##### 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, 2006
 Commission File Number: 033-47040
 CINEMARK USA, INC.
 (Exact name of registrant as specified in its charter)
 Texas
    
    75-2206284(State or other jurisdiction
    
    (I.R.S. Employerof incorporation or organization)
    
    Identification No.)3900 Dallas ParkwaySuite 500Plano, Texas
    
    75093(Address of principal executive offices)
    
    (Zip Code)
  þ o
  o o þ
 o þ




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CINEMARK USA, INC. AND SUBSIDIARIES
TABLE OF CONTENTS
  
 PagePART I. FINANCIAL INFORMATIONItem 1. Financial StatementsCondensed Consolidated Balance Sheets as of June 30, 2006
(unaudited) and December 31, 2005
    
    
    3Condensed Consolidated Statements of Income (unaudited)
for the three and six months ended June 30, 2006 and 2005
    
    
    4Condensed Consolidated Statements of Cash Flows
(unaudited) for the six months ended June 30, 2006 and 2005
    
    
    5Notes to Condensed Consolidated Financial Statements,
including Note 15 as restated (unaudited)
    
    
    6Item 2. Managements Discussion and Analysis of Financial
Condition and Results of Operations
    
    
    21Item 3. Quantitative and Qualitative Disclosures About Market Risk
    
    
    31Item 4. Controls and Procedures
    
    
    32PART II. OTHER INFORMATIONItem 1. Legal Proceedings
    
    
    33Item 1A. Risk Factors
    
    
    33Item 5. Other Information
    
    
    33Item 6. Exhibits
    
    
    37SIGNATURES
    
    
    40Certification of CEO Pursuant to Section 302Certification of CFO Pursuant to Section 302Certification of CEO Pursuant to Section 906Certification of CFO Pursuant to Section 906
  2




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##### 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 31,2006
    
    
    2005(unaudited)ASSETSCURRENT ASSETSCash and cash equivalents
    
    $
    139,367
    
    
    $
    182,180Inventories
    
    
    5,030
    
    
    
    4,546Accounts receivable
    
    
    22,852
    
    
    
    15,405Prepaid expenses and other
    
    
    3,751
    
    
    
    4,538Total current assets
    
    
    171,000
    
    
    
    206,669THEATRE PROPERTIES AND EQUIPMENT
    
    
    1,431,876
    
    
    
    1,398,798Less accumulated depreciation and amortization
    
    
    635,266
    
    
    
    608,232Theatre properties and equipment  net
    
    
    796,610
    
    
    
    790,566OTHER ASSETSGoodwill
    
    
    43,241
    
    
    
    42,107Intangible assets  net
    
    
    8,927
    
    
    
    9,958Investments in and advances to affiliates
    
    
    7,017
    
    
    
    8,400Deferred charges and other assets  net
    
    
    41,202
    
    
    
    40,040Total other assets
    
    
    100,387
    
    
    
    100,505TOTAL ASSETS
    
    $
    1,067,997
    
    
    $
    1,097,740LIABILITIES AND SHAREHOLDERS EQUITYCURRENT LIABILITIESCurrent portion of long-term debt
    
    $
    5,361
    
    
    $
    6,871Income tax payable
    
    
    4,093
    
    
    
    13,144Accounts payable and accrued expenses
    
    
    129,064
    
    
    
    139,992Total current liabilities
    
    
    138,518
    
    
    
    160,007LONG-TERM LIABILITIESSenior credit agreements
    
    
    258,020
    
    
    
    260,076Senior subordinated notes
    
    
    342,548
    
    
    
    353,330Deferred income taxes
    
    
    9,631
    
    
    
    15,427Deferred lease expenses
    
    
    30,083
    
    
    
    29,518Deferred gain on sale leasebacks
    
    
    3,092
    
    
    
    3,275Deferred revenues and other long-term liabilities
    
    
    6,578
    
    
    
    8,513Total long-term liabilities
    
    
    649,952
    
    
    
    670,139COMMITMENTS AND CONTINGENCIES
    
    
    
    
    
    
    MINORITY INTERESTS IN SUBSIDIARIES
    
    
    16,237
    
    
    
    16,422SHAREHOLDER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
    
    
    77,687
    
    
    
    68,105Retained earnings
    
    
    222,489
    
    
    
    217,942Treasury stock, 57,245 Class B shares at cost
    
    
    (24,233
    )
    
    
    (24,233
    )Accumulated other comprehensive loss
    
    
    (62,196
    )
    
    
    (60,185
    )Total shareholders equity
    
    
    263,290
    
    
    
    251,172TOTAL LIABILITIES AND SHAREHOLDERS EQUITY
    
    $
    1,067,997
    
    
    $
    1,097,740
  3




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##### Table of Contents



CINEMARK USA, INC. AND SUBSIDIARIES
 
 CONDENSED CONSOLIDATED STATEMENTS OF INCOME
 (in thousands, unaudited)
 Three months ended
June 30,
    
    
    Six months ended
June 30,2006
    
    
    2005
    
    
    2006
    
    
    2005REVENUESAdmissions
    
    $
    182,862
    
    
    $
    157,749
    
    
    $
    336,530
    
    
    $
    308,909Concession
    
    
    91,901
    
    
    
    80,335
    
    
    
    169,973
    
    
    
    154,103Other
    
    
    20,342
    
    
    
    14,943
    
    
    
    34,591
    
    
    
    27,696Total revenues
    
    
    295,105
    
    
    
    253,027
    
    
    
    541,094
    
    
    
    490,708COSTS AND EXPENSESCost of operations (excludes depreciation and amortization):Film rentals and advertising
    
    
    100,298
    
    
    
    88,348
    
    
    
    179,246
    
    
    
    167,249Concession supplies
    
    
    14,807
    
    
    
    12,650
    
    
    
    26,847
    
    
    
    24,395Salaries and wages
    
    
    26,959
    
    
    
    25,442
    
    
    
    51,486
    
    
    
    49,725Facility lease expense
    
    
    36,623
    
    
    
    32,945
    
    
    
    72,450
    
    
    
    65,836Utilities and other
    
    
    33,337
    
    
    
    29,683
    
    
    
    65,457
    
    
    
    58,862Total cost of operations
    
    
    212,024
    
    
    
    189,068
    
    
    
    395,486
    
    
    
    366,067General and administrative expenses
    
    
    15,398
    
    
    
    12,210
    
    
    
    29,444
    
    
    
    24,505Depreciation and amortization
    
    
    20,011
    
    
    
    19,667
    
    
    
    40,180
    
    
    
    37,921Impairment of long-lived assets
    
    
    647
    
    
    
    
    
    
    
    923
    
    
    
    226Loss on sale of assets and other
    
    
    815
    
    
    
    150
    
    
    
    1,543
    
    
    
    838Total costs and expenses
    
    
    248,895
    
    
    
    221,095
    
    
    
    467,576
    
    
    
    429,557OPERATING INCOME
    
    
    46,210
    
    
    
    31,932
    
    
    
    73,518
    
    
    
    61,151OTHER INCOME (EXPENSE)Interest expense
    
    
    (11,828
    )
    
    
    (10,943
    )
    
    
    (23,653
    )
    
    
    (21,521
    )Amortization of debt issue costs
    
    
    (701
    )
    
    
    (689
    )
    
    
    (1,405
    )
    
    
    (1,378
    )Interest income
    
    
    1,580
    
    
    
    1,194
    
    
    
    3,474
    
    
    
    2,024Foreign currency exchange gain (loss)
    
    
    695
    
    
    
    (878
    )
    
    
    755
    
    
    
    (960
    )Loss on early retirement of debt
    
    
    (941
    )
    
    
    
    
    
    
    (941
    )
    
    
    Equity in income (loss) of affiliates
    
    
    (79
    )
    
    
    28
    
    
    
    (1,268
    )
    
    
    122Minority interests in income of subsidiaries
    
    
    (885
    )
    
    
    (340
    )
    
    
    (1,157
    )
    
    
    (440
    )Total other expenses
    
    
    (12,159
    )
    
    
    (11,628
    )
    
    
    (24,195
    )
    
    
    (22,153
    )INCOME BEFORE INCOME TAXES
    
    
    34,051
    
    
    
    20,304
    
    
    
    49,323
    
    
    
    38,998Income taxes
    
    
    11,691
    
    
    
    5,837
    
    
    
