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, 2002


Commission File Nos. 33-47040; 333-11895; 333-45417



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

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

                 3900 Dallas Parkway
                       Suite 500
                     Plano, Texas                            75093
        (Address of principal executive offices)           (Zip Code)

       Registrant's telephone number, including area code: (972) 665-1000




    Indicate  by check mark  whether  the  registrant  (1) has filed all reports
required to be filed by Section 13 or 15(d) of the  Securities  Exchange  Act of
1934  during  the  preceding  12 months  (or for such  shorter  period  that the
registrant was required to file such reports),  and (2) has been subject to such
filing requirements for the past 90 days.

                                  Yes X No ____








    As of August 14,  2002,  1,500  shares of Class A common  stock and  182,648
shares of Class B common stock were outstanding.


<PAGE>


                       CINEMARK USA, INC. AND SUBSIDIARIES

                                      Index

                                                                            Page
                                                                            ----

PART I         FINANCIAL INFORMATION

      Item 1.  Financial Statements

               Condensed Consolidated Balance Sheets
                   as of June 30, 2002 (unaudited)
                   and December 31, 2001                                      4

               Condensed Consolidated Statements of Income
                   (unaudited) for the three and six month
                   periods ended June 30, 2002 and 2001                       5

               Condensed Consolidated Statements of Cash
                   Flows (unaudited) for the six month
                   periods ended June 30, 2002 and 2001                       6

               Notes to Condensed Consolidated Financial
                   Statements (unaudited)                                     7

      Item 2.  Management's Discussion and Analysis of
                   Financial Condition and Results of
                   Operations                                                 15

      Item 3.  Quantitative and Qualitative Disclosures
                   About Market Risk                                          26


PART II        OTHER INFORMATION

      Item 1.  Legal Proceedings                                              28

      Item 2.  Changes in Securities and Use of Proceeds                      28

      Item 3.  Defaults Upon Senior Securities                                28

      Item 4.  Submission of Matters to a Vote of Security Holders            28

      Item 5.  Other Information                                              28

      Item 6.  Exhibits and Reports on Form 8-K                               28


SIGNATURES                                                                    30


                                        2


<PAGE>

            CAUTIONARY STATEMENT REGARDING FORWARD LOOKING STATEMENTS

This quarterly report on Form 10-Q includes  "forward-looking  statements" based
on the Company's current  expectations,  assumptions,  estimates and projections
about the Company's  and its  subsidiaries'  business and industry.  The Company
intends that this quarterly report be governed by the "safe harbor" provision of
the  Private  Securities  Litigation  Reform Act of 1995 (the  "PSLR  Act") with
respect to statements that may be deemed to be forward-looking  statements under
the PSLR Act. They include statements relating to:

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

You can identify forward-looking  statements by  the use of words such as "may,"
"should," "will," "could,"  "estimates,"  "predicts,"  "potential,"  "continue,"
"anticipates,"  "believes,"  "plans,"  "expects,"  "future"  and  "intends"  and
similar expressions which are intended to identify  forward-looking  statements.
These  statements  are not guarantees of future  performance  and are subject to
risks,  uncertainties and other factors,  some of which are beyond the Company's
control  and  difficult  to predict  and could  cause  actual  results to differ
materially from those expressed or forecasted in the forward-looking statements.
In evaluating these  forward-looking  statements,  you should carefully consider
the risks and  uncertainties  described  in this report.  These  forward-looking
statements reflect the Company's view only as of the date of this report. Actual
results could differ  materially  from those  indicated by such  forward-looking
statements  due  to  a  number  of  factors.   All  forward-looking   statements
attributable  to the  Company  or persons  acting on its  behalf  are  expressly
qualified in their entirety by this cautionary statement. The Company undertakes
no current  obligation  to publicly  update such  forward-looking  statements to
reflect subsequent events or circumstances.


                                        3


<PAGE>
<TABLE>
<CAPTION>
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements

                       CINEMARK USA, INC. AND SUBSIDIARIES
                      CONDENSED CONSOLIDATED BALANCE SHEETS
                                                                                    June 30,            December 31,
                                                                                      2002                  2001
                                                                                  (Unaudited)
                                                                                -------------------------------------
<S>                                                                             <C>                   <C>
                                     ASSETS
CURRENT ASSETS
    Cash and cash equivalents                                                   $   68,496,496        $   50,199,223
    Inventories                                                                      3,660,457             3,322,032
    Accounts receivable                                                             10,502,896            11,049,648
    Income tax receivable                                                            2,354,238             1,438,794
    Prepaid expenses and other                                                       3,932,522             3,246,829
                                                                                -------------------------------------
      Total current assets                                                          88,946,609            69,256,526

THEATRE PROPERTIES AND EQUIPMENT                                                 1,169,848,838         1,201,334,337
    Less accumulated depreciation and amortization                                (355,879,347)         (334,927,920)
                                                                                -------------------------------------
      Theatre properties and equipment - net                                       813,969,491           866,406,417

OTHER ASSETS
    Goodwill - net                                                                  10,788,356            15,124,954
    Investments in and advances to affiliates                                        2,763,002             4,447,003
    Deferred tax asset                                                                     -               3,716,206
    Deferred charges and other - net                                                29,578,318            37,592,644
                                                                                -------------------------------------
      Total other assets                                                            43,129,676            60,880,807
                                                                                -------------------------------------
TOTAL                                                                           $  946,045,776        $  996,543,750
                                                                                =====================================

                      LIABILITIES AND SHAREHOLDER'S EQUITY
CURRENT LIABILITIES
    Current portion of long-term debt                                           $   38,640,121        $   21,853,742
    Accounts payable and accrued expenses                                          112,220,658           117,501,526
                                                                                -------------------------------------
      Total current liabilities                                                    150,860,779           139,355,268

LONG-TERM LIABILITIES
    Senior credit agreements                                                       323,176,086           378,914,750
    Senior subordinated notes                                                      380,173,421           380,187,674
    Deferred lease expenses                                                         23,740,792            22,832,388
    Deferred gain on sale leasebacks                                                 4,555,580             4,738,540
    Deferred income taxes                                                            5,018,483                   -
    Deferred revenues and other long-term liabilities                                7,227,932             9,824,212
                                                                                -------------------------------------
      Total long-term liabilities                                                  743,892,294           796,497,564

COMMITMENTS AND CONTINGENCIES (see Note 10)                                                -                     -

MINORITY INTERESTS IN SUBSIDIARIES                                                  31,097,586            35,353,662

SHAREHOLDER'S EQUITY (As restated at December 31, 2001, see Note 11)
    Class A Common stock, $.01 par value: 10,000,000 shares
      authorized, 1,500 shares issued and outstanding                                       15                    15
    Class B Common stock, no par value: 1,000,000 shares
      authorized, 239,893 shares issued and outstanding                             49,543,427            49,543,427
    Additional paid-in-capital                                                      11,426,265            15,097,709
    Unearned compensation - stock options                                                  -              (4,226,004)
    Retained earnings                                                               65,596,624            44,696,299
    Treasury stock, 57,245 Class B shares at cost                                  (24,232,890)          (24,232,890)
    Accumulated other comprehensive loss                                           (82,138,324)          (55,541,300)
                                                                                -------------------------------------
      Total shareholder's equity                                                    20,195,117            25,337,256
                                                                                -------------------------------------
TOTAL                                                                           $  946,045,776        $  996,543,750
                                                                                =====================================
</TABLE>

See Notes to Condensed Consolidated Financial Statements


                                       4


<PAGE>
<TABLE>
<CAPTION>
                       CINEMARK USA, INC. AND SUBSIDIARIES
                   CONDENSED CONSOLIDATED STATEMENTS OF INCOME
                                   (Unaudited)

                                                                     THREE MONTHS ENDED JUNE 30,         SIX MONTHS ENDED JUNE 30,
                                                                       2002             2001              2002             2001
                                                                   ------------------------------     ------------------------------
<S>                                                                <C>              <C>               <C>              <C>
REVENUES
     Admissions                                                    $161,395,144     $130,004,407      $307,806,708     $257,843,145
     Concession                                                      80,084,602       61,702,235       149,370,820      119,545,982
     Other                                                           11,969,591       10,652,217        22,973,915       21,039,804
                                                                   ------------------------------     ------------------------------
            Total                                                   253,449,337      202,358,859       480,151,443      398,428,931

COSTS AND EXPENSES
     Cost of operations:
        Film rentals and advertising                                 87,770,920       68,490,322       162,733,412      133,798,745
        Concession supplies                                          13,775,334       10,230,831        25,757,154       20,503,711
        Salaries and wages                                           25,977,570       22,377,694        48,528,004       43,856,298
        Facility leases                                              29,125,793       28,132,827        58,275,403       56,924,233
        Utilities and other                                          28,406,815       27,205,026        57,014,691       53,892,744
                                                                   ------------------------------     ------------------------------
            Total cost of operations                                185,056,432      156,436,700       352,308,664      308,975,731

     General and administrative expenses                             11,815,562       10,347,268        22,458,579       20,190,208
     Depreciation and amortization                                   16,845,737       17,076,249        34,012,518       33,684,813
     Asset impairment loss                                              223,378              -             781,776          450,000
     Loss on sale of assets and other                                   273,732        1,720,172           812,924        1,831,086
                                                                   ------------------------------     ------------------------------
            Total costs and expenses                                214,214,841      185,580,389       410,374,461      365,131,838

OPERATING INCOME                                                     39,234,496       16,778,470        69,776,982       33,297,093

OTHER INCOME (EXPENSE)
     Interest expense                                               (14,066,488)     (17,850,288)      (28,806,800)     (37,112,518)
     Amortization of debt issue cost and debt discount                 (634,795)        (643,129)       (1,269,590)      (1,286,257)
     Interest income                                                    514,716          349,546           998,055          719,190
     Foreign currency exchange loss                                  (2,100,767)      (1,379,241)       (2,321,764)      (2,531,370)
     Equity in income (loss) of affiliates                               96,267       (1,418,886)          213,008       (1,456,564)
     Minority interests in (income) loss of subsidiaries                140,745          575,879          (735,726)         695,769
                                                                   ------------------------------     ------------------------------
            Total                                                   (16,050,322)     (20,366,119)      (31,922,817)     (40,971,750)
                                                                   ------------------------------     ------------------------------

INCOME (LOSS) BEFORE INCOME TAXES AND
     CUMULATIVE EFFECT OF AN ACCOUNTING CHANGE                       23,184,174       (3,587,649)       37,854,165       (7,674,657)

Income taxes (benefit)                                                9,124,792       (1,261,124)       13,564,061       (2,685,614)
                                                                   ------------------------------     ------------------------------
INCOME (LOSS) BEFORE CUMULATIVE EFFECT
     OF AN ACCOUNTING CHANGE                                         14,059,382       (2,326,525)       24,290,104       (4,989,043)

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

NET INCOME (LOSS)                                                  $ 14,059,382     $ (2,326,525)     $ 20,900,325     $ (4,989,043)
                                                                   ==============================     ==============================

EARNINGS (LOSS) PER SHARE:
     Basic:
        Income (loss) before accounting change                     $      76.35     $     (12.99)     $     131.91     $     (27.87)
        Cumulative effect of an accounting change                            -                -             (18.41)              -
                                                                   ------------------------------     ------------------------------
        Net income (loss)                                          $      76.35     $     (12.99)     $     113.50     $     (27.87)
                                                                   ==============================     ==============================

     Diluted:
        Income (loss) before accounting change                     $      76.35     $     (12.99)     $     131.91     $     (27.87)
        Cumulative effect of an accounting change                            -                -             (18.41)              -
                                                                   ------------------------------     ------------------------------
        Net income (loss)                                          $      76.35     $     (12.99)     $     113.50     $     (27.87)
                                                                   ==============================     ==============================
</TABLE>

See Notes to Condensed Consolidated Financial Statements


                                       5


<PAGE>
<TABLE>
<CAPTION>
                       CINEMARK USA, INC. AND SUBSIDIARIES
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (Unaudited)
                                                                       SIX MONTHS ENDED JUNE 30,
                                                                        2002              2001
                                                                   -------------------------------
<S>                                                                <C>               <C>
OPERATING ACTIVITIES
    Net income (loss)                                              $ 20,900,325      $ (4,989,043)

