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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549
 FORM 10-Q QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 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 500
Plano, Texas
(Address of principal executive offices)
    
    75093
(Zip Code)
 Registrants telephone number, including area code: (972) 665-1000 Indicate by check mark whether the registrant (1) has filed all reports required to be filed
by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or
for such shorter period that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days. Yes þ No o Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule
12b-2 of the Exchange Act). Yes o No þ As of April 30, 2005, 1,500 shares of Class A common stock and 182,648 shares of Class B
common stock were outstanding.




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##### Table of Contents



CINEMARK USA, INC. AND SUBSIDIARIES
TABLE OF CONTENTS PagePART I.
    
    FINANCIAL INFORMATIONItem 1.
    
    Financial StatementsCondensed Consolidated Balance Sheets as of March 31, 2005 (unaudited) and December 31, 2004
    
    
    3Condensed Consolidated Statements of Income (unaudited) for the three months ended March 31, 2005 and 2004
    
    
    4Condensed Consolidated Statements of Cash Flows (unaudited) for the three months ended March 31, 2005 and 2004
    
    
    5Notes to Condensed Consolidated Financial Statements (unaudited)
    
    
    6Item 2.
    
    Management's Discussion and Analysis of Financial Condition and Results of Operations
    
    
    22Item 3.
    
    Quantitative and Qualitative Disclosures About Market Risk
    
    
    31Item 4.
    
    Controls and Procedures
    
    
    32PART II.
    
    OTHER INFORMATIONItem 1.
    
    Legal Proceedings
    
    
    33Item 5.
    
    Other Information
    
    
    33Item 6.
    
    Exhibits
    
    
    37SIGNATURES
    
    
    
    
    40Certification 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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PART I  FINANCIAL INFORMATION 
 Item 1. Financial Statements CINEMARK USA, INC. AND SUBSIDIARIES 
 CONDENSED CONSOLIDATED BALANCE SHEETS
 (in thousands, except share data)
 March 31,
    
    
    December 31,2005
    
    
    2004(unaudited)ASSETSCURRENT ASSETSCash and cash equivalents
    
    $
    86,019
    
    
    $
    100,228Inventories
    
    
    4,136
    
    
    
    4,237Accounts receivable
    
    
    11,977
    
    
    
    11,303Income tax receivable
    
    
    6,306
    
    
    
    7,037Prepaid expenses and other
    
    
    4,432
    
    
    
    3,819Total current assets
    
    
    112,870
    
    
    
    126,624THEATRE PROPERTIES AND EQUIPMENT
    
    
    1,323,079
    
    
    
    1,307,088Less accumulated depreciation and amortization
    
    
    538,307
    
    
    
    521,493Theatre properties and equipment  net
    
    
    784,772
    
    
    
    785,595OTHER ASSETSGoodwill
    
    
    44,661
    
    
    
    45,006Intangible assets  net
    
    
    5,976
    
    
    
    6,084Investments in and advances to affiliates
    
    
    1,918
    
    
    
    1,710Deferred charges and other assets  net
    
    
    41,419
    
    
    
    36,546Total other assets
    
    
    93,974
    
    
    
    89,346TOTAL ASSETS
    
    $
    991,616
    
    
    $
    1,001,565LIABILITIES AND SHAREHOLDERS EQUITYCURRENT LIABILITIESCurrent portion of long-term debt
    
    $
    6,535
    
    
    $
    6,539Accounts payable and accrued expenses
    
    
    89,899
    
    
    
    122,324Total current liabilities
    
    
    96,434
    
    
    
    128,863LONG-TERM LIABILITIESSenior credit agreements
    
    
    263,567
    
    
    
    265,510Senior subordinated notes
    
    
    354,503
    
    
    
    354,894Deferred income taxes
    
    
    24,451
    
    
    
    23,138Deferred lease expenses
    
    
    28,256
    
    
    
    27,962Deferred gain on sale leasebacks
    
    
    3,549
    
    
    
    3,641Deferred revenues and other long-term liabilities
    
    
    20,466
    
    
    
    12,025Total long-term liabilities
    
    
    694,792
    
    
    
    687,170COMMITMENTS AND CONTINGENCIES
    
    
    
    
    
    
    MINORITY INTERESTS IN SUBSIDIARIES
    
    
    16,767
    
    
    
    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
    
    
    54,536
    
    
    
    51,070Retained earnings
    
    
    181,630
    
    
    
    169,577Treasury stock, 57,245 Class B shares at cost
    
    
    (24,233
    )
    
    
    (24,233
    )Accumulated other comprehensive loss
    
    
    (77,853
    )
    
    
    (77,122
    )Total shareholders equity
    
    
    183,623
    
    
    
    168,835TOTAL LIABILITIES AND SHAREHOLDERS EQUITY
    
    $
    991,616
    
    
    $
    1,001,565
 The accompanying notes are an integral part of the condensed consolidated financial statements. 3




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CINEMARK USA, INC. AND SUBSIDIARIES 
 CONDENSED CONSOLIDATED STATEMENTS OF INCOME
 (in thousands, unaudited)
 Three months ended March 31,2005
    
    
    2004REVENUESAdmissions
    
    $
    151,160
    
    
    $
    149,134Concession
    
    
    73,768
    
    
    
    72,480Other
    
    
    12,753
    
    
    
    12,011Total revenues
    
    
    237,681
    
    
    
    233,625COSTS AND EXPENSESCost of operations:Film rentals and advertising
    
    
    78,901
    
    
    
    78,678Concession supplies
    
    
    11,745
    
    
    
    11,989Salaries and wages
    
    
    24,283
    
    
    
    23,989Facility lease expense
    
    
    32,891
    
    
    
    30,915Utilities and other
    
    
    29,179
    
    
    
    26,282Total cost of operations
    
    
    176,999
    
    
    
    171,853General and administrative expenses
    
    
    12,295
    
    
    
    11,800Depreciation and amortization
    
    
    18,254
    
    
    
    16,865Impairment of long-lived assets
    
    
    226
    
    
    
    1,000(Gain) loss on sale of assets and other
    
    
    688
    
    
    
    (513
    )Total costs and expenses
    
    
    208,462
    
    
    
    201,005OPERATING INCOME
    
    
    29,219
    
    
    
    32,620OTHER INCOME (EXPENSE)Interest expense
    
    
    (10,578
    )
    
    
    (11,876
    )Amortization of debt issue costs
    
    
    (689
    )
    
    
    (590
    )Interest income
    
    
    830
    
    
    
    491Foreign currency exchange gain (loss)
    
    
    (82
    )
    
    
    170Equity in income of affiliates
    
    
    94
    
    
    
    37Minority interests in income of subsidiaries
    
    
    (100
    )
    
    
    (1,466
    )Total other expenses
    
    
    (10,525
    )
    
    
    (13,234
    )INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES
    
    
    18,694
    
    
    
    19,386Income taxes
    
    
    6,641
    
    
    
    7,887INCOME FROM CONTINUING OPERATIONS
    
    
    12,053
    
    
    
    11,499Loss from discontinued operations, net of taxes (See Note 4)
    
    
    
    
    
    
    (1,565
    )NET INCOME
    
    $
    12,053
    
    
    $
    9,934
 The accompanying notes are an integral part of the condensed consolidated financial statements. 4




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CINEMARK USA, INC. AND SUBSIDIARIES 
 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
 (in thousands, unaudited)
 Three months ended March 31,2005
    
    
    2004OPERATING ACTIVITIESNet income
    
    $
    12,053
    
    
    $
    9,934Noncash items in net income:Depreciation
    
    
    18,084
    
    
    
    16,705Amortization of intangible and other assets
    
    
    170
    
    
    
    160Amortization of foreign advanced rents
    
    
    411
    
    
    
    497Amortized compensation  stock options
    
    
    
    
    
    
    145Amortization of debt issue costs
    
    
    689
    
    
    
    590Amortization of gain on sale leasebacks
    
    
    (92
    )
    
    
    (91
    )Amortization of debt discount and premium
    
    
    (391
    )
    
    
    (366
    )Amortization of deferred revenues
    
    
    (45
    )
    
    
    (55
    )Impairment of long-lived assets
    
    
    226
    
    
    
    1,000(Gain) loss on sale of assets and other
    
    
    688
    
    
    
    (513
    )Deferred lease expenses
    
    
    294
    
    
    
    63Deferred income tax expenses
    
    
    1,313
    
    
    
    2,059Equity in income of affiliates
    
    
    (94
    )
    
    
    (37
    )Minority interests in income of subsidiaries
    
    
    100
    
    
    
    1,466Other noncash items
    
    
    
    
    
    
    1,869Changes in assets and liabilities:Inventories
    
    
    101
    
    
    
    219Accounts receivable
    
    
    (674
    )
    
    
    1,772Prepaid expenses and other
    
    
    (613
    )
    
    
    (780
    )Other assets
    
    
    (5,690
    )
    
    
    (3,255
    )Advances with affiliates
    
    
    (114
    )
    
    
    (4,849
    )Accounts payable and accrued expenses
    
    
    (32,505
    )
    
    
    (31,199
    )Other long-term liabilities
    
    
    (35
    )
    
    
    100Income tax receivable/payable
    
    
    731
    
    
    
    (118
    )Net cash used for operating activities
    
    
    (5,393
    )
    
    
    (4,684
    )INVESTING ACTIVITIESAdditions to theatre properties and equipment
    
    
    (10,501
    )
    
    
    (17,850
    )Proceeds from sale of theatre properties and equipment
    
    
    
    
    
    
    262Proceeds from sale of equity investment
    
    
    
    
    
    
    1,250Dividends/capital returned from affiliates
    
    
    
    
    
    
    128Net cash used for investing activities
    
    
    (10,501
    )
    
    
    (16,210
    )FINANCING ACTIVITIESCapital contribution from parent
    
    
    3,466
    
    
    
    Proceeds from long-term debt
    
    
    
    
    
    
    692Repayments of long-term debt
    
    
    (1,637
    )
    
    
    (2,267
    )Debt issue costs
    
    
    
    
    
    
    (10
    )Increase in minority investment in subsidiaries
    
    
    12
    
    
    
    171Decrease in minority investment in subsidiaries
    
    
    (42
    )
    
    
    (1,122
    )Net cash provided by (used for) financing activities
    
    
    1,799
    
    
    
    (2,536
    )Effect of exchange rate changes on cash and cash equivalents
    
    
    (114
    )
    
    
    (45
    )DECREASE IN CASH AND CASH EQUIVALENTS
    
    
    (14,209
    )
    
    
    (23,475
    )CASH AND CASH EQUIVALENTS:Beginning of period
    
    
    100,228
    
    
    
    107,319End of period
    
    $
    86,019
    
    
    $
    83,844
 SUPPLEMENTAL INFORMATION (See Note 10) The accompanying notes are an integral part of the condensed consolidated financial statements. 5




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CINEMARK USA, INC. AND SUBSIDIARIES 
   1. The Company and Basis of Presentation Cinemark USA, Inc. and subsidiaries (the Company) are leaders in the motion picture
exhibition industry in terms of both revenues and the number of screens in operation, with theatres
in the United States (U.S.), Canada, Mexico, Argentina, Brazil, Chile, Ecuador, Peru, Honduras,
El Salvador, Nicaragua, Costa Rica, Panama and Colombia. The Company also managed additional
theatres in the U.S., Canada, Brazil and Taiwan during the three months ended March 31, 2005. The condensed consolidated financial statements have been prepared by the Company, without
audit, according to the rules and regulations of the Securities and Exchange Commission. In the
opinion of management, these interim financial statements reflect all adjustments necessary to
state fairly the financial position and results of operations as of, and for, the periods
indicated. The condensed consolidated financial statements include the accounts of Cinemark USA,
Inc. and its subsidiaries. Majority-owned subsidiaries that the Company controls are consolidated
while those subsidiaries of which the Company owns between 20% and 50% and does not control are
accounted for as affiliates under the equity method. Those subsidiaries of which the Company owns
less than 20% are accounted for as affiliates under the cost method. The results of these
subsidiaries and affiliates are included in the condensed consolidated financial statements
effective with their formation or from their dates of acquisition. Significant intercompany
balances and transactions are eliminated in consolidation. Certain reclassifications have been
made to the 2004 financial statements to conform to the 2005 presentation. These condensed consolidated financial statements should be read in conjunction with the
audited annual consolidated financial statements and the notes thereto for the year ended December
31, 2004, included in the Annual Report filed March 29, 2005 on Form 10-K by the Company under the
Securities Exchange Act of 1934. Operating results for the three months ended March 31, 2005 are
not necessarily indicative of the results to be achieved for the full year. 2. Recapitalization of Cinemark, Inc. and Refinancing of Certain Long-Term Debt Recapitalization of Cinemark, Inc.- On March 12, 2004, the Companys parent, Cinemark, Inc.,
entered into an agreement and plan of merger with a newly formed subsidiary of Madison Dearborn
Partners, LLC (Madison). The transaction was completed on April 2, 2004, at which time the newly
formed subsidiary of Madison was merged with and into Cinemark, Inc., with Cinemark, Inc.
continuing as the surviving corporation. Simultaneously, an affiliate of Madison purchased shares
of common stock of Cinemark, Inc. for $518,245 in cash and became the controlling stockholder of
Cinemark, Inc., owning approximately 83% of Cinemark, Inc.s capital stock. Lee Roy Mitchell, the
Companys Chief Executive Officer, and the Mitchell Special Trust collectively retained
approximately 16% ownership of Cinemark, Inc.s capital stock with certain members of management
owning the remaining 1%. Based on the terms of the transaction, including Mr. Mitchells ownership
retention, the transaction was accounted for as a recapitalization, which resulted in Cinemark,
Inc. and its subsidiaries retaining their historical book values. Since April 2, 2004, Madison
sold approximately 10% of its stock in Cinemark, Inc. to outside investors. As of the date of this
report, Madison owned approximately 75% of the capital stock of Cinemark, Inc., outside investors
owned approximately 8%, Lee Roy Mitchell and the Mitchell Special Trust collectively owned
approximately 16% and certain members of management owned the remaining 1%. On March 31, 2004, Cinemark, Inc. issued $577,173 aggregate principal amount at maturity of 9
3/4% senior discount notes due 2014. The gross proceeds at issuance of $360,000 were used to fund in
part the Recapitalization. Interest on the notes accretes until March 15, 2009 up to the aggregate
principal amount of $577,173. Cash interest will accrue and be payable semi-annually in arrears on
March 15 and September 15, commencing on September 15, 2009. Due to the holding company status of
Cinemark, Inc., payments of principal and interest under these notes will be dependent on loans,
dividends and other payments from the Company to Cinemark, Inc. As of March 31, 2005, the accreted
principal balance of the notes was $396,041. Upon a change of control, Cinemark, Inc. would be
required to make an offer to repurchase all of the 9 3/4% senior discount notes at a price equal to
101% of the accreted value of the notes plus accrued and unpaid interest, if any, through the date
of purchase. The Company has no obligation, contingent or otherwise, to pay the amounts due under
the 9 3/4% senior discount notes or to make funds
available to pay those amounts. The 9 3/4% senior discount notes are general, unsecured senior
obligations of Cinemark, Inc. that are effectively subordinated to indebtedness and other
liabilities of the Company. 6