    13,031
    
    
    
    12,478NET INCOME
    
    $
    22,360
    
    
    $
    14,467
    
    
    $
    36,292
    
    
    $
    26,520
  4




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##### Table of Contents



CINEMARK USA, INC. AND SUBSIDIARIES
 
 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
 (in thousands, unaudited)
 Six months ended June 30,2006
    
    
    2005OPERATING ACTIVITIESNet income
    
    $
    36,292
    
    
    $
    26,520Noncash items in net income:Depreciation
    
    
    39,047
    
    
    
    36,219Amortization of intangible and other assets
    
    
    1,133
    
    
    
    1,702Amortization of foreign advanced rents
    
    
    582
    
    
    
    699Amortization of debt issue costs
    
    
    1,405
    
    
    
    1,378Amortization of gain on sale leasebacks
    
    
    (183
    )
    
    
    (183
    )Amortization of debt premium
    
    
    (782
    )
    
    
    (782
    )Amortization of deferred revenues
    
    
    (188
    )
    
    
    (154
    )Impairment of long-lived assets
    
    
    923
    
    
    
    226Stock option compensation expense
    
    
    1,432
    
    
    
    Loss on sale of assets and other
    
    
    1,543
    
    
    
    838Write-off unamortized debt issue costs related to early retirement of debt
    
    
    222
    
    
    
    Deferred lease expenses
    
    
    565
    
    
    
    681Deferred income tax expenses
    
    
    (5,796
    )
    
    
    (2,300
    )Equity in (income) loss of affiliates
    
    
    1,268
    
    
    
    (122
    )Minority interests in income of subsidiaries
    
    
    1,157
    
    
    
    440Changes in assets and liabilities:Inventories
    
    
    (484
    )
    
    
    (598
    )Accounts receivable
    
    
    (7,447
    )
    
    
    (4,026
    )Prepaid expenses and other
    
    
    787
    
    
    
    (57
    )Other assets
    
    
    (4,613
    )
    
    
    (11,986
    )Advances with affiliates
    
    
    (156
    )
    
    
    (122
    )Accounts payable and accrued expenses
    
    
    (7,679
    )
    
    
    (4,383
    )Other long-term liabilities
    
    
    404
    
    
    
    294Income tax receivable/payable
    
    
    (901
    )
    
    
    13,836Net cash provided by operating activities
    
    
    58,531
    
    
    
    58,120INVESTING ACTIVITIESAdditions to theatre properties and equipment
    
    
    (55,064
    )
    
    
    (27,849
    )Proceeds from sale of theatre properties and equipment
    
    
    178
    
    
    
    1,249Return of capital from affiliates
    
    
    271
    
    
    
    284Net cash used for investing activities
    
    
    (54,615
    )
    
    
    (26,316
    )FINANCING ACTIVITIESCapital contribution from parent
    
    
    
    
    
    
    6,935Dividends to parent
    
    
    (31,745
    )
    
    
    Retirement of senior subordinated notes
    
    
    (10,000
    )
    
    
    Proceeds from long-term debt
    
    
    963
    
    
    
    Repayments of long-term debt
    
    
    (3,570
    )
    
    
    (3,238
    )Other
    
    
    (1,601
    )
    
    
    186Net cash provided by (used for) financing activities
    
    
    (45,953
    )
    
    
    3,883Effect of exchange rate changes on cash and cash equivalents
    
    
    (776
    )
    
    
    2,910INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
    
    
    (42,813
    )
    
    
    38,597CASH AND CASH EQUIVALENTS:Beginning of period
    
    
    182,180
    
    
    
    100,228End of period
    
    $
    139,367
    
    
    $
    138,825
   5




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CINEMARK USA, INC. AND SUBSIDIARIES
 
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 (IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)
 1. The Company and Basis of Presentation
     2. New
Accounting Pronouncements and Tax Regulations
 Accounting for Uncertainty in Income Taxes Accounting for
Income Taxes
  3. Investment in National CineMedia
   6




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CINEMARK USA, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)
    4. Stock Option Accounting
    September 30, 2004
    
    January 28, 2005Grant
    
    GrantExpected life
    
    6.5 years
    
    6.5 yearsExpected volatility1
    
    39%
    
    44%Risk-free interest rate
    
    3.79%
    
    3.93%Dividend yield
    
    0%
    
    0%
 
 1
    
    Expected volatility is based on historical volatility of the common stock price of comparable public companies.  Number of
    
    Weighted AverageOptions
    
    Exercise PriceOutstanding at 12/31/05
    
    
    2,365,665
    
    
    $
    22.58Granted
    
    
    
    
    
    $
    Exercised
    
    
    
    
    
    $
    Forfeited
    
    
    (3,075
    )
    
    $
    22.58Outstanding at 6/30/06
    
    
    2,362,590
    
    
    $
    22.58
 7




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CINEMARK USA, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)
 Share-Based Payment
  Accounting for Stock-Based Compensation Accounting for Stock-Based
Compensation Transition and Disclosure
 Three Months Ended
    
    Six Months EndedJune 30, 2005
    
    June 30, 2005Net income as reported
    
    $
    14,467
    
    
    $
    26,520Compensation expense
included in reported
net income, net of
tax
    
    
    
    
    
    
    Compensation expense
under fair value
method, net of tax
    
    
    (741
    )
    
    
    (1,482
    )Pro-forma net income
    
    $
    13,726
    
    
    $
    25,038
 5. Early Retirement of Long-Term Debt
  3 4 3 4
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CINEMARK USA, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)
 6. Goodwill and Other Intangible Assets
  Tax Impact of
    
    Foreign CurrencyBalance at
    
    Tax Deductible
    
    Translation
    
    Balance atDecember 31, 2005
    
    Goodwill
    
    Adjustment
    
    June 30, 2006United States
    
    $
    4,265
    
    
    $
    
    
    
    $
    
    
    
    $
    4,265Brazil
    
    
    29,730
    
    
    
    (63
    )
    
    
    1,656
    
    
    
    31,323Mexico
    
    
    1,830
    
    
    
    
    
    
    
    (113
    )
    
    
    1,717Argentina
    
    
    231
    
    
    
    
    
    
    
    (4
    )
    
    
    227Chile
    
    
    3,490
    
    
    
    
    
    
    
    (360
    )
    
    
    3,130Peru
    
    
    2,561
    
    
    
    
    
    
    
    18
    
    
    
    2,579Total
    
    $
    42,107
    
    
    $
    (63
    )
    
    $
    1,197
    
    
    $
    43,241
  Foreign CurrencyBalance at
    
    
    
    
    
    Translation
    
    Balance atDecember 31, 2005
    
    Additions
    
    Adjustment
    
    June 30, 2006Intangible assets with finite lives:Capitalized licensing fees:Gross carrying amount
    
    $
    8,250
    
    
    $
    
    
    
    $
    
    
    
    $
    8,250Accumulated amortization
    
    
    (2,591
    )
    
    
    (276
    )
    
    
    
    
    
    
    (2,867
    )Net carrying amount
    
    $
    5,659
    
    
    $
    (276
    )
    
    $
    
    
    
    $
    5,383Vendor contracts:Gross carrying amount
    
    
    3,217
    
    
    
    
    
    
    
    68
    
    
    
    3,285Accumulated amortization
    
    
    (1,703
    )
    
    
    (682
    )
    
    
    
    
    
    
    (2,385
    )Net carrying amount
    
    $
    1,514
    
    
    $
    (682
    )
    
    $
    68
    
    
    $
    900Net favorable leases:Gross carrying amount
    
    
    1,392
    
    
    
    
    
    
    
    42
    
    
    
    1,434Accumulated amortization
    
    
    (232
    )
    
    
    (86
    )
    
    
    
    
    
    
    (318
    )Net carrying amount
    
    $
    1,160
    
    
    $
    (86
    )
    
    $
    42
    
    
    $
    1,116Other intangible assets:Gross carrying amount
    
    
    429
    
    
    
    
    
    
    
    (3
    )
    
    
    426Accumulated amortization
    
    
    (79
    )
    
    
    (16
    )
    
    
    
    
    
    
    (95
    )Net carrying amount
    
    $
    350
    
    
    $
    (16
    )
    
    $
    (3
    )
    
    $
    331Total net intangible assets with finite lives
    
    $
    8,683
    
    
    $
    (1,060
    )
    