    Noncash items in net income (loss):
       Depreciation                                                  33,623,952        32,364,610
       Amortization of goodwill and other assets                        388,566         1,320,203
       Amortization of foreign advanced rents                           942,739         1,143,028
       Amortized compensation - stock options                           554,559           388,742
       Amortization of debt issue costs                               1,182,340         1,199,007
       Amortization of gain on sale leasebacks                         (182,960)         (182,961)
       Amortization of debt discount and premium                        (14,253)          (14,254)
       Amortization of deferred revenues                             (2,403,953)       (5,780,397)
       Loss on impairment of assets                                     781,776           450,000
       Loss on sale of assets and other                                 812,924         1,831,086
       Deferred lease expenses                                          908,404         1,108,562
       Deferred income tax expenses                                   8,734,689        (3,203,579)
       Equity in (income) loss of affiliates                           (213,008)        1,456,564
       Minority interests in income (loss) of subsidiaries              735,726          (695,769)
       Cumulative effect of an accounting change                      3,389,779               -

    Changes in assets and liabilities:
       Inventories                                                     (338,425)          182,627
       Accounts receivable                                              546,752        (1,749,443)
       Prepaid expenses and other                                      (685,693)         (179,589)
       Other assets                                                   5,889,103           (39,509)
       Advances with affiliates                                       1,302,669          (135,091)
       Accounts payable and accrued expenses                           (615,285)      (13,497,568)
       Other long-term liabilities                                     (192,327)         (433,283)
       Income tax receivable/payable                                   (915,444)       (1,558,932)
                                                                   -------------------------------
       Net cash provided by operating activities                     75,132,955         8,985,011

INVESTING ACTIVITIES
    Additions to theatre properties and equipment                   (12,191,593)      (14,022,555)
    Sale of theatre properties and equipment                          1,514,477         3,942,537
    Investment in affiliates                                                -            (379,373)
    Dividends/capital returned from affiliates                          594,340               -
                                                                   -------------------------------
       Net cash used for investing activities                       (10,082,776)      (10,459,391)

FINANCING ACTIVITIES
    Increase in long-term debt                                       19,115,888        40,806,562
    Decrease in long-term debt                                      (57,257,124)      (27,990,167)
    Increase in minority investment in subsidiaries                     421,855           429,373
    Decrease in minority investment in subsidiaries                  (5,413,657)       (3,665,005)
                                                                   -------------------------------
       Net cash provided by (used for) financing activities         (43,133,038)        9,580,763

EFFECT OF EXCHANGE RATE CHANGES ON CASH AND
    CASH EQUIVALENTS                                                 (3,619,868)          (92,850)
                                                                   -------------------------------

INCREASE IN CASH AND CASH EQUIVALENTS                                18,297,273         8,013,533

CASH AND CASH EQUIVALENTS:
    Beginning of period                                              50,199,223        19,839,994
                                                                   -------------------------------

    End of period                                                  $ 68,496,496      $ 27,853,527
                                                                   ===============================
</TABLE>

SUPPLEMENTAL INFORMATION (see Note 5)

See Notes to Condensed Consolidated Financial Statements


                                       6


<PAGE>


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

1.  The Company and Basis of Presentation

        Cinemark USA, Inc. and its  subsidiaries  (the  "Company") is one of the
leaders  in the  motion  picture  exhibition  industry  and owns or  leases  and
operates  motion  picture  theatres  in 33 states,  Canada,  Mexico,  Argentina,
Brazil, Chile,  Ecuador,  Peru, Honduras,  El Salvador,  Nicaragua,  Costa Rica,
Colombia  and the United  Kingdom.  The Company  operates  3,026  screens in 279
theatres and manages an additional 7 theatres (58 screens) at June 30, 2002.

        The condensed  consolidated  financial  statements have been prepared by
the  Company,  without  audit,  according  to the rules and  regulations  of the
Securities and Exchange Commission. In the opinion of management,  these interim
financial  statements reflect all adjustments (which,  except for the cumulative
effect of an  accounting  change,  include  only normal  recurring  adjustments)
necessary to state fairly the financial position and results of operations as of
and for the periods indicated.  The condensed  consolidated financial statements
include the accounts of Cinemark USA, Inc. and its subsidiaries.  Majority-owned
subsidiaries that the Company controls are consolidated while those subsidiaries
of which the Company owns between 20% and 50% and does not control are accounted
for as affiliates under the equity method. The results of these subsidiaries and
affiliates  are  included  in the  financial  statements  effective  with  their
formation or from their dates of acquisition.  Significant intercompany balances
and transactions are eliminated in consolidation. Certain reclassifications have
been made to June 30, 2001 and  December 31, 2001 amounts to conform to the June
30, 2002 presentation.

        These  financial  statements  should  be read in  conjunction  with  the
audited  annual  financial  statements  and the notes thereto for the year ended
December  31, 2001,  included in the Annual  Report filed March 27, 2002 on Form
10-K and the  amended  Annual  Report  filed June 28, 2002 on Form 10-K/A by the
Company under the  Securities  Exchange Act of 1934.  Operating  results for the
three and six month periods ended June 30, 2002 are not  necessarily  indicative
of the results to be achieved for the full year.

        On May 16,  2002,  Cinemark,  Inc.  was formed as the  Delaware  holding
company of Cinemark USA, Inc.  Under a share exchange  agreement,  dated May 17,
2002, and after giving effect to a reverse stock split, each outstanding  share,
and each outstanding option to purchase shares of the Company were exchanged for
shares,  and  options  to  purchase  shares,  respectively,  of common  stock of
Cinemark, Inc.  As a result,  weighted average common shares outstanding for the
three and six month  periods  ended  June 30,  2002 do not  include  options  to
purchase shares of Cinemark, Inc.'s common stock.


                                        7


<PAGE>


2.  Earnings (Loss) Per Share

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

<TABLE>
<CAPTION>

                                                                      Three Months Ended            Six Months Ended
                                                                           June 30,                     June 30,
                                                                      2002          2001           2002          2001
                                                                      ----          ----           ----          ----
<S>                                                               <C>           <C>            <C>           <C>
     Income (loss) before cumulative effect of an accounting
       change                                                     $14,059,382   $(2,326,525)   $24,290,104   $(4,989,043)
                                                                  ===========   ============   ===========   ============

     Basic:
     Weighted average common shares outstanding                       184,148        179,037       184,148        179,037
                                                                      =======        =======       =======        =======

     Income (loss) before cumulative effect of an accounting
       change per common share                                         $76.35       $(12.99)       $131.91       $(27.87)
                                                                       ======       ========       =======       ========

     Diluted:
     Weighted average common shares outstanding                       184,148        179,037       184,148        179,037
     Common equivalent shares for stock options                           -              -             -              -
                                                                      -------        -------       -------        -------
     Weighted average common and common equivalent shares
       outstanding                                                    184,148        179,037       184,148        179,037
                                                                      =======        =======       =======        =======

     Income (loss) before cumulative effect of an accounting
       change per common and common equivalent share                   $76.35       $(12.99)       $131.91       $(27.87)
                                                                       ======       ========       =======       ========
</TABLE>

        Basic income  (loss) per share is computed by dividing the income (loss)
by the  weighted  average  number  of  shares  of  common  stock of all  classes
outstanding  during the period.  Diluted  income (loss) per share is computed by
dividing the income  (loss) by the weighted  average  number of shares of common
stock and potential  issuable common stock using the treasury stock method.  The
dilutive  effect of the options to purchase  common  stock is excluded  from the
computation of diluted income (loss) per share if their effect is  antidilutive.
Options to purchase  11,752  shares of common stock have been  excluded from the
diluted income (loss) per share  calculation for the three and six month periods
ended June 30, 2001, as their effect would have been antidilutive.

        On May 16,  2002,  Cinemark,  Inc.  was formed as the  Delaware  holding
company of Cinemark USA, Inc.  Under a share exchange  agreement,  dated May 17,
2002, and after giving effect to a reverse stock split, each outstanding  share,
and each outstanding option to purchase shares of the Company were exchanged for
shares,  and  options  to  purchase  shares,  respectively,  of common  stock of
Cinemark, Inc.  As a result,  weighted average common shares outstanding for the
three and six month  periods  ended  June 30,  2002 do not  include  options  to
purchase shares of Cinemark, Inc.'s common stock.

3.  Comprehensive Income (Loss)

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

<TABLE>
<CAPTION>
                                                                      Three Months Ended            Six Months Ended
                                                                           June 30,                     June 30,
                                                                      2002          2001           2002          2001
                                                                      ----          ----           ----          ----
<S>                                                               <C>           <C>            <C>           <C>
Net income (loss)                                                 $14,059,382   $(2,326,525)   $20,900,325   $(4,989,043)
Foreign currency translation adjustment                           (16,666,510)    1,101,744    (26,597,024)   (1,961,639)
                                                                  ------------  ------------   ------------  ------------
Comprehensive loss                                                $(2,607,128)  $(1,224,781)   $(5,696,699)  $(6,950,682)
                                                                  ============  ============   ============  ============
</TABLE>


                                        8


<PAGE>


4.  Foreign Currency Translation

        The accumulated  other  comprehensive  loss in  shareholder's  equity of
$82,138,324   and   $55,541,300   at  June  30,  2002  and  December  31,  2001,
respectively,  primarily relates to the unrealized  adjustments from translating
the financial  statements of Cinemark Argentina,  S.A., Cinemark Brasil S.A. and
Cinemark de Mexico, S.A. de C.V. into U.S. dollars.

        For the majority of 2001, the country of Argentina  utilized the peso as
its functional currency with it pegged at a rate of 1.0 peso to the U.S. dollar.
As a result of economic  turmoil  which began in December  2001,  the  Argentine
government  announced several restrictions on currency conversions and transfers
of funds  abroad in early  January  2002.  The  Argentine  government  ended the
peso-dollar  parity regime and  established a dual exchange rate system,  with a
"commercial  rate" and a "market rate".  The commercial rate of 1.4 pesos to the
U.S.  dollar was to be utilized  to settle all  exports  and  certain  essential
imports.  The market  rate  traded for the first  time on January  11,  2002 and
closed at a rate of 1.7 pesos to the U.S.  dollar.  As a result,  the  effect of
translating the December 31, 2001 peso balances for assets and liabilities  into
U.S. dollars at the first known free-floating market rate as of January 11, 2002
(1.7 pesos to the U.S.  dollar) is reflected as a  cumulative  foreign  currency
translation  adjustment to the accumulated other comprehensive loss account as a
reduction of shareholder's equity in the amount of $19.1 million at December 31,
2001.  Income and expense  accounts  from  January  through  November  2001 were
converted into U.S.  dollars at the exchange rate of 1.0 peso to the U.S. dollar
and income and  expense  accounts  in  December  2001 were  converted  into U.S.
dollars at the rate of 1.7 pesos to the U.S.  dollar.  On January 14, 2002,  the
Argentine  government  unified the commercial  rate and the market rate into one
floating rate which is presently in use. At June 30, 2002, the floating rate was
3.8 pesos to the U.S.  dollar.  As a result,  the effect of translating the June
30, 2002 peso balances for assets and liabilities into U.S. dollars is reflected
as a cumulative foreign currency translation adjustment to the accumulated other
comprehensive loss account as an additional reduction of shareholder's equity in
the amount of $14.4 million at June 30, 2002.  Income and expense  accounts from
January  through June 2002 were  converted  into U.S.  dollars at the prevailing
average floating rate for each of those six months.

        On June 30, 2002, the exchange rate for the Brazilian real was 2.8 reais
to the U.S.  dollar  (the  exchange  rate was 2.3  reais to the U.S.  dollar  at
December 31, 2001).  As a result,  the effect of  translating  the June 30, 2002
real  balances for assets and  liabilities  into U.S.  dollars is reflected as a
cumulative  foreign  currency  translation  adjustment to the accumulated  other
comprehensive loss account as an additional reduction of shareholder's equity in
the amount of $5.1 million at June 30, 2002.

        On June 30, 2002,  the exchange rate for the Mexican peso was 10.0 pesos
to the U.S.  dollar  (the  exchange  rate was 9.2  pesos to the U.S.  dollar  at
December 31, 2001).  As a result,  the effect of  translating  the June 30, 2002
peso  balances for assets and  liabilities  into U.S.  dollars is reflected as a
cumulative  foreign  currency  translation  adjustment to the accumulated  other
comprehensive loss account as an additional reduction of shareholder's equity in
the amount of $6.2 million at June 30, 2002.

        In  2001  and  2002,  all  foreign   countries  where  the  Company  has
operations,  including  Argentina,  Brazil and Mexico,  were  deemed  non-highly
inflationary.  Thus,  any  fluctuation  in the  currency  results in the Company
recording  a  cumulative   foreign  currency   translation   adjustment  to  the
accumulated  other  comprehensive  loss  account as an increase or  reduction to
shareholder's equity.

