##### Table of Contents



UNITED STATES SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 FORM 10-Q
 QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
 SECURITIES EXCHANGE ACT OF 1934
 For the quarterly period ended September 30, 2005
 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 500Plano, Texas
(Address of principal executive offices)
    
    75093
(Zip Code)
   þ o
 o þ
 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, 2005 (unaudited) and December 31, 2004
    
    
    3Condensed Consolidated Statements of Income (unaudited) for the three and nine months ended September 30, 2005 and 2004
    
    
    4Condensed Consolidated Statements of Cash Flows (unaudited) for the nine months ended September 30, 2005 and 2004
    
    
    5Notes to Condensed Consolidated Financial Statements (unaudited)
    
    
    6Item 2.
    
    Management's Discussion and Analysis of Financial Condition and Results of Operations
    
    
    24Item 3.
    
    Quantitative and Qualitative Disclosures About Market Risk
    
    
    35Item 4.
    
    Controls and Procedures
    
    
    36PART II.
    
    OTHER INFORMATIONItem 1.
    
    Legal Proceedings
    
    
    36Item 5.
    
    Other Information
    
    
    36Item 6.
    
    Exhibits
    
    
    40SIGNATURES
    
    
    
    
    43Certification of CEO Pursuant to Section 302Certification of CFO Pursuant to Section 302Certification of CEO Pursuant to Section 906Certification of CFO Pursuant to Section 906
  2




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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)
 September 30,
    
    
    December 31,2005
    
    
    2004(unaudited)ASSETSCURRENT ASSETSCash and cash equivalents
    
    $
    133,738
    
    
    $
    100,228Inventories
    
    
    4,109
    
    
    
    4,237Accounts receivable
    
    
    14,723
    
    
    
    11,303Income tax receivable
    
    
    
    
    
    
    7,037Prepaid expenses and other
    
    
    5,016
    
    
    
    3,819Total current assets
    
    
    157,586
    
    
    
    126,624THEATRE PROPERTIES AND EQUIPMENT
    
    
    1,369,952
    
    
    
    1,307,088Less accumulated depreciation and amortization
    
    
    587,816
    
    
    
    521,493Theatre properties and equipment  net
    
    
    782,136
    
    
    
    785,595OTHER ASSETSGoodwill
    
    
    44,283
    
    
    
    45,006Intangible assets  net
    
    
    10,600
    
    
    
    6,084Investments in and advances to affiliates
    
    
    2,179
    
    
    
    1,710Deferred charges and other assets  net
    
    
    42,185
    
    
    
    36,546Total other assets
    
    
    99,247
    
    
    
    89,346TOTAL ASSETS
    
    $
    1,038,969
    
    
    $
    1,001,565LIABILITIES AND SHAREHOLDERS EQUITYCURRENT LIABILITIESCurrent portion of long-term debt
    
    $
    6,841
    
    
    $
    6,539Income tax payable
    
    
    3,001
    
    
    
    Accounts payable and accrued expenses
    
    
    99,050
    
    
    
    122,324Total current liabilities
    
    
    108,892
    
    
    
    128,863LONG-TERM LIABILITIESSenior credit agreements
    
    
    261,332
    
    
    
    265,510Senior subordinated notes
    
    
    353,721
    
    
    
    354,894Deferred income taxes
    
    
    24,168
    
    
    
    23,138Deferred lease expenses
    
    
    29,135
    
    
    
    27,962Deferred gain on sale leasebacks
    
    
    3,366
    
    
    
    3,641Deferred revenues and other long-term liabilities
    
    
    7,084
    
    
    
    12,025Total long-term liabilities
    
    
    678,806
    
    
    
    687,170COMMITMENTS AND CONTINGENCIES
    
    
    
    
    
    
    MINORITY INTERESTS IN SUBSIDIARIES
    
    
    16,458
    
    
    
    16,697SHAREHOLDERS EQUITYClass A common stock, $.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 outstanding
    
    
    49,543
    
    
    
    49,543Additional paid-in-capital
    
    
    58,005
    
    
    
    51,070Retained earnings
    
    
    206,740
    
    
    
    169,577Treasury stock, 57,245 Class B shares at cost
    
    
    (24,233
    )
    
    
    (24,233
    )Accumulated other comprehensive loss
    
    
    (55,242
    )
    
    
    (77,122
    )Total shareholders equity
    
    
    234,813
    
    
    
    168,835TOTAL LIABILITIES AND SHAREHOLDERS EQUITY
    
    $
    1,038,969
    
    
    $
    1,001,565
  3
    Table of Contents   CINEMARK USA, INC. AND SUBSIDIARIES
 
 CONDENSED CONSOLIDATED STATEMENTS OF INCOME
 (in thousands, unaudited)
 Three months ended September 30,
    
    
    Nine months ended September 30,2005
    
    
    2004
    
    
    2005
    
    
    2004REVENUESAdmissions
    
    $
    161,626
    
    
    $
    164,174
    
    
    $
    470,535
    
    
    $
    486,735Concession
    
    
    80,461
    
    
    
    82,077
    
    
    
    234,564
    
    
    
    242,664Other
    
    
    14,213
    
    
    
    13,797
    
    
    
    41,909
    
    
    
    38,891Total revenues
    
    
    256,300
    
    
    
    260,048
    
    
    
    747,008
    
    
    
    768,290COSTS AND EXPENSESCost of operations:Film rentals and advertising
    
    
    86,262
    
    
    
    88,357
    
    
    
    253,511
    
    
    
    261,528Concession supplies
    
    
    13,756
    
    
    
    14,041
    
    
    
    38,151
    
    
    
    40,401Salaries and wages
    
    
    25,520
    
    
    
    26,720
    
    
    
    75,245
    
    
    
    77,392Facility lease expense
    
    
    35,190
    
    
    
    32,244
    
    
    
    101,026
    
    
    
    94,213Utilities and other
    
    
    32,022
    
    
    
    29,692
    
    
    
    90,884
    
    
    
    84,424Total cost of operations
    
    
    192,750
    
    
    
    191,054
    
    
    
    558,817
    
    
    
    557,958General and administrative expenses
    
    
    13,367
    
    
    
    12,143
    
    
    
    37,872
    
    
    
    37,134Stock option compensation and change of control
expenses related to the Recapitalization
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    31,995Depreciation and amortization
    
    
    18,966
    
    
    
    16,002
    
    
    
    56,887
    
    
    
    49,707Impairment of long-lived assets
    
    
    2,317
    
    
    
    
    
    
    
    2,543
    
    
    
    1,000Loss on sale of assets and other
    
    
    1,070
    
    
    
    3,189
    
    
    
    1,908
    
    
    
    2,636Total costs and expenses
    
    
    228,470
    
    
    
    222,388
    
    
    
    658,027
    
    
    
    680,430OPERATING INCOME
    
    
    27,830
    
    
    
    37,660
    
    
    
    88,981
    
    
    
    87,860OTHER INCOME (EXPENSE)Interest expense
    
    
    (11,014
    )
    
    
    (10,047
    )
    
    
    (32,535
    )
    
    
    (32,429
    )Amortization of debt issue costs
    
    
    (697
    )
    
    
    (702
    )
    
    
    (2,075
    )
    
    
    (1,969
    )Interest income
    
    
    2,182
    
    
    
    564
    
    
    
    4,206
    
    
    
    1,442Foreign currency exchange gain (loss)
    
    
    262
    
    
    
    (385
    )
    
    
    (698
    )
    
    
    187Loss on early retirement of debt
    
    
    
    
    
    
    (372
    )
    
    
    
    
    
    
    (5,949
    )Equity in income of affiliates
    
    
    60
    
    
    
    145
    
    
    
    182
    
    
    
    110Minority interests in income of subsidiaries
    
    
    (442
    )
    
    
    (718
    )
    
    
    (882
    )
    
    
    (4,311
    )Total other expenses
    
    
    (9,649
    )
    
    
    (11,515
    )
    
    
    (31,802
    )
    
    
    (42,919
    )INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES
    
    
    18,181
    
    
    
    26,145
    
    
    
    57,179
    
    
    
    44,941Income taxes
    
    
    7,538
    
    
    
    6,524
    
    
    
    20,016
    
    
    
    13,825INCOME FROM CONTINUING OPERATIONS
    
    
    10,643
    
    
    
    19,621
    
    
    
    37,163
    
    
    
    31,116Income from discontinued operations, net of taxes (See Note 5)
    
    
    
    
    
    
    868
    
    
    
    
    
    
    
    667NET INCOME
    
    $
    10,643
    
    
    $
    20,489
    
    
    $
    37,163
    
    
    $
    31,783
  4
    Table of Contents   CINEMARK USA, INC. AND SUBSIDIARIES
 
 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
 (in thousands, unaudited)
 Nine months ended September 30,2005
    
    
    2004OPERATING ACTIVITIESNet income
    
    $
    37,163
    
    
    $
    31,783Noncash items in net income:Depreciation
    
    
    54,802
    
    
    
    49,221Amortization of intangible and other assets
    
    
    2,085
    
    
    
    486Amortization of foreign advanced rents
    
    
    999
    
    
    
    1,324Amortized compensation  stock options
    
    
    
    
    
    
    145Amortization of debt issue costs
    
    
    2,075
    
    
    
    1,969Amortization of gain on sale leasebacks
    
    
    (274
    )
    
    
    (274
    )Amortization of debt discount and premium
    
    
    (1,173
    )
    
    
    (1,144
    )Amortization of deferred revenues
    
    
    (358
    )
    
    
    (420
    )Impairment of long-lived assets
    
    
    2,543
    
    
    
    1,000Loss on sale of assets and other
    
    
    1,908
    
    
    
    2,636Write-off unamortized debt issue costs and debt discount and
premium related to the early retirement of debt
    
    
    
    
    
    
    938Write-off of unearned compensation related to the Recapitalization
    
    
    
    
    
    
    1,595Deferred lease expenses
    
    
    1,173
    
    
    
    222Deferred income tax expenses
    
    
    1,030
    
    
    
    438Equity in income of affiliates
    
    
    (182
    )
    
    
    (110
    )Minority interests in income of subsidiaries
    
    
    882
    
    
    
    4,311Other noncash items
    
    
    
    
    
    
    743Changes in assets and liabilities:Inventories
    
    
    128
    
    
    
    158Accounts receivable
    
    
    (3,420
    )
    
    
    435Prepaid expenses and other
    
    
    (1,197
    )
    
    
    1,147Other assets
    
    
    (15,056
    )
    
    
    (6,700
    )Advances with affiliates
    
    
    6,758
    
    
    
    (395
    )Accounts payable and accrued expenses
    
    
    (19,609
    )
    
    
    (36,914
    )Other long-term liabilities
    
    
    529
    
    
    
    597Income tax receivable/payable
    
    
    10,038
    
    
    
    (7,151
    )Net cash provided by operating activities
    
    
    80,844
    
    
    
    46,040INVESTING ACTIVITIESAdditions to theatre properties and equipment
    
    
    (47,676
    )
    
    
    (59,233
    )Proceeds from sale of theatre properties and equipment
    
    
    1,266
    
    
    
    3,419Proceeds from sale of equity investment
    
    
    
    
    
    
    1,250Purchase of shares in National CineMedia
    
    
    (7,329
    )
    
    
    Purchase of minority partner shares in Cinemark Brasil
    
    
    
    
    
    
    (44,958
    )Purchase of minority partner shares in Cinemark Mexico
    
    
    
    
    
    
    (5,379
    )Dividends/capital returned from affiliates
    
    
    284
    
    
    
    203Net cash used for investing activities
    
    
    (53,455
    )
    
    
    (104,698
    )FINANCING ACTIVITIESCapital contribution from parent
    
    
    6,935
    
    
    
    29,500Retirement of senior subordinated notes
    
    
    
    
    
    
    (122,750
    )Proceeds from long-term debt
    
    
    307
    
    
    
