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 June 30, 2003


                        Commission File Number: 033-47040



                               CINEMARK USA, INC.
             (Exact name of registrant as specified in its charter)

                        Texas                             75-2206284
            (State or other jurisdiction               (I.R.S. Employer
          of incorporation or organization)           Identification No.)

                 3900 Dallas Parkway
                       Suite 500
                     Plano, Texas                            75093
        (Address of principal executive offices)           (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 X No ____

Indicate  by check mark  whether  the  registrant  is an  accelerated  filer (as
defined in Rule 12b-2 of the Exchange Act).

                                  Yes ____ No X




As of August 11, 2003,  1,500 shares of Class A common stock and 182,648  shares
of Class B common stock were outstanding.

<PAGE>

                       CINEMARK USA, INC. AND SUBSIDIARIES

                                      Index                                 Page
                                                                            ----

PART I       FINANCIAL INFORMATION

     Item 1. Financial Statements

             Condensed Consolidated Balance Sheets as of June 30, 2003
                  (unaudited) and December 31, 2002                            3

             Condensed Consolidated Statements of Operations (unaudited)
                  for the three and six month periods ended June 30, 2003
                  and 2002                                                     4

             Condensed Consolidated Statements of Cash Flows (unaudited)
                  for the six month periods ended June 30, 2003 and 2002       5

             Notes to Condensed Consolidated Financial Statements (unaudited)  6

     Item 2. Management's Discussion and Analysis of
                  Financial Condition and Results of Operations               21

     Item 3. Quantitative and Qualitative Disclosures About Market Risk       30

     Item 4. Controls and Procedures                                          31

PART II      OTHER INFORMATION

     Item 1. Legal Proceedings                                                32

     Item 2. Changes in Securities and Use of Proceeds                        32

     Item 3. Defaults Upon Senior Securities                                  32

     Item 4. Submission of Matters to a Vote of Security Holders              32

     Item 5. Other Information                                                32

     Item 6. Exhibits and Reports on Form 8-K                                 36


SIGNATURES                                                                    38

                                       2

<PAGE>

<TABLE>
<CAPTION>

PART I - FINANCIAL INFORMATION
Item 1. Financial Statements

                       CINEMARK USA, INC. AND SUBSIDIARIES
                      CONDENSED CONSOLIDATED BALANCE SHEETS

                                                                      June 30,       December 31,
                                                                        2003             2002
                                                                    (Unaudited)
                                                                   -------------------------------
<S>                                                                <C>              <C>
                                     ASSETS

CURRENT ASSETS
  Cash and cash equivalents                                        $  50,646,698    $  63,718,515
  Inventories                                                          4,398,202        3,688,915
  Accounts receivable                                                 15,302,136       12,441,849
  Income tax receivable                                                      -            715,931
  Prepaid expenses and other                                           5,790,363        4,094,135
                                                                   -------------------------------
    Total current assets                                              76,137,399       84,659,345

THEATRE PROPERTIES AND EQUIPMENT                                   1,210,413,633    1,177,508,981
  Less accumulated depreciation and amortization                    (425,805,783)    (385,778,478)
                                                                   -------------------------------
    Theatre properties and equipment - net                           784,607,850      791,730,503

OTHER ASSETS
  Goodwill                                                            10,885,354       10,751,844
  Investments in and advances to affiliates                            2,662,812        3,040,940
  Deferred charges and other - net                                    38,574,528       26,631,296
                                                                   -------------------------------
    Total other assets                                                52,122,694       40,424,080
                                                                   -------------------------------

TOTAL ASSETS                                                       $ 912,867,943    $ 916,813,928
                                                                   ===============================

                      LIABILITIES AND SHAREHOLDER'S EQUITY

CURRENT LIABILITIES
  Current portion of long-term debt                                $   5,975,666    $  30,190,449
  Current income taxes payable                                         7,102,705              -
  Accounts payable and accrued expenses                              115,002,413      124,237,312
                                                                   -------------------------------
    Total current liabilities                                        128,080,784      154,427,761

LONG-TERM LIABILITIES
  Senior credit agreements                                           136,204,835      282,237,221
  Senior subordinated notes                                          521,602,807      380,159,167
  Deferred lease expenses                                             25,596,461       24,837,457
  Deferred gain on sale leasebacks                                     4,189,660        4,372,620
  Deferred income taxes                                               11,718,179       11,170,128
  Deferred revenues and other long-term liabilities                    2,999,488        5,129,370
                                                                   -------------------------------
    Total long-term liabilities                                      702,311,430      707,905,963

MINORITY INTERESTS IN SUBSIDIARIES                                    32,612,970       26,714,929

SHAREHOLDER'S EQUITY
  Class A common stock, $.01 par value: 10,000,000 shares
   authorized, 1,500 shares issued and outstanding                            15               15
  Class B common stock, no par value: 1,000,000 shares
   authorized, 239,893 shares issued and outstanding                  49,543,427       49,543,427
  Additional paid-in-capital                                          12,523,455       11,974,860
  Retained earnings                                                   94,108,343       80,273,323
  Treasury stock, 57,245 Class B shares at cost                      (24,232,890)     (24,232,890)
  Accumulated other comprehensive loss                               (82,079,591)     (89,793,460)
                                                                   -------------------------------
    Total shareholder's equity                                        49,862,759       27,765,275
                                                                   -------------------------------

TOTAL LIABILITIES AND SHAREHOLDER'S EQUITY                         $ 912,867,943    $ 916,813,928
                                                                   ===============================

The accompanying notes are an integral part of the condensed consolidated financial statements.
</TABLE>

                                        3

<PAGE>

<TABLE>
<CAPTION>

                      CINEMARK USA, INC. AND SUBSIDIARIES
                CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (Unaudited)

                                                                      Three Months Ended June 30,        Six Months Ended June 30,
                                                                         2003            2002             2003             2002
                                                                    ------------------------------    ------------------------------
<S>                                                                 <C>              <C>              <C>              <C>
REVENUES
  Admissions                                                        $157,295,430     $161,395,144     $285,976,567     $307,806,708
  Concession                                                          79,338,705       80,084,602      143,711,945      149,370,820
  Other                                                               12,343,436       11,969,591       23,290,818       22,973,915
                                                                    ------------------------------    ------------------------------
      Total revenues                                                 248,977,571      253,449,337      452,979,330      480,151,443

COSTS AND EXPENSES
  Cost of operations:
    Film rentals and advertising                                      88,748,650       89,733,324      155,997,857      166,618,351
    Concession supplies                                               12,796,853       13,775,334       22,710,427       25,757,154
    Salaries and wages                                                24,691,432       25,977,570       47,301,181       48,528,004
    Facility lease expense                                            29,638,793       29,125,793       58,452,923       58,275,403
    Utilities and other                                               28,242,555       26,444,411       53,721,682       53,129,752
                                                                    ------------------------------    ------------------------------
      Total cost of operations                                       184,118,283      185,056,432      338,184,070      352,308,664

  General and administrative expenses                                 10,611,409       11,815,562       20,201,223       22,458,579
  Depreciation and amortization                                       16,698,568       16,845,737       32,835,482       34,012,518
  Asset impairment loss                                                2,060,845          223,378        2,060,845          781,776
  (Gain) loss on sale of assets and other                               (374,590)         273,732         (991,019)         812,924
                                                                    ------------------------------    ------------------------------
      Total costs and expenses                                       213,114,515      214,214,841      392,290,601      410,374,461

OPERATING INCOME                                                      35,863,056       39,234,496       60,688,729       69,776,982

OTHER INCOME (EXPENSE)
  Interest expense                                                   (14,218,719)     (14,110,113)     (27,514,327)     (28,894,050)
  Amortization of debt issue cost                                       (587,330)        (591,170)      (1,170,950)      (1,182,340)
  Interest income                                                        424,735          514,716        1,083,364          998,055
  Foreign currency exchange gain (loss)                                  135,068       (2,100,767)         151,199       (2,321,764)
  Loss on early retirement of debt                                    (5,612,377)             -         (7,258,136)             -
  Equity in income (loss) of affiliates                                  (46,832)          96,267          149,524          213,008
  Minority interests in (income) loss of subsidiaries                 (1,506,280)         140,745       (2,276,485)        (735,726)
                                                                    ------------------------------    ------------------------------
      Total other expenses                                           (21,411,735)     (16,050,322)     (36,835,811)     (31,922,817)
                                                                    ------------------------------    ------------------------------
INCOME BEFORE INCOME TAXES AND
  CUMULATIVE EFFECT OF AN ACCOUNTING CHANGE                           14,451,321       23,184,174       23,852,918       37,854,165

Income taxes                                                           6,069,227        9,124,792       10,017,898       13,564,061
                                                                    ------------------------------    ------------------------------

INCOME BEFORE CUMULATIVE EFFECT
  OF AN ACCOUNTING CHANGE                                              8,382,094       14,059,382       13,835,020       24,290,104

Cumulative effect of a change in accounting principle, net
  of income tax benefit of $0.                                               -                -                -         (3,389,779)
                                                                    ------------------------------    ------------------------------

NET INCOME                                                          $  8,382,094     $ 14,059,382     $ 13,835,020     $ 20,900,325
                                                                    ==============================    ==============================

EARNINGS PER SHARE-Basic/Diluted
    Income before accounting change                                 $      45.52     $      76.35          $ 75.13     $     131.91
    Cumulative effect of an accounting change                                -                -                -             (18.41)
                                                                    ------------------------------    ------------------------------
    Net income                                                      $      45.52     $      76.35          $ 75.13     $     113.50
                                                                    ==============================    ==============================

The accompanying notes are an integral part of the condensed consolidated financial statements.
</TABLE>

                                        4

<PAGE>

<TABLE>
<CAPTION>

                      CINEMARK USA, INC. AND SUBSIDIARIES
                CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (Unaudited)

                                                                       Six Months Ended June 30,
                                                                        2003             2002
                                                                    ------------------------------
<S>                                                                 <C>              <C>
OPERATING ACTIVITIES
  Net income                                                        $ 13,835,020     $ 20,900,325

  Noncash items in net income:
    Depreciation                                                      32,510,137       33,623,952
    Amortization of other assets                                         325,345          388,566
    Amortization of foreign advanced rents                               865,123          942,739
    Amortized compensation - stock options                               548,595          554,559
    Amortization of debt issue costs                                   1,170,950        1,182,340
    Amortization of gain on sale leasebacks                             (182,960)        (182,960)
    Amortization of debt discount and premium                           (235,522)         (14,253)
    Amortization of deferred revenues                                 (2,013,119)      (2,403,953)
    Loss on impairment of assets                                       2,060,845          781,776
    (Gain) loss on sale of assets and other                             (991,019)         812,924
    Loss on early retirement of debt                                   7,258,136              -
    Deferred lease expenses                                              759,004          908,404
    Deferred income tax expenses                                         548,051        8,734,689
    Equity in income of affiliates                                      (149,524)        (213,008)
    Minority interests in income of subsidiaries                       2,276,485          735,726
    Cumulative effect of an accounting change                                -          3,389,779

  Cash provided by (used for) operating working capital:

    Inventories                                                         (709,287)        (338,425)
    Accounts receivable                                               (2,860,287)         546,752
    Prepaid expenses and other                                        (1,696,228)        (685,693)
    Other assets                                                      (7,308,911)       5,889,103
    Advances with affiliates                                             302,966        1,302,669
    Accounts payable and accrued expenses                            (13,742,782)        (615,285)
    Other long-term liabilities                                         (116,763)        (192,327)
    Income tax receivable/payable                                      7,818,636         (915,444)
                                                                    ------------------------------

      Net cash provided by operating activities                       40,272,891       75,132,955

INVESTING ACTIVITIES
  Additions to theatre properties and equipment                      (17,976,259)     (12,191,593)
  Sale of theatre properties and equipment                             2,075,395        1,514,477
  Investment in affiliates                                                (3,314)             -
  Dividends/capital returned from affiliates                             228,000          594,340
                                                                    ------------------------------

      Net cash used for investing activities                         (15,676,178)     (10,082,776)

FINANCING ACTIVITIES
  Issuance of senior subordinated notes                              375,225,000              -
  Retirement of senior subordinated notes                           (232,989,000)             -
  Increase in long-term debt                                         238,508,545       19,115,888
  Decrease in long-term debt                                        (408,827,678)     (57,257,124)
  Increase in debt issue cost                                        (14,944,223)             -
  Increase in minority investment in subsidiaries                      3,896,860          421,855
  Decrease in minority investment in subsidiaries                       (275,304)      (5,413,657)
                                                                    ------------------------------

      Net cash used for financing activities                         (39,405,800)     (43,133,038)

EFFECT OF EXCHANGE RATE CHANGES ON CASH AND
  CASH EQUIVALENTS                                                     1,737,270       (3,619,868)
                                                                    ------------------------------

INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS                     (13,071,817)      18,297,273

CASH AND CASH EQUIVALENTS:
  Beginning of period                                                 63,718,515       50,199,223
                                                                    ------------------------------

  End of period                                                     $ 50,646,698     $ 68,496,496
                                                                    ==============================

The accompanying notes are an integral part of the condensed consolidated financial statements.
</TABLE>

                                        5

<PAGE>

                       CINEMARK USA, INC. AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)

1. The Company and Basis of Presentation

        Cinemark USA, Inc. and its  subsidiaries  (the  "Company") is 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 United States ("U.S."),
Canada, Mexico, Argentina,  Brazil, Chile, Ecuador, Peru, Honduras, El Salvador,
Nicaragua, Costa Rica, Panama, Colombia and the United Kingdom. The Company also
manages additional theatres in the U.S. and provides management services for one
theatre in Taiwan at June 30, 2003.

        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 (which,  except for the cumulative
effect of an  accounting  change,  include  only normal  recurring  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 2002 financial statements to conform to
the 2003 presentation.

        These  condensed  consolidated  financial  statements  should be read in
conjunction with the audited annual  financial  statements and the notes thereto
for the year ended December 31, 2002,  included in the Annual Report filed March
19, 2003 on Form 10-K by the Company under the Securities  Exchange Act of 1934.
Operating  results for the three and six month  periods  ended June 30, 2003 are
not necessarily indicative of the results to be achieved for the full year.

2. Earnings Per Share

        Earnings per share are computed  using the  weighted  average  number of
shares of Class A and Class B common stock outstanding  during each period.  The
following  table sets forth the  computation  of basic and diluted  earnings per
share.

<TABLE>
<CAPTION>

                                                         Three Months Ended               Six Months Ended
                                                              June 30,                        June 30,
                                                              --------                        --------
                                                        2003            2002            2003            2002
                                                        ----            ----            ----            ----
<S>                                                  <C>            <C>             <C>             <C>
  Income before accounting change                    $8,382,094     $14,059,382     $13,835,020     $24,290,104
                                                     ==========     ===========     ===========     ===========

  Basic:
  Weighted average common shares outstanding            184,148         184,148         184,148         184,148
                                                        =======         =======         =======         =======

  Income before accounting change per common share       $45.52          $76.35          $75.13         $131.91
                                                         ======          ======          ======         =======

  Diluted:
  Weighted average common shares outstanding            184,148         184,148         184,148         184,148
  Common equivalent shares for stock options                -               -               -               -
                                                        -------         -------         -------         -------
  Weighted average common and common
       equivalent shares outstanding                    184,148         184,148         184,148         184,148
                                                        =======         =======         =======         =======

  Income before accounting change per common
       and common equivalent share                       $45.52          $76.35          $75.13         $131.91
                                                         ======          ======          ======         =======
</TABLE>

                                        6

<PAGE>

        Basic  income per share is computed by dividing  income by the  weighted
average number of shares of common stock of all classes  outstanding  during the
period.  Diluted income per share is computed by dividing income by the weighted
average number of shares of common stock and  potentially  dilutive common stock
outstanding using the treasury stock method.