5.  Supplemental Cash Flow Information

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

<TABLE>
<CAPTION>
                                                                       Six Months Ended
                                                                           June 30,
                                                                           --------
                                                                     2002            2001
                                                                     ----            ----
<S>                                                              <C>             <C>
        Cash paid for interest                                   $27,793,836     $38,602,949
        Cash paid for income taxes (net of refunds)                5,782,379       1,903,256
</TABLE>


                                        9


<PAGE>


6.  Financial Information About Geographic Areas

        The Company  operates in a single  business  segment as a motion picture
exhibitor.  The  Company  is  a  multinational   corporation  with  consolidated
operations in the United  States,  Canada,  Mexico,  Argentina,  Brazil,  Chile,
Ecuador,  Peru, Honduras, El Salvador,  Nicaragua,  Costa Rica, Colombia and the
United  Kingdom.  Revenues in the United States and Canada,  Mexico,  Brazil and
other foreign countries for the six months ended June 30 are as follows:

<TABLE>
<CAPTION>
                                                                       Six Months Ended
                                                                           June 30,
                                                                           --------
        Revenues                                                     2002            2001
        --------                                                     ----            ----
<S>                                                             <C>             <C>
        U.S. and Canada                                         $369,019,438    $297,529,212
        Mexico                                                    43,590,520      34,858,256
        Brazil                                                    36,471,520      31,310,175
        Other foreign countries                                   31,537,451      35,179,100
        Eliminations                                                (467,486)       (447,812)
                                                                -------------   -------------
        Total                                                   $480,151,443    $398,428,931
                                                                =============   =============
</TABLE>

        Long-lived  assets in the United States and Canada,  Mexico,  Brazil and
other foreign countries as of June 30 are as follows:

<TABLE>
<CAPTION>
                                                                           June 30,
                                                                           --------
        Long-Lived Assets                                            2002            2001
        -----------------                                            ----            ----
<S>                                                             <C>             <C>
        U.S. and Canada                                         $649,037,519    $715,195,578
        Mexico                                                    69,694,926      76,282,484
        Brazil                                                    50,206,129      58,682,074
        Other foreign countries                                   45,030,917      73,540,117
                                                                ------------    ------------
        Total                                                   $813,969,491    $923,700,253
                                                                ============    ============
</TABLE>

7.  Accounting for Derivative Instruments and Hedging Activities

        The Company's condensed  consolidated balance sheets as of June 30, 2002
and  December 31, 2001 include an interest  rate cap  agreement  recorded at its
fair value of $0.4 million and $1.1 million, respectively. This derivative asset
is  recorded  as a component  of  deferred  charges  and other on the  Company's
condensed  consolidated balance sheets. For the six month periods ended June 30,
2002 and 2001, a loss of $0.7 million and $0.6 million,  respectively,  has been
recorded  as a  component  of  interest  expense in the  condensed  consolidated
statements  of  income  to  recognize  the  decrease  in the  fair  value of the
derivative asset.

8.  Accounting for Amortization of Goodwill and Other Intangible Assets

        On  January  1,  2002,  the  Company  adopted   Statement  of  Financial
Accounting  Standards (SFAS) No. 142,  "Goodwill and Other  Intangible  Assets".
This  statement   requires  that  goodwill  and  other  intangible  assets  with
indefinite  useful  lives no longer be  amortized,  but  instead  be tested  for
impairment at least annually.

        The Company's goodwill at December 31, 2001 was as follows:

<TABLE>
<CAPTION>
                                  Gross Carrying      Accumulated       Net Goodwill
              Goodwill                Amount          Amortization         Amount
              --------                ------          ------------         ------
<S>                                  <C>              <C>                <C>
        U.S. operations               $9,313,165      $(4,004,427)        $5,308,738
        Argentina operations           5,162,418         (893,308)         4,269,110
        Chile operations               3,663,883         (732,777)         2,931,106
        Peru operations                3,270,000         (654,000)         2,616,000
                                     -----------      ------------       -----------
                                     $21,409,466      $(6,284,512)       $15,124,954
                                     ===========      ============       ===========
</TABLE>


                                       10


<PAGE>


        The adoption of this accounting  pronouncement resulted in the aggregate
write  down of  goodwill  to fair  value as a  cumulative  effect of a change in
accounting principle on January 1, 2002 as follows:

                    U.S. operations           $   27,226
                    Argentina operations       3,298,385
                                              ----------
                                              $3,325,611
                                              ==========

        The Company has  recorded an  additional  impairment  of goodwill in the
amount of $558,398 in the six month  period  ended June 30, 2002  (recorded as a
component of asset impairment loss in the condensed  consolidated  statements of
income). The additional impairment of goodwill relates to further write-downs of
goodwill to fair value associated with the Company's Argentina  operations which
continue to be impacted by the economic  turmoil in the country.  Fair value for
this goodwill reporting unit was estimated based on a multiple of estimated cash
flows for each of the individual  Argentina  properties.  No additional goodwill
was acquired in the six month period ended June 30, 2002.

        The Company's other intangible  assets (included in deferred charges and
other on the Company's  condensed  consolidated  balance sheets) at December 31,
2001 were as follows:

<TABLE>
<CAPTION>
                                             Gross Carrying      Accumulated        Net Intangible
         Other Intangible Assets                 Amount          Amortization        Asset Amount
         -----------------------                 ------          ------------        ------------
<S>                                              <C>              <C>                  <C>
        Capitalized licensing fees               $9,000,000        $(566,666)          $8,433,334
        Trademarks                                  147,919          (83,751)              64,168
        Non-compete fee                              72,403          (64,876)               7,527
        Other intangible assets                     169,116         (152,953)              16,163
                                                 ----------        ----------          ----------
                                                 $9,389,438        $(868,246)          $8,521,192
                                                 ==========        ==========          ==========
</TABLE>

        The adoption of this accounting  pronouncement resulted in the aggregate
write down of other intangible assets with indefinite useful lives to fair value
as a cumulative effect of a change in accounting principle on January 1, 2002 as
follows:

                    Trademarks                $64,168
                                              -------
                                              $64,168
                                              =======

       The  Company's  capitalized  licensing  fees  and  non-compete  fee  have
definite  useful  lives  and thus are  continuing  to be  amortized  over  their
remaining useful lives.  The Company's other  intangible  assets have indefinite
useful lives  remaining  but were not written down on January 1, 2002 since they
are presently recorded at or below their fair value.

        The Company's other intangible assets at June 30, 2002 are as follows:

<TABLE>
<CAPTION>
                                             Gross Carrying       Accumulated      Net Intangible
        Other Intangible Assets                  Amount           Amortization      Asset Amount
        ------------------------                 ------           ------------      ------------
<S>                                              <C>                <C>               <C>
        Amortized Intangible Assets:
        Capitalized licensing fees               $9,000,000         $(816,666)        $8,183,334
        Non-compete fee                              72,403           (71,329)             1,074
                                                     ------           --------             -----
                                                 $9,072,403         $(887,995)        $8,184,408
                                                 ==========         ==========        ==========

        Unamortized Intangible Assets:
        Trademarks                                 $147,919         $(147,919)           $   -
        Other intangible assets                     169,116          (152,953)            16,163
                                                    -------          ---------            ------
                                                   $317,035         $(300,872)           $16,163
                                                   ========         ==========           =======

     Aggregate Amortization Expense:
     For the six month period ended June 30, 2002                    $388,566
                                                                     ========
</TABLE>


                                       11


<PAGE>


        Aggregate  amortization  expense for the six month period ended June 30,
2002  consists  of  $256,453  of  amortization  of other  intangible  assets and
$132,113 of amortization of other assets (both of which are included in deferred
charges and other on the Company's condensed consolidated balance sheets).

<TABLE>
<CAPTION>
          Estimated Amortization Expense of Other Intangible Assets:
<S>                                                                             <C>
          For the year ended December 31, 2002                                  $507,527
          For the year ended December 31, 2003                                   500,000
          For the year ended December 31, 2004                                   500,000
          For the year ended December 31, 2005                                   500,000
          For the year ended December 31, 2006                                   500,000
</TABLE>

        The Company's  non-compete  fee will be fully  amortized by December 31,
2002.

        The impact on net income (loss) and earnings (loss) per share related to
the adoption of this accounting pronouncement is as follows:

<TABLE>
<CAPTION>
                                                                Three Months Ended              Six Months Ended
                                                                     June 30,                       June 30,
                                                                2002          2001            2002           2001
                                                                ----          ----            ----           ----
<S>                                                         <C>           <C>              <C>           <C>
   Reported net income (loss)                               $14,059,382   $(2,326,525)     $20,900,325   $(4,989,043)
   Add back: Cumulative effect of an accounting change              -             -          3,389,779           -
   Add back: Goodwill amortization                                  -         359,045              -         718,091
   Add back: Other intangible asset amortization                    -           8,382              -          16,764
                                                            -----------   ------------     -----------   ------------
   Adjusted net income (loss)                               $14,059,382   $(1,959,098)     $24,290,104   $(4,254,188)
                                                            ===========   ============     ===========   ============

   Basic earnings (loss) per share:
   Reported net income (loss)                                    $76.35       $(12.99)         $113.50       $(27.87)
   Add back: Cumulative effect of an accounting change               -             -             18.41            -
   Add back: Goodwill amortization                                   -           2.01               -           4.02
   Add back: Other intangible asset amortization                     -            .04               -            .09
                                                                 ------       --------         -------       --------
   Adjusted net income (loss)                                    $76.35       $(10.94)         $131.91       $(23.76)
                                                                 ======       ========         =======       ========

   Diluted earnings (loss) per share:
   Reported net income (loss)                                    $76.35       $(12.99)         $113.50       $(27.87)
   Add back: Cumulative effect of an accounting change               -             -             18.41            -
   Add back: Goodwill amortization                                   -           2.01               -           4.02
   Add back: Other intangible asset amortization                     -            .04               -            .09
                                                                 ------       --------         -------       --------
   Adjusted net income (loss)                                    $76.35       $(10.94)         $131.91       $(23.76)
                                                                 ======       ========         =======       ========
</TABLE>

9.  New Accounting Pronouncements

        In  August  2001,  the  Financial   Accounting  Standards  Board  issued
Statement of Financial  Accounting  Standards ("SFAS") No. 143,  "Accounting for
Asset Retirement  Obligations".  This statement  requires the establishment of a
liability for an asset  retirement  obligation.  This statement is effective for
financial  statements issued for fiscal years beginning after June 15, 2002. The
Company is currently  considering  the impact,  if any, that this statement will
have on the condensed consolidated financial statements.

        In October 2001, the Financial  Accounting  Standards  Board issued SFAS
No. 144, "Accounting for the Impairment or Disposal of Long-Lived Assets", which
supersedes SFAS No. 121, "Accounting for the Impairment of Long-Lived Assets and
of Long-Lived  Assets to be Disposed Of", and portions of APB No. 30, "Reporting
the Results of  Operations  - Reporting  the Effects of Disposal of a Segment of
Business,  and  Extraordinary,  Unusual and  Infrequently  Occurring  Events and
Transactions",  and amends Accounting  Research  Bulletin No. 51,  "Consolidated
Financial  Statements".  This statement generally conforms,  among other things,
impairment   accounting  for  assets  to  be  disposed  of  including  those  in
discontinued  operations and eliminates the exception to consolidation for which
control is likely to be  temporary.  This  statement  became  effective  for the
Company on  January  1, 2002.  The  adoption  of this  statement  did not have a
material effect on the condensed consolidated financial statements.


                                       12


<PAGE>


        In April 2002, the Financial  Accounting Standards Board issued SFAS No.
145,  "Rescission  of FASB  Statements  No.  4, 44,  and 64,  Amendment  of FASB
Statement No. 13, and Technical  Corrections".  This statement  requires,  among
other  things,  that  gains and  losses on the early  extinguishment  of debt be
classified  as  extraordinary  only if they meet the criteria for  extraordinary
treatment  set  forth  in  Accounting  Principles  Board  Opinion  No.  30.  The
provisions of this statement  related to  classification  of gains and losses on
the early  extinguishment of debt are effective for fiscal years beginning after
May 15,  2002.  Upon  adoption  of  SFAS  No.  145,  any  gain or loss on  early
extinguishment  of debt would be classified as income from operations  unless it
meets  the  criteria  for  extraordinary   treatment  set  forth  in  Accounting
Principles Board Opinion No. 30.

