##### Table of Contents



CINEMARK USA, INC. MEETS THE CONDITIONS SET FORTH IN GENERAL
INSTRUCTION (H)(1)(A) AND (B) OF FORM 10-Q AND THEREFORE IS FILING THIS FORM
WITH THE REDUCED DISCLOSURE FORMAT
   UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 FORM 10-Q
 QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
 For the quarterly period ended September 30, 2010
 Commission File Number: 033-47040
 CINEMARK USA, INC.
 (Exact name of registrant as specified in its charter)
 Texas
(State or other jurisdiction 
of incorporation or organization)
    
    75-2206284
(I.R.S. Employer
Identification No.)3900 Dallas Parkway 
Suite 500
Plano, Texas
(Address of principal executive offices)
    
    75093
(Zip Code)
   þ o
  o o
  Large accelerated filer o
Accelerated filer o
Non-accelerated filer þ(Do not check if a smaller reporting company)
Smaller reporting company o  o þ




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##### 



CINEMARK USA, INC. AND SUBSIDIARIES
TABLE OF CONTENTS
 PagePART I.
    
    FINANCIAL INFORMATIONItem 1.
    
    Financial StatementsCondensed Consolidated Balance Sheets as of September 30, 2010
and December 31, 2009 (unaudited)
    
    
    4Condensed Consolidated Statements of Income for the three and
nine months ended September 30, 2010 and 2009 (unaudited)
    
    
    5Condensed Consolidated Statements of Cash Flows for the nine
months ended September 30, 2010 and 2009 (unaudited)
    
    
    6Notes to Condensed Consolidated Financial Statements (unaudited)
    
    
    7Item 2.
    
    Managements Discussion and Analysis of Financial Condition and
Results of Operations
    
    
    33Item 4.
    
    Controls and Procedures
    
    
    41PART II.
    
    OTHER INFORMATION`Item 1.
    
    Legal Proceedings
    
    
    42Item 1A.
    
    Risk Factors
    
    
    42Item 5.
    
    Other Information
    
    
    42Item 6.
    
    Exhibits
    
    
    46SIGNATURES
    
    
    47EX-31.1EX-31.2EX-32.1EX-32.2
  2




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Cautionary Statement Regarding Forward-Looking Statements
  3




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##### Table of Contents



PART I  FINANCIAL INFORMATION
 
 Item 1. Financial Statements
 
 CINEMARK USA, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except share data, unaudited)
 September 30,
    
    
    December 31,2010
    
    
    2009AssetsCurrent assetsCash and cash equivalents
    
    $
    430,347
    
    
    $
    437,737Inventories
    
    
    9,594
    
    
    
    9,854Accounts receivable
    
    
    38,807
    
    
    
    32,793Income tax receivable
    
    
    13,731
    
    
    
    13,025Current deferred tax asset
    
    
    3,344
    
    
    
    3,321Prepaid expenses and other
    
    
    11,013
    
    
    
    10,051Accounts receivable from parent
    
    
    8,443
    
    
    
    7,656Total current assets
    
    
    515,279
    
    
    
    514,437Theatre properties and equipment
    
    
    1,996,860
    
    
    
    1,936,535Less accumulated depreciation and amortization
    
    
    807,669
    
    
    
    716,947Theatre properties and equipment  net
    
    
    1,189,191
    
    
    
    1,219,588Other assetsGoodwill
    
    
    1,120,866
    
    
    
    1,116,302Intangible assets  net
    
    
    332,770
    
    
    
    342,998Investment in NCM
    
    
    65,638
    
    
    
    34,232Investment in DCIP
    
    
    9,875
    
    
    
    640Investment in Real D
    
    
    15,994
    
    
    
    Investments in and advances to affiliates
    
    
    2,918
    
    
    
    2,889Deferred charges and other assets  net
    
    
    68,103
    
    
    
    52,502Total other assets
    
    
    1,616,164
    
    
    
    1,549,563Total assets
    
    $
    3,320,634
    
    
    $
    3,283,588Liabilities and equityCurrent liabilitiesCurrent portion of long-term debt
    
    $
    10,836
    
    
    $
    12,227Current portion of capital lease obligations
    
    
    7,280
    
    
    
    7,340Current liability for uncertain tax positions
    
    
    2,528
    
    
    
    13,229Accounts payable and accrued expenses
    
    
    195,303
    
    
    
    247,938Total current liabilities
    
    
    215,947
    
    
    
    280,734Long-term liabilitiesLong-term debt, less current portion
    
    
    1,524,293
    
    
    
    1,531,478Capital lease obligations, less current portion
    
    
    129,991
    
    
    
    133,028Deferred tax liability
    
    
    111,704
    
    
    
    124,823Liability for uncertain tax positions
    
    
    17,322
    
    
    
    18,432Deferred lease expenses
    
    
    30,530
    
    
    
    27,698Deferred revenue  NCM
    
    
    231,393
    
    
    
    203,006Other long-term liabilities
    
    
    55,004
    
    
    
    42,248Total long-term liabilities
    
    
    2,100,237
    
    
    
    2,080,713Commitments and contingencies (see Note 20)EquityCinemark USA, Inc.s stockholders equity:Class A common stock, $0.01 par value: 10,000,000 shares authorized, 1,500 shares issued and
outstanding
    
    
    
    
    
    
    Class B common stock, no par value: 1,000,000 shares authorized, 239,893 shares issued and 182,648
shares outstanding
    
    
    49,543
    
    
    
    49,543Treasury stock, 57,245 Class B shares at cost
    
    
    (24,233
    )
    
    
    (24,233
    )Additional paid-in-capital
    
    
    1,164,645
    
    
    
    1,151,166Retained deficit
    
    
    (207,255
    )
    
    
    (261,672
    )Accumulated other comprehensive income (loss)
    
    
    9,752
    
    
    
    (7,459
    )Total Cinemark USA, Inc.s stockholders equity
    
    
    992,452
    
    
    
    907,345Noncontrolling interests
    
    
    11,998
    
    
    
    14,796Total equity
    
    
    1,004,450
    
    
    
    922,141Total liabilities and equity
    
    $
    3,320,634
    
    
    $
    3,283,588
  4




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CINEMARK USA, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(in thousands, unaudited)
 Three months ended September 30,
    
    
    Nine months ended September 30,2010
    
    
    2009
    
    
    2010
    
    
    2009RevenuesAdmissions
    
    $
    367,662
    
    
    $
    322,915
    
    
    $
    1,063,737
    
    
    $
    941,886Concession
    
    
    170,130
    
    
    
    152,938
    
    
    
    488,464
    
    
    
    441,895Other
    
    
    22,443
    
    
    
    20,972
    
    
    
    64,034
    
    
    
    56,352Total revenues
    
    
    560,235
    
    
    
    496,825
    
    
    
    1,616,235
    
    
    
    1,440,133Cost of operationsFilm rentals and advertising
    
    
    200,495
    
    
    
    175,993
    
    
    
    582,864
    
    
    
    513,945Concession supplies
    
    
    26,565
    
    
    
    23,485
    
    
    
    73,465
    
    
    
    67,229Salaries and wages
    
    
    56,823
    
    
    
    52,675
    
    
    
    165,615
    
    
    
    149,095Facility lease expense
    
    
    66,587
    
    
    
    61,545
    
    
    
    191,292
    
    
    
    176,478Utilities and other
    
    
    64,310
    
    
    
    61,341
    
    
    
    177,179
    
    
    
    164,237General and administrative expenses
    
    
    27,682
    
    
    
    23,109
    
    
    
    77,134
    
    
    
    67,767Depreciation and amortization
    
    
    34,805
    
    
    
    38,207
    
    
    
    103,395
    
    
    
    111,875Amortization of favorable/unfavorable leases
    
    
    179
    
    
    
    301
    
    
    
    595
    
    
    
    970Impairment of long-lived assets
    
    
    1,022
    
    
    
    3,146
    
    
    
    6,057
    
    
    
    8,115Loss on sale of assets and other
    
    
    7,548
    
    
    
    944
    
    
    
    11,906
    
    
    
    2,402Total cost of operations
    
    
    486,016
    
    
    
    440,746
    
    
    
    1,389,502
    
    
    
    1,262,113Operating income
    
    
    74,219
    
    
    
    56,079
    
    
    
    226,733
    
    
    
    178,020Other income (expense)Interest expense
    
    
    (28,938
    )
    
    
    (25,571
    )
    
    
    (83,553
    )
    
    
    (56,110
    )Interest income
    
    
    1,807
    
    
    
    1,036
    
    
    
    4,239
    
    
    
    3,646Foreign currency exchange gain
    
    
    682
    
    
    
    383
    
    
    
    762
    
    
    
    921Distributions from NCM
    
    
    4,263
    
    
    
    4,162
    
    
    
    15,541
    
    
    
    15,768Equity in loss of affiliates
    
    
    (1,842
    )
    
    
    (35
    )
    
    
    (4,997
    )
    
    
    (1,055
    )Total other expense
    
    
    (24,028
    )
    
    
    (20,025
    )
    
    
    (68,008
    )
    
    
    (36,830
    )Income before income taxes
    
    
    50,191
    
    
    
    36,054
    
    
    
    158,725
    
    
    
    141,190Income taxes
    
    
    16,037
    
    
    
    12,289
    
    
    
    46,462
    
    
    
    48,940Net income
    
    $
    34,154
    
    
    $
    23,765
    
    
    $
    112,263
    
    
    $
    92,250Less: Net income attributable to noncontrolling interests
    
    
    551
    
    
    
    1,044
    
    
    
    3,246
    
    
    
    2,967Net income attributable to Cinemark USA, Inc.
    
    $
    33,603
    
    
    $
    22,721
    
    
    $
    109,017
    
    
    $
    89,283
  5




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##### Table of Contents



CINEMARK USA, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands, unaudited)
 Nine months ended September 30,2010
    
    
    2009Operating activitiesNet income
    
    $
    112,263
    
    
    $
    92,250Adjustments to reconcile net income to cash provided by operating activities:Depreciation
    
    
    100,246
    
    
    
    108,782Amortization of intangible and other assets and unfavorable leases
    
    
    3,744
    
    
    
    4,063Amortization of long-term prepaid rents
    
    
    1,247
    
    
    
    1,074Amortization of debt issue costs
    
    
    3,533
    
    
    
    2,902Amortization of deferred revenues, deferred lease incentives and other
    
    
    (4,844
    )
    
    
    (3,479
    )Amortization of accumulated other comprehensive loss related to interest rate
swap agreement
    
    
    3,475
    
    
    
    3,475Amortization of bond discount
    
    
    578
    
    
    
    180Impairment of long-lived assets
    
    
    6,057
    
    
    
    8,115Share based awards compensation expense
    
    
    4,622
    
    
    
    3,045Loss on sale of assets and other
    
    
    9,873
    
    
    
    2,402Loss on contribution and sale of digital projection systems to DCIP
    
    
    2,033
    
    
    
    Deferred lease expenses
    
    
    2,776
    
    
    
    3,189Deferred income tax expenses
    
    
    (13,005
    )
    
    
    (13,967
    )Equity in loss of affiliates
    
    
    4,997
    
    
    
    1,055Tax benefit related to stock option exercises
    
    
    1,904
    
    
    
    Increase in deferred revenue related to new U.S. beverage agreement
    
    
    
    
    
    
    6,550Distributions from equity investees
    
    
    3,292
    
    
    
    1,725Changes in assets and liabilities
    
    
    (89,349
    )
    
    
    (2,861
    )Net cash provided by operating activities
    
    
    153,442
    
    
    
    218,500Investing activitiesAdditions to theatre properties and equipment
    
    
    (88,256
    )
    
    
    (85,603
    )Proceeds from sale of theatre properties and equipment
    
    
    3,994
    
    
    
    721Acquisition of theatres in the U.S.
    