        On May 16,  2002,  Cinemark,  Inc.  was formed as the  Delaware  holding
company of Cinemark USA, Inc.  Under a share exchange  agreement,  dated May 17,
2002, and after giving effect to a reverse stock split,  each outstanding  share
and each  outstanding  option to  purchase  shares of  Cinemark  USA,  Inc.  was
exchanged  for shares and options to purchase  shares,  respectively,  of common
stock of  Cinemark,  Inc.  (the  "Share  Exchange").  As a result of  the  Share
Exchange, the Company no longer has any options outstanding under existing stock
option  plans and  its weighted  average  common  and common  equivalent  shares
outstanding  for the three and six month periods ended June 30, 2003 and 2002 do
not include options to purchase shares of Cinemark, Inc.'s common stock.

3. Stock Option Accounting

        As a result of the Share Exchange, the Company no longer has any options
outstanding  under existing stock option plans.  However,  compensation  expense
resulting  from  amortization  of unearned  compensation  related to outstanding
stock  options of  Cinemark,  Inc.  is still  being  recorded  in the  Company's
condensed consolidated statements of operations.

        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 Statement of Financial Accounting
Standards ("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 and earnings per share would have been reduced to the
pro-forma amounts indicated below:

<TABLE>
<CAPTION>

                                                         Three Months Ended               Six Months Ended
                                                              June 30,                        June 30,
                                                              --------                        --------
                                                        2003            2002            2003            2002
                                                        ----            ----            ----            ----
<S>                                                  <C>            <C>             <C>             <C>
  Net income as reported                             $8,382,094     $14,059,382     $13,835,020     $20,900,325
  Compensation expense included in reported net
       income, net of tax                               274,298         277,280         548,595         554,559
  Compensation expense under fair value method,
       net of tax                                      (339,417)       (342,399)       (678,831)       (684,796)
                                                       ---------       ---------       ---------       ---------
  Pro-forma net income                               $8,316,975     $13,994,263     $13,704,784     $20,770,088
                                                     ==========     ===========     ===========     ===========

  Earnings per share:
  Basic earnings per share                               $45.52          $76.35          $75.13         $113.50
  Pro-forma basic earnings per share                     $45.16          $75.99          $74.42         $112.79
  Diluted earnings per share                             $45.52          $76.35          $75.13         $113.50
  Pro-forma diluted earnings per share                   $45.16          $75.99          $74.42         $112.79
</TABLE>

        No stock options were granted during 2002 or during the six month period
ended June 30,  2003.  The fair value of each option  grant is  estimated on the
date of grant using the multiple  option  approach of 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 38 percent; and
risk-free  interest  rates of  approximately  5% at the time of the last  option
grant date in 2001.

                                        7

<PAGE>

4. Comprehensive Income (Loss)

        Statement of Financial  Accounting  Standards (SFAS) No. 130, "Reporting
Comprehensive  Income,"  establishes  standards for the reporting and display of
comprehensive income (loss) and its components in the financial statements.  The
following components are reflected in the Company's comprehensive income (loss):

<TABLE>
<CAPTION>

                                                         Three Months Ended               Six Months Ended
                                                              June 30,                        June 30,
                                                              --------                        --------
                                                        2003            2002            2003            2002
                                                        ----            ----            ----            ----
<S>                                                 <C>             <C>             <C>             <C>
  Net income                                         $8,382,094     $14,059,382     $13,835,020     $20,900,325
  Foreign currency translation adjustment             6,868,190     (16,666,510)      7,713,869     (26,597,024)
                                                      ---------     ------------      ---------     ------------
  Comprehensive income (loss)                       $15,250,284     $(2,607,128)    $21,548,889     $(5,696,699)
                                                    ===========     ============    ===========     ============
</TABLE>

5. Foreign Currency Translation

        The   accumulated   other   comprehensive   loss  account   included  in
shareholder's  equity  of  $82,079,591  and  $89,793,460  at June  30,  2003 and
December 31, 2002,  respectively,  primarily  relates to the cumulative  foreign
currency  adjustments  from  translating  the  financial  statements of Cinemark
Argentina,  S.A., Cinemark Brasil S.A. and Cinemark de Mexico, S.A. de C.V. into
U.S. dollars.

        On June 30, 2003, the exchange rate for the Argentine peso was 2.8 pesos
to the U.S.  dollar  (the  exchange  rate was 3.4  pesos to the U.S.  dollar  at
December 31, 2002).  As a result,  the effect of  translating  the June 30, 2003
Argentine financial  statements into U.S. dollars resulted in a foreign currency
translation adjustment to the accumulated other comprehensive loss account as an
increase to  shareholder's  equity of approximately $3 million at June 30, 2003.
At June 30, 2003, total assets of Cinemark  Argentina,  S.A. were  approximately
U.S. $16 million.

        On June 30, 2003, the exchange rate for the Brazilian real was 2.9 reais
to the U.S.  dollar  (the  exchange  rate was 3.5  reais to the U.S.  dollar  at
December 31, 2002).  As a result,  the effect of  translating  the June 30, 2003
Brazilian financial  statements into U.S. dollars resulted in a foreign currency
translation adjustment to the accumulated other comprehensive loss account as an
increase to  shareholder's  equity of approximately $4 million at June 30, 2003.
At June 30, 2003, total assets of Cinemark Brasil S.A. were  approximately  U.S.
$59 million.

        On June 30, 2003,  the exchange rate for the Mexican peso was 10.4 pesos
to the U.S.  dollar  (the  exchange  rate was 10.4  pesos to the U.S.  dollar at
December 31, 2002).  As a result,  the effect of  translating  the June 30, 2003
Mexican  financial  statements  into U.S.  dollars  did not result in a material
foreign currency  translation  adjustment to the accumulated other comprehensive
loss account in  shareholder's  equity at June 30, 2003. At June 30, 2003, total
assets of Cinemark de Mexico, S.A. de C.V. were approximately U.S. $86 million.

        In 2002 and  2003,  all  foreign  countries  in which  the  Company  has
operations,  including  Argentina,  Brazil and  Mexico  were  deemed  non-highly
inflationary.   Thus,  the  Company  records  a  foreign  currency   translation
adjustment to the accumulated other comprehensive loss account as an increase or
reduction to shareholder's equity for any fluctuation in foreign currencies.

6. Supplemental Cash Flow Information

        The following is provided as  supplemental  information to the condensed
consolidated statements of cash flows:

                                                          Six Months Ended
                                                              June 30,
                                                              --------
                                                        2003            2002
                                                        ----            ----
  Cash paid for interest                            $28,944,777     $27,793,836
  Cash paid for income taxes (net of refunds)         1,067,061       5,782,379

                                        8

<PAGE>

7. Financial Information About Geographic Areas

        The Company  operates in a single  business  segment as a motion picture
exhibitor.  The  Company  is  a  multinational   corporation  with  consolidated
operations in the U.S., Canada, Mexico, Argentina, Brazil, Chile, Ecuador, Peru,
Honduras, El Salvador,  Nicaragua,  Costa Rica, Panama,  Colombia and the United
Kingdom.

        Revenues  in the United  States  and  Canada,  Mexico,  Brazil and other
foreign  countries for the six month periods ended June 30, 2003 and 2002 are as
follows:

                                                          Six Months Ended
                                                              June 30,
                                                              --------
  Revenues                                              2003            2002
  --------                                              ----            ----
  U.S. and Canada                                  $350,520,276    $369,019,438
  Mexico                                             33,695,235      43,590,520
  Brazil                                             35,563,541      36,471,520
  Other foreign countries                            33,702,764      31,537,451
  Eliminations                                         (502,486)       (467,486)
                                                      ----------      ----------
  Total                                            $452,979,330    $480,151,443
                                                   ============    ============

        Long-lived  assets in the U.S.  and  Canada,  Mexico,  Brazil  and other
foreign countries as of June 30, 2003 and December 31, 2002 are as follows:

                                                      June 30,      December 31,
  Long-Lived Assets                                     2003            2002
  -----------------                                     ----            ----
  U.S. and Canada                                  $619,905,671    $633,896,654
  Mexico                                             68,197,117      67,990,885
  Brazil                                             43,435,684      37,892,202
  Other foreign countries                            53,069,378      51,950,762
                                                     ----------      ----------
  Total                                            $784,607,850    $791,730,503
                                                   ============    ============

8. Goodwill and Other Intangible Assets

        The Company adopted Statement of Financial Accounting Standards ("SFAS")
No. 142,  "Goodwill and Other Intangible  Assets," effective January 1, 2002. In
accordance  with SFAS No.  142,  beginning  on January 1,  2002,  the  Company's
goodwill  and its  other  intangible  assets,  which  have  been  deemed to have
indefinite  lives,  are no longer  being  amortized  and are  subject  to annual
impairment  tests.  As of January 1, 2002,  the Company  performed  the required
transitional  impairment  tests of  goodwill  and other  intangible  assets with
indefinite  useful  lives,  and as a  result,  recorded  impairment  charges  of
$3,325,611  and  $64,168,  respectively.   These  charges  are  reflected  as  a
cumulative  effect  of  a  change  in  accounting  principle  in  the  condensed
consolidated  statement  of  operations  for the six month period ended June 30,
2002.

        The Company recorded an additional  impairment of goodwill in the amount
of $558,398 in the six month period ended June 30, 2002 (recorded as a component
of asset impairment loss in the condensed consolidated statement of operations).
The  additional  impairment  of goodwill  related to a write-down of goodwill to
fair value associated with the Company's  Argentine  operations.  As of December
31, 2002, the Company performed the required annual impairment tests of goodwill
and other  intangible  assets with  indefinite  useful  lives and no  additional
impairment was present.  Goodwill and other intangible assets can be affected by
foreign  currency  adjustments  from translating  foreign  subsidiary  financial
statements into U.S. dollars.

        Goodwill and other  intangible  assets at June 30, 2003 and December 31,
2002 are as follows:

                                                      June 30,      December 31,
                                                        2003            2002
                                                        ----            ----
  Amortized Other Intangible Assets:
  Capitalized licensing fees                         $9,000,000      $9,000,000
  Other intangible assets                               536,518          72,403
  Less - accumulated amortization                    (1,403,205)     (1,139,070)
                                                     -----------     -----------
  Net other intangible assets                        $8,133,313      $7,933,333
                                                     ==========      ==========

  Unamortized Goodwill and Other Intangible Assets:
  Goodwill                                          $10,885,354     $10,751,844
  Other intangible assets                                65,088          16,163
                                                         ------          ------
                                                    $10,950,442     $10,768,007
                                                    ===========     ===========

                                        9

<PAGE>

  Aggregate Amortization Expense:
  For the six month period ended June 30, 2003         $325,345
                                                       ========
  For the six month period ended June 30, 2002         $388,566
                                                       ========

        Aggregate  amortization  expense for the six month period ended June 30,
2003 consists of $264,136 of amortization of other intangible assets and $61,209
of amortization of other assets (both of which are included in deferred  charges
and other on the condensed consolidated balance sheet).

  Estimated Amortization Expense of Other Intangible Assets:
  For the twelve month period ended June 30, 2004      $528,273
  For the twelve month period ended June 30, 2005       528,273
  For the twelve month period ended June 30, 2006       528,273
  For the twelve month period ended June 30, 2007       528,273
  For the twelve month period ended June 30, 2008       528,273
  Thereafter                                          5,491,948
                                                      ---------
  Total                                              $8,133,313
                                                     ==========

9. New Accounting Pronouncements

        In April 2002, the Financial Accounting Standards Board issued Statement
of  Financial  Accounting  Standards  ("SFAS")  No.  145,  "Rescission  of  FASB
Statements No. 4, 44, and 64,  Amendment of FASB Statement No. 13, and Technical
Corrections".  SFAS No. 145 requires,  among other things, that gains and losses
on the early  extinguishment of debt be classified as extraordinary only if they
meet the criteria for extraordinary treatment set forth in Accounting Principles
Board Opinion No. 30. The provisions of this statement related to classification
of gains and losses on the early extinguishment of debt are effective for fiscal
years  beginning  after May 15, 2002.  This statement  became  effective for the
Company  on January 1,  2003.  See note 12 for  discussion  of the loss on early
retirement  of debt  recorded in the three and six month  periods ended June 30,
2003 in conjunction with the Company's long-term debt refinancing.

        In November  2002,  the  Financial  Accounting  Standards  Board  issued
Interpretation No. 45, "Guarantor's  Accounting and Disclosure  Requirements for
Guarantees, Including Indirect Guarantees of Indebtedness of Others" ("FIN 45").
This  interpretation  elaborates on the disclosures to be made by a guarantor in
its interim and annual financial  statements about its obligations under certain
guarantees that it has issued. It also clarifies that a guarantor is required to
recognize,  at the  inception of a guarantee,  a liability for the fair value of
the obligation undertaken in issuing the guarantee.  The disclosure requirements
of FIN 45 are effective for interim and annual  periods after December 15, 2002.
The initial  recognition  and  initial  measurement  requirements  of FIN 45 are
effective  prospectively  for  guarantees  issued or modified after December 31,
2002. The adoption of this statement had no impact on the condensed consolidated
financial statements.

        In April 2003, the Financial  Accounting Standards Board issued SFAS No.
149,  "Amendment  of  SFAS  No.  133  on  Derivative   Instruments  and  Hedging
Activities."  SFAS No.  149  amends  and  clarifies  accounting  for  derivative
instruments,   including  certain  derivative   instruments  embedded  in  other
contracts,  and for hedging  activities  under SFAS No. 133. The Company,  which
uses derivatives on a limited basis,  will apply this statement on a prospective
basis.

                                       10

<PAGE>

        In May 2003, the Financial  Accounting  Standards  Board issued SFAS No.
150, "Accounting for Certain Financial  Instruments with Characteristics of both
Liabilities  and Equity." SFAS No. 150  establishes  standards for how an issuer
classifies and measures certain financial  instruments with  characteristics  of
both  liabilities  and equity.  It requires that an issuer  classify a financial
instrument  that is  within  its  scope  as a  liability  (or an  asset  in some
circumstances).   Many  of  these  instruments  were  previously  classified  as
temporary  equity.  This statement  will be effective for financial  instruments
entered into or modified after May 31, 2003, and otherwise shall be effective at
the  beginning  of the first  interim  period  beginning  after  June 15,  2003.
Adoption  of SFAS  No.  150 will not have a  material  impact  on the  Company's
condensed consolidated financial statements.

10. Related Party Transactions

        The Company  manages one theatre with twelve screens for Laredo Theatre,
Ltd ("Laredo").  Lone Star Theatres,  Inc. owns 25% of  the limited  partnership
interests  in Laredo.  The  Company  is the sole  general  partner  and owns the
remaining limited partnership interests in Laredo.  Lone Star Theatres,  Inc. is
100% owned by Mr. David Roberts, who is 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
theatre  revenues  up to  $50,000,000  each year and 3% of theater  revenues  in
excess of $50,000,000 each year. The Company recorded $112,653 of management fee
revenues and received  $375,000 of  dividends  from Laredo  during the six month
period  ended June 30,  2003.  All such  amounts are  included in the  Company's
condensed  consolidated  financial  statements  with  the  intercompany  amounts
eliminated in consolidation.

        The  Company  manages  one  theatre  with  eight  screens  for  Mitchell
Theatres.  Mitchell  Theatres  is 100% owned by  members  of Lee Roy  Mitchell's
family.  Under the agreement,  management fees are paid by Mitchell  Theatres to
the Company at a rate of 5% of theatre revenues. The term ends in November 2003.
However,  the Company has the option to renew for one or more five-year periods.
The Company recorded  $15,054 of management fee revenues from Mitchell  Theatres
during the six month period ended June 30, 2003.