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CINEMARK USA, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(IN THOUSANDS, UNAUDITED) Upon consummation of the Recapitalization on April 2, 2004, all outstanding stock options
of Cinemark, Inc. immediately vested and the majority were repurchased, which resulted in
compensation expense of $16,245 recorded by the Company during April 2004. Compensation expense,
which was included in general and administrative expenses, consisted of the write-off of the
unamortized unearned compensation expense for options outstanding as of the date of the
Recapitalization and the impact of the cash settlement of these options. As part of the
transaction, Cinemark, Inc. paid change of control fees and other management compensation expenses
of $15,749, which were also included in general and administrative expenses during April 2004. As a result of the Recapitalization, the Companys Brazilian partners exercised their option
to cause Cinemark, Inc. to purchase all of their shares of common stock of Cinemark Brasil S.A.,
which represented 47.2% of total common stock of Cinemark Brasil S.A. See Note 3. Refinancing of Certain Long-Term Debt- On March 16, 2004, the Company initiated a tender
offer for its then outstanding $105,000 aggregate principal amount 8 1/2% senior subordinated notes
due 2008 and a consent solicitation to remove substantially all restrictive covenants in the
indenture governing those notes. On March 25, 2004, a supplemental indenture removing
substantially all of the covenants was executed and became effective on the date of the
Recapitalization. Additionally, on the date of the Recapitalization, the Company amended its
senior secured credit facility to provide for a $260,000 seven year term loan and a $100,000 six
and one-half year revolving credit line, which was left undrawn. The net proceeds from the amended
senior secured credit facility were used to repay the term loan under the Companys then existing
senior secured credit facility of approximately $163,763 and to redeem the $94,165 aggregate
principal amount of the Companys outstanding $105,000 aggregate principal amount of 8 1/2% senior
subordinated notes that were tendered pursuant to the tender offer. The tender offer was made at
104.5% of the principal amount of the notes tendered on or prior to the consent date and at 101.5%
of the aggregate principal amount of the notes tendered subsequent to the consent date but prior to
the expiration date. On April 6, 2004, as a result of the consummation of the Recapitalization and in accordance
with the terms of the indenture governing the Companys 9% senior subordinated notes due 2013, the
Company made a change of control offer to purchase the 9% senior subordinated notes at a purchase
price of 101% of the aggregate principal amount, plus accrued and unpaid interest, if any, at the
date of purchase. Approximately $17,750 aggregate principal amount of the 9% senior subordinated
notes were tendered and not withdrawn in the change of control offer, which expired on May 26,
2004. Payment of the change of control price was made with available cash by the Company on June 1,
2004. On July 28, 2004, the Company provided notice to the holders of the remaining outstanding 8 1/2%
senior subordinated notes due 2008 of its election to redeem all outstanding notes at a redemption
price of 102.833% of the aggregate principal amount plus accrued interest. On August 27, 2004, the
Company redeemed the remaining $10,835 aggregate principal amount of notes utilizing available cash
and borrowings under the Companys revolving credit line. The amended senior secured credit facility was further amended on August 18, 2004 to, among
other things, reduce the interest rate applicable to the term loan. Under the amended term loan,
principal payments of $650 are due each calendar quarter through March 31, 2010 and increase to
$61,100 each calendar quarter from June 30, 2010 to maturity at March 31, 2011. The
amended term loan bears interest, at the Companys option, at: (A) the base rate equal to the
higher of (i) the prime lending rate as set forth on the British Banking Association Telerate page
5 or (ii) the federal funds effective rate from time to time plus 0.50%, plus a margin of 1.00% per
annum, or (B) a eurodollar rate plus a margin of 2.00% per annum. After the completion of two
fiscal quarters after the closing date, the margin under the amended term loan applicable to base
rate loans ranges from 0.75% per annum to 1.00% per annum and the margin applicable to eurodollar
rate loans ranges from 1.75% per annum to 2.00% per annum, and will be adjusted based upon the
Company achieving certain performance targets. Borrowings under the amended revolving credit line bear interest, at the Companys option, at:
(A) a base rate equal to the higher of (i) the prime lending rate as set forth on the British
Banking Association Telerate page 5 or (ii) the federal funds effective rate from time to time plus
0.50%, plus a margin of 1.50% per annum, or (B) a eurodollar rate plus a margin of 2.50% per
annum. After the completion of two fiscal quarters after the closing date, the margin under the
amended revolving credit line applicable to base rate loans ranges from 1.00% per annum to 1.50%
per annum and the margin applicable to eurodollar rate loans ranges from 2.00% per annum to 2.50%
per annum, and
will be adjusted based upon the Company achieving certain performance targets. The Company is
required to pay a commitment fee calculated at 7




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CINEMARK USA, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(IN THOUSANDS, UNAUDITED) the rate of 0.50% per annum on the average daily unused portion of the amended revolving
credit line, payable quarterly in arrears. 3. Acquisitions As a result of the Recapitalization, the Companys Brazilian partners exercised their option
to cause Cinemark, Inc. to purchase all of their shares of common stock of Cinemark Brasil S.A.,
which represented 47.2% of total common stock of Cinemark Brasil S.A. The Company, through its
subsidiary Brasil Holdings, LLC, directly and indirectly purchased the partners shares of Cinemark
Brasil S.A. for $44,958 with available cash on August 18, 2004. The Company accounted for the
purchase as a step acquisition and, as a result of the preliminary purchase price allocation,
recorded goodwill of $26,923 and eliminated the Brazilian partners minority interest. After the
final purchase price allocation is complete for both book and tax purposes, it is expected that
goodwill will be deductible for tax purposes. As a result of this acquisition, the Company owns
100% of the common stock in Cinemark Brasil S.A. On September 15, 2004, the Company purchased shares of common stock of its Mexican subsidiary
from its Mexican partners, increasing its ownership interest in the Mexican subsidiary from 95.0%
to 99.4%. The purchase price was $5,379 and was funded with available cash and borrowings on the
Companys revolving credit line. The Company accounted for the purchase as a step acquisition and,
as a result of the preliminary purchase price allocation, recorded goodwill of $3,813 and
eliminated the Mexican partners 4.4% minority interest. 4. Discontinued Operations As of March 31, 2004, the Companys two United Kingdom theatres met the criteria of assets
held for sale in accordance with Statement of Financial Accounting Standards (SFAS) No. 144,
Accounting for Impairment or Disposal of Long-Lived Assets.On April 30, 2004, the Company sold
its two United Kingdom theatres through the sale of all of the capital stock of Cinemark Theatres
UK, Ltd., its United Kingdom subsidiary. The Company received $2,646 in proceeds upon closing of
the transaction and an additional $540 once the final working capital position was determined in
accordance with the stock purchase agreement. The sale resulted in a loss of $463, which was
recorded during April 2004. On December 23, 2004, the Company sold eleven discount theatres (Interstate theatres)
through the sale of all of the capital stock of Interstate Holdings, Inc. The Company received
$5,810 in proceeds upon closing of the transaction. The final sales price is subject to the final
working capital position to be determined in accordance with the stock purchase agreement. The
sale resulted in a preliminary gain of $2,715, which was recorded during December 2004. 8




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CINEMARK USA, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(IN THOUSANDS, UNAUDITED) The results of operations for the United Kingdom and Interstate theatres have been
classified as discontinued operations for all periods presented. Amounts reported as discontinued
operations in the Companys condensed consolidated statements of income include the following
components: Three MonthsEndedMarch 31,2004REVENUESAdmissions
    
    $
    1,730Concession
    
    
    1,285Other
    
    
    326Total revenues
    
    $
    3,341COSTS AND EXPENSESCost of operations:Film rentals and advertising
    
    
    757Concession supplies
    
    
    262Salaries and wages
    
    
    628Facility lease expense
    
    
    608Utilities and other
    
    
    634Total cost of operations
    
    
    2,889General and administrative expenses
    
    
    277Depreciation and amortization
    
    
    83Impairment of long-lived assets
    
    
    1,800Total costs and expenses
    
    
    5,049OPERATING LOSS
    
    
    (1,708
    )Minority interests in loss of subsidiaries
    
    
    14LOSS BEFORE INCOME TAXES
    
    
    (1,694
    )Income tax benefit
    
    
    (129
    )Loss from discontinued operations
    
    $
    (1,565
    )
 5. Stock Option Accounting Upon consummation of the Recapitalization on April 2, 2004, all outstanding stock options of
Cinemark, Inc. immediately vested and the majority were repurchased, resulting in compensation
expense of $16,245 recorded by the Company during April 2004. Compensation expense, which was
included in general and administrative expenses, consisted of the write-off of the remaining
unearned compensation for options outstanding as of the date of the Recapitalization and the impact
of the cash settlement of these options. The then existing stock option plans were terminated. During September 2004, the Board of Directors of Cinemark, Inc. approved the 2004 Long Term
Incentive Plan (the Plan) under which approximately 3,075 shares of Cinemark, Inc. Class A common stock are
available for issuance to selected employees, directors and consultants of the Company. The Plan
provides for restricted share grants, incentive option grants and nonqualified option grants.
Cinemark, Inc. granted approximately 2,362 options under the Plan on September 30, 2004 at an exercise price
of $22.58 per option (equal to the market value at the date of grant). Options to purchase approximately 234
shares vested immediately and the remaining options granted in 2004 vest daily over the period
ending April 1, 2009 and expire ten years from the grant date. On January 28, 2005, Cinemark, Inc. granted an additional 4 options under the Plan at an
exercise price of $22.58 per option (equal to the market value at the date of grant). The options
granted during January 2005 vest daily over five years and the options expire ten years from the
grant date. 9




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CINEMARK USA, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(IN THOUSANDS, UNAUDITED) Although the Company did not have any options outstanding during the periods presented,
compensation expense related to outstanding options of Cinemark, Inc. was recorded in the Companys
condensed consolidated statements of income during the three months ended March 31, 2004. The
Company applies Accounting Principles Board Opinion No. 25 and related interpretations in
accounting for stock option plans. Had compensation costs been determined based on the fair value
at the date of grant for awards under the plans, consistent with the method of SFAS No. 123,
Accounting for Stock-Based Compensation and SFAS No. 148, Accounting for Stock-Based
Compensation Transition and Disclosure, the Companys net income would have been reduced to the
pro-forma amounts indicated below: Three Months EndedMarch 31,2005
    
    
    2004Net income as reported
    
    $
    12,053
    
    
    $
    9,934Compensation expense included in reported net
income, net of tax
    
    
    
    
    
    
    88Compensation expense under fair value method, net
of tax
    
    
    (741
    )
    
    
    (162
    )Pro-forma net income
    
    $
    11,312
    
    
    $
    9,860
 The weighted average fair value per share of stock options granted by Cinemark, Inc. during
2004 was $22.58 (all of which had an exercise price equal to the market value at the date of
grant). For each 2004 grant, compensation expense under the fair value method of SFAS No. 123 was
estimated on the date of grant using the Black-Scholes option-pricing model with the following
assumptions: dividend yield of 0 percent; an expected life of 6.5 years; expected volatility of
approximately 39 percent; and a risk-free interest rate of 3.79 percent. The weighted average fair
value per share of stock options granted by Cinemark, Inc. during the three months ended March 31,
2005 was $22.58 (all of which had an exercise price equal to the market value at the date of
grant). For the 2005 grant, compensation expense under the fair value method of SFAS No. 123 was
estimated on the date of grant using the Black-Scholes option-pricing model with the following
assumptions: dividend yield of 0 percent; an expected life of 6.5 years; expected volatility of
approximately 44 percent; and a risk-free interest rate of 3.93 percent. 6. Goodwill and Other Intangible Assets The Companys goodwill was as follows: ForeignCurrencyBalance at
    
    
    Translation
    
    
    Balance atDecember 31, 2004
    
    
    Adjustment
    
    
    March 31, 2005United States
    
    $
    4,932
    
    

    $
    
    
    
    $
    4,932Brazil
    
    
    30,069
    
    
    
    (216
    )
    
    
    29,853Mexico
    
    
    3,884
    
    
    
    (4
    )
    
    
    3,880Chile
    
    
    3,206
    
    
    
    (146
    )
    
    
    3,060Peru
    
    
    2,679
    
    
    
    17
    
    
    
    2,696Argentina
    
    
    236
    
    
    
    4
    
    
    
    240Total
    
    $
    45,006
    
    
    $
    (345
    )
    
    $
    44,661
 10




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CINEMARK USA, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(IN THOUSANDS, UNAUDITED) Intangible assets consisted of the following: March 31,
    
    
    December 31,2005
    
    
    2004Capitalized licensing fees
    
    $
    7,750
    
    
    $
    7,750Other intangible assets
    
    
    445
    
    
    
    438Less: Accumulated amortization
    
    
    (2,252
    )
    
    
    (2,120
    )Amortized intangible assets
    
    
    5,943
    
    
    
    6,068Unamortized intangible assets
    
    
    33
    
    
    
    16Total
    
    $
    5,976
    
    
    $
    6,084
 Aggregate amortization expense of $170 for the three months ended March 31, 2005 consisted of
$132 of amortization of intangible assets and $38 of amortization of other assets. Estimated
aggregate future amortization expense for intangible assets is as follows: For the nine months ended December 31, 2005
    