    $
    107
    
    
    $
    7,730Intangible assets with indefinite lives:Tradename
    
    
    1,259
    
    
    
    
    
    
    
    (78
    )
    
    
    1,181Other unamortized intangible assets
    
    
    16
    
    
    
    
    
    
    
    
    
    
    
    16Total intangible assets  net
    
    $
    9,958
    
    
    $
    (1,060
    )
    
    $
    29
    
    
    $
    8,927
 9




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CINEMARK USA, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)
  For the six months ended December 31, 2006
    
    $
    608For the twelve months ended December 31, 2007
    
    
    1,203For the twelve months ended December 31, 2008
    
    
    953For the twelve months ended December 31, 2009
    
    
    724For the twelve months ended December 31, 2010
    
    
    692Thereafter
    
    
    3,550Total
    
    $
    7,730
 7. Impairment of Long-Lived Assets
 Accounting for the Impairment or Disposal of Long-Lived
Assets
  8. Foreign Currency Translation
    10




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CINEMARK USA, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)
    9. Comprehensive Income
 Reporting Comprehensive Income
 Three Months Ended
    
    Six Months EndedJune 30,
    
    June 30,2006
    
    2005
    
    2006
    
    2005Net income
    
    $
    22,360
    
    
    $
    14,467
    
    
    $
    36,292
    
    
    $
    26,520Foreign currency
translation
adjustment
    
    
    (4,466
    )
    
    
    15,955
    
    
    
    (2,011
    )
    
    
    15,225Comprehensive income
    
    $
    17,894
    
    
    $
    30,422
    
    
    $
    34,281
    
    
    $
    41,745
 10. Supplemental Cash Flow Information
  Six months endedJune 30,2006
    
    2005Cash paid for interest
    
    $
    26,196
    
    
    $
    21,892Net cash paid (refunds received) for income taxes
    
    $
    19,567
    
    
    $
    (6,056
    )Noncash investing and financing activities:Change in construction lease obligations
related to construction of theatres
    
    $
    (2,151
    )
    
    $
    8,315Changes in accounts payable and accrued
expenses for the acquisition of theatre
properties and equipment
    
    $
    (2,356
    )
    
    $
    2,081Capital contribution from Cinemark, Inc.
    
    $
    8,150
    
    
    $
    
 11




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CINEMARK USA, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)
 11. Financial Information About Geographic Areas
  Six months endedJune 30,Revenues
    
    2006
    
    2005U.S. and Canada
    
    $
    396,996
    
    
    $
    367,616Brazil
    
    
    64,417
    
    
    
    51,084Mexico
    
    
    36,295
    
    
    
    36,049Other foreign countries
    
    
    44,250
    
    
    
    36,719Eliminations
    
    
    (864
    )
    
    
    (760
    )Total
    
    $
    541,094
    
    
    $
    490,708June 30,
    
    December 31,Theatre Properties and Equipment-net
    
    2006
    
    2005U.S. and Canada
    
    $
    645,985
    
    
    $
    634,938Brazil
    
    
    52,591
    
    
    
    52,371Mexico
    
    
    51,015
    
    
    
    55,366Other foreign countries
    
    
    47,019
    
    
    
    47,891Total
    
    $
    796,610
    
    
    $
    790,566
 12. Related Party Transactions
     12




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CINEMARK USA, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)
 13. Litigation
  14. Subsequent Event
   15. Condensed Consolidating Financial Information of Subsidiary Guarantors  Restated
        
    
    Shareholders equity balances in 1999 presented in the beginning balance sheet
information for the parent and subsidiary guarantors financial information improperly
included dividends received from their respective subsidiaries;
    
    Certain investments in affiliate subsidiaries were not properly eliminated within the
parent and subsidiary guarantors balance sheet information;
    
    Cumulative translation adjustments were not properly reflected within the subsidiary
guarantors and subsidiary non-guarantors balance sheet information, which in turn
impacted the investment in and advances to affiliates and other shareholders equity
balances presented for the parent and the subsidiary guarantors, respectively;
 13




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CINEMARK USA, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)
 
    
    Dividends paid by certain subsidiary guarantors and subsidiary non-guarantors entities
were improperly presented as part of cash flows from investing activities rather than
financing activities.
  14




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CINEMARK USA, INC. AND SUBSIDIARIES
SUBSIDIARY GUARANTORS
CONDENSED CONSOLIDATING BALANCE SHEET INFORMATION
JUNE 30, 2006
 Parent
    
    Subsidiary
    
    SubsidiaryCompany
    
    Guarantors
    
    Non-Guarantors
    
    Eliminations
    
    ConsolidatedASSETSCURRENT ASSETSCash and cash equivalents
    
    $
    49,627
    
    
    $
    36,757
    
    
    $
    52,983
    
    
    $
    
    
    
    $
    139,367Other current assets
    
    
    32,942
    
    
    
    34,718
    
    
    
    19,392
    
    
    
    (55,419
    )
    
    
    31,633Total current assets
    
    
    82,569
    
    
    
    71,475
    
    
    
    72,375
    
    
    
    (55,419
    )
    
    
    171,000THEATRE PROPERTIES AND EQUIPMENT  net
    
    
    290,881
    
    
    
    335,238
    
    
    
    170,491
    
    
    
    
    
    
    
    796,610OTHER ASSETS
    
    
    631,137
    
    
    
    367,673
    
    
    
    140,260
    
    
    
    (1,038,683
    )
    
    
    100,387TOTAL ASSETS
    
    $
    1,004,587
    
    
    $
    774,386
    
    
    $
    383,126
    
    
    $
    (1,094,102
    )
    
    $
    1,067,997LIABILITIES AND SHAREHOLDERS EQUITYCURRENT LIABILITIESCurrent portion of long-term debt
    
    $
    2,652
    
    
    $
    
    
    
    $
    2,709
    
    
    $
    
    
    
    $
    5,361Accounts payable and accrued expenses
    
    
    88,085
    
    
    
    31,760
    
    
    
    65,376
    
    
    
    (52,064
    )
    
    
    133,157Total current liabilities
    
    
    90,737
    
    
    
    31,760
    
    
    
    68,085
    
    
    
    (52,064
    )
    
    
    138,518LONG-TERM LIABILITIESLong-term debt, less current portion
    
    
    612,723
    
    
    
    27,150
    
    
    
    65,832
    
    
    
    (105,137
    )
    
    
    600,568Other long-term liabilities and deferrals
    
    
    37,837
    
    
    
    83,603
    
    
    
    5,942
    
    
    
    (77,998
    )
    
    
    49,384Total long-term liabilities
    
    
    650,560
    
    
    
    110,753
    
    
    
    71,774
    
    
    
    (183,135
    )
    
    
    649,952COMMITMENTS AND CONTINGENCIES
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    MINORITY INTERESTS IN SUBSIDIARIES
    
    
    
    
    
    
    302
    
    
    
    15,935
    
    
    
    
    
    
    
    16,237SHAREHOLDERS EQUITYCommon stock
    
    
    49,543
    
    
    
    17
    
    
    
    167,802
    
    
    
    (167,819
    )
    
    
    49,543Other shareholders equity
    
    
    213,747
    
    
    
    631,554
    
    
    
    59,530
    
    
    
    (691,084
    )
    
    
    213,747Total shareholders equity
    
    
    263,290
    
    
    
    631,571
    
    
    
    227,332
    
    
    
    (858,903
    )
    
    
    263,290TOTAL LIABILITIES AND SHAREHOLDERS EQUITY
    
    $
    1,004,587
    
    
    $
    774,386
    
    
    $
    383,126
    
    
    $
    (1,094,102
    )
    
    $
    1,067,997
 15




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CINEMARK USA, INC. AND SUBSIDIARIES
SUBSIDIARY GUARANTORS
CONDENSED CONSOLIDATING STATEMENT OF INCOME INFORMATION
SIX MONTHS ENDED JUNE 30, 2006
 Parent
    
    Subsidiary
    
    SubsidiaryCompany
    
    Guarantors
    
    Non-Guarantors
    
    Eliminations
    
    ConsolidatedREVENUES
    
    $
    231,131
    
    
    $
    183,608
    
    
    $
    153,388
    
    
    $
    (27,033
    )
    
    $
    541,094COSTS AND EXPENSESCost of operations
    
    
    197,532
    
    
    
    109,779
    
    
    
