##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 FORM 10-Q
 QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
 SECURITIES EXCHANGE ACT OF 1934
 For the quarterly period ended June 30, 2005
 Commission File Number: 033-47040
 CINEMARK USA, INC.
 (Exact name of registrant as specified in its charter)
 Texas
(State or other jurisdiction
of incorporation or organization)
    
    75-2206284
(I.R.S. Employer
Identification No.)3900 Dallas Parkway
Suite 500
Plano, Texas
(Address of principal executive offices)
    
    75093
(Zip Code)
   þ o
  o þ




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##### Table of Contents



CINEMARK
USA, INC. AND SUBSIDIARIES
 TABLE OF CONTENTS
  
 PagePART I.
    
    FINANCIAL INFORMATIONItem 1.
    
    Financial StatementsCondensed Consolidated Balance Sheets as of June 30, 2005 (unaudited) and December 31, 2004
    
    3Condensed Consolidated Statements of Income (unaudited) for the three and six months ended June 30, 2005 and 2004
    
    4Condensed Consolidated Statements of Cash Flows (unaudited) for the six months ended June 30, 2005 and 2004
    
    5Notes to Condensed Consolidated Financial Statements (unaudited)
    

    6Item 2.
    
    Management's Discussion and Analysis of Financial Condition and Results of Operations
    
    23Item 3.
    
    Quantitative and Qualitative Disclosures About Market Risk
    
    33Item 4.
    
    Controls and Procedures
    
    34PART II.
    
    OTHER INFORMATIONItem 1.
    
    Legal Proceedings
    
    35Item 5.
    
    Other Information
    
    35Item 6.
    
    Exhibits
    
    39SIGNATURES
    
    
    
    42Certfication of CEO Pursuant to Section 302Certfication of CFO Pursuant to Section 302Certfication of CEO Pursuant to Section 906Certfication of CFO Pursuant to Section 906
 2




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##### Table of Contents



PART I  FINANCIAL INFORMATION
 
 Item 1. Financial Statements
 CINEMARK USA, INC. AND SUBSIDIARIES
 
 CONDENSED CONSOLIDATED BALANCE SHEETS
 (in thousands, except share data)
 June 30,
    
    December 31,2005
    
    2004(unaudited)ASSETSCURRENT ASSETSCash and cash equivalents
    
    $
    138,825
    
    
    $
    100,228Inventories
    
    
    4,835
    
    
    
    4,237Accounts receivable
    
    
    15,329
    
    
    
    11,303Income tax receivable
    
    
    
    
    
    
    7,037Prepaid expenses and other
    
    
    3,876
    
    
    
    3,819Total current assets
    
    
    162,865
    
    
    
    126,624THEATRE PROPERTIES AND EQUIPMENT
    
    
    1,356,791
    
    
    
    1,307,088Less accumulated depreciation and amortization
    
    
    563,258
    
    
    
    521,493Theatre properties and equipment  net
    
    
    793,533
    
    
    
    785,595OTHER ASSETSGoodwill
    
    
    42,930
    
    
    
    45,006Intangible assets  net
    
    
    10,867
    
    
    
    6,084Investments in and advances to affiliates
    
    
    1,670
    
    
    
    1,710Deferred charges and other assets  net
    
    
    42,046
    
    
    
    36,546Total other assets
    
    
    97,513
    
    
    
    89,346TOTAL ASSETS
    
    $
    1,053,911
    
    
    $
    1,001,565LIABILITIES AND SHAREHOLDERS EQUITYCURRENT LIABILITIESCurrent portion of long-term debt
    
    $
    6,656
    
    
    $
    6,539Income tax payable
    
    
    6,799
    
    
    
    Accounts payable and accrued expenses
    
    
    115,981
    
    
    
    122,324Total current liabilities
    
    
    129,436
    
    
    
    128,863LONG-TERM LIABILITIESSenior credit agreements
    
    
    262,106
    
    
    
    265,510Senior subordinated notes
    
    
    354,112
    
    
    
    354,894Deferred income taxes
    
    
    20,838
    
    
    
    23,138Deferred lease expenses
    
    
    28,643
    
    
    
    27,962Deferred gain on sale leasebacks
    
    
    3,458
    
    
    
    3,641Deferred revenues and other long-term liabilities
    
    
    21,018
    
    
    
    12,025Total long-term liabilities
    
    
    690,175
    
    
    
    687,170COMMITMENTS AND CONTINGENCIES
    
    
    
    
    
    
    MINORITY INTERESTS IN SUBSIDIARIES
    
    
    16,785
    
    
    
    16,697SHAREHOLDERS EQUITYClass A common stock, $.01 par value: 10,000,000 shares authorized,
1,500 shares issued and outstanding
    
    
    
    
    
    
    Class B common stock, no par value: 1,000,000 shares authorized,
239,893 shares issued and outstanding
    
    
    49,543
    
    
    
    49,543Additional paid-in-capital
    
    
    58,005
    
    
    
    51,070Retained earnings
    
    
    196,097
    
    
    
    169,577Treasury stock, 57,245 Class B shares at cost
    
    
    (24,233
    )
    
    
    (24,233
    )Accumulated other comprehensive loss
    
    
    (61,897
    )
    
    
    (77,122
    )Total shareholders equity
    
    
    217,515
    
    
    
    168,835TOTAL LIABILITIES AND SHAREHOLDERS EQUITY
    
    $
    1,053,911
    
    
    $
    1,001,565
  3




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CINEMARK USA, INC. AND SUBSIDIARIES
 
 CONDENSED CONSOLIDATED STATEMENTS OF INCOME
 (in thousands, unaudited)
 Three months ended June 30,
    
    Six months ended June 30,2005
    
    2004
    
    2005
    
    2004REVENUESAdmissions
    
    $
    157,749
    
    
    $
    173,427
    
    
    $
    308,909
    
    
    $
    322,561Concession
    
    
    80,335
    
    
    
    88,107
    
    
    
    154,103
    
    
    
    160,586Other
    
    
    14,943
    
    
    
    13,082
    
    
    
    27,696
    
    
    
    25,094Total revenues
    
    
    253,027
    
    
    
    274,616
    
    
    
    490,708
    
    
    
    508,241COSTS AND EXPENSESCost of operations:Film rentals and advertising
    
    
    88,348
    
    
    
    94,493
    
    
    
    167,249
    
    
    
    173,171Concession supplies
    
    
    12,650
    
    
    
    14,371
    
    
    
    24,395
    
    
    
    26,360Salaries and wages
    
    
    25,442
    
    
    
    26,683
    
    
    
    49,725
    
    
    
    50,672Facility lease expense
    
    
    32,945
    
    
    
    31,055
    
    
    
    65,836
    
    
    
    61,969Utilities and other
    
    
    29,683
    
    
    
    28,449
    
    
    
    58,862
    
    
    
    54,732Total cost of operations
    
    
    189,068
    
    
    
    195,051
    
    
    
    366,067
    
    
    
    366,904General and administrative expenses
    
    
    12,210
    
    
    
    13,191
    
    
    
    24,505
    
    
    
    24,991Stock option compensation and change of control
expenses related to the Recapitalization
    
    
    
    
    
    
    31,995
    
    
    
    
    
    
    
    31,995Depreciation and amortization
    
    
    19,667
    
    
    
    16,840
    
    
    
    37,921
    
    
    
    33,705Impairment of long-lived assets
    
    
    
    
    
    
    
    
    
    
    226
    
    
    
    1,000(Gain) loss on sale of assets and other
    
    
    150
    
    
    
    (40
    )
    
    
    838
    
    
    
    (553
    )Total costs and expenses
    
    
    221,095
    
    
    
    257,037
    
    
    
    429,557
    
    
    
    458,042OPERATING INCOME
    
    
    31,932
    
    
    
    17,579
    
    
    
    61,151
    
    
    
    50,199OTHER INCOME (EXPENSE)Interest expense
    
    
    (10,943
    )
    
    
    (10,506
    )
    
    
    (21,521
    )
    
    
    (22,382
    )Amortization of debt issue costs
    
    
    (689
    )
    
    
    (677
    )
    
    
    (1,378
    )
    
    
    (1,267
    )Interest income
    
    
    1,194
    
    
    
    386
    
    
    
    2,024
    
    
    
    877Foreign currency exchange gain (loss)
    
    
    (878
    )
    
    
    403
    
    
    
    (960
    )
    
    
    572Loss on early retirement of debt
    
    
    
    
    
    
    (5,577
    )
    
    
    
    
    
    
    (5,577
    )Equity in income (loss) of affiliates
    
    
    28
    
    
    
    (73
    )
    
    
    122
    
    
    
    (36
    )Minority interests in income of subsidiaries
    
    
    (340
    )
    
    
    (2,125
    )
    
    
    (440
    )
    
    
    (3,591
    )Total other expenses
    
    
    (11,628
    )
    
    
    (18,169
    )
    
    
    (22,153
    )
    
    
    (31,404
    )INCOME (LOSS) FROM CONTINUING OPERATIONS
BEFORE INCOME TAXES (BENEFIT)
    
    
    20,304
    
    
    
    (590
    )
    
    
    38,998
    
    
    
    18,795Income taxes (benefit)
    
    
    5,837
    
    
    
    (586
    )
    
    
    12,478
    
    
    
    7,300INCOME (LOSS) FROM CONTINUING OPERATIONS
    
    
    14,467
    
    
    
    (4
    )
    
    
    26,520
    
    
    
    11,495Income (loss) from discontinued operations, net of taxes (See Note 4)
    
    
    
    
    
    
    1,364
    
    
    
    
    
    
    
    (201
    )NET INCOME
    
    $
    14,467
    
    
    $
    1,360
    
    
    $
    26,520
    
    
    $
    11,294
  4




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CINEMARK USA, INC. AND SUBSIDIARIES
 
 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
 (in thousands, unaudited)
 Six months ended June 30,2005
    
    2004OPERATING ACTIVITIESNet income
    
    $
    26,520
    
    
    $
    11,294Noncash items in net income:Depreciation
    
    
    36,219
    
    
    
    33,381Amortization of intangible and other assets
    
    
    1,702
    
    
    
    324Amortization of foreign advanced rents
    
    
    699
    
    
    
    880Amortized compensation  stock options
    
    
    
    
    
    
    145Amortization of debt issue costs
    
    
    1,378
    
    
    
    1,267Amortization of gain on sale leasebacks
    
    
    (183
    )
    
    
    (183
    )Amortization of debt discount and premium
    
    
    (782
    )
    
    
    (755
    )Amortization of deferred revenues
    
    
    (154
    )
    
    
    (165
    )Impairment of long-lived assets
    
    
    226
    
    
    
    1,000(Gain) loss on sale of assets and other
    
    
    838
    
    
    
    (553
    )Write-off unamortized debt issue costs and debt discount and
premium related to the early retirement of debt
    
    
    
    
    
    
    898Write-off of unearned compensation related to the Recapitalization
    
    
    
    
    
    
    1,595Deferred lease expenses
    
    
    681
    
    
    
    60Deferred income tax expenses
    
    
    (2,300
    )
    
    
    (2,922
    )Equity in (income) loss of affiliates
    
    
    (122
    )
    
    
    36Minority interests in income of subsidiaries
    
    
    440
    
    
    
    3,591Other noncash items
    
    
    
    
    
    
    718Changes in assets and liabilities:Inventories
    
    
    (598
    )
    
    
    (488
    )Accounts receivable
    
    
    (4,026
    )
    
    
    (339
    )Prepaid expenses and other
    
    
    (57
    )
    
    
    1,824Other assets
    
    
    (11,986
    )
    
    
    (2,885
    )Advances with affiliates
    
    
    (122
    )
    
    
    (125
    )Accounts payable and accrued expenses
    
    
    (4,383
    )
    
    
    (10,417
    )Other long-term liabilities
    
    
    294
    
    
    
    (222
    )Income tax receivable/payable
    
    
    13,836
    
    
    
    (6,874
    )Net cash provided by operating activities
    
    
    58,120
    
    
    