        The Company leases one theatre with seven screens from Plitt Plaza Joint
Venture ("Plitt  Plaza").  Plitt Plaza is indirectly  owned by Lee Roy Mitchell.
The annual  rent is  approximately  $264,000  plus  certain  taxes,  maintenance
expenses,  insurance,  and a  percentage  of  gross  admissions  and  concession
receipts in excess of certain amounts. The Company recorded $139,412 of facility
lease expense  payable to Plitt Plaza during the six month period ended June 30,
2003.The lease expired in July 2003. The Company and Plitt Plaza signed a letter
agreement under which the Company will enter into a new lease with similar terms
as the  expired  lease.  The Company has plans to open a new theatre in the same
city (scheduled to open in December 2003), at which time the new lease under the
letter agreement would become month-to-month.

        The Company entered into a profit participation  agreement dated May 17,
2002 with its  President,  Alan Stock,  pursuant to which Mr.  Stock  receives a
profit  interest in two recently  built  theatres once the Company has recovered
its capital  investment in these theatres plus its borrowing  costs.  Under this
agreement,  operating  losses and disposition  losses for any year are allocated
100% to the  Company.  Operating  profits  and  disposition  profits  for  these
theatres for any fiscal year are allocated first to the Company to the extent of
total  operating  losses  and losses  from any  disposition  of these  theatres.
Thereafter, net cash from operations from these theatres or from any disposition
of these  theatres is paid first to the Company  until such  payments  equal the
Company's  investment  in these  theatres,  plus  interest,  and then 51% to the
Company  and 49% to Mr.  Stock.  In the event  that Mr.  Stock's  employment  is
terminated without cause, profits will be distributed  according to this formula
without  first  allowing  the  Company to recoup its  investment  plus  interest
thereon.  No amounts have been paid to Mr. Stock to date  pursuant to the profit
participation  agreement.  Upon  completion  of an initial  public  offering  of
Cinemark,  Inc.'s common stock, the Company will have the option to purchase Mr.
Stock's  interest in the  theatres for a price equal to the fair market value of
the profit interest, as determined by an independent appraiser. The Company does
not intend to enter into similar arrangements with its executive officers in the
future.

11. Litigation and Litigation Settlements

        In March 1999, the Department of Justice 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 has appealed the district  court's ruling with
the Sixth  Circuit Court of Appeals.  If the Company loses  this litigation, the

                                       11

<PAGE>

Company's  financial  position,  results  of  operations  and cash  flows may be
materially and adversely affected.  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.

        In August 2001,  David  Wittie,  Rona Schnall,  Ron  Cranston,  Jennifer
McPhail,  Peggy  Garaffa  and ADAPT of Texas  filed  suit in the 201st  Judicial
District Court of Travis 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 two theatres  located in the
Austin,   Texas  market.   The  plaintiffs  were  seeking  remedial  action  and
unspecified  damages. On February 20, 2003, a jury determined that the Company's
theatres  located in the Austin,  Texas market complied with the Human Resources
Code,  the  Texas  Architectural   Barriers  Act  and  the  Texas  Accessibility
Standards. The judge granted summary judgment to the Company with respect to the
Deceptive  Trade  Practices  Act.  The  plaintiffs  failed to timely  appeal the
verdict.  Accordingly,  the  Company has not  established  a reserve for loss in
connection with this proceeding.

        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 which claims are similar
to those raised in the Wittie case in the preceding  paragraph.  The  plaintiffs
are seeking  remedial action and unspecified  damages.  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.

        The plaintiffs in the Department of Justice  litigation,  Austin,  Texas
litigation  and Mission,  Texas  litigation  have argued that the theatres  must
provide  wheelchair seating locations with viewing angles to the screen that are
at the median or better than all seats in the  auditorium.  To date three courts
and one jury in a fourth court have rejected that position. In three of the four
courts,  the Company was the defendant,  and the courts or a jury have found the
Company's  theatres to comply with the ADA; Lara v. Cinemark USA,  Inc.,  United
States  Court of  Appeals  for the Fifth  Circuit;  United  States of America v.
Cinemark USA, Inc.,  United States  District Court for the Northern  District of
Ohio,  Eastern  Division;  and Wittie v.  Cinemark  USA,  Inc.,  201st  Judicial
District Court of Travis County,  Texas. Oregon Paralyzed Veterans of America v.
Regal Cinemas,  Inc.,  United States  District Court for the District of Oregon,
adopted the reasoning  established in Lara and granted summary judgment in favor
of Regal Cinemas, Inc.

        In May 2002,  Robert Todd on behalf of Robert  Preston  Todd,  his minor
child  and "all  individuals  who are  deaf or are  severely  hearing  impaired"
brought this case in the United States District Court for the Southern  District
of Texas,  Houston Division against several movie theatre  operators,  including
AMC  Entertainment,  Inc.,  Regal  Entertainment,  Inc., the Company and Century
Theaters  as well as eight  movie  production  companies.  The  lawsuit  alleges
violation of Title III of the ADA and the First Amendment to the Constitution of
the United States.  Plaintiffs seek unspecified  injunctive relief,  unspecified
declaratory relief,  unspecified monetary damages (both actual and punitive) and
unspecified attorney's fees. The Company has denied any violation of law and has
vigorously  defended against all claims.  On March 7, 2003, the federal district
judge presiding over the case granted summary  judgment to the defendants on the
alleged First  Amendment  violations.  On August 5, 2003,  the federal  district
judge presiding over the case granted summary  judgment to the defendants on the
alleged  ADA  violations.  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.

                                       12

<PAGE>

        In April 2002, the Malthouse  Development  Company Limited, as landlord,
filed a lawsuit in the High Court of  Justice,  Chancery  Division,  in England,
against  Cinemark  Theatres UK Limited and  Cinemark  International  L.L.C.,  as
tenant and guarantor of tenant's  obligations,  respectively,  under a lease for
the construction and operation of a movie theatre in Banbury, England. The lease
was  previously  terminated  for cause by  Cinemark  Theatres  UK  Limited.  The
Malthouse  Development  Company  Limited is seeking  damages for the U.S. dollar
equivalent  of   approximately   $1.5  million  based  on  an  alleged  improper
termination.  Cinemark  Theatres UK Limited and Cinemark  International,  L.L.C.
have filed an answer to the  complaint,  denying  the  allegations.  The Company
intends to  vigorously  defend  this suit.  The Company is unable to predict the
outcome of this litigation or the range of potential loss, however, based on the
opinion  of its  barristers  and  Queen's  counsel,  the  Company  believes  its
potential  liability  with  respect to such  proceeding  is not  material in the
aggregate  to its  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.

12. Long-Term Debt Refinancing

        On February 11, 2003, the Company issued $150 million  principal  amount
of 9% Senior Subordinated Notes to qualified institutional buyers in reliance on
Rule 144A which were  subsequently  registered under the Securities Act of 1933.
Interest is payable on February 1 and August 1 of each year, beginning on August
1, 2003. The notes mature on February 1, 2013. The net proceeds of approximately
$145.9 million from the issuance of the 9% Senior  Subordinated  Notes were used
to repay a portion of the Company's existing Credit Facility.

        On February 14,  2003,  the Company  entered  into a new senior  secured
credit  facility  consisting of a $75 million  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 new credit  facility also
provides for incremental loans of up to $100 million. The new credit facility is
guaranteed by the guarantors of the senior  subordinated notes and is secured by
mortgages on certain fee and  leasehold  properties  and  security  interests on
certain personal and intangible property, including without limitation,  pledges
of all of the  capital  stock of certain  domestic  subsidiaries  and 65% of the
voting stock of certain of the Company's foreign subsidiaries.  The net proceeds
from the new credit  facility  were used to repay,  in full,  the then  existing
Credit Facility and the Cinema Properties Facility.

        The term of the revolving  credit line is five years.  Borrowings  under
the revolving  credit line bear  interest,  at the Company's  option,  at: (A) a
margin of 2.00%  per annum  plus 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%, or (B)
a "eurodollar  rate" equal to the rate at which eurodollar  deposits are offered
in the interbank  eurodollar  market for terms of one, two, three or six, or (if
available to all lenders in their sole  discretion)  nine or twelve  months,  as
selected by the Company,  plus a margin of 3.00% per annum.  After September 30,
2003 the margin applicable to base rate loans will range from 1.25% per annum to
2.00% per annum and the margin  applicable to  eurodollar  rate loans will range
from 2.25% per annum to 3.00% per annum based upon the Company achieving certain
ratios of debt to consolidated EBITDA (as defined in the new Credit Facility).

        The term loan matures on March 31,  2008,  but will be extended to March
31, 2009 if, on or prior to May 31, 2007 the maturity of the Company's  existing
senior  subordinated  debt is extended beyond  September 30, 2009. The term loan
reduces  automatically  each calendar  quarter by $312,500 from June 30, 2003 to
March 31, 2007 and then reduces by $30,000,000  each calendar  quarter from June
30, 2007 to maturity at March 31,  2008.  The term loan bears  interest,  at the
Company's  option,  at:  (A) the base  rate  plus a  margin  of 1.75% or (B) the
eurodollar rate plus a margin of 2.75%.

        On April 18, 2003,  the Company announced  a tender offer  to repurchase
up to $240 million  aggregate principal  amount of its  outstanding $200 million
9 5/8%  Series B Senior  Subordinated  Notes due 2008 and its $75 million 9 5/8%
Series D Senior Subordinated Notes due 2008.

                                       13

<PAGE>

        On May 7, 2003,  the Company  issued an  additional  $210  million of 9%
Senior Subordinated Notes due 2013 at a premium of 107.25% of the face amount to
qualified  institutional buyers in reliance on Rule 144A which were subsequently
registered  under the  Securities  Act of 1933.  The new notes  were  offered as
additional debt securities under an indenture pursuant to which, on February 11,
2003, the Company issued $150 million of 9% Senior  Subordinated Notes due 2013.
Interest is payable on February 1 and August 1 of each year, beginning on August
1, 2003.  The notes mature on February 1, 2013.  The net proceeds of this add-on
issuance of $226.7 million and additional  borrowings under the Company's senior
secured  credit  facility  were utilized on May 16, 2003 to fund the purchase of
approximately  $233.0  million of outstanding 9 5/8% senior  subordinated  notes
tendered as of  midnight  on May 15, 2003  pursuant to the April 18, 2003 tender
offer.

        The loss on  early  retirement  of debt of  $7,258,136  recorded  in the
condensed  consolidated  statement of operations  for the six month period ended
June 30, 2003  related to the  $1,645,759  write-off of  unamortized  debt issue
costs  associated with the retirement of the Company's  existing Credit Facility
and the  Cinema  Properties  Facility  in the  first  quarter  of  2003  and the
$5,612,377   write-off  of  unamortized  debt  issue  costs,   unamortized  bond
premiums/discounts  and tender offer repurchase costs associated with the tender
offer to repurchase and subsequent  retirement of senior  subordinated  notes in
the second quarter of 2003.

13. Condensed Consolidated Financial Statements of Subsidiary Guarantors

        The Company has outstanding  approximately  $42 million principal amount
of 9 5/8% Senior Subordinated Notes due 2008, $105 million principal amount of 8
1/2% Senior  Subordinated Notes due 2008 and $360 million principal amount of 9%
Senior  Subordinated  Notes due 2013. All of the Company's  Senior  Subordinated
Notes are fully and  unconditionally  guaranteed,  jointly and  severally,  on a
senior subordinated unsecured basis by the following  wholly-owned  subsidiaries
of Cinemark USA, Inc.

        Cinemark,  L.L.C.,  Sunnymead  Cinema Corp.,  Cinema  Properties,  Inc.,
Greeley Holdings, Inc. (formerly known as Cinemark Paradiso,  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  June  30,  2003  and
                December  31, 2002 and  condensed  consolidating  statements  of
                operations  and cash  flows  for each of the six  month  periods
                ended June 30, 2003 and 2002.

        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.

                                       14

<PAGE>

<TABLE>
<CAPTION>

SUBSIDIARY GUARANTORS
CONDENSED CONSOLIDATING BALANCE SHEET INFORMATION
June 30, 2003

                                                                Parent      Subsidiary    Subsidiary
ASSETS                                                          Company     Guarantors  Non-Guarantors  Eliminations   Consolidated
<S>                                                          <C>           <C>          <C>            <C>             <C>
CURRENT ASSETS
  Cash and cash equivalents                                  $  6,705,032  $  3,448,731  $ 40,492,935  $         -     $ 50,646,698
  Inventories                                                   1,885,924     1,249,193     1,263,085            -        4,398,202
  Accounts receivable                                          26,686,104     8,628,265     9,180,988    (29,193,221)    15,302,136
  Income tax receivable                                           604,672        28,900     1,017,723     (1,651,295)           -
  Prepaid expenses and other                                    6,545,432       503,390     2,741,541     (4,000,000)     5,790,363
                                                             -----------------------------------------------------------------------

    Total current assets                                       42,427,164    13,858,479    54,696,272    (34,844,516)    76,137,399

THEATRE PROPERTIES AND EQUIPMENT - net                        311,714,970   289,520,706   183,372,174            -      784,607,850

OTHER ASSETS
  Goodwill                                                      7,897,512       412,327     2,758,616       (183,101)    10,885,354
  Investments in and advances to affiliates                   483,201,679   350,305,714    28,851,932   (859,696,513)     2,662,812
  Deferred charges and other - net                             22,946,412     1,357,509    75,724,766    (61,454,159)    38,574,528
                                                             -----------------------------------------------------------------------

    Total other assets                                        514,045,603   352,075,550   107,335,314   (921,333,773)    52,122,694
                                                             -----------------------------------------------------------------------

TOTAL ASSETS                                                 $868,187,737  $655,454,735  $345,403,760  $(956,178,289)  $912,867,943
                                                             =======================================================================

LIABILITIES AND SHAREHOLDER'S EQUITY

CURRENT LIABILITIES
  Current portion of long-term debt                          $  1,305,629  $        -    $  4,670,037  $         -     $  5,975,666
  Current income taxes payable                                  8,754,000           -             -       (1,651,295)     7,102,705
  Accounts payable and accrued expenses                        65,458,567    42,061,744    36,637,036    (29,154,934)   115,002,413
                                                             -----------------------------------------------------------------------

    Total current liabilities                                  75,518,196    42,061,744    41,307,073    (30,806,229)   128,080,784

LONG-TERM LIABILITIES
  Long-term debt, less current portion                        661,445,427    45,237,910    86,821,620   (135,697,315)   657,807,642
  Deferred income taxes                                        10,163,691     8,210,473    (6,655,985)           -       11,718,179
  Other long-term liabilities and deferrals                    28,350,787    74,185,977     4,238,845    (73,990,000)    32,785,609
                                                              ----------------------------------------------------------------------

    Total long-term liabilities                               699,959,905   127,634,360    84,404,480   (209,687,315)   702,311,430

MINORITY INTERESTS IN SUBSIDIARIES                                    -       1,229,981    31,382,989            -       32,612,970

SHAREHOLDER'S EQUITY
  Common stock                                                 49,546,772        25,789   111,543,706   (111,572,825)    49,543,442
  Other shareholder's equity                                   43,162,864   484,502,861    76,765,512   (604,111,920)       319,317
                                                             -----------------------------------------------------------------------

    Total shareholder's equity                                 92,709,636   484,528,650   188,309,218   (715,684,745)    49,862,759
                                                             -----------------------------------------------------------------------

TOTAL LIABILITIES AND SHAREHOLDER'S EQUITY                   $868,187,737  $655,454,735  $345,403,760  $(956,178,289)  $912,867,943
                                                             =======================================================================
</TABLE>