    115,208
    
    
    
    (27,033
    )
    
    
    395,486General and administrative expenses
    
    
    2,747
    
    
    
    17,680
    
    
    
    9,017
    
    
    
    
    
    
    
    29,444Depreciation and amortization
    
    
    12,268
    
    
    
    13,139
    
    
    
    14,773
    
    
    
    
    
    
    
    40,180Impairment of long-lived assets
    
    
    923
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    923Loss on sale of assets and other
    
    
    808
    
    
    
    703
    
    
    
    32
    
    
    
    
    
    
    
    1,543Total costs and expenses
    
    
    214,278
    
    
    
    141,301
    
    
    
    139,030
    
    
    
    (27,033
    )
    
    
    467,576OPERATING INCOME
    
    
    16,853
    
    
    
    42,307
    
    
    
    14,358
    
    
    
    
    
    
    
    73,518OTHER INCOME (EXPENSE)Interest expense
    
    
    (23,539
    )
    
    
    (1,122
    )
    
    
    (3,068
    )
    
    
    4,076
    
    
    
    (23,653
    )Amortization of debt issue costs
    
    
    (1,393
    )
    
    
    
    
    
    
    (12
    )
    
    
    
    
    
    
    (1,405
    )Interest income
    
    
    2,906
    
    
    
    3,420
    
    
    
    1,224
    
    
    
    (4,076
    )
    
    
    3,474Foreign currency exchange gain (loss)
    
    
    
    
    
    
    (1
    )
    
    
    756
    
    
    
    
    
    
    
    755Loss on early retirement of debt
    
    
    (941
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (941
    )Equity in income (loss) of affiliates
    
    
    46,451
    
    
    
    9,286
    
    
    
    (1,310
    )
    
    
    (55,695
    )
    
    
    (1,268
    )Minority interests in income of subsidiaries
    
    
    
    
    
    
    (123
    )
    
    
    (1,034
    )
    
    
    
    
    
    
    (1,157
    )Total other income (expense)
    
    
    23,484
    
    
    
    11,460
    
    
    
    (3,444
    )
    
    
    (55,695
    )
    
    
    (24,195
    )INCOME BEFORE INCOME TAXES
    
    
    40,337
    
    
    
    53,767
    
    
    
    10,914
    
    
    
    (55,695
    )
    
    
    49,323Income taxes
    
    
    4,045
    
    
    
    6,532
    
    
    
    2,454
    
    
    
    
    
    
    
    13,031NET INCOME
    
    $
    36,292
    
    
    $
    47,235
    
    
    $
    8,460
    
    
    $
    (55,695
    )
    
    $
    36,292
 16




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CINEMARK USA, INC. AND SUBSIDIARIES
SUBSIDIARY GUARANTORS
CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS INFORMATION
SIX MONTHS ENDED JUNE 30, 2006
 Parent
    
    Subsidiary
    
    SubsidiaryCompany
    
    Guarantors
    
    Non-Guarantors
    
    Eliminations
    
    ConsolidatedOPERATING ACTIVITIESNet income
    
    $
    36,292
    
    
    $
    47,235
    
    
    $
    8,460
    
    
    $
    (55,695
    )
    
    $
    36,292Noncash items in net income
    
    
    (37,593
    )
    
    
    12,513
    
    
    
    18,081
    
    
    
    49,327
    
    
    
    42,328Changes in assets and liabilities
    
    
    (27,423
    )
    
    
    (9,415
    )
    
    
    4,700
    
    
    
    12,049
    
    
    
    (20,089
    )Net cash provided by (used for) operating activities
    
    
    (28,724
    )
    
    
    50,333
    
    
    
    31,241
    
    
    
    5,681
    
    
    
    58,531INVESTING ACTIVITIESAdditions to theatre properties and equipment
    
    
    (18,269
    )
    
    
    (27,030
    )
    
    
    (9,765
    )
    
    
    
    
    
    
    (55,064
    )Proceeds from sale of theatre properties and
equipment
    
    
    3
    
    
    
    
    
    
    
    175
    
    
    
    
    
    
    
    178Net transactions with affiliates
    
    
    34,313
    
    
    
    (15,293
    )
    
    
    (5,938
    )
    
    
    (12,811
    )
    
    
    271Net cash provided by (used for) investing activities
    
    
    16,047
    
    
    
    (42,323
    )
    
    
    (15,528
    )
    
    
    (12,811
    )
    
    
    (54,615
    )FINANCING ACTIVITIESRetirement of senior subordinated notes
    
    
    (10,000
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (10,000
    )Proceeds from long-term debt
    
    
    3
    
    
    
    
    
    
    
    960
    
    
    
    
    
    
    
    963Repayments of long-term debt
    
    
    (1,356
    )
    
    
    
    
    
    
    (2,214
    )
    
    
    
    
    
    
    (3,570
    )Change in intercompany notes
    
    
    
    
    
    
    (3,068
    )
    
    
    (2,790
    )
    
    
    5,858
    
    
    
    Dividends to parent
    
    
    (31,745
    )
    
    
    
    
    
    
    (1,905
    )
    
    
    1,905
    
    
    
    (31,745
    )Other
    
    
    (259
    )
    
    
    (100
    )
    
    
    (609
    )
    
    
    (633
    )
    
    
    (1,601
    )Net cash used for financing activities
    
    
    (43,357
    )
    
    
    (3,168
    )
    
    
    (6,558
    )
    
    
    7,130
    
    
    
    (45,953
    )Effect of exchange rate changes on cash and cash equivalents
    
    
    
    
    
    
    
    
    
    
    (776
    )
    
    
    
    
    
    
    (776
    )INCREASE
(DECREASE) IN CASH AND CASH EQUIVALENTS
    
    
    (56,034
    )
    
    
    4,842
    
    
    
    8,379
    
    
    
    
    
    
    
    (42,813
    )CASH AND CASH EQUIVALENTS:Beginning of period
    
    
    105,661
    
    
    
    31,915
    
    
    
    44,604
    
    
    
    
    
    
    
    182,180End of period
    
    $
    49,627
    
    
    $
    36,757
    
    
    $
    52,983
    
    
    $
    
    
    
    $
    139,367
 17




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CINEMARK USA, INC. AND SUBSIDIARIES
SUBSIDIARY GUARANTORS
CONDENSED CONSOLIDATING BALANCE SHEET INFORMATION
DECEMBER 31, 2005
 Parent
    
    Subsidiary
    
    SubsidiaryCompany
    
    Guarantors
    
    Non-Guarantors
    
    Eliminations
    
    ConsolidatedASSETSCURRENT ASSETSCash and cash equivalents
    
    $
    105,661
    
    
    $
    31,915
    
    
    $
    44,604
    
    
    $
    
    
    
    $
    182,180Other current assets
    
    
    23,869
    
    
    
    25,512
    
    
    
    16,059
    
    
    
    (40,951
    )
    
    
    24,489Total current assets
    
    
    129,530
    
    
    
    57,427
    
    
    
    60,663
    
    
    
    (40,951
    )
    
    
    206,669THEATRE PROPERTIES AND EQUIPMENT  net
    
    
    290,834
    
    
    
    323,820
    
    
    
    175,912
    
    
    
    
    
    
    
    790,566OTHER ASSETS
    
    
    591,827
    
    
    
    344,660
    
    
    
    135,060
    
    
    
    (971,042
    )
    
    
    100,505TOTAL ASSETS
    
    $
    1,012,191
    
    
    $
    725,907
    
    
    $
    371,635
    
    
    $
    (1,011,993
    )
    
    $
    1,097,740LIABILITIES AND SHAREHOLDERS EQUITYCURRENT LIABILITIESCurrent portion of long-term debt
    
    $
    2,656
    
    
    $
    
    
    
    $
    4,215
    
    
    $
    
    
    
    $
    6,871Accounts payable and accrued expenses
    
    
    104,794
    
    
    
    31,592
    
    
    
    54,254
    
    
    
    (37,504
    )
    
    
    153,136Total current liabilities
    
    
    107,450
    
    
    
    31,592
    
    
    
    58,469
    
    
    
    (37,504
    )
    
    
    160,007LONG-TERM LIABILITIESLong-term debt, less current portion
    
    
    606,229
    
    
    
    30,217
    
    
    
    69,540
    
    
    
    (92,580
    )
    