    $
    395For the twelve months ended December 31, 2006
    
    
    548For the twelve months ended December 31, 2007
    
    
    548For the twelve months ended December 31, 2008
    
    
    548For the twelve months ended December 31, 2009
    
    
    548Thereafter
    
    
    3,356Total
    
    $
    5,943
 7. Impairment of Long-Lived Assets In accordance with SFAS No. 144, Accounting for the Impairment or Disposal of Long-Lived
Assets, the Company reviews long-lived assets for impairment on a quarterly basis or whenever
events or changes in circumstances indicate the carrying amount of the assets may not be fully
recoverable. The Company considers 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 other
Company theatres, changes in foreign currency exchange rates, the impact of recent ticket price
changes, available lease renewal options and other factors in its assessment of impairment of
individual theatre assets. Long-lived assets are evaluated for impairment on an individual theatre
basis or a group basis if the group of theatres shares the same marketplace, which the Company
believes is the lowest applicable level for which there are identifiable cash flows. The
impairment evaluation is based on the estimated undiscounted cash flows from continuing use through
the remainder of the theatres useful life. The remainder of the useful life correlates with the
available remaining lease period for leased properties and a period of twenty years for fee owned
properties. If the estimated undiscounted cash flows are not sufficient to recover a long-lived
assets carrying value, the Company then compares the carrying value of the asset with its
estimated fair value, which is determined based on a multiple of cash flows. When estimated fair
value is determined to be lower than the carrying value of the long-lived asset, the asset is
written down to its estimated fair value and the impairment loss is recognized in the Companys
condensed consolidated statements of income. During the three months ended March 31, 2005, the
Company recorded an asset impairment charge of $226 to write-down two theatres in the United States
to their estimated fair values. 8. Foreign Currency Translation The accumulated other comprehensive loss account in shareholders equity of $77,853 and
$77,122 at March 31, 2005 and December 31, 2004, respectively, primarily relates to the cumulative
foreign currency adjustments from translating the financial statements of Cinemark Argentina, S.A.,
Cinemark Brasil S.A., Cinemark de Mexico, S.A. de C.V. and Cinemark Chile S.A. into U.S. dollars. In 2005 and 2004, all foreign countries where the Company has operations, including Argentina,
Brazil, Mexico and Chile were deemed non-highly inflationary. Thus, any fluctuation in the
currency results in a cumulative foreign currency 11




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CINEMARK USA, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(IN THOUSANDS, UNAUDITED) translation adjustment to the accumulated other comprehensive loss account recorded as an
increase in, or reduction of, shareholders equity. On March 31, 2005, the exchange rate for the Brazilian real was 2.67 reais to the U.S. dollar
(the exchange rate was 2.65 reais to the U.S. dollar at December 31, 2004). As a result, the
effect of translating the March 31, 2005 Brazilian financial statements into U.S. dollars is
reflected as a cumulative foreign currency translation adjustment to the accumulated other
comprehensive loss account as a reduction of shareholders equity of $414. At March 31, 2005, the
total assets of the Companys Brazilian subsidiaries were U.S. $99,947. On March 31, 2005, the exchange rate for the Mexican peso was 11.23 pesos to the U.S. dollar
(the exchange rate was 11.22 pesos to the U.S. dollar at December 31, 2004). As a result, the
effect of translating the March 31, 2005 Mexican financial statements into U.S. dollars was
immaterial to the change in the accumulated other comprehensive loss account. At March 31, 2005,
the total assets of the Companys Mexican subsidiaries were U.S. $104,536. On March 31, 2005, the exchange rate for the Argentine peso was 2.92 pesos to the U.S. dollar
(the exchange rate was 2.97 pesos to the U.S. dollar at December 31, 2004). The effect of
translating the March 31, 2005 Argentine financial statements into U.S. dollars is reflected as a
cumulative foreign currency translation adjustment to the accumulated other comprehensive loss
account as an increase in shareholders equity of $291. At March 31, 2005, the total assets of the
Companys Argentine subsidiaries were U.S. $17,022. On March 31, 2005, the exchange rate for the Chilean peso was 586.45 pesos to the U.S. dollar
(the exchange rate was 559.83 pesos to the U.S. dollar at December 31, 2004). The effect of
translating the March 31, 2005 Chilean financial statements into U.S. dollars is reflected as a
cumulative foreign currency translation adjustment to the accumulated other comprehensive loss
account as a reduction of shareholders equity of $562. At March 31, 2005, the total assets of the
Companys Chilean subsidiaries were U.S. $19,911. 9. Comprehensive Income SFAS No. 130, Reporting Comprehensive Income, establishes standards for the reporting and
display of comprehensive income and its components in the condensed consolidated financial
statements. The Companys comprehensive income was as follows: Three Months EndedMarch 31,2005
    
    
    2004Net income
    
    $
    12,053
    
    
    $
    9,934Foreign currency translation adjustment
    
    
    (731
    )
    
    
    6Comprehensive income
    
    $
    11,322
    
    
    $
    9,940
 10. Supplemental Cash Flow Information The following is provided as supplemental information to the condensed consolidated statements
of cash flows: Three Months EndedMarch 31,2005
    
    
    2004Cash paid for interest
    
    $
    18,691
    
    
    $
    23,307Cash paid for income taxes (net of refunds)
    
    $
    1,229
    
    
    $
    5,070Noncash activities:Construction lease obligations related to
construction of three theatres in Mexico and one theatre in the U.S.
    
    $
    14,983
    
    
    $
    
 12




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CINEMARK USA, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(IN THOUSANDS, UNAUDITED) 11. Financial Information About Geographic Areas The Company operates in one business segment as a motion picture exhibitor. The Company has
operations in the U.S., Canada, Mexico, Argentina, Brazil, Chile, Ecuador, Peru, Honduras, El
Salvador, Nicaragua, Costa Rica, Panama and Colombia, which are reflected in the condensed
consolidated financial statements. Below is a breakdown of select financial information by
geographic area: Three Months EndedMarch 31,Revenues
    
    2005
    
    
    2004U.S. and Canada
    
    $
    176,238
    
    
    $
    175,563Brazil
    
    
    26,116
    
    
    
    21,775Mexico
    
    
    17,754
    
    
    
    17,801Other foreign countries (1)
    
    
    17,926
    
    
    
    18,889Eliminations
    
    
    (353
    )
    
    
    (403
    )Total
    
    $
    237,681
    
    
    $
    233,625
 March 31,
    
    
    December 31,Theatre Properties and Equipment-net
    
    2005
    
    
    2004U.S. and Canada
    
    $
    622,818
    
    
    $
    622,578Mexico
    
    
    63,316
    
    
    
    61,043Brazil
    
    
    49,751
    
    
    
    51,982Other foreign countries
    
    
    48,887
    
    
    
    49,992Total
    
    $
    784,772
    
    
    $
    785,595
   (1)
    
    Revenues for the three months ended March 31, 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 are included as discontinued operations for all
periods presented. 12. New Accounting Pronouncements In December 2004, the Financial Accounting Standards Board (FASB) issued SFAS No. 153,
Exchanges of Non-monetary Assets-Amendment of APB Opinion No. 29. SFAS No. 153 amends APB
Opinion No. 29 to eliminate the exception for nonmonetary exchanges of similar productive assets
and replaces it with a general exception for exchanges of nonmonetary assets that do not have
commercial substance, defined as transactions that are not expected to result in significant
changes in the cash flows of the reporting entity. This statement is effective for exchanges of
non-monetary assets occurring after June 15, 2005. The adoption of SFAS No. 153 is not expected to
have a material impact on the Companys condensed consolidated financial statements. In
December 2004, the FASB issued SFAS No. 123(R), Share-Based Payment, which
establishes accounting standards for all transactions in which an entity exchanges its equity
instruments for goods and services. SFAS No. 123(R) focuses primarily on accounting for transactions with
employees, and carries forward without change prior guidance for share-based payments for transactions with non
employees. SFAS No. 123(R) eliminates the intrinsic value measurement objective in APB Opinion No. 25 and
generally requires the Company to measure the cost of employee services received
in exchange for an award of equity instruments based on the fair value of the award on the date of
the grant. The standard requires grant date fair value to be estimated using either an
option-pricing model, which is consistent with the terms of the award, or a market observed
price, if such a price exists. Such cost must be recognized over the period during which an
employee is required to provide service in exchange for the award (which is usually
the vesting period). The standard also requires the Company to estimate the number of
instruments that will ultimately be issued, rather than accounting for forfeitures as
they occur. The Company is required to apply SFAS No. 123(R) to all awards granted,
modified or settled in its first annual reporting period after December 15, 2005. The
Company will be required to use the modified prospective method, under which it must
recognize compensation cost for all awards granted after it adopts the standard and for the
unvested portion of previously granted awards that are outstanding on that date.
The Company has commenced its analysis of the impact of SFAS 123(R), but cannot predict
with reasonable certainty the number of options that will be unvested and outstanding on
December 31, 2005. Accordingly, the Company cannot currently quantify with precision the
effect that this standard will have on its 13




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CINEMARK USA, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(IN THOUSANDS, UNAUDITED) financial position or results of operations. FASB Staff Position (FSP) No. 109-2, Accounting and Disclosure Guidance for the Foreign
Earnings Repatriation Provision within the American Jobs Creation Act of 2004 (the Jobs Act)
provides guidance on enterprises income tax expense and deferred tax liability. The Jobs Act was
enacted on October 22, 2004. FSP 109-2 states that an enterprise is allowed time beyond the
financial reporting period of enactment to evaluate the effect of the Jobs Act on its plan for
reinvestment or repatriation of foreign earnings for purposes of applying SFAS No. 109 Accounting
for Income Taxes. The Company has not yet completed evaluating the impact of the repatriation
provisions. The Company is currently performing an earnings and profit study to enable it to model
and evaluate the impact. Results cannot be estimated at this time. Accordingly, as provided for
in FSP 109-2, the Company has not adjusted its tax expense or deferred tax liability to reflect the
repatriation provisions of the Jobs Act. The Company will complete its evaluation by the end of
2005. 13. Related Party Transactions The Company has paid certain fees and expenses on behalf of its parent, Cinemark, Inc., that
are included in investments in and advances to affiliates on the Companys condensed consolidated
balance sheets. At March 31, 2005, the amount due from Cinemark, Inc. was $489. The Company also
received capital contributions from Cinemark, Inc. totaling $3,466 during the three months ended
March 31, 2005. The Company manages one theatre for Laredo Theatre, Ltd. (Laredo). The Company is the sole
general partner and owns 75% of the limited partnership interests of Laredo. Lone Star Theatres,
Inc. owns the remaining 25% of the limited partnership interests in Laredo and is 100% owned by Mr.
David Roberts, Lee Roy Mitchells son-in-law. Under the agreement, management fees are paid by
Laredo to the Company at a rate of 5% of annual theatre revenues up to $50 million and 3% of annual
theatre revenues in excess of $50 million. The Company recorded $46 of management fee revenues
during the three months ended March 31, 2005. All such amounts are included in the Companys
condensed consolidated financial statements with the intercompany amounts eliminated in
consolidation. The Company leases one theatre from Plitt Plaza Joint Venture (Plitt Plaza). Plitt Plaza is
indirectly owned by Lee Roy Mitchell. Annual rent is approximately $118 plus certain taxes,
maintenance expenses and insurance. The Company recorded $32 of facility lease expense payable to
Plitt Plaza joint venture during the three months ended March 31, 2005. The Company entered into an amended and restated profit participation agreement on March 12,
2004 with its President, Alan Stock, which became effective upon consummation of the
Recapitalization and amends a profit participation agreement with Mr. Stock in effect since May
2002. Under the agreement, Mr. Stock receives a profit interest in two theatres once the Company
has recovered its capital investment in these theatres plus its borrowing costs. During the three
months ended March 31, 2005, the Company recorded $155 in profit participation expense payable to
Mr. Stock, which is included in general and administrative expenses on the Companys condensed
consolidated statements of income. In the event that Mr. Stocks employment is terminated without
cause, profits will be distributed according to a formula set forth in the profit participation
agreement. 14. Litigation DOJ Litigation- In March 1999, the Department of Justice (DOJ) filed suit in the U.S.
District Court, Northern District of Ohio, Eastern Division, against the Company alleging certain
violations of the Americans with Disabilities Act of 1990 (the ADA) relating to the Companys
wheelchair seating arrangements and seeking remedial action. An order granting summary judgment to
the Company was issued in November 2001. The Department of Justice appealed the district courts
ruling with the Sixth Circuit Court of Appeals. On November 7, 2003, the Sixth Circuit Court of
Appeals reversed the summary judgment and sent the case back to the district court for further
review without deciding whether wheelchair seating at the Companys theatres comply with the ADA.
The Sixth Circuit Court of Appeals also stated that if the district court found that the theatres
did not comply with the ADA, any remedial action should be prospective only. The Company and the
United States have resolved this lawsuit. A Consent Order was entered by the U.S. District Court
for the Northern District of Ohio, Eastern Division,
on November 17, 2004. This Consent Order fully and finally resolves the United States v.
Cinemark USA, Inc.lawsuit, and all claims asserted against the Company in that lawsuit have been
dismissed with prejudice. Under the Consent Order, over the next five years, the Company will make
modifications to wheelchair seating locations in fourteen stadium-style movie theatres within the
Sixth Circuit and elsewhere, and spacing 14