        In June 2002, the Financial  Accounting  Standards Board issued SFAS No.
146,  "Accounting for Costs Associated with Exit or Disposal  Activities."  This
Statement requires  recording costs associated with exit or disposal  activities
at their  fair  values  when a  liability  has  been  incurred.  Under  previous
guidance,  certain exit costs were accrued upon  management's  commitment  to an
exit plan, which is generally before an actual liability has been incurred.  The
provisions of this Statement are effective for exit or disposal  activities that
are initiated after December 31, 2002. The Company is currently  considering the
impact,  if any, that this  statement  will have on the  condensed  consolidated
financial statements.

10.  Litigation and Litigation Settlements

        The Company is currently a defendant in certain  litigation  proceedings
alleging certain  violations of the Americans with Disabilities Act of 1990 (the
"ADA")  relating to  accessibility  of movie theatres for  handicapped  and deaf
patrons.

        In March 1999, the Department of Justice filed suit in the U.S. District
Court, Northern District of Ohio, Eastern Division, against the Company alleging
certain  violations  of the ADA  relating to the  Company's  wheelchair  seating
arrangements and seeking remedial action.  An Order granting Summary Judgment to
the Company was issued in November  2001.  The Department of Justice has filed a
Notice of Appeal with the Sixth Circuit  Court of Appeals.  If the Company loses
this litigation,  the Company's  financial  position,  results of operations and
cash flows may be materially  and adversely  affected.  The Company is unable to
predict the outcome of this litigation or the range of potential loss,  however,
management  believes that based upon current  precedent the Company's  potential
liability  with respect to such  proceeding  is not material in the aggregate to
the  Company's  financial  position,  results  of  operations  and  cash  flows.
Accordingly,  the Company has not  established  a reserve for loss in connection
with this proceeding.

        In February 2000, Barbara Cornilles,  Edwin Cornilles,  Dorothy Johnson,
Damara Paris, Stephen Purvis, George Scheler,  Susan Teague, and Jackie Woltring
filed suit in the U.S.  District  Court for the  District of Oregon  against the
Company, Regal Cinemas, Inc., Century Theatres, Inc., and Carmike Cinemas, Inc.,
alleging  certain  violations  of the ADA  relating  to  accessibility  of movie
theatres for deaf patrons. An Order granting Summary Judgment to the Company was
issued by a federal  magistrate judge in December 2001 which was ratified by the
federal  district judge in March 2002. In April 2002, the plaintiffs  agreed not
to appeal the summary judgment ruling.

        In August 2001,  David  Wittie,  Rona Schnall,  Ron  Cranston,  Jennifer
McPhail,  Peggy  Garaffa  and ADAPT of Texas  filed  suit in the 201st  Judicial
District Court of Travis County,  Texas alleging certain violations of the Human
Resources Code, the Texas  Architectural  Barriers Act, the Texas  Accessibility
Standards and the Deceptive  Trade  Practices Act relating to  accessibility  of
movie  theatres for patrons  using  wheelchairs  at two theatres  located in the
Austin, Texas market. The plaintiffs are seeking remedial action and unspecified
damages.  The  Company  has  filed an  answer  denying  the  allegations  and is
vigorously  defending this suit. The Company is unable to predict the outcome of
this litigation or the range of potential  loss,  however,  management  believes
that based upon current precedent the Company's potential liability with respect
to such  proceeding is not material in the aggregate to the Company's  financial
position, results of operations and cash flows. Accordingly, the Company has not
established a reserve for loss in connection with this proceeding.


                                       13


<PAGE>


        In July 2001, Sonia Rivera-Garcia and Valley Association for Independent
Living filed suit in the 93rd Judicial  District Court of Hidalgo County,  Texas
alleging certain violations of the Human Resources Code, the Texas Architectural
Barriers  Act,  the  Texas  Accessibility  Standards  and  the  Deceptive  Trade
Practices  Act relating to  accessibility  of movie  theatres for patrons  using
wheelchairs  at one theatre in the Mission,  Texas market.  The  plaintiffs  are
seeking remedial action and unspecified damages. The Company has filed an answer
denying the  allegations  and is vigorously  defending this suit. The Company is
unable to predict the outcome of this litigation or the range of potential loss,
however,  management  believes  that based upon current  precedent the Company's
potential  liability  with  respect to such  proceeding  is not  material in the
aggregate to the Company's  financial  position,  results of operations and cash
flows.  Accordingly,  the  Company  has not  established  a reserve  for loss in
connection with this proceeding.

        On May 23, 2002, Robert Todd on behalf of Robert Preston Todd, his minor
child  and "all  individuals  who are  deaf or are  severely  hearing  impaired"
brought this case in the United States District Court for the Southern  District
of Texas,  Houston  Division  against several movie  operators,  including,  AMC
Entertainment,  Inc.,  Regal  Entertainment,  Inc.,  the  Company,  and  Century
Theaters  as well as eight  movie  production  companies.  The  lawsuit  alleges
violation of Title III of the ADA and the First Amendment to the Constitution of
the United States.  Plaintiffs seek unspecified  injunctive relief,  unspecified
declaratory relief,  unspecified monetary damages (both actual and punitive) and
unspecified  attorneys'  fees.  The answer is not yet due. The Company  plans to
deny any  violation  of law and to  vigorously  defend  against all claims.  The
Company is unable to predict  the  outcome  of this  litigation  or the range of
potential loss,  however,  management believes that based upon current precedent
the  Company's  potential  liability  with  respect  to such  proceeding  is not
material  in the  aggregate  to the  Company's  financial  position,  results of
operations  and cash  flows.  Accordingly,  the Company  has not  established  a
reserve for loss in connection with this proceeding.

        From time to time,  the  Company  is  involved  in other  various  legal
proceedings arising from the ordinary course of its business operations, such as
personal injury claims,  employment  matters and contractual  disputes,  most of
which are covered by insurance.  The Company  believes its  potential  liability
with respect to proceedings  currently  pending is not material in the aggregate
to the Company's financial position, results of operations and cash flows.

11. Restatement

        Subsequent to the issuance of the Company's 2001 consolidated  financial
statements,  the Company's management  determined that it should revise the fair
value of employee stock options granted during December 2001. This determination
was based in part on the timing between the original  valuation and the proposed
initial public offering of common stock by the Company's parent,  Cinemark, Inc.
The Company's management believed that on the date of grant the common stock had
a fair value of $330 per share.  In connection with the parent Company's  public
offering of common stock and Staff  Accounting  Bulletin Topic 4.D., the Company
revised  this fair value to $2,519 per share.  As a result,  the 2001  financial
statements  have been restated on the amended  Annual Report filed June 28, 2002
on Form 10-K/A from amounts  previously  reported to record additional  unearned
compensation of $3,338,225 as of December 31, 2001.

        A summary of the significant effects of the restatement is as follows:
<TABLE>
<CAPTION>

                                                       As of December 31, 2001
                                              As Previously Reported        As Restated
                                              ----------------------        -----------
Balance Sheet Data:
<S>                                                     <C>                 <C>
  Additional paid-in-capital                            $11,759,484         $15,097,709
  Unearned compensation - stock options                    (887,779)         (4,226,004)
</TABLE>


                                       14


<PAGE>


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

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

Overview

        The Company's revenues are generated primarily from box office receipts,
concession  sales and screen  advertising  sales.  Revenues are recognized  when
admissions  and  concession  sales are  received  at the box  office  and screen
advertising  is shown at the theatres.  The  Company's  revenues are affected by
changes in attendance and average admissions and concession revenues per patron.
Attendance is primarily  affected by the commercial appeal of the films released
during the period reported.  Additional  revenues related to theatre  operations
are generated by pay phones,  ATM machines and electronic  video games installed
in video arcades located in some of the Company's theatres.

        Film rentals and advertising, concession supplies and salaries and wages
vary  directly  with  changes in  revenues.  These  expenses  have  historically
represented   approximately   65%  of  all  theatre   operating   expenses   and
approximately  50% of  revenues.  Film  rental  costs are  accrued  based on the
applicable box office receipts and either the mutually agreed upon firm terms or
estimates of the final settlement  depending on the film licensing  arrangement.
Advertising  cost,  which is expensed as  incurred,  is  primarily  fixed at the
theatre  level as daily movie  directories  placed in  newspapers  represent the
largest  component of advertising  costs. The monthly cost of these ads is based
on, among other things,  the size of the directory and the frequency and size of
the  newspaper's  circulation.  The  Company  purchases  concession  supplies to
replace units sold.  Although  salaries and wages  include a fixed  component of
cost  (i.e.  the  minimum  staffing  cost to operate a theatre  facility  during
non-peak  periods),  salaries  and wages move in relation to revenues as theatre
staffing is adjusted to handle attendance volume.

        Conversely,  facility  lease  expense is  primarily  a fixed cost at the
theatre level as the Company's facility leases generally require a fixed monthly
minimum rent payment. Facility lease expense as a percentage of revenues is also
affected by the number of leased versus fee owned facilities.

        Utilities and other costs  include  certain costs that are fixed such as
property  taxes,  certain costs which are variable such as liability  insurance,
and  certain  costs that  possess  both fixed and  variable  components  such as
utilities, repairs and maintenance and security services.

Critical Accounting Policies

        The Company prepares the condensed  consolidated financial statements in
conformity with accounting principles generally accepted in the United States of
America.  As such, the Company is required to make certain estimates,  judgments
and  assumptions  that  the  Company  believes  are  reasonable  based  upon the
information  available.  These estimates,  judgments and assumptions  affect the
reported  amounts  of  assets  and  liabilities  at the  date  of the  financial
statements and the reported  amounts of revenues and expenses during the periods
presented.  The significant  accounting  policies which the Company believes are
the most  critical to aid in fully  understanding  and  evaluating  its reported
financial results include the following:


                                       15


<PAGE>


Revenue and Expense Recognition

        Revenues  are  recognized  when  admissions  and  concession  sales  are
received at the box office and screen advertising is shown at the theatres. Film
rental costs are accrued based on the applicable box office  receipts and either
the  mutually  agreed  upon firm  terms or  estimates  of the  final  settlement
depending on the film  licensing  arrangement.  Estimates  are made based on the
expected success of a film over the length of its run. The success of a film can
typically be  determined  a few weeks after a film is released  when initial box
office  performance  of  the  film  is  known.  Accordingly,  final  settlements
typically  approximate estimates since box office receipts are known at the time
the estimate is made and the  expected  success of a film over the length of its
run can  typically  be  estimated  early  in the  film's  run.  The  final  film
settlement  amount is negotiated at the  conclusion of the film's run based upon
how a film  actually  performs.  If actual  settlements  are  higher  than those
estimated,  additional film rental costs are recorded at that time.  Advertising
costs are expensed as incurred.

Deferred Revenues

        Advances  collected  on  long-term  screen  advertising  and  concession
contracts are recorded as deferred  revenues.  The advances  collected on screen
advertising  contracts  are  recognized  as other  revenues in the period earned
based primarily on the Company's  attendance  counts or screenings  depending on
the agreements. The periods when the Company recognizes revenues may differ from
the period the advance was  collected.  The  advances  collected  on  concession
contracts are  recognized as a reduction to concession  supplies  expense in the
period earned which may differ from the period the advance was collected.

Asset Impairment Loss

        The  Company  reviews  long-lived  assets,   including   goodwill,   for
impairment  in  conjunction  with the  preparation  of the  Company's  quarterly
consolidated   financial   statements   and   whenever   events  or  changes  in
circumstances  indicate  the  carrying  amount  of the  assets  may not be fully
recoverable.  The Company considers actual theatre level cash flow, future years
budgeted  theatre  level cash  flow,  theatre  property  and  equipment  values,
goodwill values, competitive theatres in the marketplace, theatre operating cash
flows compared to annual long-term lease payments,  the sharing of a market with
other Company theatres, the age of a recently built theatre and other factors in
its  assessment  of  impairment of individual  theatre  assets.  The  impairment
evaluation  is based on the estimated  cash flows from theatres from  continuing
use through the  remainder of the  theatre's  useful life.  The remainder of the
useful life  correlates  with the  available  remaining  lease period for leased
properties  and a period of twenty  years  for fee owned  properties.  If actual
future  cash flows  differ  from those  estimated  in the  Company's  impairment
evaluation, additional impairment charges may be required in the future.