    284,589Repayments of long-term debt
    
    
    (4,831
    )
    
    
    (175,850
    )Debt issue costs
    
    
    (202
    )
    
    
    (7,909
    )Increase in deferred revenues
    
    
    671
    
    
    
    Increase in minority investment in subsidiaries
    
    
    133
    
    
    
    758Decrease in minority investment in subsidiaries
    
    
    (1,253
    )
    
    
    (1,917
    )Net cash provided by financing activities
    
    
    1,760
    
    
    
    6,421Effect of exchange rate changes on cash and cash equivalents
    
    
    4,361
    
    
    
    (217
    )INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
    
    
    33,510
    
    
    
    (52,454
    )CASH AND CASH EQUIVALENTS:Beginning of period
    
    
    100,228
    
    
    
    107,319End of period
    
    $
    133,738
    
    
    $
    54,865
  5
    Table of Contents  1. The Company and Basis of Presentation
    2. Recapitalization of Cinemark, Inc. and Refinancing of Certain Long-Term Debt
 Recapitalization of Cinemark, Inc.
 3 4 3 4 3 4 3 4 3 4
 6
    Table of Contents  Refinancing of Certain Long-Term Debt 1 2 1 2
  1 2
   7
    Table of Contents  3. Acquisitions
  Net favorable leases
    
    $
    730Vendor contracts
    
    
    2,231Goodwill
    
    
    23,962Reduction of minority interest liability
    
    
    18,806$
    45,729
   Vendor contract
    
    $
    439Net favorable leases
    
    
    480Tradename
    
    
    1,179Goodwill
    
    
    1,715Reduction of minority interest liability
    
    
    1,566$
    5,379
  8
    Table of Contents  4. Investment in National CineMedia
    5. Discontinued Operations
 Accounting for Impairment or Disposal of Long-Lived Assets.
   9
    Table of Contents  Three Months Ended
    
    Nine months endedSeptember 30, 2004
    
    September 30, 2004REVENUESAdmissions
    
    $
    1,210
    
    
    $
    4,125Concession
    
    
    1,774
    
    
    
    4,318Other
    
    
    272
    
    
    
    872Total revenues
    
    
    3,256
    
    
    
    9,315COSTS AND EXPENSESCost of operations:Film rentals and advertising
    
    
    534
    
    
    
    1,834Concession supplies
    
    
    303
    
    
    
    706Salaries and wages
    
    
    603
    
    
    
    1,816Facility lease expense
    
    
    383
    
    
    
    1,396Utilities and other
    
    
    525
    
    
    
    1,708Total cost of operations
    
    
    2,348
    
    
    
    7,460General and administrative expenses
    
    
    
    
    
    
    498Depreciation and amortization
    
    
    52
    
    
    
    238(Gain) loss on sale of assets and other
    
    
    (103
    )
    
    
    463Total costs and expenses
    
    
    2,297
    
    
    
    8,659OPERATING INCOME
    
    
    959
    
    
    
    656Minority interests in income of subsidiaries
    
    
    (77
    )
    
    
    (41
    )INCOME BEFORE INCOME TAXES
    
    
    882
    
    
    
    615Income tax expense (benefit)
    
    
    14
    
    
    
    (52
    )Income from discontinued operations
    
    $
    868
    
    
    $
    667
 6. Stock Option Accounting
     10
    Table of Contents  Accounting for Stock-Based Compensation Accounting for
Stock-Based Compensation Transition and Disclosure
 Three Months Ended
    
    Nine months endedSeptember 30,
    
    September 30,2005
    
    2004
    
    2005
    
    2004Net income as reported
    
    $
    10,643
    
    
    $
    20,489
    
    
    $
    37,163
    
    
    $
    31,783Compensation expense
included in reported
net income, net of
tax
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    88Compensation expense
under fair value
method, net of tax
    
    
    (741
    )
    
    
    (1,212
    )
    
    
    (2,223
    )
    
    
    (1,374
    )Pro-forma net income
    
    $
    9,902
    
    
    $
    19,277
    
    
    $
    34,940
    
    
    $
    30,497
  7. Goodwill and Other Intangible Assets
  ForeignPurchase Price
    
    
    
    
    
    CurrencyBalance at
    
    Allocation
    
    Impairment
    
    Translation
    
    Balance atDecember 31, 2004
    
    Adjustment
    
    Charges
    
    Adjustment
    
    September 30, 2005United States
    
    $
    4,932
    
    
    $
    
    
    
    $
    (667
    )
    
    $
    
    
    
    $
    4,265Brazil
    
    
    30,069
    
    
    
    (2,961
    )
    
    
    
    
    
    
    4,862
    
    
    
    31,970Mexico
    
    
    3,884
    
    
    
    (2,098
    )
    
    
    
    
    
    
    26
    
    
    
    1,812Chile
    
    
    3,206
    
    
    
    
    
    
    
    
    
    
    
    157
    
    
    
    3,363Peru
    
    
    2,679
    
    
    
    
    
    
    
    
    
    
    
    (50
    )
    
    
    2,629Argentina
    
    
    236
    
    
    
    
    
    
    
    
    
    
    
    8
    
    
    
    244Total
    
    $
    45,006
    
    
    $
    (5,059
    )
    
    $
    (667
    )
    
    $
    5,003
    
    
    $
    44,283
  11
    Table of Contents  September 30,
    
    December 31,2005
    
    2004Capitalized licensing fees
    
    $
    8,250
    
    
    $
    7,750Vendor contracts
    
    
    3,285
    
    
    
    Net favorable leases
    
    
    1,434
    
    
    
    Other intangible assets
    
    
    450
    
    
    
    438Less: Accumulated amortization
    
    
    (4,081
    )
    
    
    (2,120
    )Amortized intangible assets
    
    
    9,338
    
    
    
    6,068Tradename
    
    
    1,246
    
    
    
    Other unamortized intangible assets
    
    
    16
    
    
    
    16Total
    
    $
    10,600
    
    
    $
    6,084
  For the three months ended December 31, 2005
    
    $
    528For the twelve months ended December 31, 2006
    
    
    1,656For the twelve months ended December 31, 2007
    
    
    1,198For the twelve months ended December 31, 2008
    
    
    946For the twelve months ended December 31, 2009
    
    
    719Thereafter
    
    
    4,291Total
    
    $
    9,338
 8. Impairment of Long-Lived Assets
 Accounting for the Impairment or Disposal of Long-Lived
Assets
  12
    Table of Contents  9. Foreign Currency Translation
       10. Comprehensive Income
 Reporting Comprehensive Income
 Three Months Ended
    
    Nine months endedSeptember 30,
    
    September 30,2005
    
    2004
    
    2005
    
    2004Net income
    
    $
    10,643
    
    
    $
    20,489
    
    
    $
    37,163
    
    
    $
    31,783Foreign currency translation adjustment
    
    
    6,655
    
    
    
    6,266
    
    
    
    21,880
    
    
    
    1,152Comprehensive income
    
    $
    17,298
    
    
    $
    26,755
    
    
    $
    59,043
    
    
    $
    32,935
 13
    Table of Contents  11. Supplemental Cash Flow Information
  Nine months endedSeptember 30,2005
    
    2004Cash paid for interest
    
    $
    41,172
    
    
    $
    43,889Net cash paid (refunds received) for income taxes
    
    $
    (1,228
    )
    
    $
    16,274Noncash activities:Change in construction lease obligations
related to construction of theatres
    
    $
    (5,783
    )
    
    $
    Changes in accounts payable and accrued
expenses for the acquisition of theatre
properties and equipment
    
    $
    1,607
    
    
    $
    2,846
 12. Financial Information About Geographic Areas
  Nine months endedSeptember 30,Revenues
    
    2005
    
    2004U.S. and Canada (1)
    
    $
    553,631
    
    
    $
    582,284Brazil
    
    
    81,614
    
    
    
    68,118Mexico
    
    
    54,939
    
    
    
    59,930Other foreign countries (1)
    
    
    58,028
    
    
    
    59,185Eliminations
    
    
    (1,204
    )
    
    
    (1,227
    )Total
    
    $
    747,008
    
    
    $
    768,290
 Theatre Properties and
    
    September 30,
    
    December 31,Equipment-net
    
    2005
    
    2004U.S. and Canada
    
    $
    621,957
    
    
    $
    622,578Brazil
    
    
    56,369
    
    
    
    51,982Mexico
    
    
    54,016
    
    
    
    61,043Other foreign countries
    
    
    49,794
    
    
    
    49,992Total
    
    $
    782,136
    
    
    $
    785,595
 
 (1)
    
    Revenues for the nine months ended September 30, 2004 do not include results of the
two United Kingdom theatres or the eleven Interstate theatres that were sold during
2004, as the results of operations for these theatres are included as discontinued
operations for all periods presented. 14
    Table of Contents  13. New Accounting Pronouncements
 Exchanges of Non-monetary Assets-Amendment of APB Opinion No. 29
 Share-Based Payment
 Accounting and Disclosure Guidance for the Foreign
Earnings Repatriation Provision within the American Jobs Creation Act of 2004 Accounting
for Income Taxes
 15
    Table of Contents  14. Related Party Transactions
     15. Litigation
 DOJ Litigation United States v. Cinemark USA, Inc.
 16
    Table of Contents  Mission, Texas Litigation rd
  16. Condensed Consolidating Financial Statements of Subsidiary Guarantors
       17
    Table of Contents  CINEMARK USA, INC. AND SUBSIDIARIES
SUBSIDIARY GUARANTORS
CONDENSED CONSOLIDATING BALANCE SHEET INFORMATION
SEPTEMBER 30, 2004
 Parent
    
    Subsidiary
    
    SubsidiaryCompany
    
    Guarantors
    
    Non-Guarantors
    
    Eliminations
    
    ConsolidatedASSETSCURRENT ASSETSCash and cash equivalents
    
    $
    31,875
    
    
    $
    27,052
    
    
    $
    74,811
    
    
    $
    
    
    
    $
    133,738Inventories
    
    
    1,733
    
    
    
    1,134
    
    
    
    1,242
    
    
    
    
    
    
    
    4,109Accounts receivable
    
    
    15,062
    
    
    
    20,344
    
    
    
    6,922
    
    
    
    (27,605
    )
    
    
    14,723Income tax receivable
    
    
    3,436
    
    
    
    152
    
    
    
    7,748
    
    
    
    (11,336
    )
    
    
    Prepaid expenses and other
    
    
    7,106
    
    
    
    665
    
    
    
    917
    
    
    
    (3,672
    )
    
    
    5,016Total current assets
    
    
    59,212
    
    
    
    49,347
    
    
    
    91,640
    
    
    
    (42,613
    )
    
    
    157,586THEATRE PROPERTIES AND EQUIPMENT  net
    
    
    284,674
    
    
    
    316,952
    
    
    
    180,510
    
    
    
    
    
    
    
    782,136OTHER ASSETSGoodwill
    
    
    6,818
    
    
    
    2,452
    
    
    
    34,904
    
    
    
    109
    
    
    
    44,283Investments in and advances to affiliates
    
    
    635,341
    
    
    
    567,928
    
    
    
    8,196
    
    
    
    (1,209,286
    )
    
    
    2,179Intangible assets, deferred charges and other assets
 net
    
    
    23,355
    
    
    
    5,167
    
    
    
    83,397
    
    
    
    (59,134
    )
    
    
    52,785Total other assets
    
    
    665,514
    
    
    
    575,547
    
    
    
    126,497
    
    
    
    (1,268,311
    )
    
    
    99,247TOTAL ASSETS
    
    $
    1,009,400
    
    
    $
    941,846
    
    
    $
    398,647
    
    
    $
    (1,310,924
    )
    
    $
    1,038,969LIABILITIES AND SHAREHOLDERS EQUITYCURRENT LIABILITIESCurrent portion of long-term debt
    
    $
    2,656
    
    
    $
    
    
    
    $
    4,185
    
    
    $
    
    
    