                                       15

<PAGE>

<TABLE>
<CAPTION>

SUBSIDIARY GUARANTORS
CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS INFORMATION
SIX MONTHS ENDED JUNE 30, 2003

                                                                Parent      Subsidiary    Subsidiary
                                                                Company     Guarantors  Non-Guarantors  Eliminations   Consolidated
<S>                                                          <C>           <C>          <C>            <C>             <C>
REVENUES                                                     $215,226,617  $159,125,440  $110,046,237  $ (31,418,964)  $452,979,330

COSTS AND EXPENSES
  Cost of operations                                          186,959,288   100,941,196    81,964,346    (31,680,760)   338,184,070
  General and administrative expenses                           1,752,786    11,967,292     6,219,349        261,796     20,201,223
  Depreciation and amortization                                10,725,108    10,952,463    11,157,911            -       32,835,482
  Asset impairment loss                                               -         820,493     1,240,352            -        2,060,845
  (Gain) loss on sale of assets and other                          48,362    (1,040,239)          858            -         (991,019)
                                                             -----------------------------------------------------------------------
    Total costs and expenses                                  199,485,544   123,641,205   100,582,816    (31,418,964)   392,290,601
                                                             -----------------------------------------------------------------------

OPERATING INCOME                                               15,741,073    35,484,235     9,463,421            -       60,688,729

OTHER INCOME (EXPENSE)
  Interest expense                                            (26,587,025)   (2,902,912)   (3,765,749)     5,741,359    (27,514,327)
  Amortization of debt issue cost                              (1,010,561)     (130,329)      (30,060)           -       (1,170,950)
  Interest income                                               2,713,017     3,181,200       930,506     (5,741,359)     1,083,364
  Foreign currency exchange gain                                      -             -         151,199            -          151,199
  Loss on early retirement of debt                             (6,374,514)     (883,622)          -              -       (7,258,136)
  Equity in income (loss) of affiliates                        31,973,164     2,740,921       170,915    (34,735,476)       149,524
  Minority interests in income of subsidiaries                        -        (118,678)   (2,157,807)           -       (2,276,485)
                                                             -----------------------------------------------------------------------
    Total other income (expense)                                  714,081     1,886,580    (4,700,996)   (34,735,476)   (36,835,811)
                                                             -----------------------------------------------------------------------

INCOME (LOSS) BEFORE INCOME TAXES                              16,455,154    37,370,815     4,762,425    (34,735,476)    23,852,918

Income taxes                                                    2,245,134     5,751,236     2,021,528            -       10,017,898
                                                             -----------------------------------------------------------------------

NET INCOME (LOSS)                                            $ 14,210,020  $ 31,619,579  $  2,740,897  $ (34,735,476)  $ 13,835,020
                                                             =======================================================================
</TABLE>

                                       16

<PAGE>

<TABLE>
<CAPTION>

SUBSIDIARY GUARANTORS
CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS INFORMATION
SIX MONTHS ENDED JUNE 30, 2003

                                                                Parent      Subsidiary    Subsidiary
                                                                Company     Guarantors  Non-Guarantors  Eliminations   Consolidated
<S>                                                          <C>           <C>          <C>            <C>             <C>
OPERATING ACTIVITIES
  Net income (loss)                                          $ 14,210,020  $ 31,619,579  $  2,740,897  $ (34,735,476)  $ 13,835,020

  Noncash items in net income (loss):
    Depreciation and amortization                               9,852,662    11,082,793    12,053,094            -       32,988,549
    Loss on impairment of assets                                      -         820,493     1,240,352            -        2,060,845
    (Gain) loss on sale of assets and other                        48,362    (1,040,239)          858            -         (991,019)
    Loss on early retirement of debt                            6,374,514       883,622           -              -        7,258,136
    Deferred lease expenses                                     8,375,193    (7,536,514)      (79,675)           -          759,004
    Deferred income tax expenses                                 (211,732)      184,883       574,900            -          548,051
    Equity in (income) loss of affiliates                     (31,973,164)   (2,740,921)     (170,915)    34,735,476       (149,524)
    Minority interests in income of subsidiaries                      -         118,678     2,157,807            -        2,276,485
  Cash provided by (used for) operating working capital       (12,160,442)    1,241,817    (1,989,457)    (5,404,574)   (18,312,656)
                                                             -----------------------------------------------------------------------

      Net cash provided by (used for) operating activities     (5,484,587)   34,634,191    16,527,861     (5,404,574)    40,272,891

INVESTING ACTIVITIES
  Additions to theatre properties and equipment                (5,752,807)   (3,771,948)   (8,451,504)           -      (17,976,259)
  Sale of theatre properties and equipment                          1,200     2,063,364        10,831            -        2,075,395
  Net transactions with affiliates                            (45,089,611)   (1,901,467)   (2,826,886)    50,042,650        224,686
                                                             -----------------------------------------------------------------------

      Net cash provided by (used for) investing activities    (50,841,218)   (3,610,051)  (11,267,559)    50,042,650    (15,676,178)

FINANCING ACTIVITIES
  Issuance of senior subordinated notes                       375,225,000           -             -              -      375,225,000
  Retirement of senior subordinated notes                    (232,989,000)          -             -              -     (232,989,000)
  Increase in long-term debt                                  238,508,545           -             -              -      238,508,545
  Decrease in long-term debt                                 (328,532,229)  (74,335,900)   (5,959,549)           -     (408,827,678)
  Increase in debt issue cost                                 (14,944,223)          -             -              -      (14,944,223)
  Change in intercompany notes                                 16,275,000    23,050,000     5,313,076    (44,638,076)           -
  Increase in minority investment in subsidiaries                     -             -       3,896,860            -        3,896,860
  Decrease in minority investment in subsidiaries                     -        (125,000)     (150,304)           -         (275,304)
                                                             -----------------------------------------------------------------------

      Net cash provided by (used for) financing activities     53,543,093   (51,410,900)    3,100,083    (44,638,076)   (39,405,800)

EFFECT OF EXCHANGE RATE CHANGES
  ON CASH AND CASH EQUIVALENTS                                        -             -       1,737,270            -        1,737,270
                                                             -----------------------------------------------------------------------

INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS               (2,782,712)  (20,386,760)   10,097,655            -      (13,071,817)

CASH AND CASH EQUIVALENTS:
  Beginning of period                                           9,487,744    23,835,491    30,395,280            -       63,718,515
                                                             -----------------------------------------------------------------------

  End of period                                              $  6,705,032  $  3,448,731  $ 40,492,935  $         -     $ 50,646,698
                                                             =======================================================================
</TABLE>

                                       17

<PAGE>

<TABLE>
<CAPTION>

SUBSIDIARY GUARANTORS
CONDENSED CONSOLIDATING BALANCE SHEET INFORMATION
DECEMBER 31, 2002

                                                                Parent      Subsidiary    Subsidiary
ASSETS                                                          Company     Guarantors  Non-Guarantors  Eliminations   Consolidated
<S>                                                          <C>           <C>          <C>            <C>             <C>
CURRENT ASSETS
  Cash and cash equivalents                                  $  9,487,744  $ 23,835,491  $ 30,395,280  $         -     $ 63,718,515
  Inventories                                                   1,618,111       924,709     1,146,095            -        3,688,915
  Accounts receivable                                          20,715,100     7,577,935     8,127,358    (23,978,544)    12,441,849
  Income tax receivable                                           (76,969)      745,133        47,767            -          715,931
  Prepaid expenses and other                                    4,948,540     2,459,454     1,281,141     (4,595,000)     4,094,135
                                                             -----------------------------------------------------------------------

    Total current assets                                       36,692,526    35,542,722    40,997,641    (28,573,544)    84,659,345

THEATRE PROPERTIES AND EQUIPMENT - net                        297,727,453   317,354,222   176,648,828            -      791,730,503

OTHER ASSETS
  Goodwill                                                      5,275,538     3,034,301     2,442,005            -       10,751,844
  Investments in and advances to affiliates                   419,075,595   277,255,664    28,970,718   (722,261,037)     3,040,940
  Deferred charges and other - net                              9,002,357     5,347,599    74,064,083    (61,782,743)    26,631,296
                                                             -----------------------------------------------------------------------

    Total other assets                                        433,353,490   285,637,564   105,476,806   (784,043,780)    40,424,080
                                                             -----------------------------------------------------------------------

TOTAL ASSETS                                                 $767,773,469  $638,534,508  $323,123,275  $(812,617,324)  $916,813,928
                                                             =======================================================================

LIABILITIES AND SHAREHOLDER'S EQUITY

CURRENT LIABILITIES
  Current portion of long-term debt                          $     55,629  $ 23,000,000  $  7,134,820  $         -     $ 30,190,449
  Accounts payable and accrued expenses                        72,131,876    43,636,926    32,228,042    (23,759,532)   124,237,312
                                                             -----------------------------------------------------------------------

    Total current liabilities                                  72,187,505    66,636,926    39,362,862    (23,759,532)   154,427,761

LONG-TERM LIABILITIES
  Long-term debt, less current portion                        594,977,372    74,956,909    83,521,345    (91,059,238)   662,396,388
  Deferred income taxes                                        10,375,423     8,025,590    (7,230,885)           -       11,170,128
  Other long-term liabilities and deferrals                    19,858,840    84,630,823     4,434,784    (74,585,000)    34,339,447
                                                             -----------------------------------------------------------------------

    Total long-term liabilities                               625,211,635   167,613,322    80,725,244   (165,644,238)   707,905,963

MINORITY INTERESTS IN SUBSIDIARIES                                    -       1,236,303    25,478,626            -       26,714,929

SHAREHOLDER'S EQUITY
  Common stock                                                 49,546,772        25,789   111,543,706   (111,572,825)    49,543,442
  Other shareholder's equity                                   20,827,557   403,022,168    66,012,837   (511,640,729)   (21,778,167)
                                                             -----------------------------------------------------------------------

    Total shareholder's equity                                 70,374,329   403,047,957   177,556,543   (623,213,554)    27,765,275
                                                             -----------------------------------------------------------------------

TOTAL LIABILITIES AND SHAREHOLDER'S EQUITY                   $767,773,469  $638,534,508  $323,123,275  $(812,617,324)  $916,813,928
                                                             =======================================================================
</TABLE>

                                       18

<PAGE>

<TABLE>
<CAPTION>

SUBSIDIARY GUARANTORS
CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS INFORMATION
SIX MONTHS ENDED JUNE 30, 2002

                                                                Parent      Subsidiary    Subsidiary
                                                                Company     Guarantors  Non-Guarantors  Eliminations   Consolidated
<S>                                                          <C>           <C>          <C>            <C>             <C>
REVENUES                                                     $230,320,608  $158,817,761  $119,550,156  $ (28,537,082)  $480,151,443

COSTS AND EXPENSES
  Cost of operations                                          181,627,630   113,063,765    86,154,351    (28,537,082)   352,308,664
  General and administrative expenses                          15,867,030           -       6,591,549            -       22,458,579
  Depreciation and amortization                                10,843,878    10,642,936    12,525,704            -       34,012,518
  Asset impairment loss                                               -         558,398       223,378            -          781,776
  Loss on sale of assets and other                                360,256       179,049       273,619            -          812,924
                                                             -----------------------------------------------------------------------
    Total costs and expenses                                  208,698,794   124,444,148   105,768,601    (28,537,082)   410,374,461
                                                             -----------------------------------------------------------------------

OPERATING INCOME                                               21,621,814    34,373,613    13,781,555            -       69,776,982

OTHER INCOME (EXPENSE)
  Interest expense                                            (27,351,144)   (2,057,673)   (4,968,842)     5,483,609    (28,894,050)
  Amortization of debt issue cost                              (1,126,034)      (49,167)       (7,139)           -       (1,182,340)
  Interest income                                               1,052,029     4,618,692       810,943     (5,483,609)       998,055
  Foreign currency exchange loss                                      -             -      (2,321,764)           -       (2,321,764)
  Equity in income (loss) of affiliates                        30,617,282     4,478,751       205,733    (35,088,758)       213,008
  Minority interests in income of subsidiaries                        -        (130,216)     (605,510)           -         (735,726)
                                                             -----------------------------------------------------------------------
    Total other income (expense)                                3,192,133     6,860,387    (6,886,579)   (35,088,758)   (31,922,817)
                                                             -----------------------------------------------------------------------

INCOME (LOSS) BEFORE INCOME TAXES AND
  CUMULATIVE EFFECT OF AN ACCOUNTING CHANGE                    24,813,947    41,234,000     6,894,976    (35,088,758)    37,854,165

Income taxes                                                    3,558,802     8,090,662     1,914,597            -       13,564,061
                                                             -----------------------------------------------------------------------

INCOME (LOSS) BEFORE CUMULATIVE EFFECT OF AN
  ACCOUNTING CHANGE                                            21,255,145    33,143,338     4,980,379    (35,088,758)    24,290,104

  Cumulative effect of a change in accounting principle,
   net of tax benefit of $0.                                      (91,394)   (3,298,385)          -              -       (3,389,779)
                                                             -----------------------------------------------------------------------

NET INCOME (LOSS)                                            $ 21,163,751  $ 29,844,953  $  4,980,379  $ (35,088,758)  $ 20,900,325
                                                             =======================================================================
</TABLE>

                                       19

<PAGE>

<TABLE>
<CAPTION>

SUBSIDIARY GUARANTORS
CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS INFORMATION
SIX MONTHS ENDED JUNE 30, 2002

                                                                Parent      Subsidiary    Subsidiary
                                                                Company     Guarantors  Non-Guarantors  Eliminations   Consolidated
<S>                                                          <C>           <C>          <C>            <C>             <C>
OPERATING ACTIVITIES
  Net income (loss)                                          $ 21,163,751  $ 29,844,953  $  4,980,379  $ (35,088,758)  $ 20,900,325

  Noncash items in net income (loss):
    Depreciation and amortization                               9,923,305    10,692,104    13,475,581            -       34,090,990
    Loss on impairment of assets                                      -         558,398       223,378            -          781,776
    Loss on sale of assets and other                              360,256       179,049       273,619            -          812,924
    Deferred lease expenses                                       802,183        62,063        44,158            -          908,404
    Deferred income tax expenses                                1,549,461     7,187,492        (2,264)           -        8,734,689
    Equity in (income) loss of affiliates                     (30,617,282)   (4,478,751)     (205,733)    35,088,758       (213,008)
    Minority interests in income of subsidiaries                      -         130,216       605,510            -          735,726
    Cumulative effect of an accounting change                      91,394     3,298,385           -              -        3,389,779
  Cash provided by (used for) operating working capital         1,938,036    66,910,931   (64,528,295)       670,678      4,991,350
                                                             -----------------------------------------------------------------------

      Net cash provided by (used for) operating activities      5,211,104   114,384,840   (45,133,667)       670,678     75,132,955

INVESTING ACTIVITIES
  Additions to theatre properties and equipment                (2,379,620)   (2,784,486)   (7,027,487)           -      (12,191,593)
  Sale of theatre properties and equipment                      1,514,477           -             -              -        1,514,477
  Net transactions with affiliates                             18,407,751  (104,367,997)    4,891,316     81,663,270        594,340
                                                             -----------------------------------------------------------------------

      Net cash provided by (used for) investing activities     17,542,608  (107,152,483)   (2,136,171)    81,663,270    (10,082,776)

FINANCING ACTIVITIES
  Increase in long-term debt                                   17,510,038           -       1,605,850            -       19,115,888
  Decrease in long-term debt                                  (50,555,629)   (1,500,000)   (5,201,495)           -      (57,257,124)
  Change in intercompany notes                                 13,958,000           -      68,375,948    (82,333,948)           -
  Increase in minority investment in subsidiaries                     -             -         421,855            -          421,855
  Decrease in minority investment in subsidiaries                     -        (112,500)   (5,301,157)           -       (5,413,657)
                                                             -----------------------------------------------------------------------

      Net cash provided by (used for) financing activities    (19,087,591)   (1,612,500)   59,901,001    (82,333,948)   (43,133,038)

EFFECT OF EXCHANGE RATE CHANGES
  ON CASH AND CASH EQUIVALENTS                                        -             -      (3,619,868)           -       (3,619,868)
                                                             -----------------------------------------------------------------------

INCREASE IN CASH AND CASH EQUIVALENTS                           3,666,121     5,619,857     9,011,295            -       18,297,273

CASH AND CASH EQUIVALENTS:
  Beginning of period                                           8,590,808    12,560,326    29,048,089            -       50,199,223
                                                             -----------------------------------------------------------------------

  End of period                                              $ 12,256,929  $ 18,180,183  $ 38,059,384   $        -     $ 68,496,496
                                                             =======================================================================
</TABLE>

                                       20

<PAGE>

Item 2. Management's Discussion and Analysis of  Financial Condition and Results
of Operations

        The following is an analysis of our  financial  condition and results of
operations.  This  analysis  should be read in  conjunction  with our  Condensed
Consolidated  Financial  Statements,  including  the  notes  thereto,  appearing
elsewhere in this report.

