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CINEMARK, INC. MEETS THE CONDITIONS SET FORTH IN GENERAL INSTRUCTION H(1)(A) AND (B) OF FORM 10-Q AND THEREFORE IS FILING THIS FORM WITH THE REDUCED DISCLOSURE FORMAT.

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, ~~2006~~2007

Commission File Number: ~~333~~001-~~116292~~31372

CINEMARK, INC.

(Exact name of registrant as specified in its charter)

Delaware		01-0687923
Delaware (State or other jurisdiction of incorporation or organization)		01-0687923 (I.R.S. Employer Identification No.)
(State or other jurisdiction		(I.R.S. Employer
3900 Dallas Parkway Suite 500 Plano, Texas (Address of principal executive offices)		75093 (Zip Code)
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 þ No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act. (Check One):

Large accelerated filer o Accelerated filer o Non-accelerated filer þ

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes o No þ

As of July 31, ~~2006~~2007, 27,896,316 shares of ~~Class A~~ common stock were outstanding.

CINEMARK, INC. AND SUBSIDIARIES
TABLE OF CONTENTS

	Page
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Condensed Consolidated Balance Sheets as of June 30, 2006 (unaudited) and December 31, 2005		3
Condensed Consolidated Balance Sheets as of June 30, 2007 and December 31, 2006 (unaudited)		3
Condensed Consolidated Statements of Income (unaudited) for the three and six months ended June 30, 2006 and 2005		4
Condensed Consolidated Statements of Income for the three and six months ended June 30, 2007 and 2006 (unaudited)		4
Condensed Consolidated Statements of Cash Flows (unaudited) for the six months ended June 30, 2006 and 2005		5
Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2007 and 2006 (unaudited)		5
Notes to Condensed Consolidated Financial Statements		6
Notes to Condensed Consolidated Financial Statements (unaudited)		6
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations		1521
Item 3. Quantitative and Qualitative Disclosures About Market Risk		25
Item 4. Controls and Procedures		29
Item 4. Controls and Procedures		26
PART II. OTHER INFORMATION
Item 1. Legal Proceedings		2730
Item 1A. Risk Factors		2730
Item 5. Other Information		2730
Item 6. Exhibits		3134
SIGNATURES		3436
Certification of CEO Pursuant to Section 302
Certification of CFO Pursuant to Section 302
Certification of CEO Pursuant to Section 906
Certification of CFO Pursuant to Section 906

PART I — FINANCIAL INFORMATION

Item 1. Financial Statements

CINEMARK, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, ~~except share data~~unaudited)

	June 30,			December 31,
	2006			2005
	2007			2006
	(unaudited)
	(Successor)			(Successor)
ASSETS
CURRENT ASSETS
Cash and cash equivalents	$	~~139~~138,~~381~~268		$	~~182~~147,~~199~~099
Inventories		56,~~030~~786			46,~~546~~058
Accounts receivable		2232,~~852~~487			1531,~~405~~165
Prepaid expenses and other		3,751			4,538
Income tax receivable		—			8,946
Total current assets		171,014			206,688
Current deferred tax asset		4,711			4,661
THEATRE PROPERTIES AND EQUIPMENT		1,431,876			1,398,798
Prepaid expenses and other		8,124			8,424
Less accumulated depreciation and amortization		635,266			608,232
Total current assets		190,376			206,353
Theatre properties and equipment — net		796,610			790,566
THEATRE PROPERTIES AND EQUIPMENT		1,834,667			1,736,706
Less accumulated depreciation and amortization		496,101			412,134
Theatre properties and equipment — net		1,338,566			1,324,572
OTHER ASSETS
Goodwill		431,~~241~~150,291			421,~~107~~205,423
Intangible assets — net		8356,~~927~~867			9360,~~958~~752
Investments in and advances to affiliates		75,~~176~~889			811,~~593~~354
Deferred charges and other assets — net		5371,~~927~~223			5463,~~376~~092
Total other assets		~~113~~1,~~271~~584,270			~~115~~1,~~034~~640,621
TOTAL ASSETS	$	13,~~080~~113,~~895~~212		$	13,~~112~~171,~~288~~546
LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIENCY)
LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES
Current portion of long-term debt	$	513,~~361~~954		$	614,~~871~~259
Income tax payable		4,093			13,144
Current portion of capital lease obligations		3,944			3,649
Accounts payable and accrued expenses		129,151			140,052
Income tax payable		35,157			—
Total current liabilities		138,605			160,067
Accounts payable and accrued expenses		189,078			212,914
Total current liabilities		242,133			230,822
LONG-TERM LIABILITIES
Senior credit agreements		258,020			260,076
Long-term debt, less current portion		1,561,227			1,897,394
Senior subordinated notes		756,453			777,308
Capital lease obligations, less current portion		113,066			112,178
Deferred income taxes		987,~~795~~219			15198,~~591~~320
Deferred lease expenses		30,083			29,518
Long-term portion FIN 48 liability		12,084			—
Deferred gain on sale leasebacks		3,092			3,275
Deferred lease expenses		16,545			14,285
Deferred revenues and other long-term liabilities		6185,~~578~~627			812,~~513~~672
Total long-term liabilities		1,~~064~~975,~~021~~768			12,~~094~~234,~~281~~849
COMMITMENTS AND CONTINGENCIES		—			—
COMMITMENTS AND CONTINGENCIES (see Note 20)
MINORITY INTERESTS IN SUBSIDIARIES		1617,~~237~~300			16,~~422~~613
STOCKHOLDERS’ EQUITY (DEFICIENCY)
STOCKHOLDERS’ EQUITY
Class A common stock, $0.001 par value: 40,000,000 shares authorized and 27,896,316 shares issued and outstanding		28			28
Class A common stock, $0.001 par value: 40,000 shares authorized and 27,896 shares issued and outstanding		28			28
Additional paid-in-capital		~~605~~686,~~875~~912			~~604~~685,~~443~~463
Retained deficit		(681,675	)		(702,768	)
Retained earnings (deficit)		156,058			(7,692	)
Accumulated other comprehensive loss		(62,196	)		(60,185	)
Accumulated other comprehensive income		35,013			11,463
Total stockholders’ equity (deficiency)		(137,968	)		(158,482	)
Total stockholders’ equity		878,011			689,262
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIENCY)	$	1,080,895		$	1,112,288
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	3,113,212		$	3,171,546

The accompanying notes are an integral part of the condensed consolidated financial statements.