    $
    6,841Income tax payable
    
    
    7,035
    
    
    
    
    
    
    
    7,302
    
    
    
    (11,336
    )
    
    
    3,001Accounts payable and accrued expenses
    
    
    55,788
    
    
    
    32,195
    
    
    
    40,989
    
    
    
    (29,922
    )
    
    
    99,050Total current liabilities
    
    
    65,479
    
    
    
    32,195
    
    
    
    52,476
    
    
    
    (41,258
    )
    
    
    108,892LONG-TERM LIABILITIESLong-term debt, less current portion
    
    
    635,718
    
    
    
    44,018
    
    
    
    71,704
    
    
    
    (136,387
    )
    
    
    615,053Deferred income taxes
    
    
    15,064
    
    
    
    11,882
    
    
    
    (2,778
    )
    
    
    
    
    
    
    24,168Other long-term liabilities and deferrals
    
    
    31,368
    
    
    
    73,829
    
    
    
    8,050
    
    
    
    (73,662
    )
    
    
    39,585Total long-term liabilities
    
    
    682,150
    
    
    
    129,729
    
    
    
    76,976
    
    
    
    (210,049
    )
    
    
    678,806COMMITMENTS AND CONTINGENCIES
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    MINORITY INTERESTS IN SUBSIDIARIES
    
    
    
    
    
    
    296
    
    
    
    16,162
    
    
    
    
    
    
    
    16,458SHAREHOLDERS EQUITYCommon stock
    
    
    49,543
    
    
    
    19
    
    
    
    167,802
    
    
    
    (167,821
    )
    
    
    49,543Other shareholders equity
    
    
    212,228
    
    
    
    779,607
    
    
    
    85,231
    
    
    
    (891,796
    )
    
    
    185,270Total shareholders equity
    
    
    261,771
    
    
    
    779,626
    
    
    
    253,033
    
    
    
    (1,059,617
    )
    
    
    234,813TOTAL LIABILITIES AND SHAREHOLDERS EQUITY
    
    $
    1,009,400
    
    
    $
    941,846
    
    
    $
    398,647
    
    
    $
    (1,310,924
    )
    
    $
    1,038,969
 18
    Table of Contents  CINEMARK USA, INC. AND SUBSIDIARIES
SUBSIDIARY GUARANTORS
CONDENSED CONSOLIDATING STATEMENT OF INCOME INFORMATION
NINE MONTHS ENDED SEPTEMBER 30, 2005
 Parent
    
    Subsidiary
    
    SubsidiaryCompany
    
    Guarantors
    
    Non-Guarantors
    
    Eliminations
    
    ConsolidatedREVENUES
    
    $
    336,302
    
    
    $
    256,016
    
    
    $
    206,362
    
    
    $
    (51,672
    )
    
    $
    747,008COSTS AND EXPENSESCost of operations
    
    
    293,563
    
    
    
    162,431
    
    
    
    154,495
    
    
    
    (51,672
    )
    
    
    558,817General and administrative expenses
    
    
    3,370
    
    
    
    22,726
    
    
    
    11,776
    
    
    
    
    
    
    
    37,872Depreciation and amortization
    
    
    17,307
    
    
    
    18,166
    
    
    
    21,414
    
    
    
    
    
    
    
    56,887Impairment of long-lived assets
    
    
    898
    
    
    
    904
    
    
    
    741
    
    
    
    
    
    
    
    2,543Loss on sale of assets and other
    
    
    691
    
    
    
    864
    
    
    
    353
    
    
    
    
    
    
    
    1,908Total costs and expenses
    
    
    315,829
    
    
    
    205,091
    
    
    
    188,779
    
    
    
    (51,672
    )
    
    
    658,027OPERATING INCOME
    
    
    20,473
    
    
    
    50,925
    
    
    
    17,583
    
    
    
    
    
    
    
    88,981OTHER INCOME (EXPENSE)Interest expense
    
    
    (32,688
    )
    
    
    (2,634
    )
    
    
    (4,866
    )
    
    
    7,653
    
    
    
    (32,535
    )Amortization of debt issue costs
    
    
    (2,060
    )
    
    
    
    
    
    
    (15
    )
    
    
    
    
    
    
    (2,075
    )Interest income
    
    
    3,465
    
    
    
    5,103
    
    
    
    3,292
    
    
    
    (7,654
    )
    
    
    4,206Foreign currency exchange loss
    
    
    
    
    
    
    
    
    
    
    (698
    )
    
    
    
    
    
    
    (698
    )Equity in income of affiliates
    
    
    57,824
    
    
    
    13,215
    
    
    
    82
    
    
    
    (70,939
    )
    
    
    182Minority interests in income of subsidiaries
    
    
    
    
    
    
    (163
    )
    
    
    (719
    )
    
    
    
    
    
    
    (882
    )Total other income (expense)
    
    
    26,541
    
    
    
    15,521
    
    
    
    (2,924
    )
    
    
    (70,940
    )
    
    
    (31,802
    )INCOME BEFORE INCOME TAXES
    
    
    47,014
    
    
    
    66,446
    
    
    
    14,659
    
    
    
    (70,940
    )
    
    
    57,179Income taxes
    
    
    8,362
    
    
    
    9,482
    
    
    
    2,172
    
    
    
    
    
    
    
    20,016NET INCOME
    
    $
    38,652
    
    
    $
    56,964
    
    
    $
    12,487
    
    
    $
    (70,940
    )
    
    $
    37,163
 19
    Table of Contents  CINEMARK USA, INC. AND SUBSIDIARIES
SUBSIDIARY GUARANTORS
CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS INFORMATION
NINE MONTHS ENDED SEPTEMBER 30, 2005
 Parent
    
    Subsidiary
    
    SubsidiaryCompany
    
    Guarantors
    
    Non-Guarantors
    
    Eliminations
    
    ConsolidatedOPERATING ACTIVITIESNet income
    
    $
    38,652
    
    
    $
    56,964
    
    
    $
    12,487
    
    
    $
    (70,940
    )
    
    $
    37,163Noncash items in net income:Depreciation and amortization
    
    
    17,562
    
    
    
    18,166
    
    
    
    22,428
    
    
    
    
    
    
    
    58,156Impairment of long-lived assets
    
    
    898
    
    
    
    904
    
    
    
    741
    
    
    
    
    
    
    
    2,543Loss on sale of assets and other
    
    
    691
    
    
    
    864
    
    
    
    353
    
    
    
    
    
    
    
    1,908Deferred lease expenses
    
    
    873
    
    
    
    (11
    )
    
    
    311
    
    
    
    
    
    
    
    1,173Deferred income tax expenses
    
    
    (8,280
    )
    
    
    9,277
    
    
    
    33
    
    
    
    
    
    
    
    1,030Equity in income of affiliates
    
    
    (57,824
    )
    
    
    (13,215
    )
    
    
    (82
    )
    
    
    70,939
    
    
    
    (182
    )Minority interests in income of subsidiaries
    
    
    
    
    
    
    163
    
    
    
    719
    
    
    
    
    
    
    
    882Changes in assets and liabilities
    
    
    (1,622
    )
    
    
    (9,209
    )
    
    
    (20,604
    )
    
    
    9,606
    
    
    
    (21,829
    )Net cash provided by (used for) operating activities
    
    
    (9,050
    )
    
    
    63,903
    
    
    
    16,386
    
    
    
    9,605
    
    
    
    80,844INVESTING ACTIVITIESAdditions to theatre properties and equipment
    
    
    (10,752
    )
    
    
    (23,232
    )
    
    
    (13,692
    )
    
    
    
    
    
    
    (47,676
    )Proceeds from sale of theatre properties and equipment
    
    
    679
    
    
    
    80
    
    
    
    507
    
    
    
    
    
    
    
    1,266Purchase of shares in National CineMedia
    
    
    
    
    
    
    
    
    
    
    (7,329
    )
    
    
    
    
    
    
    (7,329
    )Net transactions with affiliates
    
    
    21,976
    
    
    
    (31,053
    )
    
    
    21,600
    
    
    
    (12,239
    )
    
    
    284Net cash provided by (used for) investing activities
    
    
    11,903
    
    
    
    (54,205
    )
    
    
    1,086
    
    
    
    (12,239
    )
    
    
    (53,455
    )FINANCING ACTIVITIESCapital contribution from parent
    
    
    6,935
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    6,935Proceeds from long-term debt
    
    
    
    
    
    
    7
    
    
    
    300
    
    
    
    
    
    
    
    307Repayments of long-term debt
    
    
    (1,950
    )
    
    
    (56
    )
    
    
    (2,825
    )
    
    
    
    
    
    
    (4,831
    )Debt issue costs
    
    
    (202
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (202
    )Change in intercompany notes
    
    
    
    
    
    
    
    
    
    
    (2,634
    )
    
    
    2,634
    
    
    
    Increase in deferred revenue
    
    
    671
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    671Increase in minority investment in subsidiaries
    
    
    
    
    
    
    
    
    
    
    133
    
    
    
    
    
    
    
    133Decrease in minority investment in subsidiaries
    
    
    
    
    
    
    (150
    )
    
    
    (1,103
    )
    
    
    
    
    
    
    (1,253
    )Net cash provided by (used for) financing activities
    
    
    5,454
    
    
    
    (199
    )
    
    
    (6,129
    )
    
    
    2,634
    
    
    
    1,760Effect of exchange rate changes on cash and cash equivalents
    
    
    
    
    
    
    
    
    
    
    4,361
    
    
    
    
    
    
    
    4,361INCREASE IN CASH AND CASH EQUIVALENTS
    
    
    8,307
    
    
    
    9,499
    
    
    
    15,704
    
    
    
    
    
    
    
    33,510CASH AND CASH EQUIVALENTS:Beginning of period
    
    
    23,568
    
    
    
    17,553
    
    
    
    59,107
    
    
    
    
    
    
    
    100,228End of period
    
    $
    31,875
    
    
    $
    27,052
    
    
    $
    74,811
    
    
    $
    
    
    
    $
    133,738
 20
    Table of Contents  CINEMARK USA, INC. AND SUBSIDIARIES
SUBSIDIARY GUARANTORS
CONDENSED CONSOLIDATING BALANCE SHEET INFORMATION
DECEMBER 31, 2004
 Parent
    
    Subsidiary
    
    SubsidiaryCompany
    
    Guarantors
    
    Non-Guarantors
    
    Eliminations
    
    ConsolidatedASSETSCURRENT ASSETSCash and cash equivalents
    
    $
    23,568
    
    
    $
    17,553
    
    
    $
    59,107
    
    
    $
    
    
    
    $
    100,228Inventories
    
    
    1,822
    
    
    
    1,204
    
    
    
    1,211
    
    
    
    
    
    
    
    4,237Accounts receivable
    
    
    13,769
    
    
    
    22,743
    
    
    
    4,528
    
    
    
    (29,737
    )
    
    
    11,303Income tax receivable
    
    
    12,002
    
    
    
    168
    
    
    
    8,388
    
    
    
    (13,521
    )
    
    
    7,037Prepaid expenses and other
    
    
    6,789
    
    
    
    577
    
    
    
    517
    
    
    
    (4,064
    )
    
    
    3,819Total current assets
    
    
    57,950
    
    
    
    42,245
    
    
    
    73,751
    
    
    
    (47,322
    )
    
    
    126,624THEATRE PROPERTIES AND EQUIPMENT  net
    
    
    291,847
    
    
    
    309,721
    
    
    
    184,027
    
    
    
    
    
    
    
    785,595OTHER ASSETSGoodwill
    
    
    7,485
    
    
    
    4,225
    
    
    
    33,246
    
    
    
    50
    
    
    
    45,006Investments in and advances to affiliates
    
    
    560,301
    
    
    
    421,765
    
    
    
    808
    
    
    
    (981,164
    )
    
    
    1,710Intangible assets, deferred charges and other assets  net
    
    
    25,312
    
    
    
    1,815
    
    
    
    72,566
    
    
    