Overview

        We generate  revenues  primarily  from box office  receipts,  concession
sales and screen advertising sales.  Revenues are recognized when admissions and
concession sales are received and earned at the theatres and screen  advertising
is shown at the theatres. Our revenues are affected by changes in attendance and
average admissions and concession  revenues per patron.  Attendance is primarily
affected  by the  commercial  appeal of the films  released  during  the  period
reported.  We generate  additional  revenues related to theatre  operations from
vendor marketing  programs,  pay phones, ATM machines and electronic video games
installed in video arcades located in some of our theatres.

        Film rentals and advertising, concession supplies and salaries and wages
vary directly  with changes in revenues.  Film rental costs are accrued based on
the  applicable  box office  receipts and either the  mutually  agreed upon firm
terms or  estimates  of the final  settlement  depending  on the film  licensing
arrangement.  Advertising costs borne by us, 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 ads is based on, among other things, the size of the directory and
the frequency and size of the newspaper's  circulation.  We purchase  concession
supplies to replace  units sold.  Although  salaries  and wages  include a fixed
component of cost (i.e. the minimum  staffing cost 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 volume.

        Facility lease expense is primarily a fixed cost at the theatre level as
our facility leases generally require a fixed monthly minimum rent payment, with
certain  leases also subject to  additional  percentage  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,  judgments and  assumptions
that we believe  are  reasonable  based upon the  information  available.  These
estimates,  judgments 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  financial results are included in our Annual Report
filed March 19, 2003 on Form 10-K. No significant  changes have been made to our
critical accounting policies during the period covered by this filing.

Results of Operations

        The  following  table  sets  forth,  for  the  periods  indicated,   the
percentage of revenues  represented by certain items  reflected in the Company's
condensed consolidated statements of operations:

                                       21

<PAGE>

<TABLE>
<CAPTION>

                                                                 % of Revenues            % of Revenues
                                                              Three Months Ended        Six Months Ended
                                                                   June 30,                 June 30,
                                                                   --------                 --------
                                                               2003        2002         2003        2002
                                                               ----        ----         ----        ----
<S>                                                           <C>         <C>          <C>         <C>
  Revenues
    Admissions                                                 63.2%       63.7%        63.1%       64.1%
    Concession                                                 31.8        31.6         31.8        31.1
    Other                                                       5.0         4.7          5.1         4.8
                                                                ---         ---          ---         ---
  Total revenues                                              100.0       100.0        100.0       100.0

  Cost of operations                                           73.9        73.0         74.7        73.4
  General and administrative expenses                           4.3         4.7          4.5         4.7
  Depreciation and amortization                                 6.7         6.6          7.1         7.0
  Asset impairment loss                                         0.8         0.1          0.5         0.2
  (Gain) loss on sale of assets and other                      (0.1)        0.1         (0.2)        0.2
                                                               -----        ---         -----        ---
  Total cost of operations                                     85.6        84.5         86.6        85.5
                                                               ----        ----         ----        ----

  Operating income                                             14.4        15.5         13.4        14.5

  Interest expense (1)                                         (5.9)       (5.8)        (6.3)       (6.3)
  Loss on early retirement of debt                             (2.3)         -          (1.6)         -
  Income taxes                                                  2.4         3.6          2.2         2.8
  Income before accounting change                               3.4         5.5          3.1         5.1
  Net income                                                    3.4         5.5          3.1         4.4

  (1) includes amortization of debt issue costs.
</TABLE>

Second quarter ended June 30, 2003 and 2002

Revenues

        Revenues for the second  quarter ended June 30, 2003 decreased to $249.0
million from $253.4  million for the second  quarter ended June 30, 2002, a 1.7%
decrease.  The  decrease  in  revenues  for  the  second  quarter  is  primarily
attributable to a 0.7% decrease in attendance and a 1.8% decrease in the average
ticket price  related to the  unfavorable  change in foreign  currency  exchange
rates.  Revenues per screen  decreased  2.3% to $82,035 in the second quarter of
2003 from $83,924 in the second quarter of 2002.

Cost of Operations

        Cost of operations,  as a percentage of revenues,  increased to 73.9% in
the  second  quarter  of 2003 from  73.0% in the  second  quarter  of 2002.  The
percentage  increase is primarily due to the decrease in revenues  while many of
our theatre operating costs are fixed in nature. Film rentals and advertising as
a percentage of admissions  revenues increased to 56.4% in the second quarter of
2003 from 55.6% in the second  quarter of 2002,  utilities  and other costs as a
percentage  of revenues  increased  to 11.3% in the second  quarter of 2003 from
10.4% in the second  quarter of 2002 and facility  lease expense as a percentage
of revenues  increased to 11.9% in the second  quarter of 2003 from 11.5% in the
second quarter of 2002. These increased operating costs were partially offset by
a decrease in concession  supplies as a percentage of concession revenues in the
second  quarter of 2003 to 16.1% from 17.2% in the second  quarter of 2002 and a
decrease in salaries and wages as a percentage of revenues in the second quarter
of 2003 to 9.9% from  10.2% in the  second  quarter  of 2002.  The  decrease  in
concession  supplies as a percentage of concession revenues is primarily related
to the successful  implementation of a domestic concession price increase in the
fourth quarter of 2002.

                                       22

<PAGE>

General and Administrative Expenses

        General  and  administrative  expenses,  as a  percentage  of  revenues,
decreased  to 4.3% for the  second  quarter  of 2003  from  4.7% for the  second
quarter of 2002. General and administrative  expenses decreased to $10.6 million
in the second  quarter of 2003 from $11.8 million in the second quarter of 2002.
The  decrease in general and  administrative  expenses is  primarily  related to
decreased professional fees and accrued bonus expense.

Depreciation and Amortization

        Depreciation  and amortization of $16.7 million in the second quarter of
2003 is  consistent  with the $16.8  million  recorded in the second  quarter of
2002.

Asset Impairment Loss

        We wrote down the assets of certain properties to their fair value which
resulted in asset  impairment  charges of $2.1  million and $0.2  million in the
second quarter of 2003 and 2002, respectively,  related to assets to be held and
used.  The asset  impairment  charges  of $2.1  million  recorded  in the second
quarter  of 2003  related  to a $1.3  million  write-down  to fair  value of one
theatre in Mexico and a $0.8 million  write-down to fair value of one theatre in
the U.S. The asset  impairment  charges of $0.2  million  recorded in the second
quarter of 2002  related to the  write-down  to fair value of one  theatre in El
Salvador.

Interest Expense

        Interest costs incurred,  including  amortization of debt issue cost, of
$14.8  million in the  second  quarter  of 2003 were  consistent  with the $14.7
million recorded in the second quarter of 2002.

Loss on Early Retirement of Debt

        The loss on early  retirement  of debt of $5.6  million  recorded in the
second quarter of 2003 related to the write-off of unamortized debt issue costs,
unamortized bond premiums/discounts and tender offer repurchase costs associated
with the tender offer to  repurchase  and the  subsequent  retirement  of senior
subordinated notes in the second quarter of 2003.

Income Taxes

        Income tax expense of $6.1 million was recorded in the second quarter of
2003 in  comparison  with  income tax  expense of $9.1  million  recorded in the
second  quarter of 2002.  Our effective tax rate for the second  quarter of 2003
was 42.0% as compared to 39.4% for the second quarter of 2002.

Net Income

        We realized net income of $8.4 million for the second quarter of 2003 in
comparison  with  income of $14.1  million for the second  quarter of 2002.  The
decrease  is  primarily  related  to the $5.6  million  (pre-tax)  loss on early
retirement of debt recorded in the second quarter of 2003.

Six month periods ended June 30, 2003 and 2002

Revenues

        Revenues  for the six  month  period  ended  June 30,  2003  ("the  2003
period")  decreased  to $453.0  million  from  $480.2  million for the six month
period ended June 30, 2002 ("the 2002 period"), a 5.7% decrease. The decrease in
revenues for the 2003 period is  primarily  attributable  to a 3.8%  decrease in
attendance  and a 3.4%  decrease  in the  average  ticket  price  related to the
unfavorable  change in foreign  currency  exchange  rates.  Revenues  per screen
decreased 6.3% to $149,435 in the 2003 period from $159,458 in the 2002 period.

                                       23

<PAGE>

Cost of Operations

        Cost of operations,  as a percentage of revenues,  increased to 74.7% in
the 2003  period  from 73.4% in the 2002  period.  The  percentage  increase  is
primarily  due to the decrease in revenues  while many of our theatre  operating
costs are fixed in nature.  Facility  lease  expense as a percentage of revenues
increased to 12.9% in the 2003 period from 12.1% in the 2002  period,  utilities
and other  costs as a  percentage  of  revenues  increased  to 11.9% in the 2003
period from 11.1% in the 2002  period,  salaries  and wages as a  percentage  of
revenues increased to 10.4% in the 2003 period from 10.1% in the 2002 period and
film rentals and advertising as a percentage of admissions revenues increased to
54.5%  in the  2003  period  from  54.1% in the  2002  period.  These  increased
operating costs were partially offset by a decrease in concession  supplies as a
percentage of concession  revenues to 15.8% in the 2003 period from 17.2% in the
2002 period.  The decrease in concession  supplies as a percentage of concession
revenues is primarily  related to the  successful  implementation  of a domestic
concession price increase in the fourth quarter of 2002.

General and Administrative Expenses

        General  and  administrative  expenses,  as a  percentage  of  revenues,
decreased to 4.5% for the 2003 period from 4.7% for the 2002 period. General and
administrative expenses decreased to $20.2 million in the 2003 period from $22.5
million in the 2002 period.  The decrease in general and administrative expenses
is primarily related to decreased professional fees and accrued bonus expense.

Depreciation and Amortization

        Depreciation  and  amortization  decreased to $32.8  million in the 2003
period from $34.0 million in the 2002 period.

Asset Impairment Loss

        We wrote down the assets of certain properties to their fair value which
resulted in asset  impairment  charges of $2.1  million and $0.8  million in the
2003 and 2002 periods, respectively,  related to assets to be held and used. The
asset impairment  charges of $2.1 million recorded in the 2003 period related to
a $1.3  million  write-down  to fair  value of one  theatre in Mexico and a $0.8
million write-down to fair value of one theatre in the U.S. The asset impairment
charges of $0.8  million  recorded in the 2002 period  related to a $0.6 million
write-down to fair value of goodwill  associated  with our Argentine  operations
and a $0.2 million write-down to fair value of one theatre in El Salvador.

Interest Expense

        Interest  costs  incurred,  including  amortization  of debt issue cost,
decreased  4.6% in the 2003 period to $28.7  million  from $30.1  million in the
2002 period.  The decrease in interest costs incurred for the 2003 period is due
principally to a decrease in our average debt outstanding.

Loss on Early Retirement of Debt

        The loss on early  retirement  of debt of $7.3  million  recorded in the
2003 period  related to the $1.7  million  write-off of  unamortized  debt issue
costs associated with the refinancing of the Company's  existing Credit Facility
and the Cinema  Properties  Facility  in the first  quarter of 2003 and the $5.6
million write-off of debt issue costs,  unamortized bond  premiums/discounts and
tender offer repurchase costs associated with the tender offer to repurchase and
the subsequent  retirement of senior subordinated notes in the second quarter of
2003.

Income Taxes

        Income tax expense of $10.0  million was  recorded in the 2003 period in
comparison with income tax expense of $13.6 million recorded in the 2002 period.
Our  effective  tax rate for the 2003  period was 42.0% as compared to 35.8% for
the 2002 period.  The change in the  effective  tax rate is primarily  due to an
increase  in  foreign  permanent  differences  and the  impact  on the 2002 rate
resulting from the cumulative effect of an accounting change.

                                       24

<PAGE>

Net Income

        We  realized  net  income  of  $13.8  million  for the  2003  period  in
comparison with net income of $20.9 million for the 2002 period. The decrease is
primarily related to the $7.3 million (pre-tax) loss on early retirement of debt
recorded in the 2003 period.

Liquidity and Capital Resources

Operating Activities

        We  primarily  collect our revenues in cash,  mainly  through box office
receipts and the sale of concession supplies. However, we 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.

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 credit facility.

        We are continuing to expand our U.S. theatre circuit. We have opened one
new theatre (12 screens) in the six month  period  ended June 30, 2003  bringing
our total domestic screen count to 2,218 screens (12 of which are in Canada). As
of June 30, 2003, we have signed commitments to build three new theatres with 31
screens  scheduled  to open in the U.S. by the end of 2003 and six new  theatres
with 82 screens and a five screen expansion to an existing theatre  scheduled to
open  in the  U.S.  subsequent  to  2003.  We  estimate  the  remaining  capital
expenditures  for the  development  of these  118  screens  in the U.S.  will be
approximately $30 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  credit
facility,   subordinated   note   borrowings,   proceeds  from  sale   leaseback
transactions and/or sales of excess real estate. Additionally,  we may from time
to time,  subject to compliance with our debt instruments,  purchase on the open
market or call our debt securities depending upon the availability and prices of
such securities.

        We are also continuing to expand our international  theatre circuit.  We
have  opened one new  theatre (8  screens)  and added two screens to an existing
theatre  in the six  month  period  ended  June  30,  2003  bringing  our  total
international  screen count to 826 screens.  As of June 30, 2003, we have signed
commitments  to build  four  new  theatres  with 26  screens  and a five  screen
expansion to an existing theatre  scheduled to open in international  markets by
the end of 2003 and four  new  theatres  with 27  screens  scheduled  to open in
international  markets  subsequent to 2003.  We estimate the  remaining  capital
expenditures  for the development of these 58 screens in  international  markets
will be approximately  $20 million.  Actual  expenditures for continued  theatre
development and  acquisitions  are subject to change based upon the availability
of  attractive  opportunities.  We  anticipate  that  investments  in  excess of
available  cash  will  be  funded  by us or by debt or  equity  financing  to be
provided by third parties directly to our subsidiaries.

                                       25

<PAGE>

Financing Activities

        As of June 30, 2003,  our  long-term  debt  obligations,  capital  lease
obligations,  future minimum lease  obligations under  non-cancelable  operating
leases,  outstanding  letters  of credit  and  purchase  commitments  (excluding
capital expenditures) for each period indicated are summarized as follows:

<TABLE>
<CAPTION>

                                        Payments Due by Period
                                            (In millions)

                                                    Less Than                                 After 5
  Contractual Obligations                Total        1 Year      1-3 Years     4-5 years      Years
  ---------------------------------     -------     ---------     ---------     ---------     -------
<S>                                     <C>           <C>           <C>           <C>          <C>
  Long-term debt...................      $663.8        $6.0         $12.0         $124.2       $521.6
  Capital lease obligations........         0.1         0.1            -              -            -
  Operating lease obligations......     1,411.2       101.5         207.2          206.7        895.8
  Letters of credit................         0.1         0.1            -              -            -
  Purchase commitments.............         3.8         1.9           1.1            0.8           -
</TABLE>

        As of June 30,  2003,  we were in full  compliance  with all  agreements
governing our outstanding debt.