CINEMARK, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(in thousands, unaudited)

	Three months ended June 30,							~~Six months ended June 30,~~	Six months ended June 30,
	2006			2005				2006				2005
	2007				2006				2007					2006
REVENUES
	(Successor)				(Predecessor)				(Successor)					(Predecessor)
Admissions	$	182,862		$	157,749			$	336,530			$	308,909
REVENUES
Concession		91,901			80,335				169,973				154,103
Admissions	$	283,117			$	182,862			$	527,107				$	336,530
Other		20,342			14,943				34,591				27,696
Concession		138,448				91,901				253,535					169,973
Total revenues		295,105			253,027				541,094				490,708
Other		18,471				20,342				37,416					34,591
COSTS AND EXPENSES
Total revenues		440,036				295,105				818,058					541,094
Cost of operations (excludes depreciation and amortization):
COST OF OPERATIONS
Film rentals and advertising		~~100~~159,~~298~~084			~~88,348~~	100,298			~~179,246~~	287,378			~~167,249~~		179,246
Concession supplies		1422,~~807~~668			~~12,650~~	14,807			~~26,847~~	40,125			~~24,395~~		26,847
Salaries and wages		2645,~~959~~444			~~25,442~~	26,959			~~51,486~~	85,626			~~49,725~~		51,486
Facility lease expense		3653,~~623~~253			~~32,945~~	36,623			~~72,450~~	104,898			~~65,836~~		72,450
Utilities and other		3348,~~337~~219			~~29,683~~	33,337			~~65,457~~	92,412			~~58,862~~		65,457
Total cost of operations		212,024			189,068				395,486				366,067
General and administrative expenses		18,297				15,428				36,937					29,510
General and administrative expenses		15,428			12,241				29,510				24,558
Termination of profit participation agreement		6,952				—				6,952					—
Depreciation and amortization		2036,~~011~~720			~~19,667~~	19,968			~~40,180~~	73,595			~~37,921~~		40,094
Impairment of long-lived assets		647			—				923				226
Amortization of favorable leases		625				43				1,559					86
Loss on sale of assets and other		815			150				1,543				838
Impairment of long-lived assets		7,036				647				56,766					923
Total costs and expenses		248,925			221,126				467,642				429,610
(Gain) loss on sale of assets and other		(1,864	)			815				(1,559	)				1,543
OPERATING INCOME		46,180			31,901				73,452				61,098
Total cost of operations		396,434				248,925				784,689					467,642
OTHER INCOME (EXPENSE)
OPERATING INCOME		43,602				46,180				33,369					73,452
Interest expense		(21,880	)		(20,476	)			(43,911	)			(40,364	)
OTHER INCOME (EXPENSE)
Amortization of debt issue costs		(1,024	)		(986	)			(2,056	)			(1,963	)
Interest expense		(35,301	)			(22,904	)			(76,798	)				(45,967	)
Interest income		12,~~580~~266			~~1,194~~	1,580			~~3,474~~	6,049			~~2,024~~		3,474
Foreign currency exchange gain (loss)		695			(878	)			755				(960	)
Gain on NCM transaction		—				—				210,773					—
Loss on early retirement of debt		(3,315	)		—				(3,315	)			—
Gain on Fandango transaction		9,205				—				9,205					—
Equity in income (loss) of affiliates		(79	)		28				(1,268	)			122
Foreign currency exchange gain (loss)		(57	)			695				163					755
Minority interests in income of subsidiaries		(885	)		(340	)			(1,157	)			(440	)
Loss on early retirement of debt		(123	)			(3,315	)			(7,952	)				(3,315	)
Total other expenses		(24,908	)		(21,458	)			(47,478	)			(41,581	)
Distributions from NCM		1,362				—				1,362					—
INCOME BEFORE INCOME TAXES		21,272			10,443				25,974				19,517
Equity in loss of affiliates		(265	)			(79	)			(1,496	)				(1,268	)
Income taxes		7,349			2,304				4,881				5,479
Minority interests in income of subsidiaries		(606	)			(885	)			(895	)				(1,157	)
NET INCOME	$	13,923		$	8,139			$	21,093			$	14,038
Total other income (expense)		(23,519	)			(24,908	)			140,411					(47,478	)
INCOME BEFORE TAXES		20,083				21,272				173,780					25,974
Income taxes		(26,456	)			7,349				8,937					4,881
NET INCOME	$	46,539			$	13,923			$	164,843				$	21,093

The accompanying notes are an integral part of the condensed consolidated financial statements.

CINEMARK, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands, unaudited)