    (57,063
    )
    
    
    42,630Total other assets
    
    
    593,098
    
    
    
    427,805
    
    
    
    106,620
    
    
    
    (1,038,177
    )
    
    
    89,346TOTAL ASSETS
    
    $
    942,895
    
    
    $
    779,771
    
    
    $
    364,398
    
    
    $
    (1,085,499
    )
    
    $
    1,001,565LIABILITIES AND SHAREHOLDERS EQUITYCURRENT LIABILITIESCurrent portion of long-term debt
    
    $
    2,655
    
    
    $
    
    
    
    $
    3,884
    
    
    $
    
    
    
    $
    6,539Income tax payable
    
    
    5,211
    
    
    
    
    
    
    
    8,310
    
    
    
    (13,521
    )
    
    
    Accounts payable and accrued expenses
    
    
    72,867
    
    
    
    39,638
    
    
    
    39,045
    
    
    
    (29,226
    )
    
    
    122,324Total current liabilities
    
    
    80,733
    
    
    
    39,638
    
    
    
    51,239
    
    
    
    (42,747
    )
    
    
    128,863LONG-TERM LIABILITIESLong-term debt, less current portion
    
    
    610,439
    
    
    
    44,018
    
    
    
    66,721
    
    
    
    (100,774
    )
    
    
    620,404Deferred income taxes
    
    
    23,344
    
    
    
    2,605
    
    
    
    (2,811
    )
    
    
    
    
    
    
    23,138Other long-term liabilities and deferrals
    
    
    29,804
    
    
    
    74,236
    
    
    
    13,642
    
    
    
    (74,054
    )
    
    
    43,628Total long-term liabilities
    
    
    663,587
    
    
    
    120,859
    
    
    
    77,552
    
    
    
    (174,828
    )
    
    
    687,170COMMITMENTS AND CONTINGENCIES
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    MINORITY INTERESTS IN SUBSIDIARIES
    
    
    
    
    
    
    283
    
    
    
    16,414
    
    
    
    
    
    
    
    16,697SHAREHOLDERS EQUITYCommon stock
    
    
    49,543
    
    
    
    19
    
    
    
    96,813
    
    
    
    (96,832
    )
    
    
    49,543Other shareholders equity
    
    
    149,032
    
    
    
    618,972
    
    
    
    122,380
    
    
    
    (771,092
    )
    
    
    119,292Total shareholders equity
    
    
    198,575
    
    
    
    618,991
    
    
    
    219,193
    
    
    
    (867,924
    )
    
    
    168,835TOTAL LIABILITIES AND SHAREHOLDERS EQUITY
    
    $
    942,895
    
    
    $
    779,771
    
    
    $
    364,398
    
    
    $
    (1,085,499
    )
    
    $
    1,001,565
 21
    Table of Contents  SUBSIDIARY GUARANTORS
CONDENSED CONSOLIDATING STATEMENT OF INCOME INFORMATION  NINE MONTHS ENDED SEPTEMBER 30, 2004
 Parent
    
    Subsidiary
    
    SubsidiaryCompany
    
    Guarantors
    
    Non-Guarantors
    
    Eliminations
    
    ConsolidatedREVENUES
    
    $
    356,463
    
    
    $
    270,500
    
    
    $
    199,724
    
    
    $
    (58,397
    )
    
    $
    768,290COSTS AND EXPENSESCost of operations
    
    
    307,843
    
    
    
    164,453
    
    
    
    144,439
    
    
    
    (58,777
    )
    
    
    557,958General and administrative expenses
    
    
    7,745
    
    
    
    50,257
    
    
    
    10,747
    
    
    
    380
    
    
    
    69,129Depreciation and amortization
    
    
    16,014
    
    
    
    17,075
    
    
    
    16,618
    
    
    
    
    
    
    
    49,707Impairment of long-lived assets
    
    
    
    
    
    
    1,000
    
    
    
    
    
    
    
    
    
    
    
    1,000Loss on sale of assets and other
    
    
    1,741
    
    
    
    778
    
    
    
    117
    
    
    
    
    
    
    
    2,636Total costs and expenses
    
    
    333,343
    
    
    
    233,563
    
    
    
    171,921
    
    
    
    (58,397
    )
    
    
    680,430OPERATING INCOME
    
    
    23,120
    
    
    
    36,937
    
    
    
    27,803
    
    
    
    
    
    
    
    87,860OTHER INCOME (EXPENSE)Interest expense
    
    
    (32,669
    )
    
    
    (2,621
    )
    
    
    (4,892
    )
    
    
    7,753
    
    
    
    (32,429
    )Amortization of debt issue costs
    
    
    (1,927
    )
    
    
    
    
    
    
    (42
    )
    
    
    
    
    
    
    (1,969
    )Interest income
    
    
    3,062
    
    
    
    4,883
    
    
    
    1,250
    
    
    
    (7,753
    )
    
    
    1,442Foreign currency exchange gain
    
    
    
    
    
    
    
    
    
    
    187
    
    
    
    
    
    
    
    187Loss on early retirement of debt
    
    
    (5,949
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (5,949
    )Equity in income of affiliates
    
    
    46,464
    
    
    
    15,965
    
    
    
    136
    
    
    
    (62,455
    )
    
    
    110Minority interests in income of subsidiaries
    
    
    
    
    
    
    (549
    )
    
    
    (3,762
    )
    
    
    
    
    
    
    (4,311
    )Total other income (expense)
    
    
    8,981
    
    
    
    17,678
    
    
    
    (7,123
    )
    
    
    (62,455
    )
    
    
    (42,919
    )INCOME FROM CONTINUING
OPERATIONS BEFORE INCOME TAXES (BENEFIT)
    
    
    32,101
    
    
    
    54,615
    
    
    
    20,680
    
    
    
    (62,455
    )
    
    
    44,941Income taxes (benefit)
    
    
    (175
    )
    
    
    9,790
    
    
    
    4,210
    
    
    
    
    
    
    
    13,825INCOME FROM CONTINUING OPERATIONS
    
    
    32,276
    
    
    
    44,825
    
    
    
    16,470
    
    
    
    (62,455
    )
    
    
    31,116Income from discontinued operations, net of taxes
    
    
    
    
    
    
    
    
    
    
    667
    
    
    
    
    
    
    
    667NET INCOME
    
    $
    32,276
    
    
    $
    44,825
    
    
    $
    17,137
    
    
    $
    (62,455
    )
    
    $
    31,783
 22
    Table of Contents  SUBSIDIARY GUARANTORS
CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS INFORMATION
NINE MONTHS ENDED SEPTEMBER 30, 2004
 Parent
    
    Subsidiary
    
    SubsidiaryCompany
    
    Guarantors
    
    Non-Guarantors
    
    Eliminations
    
    ConsolidatedOPERATING ACTIVITIESNet income
    
    $
    32,276
    
    
    $
    44,825
    
    
    $
    17,137
    
    
    $
    (62,455
    )
    
    $
    31,783Noncash items in net income:Depreciation and amortization
    
    
    16,248
    
    
    
    17,075
    
    
    
    17,984
    
    
    
    
    
    
    
    51,307Impairment of long-lived assets
    
    
    
    
    
    
    1,000
    
    
    
    
    
    
    
    
    
    
    
    1,000Loss on sale of assets and other
    
    
    1,741
    
    
    
    778
    
    
    
    117
    
    
    
    
    
    
    
    2,636Write-off unamortized debt issue costs and debt premium/discount
    
    
    938
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    938Write-off of unearned compensation related to Recapitalization
    
    
    1,595
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,595Deferred lease expenses
    
    
    1,004
    
    
    
    (9
    )
    
    
    (773
    )
    
    
    
    
    
    
    222Deferred income tax expenses
    
    
    (9,478
    )
    
    
    9,720
    
    
    
    196
    
    
    
    
    
    
    
    438Equity in income of affiliates
    
    
    (46,464
    )
    
    
    (15,965
    )
    
    
    (136
    )
    
    
    62,455
    
    
    
    (110
    )Minority interests in income of subsidiaries
    
    
    
    
    
    
    549
    
    
    
    3,762
    
    
    
    
    
    
    
    4,311Other noncash items
    
    
    
    
    
    
    
    
    
    
    743
    
    
    
    
    
    
    
    743Changes in assets and liabilities
    
    
    (63,081
    )
    
    
    16,076
    
    
    
    (588
    )
    
    
    (1,230
    )
    
    
    (48,823
    )Net cash provided by (used for) operating activities
    
    
    (65,221
    )
    
    
    74,049
    
    
    
    38,442
    
    
    
    (1,230
    )
    
    
    46,040INVESTING ACTIVITIESAdditions to theatre properties and equipment
    
    
    (8,770
    )
    
    
    (31,728
    )
    
    
    (18,735
    )
    
    
    
    
    
    
    (59,233
    )Proceeds from sale of theatre properties and equipment
    
    
    
    
    
    
    
    
    
    
    3,419
    
    
    
    
    
    
    
    3,419Proceeds from sale of equity investment
    
    
    1,250
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,250Purchase of minority partner shares in Cinemark Brasil
    
    
    
    
    
    
    
    
    
    
    (44,958
    )
    
    
    
    
    
    
    (44,958
    )Purchase of minority partner shares in Cinemark Mexico
    
    
    
    
    
    
    (5,379
    )
    
    
    
    
    
    
    
    
    
    
    (5,379
    )Net transactions with affiliates
    
    
    14,455
    
    
    
    (45,941
    )
    
    
    34,897
    
    
    
    (3,208
    )
    
    
    203Net cash provided by (used for) investing activities
    
    
    6,935
    
    
    
    (83,048
    )
    
    
    (25,377
    )
    
    
    (3,208
    )
    
    
    (104,698
    )FINANCING ACTIVITIESCapital contribution from parent
    
    
    29,500
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    29,500Retirement of senior subordinated notes
    
    
    (122,750
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (122,750
    )Increase in long-term debt
    
    
    282,510
    
    
    
    
    
    
    
    2,079
    
    
    
    
    
    
    
    284,589Decrease in long-term debt
    
    
    (170,531
    )
    
    
    
    
    
    
    (5,319
    )
    
    
    
    
    
    
    (175,850
    )Increase in debt issue cost
    
    
    (7,859
    )
    
    
    
    
    
    
    (50
    )
    
    
    
    
    
    
    (7,909
    )Change in intercompany notes
    
    
    
    
    
    
    
    
    
    
    (4,438
    )
    
    
    4,438
    
    
    
    Increase in minority investment in subsidiaries
    
    
    
    
    
    
    
    
    
    
    758
    
    
    
    
    
    
    
    758Decrease in minority investment in subsidiaries
    
    
    
    
    
    
    (188
    )
    
    
    (1,729
    )
    
    
    
    
    
    
    (1,917
    )Net cash provided by (used for) financing activities
    
    
    10,870
    
    
    
    (188
    )
    
    
    (8,699
    )
    
    
    4,438
    
    
    
    6,421EFFECT OF EXCHANGE RATE CHANGES
ON CASH AND CASH EQUIVALENTS
    
    
    
    
    
    
    
    
    
    
    (217
    )
    
    
    
    
    
    
    (217
    )INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
    
    
    (47,416
    )
    
    
    (9,187
    )
    
    
    4,149
    
    
    
    
    
    
    
    (52,454
    )CASH AND CASH EQUIVALENTS:Beginning of period
    
    
    46,919
    
    
    
    9,523
    
    
    
    50,877
    
    
    
    
    
    
    
    107,319End of period
    
    $
    (497
    )
    
    $
    336
    
    
    $
    55,026
    
    
    $
    
    
    