                                       16


<PAGE>


Results of Operations

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

<TABLE>
<CAPTION>
                                                                         % of Revenues            % of Revenues
                                                                       Three Months Ended       Six Months Ended
                                                                            June 30,                June 30,
                                                                            --------                --------
                                                                        2002        2001        2002        2001
                                                                        ----        ----        ----        ----
<S>                                                                    <C>         <C>         <C>         <C>
  Revenues:
    Admissions                                                          63.7%       64.2%       64.1%       64.7%
    Concession                                                          31.6        30.5        31.1        30.0
    Other                                                                4.7         5.3         4.8         5.3
                                                                         ---         ---         ---         ---
  Total revenues                                                       100.0       100.0       100.0       100.0

  Cost of operations                                                    73.0        77.3        73.4        77.5
  General and administrative expenses                                    4.7         5.1         4.7         5.1
  Depreciation and amortization                                          6.6         8.4         7.0         8.4
  Asset impairment loss                                                  0.1           -         0.2         0.1
  Loss on sale of assets and other                                       0.1         0.9         0.2         0.5
                                                                         ---         ---         ---         ---
  Total cost of operations                                              84.5        91.7        85.5        91.6
                                                                        ----        ----        ----        ----

  Operating income                                                      15.5         8.3        14.5         8.4

  Interest expense                                                       5.6         8.8         6.0         9.3
  Income taxes (benefit)                                                 3.6        (0.6)        2.8        (0.7)
  Income (loss) before cumulative effect of an accounting change         5.5        (1.1)        5.1        (1.3)
  Net income (loss)                                                      5.5        (1.1)        4.4        (1.3)
</TABLE>

Second quarter ended June 30, 2002 and 2001

Revenues

        Revenues for the second  quarter ended June 30, 2002 increased to $253.4
million from $202.4  million for the second quarter ended June 30, 2001, a 25.2%
increase.  The  increase  in  revenues  for  the  second  quarter  is  primarily
attributable to a 26.4% increase in attendance and a 2.7% increase in concession
revenues  per  patron.  Revenues  per screen  increased  22.3% to $83,924 in the
second quarter of 2002 from $68,596 in the second quarter of 2001.

Cost of Operations

        Cost of operations,  as a percentage of revenues,  decreased to 73.0% in
the  second  quarter  of 2002 from  77.3% in the  second  quarter  of 2001.  The
decrease as a percentage of revenues was primarily due to the 25.2%  increase in
revenues and the Company's ability to effectively  control its theatre operating
costs (some of which are of a fixed  nature).  The decrease as a  percentage  of
revenues  resulted from a decrease in facility  lease expense as a percentage of
revenues to 11.5% in the second quarter of 2002 from 13.9% in the second quarter
of 2001, a decrease in utilities and other  expenses as a percentage of revenues
to 11.2 % in the second quarter of 2002 from 13.4% in the second quarter of 2001
and a decrease in salaries and wages as a percentage of revenues to 10.2% in the
second  quarter  of 2002 from 11.1% in the  second  quarter  of 2001,  partially
offset by an  increase  in film  rentals  and  advertising  as a  percentage  of
admissions  revenues  to 54.4% in the  second  quarter of 2002 from 52.7% in the
second  quarter of 2001 as a result of the stronger film product and an increase
in concession  supplies as a percentage  of concession  revenues to 17.2% in the
second quarter of 2002 from 16.6% in the second quarter of 2001.


                                       17


<PAGE>


General and Administrative Expenses

        General  and  administrative  expenses,  as a  percentage  of  revenues,
decreased  to 4.7% for the  second  quarter  of 2002  from  5.1% for the  second
quarter  of 2001  primarily  related  to the 25.2%  increase  in  revenues.  The
absolute level of general and administrative expenses increased to $11.8 million
in the second  quarter of 2002 from $10.3 million in the second quarter of 2001.
The increase in the  absolute  level of general and  administrative  expenses is
primarily attributed to increased professional fees.

Depreciation and Amortization

        Depreciation and  amortization as a percentage of revenues  decreased to
6.6% for the second  quarter  of 2002 from 8.4% for the second  quarter of 2001.
The  decrease  is  primarily  related to the 25.2%  increase  in  revenues.  The
absolute level of depreciation  and  amortization  decreased to $16.8 million in
the second quarter of 2002 from $17.1 million in the second quarter of 2001.

Asset Impairment Loss

        The Company  recorded  asset  impairment  charges of $0.2 million in the
second quarter of 2002 pursuant to Statement of Financial  Accounting  Standards
(SFAS)  No.  144  related  to assets to be held and used.  The asset  impairment
charges recorded in the second quarter of 2002 related to the write-down to fair
value of one theatre associated with the Company's El Salvador operations.

Interest Expense

        Interest costs incurred,  including  amortization of debt issue cost and
debt  discount  and the  mark-to-market  adjustment  to the  interest  rate  cap
agreement  decreased  21.0%  in the  second  quarter  of 2002 to  $14.7  million
(including  capitalized  interest to properties under  construction)  from $18.6
million  (including  capitalized  interest) in the second  quarter of 2001.  The
decrease was due  principally to a decrease in the average debt  outstanding and
the average interest rates under the Company's variable rate debt agreements.

Income Taxes (Benefit)

        Income tax expense of $9.1 million was  recorded for the second  quarter
of 2002 as  compared  to an income  tax  benefit  of $1.3  million in the second
quarter of 2001. The Company's effective tax rate for the second quarter of 2002
was 39.4% as compared to 35.2% for the second quarter of 2001.

Income (Loss) Before Cumulative Effect of an Accounting Change

        The Company  realized income before  cumulative  effect of an accounting
change of $14.1 million for the second quarter of 2002 in comparison with a loss
before  cumulative effect of an accounting change of $2.3 million for the second
quarter  of 2001.  The  increase  in income  in the  second  quarter  of 2002 is
primarily related to the 25.2% increase in revenues and the decrease in interest
expense.

Net Income (Loss)

        The Company  realized net income of $14.1 million for the second quarter
of 2002 in comparison  with a net loss of $2.3 million for the second quarter of
2001. The increase in income in the second quarter of 2002 is primarily  related
to the 25.2% increase in revenues and the decrease in interest expense.


                                       18


<PAGE>


Six month periods ended June 30, 2002 and 2001

Revenues

        Revenues  for the six  month  period  ended  June 30,  2002  ("the  2002
period")  increased  to $480.2  million  from  $398.4  million for the six month
period ended June 30, 2001 ("the 2001 period"),  a 20.5% increase.  The increase
in revenues for the 2002 period is primarily attributable to a 20.4% increase in
attendance and a 3.7% increase in concession  revenues per patron.  Revenues per
screen  increased 17.6% to $159,458 in the 2002 period from $135,546 in the 2001
period.

Cost of Operations

        Cost of operations,  as a percentage of revenues,  decreased to 73.4% in
the 2002 period from 77.5% in the 2001 period.  The decrease as a percentage  of
revenues was primarily  due to the 20.5%  increase in revenues and the Company's
ability to effectively control its theatre operating costs (some of which are of
a fixed  nature).  The decrease as a percentage of revenues  primarily  resulted
from a decrease in facility  lease  expense as a percentage of revenues to 12.1%
in the 2002 period from 14.3% in the 2001 period,  a decrease in  utilities  and
other  expenses  as a  percentage  of  revenues to 11.9% in the 2002 period from
13.5% in the 2001 period and a decrease in salaries and wages as a percentage of
revenues to 10.1% in the 2002 period  from 11.0% in the 2001  period,  partially
offset by an  increase  in film  rentals  and  advertising  as a  percentage  of
admissions revenues to 52.9% in the 2002 period from 51.9% in the 2001 period as
a result of the stronger film product.

General and Administrative Expenses

        General  and  administrative  expenses,  as a  percentage  of  revenues,
decreased  to 4.7% for the 2002 period  from 5.1% for the 2001 period  primarily
related to the 20.5%  increase in revenues.  The  absolute  level of general and
administrative expenses increased to $22.5 million in the 2002 period from $20.2
million in the 2001 period. The increase in general and administrative  expenses
is primarily attributed to increased professional fees.

Depreciation and Amortization

        Depreciation and  amortization as a percentage of revenues  decreased to
7.0% in the 2002 period from 8.4% in the 2001 period.  The decrease is primarily
related to the 20.5% increase in revenues.  The absolute  level of  depreciation
and  amortization  increased  to $34.0  million  in the 2002  period  from $33.7
million in the 2001 period.

Asset Impairment Loss

        The Company  wrote down the assets of certain  properties  to their fair
value  which  resulted  in asset  impairment  charges of $0.8  million  and $0.5
million in the 2002 and 2001 periods, respectively. The asset impairment charges
recorded in the 2002 period  related to a $0.6 million  write-down to fair value
of  goodwill  associated  with the  Company's  Argentina  operations  and a $0.2
million write-down to fair value of one theatre associated with the Company's El
Salvador  operations.  The asset impairment  charges of $0.5 million recorded in
the 2001 period related to the write-down to fair value of properties associated
with the Company's U.S. operations.


                                       19


<PAGE>


Interest Expense

        Interest costs incurred,  including  amortization of debt issue cost and
debt  discount  and the  mark-to-market  adjustment  to the  interest  rate  cap
agreement  decreased  21.8%  in the 2002  period  to  $30.1  million  (including
capitalized  interest  to  properties  under  construction)  from $38.5  million
(including  capitalized  interest) in the 2001 period.  The decrease in interest
costs  incurred  for the 2002  period was due  principally  to a decrease in the
Company's  average  debt  outstanding  and the  average  interest  rates  on the
Company's variable rate debt agreements.

Income Taxes (Benefit)

        Income tax expense of $13.6  million was recorded for the 2002 period as
compared  to an income tax  benefit  of $2.7  million  in the 2001  period.  The
Company's  effective tax rate for the 2002 period was 35.8% as compared to 35.0%
for the 2001 period.

Income (Loss) Before Cumulative Effect of an Accounting Change

        The Company  realized income before  cumulative  effect of an accounting
change of $24.3  million  for the 2002 period in  comparison  with a loss before
cumulative  effect of an accounting  change of $5.0 million for the 2001 period.
The  increase  in income in the 2002  period is  primarily  related to the 20.5%
increase in revenues and the decrease in interest expense.

Net Income (Loss)

        The Company  realized net income of $20.9 million for the 2002 period in
comparison with a net loss of $5.0 million for the 2001 period.  The increase in
income in the 2002 period is primarily related to the 20.5% increase in revenues
and the decrease in interest expense.

Liquidity and Capital Resources

Operating Activities

        The  Company's  revenues are  primarily  collected in cash,  through box
office  receipts and the sale of concession  supplies.  The Company is expanding
the number of theatres  that provide the patron a choice of using a credit card,
in place of cash, which the company  converts to cash in approximately  three to
four days.  Because revenues are primarily received in cash prior to the payment
of related  expenses,  the Company has an  operating  "float"  and, as a result,
historically has not required  traditional working capital financing.  Primarily
due to the lack of significant  inventory and accounts  receivable,  the Company
has typically  operated with a negative working capital position for its ongoing
theatre operations throughout the year.

Investing Activities

        The Company's  investing  activities have been principally in connection
with the  development  and  acquisition  of  additional  theatres.  New  theatre
openings  and  acquisitions  historically  have been  financed  with  internally
generated cash and by debt financing,  including  borrowings under the Company's
credit facility.


                                       20
<PAGE>


        The Company continues to expand its U.S. theatre circuit. As of June 30,
2002, the Company has opened two new domestic theatres (16 screens) in 2002. The
Company has no signed  commitments  to open any new theatres in the U.S.  during
the remainder of 2002. The Company has signed  commitments  for two new theatres
(31 screens) and a five screen  expansion  to an existing  theatre  scheduled to
open in the U.S. after 2002. As of June 30, 2002, the Company estimates that the
remaining capital  expenditures for the development of its remaining theatre and
expansion  commitments  (36  screens) in the U.S.  will be less than $5 million.
Actual  expenditures  for theatre  development and  acquisitions  are subject to
change based upon the availability of attractive  opportunities for expansion of
the Company's  theatre circuit.  The Company plans to fund capital  expenditures
for its continued  development from cash flow from operations,  borrowings under
the Credit Facility,  proceeds from sale leaseback  transactions and/or sales of
excess real estate.