	Six months ended June 30,
	2006			2005
	2007				2006
OPERATING ACTIVITIES
	(Successor)				(Predecessor)
Net income	$	21,093		$	14,038
OPERATING ACTIVITIES
Noncash items in net income:
Net income	$	164,843			$	21,093
Depreciation		39,047			36,219
Adjustments to reconcile net income to cash provided by operating activities:
Amortization of intangible and other assets		1,133			1,702
Depreciation		71,566				39,047
Amortization of foreign advanced rents		582			699
Amortization of intangible and other assets		3,588				1,133
Amortization of debt issue costs		2,056			1,963
Amortization of long-term prepaid rents		511				582
Amortization of gain on sale leasebacks		(183	)		(183	)
Amortization of debt issue costs		2,363				2,056
Amortization of debt premium		(~~782~~678	)		~~(782~~	)(782	)
Amortization of deferred revenues		(188	)		(154	)
Amortization of deferred revenues, deferred lease incentives, and other		(875	)			(371	)
Impairment of long-lived assets		~~923~~56,766			~~226~~	923
Stock option compensation expense		1,~~432~~449			—	1,432
Loss on sale of assets and other		1,543			838
Gain on NCM transaction		(210,773	)			—
Write-off unamortized debt issue costs related to early retirement of debt		1,183			—
Gain on Fandango transaction		(9,205	)
Accretion of interest on senior discount notes		20,258			18,843
(Gain) loss on sale of assets and other		(1,559	)			1,543
Deferred lease expenses		565			681
Write-off unamortized bond premiums and unamortized debt issue costs related to the early retirement of debt		(17,098	)			1,183
Deferred income tax expenses		(5,796	)		(2,300	)
Accretion of interest on senior discount notes		21,150				20,258
Equity in (income) loss of affiliates		1,268			(122	)
Deferred lease expenses		3,311				565
Minority interests in income of subsidiaries		1,157			440
Deferred income tax expenses		(126,443	)			(5,796	)
Changes in assets and liabilities:
Equity in loss of affiliates		1,496				1,268
Inventories		(484	)		(598	)
Minority interests in income of subsidiaries		895				1,157
Accounts receivable		(7,447	)		(4,026	)
Changes in assets and liabilities:
Prepaid expenses and other		787			(39	)
Inventories		(728	)			(484	)
Other assets		(4,613	)		(11,986	)
Accounts receivable		(1,322	)			(7,447	)
Advances with affiliates		(122	)		(160	)
Prepaid expenses and other		300				787
Accounts payable and accrued expenses		(7,653	)		(4,387	)
Other assets		(2,144	)			(4,613	)
Other long-term liabilities		404			294
Advances with affiliates		(742	)			(122	)
Income tax receivable/payable		(9,051	)		13,836
Accounts payable and accrued expenses		(21,175	)			(7,653	)
Net cash provided by operating activities		57,112			65,042
Interest paid on repurchased senior discount notes		—				(5,381	)
INVESTING ACTIVITIES
Increase in deferred revenues related to NCM transaction		174,001				—
Additions to theatre properties and equipment		(55,064	)		(27,849	)
Increase in deferred revenues related to Fandango transaction		5,000
Proceeds from sale of theatre properties and equipment		178			1,249
Other long-term liabilities		(5,171	)			404
Return of capital from affiliates		271			284
Income tax receivable/payable		55,094				(9,051	)
Net cash used for investing activities		(54,615	)		(26,316	)
Net cash provided by operating activities		164,420				51,731
FINANCING ACTIVITIES
INVESTING ACTIVITIES
Retirement of senior discount notes		(30,331	)		—
Additions to theatre properties and equipment		(73,148	)			(55,064	)
Retirement of senior subordinated notes		(10,000	)		—
Proceeds from sale of theatre properties and equipment		13,915				178
Proceeds from long-term debt		963			—
Net proceeds from sale of NCM stock		214,842				—
Repayments of long-term debt		(3,570	)		(3,238	)
Net proceeds from sale of Fandango stock		11,347				—
Other		(1,601	)		186
Investment in joint venture — DCIP		(1,500	)
Net cash used for financing activities		(44,539	)		(3,052	)
Other		—				271
Effect of exchange rate changes on cash and cash equivalents		(776	)		2,910
Net cash provided by (used for) investing activities		165,456				(54,615	)
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS		(42,818	)		38,584
FINANCING ACTIVITIES
CASH AND CASH EQUIVALENTS:
Retirement of senior discount notes		—				(24,950	)
Beginning of period		182,199			100,248
Retirement of senior subordinated notes		(332,066	)			(10,000	)
End of period	$	139,381		$	138,832
Proceeds from long-term debt		—				963
Repayments of long-term debt		(7,200	)			(3,570	)
Payments on capital leases		(1,760	)			—
Other		(208	)			(1,601	)
Net cash used for financing activities		(341,234	)			(39,158	)
Effect of exchange rate changes on cash and cash equivalents		2,527				(776	)
DECREASE IN CASH AND CASH EQUIVALENTS		(8,831	)			(42,818	)
CASH AND CASH EQUIVALENTS:
Beginning of period		147,099				182,199
End of period	$	138,268			$	139,381

SUPPLEMENTAL INFORMATION (~~See~~see Note 1017)

The accompanying notes are an integral part of the condensed consolidated financial statements.

CINEMARK, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)

1. The Company and Basis of Presentation

Cinemark, Inc. and subsidiaries (the “Company”) are ~~one of the~~ leaders in the motion picture ~~exhibition~~ exhibition industry in terms of both revenues and the number of screens in operation, with theatres in the United States (“U.S.”), Canada, Mexico, Argentina, Brazil, Chile, Ecuador, Peru, Honduras, El El Salvador, Nicaragua, Costa Rica, Panama and Colombia. The Company also managed additional ~~theatres~~ theatres in the U.S., ~~Canada,~~ Brazil, ~~Colombia~~ and ~~Taiwan~~Colombia during the six months ended June 30, ~~2006~~ 2007.

On ~~May~~August 162, ~~2002~~2006, Cinemark Holdings, Inc. was formed as the Delaware holding company of Cinemark, Inc. On August 7, 2006, the Cinemark, ~~USA~~Inc. stockholders entered into a share exchange agreement pursuant to which they agreed to exchange their shares of Class A common stock for an equal number of shares of common stock of Cinemark Holdings, Inc. (“Cinemark Share Exchange”). The Cinemark Share Exchange was completed on October 5, 2006 and facilitated the acquisition of Century Theatres, Inc. (“Century Acquisition”) on that date. On October 5, 2006, Cinemark, Inc. became a wholly owned subsidiary of Cinemark Holdings, Inc.