    $
    54,865
 23
    Table of Contents  Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
  Star Wars: Episode III  Revenge of the Sith Madagascar War of the Worlds King Kong Harry Potter and
the Goblet of Fire, The Chronicles of Narnia: The Lion, the Witch and the Wardrobe
      Critical Accounting Policies
  Revenue and Expense Recognition
  24
    Table of Contents  Impairment of Long-Lived Assets
  
    
    actual theatre level cash flows;
    
    future years budgeted theatre level cash flows;
    
    theatre property and equipment carrying values;
    
    goodwill carrying values;
    
    the age of a recently built theatre;
    
    competitive theatres in the marketplace;
    
    the sharing of a market with our other theatres;
    
    changes in foreign currency exchange rates;
    
    the impact of recent ticket price changes;
    
    available lease renewal options; and
    
    other factors considered relevant in our assessment of impairment of individual theatre assets.
  25
    Table of Contents  Goodwill
 ,
 Acquisitions
  Income Taxes
  26
    Table of Contents  Results of Operations
  % of Revenues
    
    % of RevenuesThree Months Ended
    
    Nine months endedSeptember 30,
    
    September 30,2005
    
    2004
    
    2005
    
    2004RevenuesAdmissions
    
    
    63.1
    %
    
    
    63.1
    %
    
    
    63.0
    %
    
    
    63.4
    %Concession
    
    
    31.4
    %
    
    
    31.6
    %
    
    
    31.4
    %
    
    
    31.6
    %Other
    
    
    5.5
    %
    
    
    5.3
    %
    
    
    5.6
    %
    
    
    5.0
    %Total revenues
    
    
    100.0
    %
    
    
    100.0
    %
    
    
    100.0
    %
    
    
    100.0
    %Cost of operations
    
    
    75.2
    %
    
    
    73.5
    %
    
    
    74.8
    %
    
    
    72.6
    %General and administrative expenses
    
    
    5.2
    %
    
    
    4.7
    %
    
    
    5.1
    %
    
    
    4.8
    %Stock option compensation and
change of control expenses
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4.2
    %Depreciation and amortization
    
    
    7.4
    %
    
    
    6.2
    %
    
    
    7.6
    %
    
    
    6.5
    %Impairment of long-lived assets
    
    
    0.9
    %
    
    
    0.0
    %
    
    
    0.3
    %
    
    
    0.1
    %Loss on sale of assets and other
    
    
    0.4
    %
    
    
    1.1
    %
    
    
    0.3
    %
    
    
    0.4
    %Total costs and expenses
    
    
    89.1
    %
    
    
    85.5
    %
    
    
    88.1
    %
    
    
    88.6
    %Operating income
    
    
    10.9
    %
    
    
    14.5
    %
    
    
    11.9
    %
    
    
    11.4
    %
 Three months ended September 30, 2005 and 2004
 Revenues.
 Cost of Operations.
  27
    Table of Contents  General and Administrative Expenses.
 Depreciation and Amortization.
 Impairment of Long-Lived Assets
 Loss on Sale of Assets and Other.
 Interest Expense.
 Loss on Early Retirement of Debt. 1 2
 Income Taxes.
 Income from Discontinued Operations, Net of Taxes.
 Nine months ended September 30, 2005 and 2004
 Revenues.
 28
    Table of Contents  Cost of Operations.
   General and Administrative Expenses.
  Depreciation and Amortization.
 Impairment of Long-Lived Assets
 Loss on Sale of Assets and Other.
 Interest Expense.
 29
    Table of Contents  Loss on Early Retirement of Debt. 1 2
 Income Taxes
 Income from Discontinued Operations, Net of Taxes.
 Liquidity and Capital Resources
 Operating Activities
  Investing Activities
    30
    Table of Contents  Financing Activities
   Payments Due by Period(in millions)Less Than
    
    
    
    
    
    
    
    
    
    AfterContractual Obligations
    
    Total
    
    One Year
    
    1 - 3 Years
    
    4 - 5 Years
    
    5 YearsLong-term debt
    
    $
    621.9
    
    
    $
    6.8
    
    
    $
    10.3
    
    
    $
    128.9
    
    
    $
    475.9Scheduled interest payments on
long-term debt1
    
    
    292.3
    
    
    
    44.8
    
    
    
    88.3
    
    
    
    84.1
    
    
    
    75.1Lease obligations
    
    
    1,617.5
    
    
    
    119.7
    
    
    
    251.0
    
    
    
    244.4
    
    
    
    1,002.4Letters of credit
    
    
    0.1
    
    
    
    0.1
    
    
    
    
    
    
    
    
    
    
    
    Employment agreements
    
    
    8.4
    
    
    
    2.8
    
    
    
    5.6
    
    
    
    
    
    
    
    Purchase commitments 2
    
    
    120.3
    
    
    
    86.5
    
    
    
    32.2
    
    
    
    0.9
    
    
    
    0.7Total obligations
    
    $
    2,660.5
    
    
    $
    260.7
    
    
    $
    387.4
    
    
    $
    458.3
    
    
    $
    1,554.1
 
 1
    
    Amounts include scheduled interest payments on fixed rate and variable rate
debt agreements. Estimates for the variable rate interest payments were based on
interest rates in effect on September 30, 2005.2
    
    Includes estimated capital expenditures associated with the construction of new
theatres to which we were committed as of September 30, 2005.  Recapitalization of Cinemark, Inc.
  31
    Table of Contents  3 4 3 4 3 4 3 4 3 4
 Senior Subordinated Notes
 1 2 1 2 1 2 1 2
  1 2
    32
    Table of Contents  Senior Secured Credit Facility
  5 8
 1 2
     33
    Table of Contents  Cinemark Brasil Notes Payable
  Cinemark Chile Note Payable
  Seasonality
  Cautionary Statement Regarding Forward-Looking Statements
  
    
    future revenues, expenses and profitability;
    
    the future development and expected growth of our business;
    
    projected capital expenditures;
    
    attendance at movies generally, or in any of the markets in which we operate;
    
    the number or diversity of popular movies released;
    
    our ability to successfully license and exhibit popular films;
    
    competition from other exhibitors; and
    
    determinations in lawsuits in which we are a defendant.
  34
    Table of Contents  Item 3. Quantitative and Qualitative Disclosures About Market Risk
  Interest Rate Risk
   Expected Maturity as of September 30, 2005(in millions)
    
    
    
    
    
    
    
    
    
    
    
    
    
    AverageSeptember 30,

    
    Fair
    
    Interest2006
    
    2007
    
    2008
    
    2009
    
    2010
    
    Thereafter
    
    Total
    
    Value
    
    RateFixed rate
    
    $
    0.1
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    353.7
    
    
    $
    353.8
    
    
    $
    347.0
    
    
    
    9.0
    %Variable rate
    
    
    6.7
    
    
    
    6.0
    
    
    
    4.3
    
    
    
    4.0
    
    
    
    124.9
    
    
    
    122.2
    
    
    
    268.1
    
    
    
    268.5
    
    
    
    5.3
    %Total debt
    
    $
    6.8
    
    
    $
    6.0
    
    
    $
    4.3
    
    
    $
    4.0
    
    
    $
    124.9
    
    
    $
    475.9
    
    
    $
    621.9
    
    
    $
    615.5
 Expected Maturity as of December 31, 2004(in millions)
    
    
    
    
    
    
    
    
    
    
    
    
    
    AverageDecember 31,
    
    Fair
    
    Interest2005
    
    2006
    
    2007
    
    2008
    
    2009
    
    Thereafter
    
    Total
    
    Value
    
    RateFixed rate
    
    $
    0.1
    
    
    $
    0.1
    
    
    $
    
    
    
    $
    
    
    
    
    
    
    
    $
    354.9
    
    
    $
    355.1
    
    
    $
    350.4
    
    
    
    9.0
    %Variable rate
    
    
    6.4
    
    
    
    6.5
    
    
    
    5.0
    
    
    
    4.0
    
    
    
    3.9
    
    
    
    246.0
    
    
    
    271.8
    
    
    
    271.4
    
    
    
    4.5
    %Total debt
    
    $
    6.5
    
    
    $
    6.6
    
    
    $
    5.0
    
    
    $
    4.0
    
    
    $
    3.9
    
    
    $
    600.9
    
    
    $
    626.9
    
    
    $
    621.8
 Foreign Currency Exchange Rate Risk
  35
    Table of Contents  Item 4. Controls and Procedures
 Evaluation of Disclosure Controls and Procedures
  Changes in Internal Controls
  
 PART II  OTHER INFORMATION
 
 Item 1. Legal Proceedings
  
 Item 5. Other Information
 Supplemental Schedules specified by the senior subordinated notes Indenture:
    
    

PageCondensed Consolidating Balance Sheets (unaudited) as of September 30, 2005
    
    
    37Condensed Consolidating Statements of Income (unaudited) for the nine
months ended September 30, 2005
    
    
    38Condensed Consolidating Statements of Cash Flows (unaudited) for the nine
months ended September 30, 2005
    
    
    39
 36
    Table of Contents  CINEMARK USA, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATING BALANCE SHEETS
AS OF SEPTEMBER 30, 2005
(in thousands, except share data, unaudited)
 Restricted
    
    
    UnrestrictedGroup
    
    
    Group
    
    
    Eliminations
    
    
    ConsolidatedASSETSCURRENT ASSETSCash and cash equivalents
    
    $
    95,324
    
    
    $
    38,414
    
    
    $
    
    
    
    $
    133,738Inventories
    
    
    3,303
    
    
    
    806
    
    
    
    
    
    
    
    4,109Accounts receivable
    
    
    10,754
    
    
    
    4,918
    
    
    
    (949
    )
    
    
    14,723Income tax receivable
    
    
    (2,977
    )
    
    
    2,977
    
    
    
    
    
    
    
    Prepaid expenses and other
    
    
    4,465
    
    
    
    551
    
    
    
    
    
    
    
    5,016Total current assets
    
    
    110,869
    
    
    
    47,666
    
    
    
    (949
    )
    
    
    157,586THEATRE PROPERTIES AND EQUIPMENT  net
    
    
    692,398
    
    
    
    89,738
    
    
    
    
    
    
    
    782,136OTHER ASSETSGoodwill
    
    
    9,379
    
    
    
    34,904
    
    
    
    
    
    
    
    44,283Investments in and advances to affiliates
    
    
    177,138
    
    
    
    8,183
    
    
    
    (183,142
    )
    
    
    2,179Intangible assets, deferred charges and other assets  net
    
    
    54,447
    
    
    
    9,623
    
    
    
    (11,285
    )
    
    
    52,785Total other assets
    
    
    240,964
    
    
    
    52,710
    
    
    
    (194,427
    )
    
    
    99,247TOTAL ASSETS
    
    $
    1,044,231
    
    
    $
    190,114
    
    
    $
    (195,376
    )
    
    $
    1,038,969LIABILITIES AND SHAREHOLDERS EQUITYCURRENT LIABILITIESCurrent portion of long-term debt
    
    $
    2,655
    
    
    $
    4,186
    
    
    $
    
    
    
    $
    6,841Income tax payable
    
    
    585
    
    
    
    2,416
    
    
    
    
    
    
    
    3,001Accounts payable and accrued expenses
    
    
    85,244
    
    
    
    14,754
    
    
    
    (948
    )
    
    
    99,050Total current liabilities
    
    
    88,484
    
    
    
    21,356
    
    
    
    (948
    )
    
    
    108,892LONG-TERM LIABILITIESSenior credit agreements
    
    
    253,547
    
    
    
    19,070
    
    
    
    (11,285
    )
    
    
    261,332Senior subordinated notes
    
    
    353,721
    
    
    
    
    
    
    
    
    
    
    
    353,721Deferred income taxes
    
    
    24,179
    
    
    
    (11
    )
    
    
    
    
    
    
    24,168Deferred lease expenses
    
    
    27,482
    
    
    
    1,653
    
    
    
    
    
    
    
    29,135Deferred gain on sale leasebacks
    
    
    3,366
    
    
    
    
    
    
    
    
    
    
    
    3,366Deferred revenues and other long-term liabilities
    
    
    1,782
    
    
    
    5,302
    
    
    
    
    
    
    
    7,084Total long-term liabilities
    
    
    664,077
    
    
    