    31,085INVESTING ACTIVITIESAdditions to theatre properties and equipment
    
    
    (27,849
    )
    
    
    (41,498
    )Proceeds from sale of theatre properties and equipment
    
    
    1,249
    
    
    
    3,467Proceeds from sale of equity investment
    
    
    
    
    
    
    1,250Dividends/capital returned from affiliates
    
    
    284
    
    
    
    128Net cash used for investing activities
    
    
    (26,316
    )
    
    
    (36,653
    )FINANCING ACTIVITIESCapital contribution from parent
    
    
    6,935
    
    
    
    27,614Retirement of senior subordinated notes
    
    
    
    
    
    
    (111,915
    )Proceeds from long-term debt
    
    
    
    
    
    
    260,763Repayments of long-term debt
    
    
    (3,238
    )
    
    
    (168,741
    )Debt issue costs
    
    
    
    
    
    
    (7,637
    )Increase in deferred revenues
    
    
    538
    
    
    
    Increase in minority investment in subsidiaries
    
    
    76
    
    
    
    670Decrease in minority investment in subsidiaries
    
    
    (428
    )
    
    
    (2,667
    )Net cash provided by (used for) financing activities
    
    
    3,883
    
    
    
    (1,913
    )Effect of exchange rate changes on cash and cash equivalents
    
    
    2,910
    
    
    
    (1,373
    )INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
    
    
    38,597
    
    
    
    (8,854
    )CASH AND CASH EQUIVALENTS:Beginning of period
    
    
    100,228
    
    
    
    107,319End of period
    
    $
    138,825
    
    
    $
    98,465SUPPLEMENTAL INFORMATION (See Note 10)
  5




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1. The Company and Basis of Presentation
    2. Recapitalization of Cinemark, Inc. and Refinancing of Certain Long-Term Debt
 Recapitalization of Cinemark, Inc.
 3 4 3 4 3 4 3 4
 6




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Refinancing of Certain Long-Term Debt 1 2 1 2
  1 2
   7




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3. Acquisitions
  Net favorable leases
    
    $
    730Vendor contracts
    
    
    2,231Goodwill
    
    
    23,962Reduction of minority interest liability
    
    
    18,806$
    45,729
   Vendor contract
    
    $
    439Net favorable leases
    
    
    480Tradename
    
    
    1,179Goodwill
    
    
    1,715Reduction of minority interest liability
    
    
    1,566$
    5,379
  
 8




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4. Discontinued Operations
 Accounting for Impairment or Disposal of Long-Lived Assets.
   Three Months
    
    Six MonthsEnded
    
    EndedJune 30, 2004
    
    June 30, 2004REVENUESAdmissions
    
    $
    1,185
    
    
    $
    2,915Concession
    
    
    1,260
    
    
    
    2,544Other
    
    
    273
    
    
    
    600Total revenues
    
    $
    2,718
    
    
    $
    6,059COSTS AND EXPENSESCost of operations:Film rentals and advertising
    
    
    544
    
    
    
    1,300Concession supplies
    
    
    141
    
    
    
    402Salaries and wages
    
    
    585
    
    
    
    1,213Facility lease expense
    
    
    404
    
    
    
    1,013Utilities and other
    
    
    549
    
    
    
    1,184Total cost of operations
    
    
    2,223
    
    
    
    5,112General and administrative expenses
    
    
    221
    
    
    
    498Depreciation and amortization
    
    
    103
    
    
    
    187Impairment of long-lived assets
    
    
    
    
    
    
    1,800Gain on sale of assets and other
    
    
    (1,235
    )
    
    
    (1,235
    )Total costs and expenses
    
    
    1,312
    
    
    
    6,362OPERATING INCOME (LOSS)
    
    
    1,406
    
    
    
    (303
    )Minority interests in loss of subsidiaries
    
    
    22
    
    
    
    36INCOME (LOSS) BEFORE INCOME TAXES
    
    
    1,428
    
    
    
    (267
    )Income tax expense (benefit)
    
    
    64
    
    
    
    (66
    )Income (loss) from discontinued operations
    
    $
    1,364
    
    
    $
    (201
    )
 9




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5. Stock Option Accounting
    Accounting for Stock-Based Compensation Accounting for Stock-Based
Compensation Transition and Disclosure
 Three Months Ended
    
    Six Months EndedJune 30,
    
    June 30,2005
    
    2004
    
    2005
    
    2004Net income as reported
    
    $
    14,467
    
    
    $
    1,360
    
    
    $
    26,520
    
    
    $
    11,294Compensation expense
included in reported
net income, net oftax
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    88Compensation expense
under fair value
method, net of tax
    
    
    (741
    )
    
    
    
    
    
    
    (1,482
    )
    
    
    (162
    )Pro-forma net income
    
    $
    13,726
    
    
    $
    1,360
    
    
    $
    25,038
    
    
    $
    11,220
  10




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6. Goodwill and Other Intangible Assets
  ForeignPurchase Price
    
    CurrencyBalance at
    
    Allocation
    
    Translation
    
    Balance atDecember 31, 2004
    
    Adjustment
    
    Adjustment
    
    June 30, 2005United States
    
    $
    4,932
    
    
    $
    
    
    
    $
    
    
    
    $
    4,932Brazil
    
    
    30,069
    
    
    
    (2,961
    )
    
    
    3,106
    
    
    
    30,214Mexico
    

    
    3,884
    
    
    
    (2,098
    )
    
    
    (47
    )
    
    
    1,739Chile
    
    
    3,206
    
    
    
    
    
    
    
    (106
    )
    
    
    3,100Peru
    
    
    2,679
    
    
    
    
    
    
    
    23
    
    
    
    2,702Argentina
    
    
    236
    
    
    
    
    
    
    
    7
    
    
    
    243Total
    
    $
    45,006
    
    
    $
    (5,059
    )
    
    $
    2,983
    
    
    $
    42,930
  June 30,
    
    December 31,2005
    
    2004Capitalized licensing fees
    
    $
    8,250
    
    
    $
    7,750Vendor contracts
    
    
    3,196
    
    
    
    Net favorable leases
    
    
    1,391
    
    
    
    Other intangible assets
    
    
    448
    
    
    
    438Less: Accumulated amortization
    
    
    (3,751
    )
    
    
    (2,120
    )Amortized intangible assets
    
    
    9,534
    
    
    
    6,068Tradename
    
    
    1,300
    
    
    
    Other unamortized intangible assets
    
    
    33
    
    
    
    16Total
    
    $
    10,867
    
    
    $
    6,084
   For the six months ended December 31, 2005
    
    $
    841For the twelve months ended December 31, 2006
    
    
    1,613For the twelve months ended December 31, 2007
    
    
    1,178For the twelve months ended December 31, 2008
    
    
    942For the twelve months ended December 31, 2009
    
    
    720Thereafter
    
    
    4,240Total
    
    $
    9,534
 11




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7. Impairment of Long-Lived Assets
 Accounting for the Impairment or Disposal of Long-Lived
Assets
  8. Foreign Currency Translation
       12




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9. Comprehensive Income (Loss)
 Reporting Comprehensive Income
 Three Months Ended
    
    Six Months EndedJune 30,
    
    June 30,2005
    
    2004
    
    2005
    
    2004Net income
    
    $
    14,467
    
    
    $
    1,360
    
    
    $
    26,520
    
    
    $
    11,294Foreign currency translation adjustment
    
    
    15,955
    
    
    
    (5,120
    )
    
    
    15,225
    
    
    
    (5,114
    )Comprehensive income (loss)
    
    $
    30,422
    
    
    $
    (3,760
    )
    
    $
    41,745
    
    
    $
    6,180
 10. Supplemental Cash Flow Information
  Six Months EndedJune 30,2005
    
    2004Cash paid for interest
    
    $
    21,892
    
    
    $
    25,105Net cash paid (refunds received) for income taxes
    
    $
    (6,056
    )
    
    $
    13,087Noncash activities:Change in construction lease obligations
related to construction of three theatres in
Mexico and one theatre in the U.S.
    
    $
    8,315
    
    
    $
    Changes in accounts payable and accrued
expenses for the acquisition of theatre properties and equipment
    
    $
    2,081
    
    
    $
    4,435
 11. Financial Information About Geographic Areas
  Six Months EndedJune 30,2005
    
    2004RevenuesU.S. and
Canada (1)
    
    $
    367,616
    
    
    $
    386,316Brazil
    
    
    51,084
    
    
    
    44,048Mexico
    
    
    36,049
    
    
    
    39,539Other foreign countries (1)
    
    
    36,719
    
    
    
    39,143Eliminations
    
    
    (760
    )
    
    
    (805
    )Total
    
    $
    490,708
    
    
    $
    508,241
 June 30,
    
    December 31,2005
    
    2004Theatre Properties and Equipment-netU.S. and Canada
    
    $
    623,718
    
    
    $
    622,578Mexico
    
    
    64,473
    
    
    
    61,043Brazil
    
    
    55,071
    
    
    
    51,982Other foreign countries
    
    
    50,271
    
    
    
    49,992Total
    
    $
    793,533
    
    
    $
    785,595
 13




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##### Table of Contents



(1)
    
    Revenues for the six months ended June 30, 2004 do not include results of the two
United Kingdom theatres or the eleven Interstate theatres that were sold during 2004,
as the results of operations for these theatres are included as discontinued
operations for all periods presented. 12. New Accounting Pronouncements
 Exchanges of Non-monetary Assets-Amendment of APB Opinion No. 29
  Accounting and Disclosure Guidance for the Foreign
Earnings Repatriation Provision within the American Jobs Creation Act of 2004 Accounting
for Income Taxes
 13. Related Party Transactions
   14




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14. Litigation
 DOJ Litigation United States v. Cinemark USA, Inc.
 Mission, Texas Litigation rd
 15




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##### Table of Contents



15. Subsequent Events
  16. Condensed Consolidating Financial Statements of Subsidiary Guarantors
    1.
    
    Condensed consolidating balance sheets as of June 30, 2005 and December 31, 2004 and
condensed consolidating statements of income and cash flows for each of the six months ended
June 30, 2005 and 2004.2.
    
    Cinemark USA, Inc. (the Parent and Issuer), combined Guarantor Subsidiaries and
combined Non-Guarantor Subsidiaries with their investments in subsidiaries accounted for
using the equity method of accounting and therefore, the Parent column reflects the equity
income (loss) of its Guarantor Subsidiaries and Non-Guarantor Subsidiaries, which are also
separately reflected in the stand-alone Guarantor Subsidiaries and Non-Guarantor Subsidiaries
column. Additionally, the Guarantor Subsidiaries column reflects the equity income (loss) of
its Non-Guarantor Subsidiaries, which are also separately reflected in the stand-alone
Non-Guarantor Subsidiaries column.3.
    