~~The~~Due ~~condensed~~to ~~consolidated~~a ~~financial~~change ~~statements~~in ~~have~~reporting ~~been~~entity ~~prepared~~that byoccurred ~~the~~as ~~Company,~~a ~~without audit,~~result ~~according to the rules and regulations~~ of the ~~Securities~~Cinemark ~~and~~Share Exchange ~~Commission. In the~~, ~~opinion~~Cinemark ~~of management~~Holdings, ~~these~~Inc.’s ~~interim~~accounting ~~financial~~basis ~~statements~~was ~~reflect~~pushed ~~all~~down ~~adjustments necessary~~ to ~~state~~ ~~fairly~~ the ~~financial~~Company ~~position~~effective ~~and~~on ~~results~~the date of the ~~operations~~Cinemark asShare ofExchange, ~~and for~~October 5, ~~the periods indicated~~2006. ~~Majority-owned~~The ~~subsidiaries~~accompanying ~~that~~condensed ~~the Company controls are~~ consolidated ~~while~~statements ~~those~~of ~~subsidiaries~~income ~~of which the Company owns between 20%~~ and ~~50%~~cash ~~and~~flows ~~does~~present ~~not control are accounted for as affiliates under~~ the ~~equity~~results ~~method. Those subsidiaries~~ of ~~which~~ the Company’s ~~owns~~operations ~~less~~and ~~than~~cash ~~20% are~~flows ~~accounted~~ for asthe periods ~~affiliates~~preceding ~~under~~ the ~~cost~~Cinemark ~~method.~~Share ~~The~~Exchange ~~results~~as ofPredecessor ~~these subsidiaries~~ and ~~affiliates~~ ~~are included in~~ the ~~condensed~~periods ~~consolidated~~subsequent ~~financial~~to ~~statements effective with their~~the ~~formation~~Cinemark orShare ~~from~~Exchange ~~their~~as ~~dates of acquisition~~Successor. ~~Significant~~See ~~intercompany~~Note ~~balances and transactions are eliminated in consolidation~~3.

~~These~~The condensed consolidated financial statements ~~should~~have bebeen ~~read~~prepared inby ~~conjunction~~the ~~with~~Company, ~~the~~without ~~audited~~audit, ~~annual~~according ~~consolidated~~to ~~financial~~the ~~statements~~rules and ~~the~~regulations ~~notes~~of ~~thereto~~the ~~for~~Securities ~~the~~and ~~year~~Exchange ~~ended~~Commission. ~~December~~In the ~~31,~~opinion ~~2005~~of management, ~~included~~these ininterim financial statements reflect all adjustments necessary to state fairly the ~~Annual~~financial ~~Report~~position ~~filed~~and ~~March 28~~results of operations as of, ~~2006~~and for, onthe ~~Form~~periods indicated. 10Majority-Kowned bysubsidiaries that the Company ~~under~~controls are consolidated while those subsidiaries of which the Company owns between 20% and 50% and does not control are accounted for ~~Securities~~as ~~Exchange~~affiliates ~~Act~~under ofthe ~~1934~~equity method. ~~Operating~~Those ~~results~~subsidiaries ~~for~~of which the ~~six~~Company ~~months~~owns ~~ended~~less ~~June 30~~than 20% are generally accounted for as affiliates under the cost method, ~~2006~~unless the Company is deemed to have the ability to exercise significant influence over the affiliate, ~~are~~in ~~not~~which case the Company ~~necessarily~~would ~~indicative~~account offor its investment under the equity method. The results toof bethese ~~achieved~~subsidiaries ~~for~~and affiliates are included in the ~~full~~condensed ~~year~~consolidated financial statements effective with their formation or from their dates of acquisition. Significant intercompany balances and transactions are eliminated in consolidation.

2. These ~~New~~condensed consolidated financial statements should be read in conjunction with the ~~Accounting~~audited ~~Pronouncements~~annual consolidated financial statements and ~~Tax~~the ~~Regulations~~notes thereto for the year ended December 31, 2006, included in the 424(b)(1) Prospectus filed April 24, 2007 by the Company pursuant to Rule 424(b)(1) of the Securities Act of 1933, as amended. Operating results for the six months ended June 30, 2007 are not necessarily indicative of the results to be achieved for the full year.

In ~~July~~May 2006, the ~~Financial~~Company ~~Accounting~~repurchased ~~Standards~~$39.8 million ~~Board~~aggregate ~~(“FASB”)~~principal ~~issued~~amount ~~FASB~~at ~~Interpretation~~maturity ~~No.~~of ~~48,~~its ~~“Accounting~~9 ~~for~~3/4% ~~Uncertainty~~senior indiscount ~~Income~~notes ~~Taxes”~~for ~~(FIN~~approximately ~~48)~~$31.7 million, ~~FIN~~including 48accreted ~~clarifies~~interest ~~the~~of ~~accounting~~$5.4 million and ~~reporting~~ ~~for~~a ~~income~~$1.4 million ~~taxes~~cash ~~recognized~~premium inpaid. ~~accordance~~In ~~with~~the ~~Statement~~Company’s of2006 ~~Financial~~second ~~Accounting~~quarter unaudited ~~Standards~~interim ~~(“SFAS”)~~consolidated ~~No. 109,~~statements ~~“Accounting~~of ~~for Income~~cash ~~Taxes.”~~flows ~~FIN 48~~included ~~prescribes~~as ~~a comprehensive~~part ~~model~~of ~~for~~its ~~the~~Form ~~financial~~10-Q ~~statement recognition~~filing, ~~measurement,~~the ~~presentation and~~Company ~~disclosure~~presented the payment of ~~uncertain~~accreted ~~tax~~interest ~~positions~~as ~~taken~~a orfinancing ~~expected~~activity. toThe beCompany ~~taken~~believes inthis presentation ~~income~~to ~~tax~~be ~~returns.~~incorrect ~~The Company~~and ishas ~~currently~~properly ~~evaluating~~presented the ~~impact~~payment ofas ~~FIN~~an ~~48.~~operating ~~The~~activity ~~Company~~in ~~will~~its ~~adopt~~condensed ~~FIN 48~~consolidated in statements of cash flows for the ~~first~~six ~~quarter~~months ofended ~~2007~~June 30, 2006.

~~On May 18, 2006, the State of Texas passed a bill to replace the current franchise tax with a new margin tax to be effective January 1, 2008~~2. ~~The~~New ~~Company~~Accounting ~~estimates the new margin tax will not~~Pronouncements ~~have a significant impact on tax expense or deferred tax assets and liabilities.~~

3 In September 2006, the Financial Accounting Standards Board (“FASB”) issued Statement of Financial Accounting Standards (“SFAS”) No. 157, ~~Investment~~“Fair inValue ~~National~~Measurements.” ~~CineMedia~~Among other requirements, this statement defines fair value, establishes a framework for using fair value to measure assets and liabilities, and expands disclosures about fair value measurements. The statement applies whenever other statements require or permit assets or liabilities to be measured at fair value. SFAS No. 157 is effective for the Company beginning January 1, 2008. Adoption of this statement is not expected to have a significant impact on the Company’s condensed consolidated financial statements.