    
    
    
    
    
    (48,950
    )Acquisition of theatres in Brazil
    
    
    
    
    
    
    (9,061
    )Investment in joint venture  DCIP, net of cash distributions
    
    
    (1,510
    )
    
    
    (2,500
    )Net cash used for investing activities
    
    
    (85,772
    )
    
    
    (145,393
    )Financing activitiesCapital contributions from parent
    
    
    
    
    
    
    19,650Dividends paid to parent
    
    
    (54,600
    )
    
    
    (491,025
    )Payroll taxes paid as a result of noncash stock option exercises and restricted stock
withholdings
    
    
    (416
    )
    
    
    Proceeds from issuance of senior notes
    
    
    
    
    
    
    458,532Payment of debt issue costs
    
    
    (8,849
    )
    
    
    (12,601
    )Repayments of long-term debt
    
    
    (9,144
    )
    
    
    (9,436
    )Payments on capital leases
    
    
    (5,422
    )
    
    
    (4,410
    )Other
    
    
    (387
    )
    
    
    (874
    )Net cash used for
financing activities
    
    
    (78,818
    )
    
    
    (40,164
    )Effect of exchange rate changes on cash and cash equivalents
    
    
    3,758
    
    
    
    12,642Increase (decrease) in cash and cash equivalents
    
    
    (7,390
    )
    
    
    45,585Cash and cash equivalents:Beginning of period
    
    
    437,737
    
    
    
    313,238End of period
    
    $
    430,347
    
    
    $
    358,823
   6




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##### Table of Contents



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




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##### Table of Contents



Consolidation
 3. Buyout of Colombia Noncontrolling Interest
  4. Equity
  CinemarkUSA, Inc.Stockholders
    
    Noncontrolling
    
    TotalEquity
    
    Interests
    
    EquityBalance at January 1, 2010
    
    $
    907,345
    
    
    $
    14,796
    
    
    $
    922,141Colombia Share Exchange (see Note 3)
    
    
    5,865
    
    
    
    (5,865
    )
    
    
    Share based awards compensation expense
    
    
    4,622
    
    
    
    
    
    
    
    4,622Dividends paid to parent
    
    
    (54,600
    )
    
    
    
    
    
    
    (54,600
    )Tax benefit related to stock option exercises
    
    
    1,904
    
    
    
    
    
    
    
    1,904Dividends paid to noncontrolling interests
    
    
    
    
    
    
    (387
    )
    
    
    (387
    )Comprehensive income:Net income
    
    
    109,017
    
    
    
    3,246
    
    
    
    112,263Fair value adjustments on interest rate swap
agreements, net of taxes of $137
    
    
    (226
    )
    
    
    
    
    
    
    (226
    )Amortization of accumulated other comprehensive loss
on terminated swap agreement
    
    
    3,475
    
    
    
    
    
    
    
    3,475Fair value adjustments on available-for-sale securities
    
    
    1,356
    
    
    
    
    
    
    
    1,356Foreign currency translation adjustment
    
    
    13,694
    
    
    
    208
    
    
    
    13,902Balance at September 30, 2010
    
    $
    992,452
    
    
    $
    11,998
    
    
    $
    1,004,450
 8




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##### Table of Contents



CinemarkUSA, Inc.Stockholders
    
    Noncontrolling
    
    TotalEquity
    
    Interests
    
    EquityBalance at January 1, 2009
    
    $
    1,142,920
    
    
    $
    12,971
    
    
    $
    1,155,891Share based awards compensation expense
    
    
    3,045
    
    
    
    
    
    
    
    3,045Dividends paid to parent
    
    
    (491,025
    )
    
    
    
    
    
    
    (491,025
    )Capital contributions from parent
    
    
    69,325
    
    
    
    
    
    
    
    69,325Dividends paid to noncontrolling interests
    
    
    
    
    
    
    (780
    )
    
    
    (780
    )Purchase of noncontrolling interest share of an Argentina subsidiary
    
    
    23
    
    
    
    (117
    )
    
    
    (94
    )Comprehensive income:Net income
    
    
    89,283
    
    
    
    2,967
    
    
    
    92,250Fair value adjustments on interest rate swap agreements,
net of taxes of $1,672
    
    
    2,762
    
    
    
    
    
    
    
    2,762Amortization of accumulated other comprehensive loss on
terminated swap agreement
    
    
    3,475
    
    
    
    
    
    
    
    3,475Foreign currency translation adjustment
    
    
    47,148
    
    
    
    1,061
    
    
    
    48,209Balance at September 30, 2009
    
    $
    866,956
    
    
    $
    16,102
    
    
    $
    883,058
 5. Acquisition of U.S. Theatres
   Theatre properties and equipment
    
    $
    25,575Brandname
    
    
    3,500Noncompete agreement
    
    
    1,630Goodwill
    
    
    44,565Unfavorable lease
    
    
    (3,600
    )Capital lease liability (for one theatre)
    
    
    (22,720
    )Total
    
    $
    48,950
  9




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##### Table of Contents



6. Investment in National CineMedia
  Investment
    
    Deferred
    
    Distributions
    
    Equity
    
    Other
    
    Cashin NCM
    
    Revenue
    
    from NCM
    
    Earnings
    
    Revenue
    
    ReceivedBalance as of December 31, 2009
    
    $
    34,232
    
    
    $
    (203,006
    )Receipt of common units due to annual
common unit adjustment
    
    
    30,683
    
    
    
    (30,683
    )
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    Change of interest gain due to 2010
extraordinary common unit adjustment
    
    
    271
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Revenues earned under exhibitor
services agreement
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (3,666
    )
    
    
    3,666Receipt of excess cash distributions
    
    
    (2,686
    )
    
    
    
    
    
    
    (12,474
    )
    
    
    
    
    
    
    
    
    
    
    15,160Receipt under tax receivable agreement
    
    
    (477
    )
    
    
    
    
    
    
    (3,067
    )
    
    
    
    
    
    
    
    
    
    
    3,544Equity in earnings
    
    
    3,615
    
    
    
    
    
    
    
    
    
    
    
    (3,615
    )
    
    
    
    
    
    
    Amortization of deferred revenue
    
    
    
    
    
    
    2,296
    
    
    
    
    
    
    
    
    
    
    
    (2,296
    )
    
    
    Balance as of and for the period
ended September 30, 2010
    
    $
    65,638
    
    
    $
    (231,393
    )
    
    $
    (15,541
    )
    
    $
    (3,615
    )
    
    $
    (5,962
    )
    
    $
    22,370
     Three Months
    
    Nine MonthsEnded
    
    EndedSeptember 30, 2010
    
    September 30, 2010Gross revenues
    
    $
    125,717
    
    
    $
    309,373Operating income
    
    $
    67,081
    
    
    $
    136,791Net earnings
    
    $
    52,530
    
    
    $
    92,723
 10




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##### Table of Contents



7. Investment in Digital Cinema Implementation Partners
    Investment inDCIPBalance as of December 31, 2009
    
    $
    640Cash contributions to DCIP
    
    
    2,567Equipment contributions to DCIP, at fair value
    
    
    16,380Distributions received from DCIP
    
    
    (1,068
    )Equity in losses
    
    
    (8,644
    )Balance as of September 30, 2010
    
    $
    9,875
  11




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8. Investment in Real D
      12




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##### Table of Contents



9. Share Based Awards
 Stock Options 
 WeightedWeighted
    
    
    Average
    
    
    AggregateNumber of
    
    
    Average
    
    
    Grant Date
    
    
    IntrinsicOptions
    
    
    Exercise Price
    
    
    Fair Value
    
    
    ValueOutstanding at December 31, 2009
    
    
    1,231,892
    
    
    $
    7.63
    
    
    $
    3.51Exercised
    
    
    (782,824
    )
    
    $
    7.63
    
    
    $
    3.51Outstanding at September 30, 2010
    
    
    449,068
    
    
    $
    7.63
    
    
    $
    3.51
    
    
    $
    3,804Options exercisable at September 30, 2010
    
    
    449,068
    
    
    $
    7.63
    
    
    $
    3.51
    
    
    $
    3,804
   Restricted
Stock
  WeightedShares of
    
    AverageRestricted
    
    Grant DateStock
    
    Fair ValueOutstanding at December 31, 2009
    
    
    764,078
    
    
    $
    11.10Granted
    
    
    679,308
    
    
    $
    17.94Forfeited
    
    
    (2,719
    )
    
    $
    11.03Vested
    
    
    (189,885
    )
    
    $
    12.64Outstanding at September 30, 2010
    
    
    1,250,782
    
    
    $
    14.58Unvested restricted stock at September 30,
2010
    
    
    1,250,782
    
    
    $
    14.58
  13




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##### Table of Contents



Restricted Stock Units
  Number ofShares
    
    Value atVesting
    
    Grantat IRR of at least 8.5%
    
    
    132,144
    
    
    $
    2,423at IRR of at least 10.5%
    
    
    264,288
    
    
    $
    4,847at IRR of at least 12.5%
    
    
    396,432
    
    
    $
    7,271
    14




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##### Table of Contents



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




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##### Table of Contents



Fair Value of Long-Term Debt
  11. Interest Rate Swap Agreements
 .
   2010
    
    2009Beginning liability balance   January 1
    
    $
    18,524
    
    
    $
    24,781Total (gain) loss included in accumulated other
comprehensive income (loss)
    
    
    363
    
    
    
    (4,434
    )Ending liability balance  September 30
    
    $
    18,887
    
    
    $
    20,347
  16




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12. Goodwill and Other Intangible Assets
  U.S.
    
    InternationalOperating
    
    OperatingSegment
    
    Segment
    
    TotalBalance at December 31, 2009 (1)
    
    $
    948,026
    
    
    $
    168,276
    
    
    $
    1,116,302Foreign currency translation adjustments
    
    
    
    
    
    
    4,564
    
    
    
    4,564Balance at September 30, 2010 (1)
    
    $
    948,026
    
    
    $
    172,840
    
    
    $
    1,120,866
 
 (1)
    
    Balances are presented net of accumulated impairment losses of $214,031 for
the U.S. operating segment and $27,622 for the international operating segment.    ForeignCurrencyBalance at
    
    
    
    
    
    Translation
    
    Balance atDecember 31,
    
    
    
    
    
    Adjustments
    
    September 30,2009
    
    Amortization
    
    & Other
    
    2010Intangible assets with finite lives:Vendor contracts:Gross carrying amount
    
    $
    56,474
    
    
    $
    
    
    
    $
    (10,043
    )
    
    $
    46,431Accumulated amortization
    
    
    (29,870
    )
    
    
    (2,282
    )
    
    
    4,395
    
    
    
    (27,757
    )Net carrying amount
    
    
    26,604
    
    
    
    (2,282
    )
    
    
    (5,648
    )
    
    
    18,674Other intangible assets:Gross carrying amount
    
    
    26,510
    
    
    
    
    
    
    
    (1,865
    )
    
    
    24,645Accumulated amortization
    
    
    (20,596
    )
    
    
    (1,658
    )
    
    
    726
    
    
    
    (21,528
    )Net carrying amount
    
    
    5,914
    
    
    
    (1,658
    )
    
    
    (1,139
    )
    
    
    3,117Total net intangible assets with finite lives
    
    
    32,518
    
    
    
    (3,940
    )
    
    
    (6,787
    )
    
    
    21,791Intangible assets with indefinite lives:Tradename
    
    
    310,480
    
    
    
    
    
    
    
    499
    
    
    
    310,979Total intangible assets   net
    
    $
    342,998
    
    
    $
    (3,940
    )
    
    $
    (6,288
    )
    
    $
    332,770
 17




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For the three months ended December 31, 2010
    
    $
    677For the twelve months ended December 31, 2011
    
    
    4,372For the twelve months ended December 31, 2012
    
    
    4,216For the twelve months ended December 31, 2013
    
    
    3,470For the twelve months ended December 31, 2014
    
    
    2,924Thereafter
    
    
    6,132Total
    
    $
    21,791
 13. Impairment of Long-Lived Assets
     Three Months Ended
    
    Nine Months EndedSeptember 30,
    
    September 30,2010
    
    2009
    
    2010
    
    2009United States theatre properties
    
    $
    424
    
    
    $
    2,817
    
    
    $
    3,265
    
    
    $
    7,482International theatre properties
    
    
    598
    
    
    
    42
    
    
    