    Elimination entries necessary to consolidate the Parent and all of its Subsidiaries.
 16




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CINEMARK
USA, INC. AND SUBSIDIARIES
 SUBSIDIARY GUARANTORS
CONDENSED CONSOLIDATING BALANCE SHEET INFORMATION
 Parent
    
    Subsidiary
    
    SubsidiaryCompany
    
    Guarantors
    
    Non-Guarantors
    
    Eliminations
    
    ConsolidatedASSETSCURRENT ASSETSCash and cash equivalents
    
    $
    49,247
    
    
    $
    21,701
    
    
    $
    67,877
    
    
    $
    
    
    
    $
    138,825Inventories
    
    
    2,129
    
    
    
    1,445
    
    
    
    1,261
    
    
    
    
    
    
    
    4,835Accounts receivable
    
    
    13,101
    
    
    
    27,123
    
    
    
    6,674
    
    
    
    (31,569
    )
    
    
    15,329Income tax receivable
    
    
    3,295
    
    
    
    91
    
    
    
    6,533
    
    
    
    (9,919
    )
    
    
    Prepaid expenses and other
    
    
    5,633
    
    
    
    652
    
    
    
    965
    
    
    
    (3,374
    )
    
    
    3,876Total current assets
    
    
    73,405
    
    
    
    51,012
    
    
    
    83,310
    
    
    
    (44,862
    )
    
    
    162,865THEATRE PROPERTIES AND EQUIPMENT  net
    
    
    290,739
    
    
    
    312,620
    
    
    
    190,174
    
    
    
    
    
    
    
    793,533OTHER ASSETSGoodwill
    
    
    7,485
    
    
    
    2,452
    
    
    
    32,921
    
    
    
    72
    
    
    
    42,930Investments in and advances to affiliates
    
    
    608,965
    
    
    
    545,815
    
    
    
    841
    
    
    
    (1,153,951
    )
    
    
    1,670Intangible assets, deferred charges and other assets  net
    
    
    24,248
    
    
    
    4,904
    
    
    
    83,109
    
    
    
    (59,348
    )
    
    
    52,913Total other assets
    
    
    640,698
    
    
    
    553,171
    
    
    
    116,871
    
    
    
    (1,213,227
    )
    
    
    97,513TOTAL ASSETS
    
    $
    1,004,842
    
    
    $
    916,803
    
    
    $
    390,355
    
    
    $
    (1,258,089
    )
    
    $
    1,053,911LIABILITIES AND SHAREHOLDERS EQUITYCURRENT LIABILITIESCurrent portion of long-term debt
    
    $
    2,656
    
    
    $
    
    
    
    $
    4,000
    
    
    $
    
    
    
    $
    6,656Income tax payable
    
    
    10,610
    
    
    
    
    
    
    
    6,108
    
    
    
    (9,919
    )
    
    
    6,799Accounts payable and accrued expenses
    
    
    71,509
    
    
    
    33,090
    
    
    
    42,412
    
    
    
    (31,030
    )
    
    
    115,981Total current liabilities
    
    
    84,775
    
    
    
    33,090
    
    
    
    52,520
    
    
    
    (40,949
    )
    
    
    129,436LONG-TERM LIABILITIESLong-term debt, less current portion
    
    
    625,907
    
    
    
    44,018
    
    
    
    73,261
    
    
    
    (126,968
    )
    
    
    616,218Deferred income taxes
    
    
    15,064
    
    
    
    8,577
    
    
    
    (2,803
    )
    
    
    
    
    
    
    20,838Other long-term liabilities and deferrals
    
    
    35,639
    
    
    
    73,534
    
    
    
    17,310
    
    
    
    (73,364
    )
    
    
    53,119Total long-term liabilities
    
    
    676,610
    
    
    
    126,129
    
    
    
    87,768
    
    
    
    (200,332
    )
    
    
    690,175COMMITMENTS AND CONTINGENCIES
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    MINORITY INTERESTS IN SUBSIDIARIES
    
    
    
    
    
    
    249
    
    
    
    16,536
    
    
    
    
    
    
    
    16,785SHAREHOLDERS EQUITYCommon stock
    
    
    49,543
    
    
    
    19
    
    
    
    167,803
    
    
    
    (167,822
    )
    
    
    49,543Other shareholders equity
    
    
    193,914
    
    
    
    757,316
    
    
    
    65,728
    
    
    
    (848,986
    )
    
    
    167,972Total shareholders equity
    
    
    243,457
    
    
    
    757,335
    
    
    
    233,531
    
    
    
    (1,016,808
    )
    
    
    217,515TOTAL LIABILITIES AND SHAREHOLDERS EQUITY
    
    $
    1,004,842
    
    
    $
    916,803
    
    
    $
    390,355
    
    
    $
    (1,258,089
    )
    
    $
    1,053,911
 17




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CINEMARK USA, INC. AND SUBSIDIARIES
 SUBSIDIARY GUARANTORS
CONDENSED CONSOLIDATING STATEMENT OF INCOME INFORMATION
SIX MONTHS ENDED JUNE 30, 2005
 Parent
    
    Subsidiary
    
    SubsidiaryCompany
    
    Guarantors
    
    Non-Guarantors
    
    Eliminations
    
    ConsolidatedREVENUES
    
    $
    223,476
    
    
    $
    169,867
    
    
    $
    131,838
    
    
    $
    (34,473
    )
    
    $
    490,708COSTS AND EXPENSESCost of operations
    
    
    194,938
    
    
    
    106,647
    
    
    
    98,955
    
    
    
    (34,473
    )
    
    
    366,067General and administrative expenses
    
    
    2,495
    
    
    
    14,343
    
    
    
    7,667
    
    
    
    
    
    
    
    24,505Depreciation and amortization
    
    
    11,622
    
    
    
    12,170
    
    
    
    14,129
    
    
    
    
    
    
    
    37,921Impairment of long-lived assets
    
    
    226
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    226Loss on sale of assets and other
    
    
    235
    
    
    
    321
    
    
    
    282
    
    
    
    
    
    
    
    838Total costs and expenses
    
    
    209,516

    
    
    
    133,481
    
    
    
    121,033
    
    
    
    (34,473
    )
    
    
    429,557OPERATING INCOME
    
    
    13,960
    
    
    
    36,386
    
    
    
    10,805
    
    
    
    
    
    
    
    61,151OTHER INCOME (EXPENSE)Interest expense
    
    
    (21,399
    )
    
    
    (1,746
    )
    
    
    (3,222
    )
    
    
    4,846
    
    
    
    (21,521
    )Amortization of debt issue costs
    
    
    (1,368
    )
    
    
    
    
    
    
    (10
    )
    
    
    
    
    
    
    (1,378
    )Interest income
    
    
    2,150
    
    
    
    3,080
    
    
    
    1,640
    
    
    
    (4,846
    )
    
    
    2,024Foreign currency exchange loss
    
    
    
    
    
    
    
    
    
    
    (960
    )
    
    
    
    
    
    
    (960
    )Equity in income of affiliates
    
    
    37,645
    
    
    
    6,722
    
    
    
    38
    
    
    
    (44,283
    )
    
    
    122Minority interests in income of subsidiaries
    
    
    
    
    
    
    (116
    )
    
    
    (324
    )
    
    
    
    
    
    
    (440
    )Total other income (expense)
    
    
    17,028
    
    
    
    7,940
    
    
    
    (2,838
    )
    
    
    (44,283
    )
    
    
    (22,153
    )INCOME BEFORE INCOME TAXES
    
    
    30,988
    
    
    
    44,326
    
    
    
    7,967
    
    
    
    (44,283
    )
    
    
    38,998Income taxes
    
    
    4,246
    
    
    
    6,147
    
    
    
    2,085
    
    
    
    
    
    
    
    12,478NET INCOME
    
    $
    26,742
    
    
    $
    38,179
    
    
    $
    5,882
    
    
    $
    (44,283
    )
    
    $
    26,520
 18




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CINEMARK USA, INC. AND SUBSIDIARIES
 SUBSIDIARY GUARANTORS
CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS INFORMATION
 Parent
    
    Subsidiary
    
    SubsidiaryCompany
    
    Guarantors
    
    Non-Guarantors
    
    Eliminations
    
    ConsolidatedOPERATING ACTIVITIESNet income
    
    $
    26,742
    
    
    $
    38,179
    
    
    $
    5,882
    
    
    $
    (44,283
    )
    
    $
    26,520Noncash items in net income:Depreciation and amortization
    
    
    11,871
    
    
    
    12,170
    
    
    
    14,838
    
    
    
    
    
    
    
    38,879Impairment of long-lived assets
    
    
    226
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    226Loss on sale of assets and other
    
    
    235
    
    
    
    321
    
    
    
    282
    
    
    
    
    
    
    
    838Deferred lease expenses
    
    
    567
    
    
    
    (6
    )
    
    
    120
    
    
    
    
    
    
    
    681Deferred income tax expenses
    
    
    (8,280
    )
    
    
    5,972
    
    
    
    8
    
    
    
    
    
    
    
    (2,300
    )Equity in income of affiliates
    
    
    (37,645
    )
    
    
    (6,722
    )
    
    
    (38
    )
    
    
    44,283
    
    
    
    (122
    )Minority interests in income of subsidiaries
    
    
    
    
    
    
    116
    
    
    
    324
    
    
    
    
    
    
    
    440Changes in assets and liabilities
    
    
    12,635
    
    
    
    (15,995
    )
    
    
    (8,700
    )
    
    
    5,018
    
    
    
    (7,042
    )Net cash provided by operating activities
    
    
    6,351
    
    
    
    34,035
    
    
    
    12,716
    
    
    
    5,018
    
    
    
    58,120INVESTING ACTIVITIESAdditions to theatre properties and equipment
    
    
    (3,321
    )
    
    
    (15,752
    )
    
    
    (8,776
    )
    
    
    
    
    
    
    (27,849
    )Proceeds from sale of theatre properties and equipment
    
    
    674
    
    
    
    80
    
    
    
    495
    
    
    
    
    
    
    
    1,249Net transactions with affiliates
    
    
    15,853
    
    
    
    (14,065
    )
    
    
    6,180
    
    
    
    (7,684
    )
    
    
    284Net cash provided by (used for) investing activities
    
    
    13,206
    
    
    
    (29,737
    )
    
    
    (2,101
    )
    
    
    (7,684
    )
    
    
    (26,316
    )FINANCING ACTIVITIESCapital contribution from parent
    
    
    6,935
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    6,935Repayments of long-term debt
    
    
    (1,351
    )
    
    
    
    
    
    
    (1,887
    )
    
    
    
    
    
    
    (3,238
    )Change in intercompany notes
    
    
    
    
    
    
    
    
    
    
    (2,666
    )
    
    
    2,666
    
    
    
    Increase in deferred revenue
    
    
    538
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    538Increase in minority investment in subsidiaries
    
    
    
    
    
    
    
    
    
    
    76
    
    
    
    
    
    
    
    76Decrease in minority investment in subsidiaries
    
    
    
    
    
    
    (150
    )
    
    
    (278
    )
    
    
    
    
    
    
    (428
    )Net cash provided by (used for) financing activities
    
    
    6,122
    
    
    
    (150
    )
    
    
    (4,755
    )
    
    
    2,666
    
    
    
    3,883Effect of exchange rate changes on cash and cash equivalents
    
    
    
    
    
    
    
    
    
    
    2,910
    
    
    
    
    
    
    
    2,910INCREASE IN CASH AND CASH EQUIVALENTS
    
    
    25,679
    
    
    
    4,148
    
    
    
    8,770
    
    
    
    
    
    
    
    38,597CASH AND CASH EQUIVALENTS:Beginning of period
    
    
    23,568
    
    
    
    17,553
    
    
    
    59,107
    
    
    
    
    
    
    
    100,228End of period
    
    $
    49,247
    
    
    $
    21,701
    
    
    $
    67,877
    
    
    $
    
    
    
    $
    138,825
 19




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CINEMARK USA, INC. AND SUBSIDIARIES
 SUBSIDIARY GUARANTORS
CONDENSED CONSOLIDATING BALANCE SHEET INFORMATION
DECEMBER 31, 2004
 Parent
    
    Subsidiary
    
    SubsidiaryCompany
    
    Guarantors
    
    Non-Guarantors
    
    Eliminations
    
    ConsolidatedASSETSCURRENT ASSETSCash and cash equivalents
    
    $
    23,568
    
    
    $
    17,553
    
    
    $
    59,107
    
    
    $
    
    
    
    $
    100,228Inventories
    
    
    1,822
    
    
    
    1,204
    
    
    
    1,211
    
    
    
    
    
    
    
    4,237Accounts receivable
    
    
    13,769
    
    
    
    22,743
    
    
    
    4,528
    
    
    
    (29,737
    )
    
    
    11,303Income tax receivable
    
    
    12,002
    
    
    
    168
    
    
    
    8,388
    
    
    
    (13,521
    )
    
    
    7,037Prepaid expenses and other
    
    
    6,789
    
    
    
    577
    
    
    
    517
    
    
    
    (4,064
    )
    
    
    3,819Total current assets
    
    
    57,950
    
    
    