    26,014
    
    
    
    (11,285
    )
    
    
    678,806COMMITMENTS AND CONTINGENCIES
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    MINORITY INTERESTS IN SUBSIDIARIES
    
    
    10,282
    
    
    
    6,176
    
    
    
    
    
    
    
    16,458SHAREHOLDERS EQUITYClass A common stock, $.01 par value: 10,000,000 shares
authorized, 1,500 shares issued and outstanding
    
    
    
    
    
    
    37,942
    
    
    
    (37,942
    )
    
    
    Class B common stock, no par value: 1,000,000 shares
authorized, 239,893 shares issued and outstanding
    
    
    49,543
    
    
    
    33,050
    
    
    
    (33,050
    )
    
    
    49,543Additional paid-in-capital
    
    
    58,005
    
    
    
    112,151
    
    
    
    (112,151
    )
    
    
    58,005Retained earnings
    
    
    247,470
    
    
    
    (40,650
    )
    
    
    (80
    )
    
    
    206,740Distributions
    
    
    
    
    
    
    (80
    )
    
    
    80
    
    
    
    Treasury stock, 57,245 Class B shares at cost
    
    
    (24,233
    )
    
    
    
    
    
    
    
    
    
    
    (24,233
    )Accumulated other comprehensive loss
    
    
    (49,397
    )
    
    
    (5,845
    )
    
    
    
    
    
    
    (55,242
    )Total shareholders equity
    
    
    281,388
    
    
    
    136,568
    
    
    
    (183,143
    )
    
    
    234,813TOTAL LIABILITIES AND SHAREHOLDERS EQUITY
    
    $
    1,044,231
    
    
    $
    190,114
    
    
    $
    (195,376
    )
    
    $
    1,038,969
  37
    Table of Contents  CINEMARK USA, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATING STATEMENTS OF INCOME
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2005
(in thousands, unaudited)
 Restricted
    
    UnrestrictedGroup
    
    Group
    
    Eliminations
    
    ConsolidatedREVENUES
    
    $
    625,601
    
    
    $
    122,266
    
    
    $
    (859
    )
    
    $
    747,008COSTS AND EXPENSESCost of operations
    
    
    466,394
    
    
    
    93,282
    
    
    
    (859
    )
    
    
    558,817General and administrative expenses
    
    
    30,343
    
    
    
    7,529
    
    
    
    
    
    
    
    37,872Depreciation and amortization
    
    
    43,822
    
    
    
    13,065
    
    
    
    
    
    
    
    56,887Impairment of long-lived assets
    
    
    1,803
    
    
    
    740
    
    
    
    
    
    
    
    2,543(Gain) loss on sale of assets and other
    
    
    1,926
    
    
    
    (18
    )
    
    
    
    
    
    
    1,908Total costs and expenses
    
    
    544,288
    
    
    
    114,598
    
    
    
    (859
    )
    
    
    658,027OPERATING INCOME
    
    
    81,313
    
    
    
    7,668
    
    
    
    
    
    
    
    88,981OTHER INCOME (EXPENSE)Interest expense
    
    
    (31,683
    )
    
    
    (1,324
    )
    
    
    472
    
    
    
    (32,535
    )Amortization of debt issue costs
    
    
    (2,060
    )
    
    
    (15
    )
    
    
    
    
    
    
    (2,075
    )Interest income
    
    
    2,747
    
    
    
    1,931
    
    
    
    (472
    )
    
    
    4,206Foreign currency exchange loss
    
    
    (618
    )
    
    
    (80
    )
    
    
    
    
    
    
    (698
    )Dividend income
    
    
    80
    
    
    
    
    
    
    
    (80
    )
    
    
    Equity in income of affiliates
    
    
    100
    
    
    
    82
    
    
    
    
    
    
    
    182Minority interests in income of subsidiaries
    
    
    (706
    )
    
    
    (176
    )
    
    
    
    
    
    
    (882
    )Total other income (expense)
    
    
    (32,140
    )
    
    
    418
    
    
    
    (80
    )
    
    
    (31,802
    )INCOME BEFORE INCOME TAXES
    
    
    49,173
    
    
    
    8,086
    
    
    
    (80
    )
    
    
    57,179Income taxes
    
    
    19,221
    
    
    
    795
    
    
    
    
    
    
    
    20,016NET INCOME
    
    $
    29,952
    
    
    $
    7,291
    
    
    $
    (80
    )
    
    $
    37,163
  38
    Table of Contents  CINEMARK USA, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2005
(in thousands, unaudited)
 Restricted
    
    UnrestrictedGroup
    
    Group
    
    Eliminations
    
    ConsolidatedOPERATING ACTIVITIESNet income
    
    $
    29,952
    
    
    $
    7,291
    
    
    $
    (80
    )
    
    $
    37,163Noncash items in net income:Depreciation
    
    
    43,207
    
    
    
    11,595
    
    
    
    
    
    
    
    54,802Amortization of intangible and other assets
    
    
    615
    
    
    
    1,470
    
    
    
    
    
    
    
    2,085Amortization of foreign advanced rents
    
    
    573
    
    
    
    426
    
    
    
    
    
    
    
    999Amortization of debt issue costs
    
    
    2,060
    
    
    
    15
    
    
    
    
    
    
    
    2,075Amortization of gain on sale leasebacks
    
    
    (274
    )
    
    
    
    
    
    
    
    
    
    
    (274
    )Amortization of debt premium
    
    
    (1,173
    )
    
    
    
    
    
    
    
    
    
    
    (1,173
    )Amortization of deferred revenues
    
    
    (358
    )
    
    
    
    
    
    
    
    
    
    
    (358
    )Impairment of long-lived assets
    
    
    1,803
    
    
    
    740
    
    
    
    
    
    
    
    2,543(Gain) loss on sale of assets and other
    
    
    1,926
    
    
    
    (18
    )
    
    
    
    
    
    
    1,908Deferred lease expenses
    
    
    923
    
    
    
    250
    
    
    
    
    
    
    
    1,173Deferred income tax expenses
    
    
    985
    
    
    
    45
    
    
    
    
    
    
    
    1,030Equity in income of affiliates
    
    
    (100
    )
    
    
    (82
    )
    
    
    
    
    
    
    (182
    )Minority interests in income of subsidiaries
    
    
    706
    
    
    
    176
    
    
    
    
    
    
    
    882Changes in assets and liabilities
    
    
    (29,281
    )
    
    
    7,372
    
    
    
    80
    
    
    
    (21,829
    )Net cash provided by operating activities
    
    
    51,564
    
    
    
    29,280
    
    
    
    
    
    
    
    80,844INVESTING ACTIVITIESAdditions to theatre properties and equipment
    
    
    (40,194
    )
    
    
    (7,482
    )
    
    
    
    
    
    
    (47,676
    )Proceeds from sale of theatre properties and equipment
    
    
    1,051
    
    
    
    215
    
    
    
    
    
    
    
    1,266Purchase of shares in National CineMedia
    
    
    
    
    
    
    (7,329
    )
    
    
    
    
    
    
    (7,329
    )Dividends/capital returned from affiliates
    
    
    204
    
    
    
    80
    
    
    
    
    
    
    
    284Net cash used for investing activities
    
    
    (38,939
    )
    
    
    (14,516
    )
    
    
    
    
    
    
    (53,455
    )FINANCING ACTIVITIESCapital contribution from parent
    
    
    6,935
    
    
    
    
    
    
    
    
    
    
    
    6,935Proceeds from long-term debt
    
    
    7
    
    
    
    300
    
    
    
    
    
    
    
    307Repayments of long-term debt
    
    
    (2,006
    )
    
    
    (2,825
    )
    
    
    
    
    
    
    (4,831
    )Debt issue costs
    
    
    (202
    )
    
    
    
    
    
    
    
    
    
    
    (202
    )Increase in deferred revenue
    
    
    671
    
    
    
    
    
    
    
    
    
    
    
    671Increase in minority investment in subsidiaries
    
    
    19
    
    
    
    114
    
    
    
    
    
    
    
    133Decrease in minority investment in subsidiaries
    
    
    (977
    )
    
    
    (276
    )
    
    
    
    
    
    
    (1,253
    )Net cash provided by (used for) financing activities
    
    
    4,447
    
    
    
    (2,687
    )
    
    
    
    
    
    
    1,760Effect of exchange rate changes on cash and cash equivalents
    
    
    1,068
    
    
    
    3,293
    
    
    
    
    
    
    
    4,361INCREASE IN CASH AND CASH EQUIVALENTS
    
    
    18,140
    
    
    
    15,370
    
    
    
    
    
    
    
    33,510CASH AND CASH EQUIVALENTS:Beginning of period
    
    
    77,184
    
    
    
    23,044
    
    
    
    
    
    
    
    100,228End of period
    
    $
    95,324
    
    
    $
    38,414
    
    
    $
    
    
    
    $
    133,738
  39
    Table of Contents  Item 6. Exhibits
 3.1
    
    Amended and Restated Articles of Incorporation of the Company
filed with the Texas Secretary of State on September 3, 1992
(incorporated by reference to Exhibit 3.1(a) to the Companys
Annual Report on Form 10-K (File No. 033-47040) filed June 30,
1993).3.2(a)
    
    Bylaws of the Company, as amended (incorporated by reference to
Exhibit 3.2 to the Companys Registration Statement on Form S-1
(File No. 033-47040) filed April 9, 1992).3.2(b)
    
    Amendment to Bylaws of the Company dated March 12, 1996
(incorporated by reference to Exhibit 3.2(b) to the Companys
Annual Report on Form 10-K (File No. 033-47040) filed March 6,
1997).4.2(a)
    
    Indenture dated February 11, 2003 between the Company and The
Bank of New York Trust Company of Florida, N.A. governing the 9%
Senior Subordinated Notes issued thereunder (incorporated by
reference to Exhibit 10.2(b) to the Companys Annual Report on
Form 10-K (File No. 033-47040) filed March 19, 2003).4.2(b)
    
    First Supplemental Indenture dated as of May 7, 2003 between the
Company, the subsidiary guarantors party thereto and The Bank of
New York Trust Company of Florida, N.A. (incorporated by
reference to Exhibit 4.2(i) to the Companys Registration
Statement on Form S-4 (File No. 333-104940) filed May 28, 2003).4.2(c)
    
    Second Supplemental Indenture dated as of November 11, 2004
between the Company, the subsidiary guarantors party thereto and
The Bank of New York Trust Company of Florida, N.A. (incorporated
by reference to the Companys Annual Report on Form 10-K (File
No. 033-047040) filed March 29, 2005).4.2(d)
    
    Form of 9% Note (contained in the Indenture listed as Exhibit
4.2(a) above) (incorporated by reference to Exhibit 10.2(b) to
the Companys Annual Report on Form 10-K (File 033-47040) filed
March 19, 2003).10.1(a)
    
    Management Agreement, dated as of July 28, 1993, between the
Company and Cinemark Mexico (USA) (incorporated by reference to
Exhibit 10.1(a) to Cinemark, Inc.s Registration Statement on
Form S-1 (File No. 333-88618) filed May 17, 2002).10.1(b)
    
    Management Agreement, dated as of September 10, 2002, between
Cinemark USA, Inc. and Cinemark de Mexico (incorporated by
reference to Exhibit 10.8 to Cinemark Mexico (USA)s Registration
Statement on Form S-4 (File No. 033-72114) filed on November 24,
1994).10.1(c)
    
    Management Agreement, dated December 10, 1993, between Laredo
Theatre, Ltd. and the Company (incorporated by reference to
Exhibit 10.14(b) to the Companys Annual Report on Form 10-K
(File No. 033-47040) filed June 30, 1994).10.1(d)
    
    First Amendment to Management Agreement of Laredo Theatre, Ltd.
effective as of December 10, 2003 between CNMK Texas Properties,
Ltd. (successor in interest to Cinemark USA, Inc.) and Laredo
Theatre Ltd. (incorporated by reference to Exhibit 10.1(d) to
Cinemark, Inc.s Registration Statement on Form S-4 (File No.
333-116292) filed September 8, 2004).10.1(e)
    