    1,661
    
    
    
    275Subtotal
    
    $
    1,022
    
    
    $
    2,859
    
    
    
    4,926
    
    
    $
    7,757Intangible assets
    
    
    
    
    
    
    287
    
    
    
    1,131
    
    
    
    358Impairment of long-lived assets
    
    $
    1,022
    
    
    $
    3,146
    
    
    $
    6,057
    
    
    $
    8,115
 14. Fair Value Measurements
   18




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##### Table of Contents



Carrying
    
    Fair ValueDescription
    
    Value
    
    Level 1
    
    Level 2
    
    Level 3Debt (see Note 10)
    
    $
    (1,535,129
    )
    
    $
    
    
    
    $
    (1,568,593
    )
    
    $
    Interest Rate Swaps (see Note 11)
    
    $
    (18,887
    )
    
    $
    
    
    
    $
    
    
    
    $
    (18,887
    )Investment in Real D (see Note 8)
    
    $
    15,994
    
    
    $
    
    
    
    $
    15,994
    
    
    $
    
  Carrying
    
    Fair ValueDescription
    
    Value
    
    Level 1
    
    Level 2
    
    Level 3Debt
    
    $
    (1,543,705
    )
    
    $
    
    
    
    $
    (1,513,838
    )
    
    $
    Interest Rate Swaps
    
    $
    (18,524
    )
    
    $
    
    
    
    $
    
    
    
    $
    (18,524
    )
  2010
    
    2009Beginning liability balance   January 1
    
    $
    18,524
    
    
    $
    24,781Total (gain) loss included in accumulated other comprehensive income (loss)
    
    
    363
    
    
    
    (4,434
    )Ending liability balance  September 30
    
    $
    18,887
    
    
    $
    20,347
  15. Foreign Currency Translation
    19




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20




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##### Table of Contents



16. Supplemental Cash Flow Information
  Nine Months EndedSeptember 30,2010
    
    2009Cash paid for interest
    
    $
    66,857
    
    
    $
    39,513Cash paid for income taxes, net of refunds received
    
    $
    70,762
    
    
    $
    35,277Noncash investing and financing activities:Change in accounts payable and accrued expenses for the acquisition of
theatre properties and equipment (1)
    
    $
    1,748
    
    
    $
    (4,568
    )Theatre properties acquired under capital lease (2)
    
    $
    2,191
    
    
    $
    20,400Change in fair market values of interest rate swap agreements, net of taxes
    
    $
    (226
    )
    
    $
    Investment in NCM  receipt of common units (see Note 6)
    
    $
    30,683
    
    
    $
    15,536Investment in NCM  change of interest gain (see Note 6)
    
    $
    271
    
    
    $
    Equipment contributed to DCIP (see Note 7)
    
    $
    18,090
    
    
    $
    Investment in Real D (see Note 8)
    
    $
    14,638
    
    
    $
    Change in fair market value of available-for-sale securities (see Note 8)
    
    $
    1,356
    
    
    $
    Capital contribution from former parent, Cinemark, Inc., primarily related
to income taxes
    
    $
    
    
    
    $
    49,675Capital contribution from Cinemark Holdings, Inc. as a result of Colombia
Share Exchange (see Note 3)
    
    $
    6,951
    
    
    $
    
 
 (1)
    
    Additions to theatre properties and equipment included in accounts payable as of
December 31, 2009 and September 30, 2010 were $7,823 and $9,571, respectively.(2)
    
    Amount recorded during the nine months ended September 30, 2009 was a result of the
acquisition of theatres in the U.S. as discussed in Note 5. 17. Segments
  21




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Three Months Ended
    
    Nine Months EndedSeptember 30,
    
    September 30,2010
    
    2009
    
    2010
    
    2009RevenuesU.S.
    
    $
    400,277
    
    
    $
    378,046
    
    
    $
    1,199,856
    
    
    $
    1,139,065International
    
    
    161,492
    
    
    
    119,866
    
    
    
    420,404
    
    
    
    304,024Eliminations
    
    
    (1,534
    )
    
    
    (1,087
    )
    
    
    (4,025
    )
    
    
    (2,956
    )Total revenues
    
    $
    560,235
    
    
    $
    496,825
    
    
    $
    1,616,235
    
    
    $
    1,440,133Adjusted EBITDAU.S.
    
    $
    88,033
    
    
    $
    78,189
    
    
    $
    274,629
    
    
    $
    261,041International
    
    
    37,299
    
    
    
    26,932
    
    
    
    98,243
    
    
    
    63,417Total Adjusted EBITDA
    
    $
    125,332
    
    
    $
    105,121
    
    
    $
    372,872
    
    
    $
    324,458Capital expendituresU.S.
    
    $
    11,564
    
    
    $
    15,429
    
    
    $
    47,571
    
    
    $
    58,851International
    
    
    19,733
    
    
    
    9,256
    
    
    
    40,685
    
    
    
    26,752Total capital expenditures
    
    $
    31,297
    
    
    $
    24,685
    
    
    $
    88,256
    
    
    $
    85,603
  Three Months Ended
    
    Nine Months EndedSeptember 30,
    
    September 30,2010
    
    2009
    
    2010
    
    2009Net income
    
    $
    34,154
    
    
    $
    23,765
    
    
    $
    112,263
    
    
    $
    92,250Add (deduct):Income taxes
    
    
    16,037
    
    
    
    12,289
    
    
    
    46,462
    
    
    
    48,940Interest expense (1)
    
    
    28,938
    
    
    
    25,571
    
    
    
    83,553
    
    
    
    56,110Other income (2)
    
    
    (647
    )
    
    
    (1,384
    )
    
    
    (4
    )
    
    
    (3,512
    )Depreciation and amortization
    
    
    34,805
    
    
    
    38,207
    
    
    
    103,395
    
    
    
    111,875Amortization of favorable/unfavorable leases
    
    
    179
    
    
    
    301
    
    
    
    595
    
    
    
    970Impairment of long-lived assets
    
    
    1,022
    
    
    
    3,146
    
    
    
    6,057
    
    
    
    8,115Loss on sale of assets and other
    
    
    7,548
    
    
    
    944
    
    
    
    11,906
    
    
    
    2,402Deferred lease expenses
    
    
    1,079
    
    
    
    1,067
    
    
    
    2,776
    
    
    
    3,189Amortization of long-term prepaid rents
    
    
    468
    
    
    
    323
    
    
    
    1,247
    
    
    
    1,074Share based awards compensation expense
    
    
    1,749
    
    
    
    892
    
    
    
    4,622
    
    
    
    3,045Adjusted EBITDA
    
    $
    125,332
    
    
    $
    105,121
    
    
    $
    372,872
    
    
    $
    324,458
 
 (1)
    
    Includes amortization of debt issue costs.(2)
    
    Includes interest income, foreign currency exchange gain, and equity in loss of
affiliates and excludes distributions from NCM. Distributions from NCM are reported entirely
within the U.S. operating segment. Financial Information About Geographic Areas
  Three Months Ended
    
    Nine Months EndedSeptember 30,
    
    September 30,Revenues
    
    2010
    
    2009
    
    2010
    
    2009U.S. and Canada
    
    $
    400,277
    
    
    $
    378,046
    
    
    $
    1,199,856
    
    
    $
    1,139,065Brazil
    
    
    87,339
    
    
    
    61,132
    
    
    
    226,556
    
    
    
    153,713Mexico
    
    
    20,213
    
    
    
    18,666
    
    
    
    55,310
    
    
    
    48,195Other foreign countries
    
    
    53,940
    
    
    
    40,068
    
    
    
    138,538
    
    
    
    102,116Eliminations
    
    
    (1,534
    )
    
    
    (1,087
    )
    
    
    (4,025
    )
    
    
    (2,956
    )Total
    
    $
    560,235
    
    
    $
    496,825
    
    
    $
    1,616,235
    
    
    $
    1,440,133
 22




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##### Table of Contents



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




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##### Table of Contents



22. Condensed Consolidating Financial Information of Subsidiary Guarantors
    1.
    
    Condensed consolidating balance sheet information as of December 31, 2009 and
September 30, 2010, condensed consolidating statements of income information for each
of the three and nine months ended September 30, 2009 and 2010, and condensed
consolidating statements of cash flows information for each of the nine months ended
September 30, 2009 and 2010.
 2.
    
    Cinemark USA, Inc. (the Parent and Issuer), combined Guarantor Subsidiaries
and combined Non-Guarantor Subsidiaries with their investments in subsidiaries
accounted for using the equity method of accounting and therefore, the Parent column
reflects the equity income (loss) of its Guarantor Subsidiaries and Non-Guarantor
Subsidiaries, which are also separately reflected in the stand-alone Guarantor
Subsidiaries and Non-Guarantor Subsidiaries column. Additionally, the Guarantor
Subsidiaries column reflects the equity income (loss) of its Non-Guarantor
Subsidiaries, which are also separately reflected in the stand-alone Non-Guarantor
Subsidiaries column.
 3.
    
    Elimination entries necessary to consolidate the Parent and all of its
Subsidiaries.
 24




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##### Table of Contents



CINEMARK USA, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 CONDENSED CONSOLIDATING BALANCE SHEET INFORMATION
SEPTEMBER 30, 2010
 Parent
    
    Subsidiary
    
    SubsidiaryCompany
    
    Guarantors
    
    Non-Guarantors
    
    Eliminations
    
    Consolidated(In thousands)AssetsCurrent assetsCash and cash equivalents
    
    $
    46,088
    
    
    $
    191,829
    
    
    $
    192,430
    
    
    $
    
    
    
    $
    430,347Other current assets
    
    
    51,888
    
    
    
    32,348
    
    
    
    28,234
    
    
    
    (35,981
    )
    
    
    76,489Accounts receivable from (payable to) parent
    
    
    (237,738
    )
    
    
    290,363
    
    
    
    (44,182
    )
    
    
    
    
    
    
    8,443Total current assets
    
    
    (139,762
    )
    
    
    514,540
    
    
    
    176,482
    
    
    
    (35,981
    )
    
    
    515,279Theatre properties and equipment  net
    
    
    303,147
    
    
    
    661,803
    
    
    
    224,241
    
    
    
    
    
    
    
    1,189,191Other assets
    
    
    2,811,957
    
    
    
    679,170
    
    
    
    366,886
    
    
    
    (2,241,849
    )
    
    
    1,616,164Total assets
    
    $
    2,975,342
    
    
    $
    1,855,513
    
    
    $
    767,609
    
    
    $
    (2,277,830
    )
    
    $
    3,320,634Liabilities and equityCurrent liabilitiesCurrent portion of long-term debt
    
    $
    10,836
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    10,836Current portion of capital lease obligations
    
    
    1,499
    
    
    
    5,124
    
    
    
    657
    
    
    
    
    
    
    
    7,280Accounts payable and accrued expenses
    
    
    91,066
    
    
    
    58,919
    
    
    
    78,731
    
    
    
    (30,885
    )
    
    
    197,831Total current liabilities
    
    
    103,401
    
    
    
    64,043
    
    
    
    79,388
    
    
    
    (30,885
    )
    
    
    215,947Long-term liabilitiesLong-term debt, less current portion
    
    
    1,565,141
    
    
    
    
    
    
    
    31,762
    
    
    
    (72,610
    )
    
    
    1,524,293Capital lease obligations, less current portion
    
    
    27,339
    
    
    
    96,101
    
    
    
    6,551
    
    
    
    
    
    
    
    129,991Other long-term liabilities and deferrals
    
    
    287,009
    
    
    
    168,844
    
    
    
    59,587
    
    
    
    (69,487
    )
    
    
    445,953Total long-term liabilities
    
    
    1,879,489
    
    
    
    264,945
    
    
    
    97,900
    
    
    
    (142,097
    )
    
    
    2,100,237Commitments and contingenciesEquityCinemark USA, Inc.s stockholders equity:Common stock
    
    
    49,543
    
    
    
    457,372
    
    
    
    167,766
    
    
    
    (625,138
    )
    
    
    49,543Other stockholders equity
    
    
    942,909
    
    
    