OnIn ~~July~~February 152007, ~~2005,~~the ~~Cinemark~~FASB ~~Media,~~issued ~~Inc~~SFAS No. 159, a“The ~~wholly-owned~~Fair ~~subsidiary~~Value ofOption ~~the~~for ~~Company,~~Financial ~~purchased a~~Assets ~~20.7%~~and ~~interest~~Financial ~~in National CineMedia LLC (“National CineMedia~~Liabilities”~~) for approximately $7,329~~. ~~National CineMedia~~SFAS ~~is a joint venture between Regal Entertainment Group, AMC Entertainment Inc~~No. 159 ~~and the Company. National CineMedia~~ provides ~~marketing,~~companies ~~sales~~with ~~and~~an ~~distribution~~option ofto ~~cinema~~report ~~advertising and~~selected ~~promotional~~financial ~~products;~~assets ~~business~~and ~~communications~~liabilities ~~and~~at ~~training~~fair ~~services;~~value and ~~the~~establishes ~~distribution~~presentation ~~of digital alternative content. As part of the transaction, the Company~~ and ~~National CineMedia~~disclosure ~~entered~~requirements ~~into~~designed anto ~~exhibitor~~facilitate ~~services~~comparisons ~~agreement,~~between ~~pursuant~~companies tothat ~~which~~choose ~~National~~different ~~CineMedia provides~~measurement ~~advertising,~~attributes ~~promotion~~for ~~and~~similar ~~event~~types ~~services~~of toassets ~~the Company’s theatres,~~ and aliabilities. ~~software~~SFAS ~~license agreement~~No. 159 inis ~~connection~~effective ~~with~~for the ~~licensing of certain software and related rights.~~

The Company is accounting for its investment in National CineMedia under the equity method of accounting. The Company’s investment in National CineMedia is included in investments in and advances to affiliates on the Company’s condensed consolidated balance sheets. During the six months ended June 30, 2006, the Company received a $271 return of its capital investment from National CineMedia and recorded an equity loss of $1,299. As of June 30, 2006, the Company’s investment in National CineMedia was approximately $5,759. The Company recorded $10,444 and $0 of other revenue from National CineMedia during the six months ended June 30, 2006 and June 30, 2005, respectively, related to screen advertising and other ancillary streams of revenue. The Company had a

CINEMARK, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)

~~receivable~~Company ~~recorded~~beginning inJanuary 1, ~~the~~2008. ~~amount~~Adoption of ~~$8,421~~this ~~and~~statement ~~$58~~is ~~due~~not ~~from~~expected ~~National CineMedia related~~ to ~~screen advertising~~have ~~and~~a ~~other~~significant ~~ancillary streams of revenue as of~~impact ~~June 30,~~on ~~2006~~the ~~and~~Company’s ~~December 31,~~condensed ~~2005,~~consolidated ~~respectively~~financial statements.

~~Under~~3. ~~the~~Merger ~~terms of its agreement~~ with ~~National~~Madison ~~CineMedia,~~Dearborn ~~the~~Partners ~~Company~~and ~~installed~~Related ~~digital distribution~~Change ~~technology~~ in ~~certain~~Accounting ~~of its domestic theatres. The Company has spent approximately~~Basis ~~$21,000 for digital projectors and related equipment necessary to show various digital media to meet the requirements of this agreement.~~

AsOn ~~part~~April 2, of2004, ~~the~~a ~~joint~~newly ~~venture,~~formed ~~the~~subsidiary ~~Company,~~of ~~Regal~~an ~~Entertainment~~affiliate ~~Group,~~of ~~AMC~~Madison ~~Entertainment~~Dearborn ~~Inc.~~Partners ~~and~~(“MDP”) ~~National~~was ~~CineMedia~~merged ~~signed~~with aand ~~promissory~~into ~~note under which~~ the Company, ~~Regal~~with ~~Entertainment~~the ~~Group and~~Company ~~AMC~~continuing ~~Entertainment~~as ~~Inc.~~the ~~were~~surviving corporation ~~obligated~~(the to“MDP ~~make loans to National CineMedia on a revolving basis as needed~~Merger”). ~~The~~Simultaneously, ~~maximum~~an ~~amount~~affiliate ~~that~~of ~~National~~MDP ~~CineMedia~~purchased ~~could~~shares ~~borrow~~of ~~under~~ the ~~note was $11,000 for~~ ~~which the~~ Company’s ~~obligation~~common ~~was~~stock ~~approximately~~for $2518,~~300.~~245 ~~Amounts~~in ~~borrowed~~cash byand ~~National~~became ~~CineMedia were~~the ~~due~~Company’s incontrolling ~~full~~stockholder, owning ~~upon~~approximately ~~the~~83% ~~earlier~~ of ~~March 31,~~the ~~2007~~Company’s orcapital anstock ~~event~~as of ~~default~~the asdate ~~defined~~of in the ~~promissory~~ ~~note~~Merger. ~~During~~Lee ~~March 2006~~Roy Mitchell, ~~National~~the ~~CineMedia secured a $20,000 revolving credit facility with various lenders. The~~ Company’s isthen ~~not~~Chief aExecutive ~~party~~Officer, toand ~~nor~~the ~~has~~Mitchell ~~any~~Special ~~obligation~~Trust ~~under~~collectively retained ~~this~~approximately ~~credit facility.~~16% Asownership of ~~June 30, 2006, all amounts due under~~ the ~~promissory~~Company’s ~~note~~capital ~~were~~stock ~~repaid~~with incertain ~~full~~members byof ~~National~~management ~~CineMedia~~owning ~~and~~ the ~~Company~~remaining no1% ~~longer~~as ~~has~~of ~~any~~the ~~obligation~~date toof ~~make~~the ~~loans to National CineMedia~~Merger.