        The Company also continues to expand its international operations. As of
June 30, 2002, Cinemark International,  through its subsidiaries, has opened two
new theatres (18 screens) and closed two screens at an existing theatre in 2002.
As of June 30, 2002, Cinemark International,  through its subsidiaries, has four
new  theatres  (32  screens)  under   construction  and  scheduled  to  open  in
international  markets by the end of 2002.  Although Cinemark  International and
its subsidiaries are reviewing sites,  there are no signed  commitments to build
any theatres in  international  markets beyond 2002. The Company  estimates that
the  remaining  capital  expenditures  for  the  development  of  its  remaining
international  theatre  commitments  (32  screens)  will  be  approximately  $15
million.  Actual expenditures for continued theatre development and acquisitions
during 2002 and thereafter are subject to change based upon the  availability of
attractive  opportunities for expansion of the Company's  international  theatre
circuit.  The  Company  anticipates  that  investments  in  excess  of  Cinemark
International's  available  cash  will be funded  by the  Company  or by debt or
equity   financing  to  be  provided  by  third  parties  directly  to  Cinemark
International or its subsidiaries.

        As of June 30, 2002,  the Company  owned  approximately  $275 million of
real  estate  and  improvements  resulting  from the  development  of  multiplex
facilities  over the last several  years.  Additionally,  the Company and/or its
affiliates, may from time to time, subject to compliance with the Company's debt
instruments, purchase on the open market the Company's debt securities depending
upon the availability and prices of such securities.

Financing Activities

        As of June 30, 2002, the Company's  long-term debt obligations,  capital
lease  obligations  and future minimum lease  obligations  under  non-cancelable
operating leases for each period indicated are summarized as follows:

<TABLE>
<CAPTION>
                                        Payments Due by Period
                                             (In millions)

                                                              Less Than     1-3       4-5       After
        Contractual Obligations                       Total     1 Year     Years     Years     5 Years
        -----------------------                       -----     ------     -----     -----     -------
<S>                                                 <C>          <C>      <C>        <C>        <C>
        Long-term debt.........................      $742.0      $38.6    $249.8     $72.3      $381.3
        Capital lease obligations..............         0.3        0.2       0.1         -           -
        Operating lease obligations............     1,516.1      103.8     210.1     209.9       992.3
</TABLE>

Senior Subordinated Notes

        The Company has outstanding three issues of senior  subordinated  notes:
(1) $200 million in 9 5/8% Series B Senior  Subordinated Notes due 2008; (2) $75
million  in 9 5/8%  Series D Senior  Subordinated  Notes due 2008;  and (3) $105
million in 8 1/2% Series B Senior  Subordinated Notes due 2008. Interest in each
issue is payable semi-annually on February 1 and August 1 of each year.


                                       21


<PAGE>


        The indentures governing the senior subordinated notes contain covenants
that  limit,  among  other  things,  dividends,  transactions  with  affiliates,
investments,  sale of assets,  mergers,  repurchases  of the  Company's  capital
stock, liens and additional indebtedness.  Upon a change of control, the Company
would be required to make an offer to repurchase the senior  subordinated  notes
at a price equal to 101% of the principal  amount  outstanding  plus accrued and
unpaid  interest  through the date of repurchase.  The indentures  governing the
senior subordinated notes allow the Company to incur additional  indebtedness if
it satisfies the coverage ratio specified in each indenture; both at the time of
incurrence  and  after  giving  effect  to  the  incurrence  of  the  additional
indebtedness, and in certain other circumstances.

        The  senior   subordinated  notes  are  general  unsecured   obligations
subordinated  in  right of  payment  to the  credit  agreement  or other  senior
indebtedness.  Generally,  if the Company is in default  under the senior credit
facility and other senior indebtedness, it would not be allowed to make payments
on the senior  subordinated  notes until the defaults have been cured or waived.
If the  Company  fails to make any  payments  when due or within the  applicable
grace period,  it would be in default under the indentures  governing the senior
subordinated notes. As of June 30, 2002, the Company was in full compliance with
all agreements governing our outstanding debt.

Cinemark USA Revolving Credit Facility

        In February 1998, the Company entered into a reducing  revolving  credit
facility  with a group  of  banks  for  which  Bank  of  America,  N.A.  acts as
administrative  agent. The credit facility provided for an initial commitment of
$350 million which is automatically  reduced each quarter by 2.5%, 3.75%,  5.0%,
6.25% and 6.25% of the  aggregate  $350 million in 2001,  2002,  2003,  2004 and
2005,  respectively,  until maturity in 2006. As of June 30, 2002, the aggregate
commitment  available  to the Company is $288.8  million.  Borrowings  under the
credit  facility  are secured by a pledge of all of the stock of the Company and
guarantees by material subsidiaries. The credit facility requires the Company to
maintain certain financial ratios;  restricts the payment of dividends,  payment
of subordinated debt prior to maturity and issuance of preferred stock and other
indebtedness; and contains other restrictive covenants typical for agreements of
this type.  Funds  borrowed  pursuant to the credit  facility bear interest at a
rate per annum equal to the Offshore  Rate or the Base Rate, as the case may be,
plus the Applicable Margin (as defined in the credit  facility).  As of June 30,
2002,  $225 million is outstanding  under the credit  facility and the effective
interest rate on such borrowings is 3.6% per annum.

Cinemark Mexico Revolving Credit Facility

        In  November  1998,  Cinemark  Mexico  (USA),  Inc.  executed  a  credit
agreement  with Bank of America  National  Trust and  Savings  Association  (the
"Cinemark Mexico Credit  Agreement").  The Cinemark Mexico Credit Agreement is a
revolving  credit  facility and provides for a loan to Cinemark  Mexico of up to
$30 million in the aggregate. The Cinemark Mexico Credit Agreement is secured by
a pledge of 65% of the stock of Cinemark de Mexico,  S.A. de C.V.  and  Cinemark
Holdings  Mexico  S.  de R.L.  de C.V.  and an  unconditional  guarantee  by the
Company.  Pursuant to the terms of the Cinemark Mexico Credit  Agreement,  funds
borrowed  bear  interest at a rate per annum equal to the  Offshore  Rate or the
Base Rate,  as the case may be,  plus the  Applicable  Margin (as defined in the
Cinemark Mexico Credit Agreement). Cinemark Mexico is required to make principal
payments  of $1.5  million  per  quarter  in 2002 with the  remaining  principal
outstanding  of $23  million due in January  2003.  As of June 30,  2002,  $27.5
million is  outstanding  under the  Cinemark  Mexico  Credit  Agreement  and the
effective interest rate on such borrowing is 4.9% per annum.


                                       22


<PAGE>


Sale and Leaseback

        In  December  1999,  the  Company  sold  the  land,  building  and  site
improvements  of its corporate  office property to a third party special purpose
entity for an aggregate  purchase  price equal to  approximately  $20.3 million.
Simultaneously  with the sale, the Company  entered into an operating  lease for
approximately  60% of the property for a base term equal to ten years at a fixed
monthly rental payment of $114,000 or $1.4 million  annually for the first seven
years and a fixed monthly  rental  payment of $123,000 or $1.5 million  annually
for the final  three  years.  The  Company  has two options to extend the office
lease; five years for the first option and ten years for the second option.  The
fixed  monthly  rental  during the first  extension  is $130,612 or $1.6 million
annually.  The fixed monthly  rental  during the second  extension is 95% of the
fair rental value.

Cinema Properties Term Loan

        In December 2000,  Cinema  Properties,  Inc., a wholly owned  subsidiary
that is not  subject  to  restrictions  imposed by the  credit  facility  or the
indenture  governing the senior  subordinated  notes,  borrowed $77 million on a
3-year  term  loan  from  Lehman  Brothers  Bank,  FSB (the  "Cinema  Properties
Facility"),  which  matures on December  31, 2003.  At the lender's  discretion,
Cinema  Properties,  Inc.  may be  required to make  principal  payments of $1.5
million  in the third and  fourth  quarters  of 2002.  Any  remaining  principal
outstanding  matures on December  31,  2003.  Cinema  Properties,  Inc.  has the
unilateral  ability to extend the  maturity  date two times for one year each by
paying   extension  fees  of  1.5%  and  3.0%  of  the  outstanding   borrowing,
respectively,  if  certain  interest  coverage  ratios  are met and no  event of
default has occurred and is continuing.  Funds  borrowed  pursuant to the Cinema
Properties Facility bear interest at a rate per annum equal to LIBOR plus 5.75%.
Borrowings  are secured  by,  among other  things,  a mortgage  placed on six of
Cinema  Properties,  Inc.'s theatres and certain  equipment  leases.  The Cinema
Properties  Facility  requires  Cinema  Properties,  Inc. to comply with certain
interest  coverage ratios and contains other  restrictive  covenants typical for
agreements of this type. Cinema Properties, Inc. has a separate legal existence,
separate  assets,  separate  creditors and separate  financial  statements.  The
assets of Cinema Properties,  Inc. are not available to satisfy the debts of any
of the Company's  other  consolidated  entities.  Cinema  Properties,  Inc. also
purchased  from Lehman  Brothers  Derivative  Products Inc. an Interest Rate Cap
Agreement with a notional  amount equal to $77 million with a five year term and
a strike rate equal to the excess of three month LIBOR over the strike  price of
6.58%.  Three month  LIBOR as of the date of closing  was 6.58%.  As of June 30,
2002, $77 million is outstanding  under the Cinema  Properties  Facility and the
effective interest rate on such borrowing is 7.6% per annum.

Cinemark Brasil Notes Payable

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

        (1) BNDES  (Banco  Nacional de  Desenvolvimento  Economico e Social (the
    Brazilian  National  Development  Bank))  credit  line  in the  U.S.  dollar
    equivalent  in Brazilian  reais of US$3.9  million  executed in October 1999
    with a term of 5  years  (with  a nine  month  grace  period)  and  accruing
    interest at a BNDES basket rate, which is a multiple  currency rate based on
    the rate at which the bank borrows, plus a spread amounting to 14.5%;

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

        (3) BNDES credit  lines,  through  FINAME (Fundo de  Financiamento  para
    Aquisicao de Maquinas e Equipamentos  Industriais (the Government Agency for
    Equipment  Financing)) in the U.S.  dollar  equivalent in Brazilian reais of
    US$158,000  executed  in  December  1999 with a term of 3 years  (with a six
    month grace  period)  and  accruing  interest at a BNDES  basket rate plus a
    spread amounting to 13.0%;

        (4) Import financing executed with several banks from April 2001 through
    February 2002 in the amount of US$6.3 million with a term of 360 to 365 days
    and accruing interest at an average rate of 7.9% per annum; and


                                       23


<PAGE>


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

        These sources are secured by a variety of instruments, including comfort
letters  from  Cinemark  International,  promissory  notes for up to 130% of the
value, a revenue reserve account and equipment collateral.  As of June 30, 2002,
an aggregate of $12.8 million was outstanding and the average effective interest
rate on such borrowings is approximately 11.2% per annum.

Cinemark Brasil Equity Financing

        During 2001,  Cinemark Brasil S.A. received  additional capital from its
Brazilian  shareholders in an aggregate amount equal to  approximately  the U.S.
dollar  equivalent in Brazilian reais of $11.0 million in exchange for shares of
common stock of Cinemark Brasil S.A. The contributions  were made in July in the
aggregate  amount of $5.0 million (US dollar  equivalent) and in November in the
aggregate amount of $6.0 million (US dollar equivalent).  The additional capital
will be used to fund  development in Brazil and to reduce Cinemark Brasil S.A.'s
outstanding  indebtedness.  After giving  effect to the  additional  issuance of
common  stock,  Cinemark  International's  ownership  interest  was  diluted  to
approximately 53%. As part of the additional capitalization,  the Company agreed
to give its Brazilian partners an option to exchange shares they own in Cinemark
Brasil  S.A.  for  shares  of the  class  of the  Company's  common  stock to be
registered in an initial public  offering under the Securities Act occurring any
time prior to December 31, 2007.  The Company has given notice to its  Brazilian
partners  that its parent  company,  Cinemark,  Inc. may  consummate  an initial
public  offering.  Certain of the Company's  Brazilian  partners have elected to
exercise their exchange option.  If Cinemark,  Inc.'s initial public offering is
completed,  the  Brazilian  partners  which  receive  shares of  Cinemark,  Inc.
pursuant to the Exchange Option  Agreement,  will have  piggy-back  registration
rights in connection with Cinemark,  Inc.'s future public offerings of its Class
A common stock.