    1,068,775
    
    
    
    410,935
    
    
    
    (1,479,710
    )
    
    
    942,909Total Cinemark USA, Inc.
stockholders equity
    
    
    992,452
    
    
    
    1,526,147
    
    
    
    578,701
    
    
    
    (2,104,848
    )
    
    
    992,452Noncontrolling interests
    
    
    
    
    
    
    378
    
    
    
    11,620
    
    
    
    
    
    
    
    11,998Total equity
    
    
    992,452
    
    
    
    1,526,525
    
    
    
    590,321
    
    
    
    (2,104,848
    )
    
    
    1,004,450Total liabilities and equity
    
    $
    2,975,342
    
    
    $
    1,855,513
    
    
    $
    767,609
    
    
    $
    (2,277,830
    )
    
    $
    3,320,634
 25




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##### Table of Contents



CINEMARK USA, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 CONDENSED CONSOLIDATING BALANCE SHEET INFORMATION
DECEMBER 31, 2009
 Parent
    
    Subsidiary
    
    SubsidiaryCompany
    
    Guarantors
    
    Non-Guarantors
    
    Eliminations
    
    Consolidated(In thousands)AssetsCurrent assetsCash and cash equivalents
    
    $
    39,761
    
    
    $
    237,540
    
    
    $
    160,436
    
    
    $
    
    
    
    $
    437,737Other current assets
    
    
    55,841
    
    
    
    32,800
    
    
    
    16,516
    
    
    
    (36,113
    )
    
    
    69,044Accounts receivable from (payable to) parent
    
    
    (153,678
    )
    
    
    173,888
    
    
    
    (12,554
    )
    
    
    
    
    
    
    7,656Total current assets
    
    
    (58,076
    )
    
    
    444,228
    
    
    
    164,398
    
    
    
    (36,113
    )
    
    
    514,437Theatre properties and equipment  net
    
    
    307,089
    
    
    
    713,860
    
    
    
    198,639
    
    
    
    
    
    
    
    1,219,588Other assets
    
    
    2,623,968
    
    
    
    637,645
    
    
    
    318,536
    
    
    
    (2,030,586
    )
    
    
    1,549,563Total assets
    
    $
    2,872,981
    
    
    $
    1,795,733
    
    
    $
    681,573
    
    
    $
    (2,066,699
    )
    
    $
    3,283,588Liabilities and equityCurrent liabilitiesCurrent portion of long-term debt
    
    $
    11,200
    
    
    $
    
    
    
    $
    1,027
    
    
    $
    
    
    
    $
    12,227Current portion of capital lease obligations
    
    
    1,313
    
    
    
    5,527
    
    
    
    500
    
    
    
    
    
    
    
    7,340Accounts payable and accrued expenses
    
    
    120,790
    
    
    
    94,721
    
    
    
    75,982
    
    
    
    (30,326
    )
    
    
    261,167Total current liabilities
    
    
    133,303
    
    
    
    100,248
    
    
    
    77,509
    
    
    
    (30,326
    )
    
    
    280,734Long-term liabilitiesLong-term debt, less current portion
    
    
    1,532,151
    
    
    
    4,440
    
    
    
    35,930
    
    
    
    (41,043
    )
    
    
    1,531,478Capital lease obligations, less current portion
    
    
    28,491
    
    
    
    99,819
    
    
    
    4,718
    
    
    
    
    
    
    
    133,028Other long-term liabilities and deferrals
    
    
    271,691
    
    
    
    156,797
    
    
    
    57,898
    
    
    
    (70,179
    )
    
    
    416,207Total long-term liabilities
    
    
    1,832,333
    
    
    
    261,056
    
    
    
    98,546
    
    
    
    (111,222
    )
    
    
    2,080,713Commitments and contingenciesEquityCinemark USA, Inc.s stockholders equity:Common stock
    
    
    49,543
    
    
    
    457,372
    
    
    
    167,765
    
    
    
    (625,137
    )
    
    
    49,543Other stockholders equity
    
    
    857,802
    
    
    
    976,729
    
    
    
    323,285
    
    
    
    (1,300,014
    )
    
    
    857,802Total Cinemark USA, Inc.
stockholders equity
    
    
    907,345
    
    
    
    1,434,101
    
    
    
    491,050
    
    
    
    (1,925,151
    )
    
    
    907,345Noncontrolling interests
    
    
    
    
    
    
    328
    
    
    
    14,468
    
    
    
    
    
    
    
    14,796Total equity
    
    
    907,345
    
    
    
    1,434,429
    
    
    
    505,518
    
    
    
    (1,925,151
    )
    
    
    922,141Total liabilities and equity
    
    $
    2,872,981
    
    
    $
    1,795,733
    
    
    $
    681,573
    
    
    $
    (2,066,699
    )
    
    $
    3,283,588
 26




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##### Table of Contents



CINEMARK USA, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 CONDENSED CONSOLIDATING STATEMENT OF INCOME INFORMATION
THREE MONTHS ENDED SEPTEMBER 30, 2010
 Parent
    
    Subsidiary
    
    SubsidiaryCompany
    
    Guarantors
    
    Non-Guarantors
    
    Eliminations
    
    Consolidated(In thousands)Revenues
    
    $
    150,467
    
    
    $
    265,351
    
    
    $
    166,910
    
    
    $
    (22,493
    )
    
    $
    560,235Cost of operations
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Theatre operating expenses
    
    
    138,275
    
    
    
    176,913
    
    
    
    122,085
    
    
    
    (22,493
    )
    
    
    414,780General and administrative expenses
    
    
    4,731
    
    
    
    14,575
    
    
    
    8,376
    
    
    
    
    
    
    
    27,682Depreciation and amortization
    
    
    7,547
    
    
    
    19,493
    
    
    
    7,944
    
    
    
    
    
    
    
    34,984Impairment of long-lived assets
    
    
    424
    
    
    
    
    
    
    
    598
    
    
    
    
    
    
    
    1,022Loss on sale of assets and other
    
    
    266
    
    
    
    482
    
    
    
    6,800
    
    
    
    
    
    
    
    7,548Total cost of operations
    
    
    151,243
    
    
    
    211,463
    
    
    
    145,803
    
    
    
    (22,493
    )
    
    
    486,016Operating income (loss)
    
    
    (776
    )
    
    
    53,888
    
    
    
    21,107
    
    
    
    
    
    
    
    74,219Other income (expense)Interest expense
    
    
    (26,790
    )
    
    
    (2,804
    )
    
    
    (738
    )
    
    
    1,394
    
    
    
    (28,938
    )Distributions from NCM
    
    
    
    
    
    
    
    
    
    
    4,263
    
    
    
    
    
    
    
    4,263Equity in income (loss) of affiliates
    
    
    50,016
    
    
    
    14,995
    
    
    
    (1,864
    )
    
    
    (64,989
    )
    
    
    (1,842
    )Other income
    
    
    72
    
    
    
    1,492
    
    
    
    2,319
    
    
    
    (1,394
    )
    
    
    2,489Total other income (expense)
    
    
    23,298
    
    
    
    13,683
    
    
    
    3,980
    
    
    
    (64,989
    )
    
    
    (24,028
    )Income before income taxes
    
    
    22,522
    
    
    
    67,571
    
    
    
    25,087
    
    
    
    (64,989
    )
    
    
    50,191Income taxes
    
    
    (11,081
    )
    
    
    19,990
    
    
    
    7,128
    
    
    
    
    
    
    
    16,037Net income
    
    
    33,603
    
    
    
    47,581
    
    
    
    17,959
    
    
    
    (64,989
    )
    
    
    34,154Less: Net income (loss) attributable
to noncontrolling interests
    
    
    
    
    
    
    (5
    )
    
    
    556
    
    
    
    
    
    
    
    551Net income attributable to Cinemark USA, Inc.
    
    $
    33,603
    
    
    $
    47,586
    
    
    $
    17,403
    
    
    $
    (64,989
    )
    
    $
    33,603
 27




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##### Table of Contents



CINEMARK USA, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 CONDENSED CONSOLIDATING STATEMENT OF INCOME INFORMATION
THREE MONTHS ENDED SEPTEMBER 30, 2009
 Parent
    
    Subsidiary
    
    SubsidiaryCompany
    
    Guarantors
    
    Non-Guarantors
    
    Eliminations
    
    Consolidated(In thousands, unaudited)Revenues
    
    $
    141,163
    
    
    $
    250,820
    
    
    $
    125,316
    
    
    $
    (20,474
    )
    
    $
    496,825Cost of operationsTheatre operating costs
    
    
    131,014
    
    
    
    170,717
    
    
    
    93,782
    
    
    
    (20,474
    )
    
    
    375,039General and administrative expenses
    
    
    4,240
    
    
    
    13,218
    
    
    
    5,651
    
    
    
    
    
    
    
    23,109Depreciation and amortization
    
    
    6,587
    
    
    
    24,258
    
    
    
    7,663
    
    
    
    
    
    
    
    38,508Impairment of long-lived assets
    
    
    2,938
    
    
    
    166
    
    
    
    42
    
    
    
    
    
    
    
    3,146Loss on sale of assets and other
    
    
    235
    
    
    
    609
    
    
    
    100
    
    
    
    
    
    
    
    944Total cost of operations
    
    
    145,014
    
    
    
    208,968
    
    
    
    107,238
    
    
    
    (20,474
    )
    
    
    440,746Operating income (loss)
    
    
    (3,851
    )
    
    
    41,852
    
    
    
    18,078
    
    
    
    
    
    
    
    56,079Other income (expense)Interest expense
    
    
    (23,269
    )
    
    
    (3,027
    )
    
    
    (892
    )
    
    
    1,617
    
    
    
    (25,571
    )Distributions from NCM
    
    
    
    
    
    
    
    
    
    
    4,162
    
    
    
    
    
    
    
    4,162Equity in income (loss) of affiliates
    
    
    39,778
    
    
    
    6,685
    
    
    
    (60
    )
    
    
    (46,438
    )
    
    
    (35
    )Other income
    
    
    199
    
    
    
    1,515
    
    
    
    1,322
    
    
    
    (1,617
    )
    
    
    1,419Total other income
    
    
    16,708
    
    
    
    5,173
    
    
    
    4,532
    
    
    
    (46,438
    )
    
    
    (20,025
    )Income before income taxes
    
    
    12,857
    
    
    
    47,025
    
    
    
    22,610
    
    
    
    (46,438
    )
    
    
    36,054Income taxes
    
    
    (9,864
    )
    
    
    10,897
    
    
    
    11,256
    
    
    
    
    
    
    
    12,289Net income
    
    
    22,721
    
    
    
    36,128
    
    
    
    11,354
    
    
    
    (46,438
    )
    
    
    23,765Less: Net income attributable to
noncontrolling interests
    
    
    
    
    
    
    60
    
    
    
    984
    
    
    
    
    
    
    
    1,044Net income attributable to Cinemark USA, Inc.
    