    42,245
    
    
    
    73,751
    
    
    
    (47,322
    )
    
    
    126,624THEATRE PROPERTIES AND EQUIPMENT  net
    
    
    291,847
    
    
    
    309,721
    
    
    
    184,027
    
    
    
    
    
    
    
    785,595OTHER ASSETSGoodwill
    
    
    7,485
    
    
    
    4,225
    
    
    
    33,246
    
    
    
    50
    
    
    
    45,006Investments in and advances to affiliates
    
    
    560,301
    
    
    
    421,765
    
    
    
    808
    
    
    
    (981,164
    )
    
    
    1,710Intangible assets, deferred charges and other assets  net
    
    
    25,312
    
    
    
    1,815
    
    
    
    72,566
    
    
    
    (57,063
    )
    
    
    42,630Total other assets
    
    
    593,098
    
    
    
    427,805
    
    
    
    106,620
    
    
    
    (1,038,177
    )
    
    
    89,346TOTAL ASSETS
    
    $
    942,895
    
    
    $
    779,771
    
    
    $
    364,398
    
    
    $
    (1,085,499
    )
    
    $
    1,001,565LIABILITIES AND SHAREHOLDERS EQUITYCURRENT LIABILITIESCurrent portion of long-term debt
    
    $
    2,655
    
    
    $
    
    
    
    $
    3,884
    
    
    $
    
    
    
    $
    6,539Income tax payable
    
    
    5,211
    
    
    
    
    
    
    
    8,310
    
    
    
    (13,521
    )
    
    
    Accounts payable and accrued expenses
    
    
    72,867
    
    
    
    39,638
    
    
    
    39,045
    
    
    
    (29,226
    )
    
    
    122,324Total current liabilities
    
    
    80,733
    
    
    
    39,638
    
    
    
    51,239
    
    
    
    (42,747
    )
    
    
    128,863LONG-TERM LIABILITIESLong-term debt, less current portion
    
    
    610,439
    
    
    
    44,018
    
    
    
    66,721
    
    
    
    (100,774
    )
    
    
    620,404Deferred income taxes
    
    
    23,344
    
    
    
    2,605
    
    
    
    (2,811
    )
    
    
    
    
    
    
    23,138Other long-term liabilities and deferrals
    
    
    29,804
    
    
    
    74,236
    
    
    
    13,642
    
    
    
    (74,054
    )
    
    
    43,628Total long-term liabilities
    
    
    663,587
    
    
    
    120,859
    
    
    
    77,552
    
    
    
    (174,828
    )
    
    
    687,170COMMITMENTS AND CONTINGENCIES
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    MINORITY INTERESTS IN SUBSIDIARIES
    
    
    
    
    
    
    283
    
    
    
    16,414
    
    
    
    
    
    
    
    16,697SHAREHOLDERS EQUITYCommon stock
    
    
    49,543
    
    
    
    19
    
    
    
    96,813
    
    
    
    (96,832
    )
    
    
    49,543Other shareholders equity
    
    
    149,032
    
    
    
    618,972
    
    
    
    122,380
    
    
    
    (771,092
    )
    
    
    119,292Total shareholders equity
    
    
    198,575
    
    
    
    618,991
    
    
    
    219,193
    
    
    
    (867,924
    )
    
    
    168,835TOTAL LIABILITIES AND SHAREHOLDERS EQUITY
    
    $
    942,895
    
    
    $
    779,771
    
    
    $
    364,398
    
    
    $
    (1,085,499
    )
    
    $
    1,001,565
 20




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##### Table of Contents



SUBSIDIARY GUARANTORS
CONDENSED CONSOLIDATING STATEMENT OF INCOME INFORMATION
SIX MONTHS ENDED JUNE 30, 2004
 Parent
    
    Subsidiary
    
    SubsidiaryCompany
    
    Guarantors
    
    Non-Guarantors
    
    Eliminations
    
    ConsolidatedREVENUES
    
    $
    234,650
    
    
    $
    178,785
    
    
    $
    131,077
    
    
    $
    (36,271
    )
    
    $
    508,241COSTS AND EXPENSESCost of operations
    
    
    200,305
    
    
    
    109,578
    
    
    
    93,520
    
    
    
    (36,499
    )
    
    
    366,904General and administrative expenses
    
    
    6,863
    
    
    
    42,883
    
    
    
    7,012
    
    
    
    228
    
    
    
    56,986Depreciation and amortization
    
    
    10,597
    
    
    
    11,308
    
    
    
    11,800
    
    
    
    
    
    
    
    33,705Impairment of long-lived assets
    
    
    
    
    
    
    1,000
    
    
    
    
    
    
    
    
    
    
    
    1,000Gain on sale of assets and other
    
    
    (419
    )
    
    
    
    
    
    
    (134
    )
    
    
    
    
    
    
    (553
    )Total costs and expenses
    
    
    217,346
    
    
    
    164,769
    
    
    
    112,198
    
    
    
    (36,271
    )
    
    
    458,042OPERATING INCOME
    
    
    17,304
    
    
    
    14,016
    
    
    
    18,879
    
    
    
    
    
    
    
    50,199OTHER INCOME (EXPENSE)Interest expense
    
    
    (22,241
    )
    
    
    (1,739
    )
    
    
    (3,384
    )
    
    
    4,982
    
    
    
    (22,382
    )Amortization of debt issue costs
    
    
    (1,249
    )
    
    
    
    
    
    
    (18
    )
    
    
    
    
    
    
    (1,267
    )Interest income
    
    
    2,079
    
    
    
    3,025
    
    
    
    755
    
    
    
    (4,982
    )
    
    
    877Foreign currency exchange gain
    
    
    
    
    
    
    
    
    
    
    572
    
    
    
    
    
    
    
    572Loss on early retirement of debt
    
    
    (5,577
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (5,577
    )Equity in income of affiliates
    
    
    19,111
    
    
    
    9,603
    
    
    
    27
    
    
    
    (28,777
    )
    
    
    (36
    )Minority interests in income of subsidiaries
    
    
    
    
    
    
    (73
    )
    
    
    (3,518
    )
    
    
    
    
    
    
    (3,591
    )Total other income (expense)
    
    
    (7,877
    )
    
    
    10,816
    
    
    
    (5,566
    )
    
    
    (28,777
    )
    
    
    (31,404
    )INCOME FROM CONTINUINGOPERATIONS BEFORE INCOME TAXES (BENEFIT)
    
    
    9,427
    
    
    
    24,832
    
    
    
    13,313
    
    
    
    (28,777
    )
    
    
    18,795Income taxes (benefit)
    
    
    (1,716
    )
    
    
    6,411
    
    
    
    2,605
    
    
    
    
    
    
    
    7,300INCOME FROM CONTINUING OPERATIONS
    
    
    11,143
    
    
    
    18,421
    
    
    
    10,708
    
    
    
    (28,777
    )
    
    
    11,495Loss from discontinued operations, net of income tax
benefit of $191
    
    
    
    
    
    
    
    
    
    
    (201
    )
    
    
    
    
    
    
    (201
    )NET INCOME
    
    $
    11,143
    
    
    $
    18,421
    
    
    $
    10,507
    
    
    $
    (28,777
    )
    
    $
    11,294
 21




---



##### Table of Contents



SUBSIDIARY GUARANTORS
CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS INFORMATION
SIX MONTHS ENDED JUNE 30, 2004
 Parent
    
    Subsidiary
    
    SubsidiaryCompany
    
    Guarantors
    
    Non-Guarantors
    
    Eliminations
    
    ConsolidatedOPERATING ACTIVITIESNet income
    
    $
    11,143
    
    
    $
    18,421
    
    
    $
    10,507
    
    
    $
    (28,777
    )
    
    $
    11,294Noncash items in net income:Depreciation and amortization
    
    
    10,888
    
    
    
    11,308
    
    
    
    12,698
    
    
    
    
    
    
    
    34,894Impairment of long-lived assets
    
    
    
    
    
    
    1,000
    
    
    
    
    
    
    
    
    
    
    
    1,000Gain on sale of assets and other
    
    
    (419
    )
    
    
    
    
    
    
    (134
    )
    
    
    
    
    
    
    (553
    )Write-off unamortized debt issue costs and debt premium/discount
    
    
    898
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    898Write-off of unearned compensation related to Recapitalization
    
    
    1,595
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,595Deferred lease expenses
    
    
    634
    
    
    
    (6
    )
    
    
    (568
    )
    
    
    
    
    
    
    60Deferred income tax expenses
    
    
    (9,478
    )
    
    
    6,365
    
    
    
    191
    
    
    
    
    
    
    
    (2,922
    )Equity in income of affiliates
    
    
    (19,111
    )
    
    
    (9,603
    )
    
    
    (27
    )
    
    
    28,777
    
    
    
    36Minority interests in income of subsidiaries
    
    
    
    
    
    
    73
    
    
    
    3,518
    
    
    
    
    
    
    
    3,591Other noncash items
    
    
    
    
    
    
    
    
    
    
    718
    
    
    
    
    
    
    
    718Changes in assets and liabilities
    
    
    (57,009
    )
    
    
    39,592
    
    
    
    2,720
    
    
    
    (4,829
    )
    
    
    (19,526
    )Net cash provided by (used for) operating activities
    
    
    (60,859
    )
    
    
    67,150
    
    
    
    29,623
    
    
    
    (4,829
    )
    
    
    31,085INVESTING ACTIVITIESAdditions to theatre properties and equipment
    
    
    (7,551
    )
    
    
    (19,938
    )
    
    
    (14,009
    )
    
    
    
    
    
    
    (41,498
    )Proceeds from sale of theatre properties and equipment
    
    
    
    
    
    
    
    
    
    
    3,467
    
    
    
    
    
    
    
    3,467Proceeds from sale of equity investment
    
    
    1,250
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,250Net transactions with affiliates
    
    
    38,629
    
    
    
    (42,899
    )
    
    
    961
    
    
    
    3,437
    
    
    
    128Net cash provided by (used for) investing activities
    
    
    32,328
    
    
    
    (62,837
    )
    
    
    (9,581
    )
    
    
    3,437
    
    
    
    (36,653
    )FINANCING ACTIVITIESCapital contribution from parent
    
    
    27,614
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    27,614Retirement of senior subordinated notes
    
    
    (111,915
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (111,915
    )Increase in long-term debt
    
    
    260,007
    
    
    
    
    
    
    
    756
    
    
    
    
    
    
    
    260,763Decrease in long-term debt
    
    
    (164,825
    )
    
    
    (55
    )
    
    
    (3,861
    )
    
    
    
    
    
    
    (168,741
    )Increase in debt issue cost
    
    
    (7,622
    )
    
    
    
    
    
    
    (15
    )
    
    
    
    
    
    
    (7,637
    )Change in intercompany notes
    
    
    
    
    
    
    81
    
    
    
    (1,473
    )
    
    
    1,392
    
    
    
    Increase in minority investment in subsidiaries
    
    
    
    
    
    
    
    
    
    
    670
    
    
    
    
    
    
    
    670Decrease in minority investment in subsidiaries
    
    
    
    
    
    
    (100
    )
    
    
    (2,567
    )
    
    
    
    
    
    
    (2,667
    )Net cash provided by (used for) financing activities
    
    
    3,259
    
    
    
    (74
    )
    
    
    (6,490
    )
    
    
    1,392
    
    
    
    (1,913
    )EFFECT OF EXCHANGE RATE CHANGES
ON CASH AND CASH EQUIVALENTS
    
    
    
    
    
    
    
    
    
    
    (1,373
    )
    
    
    
    
    
    
    (1,373
    )INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
    
    
    (25,272
    )
    
    
    4,239
    
    
    
    12,179
    
    
    
    
    
    
    
    (8,854
    )CASH AND CASH EQUIVALENTS:Beginning of period
    
    
    46,919
    
    
    
    9,523
    
    
    
    50,877
    
    
    
    
    
    
    
    107,319End of period
    
    $
    21,647
    
    
    $
    13,762
    
    
    $
    63,056
    
    
    $
    
    
    