4 On April 2, 2004, the Company accounted for the MDP Merger as a leveraged recapitalization, which resulted in the Company and its subsidiaries retaining their historical book values. ~~Stock~~As ~~Option~~a result ~~Accounting~~of the Cinemark Share Exchange on October 5, 2006, and the resulting change in reporting entity, the Company was required to prepare its financial statements to reflect the accounting basis of its parent, Cinemark Holdings, Inc. Cinemark Holdings, Inc. accounted for the MDP merger under the purchase method of accounting on April 2, 2004. The following table represents the allocation of MDP purchase price to the proportionate share of assets acquired and liabilities assumed as of April 2, 2004:

During September 2004, the Company’s Board of Directors approved the 2004 Long Term Incentive Plan (the “Plan”) under which 3,074,991 shares of the Company’s Class A common stock are available for issuance to selected employees, directors and consultants of the Company. The Plan provides for restricted share grants, incentive option grants and nonqualified option grants.


Current assets	$	79,967
Fixed assets		650,653
Goodwill		620,540
Tradename		173,882
Net favorable leases		31,047
Vendor contracts		52,012
Internally developed software		1,626
Other long term assets		42,384
Current liabilities		(90,940	)
Other long term liabilities		(120,232	)
Long-term debt		(922,694	)

Total	$	518,245

OnCinemark ~~September 30~~Holdings, ~~2004,~~Inc.’s ~~the~~accounting ~~Company~~basis ~~granted~~was ~~options~~pushed down to ~~purchase 2,361,590 shares under~~ the ~~Plan at~~Company aneffective ~~exercise price of $22~~October 5, 2006.58 ~~per~~The ~~option~~successor ~~(equal~~accounting tobasis reflects the ~~market~~MDP ~~value~~merger atpurchase ~~the~~accounting ~~date~~as of ~~grant). Options~~April 2, to2004 ~~purchase~~adjusted ~~234,219~~for ~~shares~~depreciation ~~vested immediately~~ and ~~the~~amortization ~~remaining~~as ~~options~~well ~~granted~~as inother ~~2004~~period ~~vest~~charges ~~daily over~~taken ~~the~~subsequent ~~period ending~~ to April 12, ~~2009~~2004 ~~and~~that ~~expire~~have ~~ten~~affected ~~years from~~ the ~~grant~~basis ~~date.~~of ~~On January 28, 2005,~~ the Company’s ~~granted~~assets ~~options~~and toliabilities. ~~purchase~~Below ~~4,075~~is ~~shares~~a summary ~~under~~of the ~~Plan~~impact ~~at an exercise price~~ of ~~$22.58 per~~this ~~option~~push ~~(equal~~down toon the ~~market~~Company’s ~~value~~balance atsheet ~~the~~on ~~date~~October 5, ~~of grant). The options granted during January~~2006:


Net increase in fixed assets	$	15,013
Net increase in goodwill		508,760
Net increase in intangible assets		228,424
Net increase in investments in and advances to affiliates		2,600
Net decrease in deferred charges and other assets		(7,277	)
Net increase in long-term debt		(9,059	)
Net increase in deferred income taxes		(87,059	)
Net decrease in deferred lease expense		16,561
Net decrease in deferred revenues and other long-term liabilities		2,493

Net increase in stockholders’ equity	$	670,456

The tradename, net favorable leases, and vendor contracts are presented as intangible assets on the Company’s condensed consolidated balance sheets as of December 31, 2006 and June 30, 2007. The goodwill recorded as a result of the MDP Merger is not deductible for tax purposes.

CINEMARK, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)

~~2005 vest daily over five years and the options expire ten years from the grant date~~4. ~~There~~Cinemark ~~were no grants under the Plan during the six months ended June 30~~Holdings, ~~2006~~Inc.’s ~~nor~~Initial ~~were~~Public ~~there any options~~Offering ~~exercised.~~

~~For~~On ~~each~~April 24, ~~2004~~2007, Cinemark Holdings, Inc., the Company’s parent, completed its initial public offering. Cinemark Holdings, Inc. sold 13,888,889 shares of its common stock and ~~2005~~selling stockholders ~~grant~~sold an additional 14,111,111 shares of common stock at a price of $17.955 ($19 per share less underwriting discounts). The net proceeds (before expenses) received by Cinemark Holdings, Inc. were $249,375 and Cinemark Holdings, Inc. paid approximately $3,397 in legal, accounting and other fees, all of which are recorded in additional paid-in-capital of Cinemark Holdings, Inc. The selling stockholders granted the ~~fair~~underwriters ~~values~~a 30-day option to purchase up to an additional 2,800,000 shares of Cinemark Holdings, Inc. common stock at a price of $17.955 ($19 per share less underwriting discounts). On May 21, 2007, the ~~options~~underwriters ~~were~~purchased ~~estimated~~an onadditional 269,100 shares from the ~~dates~~selling stockholders pursuant to this option. Cinemark Holdings, Inc. did not receive any proceeds from the sale of ~~grant~~shares ~~using~~by the ~~Black-Scholes~~selling stockholders. Cinemark Holdings, Inc. expects to use the net proceeds that it received from the offering to repurchase a portion of the outstanding 9 3/4% senior discount notes or repay debt outstanding under the senior secured credit facility. The 9 3/4% senior discount notes are not currently subject to repurchase at Cinemark Holdings, Inc.’s option~~-pricing~~. ~~model~~Accordingly, ~~with~~if Cinemark Holdings, Inc. is unable to repurchase the ~~following~~9 ~~assumptions:~~3/4% senior discount notes at acceptable prices, Cinemark Holdings, Inc. will use the net proceeds to repay term loan debt outstanding under the senior secured credit facility. Cinemark Holdings, Inc. has significant flexibility in applying the net proceeds from the offering. Pending the utilization of the net proceeds, Cinemark Holdings, Inc. expects to invest the proceeds in short-term, investment-grade marketable securities or money market obligations.

	September 30, 2004			January 28, 2005
	Grant			Grant
Expected life	6.5 years			6.5 years
Expected volatility1		39	%		44	%
Risk-free interest rate		3.79	%		3.93	%
Dividend yield		0	%		0	%

5. Acquisition of Century Theatres, Inc. and Related Refinancing of Certain Long-Term Debt

1 On ~~Expected~~October 5, ~~volatility~~2006, isthe ~~based~~Company onacquired ~~historical~~Century ~~volatility~~Theatres, Inc. (“Century”), a national theatre chain headquartered in San Rafael, California with approximately 77 theatres in 12 states, for a purchase price of approximately $681,225 and the ~~common~~assumption ~~stock~~of approximately $360,000 of debt of Century (“Century Acquisition”). Of the total purchase price, $150,000 consisted of ~~comparable~~the ~~public~~issuance of ~~companies~~shares of Cinemark Holdings, Inc.’s common stock. The Company also incurred approximately $7,448 in transaction costs.