    
    613,406Other long-term liabilities and deferrals
    
    
    47,340
    
    
    
    77,455
    
    
    
    5,507
    
    
    
    (73,569
    )
    
    
    56,733Total long-term liabilities
    
    
    653,569
    
    
    
    107,672
    
    
    
    75,047
    
    
    
    (166,149
    )
    
    
    670,139COMMITMENTS AND CONTINGENCIES
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    MINORITY INTERESTS IN SUBSIDIARIES
    
    
    
    
    
    
    280
    
    
    
    16,142
    
    
    
    
    
    
    
    16,422SHAREHOLDERS EQUITYCommon stock
    
    
    49,543
    
    
    
    17
    
    
    
    167,804
    
    
    
    (167,821
    )
    
    
    49,543Other shareholders equity
    
    
    201,629
    
    
    
    586,346
    
    
    
    54,173
    
    
    
    (640,519
    )
    
    
    201,629Total shareholders equity
    
    
    251,172
    
    
    
    586,363
    
    
    
    221,977
    
    
    
    (808,340
    )
    
    
    251,172TOTAL LIABILITIES AND SHAREHOLDERS EQUITY
    
    $
    1,012,191
    
    
    $
    725,907
    
    
    $
    371,635
    
    
    $
    (1,011,993
    )
    
    $
    1,097,740
 18




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CINEMARK USA, INC. AND SUBSIDIARIES
SUBSIDIARY GUARANTORS
CONDENSED CONSOLIDATING STATEMENT OF INCOME INFORMATION
SIX MONTHS ENDED JUNE 30, 2005
AS RESTATED
 Parent
    
    Subsidiary
    
    SubsidiaryCompany
    
    Guarantors
    
    Non-Guarantors
    
    Eliminations
    
    ConsolidatedREVENUES
    
    $
    223,476
    
    
    $
    161,025
    
    
    $
    131,838
    
    
    $
    (25,631
    )
    
    $
    490,708COSTS AND EXPENSESCost of operations
    
    
    194,938
    
    
    
    97,805
    
    
    
    98,955
    
    
    
    (25,631
    )
    
    
    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
    
    
    
    124,639
    
    
    
    121,033
    
    
    
    (25,631
    )
    
    
    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
    
    
    37,424
    
    
    
    5,698
    
    
    
    38
    
    
    
    (43,038
    )
    
    
    122Minority interests in income of
subsidiaries
    
    
    
    
    
    
    (116
    )
    
    
    (324
    )
    
    
    
    
    
    
    (440
    )Total other income (expense)
    
    
    16,807
    
    
    
    6,916
    
    
    
    (2,838
    )
    
    
    (43,038
    )
    
    
    (22,153
    )INCOME BEFORE INCOME TAXES
    
    
    30,767
    
    
    
    43,302
    
    
    
    7,967
    
    
    
    (43,038
    )
    
    
    38,998Income taxes
    
    
    4,247
    
    
    
    6,147
    
    
    
    2,084
    
    
    
    
    
    
    
    12,478NET INCOME
    
    $
    26,520
    
    
    $
    37,155
    
    
    $
    5,883
    
    
    $
    (43,038
    )
    
    $
    26,520
 19




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CINEMARK USA, INC. AND SUBSIDIARIES
SUBSIDIARY GUARANTORS
CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS INFORMATION
SIX MONTHS ENDED JUNE 30, 2005
AS RESTATED
 Parent
    
    Subsidiary
    
    SubsidiaryCompany
    
    Guarantors
    
    Non-Guarantors
    
    Eliminations
    
    ConsolidatedOPERATING ACTIVITIESNet income
    
    $
    26,520
    
    
    $
    37,155
    
    
    $
    5,883
    
    
    $
    (43,038
    )
    
    $
    26,520Noncash items in net income
    
    
    (32,805
    )
    
    
    12,875
    
    
    
    15,534
    
    
    
    43,038
    
    
    
    38,642Changes in assets and liabilities
    
    
    12,635
    
    
    
    (15,995
    )
    
    
    (8,700
    )
    
    
    5,018
    
    
    
    (7,042
    )Net cash provided by operating activities
    
    
    6,350
    
    
    
    34,035
    
    
    
    12,717
    
    
    
    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
    )
    
    
    6,260
    
    
    
    (7,764
    )
    
    
    284Net cash provided by (used for) investing activities
    
    
    13,206
    
    
    
    (29,737
    )
    
    
    (2,021
    )
    
    
    (7,764
    )
    
    
    (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
    
    
    
    Other
    
    
    538
    
    
    
    (150
    )
    
    
    (282
    )
    
    
    80
    
    
    
    186Net cash provided by (used for) financing activities
    
    
    6,122
    
    
    
    (150
    )
    
    
    (4,835
    )
    
    
    2,746
    
    
    
    3,883Effect of exchange rate changes on cash and cash equivalents
    
    
    
    
    
    
    
    
    
    
    2,910
    
    
    
    
    
    
    
    2,910INCREASE IN CASH AND CASH EQUIVALENTS
    
    
    25,678
    
    
    
    4,148
    
    
    
    8,771
    
    
    
    
    
    
    
    38,597CASH AND CASH EQUIVALENTS:Beginning of period
    
    
    23,568
    
    
    
    17,553
    
    
    
    59,107
    
    
    
    
    
    
    
    100,228End of period
    
    $
    49,246
    
    
    $
    21,701
    
    
    $
    67,878
    
    
    $
    
    
    
    $
    138,825
 20




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##### Table of Contents



Item 2.
Managements Discussion and Analysis of Financial Condition and Results of Operations
  Ice Age 2 The
Meltdown The Da Vinci Code, X Men 3, Cars Superman Returns. Pirates of the Carribean Dead Mans Chest,
Talladega Nights, Casino Royal Happy Feet.
      Critical Accounting Policies
  21




---



##### Table of Contents



Revenue and Expense Recognition
     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 marketplace with our other theatres;
 22




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##### Table of Contents




    
    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.
  Goodwill
 ,
 Acquisitions
  Income Taxes
 Accounting for Contingencies
 23




---



##### Table of Contents



Results
of Operations
  % of RevenuesThree Months Ended
    
    
    Six Months EndedJune 30,
    
    
    June 30,2006
    
    
    2005
    
    
    2006
    
    
    2005RevenuesAdmissions
    
    
    62.0
    %
    
    
    62.3
    %
    
    
    62.2
    %
    
    
    63.0
    %Concession
    
    
    31.1
    %
    
    
    31.7
    %
    
    
    31.4
    %
    
    
    31.4
    %Other
    
    
    6.9
    %
    
    
    6.0
    %
    
    
    6.4
    %
    
    
    5.6
    %Total revenues
    
    
    100.0
    %
    
    
    100.0
    %
    
    
    100.0
    %
    
    
    100.0
    %Cost of operations 1
    
    
    71.8
    %
    
    
    74.7
    %
    
    
    73.1
    %
    
    
    74.6
    %General and administrative expenses
    
    
    5.2
    %
    
    
    4.8
    %
    
    
    5.4
    %
    
    
    5.0
    %Depreciation and amortization
    
    
    6.8
    %
    
    
    7.8
    %
    
    
    7.4
    %
    
    
    7.8
    %Impairment of long-lived assets
    
    
    0.2
    %
    
    
    0.0
    %
    
    
    0.2
    %
    
    
    0.0
    %Loss on sale of assets and other
    
    
    0.3
    %
    
    
    0.1
    %
    
    
    0.3
    %
    
    
    0.2
    %Total costs and expenses
    
    
    84.3
    %
    
    
    87.4
    %
    
    
    86.4
    %
    
    
    87.6
    %Operating income
    
    
    15.7
    %
    
    
    12.6
    %
    
    
    13.6
    %
    
    
    12.4
    %
 
 1
    
    Excludes depreciation and amortization. Three months ended June 30, 2006 and 2005
 Revenues.
 Three Months EndedJune 30,2006
    
    
    2005
    
    
    % ChangeAdmissions revenues (in millions)
    
    $
    182.9
    
    
    $
    157.7
    
    
    
    16.0
    %Concession revenues (in millions)
    
    $
    91.9
    
    
    $
    80.3
    
    
    
    14.4
    %Other revenues (in millions)
    
    $
    20.3
    
    
    $
    15.0
    
    
    
    35.3
    %Total revenues (in millions)
    