    $
    22,721
    
    
    $
    36,068
    
    
    $
    10,370
    
    
    $
    (46,438
    )
    
    $
    22,721
 28




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##### Table of Contents



CINEMARK USA, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 CONDENSED CONSOLIDATING STATEMENT OF INCOME INFORMATION
NINE MONTHS ENDED SEPTEMBER 30, 2010
 Parent
    
    Subsidiary
    
    SubsidiaryCompany
    
    Guarantors
    
    Non-Guarantors
    
    Eliminations
    
    Consolidated(In thousands)Revenues
    
    $
    450,769
    
    
    $
    790,636
    
    
    $
    435,304
    
    
    $
    (60,474
    )
    
    $
    1,616,235Cost of operationsTheatre operating expenses
    
    
    407,127
    
    
    
    524,585
    
    
    
    319,177
    
    
    
    (60,474
    )
    
    
    1,190,415General and administrative expenses
    
    
    13,741
    
    
    
    42,346
    
    
    
    21,047
    
    
    
    
    
    
    
    77,134Depreciation and amortization
    
    
    21,872
    
    
    
    58,033
    
    
    
    24,085
    
    
    
    
    
    
    
    103,990Impairment of long-lived assets
    
    
    937
    
    
    
    2,358
    
    
    
    2,762
    
    
    
    
    
    
    
    6,057Loss on sale of assets and other
    
    
    894
    
    
    
    2,071
    
    
    
    8,941
    
    
    
    
    
    
    
    11,906Total cost of operations
    
    
    444,571
    
    
    
    629,393
    
    
    
    376,012
    
    
    
    (60,474
    )
    
    
    1,389,502Operating income
    
    
    6,198
    
    
    
    161,243
    
    
    
    59,292
    
    
    
    
    
    
    
    226,733Other income (expense)Interest expense
    
    
    (76,039
    )
    
    
    (8,610
    )
    
    
    (2,218
    )
    
    
    3,314
    
    
    
    (83,553
    )Distributions from NCM
    
    
    980
    
    
    
    
    
    
    
    14,561
    
    
    
    
    
    
    
    15,541Equity in income (loss) of affiliates
    
    
    146,349
    
    
    
    36,997
    
    
    
    (5,031
    )
    
    
    (183,312
    )
    
    
    (4,997
    )Other income
    
    
    287
    
    
    
    3,345
    
    
    
    4,683
    
    
    
    (3,314
    )
    
    
    5,001Total other income (expense)
    
    
    71,577
    
    
    
    31,732
    
    
    
    11,995
    
    
    
    (183,312
    )
    
    
    (68,008
    )Income before income taxes
    
    
    77,775
    
    
    
    192,975
    
    
    
    71,287
    
    
    
    (183,312
    )
    
    
    158,725Income taxes
    
    
    (31,242
    )
    
    
    59,287
    
    
    
    18,417
    
    
    
    
    
    
    
    46,462Net income
    
    
    109,017
    
    
    
    133,688
    
    
    
    52,870
    
    
    
    (183,312
    )
    
    
    112,263Less: Net income attributable to
noncontrolling interests
    
    
    
    
    
    
    26
    
    
    
    3,220
    
    
    
    
    
    
    
    3,246Net income attributable to Cinemark USA, Inc.
    
    $
    109,017
    
    
    $
    133,662
    
    
    $
    49,650
    
    
    $
    (183,312
    )
    
    $
    109,017
 29




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##### Table of Contents



CINEMARK USA, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 CONDENSED CONSOLIDATING STATEMENT OF INCOME INFORMATION
NINE MONTHS ENDED SEPTEMBER 30, 2009
 Parent
    
    Subsidiary
    
    SubsidiaryCompany
    
    Guarantors
    
    Non-Guarantors
    
    Eliminations
    
    Consolidated(In thousands, unaudited)Revenues
    
    $
    414,500
    
    
    $
    761,208
    
    
    $
    320,017
    
    
    $
    (55,592
    )
    
    $
    1,440,133Cost of operationsTheatre operating costs
    
    
    375,970
    
    
    
    507,897
    
    
    
    242,709
    
    
    
    (55,592
    )
    
    
    1,070,984General and administrative expenses
    
    
    11,971
    
    
    
    40,084
    
    
    
    15,712
    
    
    
    
    
    
    
    67,767Depreciation and amortization
    
    
    18,648
    
    
    
    72,953
    
    
    
    21,244
    
    
    
    
    
    
    
    112,845Impairment of long-lived assets
    
    
    3,919
    
    
    
    3,850
    
    
    
    346
    
    
    
    
    
    
    
    8,115Loss on sale of assets and other
    
    
    443
    
    
    
    1,951
    
    
    
    8
    
    
    
    
    
    
    
    2,402Total cost of operations
    
    
    410,951
    
    
    
    626,735
    
    
    
    280,019
    
    
    
    (55,592
    )
    
    
    1,262,113Operating income
    
    
    3,549
    
    
    
    134,473
    
    
    
    39,998
    
    
    
    
    
    
    
    178,020Other income (expense)Interest expense
    
    
    (48,250
    )
    
    
    (9,249
    )
    
    
    (2,392
    )
    
    
    3,781
    
    
    
    (56,110
    )Distributions from NCM
    
    
    960
    
    
    
    
    
    
    
    14,808
    
    
    
    
    
    
    
    15,768Equity in income (loss) of affiliates
    
    
    117,643
    
    
    
    24,063
    
    
    
    (1,133
    )
    
    
    (141,628
    )
    
    
    (1,055
    )Other income
    
    
    698
    
    
    
    3,650
    
    
    
    4,000
    
    
    
    (3,781
    )
    
    
    4,567Total other income (expense)
    
    
    71,051
    
    
    
    18,464
    
    
    
    15,283
    
    
    
    (141,628
    )
    
    
    (36,830
    )Income before income taxes
    
    
    74,600
    
    
    
    152,937
    
    
    
    55,281
    
    
    
    (141,628
    )
    
    
    141,190Income taxes
    
    
    (14,683
    )
    
    
    49,487
    
    
    
    14,136
    
    
    
    
    
    
    
    48,940Net income
    
    
    89,283
    
    
    
    103,450
    
    
    
    41,145
    
    
    
    (141,628
    )
    
    
    92,250Less: Net income attributable to
noncontrolling interests
    
    
    
    
    
    
    83
    
    
    
    2,884
    
    
    
    
    
    
    
    2,967Net income attributable to Cinemark USA, Inc.
    
    $
    89,283
    
    
    $
    103,367
    
    
    $
    38,261
    
    
    $
    (141,628
    )
    
    $
    89,283
 30




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##### Table of Contents



CINEMARK USA, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS INFORMATION
NINE MONTHS ENDED SEPTEMBER 30, 2010
 Parent
    
    Subsidiary
    
    SubsidiaryCompany
    
    Guarantors
    
    Non-Guarantors
    
    Eliminations
    
    Consolidated(In thousands)Operating activitiesNet income
    
    $
    109,017
    
    
    $
    133,688
    
    
    $
    52,870
    
    
    $
    (183,312
    )
    
    $
    112,263Adjustments to reconcile net income to cash provided by
(used for) operating activities
    
    
    (141,333
    )
    
    
    43,010
    
    
    
    45,539
    
    
    
    183,312
    
    
    
    130,528Changes in assets and liabilities
    
    
    134,824
    
    
    
    (200,947
    )
    
    
    (23,226
    )
    
    
    
    
    
    
    (89,349
    )Net cash provided by (used for) operating activities
    
    
    102,508
    
    
    
    (24,249
    )
    
    
    75,183
    
    
    
    
    
    
    
    153,442Investing activitiesAdditions to theatre properties and equipment
    
    
    (25,065
    )
    
    
    (22,281
    )
    
    
    (40,910
    )
    
    
    
    
    
    
    (88,256
    )Proceeds from sale of theatre properties and equipment
    
    
    1,561
    
    
    
    765
    
    
    
    1,668
    
    
    
    
    
    
    
    3,994Investment in joint venture  DCIP, net of cash distributions
    
    
    
    
    
    
    
    
    
    
    (1,510
    )
    
    
    
    
    
    
    (1,510
    )Net transactions with affiliates
    
    
    281
    
    
    
    4,175
    
    
    
    
    
    
    
    (4,456
    )
    
    
    Net cash used for investing activities
    
    
    (23,223
    )
    
    
    (17,341
    )
    
    
    (40,752
    )
    
    
    (4,456
    )
    
    
    (85,772
    )Financing activitiesDividends paid to parent
    
    
    (54,600
    )
    
    
    
    
    
    
    (287
    )
    
    
    287
    
    
    
    (54,600
    )Payroll taxes paid as a result of noncash stock option
exercises and restricted stock withholdings
    
    
    (416
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (416
    )Payment of debt issue costs
    
    
    (8,849
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (8,849
    )Repayments of other long-term debt
    
    
    (8,127
    )
    
    
    
    
    
    
    (1,017
    )
    
    
    
    
    
    
    (9,144
    )Net changes in intercompany notes
    
    
    
    
    
    
    
    
    
    
    (4,169
    )
    
    
    4,169
    
    
    
    Payments on capital leases
    
    
    (966
    )
    
    
    (4,121
    )
    
    
    (335
    )
    
    
    
    
    
    
    (5,422
    )Other
    
    
    
    
    
    
    
    
    
    
    (387
    )
    
    
    
    
    
    
    (387
    )Net cash used for financing activities
    
    
    (72,958
    )
    
    
    (4,121
    )
    
    
    (6,195
    )
    
    
    4,456
    
    
    
    (78,818
    )Effect of exchange rate changes on cash and cash equivalents
    
    
    
    
    
    
    
    
    
    
    3,758
    
    
    
    
    
    
    
    3,758Increase (decrease) in cash and cash equivalents
    
    
    6,327
    
    
    
    (45,711
    )
    
    
    31,994
    
    
    
    
    
    
    
    (7,390
    )Cash and cash equivalents:Beginning of year
    
    
    39,761
    
    
    
    237,540
    
    
    
    160,436
    
    
    
    
    
    
    
    437,737End of year
    
    $
    46,088
    
    
    $
    191,829
    
    
    $
    192,430
    
    
    $
    
    
    
    $
    430,347
 31




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##### Table of Contents



CINEMARK USA, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
NINE MONTHS ENDED SEPTEMBER 30, 2009
 Parent
    
    Subsidiary
    
    SubsidiaryCompany
    
    Guarantors
    
    Non-Guarantors
    
    Eliminations
    
    Consolidated(In thousands, unaudited)Operating activitiesNet income
    
    $
    89,283
    
    
    $
    103,450
    
    
    $
    41,145
    
    
    $
    (141,628
    )
    
    $
    92,250Adjustments to reconcile net income to cash
provided by operating activities
    
    
    (97,565
    )
    
    
    67,047
    
    
    
    18,001
    
    
    
    141,628
    
    
    
    129,111Changes in assets and liabilities
    
    
    118,014
    
    
    
    (140,685
    )
    
    
    19,810
    
    
    
    
    
    
    
    (2,861
    )Net cash provided by operating activities
    
    
    109,732
    
    
    
    29,812
    
    
    
    78,956
    
    
    
    
    
    
    
    218,500Investing activitiesAdditions to theatre properties and equipment
    
    
    (34,960
    )
    
    
    (23,486
    )
    
    
    (27,157
    )
    
    
    
    
    
    
    (85,603
    )Proceeds from sale of theatre properties and equipment
    
    
    400
    
    
    
    97
    
    
    
    224
    
    
    
    
    
    
    
    721Acquisition of theatres
    
    
    (48,950
    )
    
    
    
    
    
    
    (9,061
    )
    
    
    
    
    
    
    (58,011
    )Net transactions with affiliates
    
    
    7,148
    
    
    
    14,735
    
    
    
    
    
    
    
    (21,883
    )
    
    
    Other
    
    
    
    
    
    
    
    
    
    
    (2,500
    )
    
    
    
    
    
    
    (2,500
    )Net cash used for investing activities
    
    
    (76,362
    )
    
    
    (8,654
    )
    
    
    (38,494
    )
    
    
    (21,883
    )
    
    
    (145,393
    )Financing activitiesCapital contributions from parent
    
    
    19,650
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    19,650Dividends paid to parent
    
    
    (491,025
    )
    
    
    (150
    )
    
    
    (7,001
    )
    
    
    7,151
    
    
    
    (491,025
    )Proceeds from issuance of senior notes
    
    
    458,532
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    458,532Payment of debt issue costs
    
    
    (12,601
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (12,601
    )Repayments of long-term debt
    
    
    (8,400
    )
    
    
    
    
    
    
    (1,036
    )
    
    
    
    
    
    
    (9,436
    )Net changes in intercompany notes
    
    
    
    
    
    
    
    
    
    
    (14,732
    )
    
    
    14,732
    
    
    
    Payments on capital leases
    
    
    (680
    )
    
    
    (3,455
    )
    
    
    (275
    )
    
    
    
    
    
    
    (4,410
    )Other
    
    
    
    
    
    
    
    
    
    
    (874
    )
    
    
    
    
    
    
    (874
    )Net cash used for financing activities
    
    
    (34,524
    )
    
    
    (3,605
    )
    
    
    (23,918
    )
    
    
    21,883
    
    
    