~~Below~~ The istransaction awas ~~summary~~accounted offor ~~activity~~ under the ~~Plan~~purchase ~~for~~method ~~the~~of ~~six~~accounting ~~months~~in ~~ended~~accordance ~~June~~with SFAS No. 30141, ~~2006~~“Business Combinations”. The following table represents a preliminary allocation of purchase price to the assets acquired and liabilities assumed:

	Number of			Weighted Average
Current assets (1)	$	32,635
	Options			Exercise Price
Fixed assets (2)		548,451
Outstanding at 12/31/05		2,365,665		$	22.58
Goodwill (2)		640,436
Granted		—		$	—
Tradename		136,000
Exercised		—		$	—
Other long term assets		4,956
Forfeited		(3,075	)	$	22.58
Net unfavorable leases		(9,360	)
Outstanding at 6/30/06		2,362,590		$	22.58
Current liabilities		(74,488	)
Other long term liabilities (2)		(229,957	)
Total	$	1,048,673

In December 2004, the FASB issued SFAS No. 123(R), “Share-Based Payment”, which established accounting standards for all transactions in which an entity exchanges its equity instruments for goods and services. SFAS No. 123(R) eliminated the intrinsic value measurement objective in Accounting Principles Board (“APB”) Opinion No. 25 and generally requires a Company to measure the cost of employee services received in exchange for an award of equity instruments based on the fair value of the award on the date of the grant. The standard requires grant date fair value to be estimated using either an option-pricing model, which is consistent with the terms of the award, or a market observed price, if such a price exists. Such costs must be recognized over the period during which an employee is required to provide service in exchange for the award (which is usually the vesting period). The standard also requires a Company to estimate the number of instruments that will ultimately be issued, rather than accounting for forfeitures as they occur.


⁽¹⁾		Includes cash of $7,290.

⁽²⁾		During the six months ended June 30, 2007, the Company adjusted its preliminary purchase price allocation to fixed assets (increase of $29,398), goodwill (decrease of $18,110) and other long term liabilities (increase of $11,288) due to additional information obtained regarding the fair value of these assets and liabilities acquired.

The ~~Company~~tradename ~~applied~~and ~~SFAS~~net ~~No. 123(R)~~unfavorable ~~using~~leases ~~the~~are ~~“modified~~presented ~~prospective~~as ~~method’’, under~~intangible ~~which~~assets iton ~~recognized~~the Company’s ~~compensation~~condensed ~~cost~~consolidated ~~for~~balance ~~all~~sheets ~~awards~~as ~~granted,~~of ~~modified or settled on or after January~~December 131, 2006 and ~~for the unvested portion of previously granted awards that were outstanding on January~~June 130, ~~2006~~2007. ~~The Company had approximately 1,538,062~~Goodwill ~~unvested~~represents ~~options~~the ~~outstanding~~excess ~~on January 1, 2006 and recorded compensation expense~~ of ~~$1,432~~the ~~and~~costs ~~a tax benefit~~ of ~~approximately~~acquiring ~~$502~~Century ~~during~~over ~~the~~amounts ~~six~~assigned ~~months~~to ~~ended~~assets ~~June 30~~acquired, ~~2006 related to these~~ ~~outstanding~~including ~~options.~~identifiable Asintangible ~~of June 30~~assets, ~~2006,~~and ~~the~~liabilities ~~unrecognized compensation cost related to these unvested options was $7,876~~assumed. The ~~weighted~~goodwill ~~average~~recorded ~~period~~as ~~over~~a result ~~which~~of ~~these~~the ~~remaining~~Century ~~compensation costs~~Acquisition ~~will~~is benot ~~recognized~~deductible isfor ~~approximately~~tax 2purposes.~~75 years.~~

On October 5, 2006, the Company entered into a new senior secured credit facility, which provided for a $1,120,000 term loan and a $150,000 revolving credit line. The net proceeds of the new term loan were used to fund a portion of the $531,225 cash portion of the purchase price, to pay off approximately $360,000 under Century’s existing senior credit facility and to refinance $253,500 under the Company’s existing senior secured credit facility. The Company used approximately $53,000 of its existing cash to fund the payment of the remaining portion of the purchase price and related

CINEMARK, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)

~~The~~transaction ~~Company applied APB Opinion No~~expenses. 25 and related interpretations in accounting for stock option plans prior to the adoption of SFAS 123(R). Had compensation costs been determined based on the fair value at the date of grant for awards under the plansAdditionally, ~~consistent with~~ the ~~method of SFAS No. 123, “Accounting for Stock-Based Compensation” and SFAS No. 148, “Accounting for Stock-Based Compensation Transition and Disclosure”, the~~ Company’s ~~net~~advanced ~~income for the three and six months~~approximately ~~ended June 30~~$17,000 ~~2005~~of ~~would~~cash ~~have~~to ~~been~~Century ~~reduced~~ to ~~the~~satisfy ~~pro-forma~~working ~~amounts~~capital ~~indicated below:~~ obligations.

	Three Months Ended			Six Months Ended
	June 30, 2005			June 30, 2005
Net income as reported	$	8,139		$	14,038
Compensation expense included in reported net income, net of tax		—			—
Compensation expense under fair value method, net of tax		(741	)		(1,482	)
Pro-forma net income	$	7,398		$	12,556

The Century Acquisition is reflected in the Company’s condensed consolidated statements of income for the period subsequent to the transaction date and is reported in the Company’s U.S. operating segment.