    $
    98,465
 22




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##### Table of Contents



Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
  Star Wars: Episode III  Revenge of the Sith Madagascar War of the Worlds Charlie and the Chocolate
Factory Harry Potter and the Goblet of Fire King Kong
      Critical Accounting Policies
  Revenue and Expense Recognition
  23




---



##### Table of Contents



Impairment of Long-Lived Assets
  
    
    actual theatre level cash flows;
    
    future years budgeted theatre level cash flows;
    
    theatre property and equipment carrying values;
    
    goodwill carrying values;
    
    the age of a recently built theatre;
    
    competitive theatres in the marketplace;
    
    the sharing of a market with our other theatres;
    
    changes in foreign currency exchange rates;
    
    the impact of recent ticket price changes;
    
    available lease renewal options; and
    
    other factors considered relevant in our assessment of impairment of individual theatre assets.
  24




---



##### Table of Contents



Goodwill
 ,
 Acquisitions
  Income Taxes
  Results of Operations
  % of Revenues
    
    % of RevenuesThree Months Ended
    
    Six Months EndedJune 30,
    
    June 30,2005
    
    2004
    
    2005
    
    2004RevenuesAdmissions
    
    
    62.3
    %
    
    
    63.2
    %
    
    
    63.0
    %
    
    
    63.5
    %Concession
    
    
    31.7
    %
    
    
    32.1
    %
    
    
    31.4
    %
    
    
    31.6
    %Other
    
    
    6.0
    %
    
    
    4.7
    %
    
    
    5.6
    %
    
    
    4.9
    %Total revenues
    
    
    100.0
    %
    
    
    100.0
    %
    
    
    100.0
    %
    
    
    100.0
    %Cost of operations
    
    
    74.7
    %
    
    
    71.0
    %
    
    
    74.6
    %
    
    
    72.2
    %General and administrative expenses
    
    
    4.8
    %
    
    
    4.8
    %
    
    
    5.0
    %
    
    
    4.9
    %Stock option compensation and change
of control expenses
    
    
    
    
    
    
    11.7
    %
    
    
    
    
    
    
    6.3
    %Depreciation and amortization
    
    
    7.8
    %
    
    
    6.1
    %
    
    
    7.8
    %
    
    
    6.6
    %Impairment of long-lived assets
    
    
    0.0
    %
    
    
    0.0
    %
    
    
    0.0
    %
    
    
    0.2
    %(Gain) loss on sale of assets and other
    
    
    0.1
    %
    
    
    0.0
    %
    
    
    0.2
    %
    
    
    (0.1
    %)Total costs and expenses
    
    
    87.4
    %
    
    
    93.6
    %
    
    
    87.6
    %
    
    
    90.1
    %Operating income
    
    
    12.6
    %
    
    
    6.4
    %
    
    
    12.4
    %
    
    
    9.9
    %
 25




---



##### Table of Contents



Three months ended June 30, 2005 and 2004
 Revenues.
 Cost of Operations.
   General and Administrative Expenses.
  Depreciation and Amortization.
 Interest Expense.
 26




---



##### Table of Contents



Loss on Early Retirement of Debt. 1 2
 Income Taxes.
 Income from Discontinued Operations, Net of Taxes.
 Six months ended June 30, 2005 and 2004
 Revenues.
 Cost of Operations.
   General and Administrative Expenses.
 27




---



##### Table of Contents



Depreciation and Amortization.
 Impairment of Long-Lived Assets
 Interest Expense.
 Loss on Early Retirement of Debt. 1 2
 Income Taxes.
 Loss from Discontinued Operations, Net of Taxes.
 Liquidity and Capital Resources
 Operating Activities
  28




---



##### Table of Contents



Investing Activities
     Financing Activities
   Payments Due by Period(in millions)Less Than
    
    
    
    
    
    
    
    
    
    AfterContractual Obligations
    
    Total
    
    One Year
    
    1 - 3 Years
    
    4 - 5 Years
    
    5 YearsLong-term debt
    
    $
    622.9
    
    
    $
    6.7
    
    
    $
    10.2
    
    
    $
    68.3
    
    
    $
    537.7Scheduled interest payments on
long-term debt1
    
    
    309.2
    
    
    
    45.5
    
    
    
    89.7
    
    
    
    86.9
    
    
    
    87.1Lease obligations
    
    
    1,590.1
    
    
    
    116.3
    
    
    
    244.4
    
    
    
    237.0
    
    
    
    992.4Letters of credit
    
    
    0.1
    
    
    
    0.1
    
    
    
    
    
    
    
    
    
    
    
    Employment agreements
    
    
    8.4
    
    
    
    2.8
    
    
    
    5.6
    
    
    
    
    
    
    
    Purchase commitments 2
    
    
    124.1
    
    
    
    85.9
    
    
    
    36.5
    
    
    
    1.0
    
    
    
    0.7Total obligations
    
    $
    2,654.8
    
    
    $
    257.3
    
    
    $
    386.4
    
    
    $
    393.2
    
    
    $
    1,617.9
 29




---



##### Table of Contents



1Amounts include scheduled interest payments on fixed rate and variable rate
debt agreements. Estimates for the variable rate interest payments were based on
interest rates in effect on June 30, 2005.2Includes estimated capital expenditures associated with the construction of new
theatres to which we were committed as of June 30, 2005.  Recapitalization of Cinemark, Inc.
  3 4 3 4 3 4 3 4
 Senior Subordinated Notes
 1 2 1 2 1 2 1 2
  30




---



##### Table of Contents



1 2
    Senior Secured Credit Facility
  5 8
 1 2
   31




---



##### Table of Contents



Cinemark Brasil Notes Payable
      Cinemark Chile Note Payable
  32




---



##### Table of Contents



Seasonality
  Cautionary Statement Regarding Forward-Looking Statements
  
    
    future revenues, expenses and profitability;
    
    the future development and expected growth of our business;
    
    projected capital expenditures;
    
    attendance at movies generally, or in any of the markets in which we operate;
    
    the number or diversity of popular movies released;
    
    our ability to successfully license and exhibit popular films;
    
    competition from other exhibitors; and
    
    determinations in lawsuits in which we are a defendant.
  
 Item 3. Quantitative and Qualitative Disclosures About Market Risk
  Interest Rate Risk
  33




---



##### Table of Contents



Expected Maturity as of June 30, 2005(in millions)
    
    
    
    
    
    AverageJune 30,
    
    
    
    
    
    
    
    
    
    Fair
    
    Interest2006
    
    2007
    
    2008
    
    2009
    
    2010
    
    Thereafter
    
    Total
    
    Value
    
    RateFixed rate
    
    $
    0.1
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    354.1
    
    
    $
    354.2
    
    
    $
    352.4
    
    
    
    9.0
    %Variable rate
    
    
    6.6
    
    
    
    5.8
    
    
    
    4.4
    
    
    
    4.0
    
    
    
    64.3
    
    
    
    183.6
    
    
    
    268.7
    
    
    
    269.3
    
    
    
    5.6
    %Total debt
    
    $
    6.7
    
    
    $
    5.8
    
    
    $
    4.4
    
    
    $
    4.0
    
    
    $
    64.3
    
    
    $
    537.7
    
    
    $
    622.9
    
    
    $
    621.7
 Expected Maturity as of December 31, 2004(in millions)
    
    
    
    
    
    AverageDecember 31,
    
    Fair
    
    Interest2005
    
    2006
    
    2007
    
    2008
    
    2009
    
    Thereafter
    
    Total
    
    Value
    
    RateFixed rate
    
    $
    0.1
    
    
    $
    0.1
    
    
    $
    
    
    
    $
    
    
    
    
    
    
    
    $
    354.9
    
    
    $
    355.1
    
    
    $
    350.4
    
    
    
    9.0
    %Variable rate
    
    
    6.4
    
    
    
    6.5
    
    
    
    5.0
    
    
    
    4.0
    
    
    
    3.9
    
    
    
    246.0
    
    
    
    271.8
    
    
    
    271.4
    
    
    
    4.5
    %Total debt
    
    $
    6.5
    
    
    $
    6.6
    
    
    $
    5.0
    
    
    $
    4.0
    
    
    $
    3.9
    
    
    $
    600.9
    
    
    $
    626.9
    
    
    $
    621.8
 Foreign Currency Exchange Rate Risk
  
 Item 4. Controls and Procedures
 Evaluation of Disclosure Controls and Procedures
  34




---



##### Table of Contents



Changes in Internal Controls
  
 PART II  OTHER INFORMATION
 
 Item 1. Legal Proceedings
  
 Item 5. Other Information
 PageSupplemental Schedules specified by the senior subordinated notes Indenture:Condensed Consolidating Balance Sheets (unaudited) as of June 30, 2005
    
    
    36Condensed Consolidating Statements of Income (unaudited) for the six
months ended June 30, 2005
    
    
    37Condensed Consolidating Statements of Cash Flows (unaudited) for the
six months ended June 30, 2005
    
    
    38
 35




---



##### Table of Contents



CINEMARK USA, INC. AND SUBSIDIARIES
 
 CONDENSED CONSOLIDATING BALANCE SHEETS
 AS OF JUNE 30, 2005
 (in thousands, except share data, unaudited)
 Restricted
    
    UnrestrictedGroup
    
    Group
    
    Eliminations
    
    ConsolidatedASSETSCURRENT ASSETSCash and cash equivalents
    
    $
    107,056
    
    
    $
    31,769
    
    
    $
    
    
    
    $
    138,825Inventories
    
    
    4,076
    
    
    
    759
    
    
    
    
    
    
    
    4,835Accounts receivable
    
    
    10,677
    
    
    
    5,505
    
    
    
    (853
    )
    
    
    15,329Income tax receivable
    
    
    (2,105
    )
    
    
    2,105
    
    
    
    
    
    
    
    Prepaid expenses and other
    
    
    3,318
    
    
    
    558
    
    
    
    
    
    
    
    3,876Total current assets
    
    
    123,022
    
    
    
    40,696
    
    
    
    (853
    )
    
    
    162,865THEATRE PROPERTIES AND EQUIPMENT  net
    
    
    705,150
    
    
    
    88,383
    
    
    
    
    
    
    
    793,533OTHER ASSETSGoodwill
    
    
    10,009
    
    
    
    32,921
    
    
    
    
    
    
    
    42,930Investments in and advances to affiliates
    
    
    176,651
    
    
    
    837
    
    
    
    (175,818
    )
    
    
    1,670Intangible assets, deferred charges and other assets  net
    
    
    54,475
    
    
    
    9,715
    
    
    
    (11,277
    )
    
    
    52,913Total other assets
    
    
    241,135
    
    
    
    43,473
    
    
    
    (187,095
    )
    
    
    97,513TOTAL ASSETS
    
    $
    1,069,307
    
    
    $
    172,552
    
    
    $
    (187,948
    )
    
    $
    1,053,911LIABILITIES AND SHAREHOLDERS EQUITYCURRENT LIABILITIESCurrent portion of long-term debt
    
    $
    2,656
    
    
    $
    4,000
    
    
    $
    
    
    
    $
    6,656Income tax payable
    
    
    5,085
    
    
    
    1,714
    
    
    
    
    
    
    
    6,799Accounts payable and accrued expenses
    
    
    100,714
    
    
    
    16,124
    
    
    
    (857
    )
    
    
    115,981Total current liabilities
    
    
    108,455
    
    
    
    21,838
    
    
    
    (857
    )
    
    
    129,436LONG-TERM LIABILITIESSenior credit agreements
    
    
    254,195
    
    
    
    19,187
    
    
    
    (11,276
    )
    
    
    262,106Senior subordinated notes
    
    
    354,112
    
    
    
    
    
    
    
    
    
    
    
    354,112Deferred income taxes
    
    
    20,895
    
    
    
    (57
    )
    
    
    
    
    
    
    20,838Deferred lease expenses
    
    
    27,133
    
    
    
    1,510
    
    
    
    
    