    $
    295.1
    
    
    $
    253.0
    
    
    
    16.6
    %Attendance (in millions)
    
    
    44.9
    
    
    
    40.4
    
    
    
    11.3
    %Average ticket price
    
    $
    4.07
    
    
    $
    3.91
    
    
    
    4.2
    %Concession revenues per patron
    
    $
    2.05
    
    
    $
    1.99
    
    
    
    2.8
    %Revenues per screen
    
    $
    87,225
    
    
    $
    78,849
    
    
    
    10.6
    %
  24




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##### Table of Contents



Cost of Operations.
   General and Administrative Expenses.
 Depreciation
and Amortization.
 Impairment of Long-Lived Assets
 Loss on Sale of Assets and Other.
 Interest Expense.
 Loss on Early Retirement of Debt
 Income Taxes.
 Six months ended June 30, 2006 and 2005
 Revenues.
 25




---



##### Table of Contents



Six Months EndedJune 30,2006
    
    
    2005
    
    
    % ChangeAdmissions revenues (in millions)
    
    $
    336.5
    
    
    $
    308.9
    
    
    
    8.9
    %Concession revenues (in millions)
    
    $
    170.0
    
    
    $
    154.1
    
    
    
    10.3
    %Other revenues (in millions)
    
    $
    34.6
    
    
    $
    27.7
    
    
    
    24.9
    %Total revenues (in millions)
    
    $
    541.1
    
    
    $
    490.7
    
    
    
    10.3
    %Attendance (in millions)
    
    
    83.4
    
    
    
    80.4
    
    
    
    3.8
    %Average ticket price
    
    $
    4.03
    
    
    $
    3.84
    
    
    
    5.0
    %Concession revenues per patron
    
    $
    2.04
    
    
    $
    1.92
    
    
    
    6.3
    %Revenues per screen
    
    $
    161,026
    
    
    $
    153,442
    
    
    
    4.9
    %
  Cost of Operations.
   General and Administrative Expenses.
 Depreciation and Amortization.
 Impairment of Long-Lived Assets
 26




---



##### Table of Contents



Loss on Sale of Assets and Other.
 Interest Expense.
 Loss on Early Retirement of Debt
 Income Taxes.
 Liquidity and Capital Resources
 Operating Activities
  Investing Activities
    27




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##### Table of Contents



Financing Activities
    Payments Due by Period(in millions)Less Than
    
    
    
    
    
    
    
    
    
    
    AfterContractual Obligations
    
    Total
    
    
    One Year
    
    
    1 - 3 Years
    
    
    4 - 5 Years
    
    
    5 YearsLong-term debt
    
    $
    605.9
    
    
    $
    5.4
    
    
    $
    9.9
    
    
    $
    248.1
    
    
    $
    342.5Scheduled interest
payments on long-term
debt1
    
    
    271.0
    
    
    
    48.0
    
    
    
    94.7
    
    
    
    81.0
    
    
    
    47.3Lease obligations
    
    
    1,534.7
    
    
    
    125.5
    
    
    
    258.4
    
    
    
    243.4
    
    
    
    907.4Letters of credit
    
    
    0.1
    
    
    
    0.1
    
    
    
    
    
    
    
    
    
    
    
    Employment agreements
    
    
    9.3
    
    
    
    3.1
    
    
    
    6.2
    
    
    
    
    
    
    
    Purchase commitments 2
    
    
    71.4
    
    
    
    26.7
    
    
    
    42.9
    
    
    
    1.2
    
    
    
    0.6Total obligations
    
    $
    2,492.4
    
    
    $
    208.8
    
    
    $
    412.1
    
    
    $
    573.7
    
    
    $
    1,297.8
 
 1
    
    Amounts include scheduled interest payments on fixed rate and variable rate
debt agreements. Estimates for the variable rate interest payments were based on
interest rates in effect on June 30, 2006.2
    
    Includes estimated capital expenditures associated with the construction of new
theatres to which we were committed as of June 30, 2006.  Recent
Developments
   Cinemark, Inc. Senior Discount Notes
 3 4
 28




---



##### Table of Contents



3 4
 3 4
  3 4 3 4 3 4
 Senior Subordinated Notes
     Senior Secured Credit Facility
  29




---



##### Table of Contents



Cinemark Chile Note Payable
  Seasonality
  30




---



##### Table of Contents



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
   31




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##### Table of Contents



Expected Maturity as of June 30, 2006(in millions)
    
    
    AverageJune 30,
    
    
    Fair
    
    
    Interest2007
    
    
    2008
    
    
    2009
    
    
    2010
    
    
    2011
    
    
    Thereafter
    
    
    Total
    
    
    Value
    
    
    RateFixed rate
    
    $
    0.1
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    342.5
    
    
    $
    342.6
    
    
    $
    353.0
    
    
    
    9.0
    %Variable rate
    
    
    5.3
    
    
    
    5.7
    
    
    
    4.2
    
    
    
    64.5
    
    
    
    183.6
    
    
    
    
    
    
    
    263.3
    
    
    
    265.2
    
    
    
    6.9
    %Total debt
    
    $
    5.4
    
    
    $
    5.7
    
    
    $
    4.2
    
    
    $
    64.5
    
    
    $
    183.6
    
    
    $
    342.5
    
    
    $
    605.9
    
    
    $
    618.2
 Expected Maturity as of December 31, 2005(in millions)
    
    
    AverageDecember 31,
    
    
    Fair
    
    
    Interest2006
    
    
    2007
    
    
    2008
    
    
    2009
    
    
    2010
    
    
    Thereafter
    
    
    Total
    
    
    Value
    
    
    RateFixed rate
    
    $
    0.1
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    353.3
    
    
    $
    353.4
    
    
    $
    362.8
    
    
    
    9.0
    %Variable rate
    
    
    6.8
    
    
    
    5.5
    
    
    
    4.3
    
    
    
    4.1
    
    
    
    185.1
    
    
    
    61.1
    
    
    
    266.9
    
    
    
    268.4
    
    
    
    6.6
    %Total debt
    
    $
    6.9
    
    
    $
    5.5
    
    
    $
    4.3
    
    
    $
    4.1
    
    
    $
    185.1
    
    
    $
    414.4
    
    
    $
    620.3
    
    
    $
    631.2
 Foreign Currency Exchange Rate Risk
  
 Item 4. Controls and Procedures
 Evaluation of Disclosure Controls and Procedures
  Changes in Internal Controls
  32




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##### Table of Contents



PART II  OTHER INFORMATION
 
 Item 1. Legal Proceedings
  
 Item 1A. Risk Factors
  
 Item 5. Other Information
 Supplemental Schedules specified by the senior subordinated notes Indenture:
    
    PageCondensed Consolidating Balance Sheet Information (unaudited) as of June 30, 2006
    
    
    34Condensed Consolidating Statement of Income Information (unaudited) for the six months ended June 30, 2006
    
    
    35Condensed Consolidating Statement of Cash Flows Information (unaudited) for the six months ended June 30, 2006
    
    
    36
 33




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##### Table of Contents



CINEMARK USA, INC. AND SUBSIDIARIES
 
 CONDENSED CONSOLIDATING BALANCE SHEETS
 AS OF JUNE 30, 2006
 (In thousands, except share data, unaudited)
 Restricted
    
    
    UnrestrictedGroup
    
    
    Group
    
    
    Eliminations
    
    
    ConsolidatedASSETSCURRENT ASSETSCash and cash equivalents
    
    $
    108,810
    
    
    $
    30,557
    
    
    $
    
    
    
    $
    139,367Inventories
    
    
    4,049
    
    
    
    981
    
    
    
    
    
    
    
    5,030Accounts receivable
    
    
    21,683
    
    
    
    1,795
    
    
    
    (626
    )
    
    
    22,852Income tax receivable
    
    
    (6,049
    )
    
    
    6,049
    
    
    
    
    
    
    
    Prepaid expenses and other
    
    
    2,962
    
    
    
    789
    
    
    
    
    
    
    
    3,751Total current assets
    
    
    131,455
    
    
    
    40,171
    
    
    
    (626
    )
    
    
    171,000THEATRE PROPERTIES AND EQUIPMENT  net
    
    
    713,878
    
    
    
    82,732
    
    
    
    
    
    
    
    796,610OTHER ASSETSGoodwill
    
    
    8,788
    
    
    
    34,453
    
    
    