    (40,164
    )Effect of exchange rate changes on cash and cash equivalents
    
    
    
    
    
    
    
    
    
    
    12,642
    
    
    
    
    
    
    
    12,642Increase (decrease) in cash and cash equivalents
    
    
    (1,154
    )
    
    
    17,553
    
    
    
    29,186
    
    
    
    
    
    
    
    45,585Cash and cash equivalents:Beginning of year
    
    
    39,039
    
    
    
    163,007
    
    
    
    111,192
    
    
    
    
    
    
    
    313,238End of year
    
    $
    37,885
    
    
    $
    180,560
    
    
    $
    140,378
    
    
    $
    
    
    
    $
    358,823
 32




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##### Table of Contents



Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
  Segment Reporting
 Avatar Alice in Wonderland, How to Train Your Dragon, Clash of
the Titans, Iron Man 2, Shrek Forever After, The Karate Kid, Toy Story 3, The Twilight Saga:
Eclipse Inception, Despicable Me, Grown Ups, The Other Guys, The Expendables Salt. Jackass 3D, Due
Date, Megamind, Little Fockers, Tron: Legacy, Tangled, Yogi Bear, Gullivers Travels, Chronicles of
Narnia: The Voyage of the Dawn Treader Harry Potter
      Recent Developments
  33




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##### Table of Contents



Results of Operations
  Three Months Ended
    
    Nine Months EndedSeptember 30,
    
    September 30,2010
    
    2009
    
    2010
    
    2009Operating data (in millions):RevenuesAdmissions
    
    $
    367.6
    
    
    $
    322.9
    
    
    $
    1,063.7
    
    
    $
    941.9Concession
    
    
    170.2
    
    
    
    153.0
    
    
    
    488.5
    
    
    
    441.9Other
    
    
    22.4
    
    
    
    20.9
    
    
    
    64.0
    
    
    
    56.3Total revenues
    
    
    560.2
    
    
    
    496.8
    
    
    
    1,616.2
    
    
    
    1,440.1Cost of operationsFilm rentals and advertising
    
    
    200.5
    
    
    
    175.9
    
    
    
    582.8
    
    
    
    513.9Concession supplies
    
    
    26.6
    
    
    
    23.5
    
    
    
    73.5
    
    
    
    67.2Salaries and wages
    
    
    56.8
    
    
    
    52.7
    
    
    
    165.6
    
    
    
    149.1Facility lease expense
    
    
    66.6
    
    
    
    61.6
    
    
    
    191.3
    
    
    
    176.5Utilities and other
    
    
    64.3
    
    
    
    61.4
    
    
    
    177.2
    
    
    
    164.3General and administrative expenses
    
    
    27.7
    
    
    
    23.1
    
    
    
    77.2
    
    
    
    67.8Depreciation and amortization
    
    
    35.0
    
    
    
    38.5
    
    
    
    104.0
    
    
    
    112.8Impairment of long-lived assets
    
    
    1.0
    
    
    
    3.1
    
    
    
    6.0
    
    
    
    8.1Loss on sale of assets and other
    
    
    7.5
    
    
    
    0.9
    
    
    
    11.9
    
    
    
    2.4Total cost of operations
    
    
    486.0
    
    
    
    440.7
    
    
    
    1,389.5
    
    
    
    1,262.1Operating income
    
    $
    74.2
    
    
    $
    56.1
    
    
    $
    226.7
    
    
    $
    178.0Operating data as a percentage of total revenues:RevenuesAdmissions
    
    
    65.6
    %
    
    
    65.0
    %
    
    
    65.8
    %
    
    
    65.4
    %Concession
    
    
    30.4
    %
    
    
    30.8
    %
    
    
    30.2
    %
    
    
    30.7
    %Other
    
    
    4.0
    %
    
    
    4.2
    %
    
    
    4.0
    %
    
    
    3.9
    %Total revenues
    
    
    100.0
    %
    
    
    100.0
    %
    
    
    100.0
    %
    
    
    100.0
    %Cost of operations (1)Film rentals and advertising
    
    
    54.5
    %
    
    
    54.5
    %
    
    
    54.8
    %
    
    
    54.6
    %Concession supplies
    
    
    15.6
    %
    
    
    15.4
    %
    
    
    15.0
    %
    
    
    15.2
    %Salaries and wages
    
    
    10.1
    %
    
    
    10.6
    %
    
    
    10.2
    %
    
    
    10.4
    %Facility lease expense
    
    
    11.9
    %
    
    
    12.4
    %
    
    
    11.8
    %
    
    
    12.3
    %Utilities and other
    
    
    11.5
    %
    
    
    12.3
    %
    
    
    11.0
    %
    
    
    11.4
    %General and administrative expenses
    
    
    4.9
    %
    
    
    4.6
    %
    
    
    4.8
    %
    
    
    4.7
    %Depreciation and amortization
    
    
    6.2
    %
    
    
    7.8
    %
    
    
    6.4
    %
    
    
    7.9
    %Impairment of long-lived assets
    
    
    0.2
    %
    
    
    0.7
    %
    
    
    0.4
    %
    
    
    0.6
    %Loss on sale of assets and other
    
    
    1.3
    %
    
    
    0.2
    %
    
    
    0.7
    %
    
    
    0.2
    %Total cost of operations
    
    
    86.8
    %
    
    
    88.7
    %
    
    
    86.0
    %
    
    
    87.6
    %Operating income
    
    
    13.2
    %
    
    
    11.3
    %
    
    
    14.0
    %
    
    
    12.4
    %Average screen count (month end average)
    
    
    4,922
    
    
    
    4,901
    
    
    
    4,905
    
    
    
    4,849Revenues per average screen (dollars)
    
    $
    113,817
    
    
    $
    101,367
    
    
    $
    329,528
    
    
    $
    296,978
 
 (1)
    
    All costs are expressed as a percentage of total revenues, except film
rentals and advertising, which are expressed as a percentage of admissions revenues
and concession supplies, which are expressed as a percentage of concession revenues. 34




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##### Table of Contents



Three months ended September 30, 2010 and 2009
 Revenues.
 International OperatingU.S. Operating Segment
    
    
    
    
    
    Segment
    
    
    
    
    

    ConsolidatedThree Months Ended
    
    Three Months Ended
    
    Three Months EndedSeptember 30,
    

    September 30,
    
    September 30,%
    
    
    
    
    
    
    
    
    
    %
    
    
    
    
    
    
    
    
    
    %2010
    
    2009
    
    Change
    
    2010
    
    2009
    
    Change
    
    2010
    
    2009
    
    ChangeAdmissions revenues (1)
    
    $
    262.5
    
    
    $
    246.9
    
    
    
    6.3
    %
    
    $
    105.1
    
    
    $
    76.0
    
    
    
    38.3
    %
    
    $
    367.6
    
    
    $
    322.9
    
    
    
    13.8
    %Concession revenues (1)
    
    $
    125.0
    
    
    $
    119.8
    
    
    
    4.3
    %
    
    $
    45.2
    
    
    $
    33.2
    
    
    
    36.1
    %
    
    $
    170.2
    
    
    $
    153.0
    
    
    
    11.2
    %Other revenues (1) (2)
    
    $
    11.2
    
    
    $
    10.3
    
    
    
    8.7
    %
    
    $
    11.2
    
    
    $
    10.6
    
    
    
    5.7
    %
    
    $
    22.4
    
    
    $
    20.9
    
    
    
    7.2
    %Total revenues (1) (2)
    
    $
    398.7
    
    
    $
    377.0
    
    
    
    5.8
    %
    
    $
    161.5
    
    
    $
    119.8
    
    
    
    34.8
    %
    
    $
    560.2
    
    
    $
    496.8
    
    
    
    12.8
    %Attendance (1)
    
    
    42.2
    
    
    
    41.0
    
    
    
    2.9
    %
    
    
    23.5
    
    
    
    19.4
    
    
    
    21.1
    %
    
    
    65.7
    
    
    
    60.4
    
    
    
    8.8
    %Revenues per average screen (2)
    
    $
    103,704
    
    
    $
    98,115
    
    
    
    5.7
    %
    
    $
    149,911
    
    
    $
    113,161
    
    
    
    32.5
    %
    
    $
    113,817
    
    
    $
    101,367
    
    
    
    12.3
    %
 
 (1)
    
    Amounts in millions.(2)
    
    U.S. operating segment revenues include eliminations of intercompany transactions
with the international operating segment. See Note 17 of our condensed consolidated financial
statements. 
    
    Consolidated. The increase in admissions revenues of $44.7 million was primarily
attributable to an 8.8% increase in attendance and a 4.7% increase in average ticket price
from $5.35 for the third quarter of 2009 to $5.60 for the third quarter of 2010. The increase
in concession revenues of $17.2 million was primarily attributable to the 8.8% increase in
attendance and a 2.4% increase in concession revenues per patron from $2.53 for the third
quarter of 2009 to $2.59 for the third quarter of 2010. The increase in average ticket price
was primarily due to incremental 3-D and premium pricing and other price increases and the
favorable impact of exchange rates in certain countries in which we operate. The increase in
concession revenues per patron was primarily due to price increases and the favorable impact
of exchange rates in certain countries in which we operate. The 7.2% increase in other
revenues was primarily due to increases in ancillary revenue and the favorable impact of
exchange rates in certain countries in which we operate.
    
    U.S. The increase in admissions revenues of $15.6 million was primarily attributable
to a 2.9% increase in attendance and a 3.3% increase in average ticket price from $6.02 for
the third quarter of 2009 to $6.22 for the third quarter of 2010. The increase in concession
revenues of $5.2 million was primarily attributable to the 2.9% increase in attendance and a
1.4% increase in concession revenues per patron from $2.92 for the third quarter of 2009 to
$2.96 for the third quarter of 2010. The increase in average ticket price was primarily due to
incremental 3-D and premium pricing and other price increases and the increase in concession
revenues per patron was primarily due to price increases. The 8.7% increase in other revenues
was primarily due to increases in ancillary revenue.
    
    International. The increase in admissions revenues of $29.1 million was primarily
attributable to a 21.1% increase in attendance and a 14.0% increase in average ticket price
from $3.92 for the third quarter of 2009 to $4.47 for the third quarter of 2010. The increase
in concession revenues of $12.0 million was primarily attributable to the 21.1% increase in
attendance and a 12.3% increase in concession revenues per patron from $1.71 for the third
quarter of 2009 to $1.92 for the third quarter of 2010. The increase in average ticket price
was primarily due to incremental 3-D and premium pricing and other price increases and the
favorable impact of exchange rates in certain countries in which we operate. The increase in
concession revenues per patron was primarily due to price increases and the favorable impact
of exchange rates in certain countries in which we operate. The 5.7% increase in other
revenues was primarily due to increases in ancillary revenue and the favorable impact of
exchange rates in certain countries in which we operate.
 35




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##### Table of Contents



Cost of Operations.
 International OperatingU.S. Operating Segment
    
    Segment
    
    ConsolidatedThree Months Ended
    
    Three Months Ended
    
    Three Months EndedSeptember 30,
    
    September 30,
    
    September 30,2010
    
    2009
    
    2010
    
    2009
    
    2010
    
    2009Film rentals and advertising
    
    $
    146.5
    
    
    $
    137.4
    
    
    $
    54.0
    
    
    $
    38.5
    
    
    $
    200.5
    
    
    $
    175.9Concession supplies
    
    
    15.5
    
    
    
    14.8
    
    
    
    11.1
    
    
    
    8.7
    
    
    
    26.6
    
    
    
    23.5Salaries and wages
    
    
    44.4
    
    
    
    43.3
    
    
    
    12.4
    
    
    
    9.4
    
    
    
    56.8
    
    
    
    52.7Facility lease expense
    
    
    45.8
    
    
    
    45.2
    
    
    
    20.8
    
    
    
    16.4
    
    
    
    66.6
    
    
    
    61.6Utilities and other
    
    
    44.5
    
    
    
    45.1
    
    
    
    19.8
    
    
    
    16.3
    
    
    
    64.3
    
    
    
    61.4
 
    
    Consolidated. Film rentals and advertising costs were $200.5 million, or 54.5% of
admissions revenues, for the third quarter of 2010 compared to $175.9 million, or 54.5% of
admissions revenues, for the third quarter of 2009. The increase in film rentals and
advertising costs of $24.6 million was primarily due to a $44.7 million increase in admissions
revenues. Concession supplies expense was $26.6 million, or 15.6% of concession revenues, for
the third quarter of 2010 compared to $23.5 million, or 15.4% of concession revenues, for the
third quarter of 2009. The increase in the concession supplies rate was primarily due to the
increased weighting of our international business which typically has a higher concession
supplies rate.Salaries and wages increased to $56.8 million for the third quarter of 2010 from $52.7 million
for the third quarter of 2009 primarily due to increased minimum wages in both our U.S. and
international segments, increased staffing levels to support the 8.8% increase in attendance and
the impact of exchange rates in certain countries in which we operate. Facility lease expense
increased to $66.6 million for the third quarter of 2010 from $61.6 million for the third
quarter of 2009 primarily due to increased percentage rent and the impact of exchange rates in
certain countries in which we operate. Utilities and other costs increased to $64.3 million for
the third quarter of 2010 from $61.4 million for the third quarter of 2009 primarily due to
increased 3-D equipment rental fees, increased utility expenses and the impact of exchange rates
in certain countries in which we operate.
    