Cinemark Chile Notes Payable

        On  March  26,   2002,   Cinemark   Chile  S.A.   entered  into  a  Debt
Acknowledgement,  Rescheduling  and Joint  Guarantee and Co-Debt  Agreement with
Scotiabank Sud Americano and three local banks.  Under this agreement,  Cinemark
Chile S.A. borrowed the U.S. dollar equivalent of approximately $10.6 million in
Chilean pesos  (adjusted  for inflation  pursuant to the Unidades de Fomento for
three of the four  loans).  Cinemark  Chile S.A.  is  required  to make 24 equal
quarterly installments of principal plus accrued and unpaid interest, commencing
March 27,  2002.  The  indebtedness  is secured by a first  priority  commercial
pledge of the shares of Cinemark  Chile S.A., a chattel  mortgage  over Cinemark
Chile's personal  property and by guarantees  issued by Cinemark  International,
L.L.C.  and Chile Films S.A.,  whose owners are  shareholders  of Cinemark Chile
S.A. The agreement  requires  Cinemark Chile S.A. to maintain certain  financial
ratios and contains other  restrictive  covenants typical for agreements of this
type such as a limitation on dividends. Funds borrowed under this agreement bear
interest at the Banking  Rate, 90 day TAB rate (360 day TAB rate with respect to
one of the four banks),  as published by the  Association of Banks and Financial
Institutions Act plus 2%. As of June 30, 2002, $9.3 million is outstanding under
this  agreement  and the effective  interest rate on such  borrowing is 4.3% per
annum.

Credit Ratings

        In August  2002,  Standard  and Poor's  rated the Company as stable.  In
conjunction with this rating,  the Company's  corporate credit was assigned a B+
rating and its three series of senior  subordinated notes due 2008 were assigned
a B- rating.


                                       24


<PAGE>


New Accounting Pronouncements

        In  August  2001,  the  Financial   Accounting  Standards  Board  issued
Statement of Financial  Accounting  Standards ("SFAS") No. 143,  "Accounting for
Asset Retirement  Obligations".  This statement  requires the establishment of a
liability for an asset  retirement  obligation.  This statement is effective for
financial  statements issued for fiscal years beginning after June 15, 2002. The
Company is currently  considering  the impact,  if any, that this statement will
have on the condensed consolidated financial statements.

        In October 2001, the Financial  Accounting  Standards  Board issued SFAS
No. 144, "Accounting for the Impairment or Disposal of Long-Lived Assets", which
supersedes SFAS No. 121, "Accounting for the Impairment of Long-Lived Assets and
of Long-Lived  Assets to be Disposed Of", and portions of APB No. 30, "Reporting
the Results of  Operations  - Reporting  the Effects of Disposal of a Segment of
Business,  and  Extraordinary,  Unusual and  Infrequently  Occurring  Events and
Transactions",  and amends Accounting  Research  Bulletin No. 51,  "Consolidated
Financial  Statements".  This statement generally conforms,  among other things,
impairment   accounting  for  assets  to  be  disposed  of  including  those  in
discontinued  operations and eliminates the exception to consolidation for which
control is likely to be  temporary.  This  statement  became  effective  for the
Company on  January  1, 2002.  The  adoption  of this  statement  did not have a
material effect on the condensed consolidated financial statements.

        In April 2002, the Financial  Accounting Standards Board issued SFAS No.
145,  "Rescission  of FASB  Statements  No.  4, 44,  and 64,  Amendment  of FASB
Statement No. 13, and Technical  Corrections".  This statement  requires,  among
other  things,  that  gains and  losses on the early  extinguishment  of debt be
classified  as  extraordinary  only if they meet the criteria for  extraordinary
treatment  set  forth  in  Accounting  Principles  Board  Opinion  No.  30.  The
provisions of this statement  related to  classification  of gains and losses on
the early  extinguishment of debt are effective for fiscal years beginning after
May 15,  2002.  Upon  adoption  of  SFAS  No.  145,  any  gain or loss on  early
extinguishment  of debt would be classified as income from operations  unless it
meets  the  criteria  for  extraordinary   treatment  set  forth  in  Accounting
Principles Board Opinion No. 30.

        In June 2002, the Financial  Accounting  Standards Board issued SFAS No.
146,  "Accounting for Costs Associated with Exit or Disposal  Activities."  This
Statement requires  recording costs associated with exit or disposal  activities
at their  fair  values  when a  liability  has  been  incurred.  Under  previous
guidance,  certain exit costs were accrued upon  management's  commitment  to an
exit plan, which is generally before an actual liability has been incurred.  The
provisions of this Statement are effective for exit or disposal  activities that
are initiated after December 31, 2002. The Company is currently  considering the
impact,  if any, that this  statement  will have on the  condensed  consolidated
financial statements.

Seasonality

        The Company's revenues have historically been seasonal,  coinciding with
the timing of releases of motion pictures by the major distributors.  Generally,
the most  successful  motion  pictures  have been  released  during  the  summer
extending from Memorial Day to Labor Day and during the holiday season extending
from Thanksgiving through year-end. The seasonality of the release of successful
films,  however,  has become less pronounced in recent years with the release of
major motion pictures  occurring more evenly  throughout the year. The timing of
such film  releases can have a significant  effect on the  Company's  results of
operations,  and the results of one quarter are not  necessarily  indicative  of
results for the next quarter or for the same period in the following year.


                                       25


<PAGE>


Item 3.  Quantitative and Qualitative Disclosures About Market Risk

        The Company has exposure to financial market risks, including changes in
interest  rates,  foreign  currency  exchange  rates and other  relevant  market
prices.

        An increase or decrease in interest  rates would affect  interest  costs
relating to the Company's  variable rate credit  facilities.  The Company and/or
its subsidiaries are currently parties to such variable rate credit  facilities.
At June 30,  2002,  there was an  aggregate  of  approximately  $362  million of
variable  rate  debt  outstanding  under  these  facilities.   These  facilities
represent approximately 49% of the Company's outstanding long-term debt. Changes
in interest  rates do not have a direct impact on interest  expense  relating to
the remaining fixed rate debt facilities.

        The table below provides  information about the Company's fixed rate and
variable rate long-term debt agreements:

<TABLE>
<CAPTION>
                                                                   Expected Maturity Date
                                                                     As of June 30, 2002
                                                                     -------------------

                                  June 30,    June 30,    June 30,    June 30,    June 30,                              Fair
(in millions)                       2003        2004        2005        2006        2007     Thereafter     Total       Value
-------------                       ----        ----        ----        ----        ----     ----------     -----       -----
<S>                                 <C>         <C>         <C>         <C>         <C>          <C>        <C>         <C>
Long-term debt:
Fixed rate                             $ -        $0.1         $ -        $0.1         $ -       $380.2     $380.4      $385.1
     Average interest rate                                                                                    9.3%

Variable rate                        $38.6      $158.1       $91.6       $70.0        $2.2         $1.1     $361.6      $358.2
    Average interest rate                                                                                     5.0%

Total debt                           $38.6      $158.2       $91.6       $70.1        $2.2       $381.3     $742.0      $743.3

</TABLE>

<TABLE>
<CAPTION>
                                                                   Expected Maturity Date
                                                                  As of December 31, 2001
                                                                  -----------------------

                                  Dec. 31,    Dec. 31,    Dec. 31,    Dec. 31,    Dec. 31,                              Fair
(in millions)                       2002        2003        2004        2005        2006     Thereafter     Total       Value
-------------                       ----        ----        ----        ----        ----     ----------     -----       -----
<S>                                 <C>         <C>         <C>         <C>         <C>         <C>         <C>         <C>
Long-term debt:
Fixed rate                             $ -        $0.1        $0.1        $0.1         $ -       $380.2     $380.5      $395.3
    Average interest rate                                                                                     9.3%

Variable rate                        $21.8      $173.2       $91.3       $95.6       $18.3         $0.3     $400.5      $405.0
    Average interest rate                                                                                     5.5%

Total debt                           $21.8      $173.3       $91.4       $95.7       $18.3       $380.5     $781.0      $800.3

</TABLE>

        In December 2000, Cinema Properties,  Inc., a wholly-owned subsidiary of
the Company, entered into the Cinema Properties Facility.  Pursuant to the terms
of the Cinema  Properties  Facility,  funds borrowed bear interest at a rate per
annum equal to LIBOR (as defined in the Cinema Properties  Facility) plus 5.75%.
As part of the Cinema  Properties  Facility,  in order to hedge  against  future
changes in  interest  rates,  Cinema  Properties,  Inc.  purchased  from  Lehman
Brothers Derivative Products Inc. an Interest Rate Cap Agreement with a notional
amount equal to $77 million with a five year term and a strike rate equal to the
excess of three month LIBOR over the strike price of 6.58%. Three month LIBOR as
of the date of closing was 6.58%.  At June 30, 2002 and December  31, 2001,  the
interest  rate cap  agreement  is recorded at its fair value of $0.4 million and
$1.1 million,  respectively. The Company does not have any additional derivative
financial  instruments  in place as of June 30,  2002 that would have a material
effect on the  Company's  financial  position,  results of  operations  and cash
flows.


                                       26


<PAGE>


        The  Company is also  exposed to market  risk  arising  from  changes in
foreign  currency  exchange rates as a result of its  international  operations.
Generally accepted accounting  principles in the U.S. require that the Company's
subsidiaries use the currency of the primary economic  environment in which they
operate  as their  functional  currency.  If one of the  Company's  subsidiaries
operates  in  a  highly  inflationary  economy,  generally  accepted  accounting
principles in the U.S.  require that the U.S.  dollar be used as the  functional
currency  for  the  subsidiary.  Currency  fluctuations  result  in the  Company
reporting  exchange gains (losses) or foreign currency  translation  adjustments
relating  to  its  international  subsidiaries  depending  on  the  inflationary
environment  of the  country  in which  the  Company  operates.  Based  upon the
Company's  equity  ownership in its  international  subsidiaries  as of June 30,
2002,  holding everything else constant,  a 10% immediate  unfavorable change in
each of the  foreign  currency  exchange  rates to which the  Company is exposed
would  decrease  the  net  fair  value  of  the  Company's  investments  in  its
international subsidiaries by approximately $5 million.


                                       27


<PAGE>


PART II - OTHER INFORMATION

Item 1. Legal Proceedings

        Reference is made to Item 3 of the Company's  Annual Report on Form 10-K
and the amended  Annual Report on Form 10-K/A for the fiscal year ended December
31, 2001.

Item 2. Changes in Securities and Use of Proceeds

        Not Applicable

Item 3. Defaults Upon Senior Securities

        Not Applicable

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

        The  shareholders  of  the  Company  signed  a  Written  Consent  of the
Shareholders in Lieu of a Special Meeting dated as of May 16, 2002,  authorizing
the  establishment of a holding company  structure  pursuant to which all of the
holders  of  shares  of Class A common  stock  and  Class B common  stock of the
Company agreed to exchange their respective  shares for shares of Class A common
stock and Class B common  stock  (for the class and  amounts  shown in the Share
Exchange Agreement) in Cinemark,  Inc., a newly formed Delaware  corporation and
to do all things  necessary or  appropriate  to  consummate  the Share  Exchange
Agreement.

Item 5. Other Information

        Not Applicable

Item 6. Exhibits and Reports on Form 8-K

               a) Supplemental  schedules specified  by the Senior  Subordinated
                  Notes Indenture:

                           Condensed Consolidating Balance Sheets
                           (unaudited) as of June 30, 2002

                           Condensed Consolidating Statements of
                           Income (unaudited) for the six months
                           ended June 30, 2002

                           Condensed Consolidating Statements of
                           Cash Flows (unaudited) for the six months
                           ended June 30, 2002

               b)  Exhibits

                  2.       Share Exchange Agreement, dated as of May 17, 2002 by
                           and among Cinemark, Inc., Cinemark USA, Inc.  and the
                           signatories thereto (incorporated by  reference  from
                           Exhibit 2 to Cinemark, Inc.'s Registration  Statement
                           on Form S-1 (File No. 333-8618) filed June 28, 2002).


                                       28


<PAGE>


               * 99.1      Certification  of  the  Chief  Executive  Officer  of
                           Cinemark USA, Inc.

               * 99.2      Certification  of  the  Chief  Financial  Officer  of
                           Cinemark USA, Inc.

               * filed herewith

               c) Reports on Form 8-K

                           No reports have been filed by  Registrant  during the
                           quarter for which this report is filed.


                                       29


<PAGE>


                                   SIGNATURES

        Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned thereunder duly authorized.