    
    
    28,643Deferred gain on sale leasebacks
    
    
    3,458
    
    
    
    
    
    
    
    
    
    
    
    3,458Deferred revenues and other long-term liabilities
    
    
    15,841
    
    
    
    5,177
    
    
    
    
    
    
    
    21,018Total long-term liabilities
    
    
    675,634
    
    
    
    25,817
    
    
    
    (11,276
    )
    
    
    690,175COMMITMENTS AND CONTINGENCIES
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    MINORITY INTERESTS IN SUBSIDIARIES
    
    
    10,803
    
    
    
    5,982
    
    
    
    
    
    
    
    16,785SHAREHOLDERS EQUITYClass A common stock, $.01 par value: 10,000,000 shares
authorized, 1,500 shares issued and outstanding
    
    
    
    
    
    
    37,942
    
    
    
    (37,942
    )
    
    
    Class B common stock, no par value: 1,000,000 shares
authorized, 239,893 shares issued and outstanding
    
    
    49,543
    
    
    
    33,050
    
    
    
    (33,050
    )
    
    
    49,543Additional paid-in-capital
    
    
    58,005
    
    
    
    104,823
    
    
    
    (104,823
    )
    
    
    58,005Retained earnings
    
    
    239,970
    
    
    
    (43,793
    )
    
    
    (80
    )
    
    
    196,097Distributions
    
    
    
    
    
    
    (80
    )
    
    
    80
    
    
    
    Treasury stock, 57,245 Class B shares at cost
    
    
    (24,233
    )
    
    
    
    
    
    
    
    
    
    
    (24,233
    )Accumulated other comprehensive loss
    
    
    (48,870
    )
    
    
    (13,027
    )
    
    
    
    
    
    
    (61,897
    )Total shareholders equity
    
    
    274,415
    
    
    
    118,915
    
    
    
    (175,815
    )
    
    
    217,515TOTAL LIABILITIES AND SHAREHOLDERS EQUITY
    
    $
    1,069,307
    
    
    $
    172,552
    
    
    $
    (187,948
    )
    
    $
    1,053,911
  36




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##### Table of Contents



CINEMARK USA, INC. AND SUBSIDIARIES
 
 CONDENSED CONSOLIDATING STATEMENTS OF INCOME
 FOR THE SIX MONTHS ENDED JUNE 30, 2005
 (in thousands, unaudited)
 Restricted
    
    UnrestrictedGroup
    
    Group
    
    Eliminations
    
    ConsolidatedREVENUES
    
    $
    414,006
    
    
    $
    77,262
    
    
    $
    (560
    )
    
    $
    490,708COSTS AND EXPENSESCost of operations
    
    
    307,052
    
    
    
    59,575
    
    
    
    (560
    )
    
    
    366,067General and administrative expenses
    
    
    19,539
    
    
    
    4,966
    
    
    
    
    
    
    
    24,505Depreciation and amortization
    
    
    29,324
    
    
    
    8,597
    
    
    
    
    
    
    
    37,921Impairment of long-lived assets
    
    
    226
    
    
    
    
    
    
    
    
    
    
    
    226(Gain) loss on sale of assets and other
    
    
    918
    
    
    
    (80
    )
    
    
    
    
    
    
    838Total costs and expenses
    
    
    357,059
    
    
    
    73,058
    
    
    
    (560
    )
    
    
    429,557OPERATING INCOME
    
    
    56,947
    
    
    
    4,204
    
    
    
    
    
    
    
    61,151OTHER INCOME (EXPENSE)Interest expense
    
    
    (20,978
    )
    
    
    (842
    )
    
    
    299
    
    
    
    (21,521
    )Amortization of debt issue costs
    
    
    (1,368
    )
    
    
    (10
    )
    
    
    
    
    
    
    (1,378
    )Interest income
    
    
    1,384
    
    
    
    939
    
    
    
    (299
    )
    
    
    2,024Foreign currency exchange loss
    
    
    (944
    )
    
    
    (16
    )
    
    
    
    
    
    
    (960
    )Dividend income
    
    
    80
    
    
    
    
    
    
    
    (80
    )
    
    
    Equity in income of affiliates
    
    
    84
    
    
    
    38
    
    
    
    
    
    
    
    122Minority interests in income of subsidiaries
    
    
    (407
    )
    
    
    (33
    )
    
    
    
    
    
    
    (440
    )Total other
income (expense)
    
    
    (22,149
    )
    
    
    76
    
    
    
    (80
    )
    
    
    (22,153
    )INCOME BEFORE INCOME TAXES
    
    
    34,798
    
    
    
    4,280
    
    
    
    (80
    )
    
    
    38,998Income taxes
    
    
    12,344
    
    
    
    134
    
    
    
    
    
    
    
    12,478NET INCOME
    
    $
    22,454
    
    
    $
    4,146
    
    
    $
    (80
    )
    
    $
    26,520
  37




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##### Table of Contents



CINEMARK USA, INC. AND SUBSIDIARIES
 
 CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS
 FOR THE SIX MONTHS ENDED JUNE 30, 2005
 (in thousands, unaudited)
 Restricted
    
    UnrestrictedGroup
    
    Group
    
    Eliminations
    
    ConsolidatedOPERATING ACTIVITIESNet income
    
    $
    22,454
    
    
    $
    4,146
    
    
    $
    (80
    )
    
    $
    26,520Noncash items in net income:Depreciation
    
    
    28,725
    
    
    
    7,494
    
    
    
    
    
    
    
    36,219Amortization of intangible and other assets
    
    
    599
    
    
    
    1,103
    
    
    
    
    
    
    
    1,702Amortization of foreign advanced rents
    
    
    356
    
    
    
    343
    
    
    
    
    
    
    
    699Amortization of debt issue costs
    
    
    1,368
    
    
    
    10
    
    
    
    
    
    
    
    1,378Amortization of gain on sale leasebacks
    
    
    (183
    )
    
    
    
    
    
    
    
    
    
    
    (183
    )Amortization of debt premium
    
    
    (782
    )
    
    
    
    
    
    
    
    
    
    
    (782
    )Amortization of deferred revenues
    
    
    (154
    )
    
    
    
    
    
    
    
    
    
    
    (154
    )Impairment of long-lived assets
    
    
    226
    
    
    
    
    
    
    
    
    
    
    
    226(Gain) loss on sale of assets and other
    
    
    918
    
    
    
    (80
    )
    
    
    
    
    
    
    838Deferred lease expenses
    
    
    574
    
    
    
    107
    
    
    
    
    
    
    
    681Deferred income tax expenses
    
    
    (2,300
    )
    
    
    
    
    
    
    
    
    
    
    (2,300
    )Equity in income of affiliates
    
    
    (84
    )
    
    
    (38
    )
    
    
    
    
    
    
    (122
    )Minority interests in income of subsidiaries
    
    
    407
    
    
    
    33
    
    
    
    
    
    
    
    440Changes in assets and liabilities
    
    
    (7,382
    )
    
    
    260
    
    
    
    80
    
    
    
    (7,042
    )Net cash provided by operating activities
    
    
    44,742
    
    
    
    13,378
    
    
    
    
    
    
    
    58,120INVESTING ACTIVITIESAdditions to theatre properties and equipment
    
    
    (23,336
    )
    
    
    (4,513
    )
    
    
    
    
    
    
    (27,849
    )Proceeds from sale of theatre properties and equipment
    
    
    1,047
    
    
    
    202
    
    
    
    
    
    
    
    1,249Dividends/capital returned from affiliates
    
    
    204
    
    
    
    80
    
    
    
    
    
    
    
    284Net cash used for investing activities
    
    
    (22,085
    )
    
    
    (4,231
    )
    
    
    
    
    
    
    (26,316
    )FINANCING ACTIVITIESCapital contribution from parent
    
    
    6,935
    
    
    
    
    
    
    
    
    
    
    
    6,935Repayments of long-term debt
    
    
    (1,351
    )
    
    
    (1,887
    )
    
    
    
    
    
    
    (3,238
    )Increase in deferred revenue
    
    
    538
    
    
    
    
    
    
    
    
    
    
    
    538Increase in minority investment in subsidiaries
    
    
    21
    
    
    
    55
    
    
    
    
    
    
    
    76Decrease in minority investment in subsidiaries
    
    
    (160
    )
    
    
    (268
    )
    
    
    
    
    
    
    (428
    )Net cash provided by (used for) financing activities
    
    
    5,983
    
    
    
    (2,100
    )
    
    
    
    
    
    
    3,883Effect of exchange rate changes on cash and cash equivalents
    
    
    1,232
    
    
    
    1,678
    
    
    
    
    
    
    
    2,910INCREASE IN CASH AND CASH EQUIVALENTS
    
    
    29,872
    
    
    
    8,725
    
    
    
    
    
    
    
    38,597CASH AND CASH EQUIVALENTS:Beginning of period
    
    
    77,184
    
    
    
    23,044
    
    
    
    
    
    
    
    100,228End of period
    
    $
    107,056
    
    
    $
    31,769
    
    
    $
    
    
    
    $
    138,825
  38




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##### Table of Contents



Item 6. Exhibits
 3.1
    
    Amended and Restated Articles of Incorporation of the Company
filed with the Texas Secretary of State on September 3, 1992
(incorporated by reference to Exhibit 3.1(a) to the Companys
Annual Report on Form 10-K (File No. 033-47040) filed June 30,
1993).3.2(a)
    
    Bylaws of the Company, as amended (incorporated by reference to
Exhibit 3.2 to the Companys Registration Statement on Form S-1
(File No. 033-47040) filed April 9, 1992).3.2(b)
    
    Amendment to Bylaws of the Company dated March 12, 1996
(incorporated by reference to Exhibit 3.2(b) to the Companys
Annual Report on Form 10-K (File No. 033-47040) filed March 6,
1997).4.2(a)
    
    Indenture dated February 11, 2003 between the Company and The
Bank of New York Trust Company of Florida, N.A. governing the 9%
Senior Subordinated Notes issued thereunder (incorporated by
reference to Exhibit 10.2(b) to the Companys Annual Report on
Form 10-K (File No. 033-47040) filed March 19, 2003).4.2(b)
    
    First Supplemental Indenture dated as of May 7, 2003 between the
Company, the subsidiary guarantors party thereto and The Bank of
New York Trust Company of Florida, N.A. (incorporated by
reference to Exhibit 4.2(i) to the Companys Registration
Statement on Form S-4 (File No. 333-104940) filed May 28, 2003).4.2(c)
    
    Second Supplemental Indenture dated as of November 11, 2004
between the Company, the subsidiary guarantors party thereto and
The Bank of New York Trust Company of Florida, N.A. (incorporated
by reference to the Companys Annual Report on Form 10-K (File
No. 033-047040) filed March 29, 2005).4.2(d)
    
    Form of 9% Note (contained in the Indenture listed as Exhibit
4.2(a) above) (incorporated by reference to Exhibit 10.2(b) to
the Companys Annual Report on Form 10-K (File 033-47040) filed
March 19, 2003).10.1(a)
    
    Management Agreement, dated as of July 28, 1993, between the
Company and Cinemark Mexico (USA) (incorporated by reference to
Exhibit 10.1(a) to Cinemark, Inc.s Registration Statement on
Form S-1 (File No. 333-88618) filed May 17, 2002).10.1(b)
    
    Management Agreement, dated as of September 10, 2002, between
Cinemark USA, Inc. and Cinemark de Mexico (incorporated by
reference to Exhibit 10.8 to Cinemark Mexico (USA)s Registration
Statement on Form S-4 (File No. 033-72114) filed on November 24,
1994).10.1(c)
    
    Management Agreement, dated December 10, 1993, between Laredo
Theatre, Ltd. and the Company (incorporated by reference to
Exhibit 10.14(b) to the Companys Annual Report on Form 10-K
(File No. 033-47040) filed June 30, 1994).10.1(d)
    