    U.S. Film rentals and advertising costs were $146.5 million, or 55.8% of admissions
revenues, for the third quarter of 2010 compared to $137.4 million, or 55.7% of admissions
revenues, for the third quarter of 2009. The increase in film rentals and advertising costs of
$9.1 million is primarily due to a $15.6 million increase in admissions revenues. Concession
supplies expense was $15.5 million, or 12.4% of concession revenues, for the third quarter of
2010 compared to $14.8 million, or 12.4% of concession revenues, for the third quarter of
2009.Salaries and wages increased to $44.4 million for the third quarter of 2010 from $43.3 million
for the third quarter of 2009 primarily due to increased minimum wages and increased staffing
levels to support the 2.9% increase in attendance. Facility lease expense increased to $45.8
million for the third quarter of 2010 from $45.2 million for the third quarter of 2009 primarily
due to increased percentage rent. Utilities and other costs decreased to $44.5 million for the
third quarter of 2010 from $45.1 million for the third quarter of 2009 primarily due to
decreased utility and theatre supplies expenses, partially offset by increased 3-D equipment
rental fees.
    
    International. Film rentals and advertising costs were $54.0 million, or 51.4% of
admissions revenues, for the third quarter of 2010 compared to $38.5 million, or 50.7% of
admissions revenues, for the third quarter of 2009. The increase in film rentals and
advertising costs of $15.5 million is due to a $29.1 million increase in admissions revenues
which contributed $14.7 million and an increase in the film rentals and advertising rate which
contributed $0.8 million. Concession supplies expense was $11.1 million, or 24.6% of
concession revenues, for the third quarter of 2010 compared to $8.7 million, or 26.2% of
concession revenues, for the third quarter of 2009. The increase in concession supplies
expense was primarily due to a $12.0 million increase in concession revenues, partially offset
by a decrease in the concession supplies rate due to favorable inventory procurement costs and
the successful implementation of price increases.Salaries and wages increased to $12.4 million for the third quarter of 2010 from $9.4 million
for the third quarter of 2009 primarily due to increased staffing levels to support the 21.1%
increase in attendance, increased minimum wages and the impact of exchange rates in certain
countries in which we operate. Facility lease expense increased to $20.8 million for the third
quarter of 2010 from $16.4 million for the third quarter of 2009 primarily due to increased
percentage rent and the impact of exchange rates in certain countries in which we operate.
Utilities and
 36




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##### Table of Contents



other costs increased to $19.8 million for the third quarter of 2010 from $16.3
million for
the third quarter of 2009 primarily due to increased 3-D equipment rental fees, increased
utility expenses and the impact of exchange rates in certain countries in which we operate.
 General and Administrative Expenses.
 Depreciation and Amortization.
 Impairment of Long-Lived Asset.
 Loss on Sale of Assets and Other.
 Interest Expense.
 Distributions from NCM.
 Equity in Loss of Affiliates
 Income Taxes.
 37




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##### Table of Contents



Nine months ended September 30, 2010 and 2009
 Revenues.
 U.S. Operating Segment
    
    International Operating Segment
    
    
    
    
    
    ConsolidatedNine Months Ended
    
    Nine Months Ended
    
    Nine Months EndedSeptember 30,
    
    September 30,
    
    September 30,%
    
    
    
    
    
    
    
    
    
    %
    
    
    
    
    
    
    
    
    
    %2010
    
    2009
    
    Change
    
    2010
    
    2009
    
    Change
    
    2010
    
    2009
    
    ChangeAdmissions revenues (1)
    
    $
    791.0
    
    
    $
    748.6
    
    
    
    5.7
    %
    
    $
    272.7
    
    
    $
    193.3
    
    
    
    41.1
    %
    
    $
    1,063.7
    
    
    $
    941.9
    
    
    
    12.9
    %Concession revenues (1)
    
    $
    373.1
    
    
    $
    357.0
    
    
    
    4.5
    %
    
    $
    115.4
    
    
    $
    84.9
    
    
    
    35.9
    %
    
    $
    488.5
    
    
    $
    441.9
    
    
    
    10.5
    %Other revenues (1) (2)
    
    $
    31.7
    
    
    $
    30.5
    
    
    
    3.9
    %
    
    $
    32.3
    
    
    $
    25.8
    
    
    
    25.2
    %
    
    $
    64.0
    
    
    $
    56.3
    
    
    
    13.7
    %Total revenues (1) (2)
    
    $
    1,195.8
    
    
    $
    1,136.1
    
    
    
    5.3
    %
    
    $
    420.4
    
    
    $
    304.0
    
    
    
    38.3
    %
    
    $
    1,616.2
    
    
    $
    1,440.1
    
    
    
    12.2
    %Attendance (1)
    
    
    123.4
    
    
    
    122.2
    
    
    
    1.0
    %
    
    
    61.0
    
    
    
    53.4
    
    
    
    14.2
    %
    
    
    184.4
    
    
    
    175.6
    
    
    
    5.0
    %Revenues per average screen
(2)
    
    $
    311,967
    
    
    $
    298,615
    
    
    
    4.5
    %
    
    
    392,351
    
    
    $
    291,016
    
    
    
    34.8
    %
    
    $
    329,528
    
    
    $
    296,978
    
    
    
    11.0
    %
 
 (1)
    
    Amounts in millions.(2)
    
    U.S. operating segment revenues include eliminations of intercompany transactions
with the international operating segment. See Note 17 of our condensed consolidated financial
statements. 
    
    Consolidated. The increase in admissions revenues of $121.8 million was primarily
attributable to a 5.0% increase in attendance and a 7.6% increase in average ticket price from
$5.36 for the 2009 period to $5.77 for the 2010 period. The increase in concession revenues of
$46.6 million was primarily attributable to the 5.0% increase in attendance and a 5.2%
increase in concession revenues per patron from $2.52 for the 2009 period to $2.65 for the
2010 period. The increase in average ticket price was primarily due to incremental 3-D and
premium pricing and other price increases and the favorable impact of exchange rates in
certain countries in which we operate. The increase in concession revenues per patron was
primarily due to price increases and the favorable impact of exchange rates in certain
countries in which we operate. The 13.7% increase in other revenues was primarily due to
increases in ancillary revenue and the favorable impact of exchange rates in certain countries
in which we operate.
    
    U.S. The increase in admissions revenues of $42.4 million was primarily attributable
to a 4.6% increase in average ticket price from $6.13 for the 2009 period to $6.41 for the
2010 period and a 1.0% increase in attendance. The increase in concession revenues of $16.1
million was primarily attributable to a 3.4% increase in concession revenues per patron from
$2.92 for the 2009 period to $3.02 for the 2010 period and the 1.0% increase in attendance.
The increase in average ticket price was primarily due to incremental 3-D and premium pricing
and other price increases and the increase in concession revenues per patron was primarily due
to price increases. The 3.9% increase in other revenues was primarily due to increases in
ancillary revenue.
    
    International. The increase in admissions revenues of $79.4 million was primarily
attributable to a 14.2% increase in attendance and a 23.5% increase in average ticket price
from $3.62 for the 2009 period to $4.47 for the 2010 period. The increase in concession
revenues of $30.5 million was primarily attributable to the 14.2% increase in attendance and
an 18.9% increase in concession revenues per patron from $1.59 for the 2009 period to $1.89
for the 2010 period. The increase in average ticket price was primarily due to incremental 3-D
and premium pricing and other price increases and the favorable impact of exchange rates in
certain countries in which we operate. The increase in concession revenues per patron was
primarily due to price increases and the favorable impact of exchange rates in certain
countries in which we operate. The 25.2% increase in other revenues was primarily due to
increases in ancillary revenue and the favorable impact of exchange rates in certain countries
in which we operate.
 38




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##### Table of Contents



Cost of Operations.
 International OperatingU.S. Operating Segment
    
    Segment
    
    ConsolidatedNine Months Ended
    
    Nine Months Ended
    
    Nine Months EndedSeptember 30,
    
    September 30,
    
    September 30,2010
    
    2009
    
    2010
    
    2009
    
    2010
    
    2009Film rentals and advertising
    
    $
    445.7
    
    
    $
    416.2
    
    
    $
    137.1
    
    
    $
    97.7
    
    
    $
    582.8
    
    
    $
    513.9Concession supplies
    
    
    45.0
    
    
    
    45.4
    
    
    
    28.5
    
    
    
    21.8
    
    
    
    73.5
    
    
    
    67.2Salaries and wages
    
    
    131.5
    
    
    
    124.4
    
    
    
    34.1
    
    
    
    24.7
    
    
    
    165.6
    
    
    
    149.1Facility lease expense
    
    
    136.6
    
    
    
    132.9
    
    
    
    54.7
    
    
    
    43.6
    
    
    
    191.3
    
    
    
    176.5Utilities and other
    
    
    124.6
    
    
    
    122.7
    
    
    
    52.6
    
    
    
    41.6
    
    
    
    177.2
    
    
    
    164.3
 
    
    Consolidated. Film rentals and advertising costs were $582.8 million, or 54.8% of
admissions revenues, for the 2010 period compared to $513.9 million, or 54.6% of admissions
revenues, for the 2009 period. The increase in film rentals and advertising costs of $68.9
million was due to a $121.8 million increase in admissions revenues, which contributed $66.5
million, and an increase in our film rentals and advertising rate, which contributed $2.4
million. The increase in the film rentals and advertising rate was primarily due to higher
film rental rates in the U.S. segment due to the increase in the number of blockbuster films
released, including the carryover of Avatar, which generally have higher film rental rates.
Concession supplies expense was $73.5 million, or 15.0% of concession revenues, for the 2010
period, compared to $67.2 million, or 15.2% of concession revenues, for the 2009 period. The
decrease in the concession supplies rate was primarily due to favorable inventory procurement
costs and the successful implementation of price increases.
 Salaries and wages increased to $165.6 million for the 2010 period from $149.1 million for the
2009 period primarily due to new theatres, increased minimum wages in both our U.S. and
international segments, increased staffing levels to support the 5.0% increase in attendance and
the impact of exchange rates in certain countries in which we operate. Facility lease expense
increased to $191.3 million for the 2010 period from $176.5 million for the 2009 period
primarily due to new theatres, increased percentage rent and the impact of exchange rates in
certain countries in which we operate. Utilities and other costs increased to $177.2 million for
the 2010 period from $164.3 million for the 2009 period primarily due to new theatres, increased
3-D equipment rental fees, increased utility expenses and the impact of exchange rates in
certain countries in which we operate.
 