                                                         CINEMARK USA, INC.
                                                         Registrant


DATE:      August 14, 2002                               /s/Alan W. Stock
                                                         ----------------
                                                         Alan W. Stock
                                                         President


                                                         /s/Robert Copple
                                                         ----------------
                                                         Robert Copple
                                                         Chief Financial Officer


                                       30


<PAGE>
<TABLE>
<CAPTION>
                       CINEMARK USA, INC. AND SUBSIDIARIES
                     CONDENSED CONSOLIDATING BALANCE SHEETS
                               AS OF JUNE 30, 2002
                                   (Unaudited)

                                                                    Restricted     Unrestricted
                                                                       Group           Group        Eliminations         TOTAL
                                                                   -------------   -------------   --------------   ---------------
<S>                                                                <C>             <C>             <C>              <C>
                                     ASSETS
CURRENT ASSETS
    Cash and cash equivalents                                      $ 28,889,970    $ 39,606,526    $         -      $   68,496,496
    Inventories                                                       2,992,146         668,311              -           3,660,457
    Accounts receivable                                               6,940,707       4,739,716       (1,177,527)       10,502,896
    Income tax receivable                                               147,885       2,206,353              -           2,354,238
    Prepaid expenses and other                                        3,415,145       1,267,377         (750,000)        3,932,522
                                                                   ----------------------------------------------------------------
       Total current assets                                          42,385,853      48,488,283       (1,927,527)       88,946,609

THEATRE PROPERTIES AND EQUIPMENT                                    946,287,339     223,561,499              -       1,169,848,838
    Less accumulated depreciation and amortization                 (306,162,759)    (49,716,588)             -        (355,879,347)
                                                                   ----------------------------------------------------------------
       Theatre properties and equipment - net                       640,124,580     173,844,911              -         813,969,491

OTHER ASSETS

    Goodwill - net                                                    8,031,279       2,757,077              -          10,788,356
    Investments in and advances to affiliates                       166,827,393         975,095     (165,039,486)        2,763,002
    Deferred charges and other - net                                 22,621,471       6,956,847              -          29,578,318
                                                                   ----------------------------------------------------------------
       Total other assets                                           197,480,143      10,689,019     (165,039,486)       43,129,676
                                                                   ----------------------------------------------------------------

TOTAL                                                              $879,990,576    $233,022,213    $(166,967,013)   $  946,045,776
                                                                   ================================================================

               LIABILITIES AND SHAREHOLDER'S EQUITY
CURRENT LIABILITIES
    Current portion of long-term debt                              $ 27,740,871    $ 10,899,250    $         -      $   38,640,121
    Current income taxes payable                                        (34,906)         34,906              -                 -
    Accounts payable and accrued expenses                            93,106,284      20,166,437       (1,052,063)      112,220,658
                                                                   ----------------------------------------------------------------
       Total current liabilities                                    120,812,249      31,100,593       (1,052,063)      150,860,779

LONG-TERM LIABILITIES
    Senior credit agreements                                        231,641,942      91,534,144              -         323,176,086
    Senior subordinated debt                                        380,173,421             -                -         380,173,421
    Deferred lease expenses                                          23,310,249         430,543              -          23,740,792
    Deferred gain on sale leasebacks                                  4,555,580             -                -           4,555,580
    Deferred income taxes                                             4,341,659         676,824              -           5,018,483
    Deferred revenues and other long-term liabilities                 6,307,720       1,670,212         (750,000)        7,227,932
                                                                   ----------------------------------------------------------------
       Total long-term liabilities                                  650,330,571      94,311,723         (750,000)      743,892,294

COMMITMENTS AND CONTINGENCIES                                               -               -                -                 -

MINORITY INTERESTS IN SUBSIDIARIES                                    7,898,373      23,199,213              -          31,097,586

SHAREHOLDER'S EQUITY
    Class A Common stock, $.01 par value: 10,000,000 shares
       authorized, 1,500 shares issued and outstanding                       15             -                -                  15
    Class B Common stock, no par value: 1,000,000 shares
       authorized, 239,893 shares issued and outstanding             49,543,427      14,958,000      (14,958,000)       49,543,427
    Additional paid-in-capital                                       11,385,602     150,247,613     (150,206,950)       11,426,265
    Retained earnings                                               111,386,817     (45,790,193)             -          65,596,624
    Treasury stock, 57,245 Class B shares at cost                   (24,232,890)            -                -         (24,232,890)
    Accumulated other comprehensive loss                            (47,133,588)    (35,004,736)             -         (82,138,324)
                                                                   ----------------------------------------------------------------
       Total shareholder's equity                                   100,949,383      84,410,684     (165,164,950)       20,195,117
                                                                   ----------------------------------------------------------------

TOTAL                                                              $879,990,576    $233,022,213    $(166,967,013)   $  946,045,776
                                                                   ================================================================
</TABLE>

        Note:  "Restricted  Group" and  "Unrestricted  Group" are defined in the
Indenture for the Senior Subordinated Notes


                                       31


<PAGE>
<TABLE>
<CAPTION>
                       CINEMARK USA, INC. AND SUBSIDIARIES
                  CONDENSED CONSOLIDATING STATEMENTS OF INCOME
                     FOR THE SIX MONTHS ENDED JUNE 30, 2002
                                   (Unaudited)

                                                                    Restricted     Unrestricted
                                                                       Group           Group        Eliminations         TOTAL
                                                                   -------------   -------------   --------------   ---------------
<S>                                                                <C>             <C>             <C>              <C>
REVENUES                                                           $393,630,450    $ 92,943,937    $  (6,422,944)   $  480,151,443

COSTS AND EXPENSES
    Cost of operations                                              287,109,390      71,622,218       (6,422,944)      352,308,664
    General and administrative expenses                              18,279,819       4,178,760              -          22,458,579
    Depreciation and amortization                                    26,193,125       7,819,393              -          34,012,518
    Asset impairment loss                                               558,398         223,378              -             781,776
    Loss on sale of assets and other                                    606,928         205,996              -             812,924
                                                                   ----------------------------------------------------------------
           Total costs and expenses                                 332,747,660      84,049,745       (6,422,944)      410,374,461

OPERATING INCOME                                                     60,882,790       8,894,192              -          69,776,982

OTHER INCOME (EXPENSE)
    Interest expense                                                (23,591,187)     (5,215,613)             -         (28,806,800)
    Amortization of debt issue cost and debt discount                  (512,238)       (757,352)             -          (1,269,590)
    Interest income                                                     318,896         679,159              -             998,055
    Foreign currency exchange loss                                       (7,637)     (2,314,127)             -          (2,321,764)
    Equity in income of affiliates                                        7,275         205,733              -             213,008
    Minority interests in (income) loss of subsidiaries                (888,558)        152,832              -            (735,726)
                                                                   ----------------------------------------------------------------
           Total                                                    (24,673,449)     (7,249,368)             -         (31,922,817)
                                                                   ----------------------------------------------------------------

INCOME BEFORE INCOME TAXES AND
    CUMULATIVE EFFECT OF AN ACCOUNTING CHANGE                        36,209,341       1,644,824              -          37,854,165

Income taxes (benefit)                                               13,577,369         (13,308)             -          13,564,061
                                                                   ----------------------------------------------------------------

INCOME BEFORE CUMULATIVE EFFECT
    OF AN ACCOUNTING CHANGE                                          22,631,972       1,658,132              -          24,290,104

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

NET INCOME                                                         $ 19,242,193    $  1,658,132    $         -      $   20,900,325
                                                                   ================================================================
</TABLE>

        Note:  "Restricted  Group" and  "Unrestricted  Group" are defined in the
Indenture for the Senior Subordinated Notes


                                       32


<PAGE>
<TABLE>
<CAPTION>
                       CINEMARK USA, INC. AND SUBSIDIARIES
                CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS
                     FOR THE SIX MONTHS ENDED JUNE 30, 2002
                                   (Unaudited)

                                                                    Restricted     Unrestricted
                                                                       Group           Group        Eliminations         TOTAL
                                                                   -------------   -------------   --------------   ---------------
<S>                                                                <C>             <C>             <C>              <C>
OPERATING ACTIVITIES
    Net income                                                     $ 19,242,193    $  1,658,132    $         -      $   20,900,325

    Noncash items in net income:
      Depreciation                                                   25,915,302       7,708,650              -          33,623,952
      Amortization of other assets                                      277,823         110,743              -             388,566
      Amortization of foreign advanced rents                            572,951         369,788              -             942,739
      Amortized compensation - stock options                            554,559             -                -             554,559
      Amortization of debt issue costs                                  424,988         757,352              -           1,182,340
      Amortization of gain on sale leasebacks                          (182,960)            -                -            (182,960)
      Amortization of debt discount and premium                         (14,253)            -                -             (14,253)
      Amortization of deferred revenues                              (2,403,953)            -                -          (2,403,953)
      Loss on impairment of assets                                      558,398         223,378              -             781,776
      Loss on sale of assets and other                                  606,928         205,996              -             812,924
      Deferred lease expenses                                           923,824         (15,420)             -             908,404
      Deferred income tax expenses                                    8,773,179         (38,490)             -           8,734,689
      Equity in income of affiliates                                     (7,275)       (205,733)             -            (213,008)
      Minority interests in income (loss) of subsidiaries               888,558        (152,832)             -             735,726
      Cumulative effect of an accounting change                       3,389,779             -                -           3,389,779

    Changes in assets and liabilities:
      Inventories                                                      (371,194)         32,769              -            (338,425)
      Accounts receivable                                            (1,595,595)      2,142,347              -             546,752
      Prepaid expenses and other                                       (864,163)        178,470              -            (685,693)
      Other assets                                                   (4,235,368)     10,124,471              -           5,889,103
      Advances with affiliates                                              -         1,302,669              -           1,302,669
      Accounts payable and accrued expenses                           1,373,896      (1,989,181)             -            (615,285)
      Other long-term liabilities                                       279,324        (471,651)             -            (192,327)
      Income tax receivable/payable                                    (775,384)       (140,060)             -            (915,444)
                                                                   ----------------------------------------------------------------

      Net cash provided by operating activities                      53,331,557      21,801,398              -          75,132,955

INVESTING ACTIVITIES
    Additions to theatre properties and equipment                    (8,410,730)     (3,780,863)             -         (12,191,593)
    Sale of theatre properties and equipment                          1,506,227           8,250              -           1,514,477
    Dividends/capital returned from affiliates                              -           594,340              -             594,340
                                                                   ----------------------------------------------------------------

      Net cash used for investing activities                         (6,904,503)     (3,178,273)             -         (10,082,776)

FINANCING ACTIVITIES
    Increase in long-term debt                                       17,510,038       1,605,850              -          19,115,888
    Decrease in long-term debt                                      (52,156,670)     (5,100,454)             -         (57,257,124)
    Increase in minority investment in subsidiaries                         -           421,855              -             421,855
    Decrease in minority investment in subsidiaries                    (628,569)     (4,785,088)             -          (5,413,657)
                                                                   ----------------------------------------------------------------

      Net cash used for financing activities                        (35,275,201)     (7,857,837)             -         (43,133,038)

EFFECT OF EXCHANGE RATE CHANGES ON CASH AND
    CASH EQUIVALENTS                                                 (1,448,339)     (2,171,529)             -          (3,619,868)
                                                                   ----------------------------------------------------------------

INCREASE IN CASH AND CASH EQUIVALENTS                                 9,703,514       8,593,759              -          18,297,273

CASH AND CASH EQUIVALENTS:
    Beginning of period                                              19,186,456      31,012,767              -          50,199,223
                                                                   ----------------------------------------------------------------

    End of period                                                  $ 28,889,970     $39,606,526    $         -      $   68,496,496
                                                                   ================================================================
</TABLE>

        Note:  "Restricted  Group" and  "Unrestricted  Group" are defined in the
Indenture for the Senior Subordinated Notes


                                       33


<PAGE>


Exhibit 99.1


                                Certification of
                             Chief Executive Officer
                                       of
                               Cinemark USA, Inc.


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

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

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

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

Dated:  August 12, 2002.




                                                        /s/Lee Roy Mitchell
                                                        ------------------------
                                                 Name:  Lee Roy Mitchell
                                                        ------------------------




Subscribed and sworn to before me
this 12th day of August 2002.
    ------


/s/Keri Chorba
------------------------------
Name: Keri Chorba
      ------------------------
Title: Notary Public

My commission expires: 1/28/03








                                       34


<PAGE>


Exhibit 99.2


                                Certification of
                             Chief Financial Officer
                                       of
                               Cinemark USA, Inc.


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

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

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

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

Dated:  August 14, 2002.




                                                        /s/Robert Copple
                                                        ------------------------
                                                 Name:  Robert Copple
                                                        ------------------------




Subscribed and sworn to before me
this 14th day of August 2002.
    ------


/s/Keri Chorba
------------------------------
Name: Keri Chorba
      ------------------------
Title: Notary Public

My commission expires: 1/28/03









                                       35