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CINEMARK USA, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(IN THOUSANDS, UNAUDITED) and companion seating modifications at 67 auditoriums at other stadium-styled movie theatres.
Upon completion of these modifications, such theatres will comply with all existing and pending ADA
wheelchair seating requirements, and no further modifications will be necessary to remaining
stadium-style movie theatres in the United States to comply with the wheelchair seating
requirements of the ADA. Under the Consent Order, the DOJ approved the seating plans for nine
stadium-styled movie theatres under construction. The Company and the DOJ have also created a safe
harbor framework for the Company to construct all of its future stadium-style movie theatres. The
DOJ has stipulated that all theatres built in compliance with the Consent Order will comply with
the wheelchair seating requirements of the ADA. Management believes that its obligations under the
Consent Order are not material in the aggregate to its financial position, results of operations,
and cash flows. Mission, Texas Litigation- In July 2001, Sonia Rivera-Garcia and Valley Association for
Independent Living filed suit in the 93rd Judicial District Court of Hidalgo County,
Texas alleging certain violations of the Human Resources Code, the Texas Architectural Barriers
Act, the Texas Accessibility Standards and the Deceptive Trade Practices Act relating to
accessibility of movie theatres for patrons using wheelchairs at one theatre in the Mission, Texas
market. During the first quarter of 2005, the plaintiff dismissed any claims under the Deceptive
Trade Practices Act. The plaintiff is seeking remedial action. A jury in a similar case in
Austin, Texas found that the Company did not violate the Human Resources Code, the Texas
Architectural Business Act or the Texas Accessibility Standards. The judge in that case dismissed
the claim under the Deceptive Trade Practices Act. The Company has filed an answer denying the
allegations and is vigorously defending this suit. The Company is unable to predict the outcome of
this litigation or the range of potential loss, however, management believes that based upon
current precedent the Companys potential liability with respect to such proceeding is not material
in the aggregate to the Companys financial position, results of operations and cash flows.
Accordingly, the Company has not established a reserve for loss in connection with this proceeding. From time to time, the Company is involved in other various legal proceedings arising from the
ordinary course of its business operations, such as personal injury claims, employment matters and
contractual disputes, most of which are covered by insurance. The Company believes its potential
liability with respect to proceedings currently pending is not material, individually or in the
aggregate, to the Companys financial position, results of operations and cash flows. 15. Condensed Consolidating Financial Statements of Subsidiary Guarantors As of March 31, 2005, the Company had outstanding $342,250 aggregate principal amount of 9%
senior subordinated notes due 2013. These senior subordinated notes are fully and unconditionally
guaranteed, jointly and severally, on a senior subordinated unsecured basis by the following
subsidiaries of Cinemark USA, Inc.: Cinemark, L.L.C., Sunnymead Cinema Corp., Cinema Properties, Inc., Greeley Holdings, Inc.,
Trans Texas Cinema, Inc., Missouri City Central 6, Inc., Cinemark Mexico (USA), Inc., Cinemark
Leasing Company, Cinemark Partners I, Inc., Multiplex Properties, Inc., Multiplex Services, Inc.,
CNMK Investments, Inc., CNMK Delaware Investments I, L.L.C., CNMK Delaware Investments II, L.L.C.,
CNMK Delaware Investments Properties, L.P., CNMK Texas Properties, Ltd., Laredo Theatre, Ltd., and
Cinemark Investments Corporation. The following supplemental condensed consolidating financial statements present:  1.
    Condensed consolidating balance sheets as of March 31, 2005 and December 31, 2004 and
condensed consolidating statements of income and cash flows for each of the three months
ended March 31, 2005 and 2004.2.
    Cinemark USA, Inc. (the Parent and Issuer), combined Guarantor Subsidiaries and
combined Non-Guarantor Subsidiaries with their investments in subsidiaries accounted for
using the equity method of accounting and therefore, the Parent column reflects the equity
income (loss) of its Guarantor Subsidiaries and Non-Guarantor Subsidiaries, which are also
separately reflected in the stand-alone Guarantor Subsidiaries and Non-Guarantor Subsidiaries
column. Additionally, the Guarantor Subsidiaries column
reflects the equity income (loss) of its Non-Guarantor Subsidiaries, which are also
separately reflected in the stand-alone Non-Guarantor Subsidiaries column.3.
    Elimination entries necessary to consolidate the Parent and all of its Subsidiaries. 15




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CINEMARK USA, INC. AND SUBSIDIARIES
SUBSIDIARY GUARANTORS
CONDENSED CONSOLIDATING BALANCE SHEET INFORMATION
MARCH 31, 2005
(in thousands) Parent
    
    
    Subsidiary
    
    
    SubsidiaryCompany
    
    
    Guarantors
    
    
    Non-Guarantors
    
    
    Eliminations
    
    
    ConsolidatedASSETSCURRENT ASSETSCash and cash equivalents
    
    $
    20,202
    
    
    $
    5,800
    
    
    $
    60,017
    
    
    $
    
    
    
    $
    86,019Inventories
    
    
    1,880
    
    
    
    1,139
    
    
    
    1,117
    
    
    
    
    
    
    
    4,136Accounts receivable
    
    
    9,428
    
    
    
    29,361
    
    
    
    3,177
    
    
    
    (29,989
    )
    
    
    11,977Income tax receivable
    
    
    11,912
    
    
    
    173
    
    
    
    5,013
    
    
    
    (10,792
    )
    
    
    6,306Prepaid expenses and other
    
    
    6,564
    
    
    
    519
    
    
    
    759
    
    
    
    (3,410
    )
    
    
    4,432Total current assets
    
    
    49,986
    
    
    
    36,992
    
    
    
    70,083
    
    
    
    (44,191
    )
    
    
    112,870THEATRE PROPERTIES AND EQUIPMENT  net
    
    
    293,669
    
    
    
    308,524
    
    
    
    182,579
    
    
    
    
    
    
    
    784,772OTHER ASSETSGoodwill
    
    
    7,485
    
    
    
    4,225
    
    
    
    32,885
    
    
    
    66
    
    
    
    44,661Investments in and advances to affiliates
    
    
    570,668
    
    
    
    433,994
    
    
    
    1,022
    
    
    
    (1,003,766
    )
    
    
    1,918Intangible assets, deferred charges and other assets  net
    
    
    24,513
    
    
    
    2,277
    
    
    
    77,612
    
    
    
    (57,007
    )
    
    
    47,395Total other assets
    
    
    602,666
    
    
    
    440,496
    
    
    
    111,519
    
    
    
    (1,060,707
    )
    
    
    93,974TOTAL ASSETS
    
    $
    946,321
    
    
    $
    786,012
    
    
    $
    364,181
    
    
    $
    (1,104,898
    )
    
    $
    991,616LIABILITIES AND SHAREHOLDERS EQUITYCURRENT LIABILITIESCurrent portion of long-term debt
    
    $
    2,656
    
    
    $
    
    
    
    $
    3,879
    
    
    $
    
    
    
    $
    6,535Income tax payable
    
    
    5,711
    
    
    
    
    
    
    
    5,081
    
    
    
    (10,792
    )
    
    
    Accounts payable and accrued expenses
    
    
    55,040
    
    
    
    26,328
    
    
    
    37,958
    
    
    
    (29,427
    )
    
    
    89,899Total current liabilities
    
    
    63,407
    
    
    
    26,328
    
    
    
    46,918
    
    
    
    (40,219
    )
    
    
    96,434LONG-TERM LIABILITIESLong-term debt, less current portion
    
    
    618,751
    
    
    
    44,018
    
    
    
    64,199
    
    
    
    (108,898
    )
    
    
    618,070Deferred income taxes
    
    
    21,796
    
    
    
    5,461
    
    
    
    (2,806
    )
    
    
    
    
    
    
    24,451Other long-term liabilities and deferrals
    
    
    35,275
    
    
    
    73,580
    
    
    
    16,816
    
    
    
    (73,400
    )
    
    
    52,271Total long-term liabilities
    
    
    675,822
    
    
    
    123,059
    
    
    
    78,209
    
    
    
    (182,298
    )
    
    
    694,792COMMITMENTS AND CONTINGENCIES
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    MINORITY INTERESTS IN SUBSIDIARIES
    
    
    
    
    
    
    201
    
    
    
    16,566
    
    
    
    
    
    
    
    16,767SHAREHOLDERS EQUITYCommon stock
    
    
    49,543
    
    
    
    19
    
    
    
    96,813
    
    
    
    (96,832
    )
    
    
    49,543Other shareholders equity
    
    
    157,549
    
    
    
    636,405
    
    
    
    125,675
    
    
    
    (785,549
    )
    
    
    134,080Total shareholders equity
    
    
    207,092
    
    
    
    636,424
    
    
    
    222,488
    
    
    
    (882,381
    )
    
    
    183,623TOTAL LIABILITIES AND SHAREHOLDERS EQUITY
    
    $
    946,321
    
    
    $
    786,012
    
    
    $
    364,181
    
    
    $
    (1,104,898
    )
    
    $
    991,616
 16




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CINEMARK USA, INC. AND SUBSIDIARIES
SUBSIDIARY GUARANTORS
CONDENSED CONSOLIDATING STATEMENT OF INCOME INFORMATION
THREE MONTHS ENDED MARCH 31, 2005
(in thousands) Parent
    
    
    Subsidiary
    
    
    SubsidiaryCompany
    
    
    Guarantors
    
    
    Non-Guarantors
    
    
    Eliminations
    
    
    ConsolidatedREVENUES
    
    $
    108,333
    
    
    $
    80,500
    
    
    $
    65,970
    
    
    $
    (17,122
    )
    
    $
    237,681COSTS AND EXPENSESCost of operations
    
    
    94,945
    
    
    
    50,136
    
    
    
    49,040
    
    
    
    (17,122
    )
    
    
    176,999General and administrative expenses
    
    
    1,384
    
    
    
    7,082
    
    
    
    3,829
    
    
    
    
    
    
    
    12,295Depreciation and amortization
    
    
    5,852
    
    
    
    5,905
    
    
    
    6,497
    
    
    
    
    
    
    
    18,254Impairment of long-lived assets
    
    
    226
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    226Loss on sale of assets and other
    
    
    
    
    
    
    394
    
    
    
    294
    
    
    
    
    
    
    
    688Total costs and expenses
    
    
    102,407
    
    
    
    63,517
    
    
    
    59,660
    
    
    
    (17,122
    )
    
    
    208,462OPERATING INCOME
    
    
    5,926
    
    
    
    16,983
    
    
    
    6,310
    
    
    
    
    
    
    
    29,219OTHER INCOME (EXPENSE)Interest expense
    
    
    (10,399
    )
    
    
    (868
    )
    
    
    (1,484
    )
    
    
    2,173
    
    
    
    (10,578
    )Amortization of debt issue costs
    
    
    (684
    )
    
    
    
    
    
    
    (5
    )
    
    
    
    
    
    
    (689
    )Interest income
    
    
    1,013
    
    
    
    1,292
    
    
    
    699
    
    
    
    (2,174
    )
    
    
    830Foreign currency exchange loss
    
    
    
    
    
    
    
    
    
    
    (82
    )
    
    
    
    
    
    
    (82
    )Equity in income of affiliates
    
    
    18,797
    
    
    
    4,057
    
    
    
    23
    
    
    
    (22,783
    )
    
    
    94Minority interests in income of subsidiaries
    
    
    
    
    
    
    (51
    )
    
    
    (49
    )
    
    
    
    
    
    
    (100
    )Total other income (expense)
    
    
    8,727
    
    
    
    4,430
    
    
    
    (898
    )
    
    
    (22,784
    )
    
    
    (10,525
    )INCOME FROM CONTINUING
OPERATIONS BEFORE INCOME TAXES
    
    
    14,653
    
    
    
    21,413
    
    
    
    5,412
    
    
    
    (22,784
    )
    
    
    18,694Income taxes
    
    
    2,475
    
    
    
    2,860
    
    
    
    1,306
    
    
    
    
    
    
    
    6,641NET INCOME
    
    $
    12,178
    
    
    $
    18,553
    
    
    $
    4,106
    
    
    $
    (22,784
    )
    
    $
    12,053
 17




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CINEMARK USA, INC. AND SUBSIDIARIES
SUBSIDIARY GUARANTORS
CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS INFORMATION
THREE MONTHS ENDED MARCH 31, 2005
(in thousands) Parent
    
    
    Subsidiary
    
    
    SubsidiaryCompany
    
    
    Guarantors
    
    
    Non-Guarantors
    
    
    Eliminations
    
    
    ConsolidatedOPERATING ACTIVITIESNet income
    
    $
    12,178
    
    
    $
    18,553
    
    
    $
    4,106
    
    
    $
    (22,784
    )
    
    $
    12,053Noncash items in net income:Depreciation and amortization
    
    
    6,008
    
    
    
    5,905
    
    
    
    6,913
    
    
    
    
    
    
    
    18,826Impairment of long-lived assets
    
    
    226
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    226Loss on sale of assets and other
    
    
    
    
    
    
    394
    
    
    
    294
    
    
    
    
    
    
    
    688Deferred lease expenses
    
    
    307
    
    
    
    (3
    )
    
    
    (10
    )
    
    
    
    
    
    
    294Deferred income tax expenses
    
    
    (1,548
    )
    
    
    2,856
    
    
    
    5
    
    
    
    
    
    
    
    1,313Equity in income of affiliates
    
    
    (18,797
    )
    
    
    (4,057
    )
    
    
    (24
    )
    
    
    22,784
    
    
    
    (94
    )Minority interests in income of subsidiaries
    
    
    
    
    
    
    51
    
    
    
    49
    
    
    
    
    
    
    
    100Changes in assets and liabilities
    
    
    (12,666
    )
    
    
    (22,199
    )
    
    
    (859
    )
    
    
    (3,075
    )
    
    
    (38,799
    )Net cash provided by (used for) operating activities
    
    
    (14,292
    )
    
    
    1,500
    
    
    
    10,474
    
    
    
    (3,075
    )
    
    
    (5,393
    )INVESTING ACTIVITIESAdditions to theatre properties and equipment
    
    
    (2,500
    )
    
    
    (5,235
    )
    
    
    (2,766
    )
    
    
    
    
    
    
    (10,501
    )Net transactions with affiliates
    
    
    10,610
    
    
    
    (8,018
    )
    
    
    (4,440
    )
    
    
    1,848
    
    
    
    Net cash provided by (used for) investing activities
    
    
    8,110
    
    
    
    (13,253
    )
    
    
    (7,206
    )
    
    
    1,848
    
    
    
    (10,501
    )FINANCING ACTIVITIESCapital contribution from parent
    
    
    3,466
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,466Repayments of long-term debt
    
    
    (650
    )
    
    
    
    
    
    
    (987
    )
    
    

    
    
    
    
    (1,637
    )Change in intercompany notes
    
    
    
    
    
    
    
    
    
    
    (1,227
    )
    
    
    1,227
    
    
    
    Increase in minority investment in subsidiaries
    
    
    
    
    
    
    
    
    
    
    12
    
    
    
    
    
    
    
    12Decrease in minority investment in subsidiaries
    
    
    
    
    
    
    
    
    
    
    (42
    )
    
    
    
    
    
    
    (42
    )Net cash provided by (used for) financing activities
    
    
    2,816
    
    
    
    
    
    
    
    (2,244
    )
    
    
    1,227
    
    
    