    Management Agreement, dated September 1, 1994, between Cinemark
Partners II, Ltd. and the Company (incorporated by reference to
Exhibit 10.4(i) to the Companys Annual Report on Form 10-K (File
No. 033-47040) filed March 29, 1995).10.1(f)
    
    First Amendment to Management Agreement of Cinemark Partners II,
Ltd. dated as of January 5, 1998 by and between Cinemark USA,
Inc. and Cinemark Partners II, Ltd. (incorporated by reference to
Exhibit 10.1(f) to the Cinemark, Inc.s Registration Statement on
Form S-4 (File No. 333-116292) filed September 8, 2004).10.1(g)
    
    Management Services Agreement dated April 10, 2003 between
Greeley Partners L.P. and CNMK Texas Properties, Ltd.
(incorporated by reference to Exhibit 10.1(g) to Cinemark, Inc.s
Registration Statement on Form S-4 (File No. 333-116292) filed
September 8, 2004).10.2
    
    Amended and Restated Agreement to Participate in Profits and
Losses, dated as of March 12, 2004, between Cinemark USA, Inc.
and Alan W. Stock (incorporated by reference to Exhibit 10.2 to
the Companys Quarterly Report on Form 10-Q (File No. 033-47040)
filed May 14, 2004).10.3(a)
    
    License Agreement, dated December 10, 1993, between Laredo Joint
Venture and the Company (incorporated by reference to Exhibit
10.14(c) to the Companys Annual Report on Form 10-K (File No.
033-47040) filed June 30, 1994).10.3(b)
    
    License Agreement, dated September 1, 1994, between Cinemark
Partners II, Ltd. and the Company (incorporated by reference to
Exhibit 10.10(c) to the Companys Annual Report on Form 10-K
(File No. 033-47040) filed March 29, 1995).10.4(a)
    
    Tax Sharing Agreement, between the Company and Cinemark
International, L.L.C. (f/k/a Cinemark II, Inc. ), dated as of
June 10, 1992 (incorporated by reference to Exhibit 10.22 to the
Companys Annual Report on Form 10-K (File No. 033-47040) filed
June 30, 1993).
 40
    Table of Contents  10.4(b)
    
    Tax Sharing Agreement, dated as of July 28, 1993, between the
Company and Cinemark Mexico (USA) (incorporated by reference to
Exhibit 10.10 to Cinemark Mexico (USA)s Registration Statement
on Form S-4 (File No. 033-72114) filed on November 24, 1993).10.5(a)
    
    Indemnification Agreement, between the Company and Lee Roy
Mitchell, dated as of July 13, 1992 (incorporated by reference to
Exhibit 10.23(a) to the Companys Annual Report on Form 10-K
(File No. 033-47040) filed June 30, 1993).10.5(b)
    
    Indemnification Agreement, between the Company and Tandy
Mitchell, dated as of July 13, 1992 (incorporated by reference to
Exhibit 10.23(b) to the Companys Annual Report on Form 10-K
(File No. 033-47040) filed June 30, 1993).10.5(c)
    
    Indemnification Agreement, between the Company and Alan Stock,
dated as of July 13, 1992 (incorporated by reference to Exhibit
10.23(d) to the Companys Annual Report on Form 10-K (File No.
033-47040) filed June 30, 1993).10.5(d)
    
    Indemnification Agreement, between the Company and W. Bryce
Anderson, dated as of July 13, 1992 (incorporated by reference to
Exhibit 10.23(f) to the Companys Annual Report on Form 10-K
(File No. 033-47040) filed June 30, 1993).10.5(e)
    
    Indemnification Agreement, between the Company and Sheldon I.
Stein, dated as of July 13, 1992 (incorporated by reference to
Exhibit 10.23(g) to the Companys Annual Report on Form 10-K
(File No. 033-47040) filed June 30, 1993).10.5(f)
    
    Indemnification Agreement, between the Company and Heriberto
Guerra, dated as of December 3, 1993 (incorporated by reference
to Exhibit 10.23(f) to the Companys Annual Report on Form 10-K
(File No. 033-11895) filed September 13, 1996).10.6(a)
    
    Senior Secured Credit Agreement dated December 4, 1995 among
Cinemark International, L.L.C. (f/k/a Cinemark II, Inc., Cinemark
Mexico (USA) and Cinemark de Mexico (incorporated by reference to
Exhibit 10.18 to the Companys Annual Report on Form 10-K (File
No. 033-47040) filed April 1, 1996).10.6(b)
    
    First Amendment to Senior Secured Credit Agreement, dated as of
September 30, 1996, by and among Cinemark II, Inc., Cinemark
Mexico (USA), Inc. and Cinemark de Mexico, S.A. de C.V.
(incorporated by reference to Exhibit 10.11(b) to Cinemark,
Inc.s Registration Statement on Form S-1 (File No. 333-88618)
filed on May 17, 2002).10.6(c)
    
    Second Amendment to Senior Secured Credit Agreement, dated as of
September 28, 2000, by and among Cinemark II, Inc., Cinemark
Mexico (USA), Inc. and Cinemark de Mexico, S.A. de C.V.
(incorporated by reference to Exhibit 10.11(c) to Cinemark,
Inc.s Registration Statement on Form S-1 (File No. 333-88618)
filed on May 17, 2002).10.7(a)
    
    Employment Agreement, dated as of March 12, 2004, between
Cinemark, Inc. and Lee Roy Mitchell (incorporated by reference to
Exhibit 10.14(a) to the Companys Quarterly Report on Form 10-Q
(File No. 033-47040) filed May 14, 2004).10.7(b)
    
    Employment Agreement, dated as of March 12, 2004, between
Cinemark, Inc. and Alan Stock (incorporated by reference to
Exhibit 10.14(b) to the Companys Quarterly Report on Form 10-Q
(File No. 033-47040) filed May 14, 2004).10.7(c)
    
    Employment Agreement, dated as of March 12, 2004, between
Cinemark, Inc. and Tim Warner (incorporated by reference to
Exhibit 10.14(c) to the Companys Quarterly Report on Form 10-Q
(File No. 033-47040) filed May 14, 2004).10.7(d)
    
    Employment Agreement, dated as of March 12, 2004, between
Cinemark, Inc. and Robert Copple (incorporated by reference to
Exhibit 10.14(d) to the Companys Quarterly Report on Form 10-Q
(File No. 033-47040) filed May 14, 2004).10.7(e)
    
    Employment Agreement, dated as of March 12, 2004, between
Cinemark, Inc. and Rob Carmony (incorporated by reference to
Exhibit 10.14(e) to the Companys Quarterly Report on Form 10-Q
(File No. 033-47040) filed May 14, 2004).10.7(f)
    
    Employment Agreement, dated as of March 12, 2004, between
Cinemark, Inc. and Tandy Mitchell (incorporated by reference to
Exhibit 10.14(f) to the Companys Quarterly Report on Form 10-Q
(File No. 033-47040) filed May 14, 2004).
 41
    Table of Contents  10.8(a)
    
    Amended and Restated Credit Agreement, dated April 2, 2004, among
Cinemark, Inc., CNMK Holdings, Inc., the Company, the several
lenders from time to time parties thereto, Lehman Brothers Inc.
and Goldman Sachs Credit Partners LP, as Joint Legal Arrangers,
Goldman Sachs Credit Partners LP, as Syndication Agent, Deutsche
Bank Securities, Inc., The Bank of New York, General Electric
Capital Corporation and CIBC Inc. as Documentation Agents and
Lehman Commercial Paper Inc. as Administrative Agent
(incorporated by reference to Exhibit 10.15 to the Companys
Quarterly Report on Form 10-Q (File No. 033-47040) filed May 14,
2004).10.8(b)
    
    First Amendment to the Amended and Restated Credit Agreement,
dated August 18, 2004, among Cinemark, Inc., CNMK Holdings, Inc.,
Cinemark USA, Inc., the several lenders from time to time parties
thereto, Lehman Brothers Inc. and Goldman Sachs Credit Partners
LP, as Joint Lead Arrangers, Goldman Sachs Credit Partners LP,
as Syndication Agent, Deutsche Bank Securities, Inc., The Bank of
New York, General Electric Capital Corporation and CIBC Inc. as
Documentation Agents and Lehman Commercial Paper Inc. as
Administrative Agent (incorporated by reference to Exhibit
10.15(b) to the Companys Quarterly Report on Form 10-Q (File No.
033-47040) filed May 13, 2005).10.9
    
    Amended and Restated Guaranty and Collateral Agreement, dated
April 2, 2004, among Cinemark, Inc., CNMK Holdings Inc., the
Company and certain of it subsidiaries in favor of Lehman
Commercial Paper, Inc., as administrative agent (incorporated by
reference to Exhibit 10.16 to the Companys Quarterly Report on
Form 10-Q (File No. 033-47040) filed May 14, 2004).10.10(a)
    
    Stock Purchase Agreement dated as of August 18, 2004, among
Cinemark Empreendimentos e Participacoes, Ltda, Venture II Equity
Holdings Corporation, Inc. and Kristal Holdings Limited
(incorporated by reference to Exhibit 10.20(a) to Cinemark,
Inc.s Quarterly Report on Form 10-Q (File No. 333-116292) filed
May 13, 2005).10.10(b)
    
    Stock Purchase Agreement dated as of August 18, 2004, among
Cinemark Empreendimentos e Participacoes, Ltda, Prona Global
Ltd., Messrs. Edgar Gleich, Riccardo Arduini, Moises Pinsky,
Eduardo Alalou, and Robert Luis Leme Klabin (incorporated by
reference to Exhibit 10.20(b) to Cinemark, Inc.s Quarterly
Report on Form 10-Q (File No. 333-116292) filed May 13, 2005).*31.1
    
    Certification of Chief Executive Officer of Cinemark USA, Inc.
Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.*31.2
    
    Certification of Chief Financial Officer of Cinemark USA, Inc.
Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.*32.1
    
    Certification of the Chief Executive Officer of Cinemark USA,
Inc. Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.*32.2
    
    Certification of the Chief Financial Officer of Cinemark USA,
Inc. Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
 
 *
    
    filed herewith. 42
    Table of Contents  SIGNATURES
  CINEMARK USA, INC.RegistrantDATE:November 9, 2005/s/Alan W. StockAlan W. StockPresident/s/Robert CoppleRobert CoppleChief Financial Officer
 43
    Table of Contents  EXHIBIT INDEX
 3.1
    
    Amended and Restated Articles of Incorporation of the Company
filed with the Texas Secretary of State on September 3, 1992
(incorporated by reference to Exhibit 3.1(a) to the Companys
Annual Report on Form 10-K (File No. 033-47040) filed June 30,
1993).3.2(a)
    
    Bylaws of the Company, as amended (incorporated by reference to
Exhibit 3.2 to the Companys Registration Statement on Form S-1
(File No. 033-47040) filed April 9, 1992).3.2(b)
    
    Amendment to Bylaws of the Company dated March 12, 1996
(incorporated by reference to Exhibit 3.2(b) to the Companys
Annual Report on Form 10-K (File No. 033-47040) filed March 6,
1997).4.2(a)
    
    Indenture dated February 11, 2003 between the Company and The
Bank of New York Trust Company of Florida, N.A. governing the 9%
Senior Subordinated Notes issued thereunder (incorporated by
reference to Exhibit 10.2(b) to the Companys Annual Report on
Form 10-K (File No. 033-47040) filed March 19, 2003).4.2(b)
    
    First Supplemental Indenture dated as of May 7, 2003 between the
Company, the subsidiary guarantors party thereto and The Bank of
New York Trust Company of Florida, N.A. (incorporated by
reference to Exhibit 4.2(i) to the Companys Registration
Statement on Form S-4 (File No. 333-104940) filed May 28, 2003).4.2(c)
    