    First Amendment to Management Agreement of Laredo Theatre, Ltd.
effective as of December 10, 2003 between CNMK Texas Properties,
Ltd. (successor in interest to Cinemark USA, Inc.) and Laredo
Theatre Ltd. (incorporated by reference to Exhibit 10.1(d) to
Cinemark, Inc.s Registration Statement on Form S-4 (File No.
333-116292) filed September 8, 2004).10.1(e)
    
    Management Agreement, dated September 1, 1994, between Cinemark
Partners II, Ltd. and the Company (incorporated by reference to
Exhibit 10.4(i) to the Companys Annual Report on Form 10-K (File
No. 033-47040) filed March 29, 1995).10.1(f)
    
    First Amendment to Management Agreement of Cinemark Partners II,
Ltd. dated as of January 5, 1998 by and between Cinemark USA,
Inc. and Cinemark Partners II, Ltd. (incorporated by reference to
Exhibit 10.1(f) to the Cinemark, Inc.s Registration Statement on
Form S-4 (File No. 333-116292) filed September 8, 2004).10.1(g)
    
    Management Services Agreement dated April 10, 2003 between
Greeley Partners L.P. and CNMK Texas Properties, Ltd.
(incorporated by reference to Exhibit 10.1(g) to Cinemark, Inc.s
Registration Statement on Form S-4 (File No. 333-116292) filed
September 8, 2004).10.2
    
    Amended and Restated Agreement to Participate in Profits and
Losses, dated as of March 12, 2004, between Cinemark USA, Inc.
and Alan W. Stock (incorporated by reference to Exhibit 10.2 to
the Companys Quarterly Report on Form 10-Q (File No. 033-47040)
filed May 14, 2004).10.3(a)
    
    License Agreement, dated December 10, 1993, between Laredo Joint
Venture and the Company (incorporated by reference to Exhibit
10.14(c) to the Companys Annual Report on Form 10-K (File No.
033-47040) filed June 30, 1994).10.3(b)
    
    License Agreement, dated September 1, 1994, between Cinemark
Partners II, Ltd. and the Company (incorporated by reference to
Exhibit 10.10(c) to the Companys Annual Report on Form 10-K
(File No. 033-47040) filed March 29, 1995).10.4(a)
    
    Tax Sharing Agreement, between the Company and Cinemark
International, L.L.C. (f/k/a Cinemark II, Inc. ), dated as of
June 10, 1992 (incorporated by reference to Exhibit 10.22 to the
Companys Annual Report on Form 10-K (File No. 033-47040) filed
June 30, 1993).
 39




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##### Table of Contents



10.4(b)
    
    Tax Sharing Agreement, dated as of July 28, 1993, between the
Company and Cinemark Mexico (USA) (incorporated by reference to
Exhibit 10.10 to Cinemark Mexico (USA)s Registration Statement
on Form S-4 (File No. 033-72114) filed on November 24, 1993).10.5(a)
    
    Indemnification Agreement, between the Company and Lee Roy
Mitchell, dated as of July 13, 1992 (incorporated by reference to
Exhibit 10.23(a) to the Companys Annual Report on Form 10-K
(File No. 033-47040) filed June 30, 1993).10.5(b)
    
    Indemnification Agreement, between the Company and Tandy
Mitchell, dated as of July 13, 1992 (incorporated by reference to
Exhibit 10.23(b) to the Companys Annual Report on Form 10-K
(File No. 033-47040) filed June 30, 1993).10.5(c)
    
    Indemnification Agreement, between the Company and Alan Stock,
dated as of July 13, 1992 (incorporated by reference to Exhibit
10.23(d) to the Companys Annual Report on Form 10-K (File No.
033-47040) filed June 30, 1993).10.5(d)
    
    Indemnification Agreement, between the Company and W. Bryce
Anderson, dated as of July 13, 1992 (incorporated by reference to
Exhibit 10.23(f) to the Companys Annual Report on Form 10-K
(File No. 033-47040) filed June 30, 1993).10.5(e)
    
    Indemnification Agreement, between the Company and Sheldon I.
Stein, dated as of July 13, 1992 (incorporated by reference to
Exhibit 10.23(g) to the Companys Annual Report on Form 10-K
(File No. 033-47040) filed June 30, 1993).10.5(f)
    
    Indemnification Agreement, between the Company and Heriberto
Guerra, dated as of December 3, 1993 (incorporated by reference
to Exhibit 10.23(f) to the Companys Annual Report on Form 10-K
(File No. 033-11895) filed September 13, 1996).10.6(a)
    
    Senior Secured Credit Agreement dated December 4, 1995 among
Cinemark International, L.L.C. (f/k/a Cinemark II, Inc., Cinemark
Mexico (USA) and Cinemark de Mexico (incorporated by reference to
Exhibit 10.18 to the Companys Annual Report on Form 10-K (File
No. 033-47040) filed April 1, 1996).10.6(b)
    
    First Amendment to Senior Secured Credit Agreement, dated as of
September 30, 1996, by and among Cinemark II, Inc., Cinemark
Mexico (USA), Inc. and Cinemark de Mexico, S.A. de C.V.
(incorporated by reference to Exhibit 10.11(b) to Cinemark,
Inc.s Registration Statement on Form S-1 (File No. 333-88618)
filed on May 17, 2002).10.6(c)
    
    Second Amendment to Senior Secured Credit Agreement, dated as of
September 28, 2000, by and among Cinemark II, Inc., Cinemark
Mexico (USA), Inc. and Cinemark de Mexico, S.A. de C.V.
(incorporated by reference to Exhibit 10.11(c) to Cinemark,
Inc.s Registration Statement on Form S-1 (File No. 333-88618)
filed on May 17, 2002).10.7(a)
    
    Employment Agreement, dated as of March 12, 2004, between
Cinemark, Inc. and Lee Roy Mitchell (incorporated by reference to
Exhibit 10.14(a) to the Companys Quarterly Report on Form 10-Q
(File No. 033-47040) filed May 14, 2004).10.7(b)
    
    Employment Agreement, dated as of March 12, 2004, between
Cinemark, Inc. and Alan Stock (incorporated by reference to
Exhibit 10.14(b) to the Companys Quarterly Report on Form 10-Q
(File No. 033-47040) filed May 14, 2004).10.7(c)
    
    Employment Agreement, dated as of March 12, 2004, between
Cinemark, Inc. and Tim Warner (incorporated by reference to
Exhibit 10.14(c) to the Companys Quarterly Report on Form 10-Q
(File No. 033-47040) filed May 14, 2004).10.7(d)
    
    Employment Agreement, dated as of March 12, 2004, between
Cinemark, Inc. and Robert Copple (incorporated by reference to
Exhibit 10.14(d) to the Companys Quarterly Report on Form 10-Q
(File No. 033-47040) filed May 14, 2004).10.7(e)
    
    Employment Agreement, dated as of March 12, 2004, between
Cinemark, Inc. and Rob Carmony (incorporated by reference to
Exhibit 10.14(e) to the Companys Quarterly Report on Form 10-Q
(File No. 033-47040) filed May 14, 2004).10.7(f)
    
    Employment Agreement, dated as of March 12, 2004, between
Cinemark, Inc. and Tandy Mitchell (incorporated by reference to
Exhibit 10.14(f) to the Companys Quarterly Report on Form 10-Q
(File No. 033-47040) filed May 14, 2004).
 40




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##### Table of Contents



10.8(a)
    
    Amended and Restated Credit Agreement, dated April 2, 2004, among
Cinemark, Inc., CNMK Holdings, Inc., the Company, the several
lenders from time to time parties thereto, Lehman Brothers Inc.
and Goldman Sachs Credit Partners LP, as Joint Legal Arrangers,
Goldman Sachs Credit Partners LP, as Syndication Agent, Deutsche
Bank Securities, Inc., The Bank of New York, General Electric
Capital Corporation and CIBC Inc. as Documentation Agents and
Lehman Commercial Paper Inc. as Administrative Agent
(incorporated by reference to Exhibit 10.15 to the Companys
Quarterly Report on Form 10-Q (File No. 033-47040) filed May 14,
2004).10.8(b)
    
    First Amendment to the Amended and Restated Credit Agreement,
dated August 18, 2004, among Cinemark, Inc., CNMK Holdings, Inc.,
Cinemark USA, Inc., the several lenders from time to time parties
thereto, Lehman Brothers Inc. and Goldman Sachs Credit Partners
LP, as Joint Lead Arrangers, Goldman Sachs Credit Partners LP,
as Syndication Agent, Deutsche Bank Securities, Inc., The Bank of
New York, General Electric Capital Corporation and CIBC Inc. as
Documentation Agents and Lehman Commercial Paper Inc. as
Administrative Agent (incorporated by reference to Exhibit
10.15(b) to the Companys Quarterly Report on Form 10-Q (File No.
033-47040) filed May 13, 2005).10.9
    
    Amended and Restated Guaranty and Collateral Agreement, dated
April 2, 2004, among Cinemark, Inc., CNMK Holdings Inc., the
Company and certain of it subsidiaries in favor of Lehman
Commercial Paper, Inc., as administrative agent (incorporated by
reference to Exhibit 10.16 to the Companys Quarterly Report on
Form 10-Q (File No. 033-47040) filed May 14, 2004).10.10(a)
    
    Stock Purchase Agreement dated as of August 18, 2004, among
Cinemark Empreendimentos e Participacoes, Ltda, Venture II Equity
Holdings Corporation, Inc. and Kristal Holdings Limited
(incorporated by reference to Exhibit 10.20(a) to Cinemark,
Inc.s Quarterly Report on Form 10-Q (File No. 333-116292) filed
May 13, 2005).10.10(b)
    
    Stock Purchase Agreement dated as of August 18, 2004, among
Cinemark Empreendimentos e Participacoes, Ltda, Prona Global
Ltd., Messrs. Edgar Gleich, Riccardo Arduini, Moises Pinsky,
Eduardo Alalou, and Robert Luis Leme Klabin (incorporated by
reference to Exhibit 10.20(b) to Cinemark, Inc.s Quarterly
Report on Form 10-Q (File No. 333-116292) filed May 13, 2005).*31.1
    
    Certification of Chief Executive Officer of Cinemark USA, Inc.
Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.*31.2
    
    Certification of Chief Financial Officer of Cinemark USA, Inc.
Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.*32.1
    
    Certification of the Chief Executive Officer of Cinemark USA,
Inc. Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.*32.2
    
    Certification of the Chief Financial Officer of Cinemark USA,
Inc. Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
 
 41




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##### Table of Contents



SIGNATURES
  CINEMARK USA, INC.RegistrantDATE: August 12, 2005/s/Alan W. StockAlan W. StockPresident/s/Robert CoppleRobert CoppleChief Financial Officer
 42




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##### Table of Contents



EXHIBIT INDEX
 3.1
    
    Amended and Restated Articles of Incorporation of the Company
filed with the Texas Secretary of State on September 3, 1992
(incorporated by reference to Exhibit 3.1(a) to the Companys
Annual Report on Form 10-K (File No. 033-47040) filed June 30,
1993).3.2(a)
    
    Bylaws of the Company, as amended (incorporated by reference to
Exhibit 3.2 to the Companys Registration Statement on Form S-1
(File No. 033-47040) filed April 9, 1992).3.2(b)
    
    Amendment to Bylaws of the Company dated March 12, 1996
(incorporated by reference to Exhibit 3.2(b) to the Companys
Annual Report on Form 10-K (File No. 033-47040) filed March 6,
1997).4.2(a)
    
    Indenture dated February 11, 2003 between the Company and The
Bank of New York Trust Company of Florida, N.A. governing the 9%
Senior Subordinated Notes issued thereunder (incorporated by
reference to Exhibit 10.2(b) to the Companys Annual Report on
Form 10-K (File No. 033-47040) filed March 19, 2003).4.2(b)
    
    First Supplemental Indenture dated as of May 7, 2003 between the
Company, the subsidiary guarantors party thereto and The Bank of
New York Trust Company of Florida, N.A. (incorporated by
reference to Exhibit 4.2(i) to the Companys Registration
Statement on Form S-4 (File No. 333-104940) filed May 28, 2003).4.2(c)
    