    1,799Effect of exchange rate changes on cash and cash equivalents
    
    
    
    
    
    
    
    
    
    
    (114
    )
    
    
    
    
    
    
    (114
    )INCREASE
(DECREASE) IN CASH AND CASH EQUIVALENTS
    
    
    (3,366
    )
    
    
    (11,753
    )
    
    
    910
    
    
    
    
    
    
    
    (14,209
    )CASH AND CASH EQUIVALENTS:Beginning of period
    
    
    23,568
    
    
    
    17,553
    
    
    
    59,107
    
    
    
    
    
    
    
    100,228End of period
    
    $
    20,202
    
    
    $
    5,800
    
    
    $
    60,017
    
    
    $
    
    
    
    $
    86,019
 18




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##### Table of Contents



CINEMARK USA, INC. AND SUBSIDIARIES
SUBSIDIARY GUARANTORS
CONDENSED CONSOLIDATING BALANCE SHEET INFORMATION
DECEMBER 31, 2004
(in thousands) 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
 19




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##### Table of Contents



CINEMARK USA, INC. AND SUBSIDIARIES
SUBSIDIARY GUARANTORS
CONDENSED CONSOLIDATING STATEMENT OF INCOME INFORMATION
THREE MONTHS ENDED MARCH 31, 2004
(in thousands) Parent
    
    
    Subsidiary
    
    
    SubsidiaryCompany
    
    
    Guarantors
    
    
    Non-Guarantors
    
    
    Eliminations
    
    
    ConsolidatedREVENUES
    
    $
    107,909
    
    
    $
    79,630
    
    
    $
    62,442
    
    
    $
    (16,356
    )
    
    $
    233,625COSTS AND EXPENSESCost of operations
    
    
    93,638
    
    
    
    49,753
    
    
    
    44,932
    
    
    
    (16,470
    )
    
    
    171,853General and administrative expenses
    
    
    768
    
    
    
    7,226
    
    
    
    3,692
    
    
    
    114
    
    
    
    11,800Depreciation and amortization
    
    
    5,282
    
    
    
    5,615
    
    
    
    5,968
    
    
    
    
    
    
    
    16,865Impairment of long-lived assets
    
    
    
    
    
    
    1,000
    
    
    
    
    
    
    
    
    
    
    
    1,000Gain on sale of assets and other
    
    
    (469
    )
    
    
    
    
    
    
    (44
    )
    
    
    
    
    
    
    (513
    )Total costs and expenses
    
    
    99,219
    
    
    
    63,594
    
    
    
    54,548
    
    
    
    (16,356
    )
    
    
    201,005OPERATING INCOME
    
    
    8,690
    
    
    
    16,036
    
    
    
    7,894
    
    
    
    
    
    
    
    32,620OTHER INCOME (EXPENSE)Interest expense
    
    
    (11,646
    )
    
    
    (872
    )
    
    
    (1,785
    )
    
    
    2,427
    
    
    
    (11,876
    )Amortization of debt issue costs
    
    
    (566
    )
    
    
    
    
    
    
    (24
    )
    
    
    
    
    
    
    (590
    )Interest income
    
    
    1,096
    
    
    
    1,409
    
    
    
    413
    
    
    
    (2,427
    )
    
    
    491Foreign currency exchange gain
    
    
    
    
    
    
    
    
    
    
    170
    
    
    
    
    
    
    
    170Equity in income of affiliates
    
    
    16,341
    
    
    
    2,176
    
    
    
    26
    
    
    
    (18,506
    )
    
    
    37Minority interests in income of subsidiaries
    
    
    
    
    
    
    (38
    )
    
    
    (1,428
    )
    
    
    
    
    
    
    (1,466
    )Total other income (expense)
    
    
    5,225
    
    
    
    2,675
    
    
    
    (2,628
    )
    
    
    (18,506
    )
    
    
    (13,234
    )INCOME FROM CONTINUING
OPERATIONS BEFORE INCOME TAXES
    
    
    13,915
    
    
    
    18,711
    
    
    
    5,266
    
    
    
    (18,506
    )
    
    
    19,386Income taxes
    
    
    3,981
    
    
    
    2,867
    
    
    
    1,039
    
    
    
    
    
    
    
    7,887INCOME FROM CONTINUING OPERATIONS
    
    
    9,934
    
    
    
    15,844
    
    
    
    4,227
    
    
    
    (18,506
    )
    
    
    11,499Loss from discontinued operations, net of taxes
    
    
    
    
    
    
    
    
    
    
    (1,565
    )
    
    
    
    
    
    
    (1,565
    )NET INCOME
    
    $
    9,934
    
    
    $
    15,844
    
    
    $
    2,662
    
    
    $
    (18,506
    )
    
    $
    9,934
 20




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##### Table of Contents



CINEMARK USA, INC. AND SUBSIDIARIES
SUBSIDIARY GUARANTORS
CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS INFORMATION
THREE MONTHS ENDED MARCH 31, 2004
(in thousands) Parent
    
    
    Subsidiary
    
    
    SubsidiaryCompany
    
    
    Guarantors
    
    
    Non-Guarantors
    
    
    Eliminations
    
    
    ConsolidatedOPERATING ACTIVITIESNet income
    
    $
    9,934
    
    
    $
    15,844
    
    
    $
    2,662
    
    
    $
    (18,506
    )
    
    $
    9,934Noncash items in net income:Depreciation and amortization
    
    
    5,480
    
    
    
    5,615
    
    
    
    6,490
    
    
    
    
    
    
    
    17,585Impairment of long-lived assets
    
    
    
    
    
    
    1,000
    
    
    
    
    
    
    
    
    
    
    
    1,000Gain on sale of assets and other
    
    
    (469
    )
    
    
    
    
    
    
    (44
    )
    
    
    
    
    
    
    (513
    )Deferred lease expenses
    
    
    323
    
    
    
    (3
    )
    
    
    (257
    )
    
    
    
    
    
    
    63Deferred income tax expenses
    
    
    (978
    )
    
    
    2,850
    
    
    
    187
    
    
    
    
    
    
    
    2,059Equity in income of affiliates
    
    
    (16,341
    )
    
    
    (2,176
    )
    
    
    (26
    )
    
    
    18,506
    
    
    
    (37
    )Minority interests in income of subsidiaries
    
    
    
    
    
    
    38
    
    
    
    1,428
    
    
    
    
    
    
    
    1,466Other noncash items
    
    
    
    
    
    
    
    
    
    
    1,869
    
    
    
    
    
    
    
    1,869Changes in assets and liabilities
    
    
    (43,118
    )
    
    
    6,720
    
    
    
    (2,223
    )
    
    
    511
    
    
    
    (38,110
    )Net cash provided by (used for) operating activities
    
    
    (45,169
    )
    
    
    29,888
    
    
    
    10,086
    
    
    
    511
    
    
    
    (4,684
    )INVESTING ACTIVITIESAdditions to theatre properties and equipment
    
    
    (7,832
    )
    
    
    (5,294
    )
    
    
    (4,724
    )
    
    
    
    
    
    
    (17,850
    )Proceeds from sale of theatre properties and equipment
    
    
    
    
    
    
    
    
    
    
    262
    
    
    
    
    
    
    
    262Proceeds from sale of equity investment
    
    
    1,250
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,250Net transactions with affiliates
    
    
    33,301
    
    
    
    (31,522
    )
    
    
    54
    
    
    
    (1,705
    )
    
    
    128Net cash provided by (used for) investing activities
    
    
    26,719
    
    
    
    (36,816
    )
    
    
    (4,408
    )
    
    
    (1,705
    )
    
    
    (16,210
    )FINANCING ACTIVITIESProceeds from long-term debt
    
    
    
    
    
    
    4
    
    
    
    688
    
    
    
    
    
    
    
    692Repayments of long-term debt
    
    
    (413
    )
    
    
    (623
    )
    
    
    (1,231
    )
    
    
    
    
    
    
    (2,267

    )Debt issue cost
    
    
    (10
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (10
    )Change in intercompany notes
    
    
    
    
    
    
    
    
    
    
    (1,194
    )
    
    
    1,194
    
    
    
    Increase in minority investment in subsidiaries
    
    
    
    
    
    
    
    
    
    
    171
    
    
    
    
    
    
    
    171Decrease in minority investment in subsidiaries
    
    
    
    
    
    
    (50
    )
    
    
    (1,072
    )
    
    
    
    
    
    
    (1,122
    )Net cash used for financing activities
    
    
    (423
    )
    
    
    (669
    )
    
    
    (2,638
    )
    
    
    1,194
    
    
    
    (2,536
    )EFFECT OF EXCHANGE RATE CHANGES
ON CASH AND CASH EQUIVALENTS
    
    
    
    
    
    
    
    
    
    
    (45
    )
    
    
    
    
    
    
    (45
    )INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
    
    
    (18,873
    )
    
    
    (7,597
    )
    
    
    2,995
    
    
    
    
    
    
    
    (23,475
    )CASH AND CASH EQUIVALENTS:Beginning of period
    
    
    46,919
    
    
    
    9,523
    
    
    
    50,877
    
    
    
    
    
    
    
    107,319End of period
    
    $
    28,046
    
    
    $
    1,926
    
    
    $
    53,872
    
    
    $
    
    
    
    $
    83,844
 21




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##### Table of Contents



Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations The following discussion and analysis should be read in conjunction with our condensed
consolidated financial statements and related notes and schedules included elsewhere in this
report. We are one of the leaders in the motion picture exhibition industry, in terms of both revenues
and the number of screens in operation, with theatres in the U.S., Canada, Mexico, Argentina,
Brazil, Chile, Ecuador, Peru, Honduras, El Salvador, Nicaragua, Costa Rica, Panama and Colombia.
We generate revenues primarily from box office receipts and concession sales with additional
revenues from screen advertising sales and other revenue streams, such as vendor marketing
programs, pay phones, ATM machines and electronic video games located in some of our theatres. Our
revenues are affected by changes in attendance and average admissions and concession revenues per
patron. Attendance is primarily affected by the quality and quantity of films released by motion
picture studios. Film releases scheduled for the remainder of 2005 include the highly anticipated
Star Wars: Episode III Revenge of the Sithand other high-profile films such as Harry Potter and
the Goblet of Fire, War of the Worlds, King Kongand Batman Begins. Film rental costs are variable in nature and fluctuate with our admissions revenues. Film
rental costs as a percentage of revenues are generally higher for periods in which successful films
are released. Film rental costs can also vary based on the length of a films run. Generally, a
film that runs for a longer period results in lower film rental costs as a percentage of revenues.
Film rental rates are negotiated on a film-by-film and theatre-by-theatre basis. Advertising
costs, which are expensed as incurred, are primarily fixed at the theatre level as daily movie
directories placed in newspapers represent the largest component of advertising costs. The monthly
cost of these advertisements is based on, among other things, the size of the directory and the
frequency and size of the newspapers circulation. The internet is becoming the primary way to
check movie showtimes, replacing the traditional newspaper advertisements. Concession supplies expense is variable in nature and fluctuates with our concession revenues.
We purchase concession supplies to replace units sold. We negotiate prices for concession
supplies directly with concession vendors and manufacturers to obtain bulk rates. Although salaries and wages include a fixed cost component (i.e. the minimum staffing costs to
operate a theatre facility during non-peak periods), salaries and wages move in relation to
revenues as theatre staffing is adjusted to handle changes in attendance. Facility lease expense is primarily a fixed cost at the theatre level as most of our facility
leases require a fixed monthly minimum rent payment. Certain of our leases are subject to
percentage rent only while others are subject to percentage rent in addition to their fixed monthly
rent if a target annual revenue level is achieved. Facility lease expense as a percentage of
revenues is also affected by the number of leased versus fee owned facilities. Utilities and other costs include certain costs that are fixed such as property taxes, certain
costs which are variable such as liability insurance, and certain costs that possess both fixed and
variable components such as utilities, repairs and maintenance and security services. Critical Accounting Policies We prepare our condensed consolidated financial statements in conformity with accounting
principles generally accepted in the United States of America. As such, we are required to make
certain estimates and assumptions that we believe are reasonable based upon the information
available. These estimates and assumptions affect the reported amounts of assets and liabilities at
the date of the financial statements and the reported amounts of revenues and expenses during the
periods presented. The significant accounting policies, which we believe are the most critical to
aid in fully understanding and evaluating our reported consolidated financial results include the
following: Revenue and Expense Recognition Revenues are recognized when admissions and concession sales are received at the box office
and screen advertising is shown in the theatres. We record proceeds from the sale of gift cards and
other advanced sale-type certificates in current liabilities and recognize admissions and
concession revenue when a holder redeems the card or
certificate. We recognize unredeemed gift cards and other advanced sale-type certificates as
revenue only after such a period of time indicates, based on historical experience, the likelihood
of redemption is remote. 22




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##### Table of Contents



Film rental costs are accrued based on the applicable box office receipts and either the
mutually agreed upon firm terms established prior to the opening of the picture or estimates of the
final mutually agreed upon settlement, which occurs at the conclusion of the picture run, subject
to the film licensing arrangement. Estimates are based on the expected success of a film over the
length of its run in the theatres. The success of a film can typically be determined a few weeks
after a film is released when initial box office performance of the film is known. Accordingly,
final settlements typically approximate estimates since box office receipts are known at the time
the estimate is made and the expected success of a film over the length of its run in theatres can
typically be estimated early in the films run. The final film settlement amount is negotiated at
the conclusion of the films run based upon how a film actually performs. If actual settlements are
higher than those estimated, additional film rental costs are recorded at that time. We recognize
advertising costs and any sharing arrangements with film distributors in the same accounting
period. Our advertising costs are expensed as incurred. Impairment of Long-Lived Assets We review long-lived assets for impairment on a quarterly basis or whenever events or changes
in circumstances indicate the carrying amount of the assets may not be fully recoverable. We assess
many factors including the following to determine whether to impair individual theatre 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. Long-lived assets are evaluated for impairment on an individual theatre basis or a group basis
if the group of theatres shares the same marketplace, which we believe is the lowest applicable
level for which there are identifiable cash flows. The evaluation is based on the estimated
undiscounted cash flows from continuing use through the remainder of the theatres useful life.
The remainder of the useful life correlates with the available remaining lease period for leased
properties and a period of twenty years for fee owned properties. If the estimated undiscounted
cash flows are not sufficient to recover a long-lived assets carrying value, we then compare the
carrying value of the asset with its estimated fair value, which is determined based on a multiple
of cash flows. When estimated fair value is determined to be lower than the carrying value of the
long-lived asset, the asset is written down to its estimated fair value. Goodwill Our recorded goodwill was $44.7 million at March 31, 2005. We evaluate goodwill for
impairment annually at fiscal year-end and any time events or circumstances indicate the carrying
amount of the goodwill may not be fully recoverable. We evaluate goodwill for impairment on an
individual theatre basis, which is the lowest level of identifiable cash flows and the level at
which goodwill is recorded. The evaluation is a two-step approach requiring us to compute the fair
value of a reporting unit and compare it with its carrying value. If the carrying value exceeds
fair value, a second step would be performed to measure the potential goodwill impairment. Fair
value is determined based on a multiple of cash flows. When estimated fair value is determined to
be lower than the carrying value of the asset, the asset is written down to its estimated fair
value. 23