    
    U.S. Film rentals and advertising costs were $445.7 million, or 56.3% of admissions
revenues for the 2010 period compared to $416.2 million, or 55.6% of admissions revenues, for
the 2009 period. The increase in film rentals and advertising costs of $29.5 million is due to
a $42.4 million increase in admissions revenues, which contributed $23.6 million and an
increase in our film rentals and advertising rate, which contributed $5.9 million. The
increase in the film rentals and advertising rate was primarily due to the increase in the
number of blockbuster films released, including the carryover of Avatar, which generally have
higher film rental rates. Concession supplies expense was $45.0 million, or 12.1% of
concession revenues, for the 2010 period, compared to $45.4 million, or 12.7% of concession
revenues, for the 2009 period. The decrease in concession supplies expense is primarily due to
a decrease in the concession supplies rate due to favorable inventory procurement costs and
the successful implementation of price increases.
 Salaries and wages increased to $131.5 million for the 2010 period from $124.4 million for the
2009 period primarily due to new theatres and increased minimum wages. Facility lease expense
increased to $136.6 million for the 2010 period from $132.9 million for the 2009 period
primarily due to new theatres and increased percentage rent. Utilities and other costs increased
to $124.6 million for the 2010 period from $122.7 million for the 2009 period primarily due to
new theatres and increased 3-D equipment rental fees, partially offset by decreased utility
expenses.
 
    
    International. Film rentals and advertising costs were $137.1 million, or 50.3% of
admissions revenues, for the 2010 period compared to $97.7 million, or 50.5% of admissions
revenues, for the 2009 period. The increase in film rentals and advertising costs was
primarily due to a $79.4 million increase in admissions revenues, partially offset by a lower
film rentals and advertising rate. Concession supplies expense was $28.5 million, or 24.7% of
concession revenues, for the 2010 period compared to $21.8 million, or 25.7% of concession
revenues, for the 2009 period. The increase in concession supplies expense of $6.7 million was
primarily due to a $30.5 million increase in concession revenues, partially offset by a lower
concession supplies rate due to favorable inventory procurement costs and the successful
implementation of price increases.
 39




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##### Table of Contents



Salaries and wages increased to $34.1 million for the 2010 period from $24.7 million for the
2009 period primarily due to new theatres, increased staffing levels to support the 14.2%
increase in attendance, increased minimum wages and the impact of exchange rates in certain
countries in which we operate. Facility lease expense increased to $54.7 million for the 2010
period from $43.6 million for the 2009 period primarily due to new theatres, increased
percentage rent and the impact of exchange rates in certain countries in which we operate.
Utilities and other costs increased to $52.6 million for the 2010 period from $41.6 million for
the 2009 period primarily due to new theatres, increased 3-D equipment rental fees, increased
utility expenses and the impact of exchange rates in certain countries in which we operate.
 General and Administrative Expenses.
 Depreciation and Amortization.
 Impairment of Long-Lived Assets.
 Loss on Sale of Assets and Other.
 Interest Expense. 5 8
 Distributions from NCM.
 Equity in Loss of Affiliates
 40




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##### Table of Contents



Income Taxes.
 
 Item 4.
    
    Controls and Procedures
 Evaluation of the Effectiveness of Disclosure Controls and Procedures
  Changes in Internal Controls Over Financial Reporting
  41




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##### 



PART II  OTHER INFORMATION
 
 Item 1.
    
    Legal Proceedings
  
 Item 1A.
    
    Risk Factors
  
 Item 5.
    
    Other Information
 5 8
 Supplemental Schedules Specified by the Senior Notes Indenture:
  
 PageCondensed Consolidating Balance Sheet Information as of September 30, 2010 (unaudited)
    
    
    43Condensed Consolidating Statement of Income Information for the nine months ended
September 30, 2010 (unaudited)
    
    
    44Condensed
Consolidating Statement of Cash Flows Information for the nine months ended September 30, 2010 (unaudited)
    
    
    45
  42




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##### Table of Contents



CINEMARK USA, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATING BALANCE SHEET
SEPTEMBER 30, 2010
(In thousands, unaudited)
 Restricted
    
    UnrestrictedGroup
    
    Group
    
    Eliminations
    
    ConsolidatedAssetsCurrent assetsCash and cash equivalents
    
    $
    380,940
    
    
    $
    49,407
    
    
    $
    
    
    
    $
    430,347Other current assets
    
    
    103,285
    
    
    
    (18,353
    )
    
    
    
    
    
    
    84,932Total current assets
    
    
    484,225
    
    
    
    31,054
    
    
    
    
    
    
    
    515,279Theatre properties and equipment, net
    
    
    1,189,191
    
    
    
    
    
    
    
    
    
    
    
    1,189,191Other assets
    
    
    1,567,492
    
    
    
    75,691
    
    
    
    (27,019
    )
    
    
    1,616,164Total assets
    
    $
    3,240,908
    
    
    $
    106,745
    
    
    $
    (27,019
    )
    
    $
    3,320,634Liabilities and equityCurrent liabilitiesCurrent portion of long-term debt
    
    $
    10,836
    
    
    $
    
    
    
    $
    
    
    
    $
    10,836Current portion of capital lease obligations
    
    
    7,280
    
    
    
    
    
    
    
    
    
    
    
    7,280Accounts payable and accrued expenses
    
    
    197,831
    
    
    
    
    
    
    
    
    
    
    
    197,831Total current liabilities
    
    
    215,947
    
    
    
    
    
    
    
    
    
    
    
    215,947Long-term liabilitiesLong-term debt, less current portion
    
    
    1,524,293
    
    
    
    
    
    
    
    
    
    
    
    1,524,293Capital lease obligations, less current
portion
    
    
    129,991
    
    
    
    
    
    
    
    
    
    
    
    129,991Other long-term liabilities
    
    
    415,232
    
    
    
    30,721
    
    
    
    
    
    
    
    445,953Total long-term liabilities
    
    
    2,069,516
    
    
    
    30,721
    
    
    
    
    
    
    
    2,100,237Commitments and contingenciesEquity
    
    
    955,445
    
    
    
    76,024
    
    
    
    (27,019
    )
    
    
    1,004,450Total liabilities and equity
    
    $
    3,240,908
    
    
    $
    106,745
    
    
    $
    (27,019
    )
    
    $
    3,320,634
 
 Note:
    
    Restricted Group and Unrestricted Group are defined in the Indenture for the senior notes. 43




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##### Table of Contents



CINEMARK USA, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATING STATEMENT OF INCOME
NINE MONTHS ENDED SEPTEMBER 30, 2010
(In thousands, unaudited)
 Restricted
    
    UnrestrictedGroup
    
    Group
    
    Eliminations
    
    ConsolidatedRevenues
    
    $
    1,616,235
    
    
    $
    
    
    
    $
    
    
    
    $
    1,616,235Cost of operationsTheatre operating costs
    
    
    1,190,415
    
    
    
    
    
    
    
    
    
    
    
    1,190,415General and administrative expenses
    
    
    77,131
    
    
    
    3
    
    
    
    
    
    
    
    77,134Depreciation and amortization
    
    
    103,990
    
    
    
    
    
    
    
    
    
    
    
    103,990Impairment of long-lived assets
    
    
    6,057
    
    
    
    
    
    
    
    
    
    
    
    6,057Loss on sale of assets and other
    
    
    10,960
    
    
    
    946
    
    
    
    
    
    
    
    11,906Total cost of operations
    
    
    1,388,553
    
    
    
    949
    
    
    
    
    
    
    
    1,389,502Operating income (loss)
    
    
    227,682
    
    
    
    (949
    )
    
    
    
    
    
    
    226,733Other income (expense)
    
    
    (77,628
    )
    
    
    9,620
    
    
    
    
    
    
    
    (68,008
    )Income before income taxes
    
    
    150,054
    
    
    
    8,671
    
    
    
    
    
    
    
    158,725Income taxes
    
    
    43,193
    
    
    
    3,269
    
    
    
    
    
    
    
    46,462Net income
    
    
    106,861
    
    
    
    5,402
    
    
    
    
    
    
    
    112,263Less: Net income attributable to noncontrolling
interests
    
    
    3,246
    
    
    
    
    
    
    
    
    
    
    
    3,246Net income attributable to Cinemark USA, Inc.
    
    $
    103,615
    
    
    $
    5,402
    
    
    $
    
    
    
    $
    109,017
 
 Note:
    
    Restricted Group and Unrestricted Group are defined in the
Indenture for the senior notes. 44




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##### Table of Contents



CINEMARK USA, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
NINE MONTHS ENDED SEPTEMBER 30, 2010
(In thousands, unaudited)
 Restricted
    
    UnrestrictedGroup
    
    Group
    
    Eliminations
    
    ConsolidatedOperating activitiesNet income
    
    $
    106,861
    
    
    $
    5,402
    
    
    $
    
    
    
    $
    112,263Adjustments to reconcile net income to cash provided by
operating activities and other
    
    
    121,389
    
    
    
    9,139
    
    
    
    
    
    
    
    130,528Changes in assets and liabilities
    
    
    (92,038
    )
    
    
    2,689
    
    
    
    
    
    
    
    (89,349
    )Net cash provided by operating activities
    
    
    136,212
    
    
    
    17,230
    
    
    
    
    
    
    
    153,442Investing activitiesAdditions to theatre properties and equipment
    
    
    (88,256
    )
    
    
    
    
    
    
    
    
    
    
    (88,256
    )Proceeds from sale of theatre properties and equipment
    
    
    2,797
    
    
    
    1,197
    
    
    
    
    
    
    
    3,994Investment in joint venture  DCIP, net of cash distributions
    
    
    
    
    
    
    (1,510
    )
    
    
    
    
    
    
    (1,510
    )Net cash used for investing activities
    
    
    (85,459
    )
    
    
    (313
    )
    
    
    
    
    
    
    (85,772
    )Financing activitiesDividends paid to parent
    
    
    (54,600
    )
    
    
    
    
    
    
    
    
    
    
    (54,600
    )Payroll taxes paid as a result of noncash stock option
exercises and restricted stock withholdings
    
    
    (416
    )
    
    
    
    
    
    
    
    
    
    
    (416
    )Payment of debt issue costs
    
    
    (8,849
    )
    
    
    
    
    
    
    
    
    
    
    (8,849
    )Repayments of other long-term debt
    
    
    (9,144
    )
    
    
    
    
    
    
    
    
    
    
    (9,144
    )Payments on capital leases
    
    
    (5,422
    )
    
    
    
    
    
    
    
    
    
    
    (5,422
    )Other
    
    
    (387
    )
    
    
    
    
    
    
    
    
    
    
    (387
    )Net cash used for financing activities
    
    
    (78,818
    )
    
    
    
    
    
    
    
    
    
    
    (78,818
    )Effect of exchange rate changes on cash and cash equivalents
    
    
    3,758
    
    
    
    
    
    
    
    
    
    
    
    3,758Increase (decrease) in cash and cash equivalents
    
    
    (24,307
    )
    
    
    16,917
    
    
    
    
    
    
    
    (7,390
    )Cash and cash equivalents:Beginning of year
    
    
    405,247
    
    
    
    32,490
    
    
    
    
    
    
    
    437,737End of year
    
    $
    380,940
    
    
    $
    49,407
    
    
    $
    
    
    
    $
    430,347
 
 Note:
    
    Restricted Group and Unrestricted Group are defined in the Indenture for the senior notes. 45




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##### Table of Contents



Item 6.
    
    Exhibits
 *31.1
    
    Certification of Alan Stock, Chief Executive Officer, pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002.*31.2
    
    Certification of Robert Copple, Chief Financial Officer, pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002.*32.1
    
    Certification of Alan Stock, Chief Executive Officer, pursuant to 18
U.S.C. Section 1350, as added by Section 906 of the Sarbanes-Oxley
Act of 2002.*32.2
    
    Certification of Robert Copple, Chief Financial Officer, pursuant to
18 U.S.C. Section 1350, as added by Section 906 of the
Sarbanes-Oxley Act of 2002.
 
 *
    
    filed herewith. 46




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##### Table of Contents



SIGNATURES
  
 DATE: November 11, 2010
    CINEMARK USA, INC.
Registrant/s/ Alan W. StockAlan W. StockChief Executive Officer/s/ Robert CoppleRobert CoppleChief Financial Officer 47




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##### Table of Contents



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