    
    
    
    
    43,241Investments in and advances to affiliates
    
    
    184,415
    
    
    
    6,729
    
    
    
    (184,127
    )
    
    
    7,017Deferred tax asset
    
    
    (3,651
    )
    
    
    3,651
    
    
    
    
    
    
    
    Intangible assets, deferred charges and other assets  net
    
    
    52,679
    
    
    
    8,650
    
    
    
    (11,200
    )
    
    
    50,129Total other assets
    
    
    242,231
    
    
    
    53,483
    
    
    
    (195,327
    )
    
    
    100,387TOTAL ASSETS
    
    $
    1,087,564
    
    
    $
    176,386
    
    
    $
    (195,953
    )
    
    $
    1,067,997LIABILITIES AND SHAREHOLDERS EQUITYCURRENT LIABILITIESCurrent portion of long-term debt
    
    $
    2,652
    
    
    $
    2,709
    
    
    $
    
    
    
    $
    5,361Income tax payable
    
    
    (3,997
    )
    
    
    8,090
    
    
    
    
    
    
    
    4,093Accounts payable and accrued expenses
    
    
    112,432
    
    
    
    17,245
    
    
    
    (613
    )
    
    
    129,064Total current liabilities
    
    
    111,087
    
    
    
    28,044
    
    
    
    (613
    )
    
    
    138,518LONG-TERM LIABILITIESSenior credit agreements
    
    
    251,550
    
    
    
    17,670
    
    
    
    (11,200
    )
    
    
    258,020Senior subordinated notes
    
    
    342,548
    
    
    
    
    
    
    
    
    
    
    
    342,548Deferred income taxes
    
    
    9,631
    
    
    
    
    
    
    
    
    
    
    
    9,631Deferred lease expenses
    
    
    28,447
    
    
    
    1,636
    
    
    
    
    
    
    
    30,083Deferred gain on sale leasebacks
    
    
    3,092
    
    
    
    
    
    
    
    
    
    
    
    3,092Deferred revenues and other long-term liabilities
    
    
    1,364
    
    
    
    5,214
    
    
    
    
    
    
    
    6,578Total long-term liabilities
    
    
    636,632
    
    
    
    24,520
    
    
    
    (11,200
    )
    
    
    649,952COMMITMENTS AND CONTINGENCIES
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    MINORITY INTERESTS IN SUBSIDIARIES
    
    
    10,343
    
    
    
    5,894
    
    
    
    
    
    
    
    16,237SHAREHOLDER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
    
    
    77,687
    
    
    
    113,148
    
    
    
    (113,148
    )
    
    
    77,687Retained earnings
    
    
    280,596
    
    
    
    (56,940
    )
    
    
    (1,167
    )
    
    
    222,489Distributions
    
    
    
    
    
    
    (1,167
    )
    
    
    1,167
    
    
    
    Treasury stock, 57,245 Class B shares at cost
    
    
    (24,233
    )
    
    
    
    
    
    
    
    
    
    
    (24,233
    )Accumulated other comprehensive loss
    
    
    (54,091
    )
    
    
    (8,105
    )
    
    
    
    
    
    
    (62,196
    )Total shareholders equity
    
    
    329,502
    
    
    
    117,928
    
    
    
    (184,140
    )
    
    
    263,290TOTAL LIABILITIES AND SHAREHOLDERS EQUITY
    
    $
    1,087,564
    
    
    $
    176,386
    
    
    $
    (195,953
    )
    
    $
    1,067,997
  34




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##### Table of Contents



CINEMARK USA, INC. AND SUBSIDIARIES
 
 CONDENSED CONSOLIDATING STATEMENTS OF INCOME
 FOR THE SIX MONTHS ENDED JUNE 30, 2006
 (In thousands, unaudited)
 Restricted
    
    
    UnrestrictedGroup
    
    
    Group
    
    
    Eliminations
    
    
    ConsolidatedREVENUES
    
    $
    445,519
    
    
    $
    96,191
    
    
    $
    (616
    )
    
    $
    541,094COSTS AND EXPENSESCost of operations
    
    
    322,963
    
    
    
    73,139
    
    
    
    (616
    )
    
    
    395,486General and administrative expenses
    
    
    23,593
    
    
    
    5,851
    
    
    
    
    
    
    
    29,444Depreciation and amortization
    
    
    31,003
    
    
    
    9,177
    
    
    
    
    
    
    
    40,180Impairment of long-lived assets
    
    
    923
    
    
    
    
    
    
    
    
    
    
    
    923Loss on sale of assets and other
    
    
    1,496
    
    
    
    47
    
    
    
    
    
    
    
    1,543Total costs and expenses
    
    
    379,978
    
    
    
    88,214
    
    
    
    (616
    )
    
    
    467,576OPERATING INCOME
    
    
    65,541
    
    
    
    7,977
    
    
    
    
    
    
    
    73,518OTHER INCOME (EXPENSE)Interest expense
    
    
    (23,122
    )
    
    
    (938
    )
    
    
    407
    
    
    
    (23,653
    )Amortization of debt issue costs
    
    
    (1,393
    )
    
    
    (12
    )
    
    
    
    
    
    
    (1,405
    )Interest income
    
    
    3,181
    
    
    
    700
    
    
    
    (407
    )
    
    
    3,474Foreign currency exchange gain (loss)
    
    
    1,032
    
    
    
    (277
    )
    
    
    
    
    
    
    755Dividend income
    
    
    1,167
    
    
    
    
    
    
    
    (1,167
    )
    
    
    Loss on early retirement of debt
    
    
    (941
    )
    
    
    
    
    
    
    
    
    
    
    (941
    )Equity in income (loss) of affiliates
    
    
    42
    
    
    
    (1,310
    )
    
    
    
    
    
    
    (1,268
    )Minority interests in income of subsidiaries
    
    
    (627
    )
    
    
    (530
    )
    
    
    
    
    
    
    (1,157
    )Total other expenses
    
    
    (20,661
    )
    
    
    (2,367
    )
    
    
    (1,167
    )
    
    
    (24,195
    )INCOME BEFORE INCOME TAXES
    
    
    44,880
    
    
    
    5,610
    
    
    
    (1,167
    )
    
    
    49,323Income taxes
    
    
    12,342
    
    
    
    689
    
    
    
    
    
    
    
    13,031NET INCOME
    
    $
    32,538
    
    
    $
    4,921
    
    
    $
    (1,167
    )
    
    $
    36,292
  35




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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, 2006
 (In thousands, unaudited)
 Restricted
    
    
    UnrestrictedGroup
    
    
    Group
    
    
    Eliminations
    
    
    ConsolidatedOPERATING ACTIVITIESNet income
    
    $
    32,538
    
    
    $
    4,921
    
    
    $
    (1,167
    )
    
    $
    36,292Noncash items in net income:Depreciation
    
    
    30,621
    
    
    
    8,426
    
    
    
    
    
    
    
    39,047Amortization of intangible and other assets
    
    
    382
    
    
    
    751
    
    
    
    
    
    
    
    1,133Amortization of foreign advanced rents
    
    
    387
    
    
    
    195
    
    
    
    
    
    
    
    582Amortization of debt issue costs
    
    
    1,393
    
    
    
    12
    
    
    
    
    
    
    
    1,405Amortization of gain on sale leasebacks
    
    
    (183
    )
    
    
    
    
    
    
    
    
    
    
    (183
    )Amortization of debt premium
    
    
    (782
    )
    
    
    
    
    
    
    
    
    
    
    (782
    )Amortization of deferred revenues
    
    
    (188
    )
    
    
    
    
    
    
    
    
    
    
    (188
    )Impairment of long-lived assets
    
    
    923
    
    
    
    
    
    
    
    
    
    
    
    923Stock option compensation expense
    
    
    1,432
    
    
    
    
    
    
    
    
    
    
    
    1,432Loss on sale of assets and other
    
    
    1,496
    
    
    
    47
    
    
    
    
    
    
    
    1,543Write-off unamortized debt issue costs related to early retirement of debt
    
    
    222
    
    
    
    
    
    
    
    
    
    
    
    222Deferred lease expenses
    
    
    653
    
    
    
    (88
    )
    
    
    
    
    
    
    565Deferred income tax expenses
    
    
    (2,156
    )
    
    
    (3,640
    )
    
    
    
    
    