New Senior Subordinated Notes Issuance

        On February 11, 2003,  we issued $150 million of 9% Senior  Subordinated
Notes  due  2013 to  qualified  buyers  in  reliance  on Rule  144A  which  were
subsequently registered under the Securities Act of 1933. Interest is payable on
February  1 and August 1 of each year,  beginning  on August 1, 2003.  The notes
will mature on  February  1, 2013.  The net  proceeds  of  approximately  $145.9
million from the issuance of the 9% Senior Subordinated Notes were used to repay
a portion of our then existing credit facility.

        On May 7,  2003,  we  issued an  additional  $210  million  of 9% Senior
Subordinated  Notes  due 2013 at a  premium  of  107.25%  of the face  amount to
qualified  institutional buyers in reliance on Rule 144A which were subsequently
registered  under the  Securities  Act of 1933.  The new notes  were  offered as
additional debt securities under an indenture pursuant to which, on February 11,
2003, the Company issued $150 million of 9% Senior  Subordinated Notes due 2013.
Interest is payable on February 1 and August 1 of each year, beginning on August
1, 2003.  The notes will mature on February  1, 2013.  The net  proceeds of this
add-on  issuance of $226.7  million and additional  borrowings  under our senior
secured  credit  facility  were utilized to fund the purchase on May 16, 2003 of
approximately  $233.0  million of outstanding 9 5/8% senior  subordinated  notes
tendered as of midnight on May 15, 2003 pursuant to a tender offer  announced on
April 18, 2003.

        We may redeem all or part of the new 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 notes from the proceeds of certain equity offerings. The notes are
general,  unsecured  obligations,  are  subordinated  in right of payment to our
senior secured credit facility or other senior indebtedness, and rank pari passu
with our existing senior  subordinated debt. 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  the  Company's   non-guarantor
subsidiaries.

Senior Subordinated Notes

        As of  June  30,  2003,  we  have  outstanding  four  issues  of  senior
subordinated  notes:  (1) $29.9  million in 9 5/8% Series B Senior  Subordinated
Notes due 2008; (2) $12.1 million in 9 5/8% Series D Senior  Subordinated  Notes
due 2008;  (3) $105  million in 8 1/2%  Series B Senior  Subordinated  Notes due
2008; and (4) $360 million in 9% Senior Subordinated Notes due 2013. Interest in
each issue is payable on February 1 and August 1 of each year.

        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

                                       26

<PAGE>

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.

        The senior subordinated notes are general, unsecured obligations and are
subordinated  in right of payment to the 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 the Company's non-guarantor subsidiaries.

        Generally, if we are in default under the senior secured credit facility
and other senior  indebtedness,  we would not be allowed to make payments on the
senior  subordinated  notes until the defaults have been cured or waived.  If we
fail to make any payments when due or within the  applicable  grace  period,  we
would be in default  under the  indentures  governing  the  senior  subordinated
notes.

New Senior Secured Credit Facility

        On  February  14,  2003,  we entered  into a new senior  secured  credit
facility  consisting of a $75 million  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 new credit  facility  also  provides for
incremental  term  loans  of up to $100  million.  The new  credit  facility  is
guaranteed by the guarantors of the new senior subordinated notes and is secured
by mortgages on certain fee and leasehold  properties and security  interests on
certain personal and intangible property, including without limitation,  pledges
of all of the  capital  stock of certain  domestic  subsidiaries  and 65% of the
voting stock of certain of our foreign  subsidiaries.  The net proceeds from the
new  credit  facility  were used to repay,  in full,  the then  existing  Credit
Facility and the Cinema Properties Facility.

        The term of the revolving  credit line is five years.  Borrowings  under
the  revolving  credit line bear  interest,  at our option,  at: (A) a margin of
2.00% per annum plus 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%, or (B) a "eurodollar
rate"  equal  to the  rate at  which  eurodollar  deposits  are  offered  in the
interbank  eurodollar  market  for  terms  of one,  two,  three  or six,  or (if
available to all lenders in their sole  discretion)  nine or twelve  months,  as
selected by us, plus a margin of 3.00% per annum. The margin  applicable to base
rate  loans  ranges  from  1.25% per  annum to 2.00%  per  annum and the  margin
applicable  to  eurodollar  rate loans  ranges from 2.25% per annum to 3.00% per
annum based upon our achieving certain ratios of debt to consolidated EBITDA (as
defined in the new credit facility).

        The term loan matures on March 31,  2008,  but will be extended to March
31, 2009,  if on or prior to May 31, 2007 the  maturity of our  existing  senior
subordinated  debt is extended beyond  September 30, 2009. The term loan reduces
automatically  each calendar quarter by $312,500 from June 30, 2003 to March 31,
2007 and then reduces by $30,000,000 each calendar quarter from June 30, 2007 to
maturity at March 31, 2008. The term loan bears interest,  at our option, at (A)
the base rate plus a margin of 1.75% or (B) the eurodollar rate plus a margin of
2.75%.

        Under the new credit  facility,  we are  required to maintain  specified
levels of fixed charge coverage and set limitations on our leverage  ratios.  We
are  limited  in our  ability  to pay  dividends  and in our  ability  to  incur
additional  indebtedness and liens and,  following the issuance of certain types
of indebtedness or the disposition of assets, subject to certain exceptions,  we
would be required to apply certain of the proceeds to repay amounts  outstanding
under the credit  facility.  The new credit facility also contains certain other
covenants and restrictions customary in credit agreements of this kind.

        As of June 30, 2003,  there was no outstanding  balance on the revolving
credit  line.  As of June 30, 2003,  $74.9  million is available to us to borrow
under the  revolving  credit  line taking into  consideration  the $0.1  million
letter  of  credit  outstanding.  As of June 30,  2003,  we had  $124.7  million
outstanding  under  the  term  loan  and  the  effective  interest  rate on such
borrowings was 4.1% per annum.

                                       27

<PAGE>

Cinemark USA Revolving Credit Facility

        In February 1998, we entered into a reducing  revolving  credit facility
with a group of banks for which Bank of America,  N.A.  acted as  administrative
agent.  The credit facility  provided for an initial  commitment of $350 million
which was  automatically  reduced each quarter by 2.5%,  3.75%,  5.0%, 6.25% and
6.25%  of the  aggregate  $350  million  in 2001,  2002,  2003,  2004 and  2005,
respectively,  until  maturity in 2006.  As of December 31, 2002,  the aggregate
commitment  available  to us was  $262.5  million.  We  prepaid a portion of the
indebtedness outstanding under the credit facility on February 11, 2003 with the
net proceeds of our new $150 million 9% senior subordinated notes issuance.  The
credit facility was repaid in full on February 14, 2003 from the net proceeds of
our new senior  secured  credit  facility  entered  into with Lehman  Commercial
Paper, Inc. for itself and as administrative agent for a syndicate of lenders.

Cinemark Mexico Revolving Credit Facility

        In  November  1998,  Cinemark  Mexico  (USA),  Inc.  executed  a  credit
agreement  with Bank of America  National  Trust and  Savings  Association  (the
"Cinemark Mexico Credit Agreement").  The Cinemark Mexico Credit Agreement was a
revolving  credit  facility and provided for a loan to Cinemark  Mexico of up to
$30 million in the  aggregate.  Cinemark  Mexico was required to make  principal
payments of $0.5 million in each of the third and fourth  quarters of 2001, $1.5
million  per quarter in 2002 with the  remaining  principal  outstanding  of $23
million due in January  2003.  On January 15, 2003,  the Cinemark  Mexico Credit
Agreement was paid in full.

Cinema Properties Term Loan

        In December 2000,  Cinema  Properties,  Inc., a wholly owned  subsidiary
that was not  subject to  restrictions  imposed by the  credit  facility  or the
indentures  governing  the senior  subordinated  notes,  borrowed a $77  million
3-year  term  loan  from  Lehman  Brothers  Bank,  FSB (the  "Cinema  Properties
Facility"),  which was  originally  scheduled to mature on December 31, 2003. In
2002,  the Cinema  Properties  Facility was amended,  which among other  things,
extended the  maturity  date one year to December  31, 2004 and  eliminated  the
lender's  discretionary  right to require Cinema  Properties,  Inc. to make $1.5
million  principal  payments in the third and fourth  quarters of 2002.  The $77
million Cinema Properties  Facility was repaid in full on February 14, 2003 from
the net proceeds of our new senior  secured  credit  facility  entered into with
Lehman  Commercial  Paper,  Inc.  for itself and as  administrative  agent for a
syndicate of lenders.  Simultaneously,  with such repayment,  Cinema Properties,
Inc. and its shareholders were merged with and into us.

Cinemark Brasil Notes Payable

        Cinemark  Brasil S.A.  currently has three main types of funding sources
executed with local and international banks.  These include:

        (1) BNDES  (Banco  Nacional de  Desenvolvimento  Economico e Social (the
Brazilian National  Development Bank)) credit line in the U.S. dollar equivalent
in Brazilian  reais of US$3.8 million  executed in October 1999 with a term of 5
years (with a nine month grace  period) and accruing  interest 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 14.5%;

        (2) BNDES credit line in the U.S.  dollar  equivalent in Brazilian reais
of US$1.9  million  executed in November 2001 with a term of 5 years (with a one
year grace  period) and  accruing  interest at a BNDES basket rate plus a spread
amounting to 13.8%;

        (3) Project developer financing executed with two engineering  companies
in September 2000 in the amount of US$1.8 million with a term of 5 years (with a
nine month grace  period) and  accruing  interest at a rate of TJLP+5%  (Taxa de
Juros de Longo  Prazo (a long term  interest  rate  published  by the  Brazilian
government)).

        These sources are secured by a variety of instruments, including comfort
letters  from  Cinemark  International,  promissory  notes for up to 130% of the
value,  a revenue  reserve  account and equipment  collateral.  A fourth funding
source (import financing executed with Banco ABC Brasil) was paid in full during
the second  quarter of 2003.  As of June 30, 2003,  an aggregate of $4.5 million
was outstanding and the average  effective  interest rate on such borrowings was
14.3% per annum.

                                       28

<PAGE>

Cinemark Chile Notes 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.  is  required to make 24 equal  quarterly  installments  of
principal  plus accrued and unpaid  interest,  commencing  March 27,  2002.  The
indebtedness is secured by a first priority  commercial  pledge of the shares of
Cinemark Chile S.A., a chattel mortgage over Cinemark Chile's personal  property
and by guarantees issued by Cinemark International, L.L.C. and Chile Films S.A.,
whose owners are  shareholders  of Cinemark  Chile S.A. 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 (360 day TAB  Banking  rate with  respect  to one of the four
banks) as published by the Association of Banks and Financial  Institutions  Act
plus 2%. As of June 30, 2003, $7.8 million was outstanding  under this agreement
and the effective interest rate on such borrowing was 4.3% per annum.

Credit Ratings

        On January 31,  2003,  Standard & Poor's  revised its outlook on us from
stable to positive  and assigned a BB- rating to our new senior  secured  credit
facility and a B- rating to the $150 million 9% senior subordinated notes issued
on February 11, 2003.  On the same day, Moody's Investor  Services  upgraded its
rating on our three existing series of senior  subordinated  notes due 2008 from
Caa2 to B3 and assigned a Ba3 rating to our new senior secured  credit  facility
and a B3  rating to the $150  million  9% senior  subordinated  notes  issued on
February 11, 2003.  On April 25, 2003, Standard & Poor's assigned a B- rating to
the $210 million 9% senior subordinated notes issued on May 7, 2003.

Recent Developments

        On August 1, 2003, the  Company  announced  that  it is seeking  certain
amendments to its senior secured  credit  facility from its lenders to provide a
$165  million  term  loan with  a term  expiring  on March 31, 2008  subject  to
extensions permitted in the senior credit facility. The net proceeds of the term
loan and additional  borrowings under the revolving facility will be used to (i)
repay the $124.7 million of term loans currently outstanding under the Company's
senior secured credit facility and (ii) redeem the  approximately $42 million of
the  Company's  9  5/8%  Senior   Subordinated   Notes  due  2008  which  remain
outstanding.

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:

        o future revenues, expenses and profitability;
        o the future development and expected growth of our business;
        o projected capital expenditures;
        o attendance at movies  generally,  or in any of the markets in which we
          operate,  the number or  diversity of popular  movies  released or our
          ability to successfully license and exhibit popular films;
        o competition from other exhibitors; and
        o determinations in lawsuits in which we are a defendant.

        You can identify forward-looking  statements by the use of words such as
"may,"  "should,"  "will,"  "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

                                       29

<PAGE>

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.

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 June 30, 2003, we had an
aggregate  of $142.0  million of  variable  rate debt  outstanding  under  these
facilities.  These  facilities  represent  approximately  21% of our outstanding
long-term debt. Based on the interest rate levels in effect on the variable rate
debt outstanding at June 30, 2003, 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 table below provides  information  about our fixed rate and variable
rate long-term debt agreements:

<TABLE>
<CAPTION>

                                                                 Expected Maturity Date
                                                                  As of June 30, 2003
                                                                  -------------------

                             June 30,     June 30,     June 30,     June 30,     June 30,                              Fair
  (in millions)                2004         2005         2006         2007         2008       Thereafter     Total     Value
  -------------                ----         ----         ----         ----         ----       ----------     -----     -----
<S>                            <C>          <C>          <C>         <C>          <C>           <C>         <C>       <C>
  Long-term debt:
  Fixed rate                   $0.1         $ -          $0.1         $ -          $ -          $521.6      $521.8    $521.8
  Average interest rate                                                                                       8.9%

  Variable rate                $5.9         $5.4         $6.5        $33.1        $91.1           $ -       $142.0    $143.3
  Average interest rate                                                                                       4.4%

  Total debt                   $6.0         $5.4         $6.6        $33.1        $91.1         $521.6      $663.8    $665.1
</TABLE>

<TABLE>
<CAPTION>

                                                                 Expected Maturity Date
                                                                As of December 31, 2002
                                                                -----------------------

                             Dec. 31,     Dec. 31,     Dec. 31,     Dec. 31,     Dec. 31,                              Fair
  (in millions)                2003         2004         2005         2006         2007       Thereafter     Total     Value
  -------------                ----         ----         ----         ----         ----       ----------     -----     -----
<S>                           <C>         <C>           <C>          <C>           <C>          <C>         <C>       <C>
  Long-term debt:
  Fixed rate                   $0.1         $ -          $0.1         $ -          $ -          $380.2      $380.4    $393.8
  Average interest rate                                                                                       9.3%

  Variable rate               $30.1       $165.6        $94.6        $19.9         $2.0           $ -       $312.2    $324.1
  Average interest rate                                                                                       4.4%

  Total debt                  $30.2       $165.6        $94.7        $19.9         $2.0         $380.2      $692.6    $717.9
</TABLE>

        In December  2000, Cinema  Properties,  Inc., a wholly-owned  subsidiary
of ours, entered  into the Cinema  Properties  Facility.   Pursuant to the terms
of the  Cinema  Properties  Facility, funds  borrowed  bear  interest at  a rate
per annum  equal  to LIBOR  (as  defined  in  the  Cinema  Properties  Facility)
plus 5.75%.  As part of  the  Cinema  Properties  Facility,  in order  to  hedge
against  future changes  in interest rates,  Cinema  Properties, Inc.  purchased
from  Lehman Brothers  Derivative Products  Inc. an Interest  Rate Cap Agreement
with a  notional  amount  equal to $77  million with  a  five  year  term  and a
strike rate  equal to the excess of  three month  LIBOR over the strike price of

                                       30

<PAGE>

6.58%.  Three month LIBOR as of the date of closing was 6.58%.  At December  31,
2002,  the interest  rate cap  agreement  was recorded at its fair value of $0.1
million.  During the six month period ended June 30, 2003, the Interest Rate Cap
Agreement  was  written  down to $0.  We do not have any  additional  derivative
financial  instruments  in place as of June 30,  2003 that would have a material
effect on our financial position, results of operations and cash flows.