    Second Supplemental Indenture dated as of November 11, 2004
between the Company, the subsidiary guarantors party thereto and
The Bank of New York Trust Company of Florida, N.A. (incorporated
by reference to the Companys Annual Report on Form 10-K (File
No. 033-047040) filed March 29, 2005).4.2(d)
    
    Form of 9% Note (contained in the Indenture listed as Exhibit
4.2(a) above) (incorporated by reference to Exhibit 10.2(b) to
the Companys Annual Report on Form 10-K (File 033-47040) filed
March 19, 2003).10.1(a)
    
    Management Agreement, dated as of July 28, 1993, between the
Company and Cinemark Mexico (USA) (incorporated by reference to
Exhibit 10.1(a) to Cinemark, Inc.s Registration Statement on
Form S-1 (File No. 333-88618) filed May 17, 2002).10.1(b)
    
    Management Agreement, dated as of September 10, 2002, between
Cinemark USA, Inc. and Cinemark de Mexico (incorporated by
reference to Exhibit 10.8 to Cinemark Mexico (USA)s Registration
Statement on Form S-4 (File No. 033-72114) filed on November 24,
1994).10.1(c)
    
    Management Agreement, dated December 10, 1993, between Laredo
Theatre, Ltd. and the Company (incorporated by reference to
Exhibit 10.14(b) to the Companys Annual Report on Form 10-K
(File No. 033-47040) filed June 30, 1994).10.1(d)
    
    First Amendment to Management Agreement of Laredo Theatre, Ltd.
effective as of December 10, 2003 between CNMK Texas Properties,
Ltd. (successor in interest to Cinemark USA, Inc.) and Laredo
Theatre Ltd. (incorporated by reference to Exhibit 10.1(d) to
Cinemark, Inc.s Registration Statement on Form S-4 (File No.
333-116292) filed September 8, 2004).10.1(e)
    
    Management Agreement, dated September 1, 1994, between Cinemark
Partners II, Ltd. and the Company (incorporated by reference to
Exhibit 10.4(i) to the Companys Annual Report on Form 10-K (File
No. 033-47040) filed March 29, 1995).10.1(f)
    
    First Amendment to Management Agreement of Cinemark Partners II,
Ltd. dated as of January 5, 1998 by and between Cinemark USA,
Inc. and Cinemark Partners II, Ltd. (incorporated by reference to
Exhibit 10.1(f) to the Cinemark, Inc.s Registration Statement on
Form S-4 (File No. 333-116292) filed September 8, 2004).10.1(g)
    
    Management Services Agreement dated April 10, 2003 between
Greeley Partners L.P. and CNMK Texas Properties, Ltd.
(incorporated by reference to Exhibit 10.1(g) to Cinemark, Inc.s
Registration Statement on Form S-4 (File No. 333-116292) filed
September 8, 2004).10.2
    
    Amended and Restated Agreement to Participate in Profits and
Losses, dated as of March 12, 2004, between Cinemark USA, Inc.
and Alan W. Stock (incorporated by reference to Exhibit 10.2 to
the Companys Quarterly Report on Form 10-Q (File No. 033-47040)
filed May 14, 2004).10.3(a)
    
    License Agreement, dated December 10, 1993, between Laredo Joint
Venture and the Company (incorporated by reference to Exhibit
10.14(c) to the Companys Annual Report on Form 10-K (File No.
033-47040) filed June 30, 1994).10.3(b)
    
    License Agreement, dated September 1, 1994, between Cinemark
Partners II, Ltd. and the Company (incorporated by reference to
Exhibit 10.10(c) to the Companys Annual Report on Form 10-K
(File No. 033-47040) filed March 29, 1995).10.4(a)
    
    Tax Sharing Agreement, between the Company and Cinemark
International, L.L.C. (f/k/a Cinemark II, Inc. ), dated as of
June 10, 1992 (incorporated by reference to Exhibit 10.22 to the
Companys Annual Report on Form 10-K (File No. 033-47040) filed
June 30, 1993).




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##### Table of Contents



10.4(b)
    
    Tax Sharing Agreement, dated as of July 28, 1993, between the
Company and Cinemark Mexico (USA) (incorporated by reference to
Exhibit 10.10 to Cinemark Mexico (USA)s Registration Statement
on Form S-4 (File No. 033-72114) filed on November 24, 1993).10.5(a)
    
    Indemnification Agreement, between the Company and Lee Roy
Mitchell, dated as of July 13, 1992 (incorporated by reference to
Exhibit 10.23(a) to the Companys Annual Report on Form 10-K
(File No. 033-47040) filed June 30, 1993).10.5(b)
    
    Indemnification Agreement, between the Company and Tandy
Mitchell, dated as of July 13, 1992 (incorporated by reference to
Exhibit 10.23(b) to the Companys Annual Report on Form 10-K
(File No. 033-47040) filed June 30, 1993).10.5(c)
    
    Indemnification Agreement, between the Company and Alan Stock,
dated as of July 13, 1992 (incorporated by reference to Exhibit
10.23(d) to the Companys Annual Report on Form 10-K (File No.
033-47040) filed June 30, 1993).10.5(d)
    
    Indemnification Agreement, between the Company and W. Bryce
Anderson, dated as of July 13, 1992 (incorporated by reference to
Exhibit 10.23(f) to the Companys Annual Report on Form 10-K
(File No. 033-47040) filed June 30, 1993).10.5(e)
    
    Indemnification Agreement, between the Company and Sheldon I.
Stein, dated as of July 13, 1992 (incorporated by reference to
Exhibit 10.23(g) to the Companys Annual Report on Form 10-K
(File No. 033-47040) filed June 30, 1993).10.5(f)
    
    Indemnification Agreement, between the Company and Heriberto
Guerra, dated as of December 3, 1993 (incorporated by reference
to Exhibit 10.23(f) to the Companys Annual Report on Form 10-K
(File No. 033-11895) filed September 13, 1996).10.6(a)
    
    Senior Secured Credit Agreement dated December 4, 1995 among
Cinemark International, L.L.C. (f/k/a Cinemark II, Inc., Cinemark
Mexico (USA) and Cinemark de Mexico (incorporated by reference to
Exhibit 10.18 to the Companys Annual Report on Form 10-K (File
No. 033-47040) filed April 1, 1996).10.6(b)
    
    First Amendment to Senior Secured Credit Agreement, dated as of
September 30, 1996, by and among Cinemark II, Inc., Cinemark
Mexico (USA), Inc. and Cinemark de Mexico, S.A. de C.V.
(incorporated by reference to Exhibit 10.11(b) to Cinemark,
Inc.s Registration Statement on Form S-1 (File No. 333-88618)
filed on May 17, 2002).10.6(c)
    
    Second Amendment to Senior Secured Credit Agreement, dated as of
September 28, 2000, by and among Cinemark II, Inc., Cinemark
Mexico (USA), Inc. and Cinemark de Mexico, S.A. de C.V.
(incorporated by reference to Exhibit 10.11(c) to Cinemark,
Inc.s Registration Statement on Form S-1 (File No. 333-88618)
filed on May 17, 2002).10.7(a)
    
    Employment Agreement, dated as of March 12, 2004, between
Cinemark, Inc. and Lee Roy Mitchell (incorporated by reference to
Exhibit 10.14(a) to the Companys Quarterly Report on Form 10-Q
(File No. 033-47040) filed May 14, 2004).10.7(b)
    
    Employment Agreement, dated as of March 12, 2004, between
Cinemark, Inc. and Alan Stock (incorporated by reference to
Exhibit 10.14(b) to the Companys Quarterly Report on Form 10-Q
(File No. 033-47040) filed May 14, 2004).10.7(c)
    
    Employment Agreement, dated as of March 12, 2004, between
Cinemark, Inc. and Tim Warner (incorporated by reference to
Exhibit 10.14(c) to the Companys Quarterly Report on Form 10-Q
(File No. 033-47040) filed May 14, 2004).10.7(d)
    
    Employment Agreement, dated as of March 12, 2004, between
Cinemark, Inc. and Robert Copple (incorporated by reference to
Exhibit 10.14(d) to the Companys Quarterly Report on Form 10-Q
(File No. 033-47040) filed May 14, 2004).10.7(e)
    
    Employment Agreement, dated as of March 12, 2004, between
Cinemark, Inc. and Rob Carmony (incorporated by reference to
Exhibit 10.14(e) to the Companys Quarterly Report on Form 10-Q
(File No. 033-47040) filed May 14, 2004).10.7(f)
    
    Employment Agreement, dated as of March 12, 2004, between
Cinemark, Inc. and Tandy Mitchell (incorporated by reference to
Exhibit 10.14(f) to the Companys Quarterly Report on Form 10-Q
(File No. 033-47040) filed May 14, 2004).




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##### Table of Contents



10.8(a)
    
    Amended and Restated Credit Agreement, dated April 2, 2004, among
Cinemark, Inc., CNMK Holdings, Inc., the Company, the several
lenders from time to time parties thereto, Lehman Brothers Inc.
and Goldman Sachs Credit Partners LP, as Joint Legal Arrangers,
Goldman Sachs Credit Partners LP, as Syndication Agent, Deutsche
Bank Securities, Inc., The Bank of New York, General Electric
Capital Corporation and CIBC Inc. as Documentation Agents and
Lehman Commercial Paper Inc. as Administrative Agent
(incorporated by reference to Exhibit 10.15 to the Companys
Quarterly Report on Form 10-Q (File No. 033-47040) filed May 14,
2004).10.8(b)
    
    First Amendment to the Amended and Restated Credit Agreement,
dated August 18, 2004, among Cinemark, Inc., CNMK Holdings, Inc.,
Cinemark USA, Inc., the several lenders from time to time parties
thereto, Lehman Brothers Inc. and Goldman Sachs Credit Partners
LP, as Joint Lead Arrangers, Goldman Sachs Credit Partners LP,
as Syndication Agent, Deutsche Bank Securities, Inc., The Bank of
New York, General Electric Capital Corporation and CIBC Inc. as
Documentation Agents and Lehman Commercial Paper Inc. as
Administrative Agent (incorporated by reference to Exhibit
10.15(b) to the Companys Quarterly Report on Form 10-Q (File No.
033-47040) filed May 13, 2005).10.9
    
    Amended and Restated Guaranty and Collateral Agreement, dated
April 2, 2004, among Cinemark, Inc., CNMK Holdings Inc., the
Company and certain of it subsidiaries in favor of Lehman
Commercial Paper, Inc., as administrative agent (incorporated by
reference to Exhibit 10.16 to the Companys Quarterly Report on
Form 10-Q (File No. 033-47040) filed May 14, 2004).10.10(a)
    
    Stock Purchase Agreement dated as of August 18, 2004, among
Cinemark Empreendimentos e Participacoes, Ltda, Venture II Equity
Holdings Corporation, Inc. and Kristal Holdings Limited
(incorporated by reference to Exhibit 10.20(a) to Cinemark,
Inc.s Quarterly Report on Form 10-Q (File No. 333-116292) filed
May 13, 2005).10.10(b)
    
    Stock Purchase Agreement dated as of August 18, 2004, among
Cinemark Empreendimentos e Participacoes, Ltda, Prona Global
Ltd., Messrs. Edgar Gleich, Riccardo Arduini, Moises Pinsky,
Eduardo Alalou, and Robert Luis Leme Klabin (incorporated by
reference to Exhibit 10.20(b) to Cinemark, Inc.s Quarterly
Report on Form 10-Q (File No. 333-116292) filed May 13, 2005).*31.1
    
    Certification of Chief Executive Officer of Cinemark USA, Inc.
Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.*31.2
    
    Certification of Chief Financial Officer of Cinemark USA, Inc.
Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.*32.1
    
    Certification of the Chief Executive Officer of Cinemark USA,
Inc. Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.*32.2
    
    Certification of the Chief Financial Officer of Cinemark USA,
Inc. Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
 
 *
    
    filed herewith