    
    (5,796
    )Equity in (income) loss of affiliates
    
    
    (42
    )
    
    
    1,310
    
    
    
    
    
    
    
    1,268Minority interests in income of subsidiaries
    
    
    627
    
    
    
    530
    
    
    
    
    
    
    
    1,157Changes in assets and liabilities
    
    
    (24,216
    )
    
    
    4,127
    
    
    
    
    
    
    
    (20,089
    )Net cash provided by operating activities
    
    
    43,107
    
    
    
    16,591
    
    
    
    (1,167
    )
    
    
    58,531INVESTING ACTIVITIESAdditions to theatre properties and equipment
    
    
    (50,170
    )
    
    
    (4,894
    )
    
    
    
    
    
    
    (55,064
    )Proceeds from sale of theatre properties and equipment
    
    
    20
    
    
    
    158
    
    
    
    
    
    
    
    178Net transactions with affiliates
    
    
    (633
    )
    
    
    271
    
    
    
    633
    
    
    
    271Net cash used for investing activities
    
    
    (50,783
    )
    
    
    (4,465
    )
    
    
    633
    
    
    
    (54,615
    )FINANCING ACTIVITIESDividends to parent
    
    
    (31,745
    )
    
    
    
    
    
    
    
    
    
    
    (31,745
    )Retirement of senior subordinated notes
    
    
    (10,000
    )
    
    
    
    
    
    
    
    
    
    
    (10,000
    )Proceeds from long-term debt
    
    
    3
    
    
    
    960
    
    
    
    
    
    
    
    963Repayments of long-term debt
    
    
    (1,356
    )
    
    
    (2,214
    )
    
    
    
    
    
    
    (3,570
    )Other
    
    
    (1,109
    )
    
    
    (1,026
    )
    
    
    534
    
    
    
    (1,601
    )Net cash used for financing activities
    
    
    (44,207
    )
    
    
    (2,280
    )
    
    
    534
    
    
    
    (45,953
    )Effect of exchange rate changes on cash and cash equivalents
    
    
    (830
    )
    
    
    54
    
    
    
    
    
    
    
    (776
    )INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
    
    
    (52,713
    )
    
    
    9,900
    
    
    
    
    
    
    
    (42,813
    )CASH AND CASH EQUIVALENTS:Beginning of period
    
    
    161,523
    
    
    
    20,657
    
    
    
    
    
    
    
    182,180End of period
    
    $
    108,810
    
    
    $
    30,557
    
    
    $
    
    
    
    $
    139,367
  36




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##### Table of Contents



Item 6. Exhibits
 3.1
    
    Amended and Restated Articles of Incorporation of the Company
filed with the Texas Secretary of State on September 3, 1992
(incorporated by reference to Exhibit 3.1(a) to the Companys
Annual Report on Form 10-K (File No. 033-47040) filed 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).10.1(h)
    
    Second Amendment to Credit
Agreement dated July 7, 2006, to be effective as of
June 30, 2006, to the Amended and Restated Credit Agreement
dated as of April 2, 2004 (as amended by the First Amendment
dated as of August 18, 2004) by and among Cinemark, Inc., CNMK
Holding, Inc., Cinemark USA, Inc. and the several banks and other
financial institutions or entities thereto, and Lehman Commercial
Paper, Inc., as administrative agent (incorporated by reference to Exhibit 10.1 to the Cinemark USA, Inc. Form 8-K filed on July 7, 2006).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).
 37




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##### Table of Contents



10.4(b)
    
    Tax Sharing Agreement, dated as of July 28, 1993, between the
Company and Cinemark Mexico (USA) (incorporated by reference to
Exhibit 10.10 to Cinemark Mexico (USA)s Registration Statement
on Form S-4 (File No. 033-72114) filed on November 24, 1993).10.5(a)
    
    Indemnification Agreement, between the Company and Lee Roy
Mitchell, dated as of July 13, 1992 (incorporated by reference to
Exhibit 10.23(a) to the Companys Annual Report on Form 10-K
(File No. 033-47040) filed 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).
 38




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##### Table of Contents



10.8(a)
    
    Amended and Restated Credit Agreement, dated April 2, 2004, among
Cinemark, Inc., CNMK Holdings, Inc., the Company, the several
lenders from time to time parties thereto, Lehman Brothers Inc.
and Goldman Sachs Credit Partners LP, as Joint Legal Arrangers,
Goldman Sachs Credit Partners LP, as Syndication Agent, Deutsche
Bank Securities, Inc., The Bank of New York, General Electric
Capital Corporation and CIBC Inc. as Documentation Agents and
Lehman Commercial Paper Inc. as Administrative Agent
(incorporated by reference to Exhibit 10.15 to the Companys
Quarterly Report on Form 10-Q (File No. 033-47040) filed May 14,
2004).10.8(b)
    
    First Amendment to the Amended and Restated Credit Agreement,
dated August 18, 2004, among Cinemark, Inc., CNMK Holdings, Inc.,
Cinemark USA, Inc., the several lenders from time to time parties
thereto, Lehman Brothers Inc. and Goldman Sachs Credit Partners
LP, as Joint Lead Arrangers, Goldman Sachs Credit Partners LP,
as Syndication Agent, Deutsche Bank Securities, Inc., The Bank of
New York, General Electric Capital Corporation and CIBC Inc. as
Documentation Agents and Lehman Commercial Paper Inc. as
Administrative Agent (incorporated by reference to Exhibit
10.15(b) to the Companys Quarterly Report on Form 10-Q (File No.
033-47040) filed May 13, 2005).10.9
    
    Amended and Restated Guaranty and Collateral Agreement, dated
April 2, 2004, among Cinemark, Inc., CNMK Holdings Inc., the
Company and certain of it subsidiaries in favor of Lehman
Commercial Paper, Inc., as administrative agent (incorporated by
reference to Exhibit 10.16 to the Companys Quarterly Report on
Form 10-Q (File No. 033-47040) filed May 14, 2004).10.10(a)
    
    Stock Purchase Agreement dated as of August 18, 2004, among
Cinemark Empreendimentos e Participacoes, Ltda, Venture II Equity
Holdings Corporation, Inc. and Kristal Holdings Limited
(incorporated by reference to Exhibit 10.20(a) to Cinemark,
Inc.s Quarterly Report on Form 10-Q (File No. 333-116292) filed
May 13, 2005).10.10(b)
    
    Stock Purchase Agreement dated as of August 18, 2004, among
Cinemark Empreendimentos e Participacoes, Ltda, Prona Global
Ltd., Messrs. Edgar Gleich, Riccardo Arduini, Moises Pinsky,
Eduardo Alalou, and Robert Luis Leme Klabin (incorporated by
reference to Exhibit 10.20(b) to Cinemark, Inc.s Quarterly
Report on Form 10-Q (File No. 333-116292) filed May 13, 2005).*31.1
    
    Certification of Chief Executive Officer of Cinemark USA, Inc.
Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.*31.2
    
    Certification of Chief Financial Officer of Cinemark USA, Inc.
Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.*32.1
    
    Certification of the Chief Executive Officer of Cinemark USA,
Inc. Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.*32.2
    
    Certification of the Chief Financial Officer of Cinemark USA,
Inc. Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
 
 *
    
    filed herewith. 39




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##### Table of Contents



SIGNATURES
  CINEMARK USA, INC.RegistrantDATE:August 14, 2006
    
    /s/Alan W. StockAlan W. StockPresident/s/Robert CoppleRobert CoppleChief Financial Officer
 40




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##### Table of Contents



EXHIBIT INDEX
 3.1
    
    Amended and Restated Articles of Incorporation of the Company
filed with the Texas Secretary of State on September 3, 1992
(incorporated by reference to Exhibit 3.1(a) to the Companys
Annual Report on Form 10-K (File No. 033-47040) filed 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).10.1(h)
    
    Second Amendment to Credit
Agreement dated July 7, 2006, to be effective as of
June 30, 2006, to the Amended and Restated Credit Agreement
dated as of April 2, 2004 (as amended by the First Amendment
dated as of August 18, 2004) by and among Cinemark, Inc., CNMK
Holding, Inc., Cinemark USA, Inc. and the several banks and other
financial institutions or entities thereto, and Lehman Commercial
Paper, Inc., as administrative agent (incorporated by reference to Exhibit 10.1 to the Cinemark USA, Inc. Form 8-K filed on July 7, 2006).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