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
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 June 30, 2003, 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
$5.5 million.

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 within the last 90 days.
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
subsequent to the evaluation by the Chief Executive  Officer and Chief Financial
Officer.

                                       31

<PAGE>

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, 2002.  See updated  discussion  of Legal
Proceedings in the notes to condensed consolidated financial statements.

Item 2. Changes in Securities and Use of Proceeds

        Not Applicable

Item 3. Defaults Upon Senior Securities

        Not Applicable

Item 4. Submission of Matters to a Vote of Security Holders

        There have not been any matters  submitted to a vote of security holders
during  the first six  months of 2003  through  the  solicitation  of proxies or
otherwise.

Item 5. Other Information

        a) Recent Developments

                On August 1, 2003, the  Company  announced  that  it  is seeking
        certain  amendments  to its  senior  secured  credit  facility  from its
        lenders  to provide a $165  million  term loan with a term  expiring  on
        March 31, 2008  subject to  extensions  permitted  in the senior  credit
        facility.  The net proceeds of the term loan and  additional  borrowings
        under  the  revolving  facility  will be  used to (i) repay  the  $124.7
        million of term loans currently  outstanding  under the Company's senior
        secured credit facility and (ii) redeem the approximately $42 million of
        the  Company's 9 5/8% Senior  Subordinated  Notes due 2008 which  remain
        outstanding.

        b) Supplemental  Schedules  specified by the Senior  Subordinated  Notes
        Indenture:
                                                                            Page
                                                                            ----
                Condensed Consolidating Balance Sheet
                (unaudited) as of June 30, 2003                               33

                Condensed Consolidating Statements
                of Operations (unaudited) for the
                six month period ended June 30, 2003                          34

                Condensed Consolidating Statements of
                Cash Flows (unaudited) for the six month
                period ended June 30, 2003                                    35

                                       32

<PAGE>

<TABLE>
<CAPTION>

                      CINEMARK USA, INC. AND SUBSIDIARIES
                     CONDENSED CONSOLIDATING BALANCE SHEETS
                              AS OF JUNE 30, 2003
                                   (Unaudited)

                                                                    Restricted      Unrestricted
                                                                       Group            Group         Eliminations         TOTAL
                                                                   -------------    -------------    --------------    -------------
<S>                                                                <C>              <C>              <C>               <C>
                                     ASSETS

CURRENT ASSETS
  Cash and cash equivalents                                        $ 22,519,899     $ 28,126,799     $         -       $ 50,646,698
  Inventories                                                         3,826,440          571,762               -          4,398,202
  Accounts receivable                                               (18,239,069)      33,801,270          (260,065)      15,302,136
  Income tax receivable                                                (985,973)         985,973               -                -
  Prepaid expenses and other                                          4,944,496          845,867               -          5,790,363
                                                                   -----------------------------------------------------------------
    Total current assets                                             12,065,793       64,331,671          (260,065)      76,137,399

THEATRE PROPERTIES AND EQUIPMENT - net                              713,733,480       70,874,370               -        784,607,850

OTHER ASSETS
  Goodwill                                                            8,126,738        2,758,616               -         10,885,354
  Investments in and advances to affiliates                         167,959,009        1,167,194      (166,463,391)       2,662,812
  Deferred charges and other - net                                   34,033,329        4,541,199               -         38,574,528
                                                                   -----------------------------------------------------------------
    Total other assets                                              210,119,076        8,467,009      (166,463,391)      52,122,694
                                                                   -----------------------------------------------------------------

TOTAL ASSETS                                                       $935,918,349     $143,673,050     $(166,723,456)    $912,867,943
                                                                   =================================================================

                      LIABILITIES AND SHAREHOLDER'S EQUITY

CURRENT LIABILITIES
  Current portion of long-term debt                                $  1,490,871     $  4,484,795     $         -       $  5,975,666
  Current income taxes payable                                        6,187,859          914,846               -          7,102,705
  Accounts payable and accrued expenses                              99,895,767       15,421,957          (315,311)     115,002,413
                                                                   -----------------------------------------------------------------
    Total current liabilities                                       107,574,497       20,821,598          (315,311)     128,080,784

LONG-TERM LIABILITIES
  Senior credit agreements                                          126,339,672        9,865,163               -        136,204,835
  Senior subordinated notes                                         521,602,807              -                 -        521,602,807
  Deferred lease expenses                                            25,196,757          399,704               -         25,596,461
  Deferred gain on sale leasebacks                                    4,189,660              -                 -          4,189,660
  Deferred income taxes                                              11,950,866         (232,687)              -         11,718,179
  Deferred revenues and other long-term liabilities                     968,136        2,031,352               -          2,999,488
                                                                   -----------------------------------------------------------------
    Total long-term liabilities                                     690,247,898       12,063,532               -        702,311,430

MINORITY INTERESTS IN SUBSIDIARIES                                    8,656,018       23,956,952               -         32,612,970

SHAREHOLDER'S EQUITY
  Class A common stock, $.01 par value: 10,000,000 shares
   authorized, 1,500 shares issued and outstanding                           15              -                 -                 15
  Class B common stock, no par value: 1,000,000 shares
   authorized, 239,893 shares issued and outstanding                 49,543,427       14,958,000       (14,958,000)      49,543,427
  Additional paid-in-capital                                         12,523,455      151,450,145      (151,450,145)      12,523,455
  Retained earnings                                                 138,448,439      (44,340,096)              -         94,108,343
  Treasury stock, 57,245 Class B shares at cost                     (24,232,890)             -                 -        (24,232,890)
  Accumulated other comprehensive loss                              (46,842,510)     (35,237,081)              -        (82,079,591)
                                                                   -----------------------------------------------------------------
    Total shareholder's equity                                      129,439,936       86,830,968      (166,408,145)      49,862,759
                                                                   -----------------------------------------------------------------

TOTAL LIABILITIES AND SHAREHOLDER'S EQUITY                         $935,918,349     $143,673,050     $(166,723,456)    $912,867,943
                                                                   =================================================================

Note: "Restricted Group" and "Unrestricted Group" are defined in the Indentures for the Senior Subordinated Notes.
</TABLE>

                                       33

<PAGE>

<TABLE>
<CAPTION>

                      CINEMARK USA, INC. AND SUBSIDIARIES
                CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS
                     FOR THE SIX MONTHS ENDED JUNE 30, 2003
                                   (Unaudited)

                                                                    Restricted      Unrestricted
                                                                       Group            Group         Eliminations         TOTAL
                                                                   -------------    -------------    --------------    -------------
<S>                                                                <C>              <C>              <C>               <C>
REVENUES                                                           $390,302,685     $ 64,438,384     $  (1,761,739)    $452,979,330


COSTS AND EXPENSES
  Cost of operations                                                290,944,077       49,001,732        (1,761,739)     338,184,070
  General and administrative expenses                                16,395,275        3,805,948               -         20,201,223
  Depreciation and amortization                                      27,089,923        5,745,559               -         32,835,482
  Asset impairment loss                                               2,060,845              -                 -          2,060,845
  (Gain) loss on sale of assets and other                              (991,959)             940               -           (991,019)
                                                                   -----------------------------------------------------------------
    Total costs and expenses                                        335,498,161       58,554,179        (1,761,739)     392,290,601
                                                                   -----------------------------------------------------------------

OPERATING INCOME                                                     54,804,524        5,884,205               -         60,688,729

OTHER INCOME (EXPENSE)
  Interest expense                                                  (26,115,482)      (1,398,845)              -        (27,514,327)
  Amortization of debt issue cost                                      (958,690)        (212,260)              -         (1,170,950)
  Interest income                                                       438,471          644,893               -          1,083,364
  Foreign currency exchange gain (loss)                                (310,823)         462,022               -            151,199
  Loss on early retirement of debt                                   (5,932,769)      (1,325,367)              -         (7,258,136)
  Equity in income (loss) of affiliates                                 (21,391)         170,915               -            149,524
  Minority interests in income of subsidiaries                         (583,423)      (1,693,062)              -         (2,276,485)
                                                                   -----------------------------------------------------------------
    Total other expenses                                            (33,484,107)      (3,351,704)              -        (36,835,811)
                                                                   -----------------------------------------------------------------

INCOME BEFORE INCOME TAXES                                           21,320,417        2,532,501               -         23,852,918

Income taxes                                                          9,275,030          742,868               -         10,017,898
                                                                   -----------------------------------------------------------------

NET INCOME                                                         $ 12,045,387     $  1,789,633     $         -       $ 13,835,020
                                                                   =================================================================

Note: "Restricted Group" and "Unrestricted Group" are defined in the Indentures for the Senior Subordinated Notes.
</TABLE>

                                       34

<PAGE>

<TABLE>
<CAPTION>

                      CINEMARK USA, INC. AND SUBSIDIARIES
                CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS
                     FOR THE SIX MONTHS ENDED JUNE 30, 2003
                                   (Unaudited)

                                                                    Restricted      Unrestricted
                                                                       Group            Group         Eliminations         TOTAL
                                                                   -------------    -------------    --------------    -------------
<S>                                                                <C>              <C>              <C>               <C>
OPERATING ACTIVITIES
  Net income                                                       $ 12,045,387     $  1,789,633     $         -       $ 13,835,020

  Noncash items in net income:
    Depreciation                                                     26,811,760        5,698,377               -         32,510,137
    Amortization of other assets                                        278,163           47,182               -            325,345
    Amortization of foreign advanced rents                              523,706          341,417               -            865,123
    Amortized compensation - stock options                              548,595              -                 -            548,595
    Amortization of debt issue costs                                    958,690          212,260               -          1,170,950
    Amortization of gain on sale leasebacks                            (182,960)             -                 -           (182,960)
    Amortization of debt discount and premium                          (235,522)             -                 -           (235,522)
    Amortization of deferred revenues                                (2,013,119)             -                 -         (2,013,119)
    Loss on impairment of assets                                      2,060,845              -                 -          2,060,845
    (Gain) loss on sale of assets and other                            (991,959)             940               -           (991,019)
    Loss on early retirement of debt                                  5,932,769        1,325,367               -          7,258,136
    Deferred lease expenses                                             774,423          (15,419)              -            759,004
    Deferred income tax expenses                                      1,457,562         (909,511)              -            548,051
    Equity in (income) loss of affiliates                                21,391         (170,915)              -           (149,524)
    Minority interests in income of subsidiaries                        583,423        1,693,062               -          2,276,485
  Cash provided by (used for) operating working capital              14,005,289      (32,317,945)              -        (18,312,656)
                                                                   -----------------------------------------------------------------

      Net cash provided by (used for) operating activities           62,578,443      (22,305,552)              -         40,272,891

INVESTING ACTIVITIES
  Additions to theatre properties and equipment                     (16,084,459)      (1,891,800)              -        (17,976,259)
  Sale of theatre properties and equipment                            2,068,527            6,868               -          2,075,395
  Transfer of theatre properties and equipment                      (93,106,945)      93,106,945               -                -
  Investment in affiliates                                               (3,314)             -                 -             (3,314)
  Dividends/capital returned from affiliates                            153,000           75,000               -            228,000
                                                                   -----------------------------------------------------------------

      Net cash provided by (used for) investing activities         (106,973,191)      91,297,013               -        (15,676,178)

FINANCING ACTIVITIES
  Issuance of senior subordinated notes                             375,225,000              -                 -        375,225,000
  Retirement of senior subordinated notes                          (232,989,000)             -                 -       (232,989,000)
  Increase in long-term debt                                        238,508,545              -                 -        238,508,545
  Decrease in long-term debt                                       (327,394,170)     (81,433,508)              -       (408,827,678)
  Increase in debt issue cost                                       (14,944,223)             -                 -        (14,944,223)
  Increase in minority investment in subsidiaries                        15,583        3,881,277               -          3,896,860
  Decrease in minority investment in subsidiaries                      (149,111)        (126,193)              -           (275,304)
                                                                   -----------------------------------------------------------------

      Net cash provided by (used for) financing activities           38,272,624      (77,678,424)              -        (39,405,800)

EFFECT OF EXCHANGE RATE CHANGES ON CASH AND
  CASH EQUIVALENTS                                                      156,514        1,580,756               -          1,737,270
                                                                   -----------------------------------------------------------------

DECREASE IN CASH AND CASH EQUIVALENTS                                (5,965,610)      (7,106,207)              -        (13,071,817)

CASH AND CASH EQUIVALENTS:
  Beginning of period                                                28,485,509       35,233,006               -         63,718,515
                                                                   -----------------------------------------------------------------

  End of period                                                    $ 22,519,899     $ 28,126,799      $        -       $ 50,646,698
                                                                   =================================================================

Note: "Restricted Group" and "Unrestricted Group" are defined in the Indentures for the Senior Subordinated Notes.
</TABLE>

                                       35

<PAGE>

Item 6. Exhibits and Reports on Form 8-K

        a) Exhibits

                3.1     Amended and Restated  Articles of  Incorporation  of the
                        Company filed with the Texas  Secretary of State on June
                        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).
                4.1(a)  Exchange  and   Registration   Rights   Agreement  dated
                        February 11, 2003,  among  Cinemark USA,  Inc.,  certain
                        subsidiary  guarantor  parties  thereto  and the initial
                        purchasers  named therein  (incorporated by reference to
                        Exhibit  10.2(c) to the Company's  Annual Report on Form
                        10-K (File No. 033-47040) filed March 19, 2003).
                4.1(b)  Exchange and Registration  Rights Agreement dated May 7,
                        2003  among  Cinemark  USA,  Inc.,   certain  subsidiary
                        guarantors  party  thereto  and the  initial  purchasers
                        named  therein  (incorporated  by  reference  to Exhibit
                        4.1(b) to the Company's  Registration  Statement on Form
                        S-4 (File No. 333-104940) filed May 28, 2003.
                4.2(a)  Indenture  dated August 15, 1996 between the Company and
                        U.S. Trust Company of Texas, N.A.,  governing the 9 5/8%
                        senior     subordinated    notes    issued    thereunder
                        (incorporated   by  reference  to  Exhibit  4.1  to  the
                        Company's  Registration  Statement on Form S-4 (File No.
                        333-11895) filed September 13, 1996).
                4.2(b)  First Supplemental Indenture dated June 26, 1997 between
                        the  Company  and U.S.  Trust  Company  of  Texas,  N.A.
                        (incorporated  by  reference to Exhibit 4.4 to Cinemark,
                        Inc.'s  Registration  statement  on Form S-1  (File  No.
                        333-88618) filed on May 17, 2002).
                4.2(c)  Second  Supplemental  Indenture dated as of February 11,
                        2003  between  the  Company,  the  Subsidiary  guarantor
                        parties  thereto and The Bank of New York Trust  Company
                        of Florida,  N.A.,  as successor  trustee to U.S.  Trust
                        Company of Texas, N.A.
                4.2(d)  Indenture  dated June 26,  1997  between the Company and
                        U.S. Trust Company of Texas,  N.A.  governing the 9 5/8%
                        senior     subordinated    notes    issued    thereunder
                        (incorporated   by  reference  to  Exhibit  4.1  to  the
                        Company's  Registration  Statement on Form S-4 (File No.
                        333-32959) filed August 6, 1997).
                4.2(e)  First  Supplemental  Indenture  dated as of February 11,
                        2003  between the  Company,  the  subsidiary  guarantors
                        party  thereto and The Bank of New York Trust Company of
                        Florida,  N.A.,  as  successor  trustee  to  U.S.  Trust
                        Company of Texas, N.A.
                4.2(f)  Indenture dated January 14, 1998 between the Company and
                        U.S. Trust Company of Texas,  N.A.  governing the 8 1/2%
                        senior     subordinated    notes    issued    thereunder
                        (incorporated   by  reference  to  Exhibit  4.1  to  the
                        Company's  Registration  Statement on Form S-4 (File No.
                        333-45417) filed February 2, 1998).
                4.2(g)  First  Supplemental  Indenture  dated as of February 11,
                        2003  between the  Company,  the  subsidiary  guarantors
                        party  thereto and The Bank of New York Trust Company of
                        Florida,  N.A.,  as  successor  trustee  to  U.S.  Trust
                        Company of Texas, N.A.