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##### Table of Contents



Acquisitions We account for acquisitions under the purchase method of accounting. The purchase method
requires that we estimate the fair value of the assets and liabilities acquired and allocate
consideration paid accordingly. For significant acquisitions, we obtain independent third party
valuation studies for certain of the assets and liabilities acquired to assist us in determining
fair value. The estimation of the fair values of the assets and liabilities acquired involves a
number of estimates and assumptions that could differ materially from the actual amounts. We
completed acquisitions in 2004 as discussed in Note 3 to our condensed consolidated financial
statements. Income Taxes We use an asset and liability approach to financial accounting and reporting for income taxes.
Deferred income taxes are provided when tax laws and financial accounting standards differ with
respect to the amount of income for a year and the bases of assets and liabilities. A valuation
allowance is recorded to reduce the carrying amount of deferred tax assets unless it is more likely
than not those assets will be realized. Income taxes are provided on unremitted earnings from
foreign subsidiaries unless such earnings are expected to be indefinitely reinvested. Income taxes
have also been provided for potential tax assessments and the related tax accruals are in the
consolidated balance sheets. To the extent tax accruals differ from actual payments or
assessments, the accruals will be adjusted. Results of Operations The following table sets forth, for the periods indicated, the percentage of revenues
represented by certain items reflected in our condensed consolidated statements of income: % of RevenuesThree Months EndedMarch 31,2005
    
    
    2004RevenuesAdmissions
    
    
    63.6
    %
    
    
    63.8
    %Concession
    
    
    31.0
    %
    
    
    31.0
    %Other
    
    
    5.4
    %
    
    
    5.2
    %Total revenues
    
    
    100.0
    %
    
    
    100.0
    %Cost of operations
    
    
    74.5
    %
    
    
    73.5
    %General and administrative expenses
    
    
    5.1
    %
    
    
    5.1
    %Depreciation and amortization
    
    
    7.7
    %
    
    
    7.2
    %Impairment of long-lived assets
    
    
    0.1
    %
    
    
    0.4
    %(Gain) loss on sale of assets and
other
    
    
    0.3
    %
    
    
    (0.2
    %)Total costs and expenses
    
    
    87.7
    %
    
    
    86.0
    %Operating income
    
    
    12.3
    %
    
    
    14.0
    %
 Three months ended March 31, 2005 and 2004 Revenues.Total revenues for the three months ended March 31, 2005 (first quarter of 2005)
increased to $237.7 million from $233.6 million for the three months ended March 31, 2004 (first
quarter of 2004), representing a 1.7% increase. Admissions revenues increased 1.4% to $151.2
million for the first quarter of 2005 from $149.1 million for the first quarter of 2004.
Concession revenues increased 1.8% to $73.8 million for the first quarter of 2005 from $72.5
million for the first quarter of 2004. The increase in admissions revenues was attributable to an
increase in average ticket price, which increased from $3.59 for the first quarter of 2004 to $3.78
for the first quarter of 2005, partially offset by a 3.7% decrease in attendance from 41.6 million
patrons for the first quarter of 2004 to 40.0 million patrons for the first quarter of 2005. The
decrease in attendance for the first quarter of 2005 was primarily due to the mix of film product
compared to the first quarter of 2004. During the first quarter of 2004, The Passion of the Christ
was released, which went on to gross over $350 million in domestic markets. The increase in
concession revenues was attributable to an increase in concession revenues per patron, which
increased from $1.74 for the first quarter of 2004 to $1.84 for the first quarter of 24




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##### Table of Contents



2005, partially offset by the decline in attendance. The increased concession revenues per patron
were primarily due to a domestic price increase implemented during the fourth quarter of 2004.
Revenues per screen decreased 1.6% to $74,614 for the first quarter of 2005 from $75,821 for the
first quarter of 2004. Cost of Operations.Cost of operations was $177.0 million, or 74.5% of revenues, for the first
quarter of 2005 compared to $171.9 million, or 73.5% of revenues, for the first quarter of 2004. Film rentals and advertising costs were $78.9 million, or 52.2% of admissions revenues, for
the first quarter of 2005 compared to $78.7 million, or 52.8% of admissions revenues, for the first
quarter of 2004. The decrease in film rentals and advertising costs as a percentage of admissions
revenues was due to the weaker film product released during the first quarter of 2005 compared to
the first quarter of 2004. Concession supplies expense was $11.7 million, or 15.9% of concession
revenues, for the first quarter of 2005 compared to $12.0 million, or 16.5% of concession revenues,
for the first quarter of 2004. The decrease in concession supplies expense as a percentage of
concession revenues was primarily due to a domestic price increase implemented during the fourth
quarter of 2004 and an increase in concession rebates. Salaries and wages increased to $24.3 million for the first quarter of 2005 from $24.0 million
for 2004 primarily due to new theatre openings. Facility lease expense increased to $32.9 million
for the first quarter of 2005 from $30.9 million for the first quarter of 2004 primarily due to new
theatre openings. Utilities and other costs increased to $29.2 million for the first quarter of
2005 from $26.3 million for the first quarter of 2004 primarily due to higher utility costs and new
theatre openings. General and Administrative Expenses.General and administrative expenses increased to $12.3
million for the first quarter of 2005 from $11.8 million for the first quarter of 2004. The
increase was primarily due to increases in credit card service fees. Depreciation and Amortization.Depreciation and amortization expense was $18.3 million for the
first quarter of 2005 compared to $16.9 million for the first quarter of 2004. The increase is
primarily due to new theatre openings since the first quarter of 2004. Impairment of Long-Lived Assets. We recorded asset impairment charges on assets held and used
of $0.2 million during the first quarter of 2005 compared to $1.0 million for the first quarter of
2004. Impairment charges for 2005 include the write-down of two theatres in the United States to
their fair values. The impairment charge for 2004 was to write-down one theatre located in the
United States to its fair value. (Gain) Loss on Sale of Assets and Other.We recorded a loss on sale of assets and other of
$0.7 million during the first quarter of 2005 compared to a gain on sale of assets and other of
$0.5 million during the first quarter of 2004. Interest Expense.Interest costs incurred, including amortization of debt issue costs, was
$11.3 million for the first quarter of 2005 compared to $12.5 million for the first quarter of
2004. The decrease in interest expense is primarily due to a decrease in average debt outstanding
and a reduction in average interest rates related to the Recapitalization. Income Taxes.Income tax expense of $6.6 million was recorded for the first quarter of 2005
compared to $7.9 million recorded for the first quarter of 2004. The effective tax rate was 35.5%
for the first quarter of 2005 versus 40.7% for the first quarter of 2004. The decrease in the
effective rate was primarily due to a reduction in the valuation
allowances for certain of our foreign subsidiaries. Loss from Discontinued Operations, Net of Taxes.We recorded a loss from discontinued
operations, net of taxes, of $1.6 million during the first quarter of 2004. The loss for 2004
includes the results of operations of our two United Kingdom theatres that were sold on April 30,
2004 and the results of operations of the eleven Interstate theatres that were sold on December 23,
2004. See Note 4 to the condensed consolidated financial statements. 25




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##### Table of Contents



Liquidity and Capital Resources Operating Activities We primarily collect our revenues in cash, mainly through box office receipts and the sale of
concession supplies. We also continue to expand the number of theatres that provide the patron a
choice of using a credit card, in place of cash, which we convert to cash in approximately three to
four days. Because our revenues are received in cash prior to the payment of related expenses, we
have an operating float and historically have not required traditional working capital financing.
We typically operate with a negative working capital position for our ongoing theatre operations
throughout the year, primarily because of the lack of significant inventory and accounts
receivable. Cash used for operating activities, as reflected in the condensed consolidated
statements of cash flows, amounted to $5.4 million for the three months ended March 31, 2005
compared to $4.7 million for the three months ended March 31, 2004. Investing Activities Our investing activities have been principally related to the development and acquisition of
additional theatres. New theatre openings and acquisitions historically have been financed with
internally generated cash and by debt financing, including borrowings under our senior secured
credit facility. Cash used for investing activities, as reflected in the condensed consolidated
statements of cash flows, amounted to $10.5 million for the three months ended March 31, 2005
compared to $16.2 million for the three months ended March 31, 2004. The decrease in cash used for
investing activities is primarily due to a decrease in capital expenditures from the first quarter
of 2004. We continue to expand our U.S. theatre circuit. We opened one new theatre with 14 screens
during the three months ended March 31, 2005, bringing our total domestic screen count to 2,317
screens (12 of which are in Canada). At March 31, 2005, we had signed commitments to open ten new
theatres with 116 screens in domestic markets by the end of 2005 and open six new theatres with 86
screens in domestic markets subsequent to 2005. We estimate the remaining capital expenditures for
the development of these 202 screens will be approximately $59 million. Actual expenditures for
continued theatre development and acquisitions are subject to change based upon the availability of
attractive opportunities. We also continue to expand our international theatre circuit. We opened one new theatre with
6 screens during the three months ended March 31, 2005, bringing our total international screen
count to 875 screens. We had signed commitments to open five new theatres with 28 screens in
international markets by the end of 2005 and open eight new theatres
with 71 screens in
international markets subsequent to 2005. We estimate the remaining capital expenditures for the
development of these 99 screens in international markets will be
approximately $46 million. Actual
expenditures for continued theatre development and acquisitions are subject to change based upon
the availability of attractive opportunities. We plan to fund capital expenditures for our continued development from cash flow from
operations, borrowings under our senior secured credit facility, subordinated note borrowings,
proceeds from sale leaseback transactions and/or sales of excess real estate. Financing Activities Cash provided by financing activities, as reflected in the condensed consolidated statements
of cash flows, amounted to $1.8 million for the three months ended March 31, 2005 compared to cash
used for financing activities of $2.5 million for the three months ended March 31, 2004. As of
March 31, 2005, our long-term debt obligations, future minimum lease obligations under
non-cancelable operating leases, outstanding letters of credit, obligations under employment
agreements and purchase commitments for each period indicated are summarized as follows: 26




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##### Table of Contents



Payments Due by Period(in millions)Less Than
    
    
    
    
    
    
    
    
    
    
    AfterContractual Obligations
    
    Total
    
    
    One Year
    
    
    1 - 3 Years
    
    
    4 - 5 Years
    
    
    5 YearsLong-term debt
    
    $
    624.6
    
    
    $
    6.5
    
    
    $
    10.8
    
    
    $
    7.8
    
    
    $
    599.5Lease obligations
    
    
    1,530.7
    
    
    
    113.6
    
    
    
    238.8
    
    
    
    230.5
    
    
    
    947.8Letters of credit
    
    
    0.1
    
    
    
    0.1
    
    
    
    
    
    
    
    
    
    
    
    Employment agreements
    
    
    8.4
    
    
    
    2.8
    
    
    
    5.6
    
    
    
    
    
    
    
    Purchase commitments 1
    
    
    111.1
    
    
    
    44.4
    
    
    
    64.9
    
    
    
    1.1
    
    
    
    0.7Total obligations
    
    $
    2,274.9
    
    
    $
    167.4
    
    
    $
    320.1
    
    
    $
    239.4
    
    
    $
    1,548.0
   1
    
    Includes estimated capital expenditures associated with the construction of
new theatres to which we were committed as of March 31, 2005. As of March 31, 2005, we were in full compliance with all agreements governing our
outstanding debt. Recapitalization of Cinemark, Inc. We are a wholly-owned subsidiary of Cinemark, Inc. On March 12, 2004, Cinemark, Inc., entered
into an agreement and plan of merger with a newly formed subsidiary of Madison Dearborn Partners,
LLC (Madison). The transaction was completed on April 2, 2004, at which time the newly formed
subsidiary of Madison was merged with and into Cinemark, Inc., with Cinemark, Inc. continuing as
the surviving corporation. Simultaneously, an affiliate of Madison purchased shares of common
stock of Cinemark, Inc. for approximately $518.3 million in cash and became the controlling
stockholder of Cinemark, Inc., owning approximately 83% of Cinemark, Inc.s capital stock. Lee Roy
Mitchell, our Chief Executive Officer, and the Mitchell Special Trust collectively retained
approximately 16% ownership of Cinemark, Inc.s capital stock with certain members of management
owning the remaining 1%. Based on the terms of the transaction, including Mr. Mitchells ownership
retention, the transaction was accounted for as a recapitalization, which resulted in Cinemark,
Inc. and its subsidiaries retaining their historical book values. Since April 2, 2004, Madison sold
approximately 10% of its stock in Cinemark, Inc. to outside investors. As of the date of this
report, Madison owned approximately 75% of the capital stock of Cinemark, Inc., outside investors
owned approximately 8%, Lee Roy Mitchell and the Mitchell Special Trust collectively owned
approximately 16% and certain members of management own the remaining 1%. On March 31, 2004, Cinemark, Inc. issued approximately $577.2 million aggregate principal
amount at maturity of 9 3/4% senior discount notes due 2014. The gross proceeds at issuance of
approximately $360.0 million were used to fund in part the Recapitalization. Interest on the notes
accretes until March 15, 2009 up to the aggregate principal amount of approximately $577.2 million.
Cash interest will accrue and be payable semi-annually in arrears on March 15 and September 15,
commencing on September 15, 2009. Due to the holding company status of Cinemark, Inc., payments of
principal and interest under these notes will be dependent on loans, dividends and other payments
from us to Cinemark, Inc. As of March 31, 2005, the accreted principal balance of the notes was
approximately $396.0 million. Upon a change of control, Cinemark, Inc. would be required to make an
offer to repurchase all of the 9 3/4% senior discount notes at a price equal to 101% of the accreted
value of the notes plus accrued and unpaid interest, if any, through the date of purchase. We have
no obligation, contingent or otherwise, to pay the amounts due under the 9 3/4% senior discount notes
or to make funds available to pay those amounts. The 9 3/4% senior discount notes are general,
unsecured senior obligations of Cinemark, Inc. that are effectively subordinated to our
indebtedness and other liabilities. Senior Subordinated Notes On March 16, 2004, in connection with the Recapitalization, we initiated a tender offer for
our then outstanding $105 million aggregate principal amount 8 1/2% senior subordinated notes due
2008 and a consent solicitation to remove substantially all restrictive covenants in the indenture
governing those notes. On March 25, 2004, a supplemental indenture removing substantially all of
the covenants was executed and became effective on the date of the Recapitalization. On April 2,
2004, we redeemed approximately $94.1 million aggregate principal amount of 8 1/2% senior
subordinated notes that were tendered, pursuant to the tender offer, utilizing a portion of the
proceeds
from our amended senior secured credit facility. On April 14, 2004, after the expiration of
the tender offer, we redeemed an additional 27