    Second Supplemental Indenture dated as of November 11, 2004
between the Company, the subsidiary guarantors party thereto and
The Bank of New York Trust Company of Florida, N.A. (incorporated
by reference to the Companys Annual Report on Form 10-K (File
No. 033-047040) filed March 29, 2005).4.2(d)
    
    Form of 9% Note (contained in the Indenture listed as Exhibit
4.2(a) above) (incorporated by reference to Exhibit 10.2(b) to
the Companys Annual Report on Form 10-K (File 033-47040) filed
March 19, 2003).10.1(a)
    
    Management Agreement, dated as of July 28, 1993, between the
Company and Cinemark Mexico (USA) (incorporated by reference to
Exhibit 10.1(a) to Cinemark, Inc.s Registration Statement on
Form S-1 (File No. 333-88618) filed May 17, 2002).10.1(b)
    
    Management Agreement, dated as of September 10, 2002, between
Cinemark USA, Inc. and Cinemark de Mexico (incorporated by
reference to Exhibit 10.8 to Cinemark Mexico (USA)s Registration
Statement on Form S-4 (File No. 033-72114) filed on November 24,
1994).10.1(c)
    
    Management Agreement, dated December 10, 1993, between Laredo
Theatre, Ltd. and the Company (incorporated by reference to
Exhibit 10.14(b) to the Companys Annual Report on Form 10-K
(File No. 033-47040) filed June 30, 1994).10.1(d)
    
    First Amendment to Management Agreement of Laredo Theatre, Ltd.
effective as of December 10, 2003 between CNMK Texas Properties,
Ltd. (successor in interest to Cinemark USA, Inc.) and Laredo
Theatre Ltd. (incorporated by reference to Exhibit 10.1(d) to
Cinemark, Inc.s Registration Statement on Form S-4 (File No.
333-116292) filed September 8, 2004).10.1(e)
    
    Management Agreement, dated September 1, 1994, between Cinemark
Partners II, Ltd. and the Company (incorporated by reference to
Exhibit 10.4(i) to the Companys Annual Report on Form 10-K (File
No. 033-47040) filed March 29, 1995).10.1(f)
    
    First Amendment to Management Agreement of Cinemark Partners II,
Ltd. dated as of January 5, 1998 by and between Cinemark USA,
Inc. and Cinemark Partners II, Ltd. (incorporated by reference to
Exhibit 10.1(f) to the Cinemark, Inc.s Registration Statement on
Form S-4 (File No. 333-116292) filed September 8, 2004).10.1(g)
    
    Management Services Agreement dated April 10, 2003 between
Greeley Partners L.P. and CNMK Texas Properties, Ltd.
(incorporated by reference to Exhibit 10.1(g) to Cinemark, Inc.s
Registration Statement on Form S-4 (File No. 333-116292) filed
September 8, 2004).10.2
    
    Amended and Restated Agreement to Participate in Profits and
Losses, dated as of March 12, 2004, between Cinemark USA, Inc.
and Alan W. Stock (incorporated by reference to Exhibit 10.2 to
the Companys Quarterly Report on Form 10-Q (File No. 033-47040)
filed May 14, 2004).10.3(a)
    
    License Agreement, dated December 10, 1993, between Laredo Joint
Venture and the Company (incorporated by reference to Exhibit
10.14(c) to the Companys Annual Report on Form 10-K (File No.
033-47040) filed June 30, 1994).10.3(b)
    
    License Agreement, dated September 1, 1994, between Cinemark
Partners II, Ltd. and the Company (incorporated by reference to
Exhibit 10.10(c) to the Companys Annual Report on Form 10-K
(File No. 033-47040) filed March 29, 1995).10.4(a)
    
    Tax Sharing Agreement, between the Company and Cinemark
International, L.L.C. (f/k/a Cinemark II, Inc. ), dated as of
June 10, 1992 (incorporated by reference to Exhibit 10.22 to the
Companys Annual Report on Form 10-K (File No. 033-47040) filed
June 30, 1993).
    Table of Contents  10.4(b)
    
    Tax Sharing Agreement, dated as of July 28, 1993, between the
Company and Cinemark Mexico (USA) (incorporated by reference to
Exhibit 10.10 to Cinemark Mexico (USA)s Registration Statement
on Form S-4 (File No. 033-72114) filed on November 24, 1993).10.5(a)
    
    Indemnification Agreement, between the Company and Lee Roy
Mitchell, dated as of July 13, 1992 (incorporated by reference to
Exhibit 10.23(a) to the Companys Annual Report on Form 10-K
(File No. 033-47040) filed June 30, 1993).10.5(b)
    
    Indemnification Agreement, between the Company and Tandy
Mitchell, dated as of July 13, 1992 (incorporated by reference to
Exhibit 10.23(b) to the Companys Annual Report on Form 10-K
(File No. 033-47040) filed June 30, 1993).10.5(c)
    
    Indemnification Agreement, between the Company and Alan Stock,
dated as of July 13, 1992 (incorporated by reference to Exhibit
10.23(d) to the Companys Annual Report on Form 10-K (File No.
033-47040) filed June 30, 1993).10.5(d)
    
    Indemnification Agreement, between the Company and W. Bryce
Anderson, dated as of July 13, 1992 (incorporated by reference to
Exhibit 10.23(f) to the Companys Annual Report on Form 10-K
(File No. 033-47040) filed June 30, 1993).10.5(e)
    
    Indemnification Agreement, between the Company and Sheldon I.
Stein, dated as of July 13, 1992 (incorporated by reference to
Exhibit 10.23(g) to the Companys Annual Report on Form 10-K
(File No. 033-47040) filed June 30, 1993).10.5(f)
    
    Indemnification Agreement, between the Company and Heriberto
Guerra, dated as of December 3, 1993 (incorporated by reference
to Exhibit 10.23(f) to the Companys Annual Report on Form 10-K
(File No. 033-11895) filed September 13, 1996).10.6(a)
    
    Senior Secured Credit Agreement dated December 4, 1995 among
Cinemark International, L.L.C. (f/k/a Cinemark II, Inc., Cinemark
Mexico (USA) and Cinemark de Mexico (incorporated by reference to
Exhibit 10.18 to the Companys Annual Report on Form 10-K (File
No. 033-47040) filed April 1, 1996).10.6(b)
    
    First Amendment to Senior Secured Credit Agreement, dated as of
September 30, 1996, by and among Cinemark II, Inc., Cinemark
Mexico (USA), Inc. and Cinemark de Mexico, S.A. de C.V.
(incorporated by reference to Exhibit 10.11(b) to Cinemark,
Inc.s Registration Statement on Form S-1 (File No. 333-88618)
filed on May 17, 2002).10.6(c)
    
    Second Amendment to Senior Secured Credit Agreement, dated as of
September 28, 2000, by and among Cinemark II, Inc., Cinemark
Mexico (USA), Inc. and Cinemark de Mexico, S.A. de C.V.
(incorporated by reference to Exhibit 10.11(c) to Cinemark,
Inc.s Registration Statement on Form S-1 (File No. 333-88618)
filed on May 17, 2002).10.7(a)
    
    Employment Agreement, dated as of March 12, 2004, between
Cinemark, Inc. and Lee Roy Mitchell (incorporated by reference to
Exhibit 10.14(a) to the Companys Quarterly Report on Form 10-Q
(File No. 033-47040) filed May 14, 2004).10.7(b)
    
    Employment Agreement, dated as of March 12, 2004, between
Cinemark, Inc. and Alan Stock (incorporated by reference to
Exhibit 10.14(b) to the Companys Quarterly Report on Form 10-Q
(File No. 033-47040) filed May 14, 2004).10.7(c)
    
    Employment Agreement, dated as of March 12, 2004, between
Cinemark, Inc. and Tim Warner (incorporated by reference to
Exhibit 10.14(c) to the Companys Quarterly Report on Form 10-Q
(File No. 033-47040) filed May 14, 2004).10.7(d)
    
    Employment Agreement, dated as of March 12, 2004, between
Cinemark, Inc. and Robert Copple (incorporated by reference to
Exhibit 10.14(d) to the Companys Quarterly Report on Form 10-Q
(File No. 033-47040) filed May 14, 2004).10.7(e)
    
    Employment Agreement, dated as of March 12, 2004, between
Cinemark, Inc. and Rob Carmony (incorporated by reference to
Exhibit 10.14(e) to the Companys Quarterly Report on Form 10-Q
(File No. 033-47040) filed May 14, 2004).10.7(f)
    
    Employment Agreement, dated as of March 12, 2004, between
Cinemark, Inc. and Tandy Mitchell (incorporated by reference to
Exhibit 10.14(f) to the Companys Quarterly Report on Form 10-Q
(File No. 033-47040) filed May 14, 2004).
    Table of Contents  10.8(a)
    
    Amended and Restated Credit Agreement, dated April 2, 2004, among
Cinemark, Inc., CNMK Holdings, Inc., the Company, the several
lenders from time to time parties thereto, Lehman Brothers Inc.
and Goldman Sachs Credit Partners LP, as Joint Legal Arrangers,
Goldman Sachs Credit Partners LP, as Syndication Agent, Deutsche
Bank Securities, Inc., The Bank of New York, General Electric
Capital Corporation and CIBC Inc. as Documentation Agents and
Lehman Commercial Paper Inc. as Administrative Agent
(incorporated by reference to Exhibit 10.15 to the Companys
Quarterly Report on Form 10-Q (File No. 033-47040) filed May 14,
2004).10.8(b)
    
    First Amendment to the Amended and Restated Credit Agreement,
dated August 18, 2004, among Cinemark, Inc., CNMK Holdings, Inc.,
Cinemark USA, Inc., the several lenders from time to time parties
thereto, Lehman Brothers Inc. and Goldman Sachs Credit Partners
LP, as Joint Lead Arrangers, Goldman Sachs Credit Partners LP,
as Syndication Agent, Deutsche Bank Securities, Inc., The Bank of
New York, General Electric Capital Corporation and CIBC Inc. as
Documentation Agents and Lehman Commercial Paper Inc. as
Administrative Agent (incorporated by reference to Exhibit
10.15(b) to the Companys Quarterly Report on Form 10-Q (File No.
033-47040) filed May 13, 2005).10.9
    
    Amended and Restated Guaranty and Collateral Agreement, dated
April 2, 2004, among Cinemark, Inc., CNMK Holdings Inc., the
Company and certain of it subsidiaries in favor of Lehman
Commercial Paper, Inc., as administrative agent (incorporated by
reference to Exhibit 10.16 to the Companys Quarterly Report on
Form 10-Q (File No. 033-47040) filed May 14, 2004).10.10(a)
    
    Stock Purchase Agreement dated as of August 18, 2004, among
Cinemark Empreendimentos e Participacoes, Ltda, Venture II Equity
Holdings Corporation, Inc. and Kristal Holdings Limited
(incorporated by reference to Exhibit 10.20(a) to Cinemark,
Inc.s Quarterly Report on Form 10-Q (File No. 333-116292) filed
May 13, 2005).10.10(b)
    
    Stock Purchase Agreement dated as of August 18, 2004, among
Cinemark Empreendimentos e Participacoes, Ltda, Prona Global
Ltd., Messrs. Edgar Gleich, Riccardo Arduini, Moises Pinsky,
Eduardo Alalou, and Robert Luis Leme Klabin (incorporated by
reference to Exhibit 10.20(b) to Cinemark, Inc.s Quarterly
Report on Form 10-Q (File No. 333-116292) filed May 13, 2005).*31.1
    
    Certification of Chief Executive Officer of Cinemark USA, Inc.
Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.*31.2
    
    Certification of Chief Financial Officer of Cinemark USA, Inc.
Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.*32.1
    
    Certification of the Chief Executive Officer of Cinemark USA,
Inc. Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.*32.2
    
    Certification of the Chief Financial Officer of Cinemark USA,
Inc. Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
 
 *
    
    filed herewith