                                       36

<PAGE>

                4.2(h)  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(i)  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(j)  Form of 9 5/8% Note  (contained in the Indenture  listed
                        as Exhibit 4.2(a) above)  (incorporated  by reference to
                        Exhibit 4.1 to the Company's  Registration  Statement on
                        Form S-4 File No. 333-11895) filed September 13, 1996).
                4.2(k)  Form of 9 5/8% Note  (contained in the Indenture  listed
                        as Exhibit 4.2(d) above)  (incorporated  by reference to
                        Exhibit 4.1 to the Company's  Registration  Statement on
                        Form S-4 File No. 333-32959) filed August 6, 1997).
                4.2(l)  Form of 8 1/2% Note  (contained in the Indenture  listed
                        as Exhibit 4.2(f) above)  (incorporated  by reference to
                        Exhibit 4.1 to the Company's  Registration  Statement on
                        Form S-4 (File No. 333-45417) filed February 2, 1998).
                4.2(m)  Form of 9% Note  (contained in the  Indenture  listed as
                        Exhibit  4.2(h)  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).
                *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.

        b) Reports on Form 8-K

                On January 30, 2003, we filed a Form 8-K, reporting under Item 9
        our  intention  to issue $150 million of senior  subordinated  notes due
        2013 by means of Rule 144A private placement.

                On April 18, 2003, we filed a Form 8-K,  reporting  under Item 5
        and Item 7 the  commencement  of a tender  offer to  purchase up to $240
        million of outstanding 9 5/8% senior subordinated notes due 2008.

                On April 24, 2003, we filed a Form 8-K,  reporting  under Item 9
        our intention to issue an additional $210 million of senior subordinated
        notes due 2013 by means of Rule 144A private placement.

                On August 4, 2003, we filed a Form 8-K, reporting under Item 9 a
        press release  announcing  our  operating  results for the three and six
        month periods ended June 30, 2003.

                                       37

<PAGE>

                                   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: August 12, 2003


                                                         /s/Alan W. Stock
                                                         Alan W. Stock
                                                         President


                                                         /s/Robert Copple
                                                         Robert Copple
                                                         Chief Financial Officer

                                       38

<PAGE>

                                         EXHIBIT INDEX

                3.1     Amended and Restated  Articles of  Incorporation  of the
                        Company filed with the Texas  Secretary of State on June
                        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).
                4.1(a)  Exchange  and   Registration   Rights   Agreement  dated
                        February 11, 2003,  among  Cinemark USA,  Inc.,  certain
                        subsidiary  guarantor  parties  thereto  and the initial
                        purchasers  named therein  (incorporated by reference to
                        Exhibit  10.2(c) to the Company's  Annual Report on Form
                        10-K (File No. 033-47040) filed March 19, 2003).
                4.1(b)  Exchange and Registration  Rights Agreement dated May 7,
                        2003  among  Cinemark  USA,  Inc.,   certain  subsidiary
                        guarantors  party  thereto  and the  initial  purchasers
                        named  therein  (incorporated  by  reference  to Exhibit
                        4.1(b) to the Company's  Registration  Statement on Form
                        S-4 (File No. 333-104940) filed May 28, 2003.
                4.2(a)  Indenture  dated August 15, 1996 between the Company and
                        U.S. Trust Company of Texas, N.A.,  governing the 9 5/8%
                        senior     subordinated    notes    issued    thereunder
                        (incorporated   by  reference  to  Exhibit  4.1  to  the
                        Company's  Registration  Statement on Form S-4 (File No.
                        333-11895) filed September 13, 1996).
                4.2(b)  First Supplemental Indenture dated June 26, 1997 between
                        the  Company  and U.S.  Trust  Company  of  Texas,  N.A.
                        (incorporated  by  reference to Exhibit 4.4 to Cinemark,
                        Inc.'s  Registration  statement  on Form S-1  (File  No.
                        333-88618) filed on May 17, 2002).
                4.2(c)  Second  Supplemental  Indenture dated as of February 11,
                        2003  between  the  Company,  the  Subsidiary  guarantor
                        parties  thereto and The Bank of New York Trust  Company
                        of Florida,  N.A.,  as successor  trustee to U.S.  Trust
                        Company of Texas, N.A.
                4.2(d)  Indenture  dated June 26,  1997  between the Company and
                        U.S. Trust Company of Texas,  N.A.  governing the 9 5/8%
                        senior     subordinated    notes    issued    thereunder
                        (incorporated   by  reference  to  Exhibit  4.1  to  the
                        Company's  Registration  Statement on Form S-4 (File No.
                        333-32959) filed August 6, 1997).
                4.2(e)  First  Supplemental  Indenture  dated as of February 11,
                        2003  between the  Company,  the  subsidiary  guarantors
                        party  thereto and The Bank of New York Trust Company of
                        Florida,  N.A.,  as  successor  trustee  to  U.S.  Trust
                        Company of Texas, N.A.
                4.2(f)  Indenture dated January 14, 1998 between the Company and
                        U.S. Trust Company of Texas,  N.A.  governing the 8 1/2%
                        senior     subordinated    notes    issued    thereunder
                        (incorporated   by  reference  to  Exhibit  4.1  to  the
                        Company's  Registration  Statement on Form S-4 (File No.
                        333-45417) filed February 2, 1998).
                4.2(g)  First  Supplemental  Indenture  dated as of February 11,
                        2003  between the  Company,  the  subsidiary  guarantors
                        party  thereto and The Bank of New York Trust Company of
                        Florida,  N.A.,  as  successor  trustee  to  U.S.  Trust
                        Company of Texas, N.A.

                                       39

<PAGE>

                4.2(h)  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(i)  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(j)  Form of 9 5/8% Note  (contained in the Indenture  listed
                        as Exhibit 4.2(a) above)  (incorporated  by reference to
                        Exhibit 4.1 to the Company's  Registration  Statement on
                        Form S-4 File No. 333-11895) filed September 13, 1996).
                4.2(k)  Form of 9 5/8% Note  (contained in the Indenture  listed
                        as Exhibit 4.2(d) above)  (incorporated  by reference to
                        Exhibit 4.1 to the Company's  Registration  Statement on
                        Form S-4 File No. 333-32959) filed August 6, 1997).
                4.2(l)  Form of 8 1/2% Note  (contained in the Indenture  listed
                        as Exhibit 4.2(f) above)  (incorporated  by reference to
                        Exhibit 4.1 to the Company's  Registration  Statement on
                        Form S-4 (File No. 333-45417) filed February 2, 1998).
                4.2(m)  Form of 9% Note  (contained in the  Indenture  listed as
                        Exhibit  4.2(h)  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).
                *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.

                                       40

<PAGE>

                                                                    EXHIBIT 31.1

                                CEO CERTIFICATION
                         PURSUANT TO SECTION 302 OF THE
                          SARBANES - OXLEY ACT OF 2002

         I, Lee Roy Mitchell, certify that:

         1. I have reviewed this quarterly  report on Form 10-Q of Cinemark USA,
         Inc.;

         2. Based on my knowledge,  this  quarterly  report does not contain any
         untrue  statement of a material  fact or omit to state a material  fact
         necessary to make the  statements  made, in light of the  circumstances
         under which such  statements  were made, not misleading with respect to
         the period covered by this quarterly report;

         3. Based on my knowledge, the financial statements, and other financial
         information  included in this quarterly  report,  fairly present in all
         material  respects the financial  condition,  results of operations and
         cash flows of the  registrant as of, and for, the periods  presented in
         this quarterly report;

         4. The registrant's  other certifying officer and I are responsible for
         establishing  and  maintaining  disclosure  controls and procedures (as
         defined  in  Exchange  Act Rules  13a-15  (e) and  15d-15  (e)) for the
         registrant and have:

                  a) designed such disclosure controls and procedures, or caused
                     such  disclosure  controls  and  procedures  to be designed
                     under our supervision,  to ensure that material information
                     relating  to the  registrant,  including  its  consolidated
                     subsidiaries,  is made known to us by others  within  those
                     entities,  particularly  during  the  period in which  this
                     quarterly report is being prepared;

                  b) evaluated the effectiveness of the registrant's  disclosure
                     controls and  procedures  and  presented in this  quarterly
                     report  our  conclusions  about  the  effectiveness  of the
                     disclosure  controls and  procedures,  as of the end of the
                     period  covered  by this  quarterly  report  based  on such
                     evaluation; and

                  c) disclosed  in  this  quarterly  report  any  change  in the
                     registrant's internal control over financial reporting that
                     occurred during the registrant's most recent fiscal quarter
                     (the  registrant's  fourth fiscal quarter in the case of an
                     annual  report)  that  has  materially   affected,   or  is
                     reasonably  likely to materially  affect,  the registrant's
                     internal control over financial reporting; and

         5. The  registrant's  other  certifying  officer and I have  disclosed,
         based on our most recent  evaluation of internal control over financial
         reporting,  to the  registrant's  auditors  and the audit  committee of
         registrant's  board of directors (or persons  performing the equivalent
         functions):

                  a) all significant deficiencies and material weaknesses in the
                     design or  operation  of internal  control  over  financial
                     reporting which are reasonably  likely to adversely  affect
                     the registrant's ability to record, process,  summarize and
                     report financial information; and

                  b) any  fraud,   whether  or  not   material,   that  involves
                     management or other  employees who have a significant  role
                     in  the   registrant's   internal  control  over  financial
                     reporting.

         Date: August 11, 2003

CINEMARK USA, INC.

By:/s/Lee Roy Mitchell
Lee Roy Mitchell
Chief Executive Officer

<PAGE>

                                                                    EXHIBIT 31.2

                                CFO CERTIFICATION
                         PURSUANT TO SECTION 302 OF THE
                          SARBANES - OXLEY ACT OF 2002

         I, Robert Copple, certify that:

         1. I have reviewed this quarterly  report on Form 10-Q of Cinemark USA,
         Inc.;

         2. Based on my knowledge,  this  quarterly  report does not contain any
         untrue  statement of a material  fact or omit to state a material  fact
         necessary to make the  statements  made, in light of the  circumstances
         under which such  statements  were made, not misleading with respect to
         the period covered by this quarterly report;

         3. Based on my knowledge, the financial statements, and other financial
         information  included in this quarterly  report,  fairly present in all
         material  respects the financial  condition,  results of operations and
         cash flows of the  registrant as of, and for, the periods  presented in
         this quarterly report;

         4. The registrant's  other certifying officer and I are responsible for
         establishing  and  maintaining  disclosure  controls and procedures (as
         defined  in  Exchange  Act Rules  13a-15  (e) and  15d-15  (e)) for the
         registrant and have:

                  a) designed such disclosure controls and procedures, or caused
                     such  disclosure  controls  and  procedures  to be designed
                     under our supervision,  to ensure that material information
                     relating  to the  registrant,  including  its  consolidated
                     subsidiaries,  is made known to us by others  within  those
                     entities,  particularly  during  the  period in which  this
                     quarterly report is being prepared;

                  b) evaluated the effectiveness of the registrant's  disclosure
                     controls and  procedures  and  presented in this  quarterly
                     report  our  conclusions  about  the  effectiveness  of the
                     disclosure  controls and  procedures,  as of the end of the
                     period  covered  by this  quarterly  report  based  on such
                     evaluation; and

                  c) disclosed  in  this  quarterly  report  any  change  in the
                     registrant's internal control over financial reporting that
                     occurred during the registrant's most recent fiscal quarter
                     (the  registrant's  fourth fiscal quarter in the case of an
                     annual  report)  that  has  materially   affected,   or  is
                     reasonably  likely to materially  affect,  the registrant's
                     internal control over financial reporting; and

         5. The  registrant's  other  certifying  officer and I have  disclosed,
         based on our most recent  evaluation of internal control over financial
         reporting,  to the  registrant's  auditors  and the audit  committee of
         registrant's  board of directors (or persons  performing the equivalent
         functions):

                  a) all significant deficiencies and material weaknesses in the
                     design or  operation  of internal  control  over  financial
                     reporting which are reasonably  likely to adversely  affect
                     the registrant's ability to record, process,  summarize and
                     report financial information; and

                  b) any  fraud,   whether  or  not   material,   that  involves
                     management or other  employees who have a significant  role
                     in  the   registrant's   internal  control  over  financial
                     reporting.

         Date: August 11, 2003

CINEMARK USA, INC.

By:/s/Robert Copple
Robert Copple
Chief Financial Officer

<PAGE>

                                                                    EXHIBIT 32.1

                                CEO CERTIFICATION
                         PURSUANT TO SECTION 906 OF THE
                          SARBANES - OXLEY ACT OF 2002

This certification is provided pursuant to Section 906 of the Sarbanes-Oxley Act
of 2002 and accompanies the quarterly  report on Form 10-Q (the "Form 10-Q") for
the quarter ended June 30, 2003 of Cinemark USA, Inc. (the "Issuer").

I, Lee Roy Mitchell,  the Chief Executive  Officer of Issuer certify that to the
best of my knowledge:

        (i)     the Form 10-Q fully  complies with the  requirements  of section
                13(a) or section  15(d) of the  Securities  Exchange Act of 1934
                (15 U.S.C. 78m(a) or 78o(d)); and

        (ii)    the information  contained in the Form 10-Q fairly presents,  in
                all material  respects,  the financial  condition and results of
                operations of the Issuer.

Dated: August 11, 2003.

       /s/Lee Roy Mitchell
       Lee Roy Mitchell
       Chief Executive Officer

Subscribed and sworn to before me
this 11th day of August 2003.

       /s/Carol Waldman
Name:  Carol Waldman
Title: Notary Public

My commission expires: 06/07/04

<PAGE>

                                                                    EXHIBIT 32.2

                                CFO CERTIFICATION
                         PURSUANT TO SECTION 906 OF THE
                          SARBANES - OXLEY ACT OF 2002

This certification is provided pursuant to Section 906 of the Sarbanes-Oxley Act
of 2002 and accompanies the quarterly  report on Form 10-Q (the "Form 10-Q") for
the quarter ended June 30, 2003 of Cinemark USA, Inc. (the "Issuer").

I, Robert Copple, the Chief Financial Officer of Issuer certify that to the best
of my knowledge:

        (i)     the Form 10-Q fully  complies with the  requirements  of section
                13(a) or section  15(d) of the  Securities  Exchange Act of 1934
                (15 U.S.C. 78m(a) or 78o(d)); and

        (ii)    the information  contained in the Form 10-Q fairly presents,  in
                all material  respects,  the financial  condition and results of
                operations of the Issuer.

Dated: August 11, 2003.

       /s/Robert Copple
       Robert Copple
       Chief Financial Officer

Subscribed and sworn to before me
this 11th day of August 2003.

       /s/Carol Waldman
Name:  Carol Waldman
Title: Notary Public

My commission expires: 06/07/04