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##### Table of Contents



$50,000 aggregate principal amount of 8 1/2% senior subordinated notes that were tendered, leaving
outstanding approximately $10.8 million aggregate principal amount of 8 1/2% senior subordinated
notes. On April 6, 2004, as a result of the consummation of the Recapitalization and in accordance
with the terms of the indenture governing our 9% senior subordinated notes due 2013, we made a
change of control offer to purchase the 9% senior subordinated notes at a purchase price of 101% of
the aggregate principal amount, plus accrued and unpaid interest, if any, at the date of purchase.
Approximately $17.8 million in aggregate principal amount of the 9% senior subordinated notes were
tendered and not withdrawn in the change of control offer, which expired on May 26, 2004. Payment
of the change of control price was made with available cash by us on June 1, 2004. On July 28, 2004, we provided notice to the holders of our remaining outstanding 8 1/2% senior
subordinated notes due 2008 of our election to redeem all outstanding notes at a redemption price
of 102.833% of the aggregate principal amount plus accrued interest. On August 27, 2004, we
redeemed the remaining $10.8 million aggregate principal amount of notes utilizing available cash
and borrowings under our revolving credit line. As of March 31, 2005, we had outstanding approximately $342.3 million aggregate principal
amount of 9% senior subordinated notes due 2013. Interest is payable on February 1 and August 1 of
each year. We may redeem all or part of the existing 9% notes on or after February 1, 2008. Prior
to February 1, 2006, we may redeem up to 35% of the aggregate principal amount of the existing 9%
notes from the proceeds of certain equity offerings. The senior subordinated notes are general, unsecured obligations and are subordinated in right
of payment to the amended senior secured credit facility or other senior indebtedness. The notes
are guaranteed by certain of our domestic subsidiaries. The guarantees are subordinated to the
senior debt of the subsidiary guarantors and rank pari passu with the senior subordinated debt of
our guarantor subsidiaries. The notes are effectively subordinated to the indebtedness and other
liabilities of our non-guarantor subsidiaries. The indentures governing the senior subordinated notes contain covenants that limit, among
other things, dividends, transactions with affiliates, investments, sale of assets, mergers,
repurchases of our capital stock, liens and additional indebtedness. Upon a change of control, we
would be required to make an offer to repurchase the senior subordinated notes at a price equal to
101% of the principal amount outstanding plus accrued and unpaid interest through the date of
repurchase. The indentures governing the senior subordinated notes allow us to incur additional
indebtedness if we satisfy the coverage ratio specified in each indenture, after giving effect to
the incurrence of the additional indebtedness, and in certain other circumstances. Senior Secured Credit Facility On February 14, 2003, we entered into a senior secured credit facility consisting of a $75
million five year revolving credit line and a $125 million term loan with Lehman Commercial Paper,
Inc. for itself and as administrative agent for a syndicate of lenders. The net proceeds from the
senior secured credit facility were used to repay, in full, certain debt agreements, including our
then existing credit facility. On August 18, 2003, we amended the senior secured credit facility to provide a $165 million
term loan expiring on March 31, 2008. The net proceeds of the $165 million term loan and
additional borrowings under the $75 million five year revolving credit line were used to (i) repay
approximately $124.7 million of term loans outstanding under our senior secured credit facility
entered into February 14, 2003 and (ii) redeem the remaining approximately $42 million aggregate
principal amount of our then outstanding 9 5/8% senior subordinated notes on September 18, 2003. On April 2, 2004, we amended our senior secured credit facility in connection with the
Recapitalization. The amended senior secured credit facility provides for a $260 million seven
year term loan and a $100 million six and one-half year revolving credit line. The net proceeds
from the amended senior secured credit facility were used to repay the existing term loan of
approximately $163.8 million and to redeem the approximately $94.2 million aggregate principal
amount of our then outstanding $105 million aggregate principal amount 8 1/2% senior subordinated
notes due 2008 that were tendered pursuant to the tender offer. The amended senior secured credit facility was further amended on August 18, 2004 to, among
other things, reduce the interest rate applicable to the term loan. Under the amended term loan,
principal payments of
approximately $0.7 million are due each calendar quarter through March 31, 2010 and increase
to $61.1 million each calendar quarter from 28




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June 30, 2010 to maturity at March 31, 2011. The amended term loan bears interest, at our option,
at: (A) the base rate equal to the higher of (i) the prime lending rate as set forth on the British
Banking Association Telerate page 5 or (ii) the federal funds effective rate from time to time plus
0.50%, plus a margin of 1.00% per annum, or (B) a eurodollar rate plus a margin of 2.00% per
annum. After the completion of two fiscal quarters after the closing date, the margin under the
amended term loan applicable to base rate loans ranges from 0.75% per annum to 1.00% per annum and
the margin applicable to eurodollar rate loans ranges from 1.75% per annum to 2.00% per annum, and
will be adjusted based upon our achieving certain performance targets. Borrowings under the amended revolving credit line bear interest, at our option, at: (A) a
base rate equal to the higher of (i) the prime lending rate as set forth on the British Banking
Association Telerate page 5 or (ii) the federal funds effective rate from time to time plus 0.50%,
plus a margin of 1.50% per annum, or (B) a eurodollar rate plus a margin of 2.50% per annum.
After the completion of two fiscal quarters after the closing date, the margin under the amended
revolving credit line applicable to base rate loans ranges from 1.00% per annum to 1.50% per annum
and the margin applicable to eurodollar rate loans ranges from 2.00% per annum to 2.50% per annum,
and will be adjusted based upon our achieving certain performance targets. We are required to pay
a commitment fee calculated at the rate of 0.50% per annum on the average daily unused portion of
the amended revolving credit line, payable quarterly in arrears. Our obligations under the amended senior secured credit facility are guaranteed by Cinemark,
Inc., CNMK Holding, Inc. and certain of our subsidiaries and are secured by mortgages on certain
fee and leasehold properties and security interests in substantially all of our domestic personal
and intangible property, including without limitation, pledges of all of our capital stock, all of
the capital stock of CNMK Holding, Inc. and certain of our domestic subsidiaries and 65% of the
voting stock of certain of our foreign subsidiaries. At March 31, 2005, there was approximately $257.4 million outstanding under the term loan and
no borrowings outstanding under the amended revolving credit line. Approximately $99.9 million was
available for borrowing under the revolving credit line, giving effect to a $0.1 million letter of
credit outstanding. The average interest rate on outstanding borrowings under the senior secured
credit facility at March 31, 2005 was 4.4% per annum. Cinemark Brasil Notes Payable As of March 31, 2005, Cinemark Brasil S.A. had four main types of funding sources executed as
follows: (1) Banco Nacional de Desenvolvimento Econômico e Social (BNDES, the Brazilian
National Development Bank) credit line in the U.S. dollar equivalent in Brazilian reais
of US$3.8 million. Interest accrues at a BNDES basket rate, which is a multiple currency
rate based on the rate at which the bank borrows, plus a spread amounting to 11.4%. At
March 31, 2005, there was approximately US$0.1 million outstanding, which matures in
April 2005. (2) BNDES credit line in the U.S. dollar equivalent in Brazilian reais of US$1.9
million executed in November 2001 with a maturity date of October 2006. Interest
accrues at a BNDES basket rate plus a spread amounting to 11.2%. At March 31, 2005,
there was approximately US$0.8 million outstanding under this credit line. (3) Project developer financing executed with two engineering companies in
September 2000 in the amount of US$1.8 million with a maturity date of September 2005.
Interest accrues at a rate of TJLP+5% (Taxa de Juros de Longo Prazo (a long-term
interest rate published by the Brazilian government)). At March 31, 2005, there was
approximately US$0.2 million outstanding under this financing arrangement. (4) Project developer financing executed with a mall developer in February 2004 in
the amount of US$0.7 million with a maturity date of February 2009. Interest accrues at
a rate of TJLP + 5.5% (Taxa de Juros de Longo Prazo (a long-term interest rate published
by the Brazilian government)). At March 31, 2005, there was approximately US$0.7
million outstanding under this financing arrangement. These sources are secured by a variety of instruments, including comfort letters from Cinemark
International, L.L.C., promissory notes for up to 130% of the value, a revenue reserve account and
equipment collateral. As of March 31, 2005, an aggregate of approximately US$1.8 million was
outstanding. 29




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Cinemark Chile Note Payable On March 26, 2002, Cinemark Chile S.A. entered into a Debt Acknowledgment, Rescheduling and
Joint Guarantee and Co-Debt Agreement with Scotiabank Sud Americano and three local banks. Under
this agreement, Cinemark Chile S.A. borrowed the U.S. dollar equivalent of approximately $10.6
million in Chilean pesos (adjusted for inflation pursuant to the Unidades de Fomento). Cinemark
Chile S.A. was required to make 24 equal quarterly installments of principal plus accrued and
unpaid interest, commencing March 27, 2002. On September 29, 2004, Cinemark Chile S.A. refinanced
the outstanding debt under an amended debt agreement with two of the original local banks,
Corpbanca and Banco Security. The amended agreement requires 24 equal quarterly installments of
principal plus accrued and unpaid interest, which commenced December 31, 2004. The agreement
requires Cinemark Chile S.A. to maintain certain financial ratios and contains other restrictive
covenants typical for agreements of this type such as a limitation on dividends. Funds borrowed
under this agreement bear interest at the 90 day TAB Banking rate as published by the Association
of Banks and Financial Institutions Act plus 1.5%. At March 31, 2005, approximately US$6.7 million
was outstanding under this agreement. Seasonality Our revenues have historically been seasonal, coinciding with the timing of releases of motion
pictures by the major distributors. Generally, the most successful motion pictures have been
released during the summer, extending from Memorial Day to Labor Day, and during the holiday
season, extending from Thanksgiving through year-end. The unexpected emergence of a hit film
during other periods can alter this seasonality trend. The timing of such film releases can have a
significant effect on our results of operations, and the results of one quarter are not necessarily
indicative of results for the next quarter or for the same period in the following year. Cautionary Statement Regarding Forward-Looking Statements This quarterly report on Form 10-Q includes forward-looking statements based on our current
expectations, assumptions, estimates, and projections about our and our subsidiaries business and
industry. We intend that this quarterly report be governed by the safe harbor provision of the
Private Securities Litigation Reform Act of 1995 (the PSLR Act) with respect to statements that
may be deemed to be forward-looking statements under the PSLR Act. They include statements
relating to:  
    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. You can identify forward-looking statements by the use of words such as may, should,
could, estimates, predicts, potential, continue, anticipates, believes, plans,
expects, future and intends and similar expressions which are intended to identify
forward-looking statements. These statements are not guarantees of future performance and are
subject to risks, uncertainties and other factors, some of which are beyond our control and
difficult to predict and could cause actual results to differ materially from those expressed or
forecasted in the forward-looking statements. In evaluating these forward-looking statements, you
should carefully consider the risks and uncertainties described in this report. These
forward-looking statements reflect our view only as of the date of this report. Actual results
could differ materially from those indicated by such forward-looking statements due to a number of
factors. All forward-looking statements attributable to us or persons acting on our behalf are
expressly qualified in their entirety by this cautionary statement. We undertake no current
obligation to publicly update such forward-looking statements to reflect subsequent events or
circumstances. 30




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Item 3. Quantitative and Qualitative Disclosures About Market Risk We have exposure to financial market risks, including changes in interest rates, foreign
currency exchange rates and other relevant market prices. Interest Rate Risk An increase or decrease in interest rates would affect interest costs relating to our variable
rate debt facilities. We and our subsidiaries are currently parties to variable rate debt
facilities. At March 31, 2005, there was an aggregate of approximately $269.9 million of variable
rate debt outstanding under these facilities. Based on the interest rate levels in effect on the
variable rate debt outstanding at March 31, 2005, a 100 basis point increase in market interest
rates would not increase our annual interest expense by a material amount. Changes in interest
rates do not have a direct impact on interest expense relating to the remaining fixed rate debt
facilities. The tables below provide information about our fixed rate and variable rate long-term debt
agreements as of March 31, 2005 and December 31, 2004: Expected Maturity As of March 31, 2005
(in millions) AverageMarch 31,
    
    
    Fair
    
    
    Interest2006
    
    
    2007
    
    
    2008
    
    
    2009
    
    
    2010
    
    
    Thereafter
    
    
    Total
    
    
    Value
    
    
    RateFixed rate
    
    $
    0.1
    
    
    $
    0.1
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    354.5
    
    
    $
    354.7
    
    
    $
    354.8
    
    
    
    9.0
    %Variable rate
    
    
    6.4
    
    
    
    6.1
    
    
    
    4.6
    
    
    
    4.0
    
    
    
    3.8
    
    
    
    245.0
    
    
    
    269.9
    
    
    
    269.7
    
    
    
    4.5
    %Total debt
    
    $
    6.5
    
    
    $
    6.2
    
    
    $
    4.6
    
    
    $
    4.0
    
    
    $
    3.8
    
    
    $
    599.5
    
    
    $
    624.6
    
    
    $
    624.5
 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 We are also exposed to market risk arising from changes in foreign currency exchange rates as
a result of our international operations. Generally, we export from the U.S. certain of the
equipment and construction interior finish items and other operating supplies used by our
international subsidiaries. Principally all the revenues and operating expenses of our
international subsidiaries are transacted in the countrys local currency. Generally accepted
accounting principles in the U.S. require that our subsidiaries use the currency of the primary
economic environment in which they operate as their functional currency. If our subsidiaries
operate in a highly inflationary economy, generally accepted accounting principles in the U.S.
require that the U.S. dollar be used as the functional currency for the subsidiary. Currency
fluctuations result in us reporting exchange gains (losses) or foreign currency translation
adjustments relating to our international subsidiaries depending on the inflationary environment of
the country in which we operate. Based upon our equity ownership in our international subsidiaries
as of March 31, 2005, holding everything else constant, a 10% immediate unfavorable change in each
of the foreign currency exchange rates to which we are exposed would decrease the net fair value of
our investments in our international subsidiaries by approximately $13 million. 31




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Item 4. Controls and Procedures Evaluation of Disclosure Controls and Procedures We have established a system of controls and other procedures designed to ensure that
information required to be disclosed in our periodic reports filed under the Securities Exchange
Act of 1934 (the Exchange Act), as amended, is recorded, processed, summarized and reported
within the time periods specified in the Securities and Exchange Commissions rules and forms.
These disclosure controls and procedures have been evaluated under the direction of our Chief
Executive Officer and Chief Financial Officer for the period covered by this report. Based on such
evaluations, the Chief Executive Officer and Chief Financial Officer have concluded that the
disclosure controls and procedures are effective in alerting them in a timely basis to material
information relating to the Company and its consolidated subsidiaries required to be included in
our reports filed or submitted under the Exchange Act. Changes in Internal Controls There have been no significant changes in our system of internal controls or in other factors
that could significantly affect internal controls within the period covered by this report or
subsequent to the evaluation by the Chief Executive Officer and Chief Financial Officer. 32




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PART II  OTHER INFORMATION 
 Item 1. Legal Proceedings Reference is made to Item 3 of the Companys Annual Report on Form 10-K for the fiscal year
ended December 31, 2004. 
 Item 5. Other Information PageSupplemental Schedules specified by the senior subordinated notes Indenture:Condensed
Consolidating Balance Sheets (unaudited) as of March 31,
2005
    
    
    34Condensed
Consolidating Statements of Income (unaudited) for the three
months ended March 31, 2005
    
    
    35Condensed
Consolidating Statements of Cash Flows (unaudited) for the three
months ended March 31, 2005
    
    
    36
 33




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CINEMARK USA, INC. AND
SUBSIDIARIES 
 CONDENSED CONSOLIDATING BALANCE SHEETS
AS OF MARCH 31, 2005
(in thousands, except share data, unaudited)
 Restricted
    
    
    UnrestrictedGroup
    
    
    Group
    
    
    Eliminations
    
    
    ConsolidatedASSETSCURRENT ASSETSCash and cash equivalents
    
    $
    59,656
    
    
    $
    26,363
    
    
    $
    
    
    
    $
    86,019Inventories
    
    
    3,519
    
    
    
    617
    
    
    
    
    
    
    
    4,136Accounts receivable
    
    
    11,167
    
    
    
    1,539
    
    
    
    (729
    )
    
    
    11,977Income tax receivable
    
    
    5,297
    
    
    
    1,009
    
    
    
    
    
    
    
    6,306Prepaid expenses and other
    
    
    3,902
    
    
    
    530
    
    
    
    
    
    
    
    4,432Total current assets
    
    
    83,541
    
    
    
    30,058
    
    
    
    (729
    )
    
    
    112,870THEATRE PROPERTIES AND EQUIPMENT  net
    
    
    702,295
    
    
    
    82,477
    
    
    
    
    
    
    
    784,772OTHER ASSETSGoodwill
    
    
    12,053
    
    
    
    32,608
    
    
    
    
    
    
    
    44,661Investments in and advances to affiliates
    
    
    174,371
    
    
    
    888
    
    
    
    (173,341
    )
    
    
    1,918Intangible assets, deferred charges and other assets  net
    
    
    50,955
    
    
    
    7,708
    
    
    
    (11,268
    )
    
    
    47,395Total other assets
    
    
    237,379
    
    
    
    41,204
    
    
    
    (184,609
    )
    
    
    93,974TOTAL ASSETS
    
    $
    1,023,215
    
    
    $
    153,739
    
    
    $
    (185,338
    )
    
    $
    991,616LIABILITIES AND SHAREHOLDERS EQUITYCURRENT LIABILITIESCurrent portion of long-term debt
    
    $
    2,656
    
    
    $
    3,879
    
    
    $
    
    
    
    $
    6,535Accounts payable and accrued expenses
    
    
    75,899
    
    
    
    14,730
    
    
    
    (730
    )
    
    
    89,899Total current liabilities
    
    
    78,555
    
    
    
    18,609
    
    
    
    (730
    )
    
    
    96,434LONG-TERM LIABILITIESSenior credit agreements
    
    
    254,898
    
    
    
    19,937
    
    
    
    (11,268
    )
    
    
    263,567Senior subordinated notes
    
    
    354,503
    
    
    
    
    
    
    
    
    
    
    
    354,503Deferred income taxes
    
    
    24,508
    
    
    
    (57
    )
    
    
    
    
    
    
    24,451Deferred lease expenses
    
    
    26,853
    
    
    
    1,403
    
    
    
    
    
    
    
    28,256Deferred gain on sale leasebacks
    
    
    3,549
    
    
    
    
    
    
    
    
    
    
    
    3,549Deferred revenues and other long-term liabilities
    
    
    15,700
    
    
    
    4,766
    
    
    
    
    
    
    
    20,466Total long-term liabilities
    
    
    680,011
    
    
    
    26,049
    
    
    
    (11,268
    )
    
    
    694,792COMMITMENTS AND CONTINGENCIES
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    MINORITY INTERESTS IN SUBSIDIARIES
    
    
    10,649
    
    
    
    6,118
    
    
    
    
    
    
    
    16,767SHAREHOLDER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
    
    
    54,536
    
    
    
    102,348
    
    
    
    (102,348
    )
    
    
    54,536Retained earnings
    
    
    226,884
    
    
    
    (45,254
    )
    
    
    
    
    
    
    181,630Treasury stock, 57,245 Class B shares at cost
    
    
    (24,233
    )
    
    
    
    
    
    
    
    
    
    
    (24,233
    )Accumulated other comprehensive loss
    
    
    (52,730
    )
    
    
    (25,123
    )
    
    
    
    
    
    
    (77,853
    )Total shareholders equity
    
    
    254,000
    
    
    
    102,963
    
    
    
    (173,340
    )
    
    
    183,623TOTAL LIABILITIES AND SHAREHOLDERS EQUITY
    
    $
    1,023,215
    
    
    $
    153,739
    
    
    $
    (185,338
    )
    
    $
    991,616
 Note: Restricted Group and Unrestricted Group are defined in the Indentures for the senior subordinated notes. 34




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CINEMARK USA, INC. AND
SUBSIDIARIES 
 CONDENSED CONSOLIDATING STATEMENTS OF INCOME
FOR THE THREE MONTHS ENDED MARCH 31, 2005
(in thousands, unaudited)
 Restricted
    
    
    UnrestrictedGroup
    
    
    Group
    
    
    Eliminations
    
    
    ConsolidatedREVENUES
    
    $
    199,167
    
    
    $
    38,771
    
    
    $
    (257
    )
    
    $
    237,681COSTS AND EXPENSESCost of operations
    
    
    147,574
    
    
    
    29,682
    
    
    
    (257
    )
    
    
    176,999General and administrative expenses
    
    
    9,803
    
    
    
    2,492
    
    
    
    
    
    
    
    12,295Depreciation and amortization
    
    
    14,531
    
    
    
    3,723
    
    
    
    
    
    
    
    18,254Impairment of long-lived assets
    
    
    226
    
    
    
    
    
    
    
    
    
    
    
    226Loss on sale of assets and other
    
    
    683
    
    
    
    5
    
    
    
    
    
    
    
    688Total costs and expenses
    
    
    172,817
    
    
    
    35,902
    
    
    
    (257
    )
    
    
    208,462OPERATING INCOME
    
    
    26,350
    
    
    
    2,869
    
    
    
    
    
    
    
    29,219OTHER INCOME (EXPENSE)Interest expense
    
    
    (10,295
    )
    
    
    (425
    )
    
    
    142
    
    
    
    (10,578
    )Amortization of debt issue costs
    
    
    (684
    )
    
    
    (5
    )
    
    
    
    
    
    
    (689
    )Interest income
    
    
    617
    
    
    
    355
    
    
    
    (142
    )
    
    
    830Foreign currency exchange gain (loss)
    
    
    (93
    )
    
    
    11
    
    
    
    
    
    
    
    (82
    )Equity in income of affiliates
    
    
    70
    
    
    
    24
    
    
    
    
    
    
    
    94Minority interests in (income) loss of subsidiaries
    
    
    (122
    )
    
    
    22
    
    
    
    
    
    
    
    (100
    )Total other expenses
    
    
    (10,507
    )
    
    
    (18
    )
    
    
    
    
    
    
    (10,525
    )INCOME FROM CONTINUING OPERATIONS
BEFORE INCOME TAXES
    
    
    15,843
    
    
    
    2,851
    
    
    
    
    
    
    
    18,694Income taxes
    
    
    6,476
    
    
    
    165
    
    
    
    
    
    
    
    6,641NET INCOME
    
    $
    9,367
    
    
    $
    2,686
    
    
    $
    
    
    
    $
    12,053
 Note: Restricted Group and Unrestricted Group are defined in the Indentures for the senior subordinated notes. 35




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CINEMARK USA, INC. AND
SUBSIDIARIES 
 CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED MARCH 31, 2005
(in thousands, unaudited)
 Restricted
    
    
    UnrestrictedGroup
    
    
    Group
    
    
    Eliminations
    
    
    ConsolidatedOPERATING ACTIVITIESNet income
    
    $
    9,367
    
    
    $
    2,686
    
    
    $
    
    
    
    $
    12,053Noncash items in net income:Depreciation
    
    
    14,381
    
    
    
    3,703
    
    
    
    
    
    
    
    18,084Amortization of intangible and other assets
    
    
    150
    
    
    
    20
    
    
    
    
    
    
    
    170Amortization of foreign advanced rents
    
    
    
    
    
    
    411
    
    
    
    
    
    
    
    411Amortization of debt issue costs
    
    
    684
    
    
    
    5
    
    
    
    
    
    
    
    689Amortization of gain on sale leasebacks
    
    
    (92
    )
    
    
    
    
    
    
    
    
    
    
    (92
    )Amortization of debt premium
    
    
    (391
    )
    
    
    
    
    
    
    
    
    
    
    (391
    )Amortization of deferred revenues
    
    
    (45
    )
    
    
    
    
    
    
    
    
    
    
    (45
    )Impairment of long-lived assets
    
    
    226
    
    
    
    
    
    
    
    
    
    
    
    226Loss on sale of assets and other
    
    
    683
    
    
    
    5
    
    
    
    
    
    
    
    688Deferred lease expenses
    
    
    294
    
    
    
    
    
    
    
    
    
    
    
    294Deferred income tax expenses
    
    
    1,313
    
    
    
    
    
    
    
    
    
    
    
    1,313Equity in income of affiliates
    
    
    (70
    )
    
    
    (24
    )
    
    
    
    
    
    
    (94
    )Minority interests in income (loss) of subsidiaries
    
    
    122
    
    
    
    (22
    )
    
    
    
    
    
    
    100Changes in assets and liabilities
    
    
    (37,535
    )
    
    
    (1,264
    )
    
    
    
    
    
    
    (38,799
    )Net cash provided by (used for) operating activities
    
    
    (10,913
    )
    
    
    5,520
    
    
    
    
    
    
    
    (5,393
    )INVESTING ACTIVITIESAdditions to theatre properties and equipment
    
    
    (9,471
    )
    
    
    (1,030
    )
    
    
    
    
    
    
    (10,501
    )Net cash used for investing activities
    
    
    (9,471
    )
    
    
    (1,030
    )
    
    
    
    
    
    
    (10,501
    )FINANCING ACTIVITIESCapital contribution from parent
    
    
    3,466
    
    
    
    
    
    
    
    
    
    
    
    3,466Repayments of long-term debt
    
    
    (650
    )
    
    
    (987
    )
    
    
    
    
    
    
    (1,637
    )Increase in minority investment in subsidiaries
    
    
    
    
    
    
    12
    
    
    
    
    
    
    
    12Decrease in minority investment in subsidiaries
    
    
    (7
    )
    
    
    (35
    )
    
    
    
    
    
    
    (42
    )Net cash provided by (used for) financing activities
    
    
    2,809
    
    
    
    (1,010
    )
    
    
    
    
    
    
    1,799Effect of exchange rate changes on cash and cash equivalents
    
    
    47
    
    
    
    (161
    )
    
    
    
    
    
    
    (114
    )INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
    
    
    (17,528
    )
    
    
    3,319
    
    
    
    
    
    
    
    (14,209
    )CASH AND CASH EQUIVALENTS:Beginning of period
    
    
    77,184
    
    
    
    23,044
    
    
    
    
    
    
    
    100,228End of period
    
    $
    59,656
    
    
    $
    26,363
    
    
    $
    
    
    
    $
    86,019
 Note: Restricted Group and Unrestricted Group are defined in the Indentures for the senior subordinated notes. 36




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##### 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 March 31,
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 March 31, 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 March 31, 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
March 31, 1993).
 37




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##### 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 March 31, 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 March 31, 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 March 31, 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 March 31, 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 March 31, 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).
 38




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##### 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. 39




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##### Table of Contents



SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly
caused this report to be signed on its behalf by the undersigned thereunto duly authorized. CINEMARK USA, INC.Registrant DATE:May 16, 2005 /s/Alan W. StockAlan W. StockPresident /s/Robert CoppleRobert CoppleChief Financial Officer 40




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##### 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 March 31,
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 March 31, 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 March 31, 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
March 31, 1993).




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##### 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 March 31, 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 March 31, 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 March 31, 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 March 31, 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 March 31, 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).




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##### 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