56. ~~Early~~Investment ~~Retirement~~in ofNational ~~Long-Term~~CineMedia ~~Debt~~and Transaction Related to its Initial Public Offering

~~During~~In ~~May~~March ~~2006~~2005, asRegal ~~part~~Entertainment ofInc. ~~three~~(“Regal”) ~~open~~and ~~market~~AMC ~~purchases~~Entertainment Inc. (“AMC”) formed National CineMedia, LLC, or NCM, and on July 15, 2005, the Company ~~repurchased~~joined ~~$10~~NCM,~~000 aggregate~~ ~~principal~~as ~~amount~~one of ~~its~~the founding 9%members. ~~senior~~NCM ~~subordinated~~operates ~~notes~~the ~~for~~largest ~~approximately~~digital ~~$10,977,~~in-theatre ~~including accrued~~network ~~and~~in ~~unpaid~~the ~~interest~~U.S. ~~The~~for ~~transactions~~providing cinema ~~were~~advertising ~~funded~~and bynon-film events and combines the ~~Company~~cinema ~~with~~advertising ~~available~~and ~~cash~~non-film ~~from~~events ~~operations.~~businesses Asof athe ~~result~~three oflargest motion picture companies in the ~~transactions~~U.S. Upon joining NCM, the Company and ~~recorded~~NCM aentered ~~loss~~into onan ~~early~~Exhibitor ~~retirement~~Services ofAgreement, pursuant to which NCM provides advertising, ~~debt~~promotion ofand ~~$941~~event ~~during~~services to the ~~six~~Company’s ~~months~~theatres. ~~ended~~On ~~June~~February 3013, ~~2006~~2007, ~~which~~National ~~included~~CineMedia, Inc., ~~premiums~~or ~~paid~~NCM, Inc., a newly formed entity that now serves as a member and the sole manager of NCM, ~~write-off~~completed an initial public offering of ~~unamortized~~its ~~debt~~common ~~issue~~stock. ~~costs~~In ~~related~~connection towith the ~~retired~~NCM, ~~senior~~Inc. ~~subordinated~~initial public ~~notes.~~offering, Asthe ofCompany amended its operating agreement with NCM and the Exhibitor Services ~~June 30,~~Agreement ~~2006~~pursuant to which NCM provides advertising, promotion and event services to the Company’s theatres. ~~had~~In ~~outstanding~~connection ~~$332,250~~with ~~aggregate~~NCM ~~principal~~Inc.’s ~~amount~~initial ofpublic ~~its~~offering 9%and ~~senior~~the transactions described ~~subordinated~~below ~~notes~~(the “NCM Transaction”), the Company received an aggregate of $389,003.

~~During~~Prior ~~May 2006,~~to aspricing ~~part~~the ofinitial ~~four~~public ~~open~~offering ~~market~~of ~~purchases~~NCM Inc., ~~the~~NCM ~~Company~~completed ~~repurchased~~a ~~$39,775~~recapitalization ~~aggregate~~whereby ~~principal~~(1) each ~~amount~~issued atand ~~maturity~~outstanding ofClass A ~~its~~unit 9of ~~3/4%~~NCM ~~senior~~was ~~discount~~split ~~notes~~into ~~for~~44,291 ~~approximately~~Class A ~~$31~~units,~~745.~~ ~~The~~and ~~Company~~(2) following ~~funded~~such ~~these~~split ~~transactions upon receipt~~ of aClass A ~~$31~~Units,~~745 dividend~~ ~~from~~each ~~Cinemark~~issued ~~USA,~~and ~~Inc.~~outstanding ~~that~~Class A Unit was recapitalized ~~paid~~into ~~with~~one ~~available~~common ~~cash from~~unit ~~its~~and ~~operations~~one preferred unit. As a result, the Company received 14,159,437 common units and 14,159,437 preferred units. All existing preferred units of NCM, or ~~the~~55,850,951 ~~transactions~~preferred units, held by Regal, AMC and the Company ~~recorded~~were redeemed on a ~~loss~~pro-rata basis on February 13, ~~early~~2007. ~~retirement~~NCM ofutilized ~~debt~~the proceeds of its new $2725,~~375~~000 ~~during~~term ~~the~~loan ~~six~~facility and a portion ~~months~~of ~~ended~~the ~~June 30,~~proceeds ~~2006~~it received from NCM, ~~which~~Inc. ~~included~~from ~~premiums~~its ~~paid~~initial ~~and~~public ~~the~~offering ~~write-off~~to ofredeem ~~unamortized~~all ~~debt~~of its ~~issue~~outstanding ~~costs~~preferred ~~related~~units. toEach ~~the~~preferred ~~retired~~unit ~~senior~~was ~~discount~~redeemed ~~notes~~for $13.7782 Asand ofthe ~~June 30,~~Company ~~2006~~received approximately $195,092 as payment in full for redemption of all of the Company’s ~~has~~preferred units in ~~outstanding~~NCM. ~~$535,558~~Upon ~~aggregate~~payment ~~principal~~of such amount, ateach ~~maturity~~preferred unit was cancelled and the holders of ~~its~~the preferred 9units ~~3/4%~~ceased ~~senior~~to ~~discount~~have ~~notes~~any rights with respect to the preferred units.

At the closing of the initial public offering, the underwriters exercised their over-allotment option to purchase additional shares of common stock of NCM, Inc. at the initial public offering price, less underwriting discounts and commissions. In connection with the over-allotment option exercise, Regal, AMC and the Company each sold to NCM, Inc. common units of NCM on a pro-rata basis at the initial public offering price, less underwriting discounts and expenses. The Company sold 1,014,088 common units to NCM, Inc. for proceeds of $19,910, and upon completion of this sale of common units, the Company owned 13,145,349 common units of NCM. The net proceeds of $215,002 from the above described stock transactions were applied against the Company’s existing investment basis in NCM of $4,069 until such basis was reduced to $0 with the remaining $210,933 of proceeds net of $160 of transaction related costs, recorded as a gain of $210,773 in the condensed consolidated statement of income for the six months ended June 30, 2007.

NCM also paid the Company a portion of the proceeds it received from NCM, Inc. in the initial public offering for agreeing to modify NCM’s payment obligation under the prior Exhibitor Services Agreement. The modification agreed to by the Company reflects a shift from circuit share expense under the prior Exhibitor Services Agreement, which obligated NCM to pay the Company a percentage of revenue, to the monthly theatre access fee described below. The theatre access fee will significantly reduce the contractual amounts paid to the Company by NCM. In exchange for the Company agreeing to so modify the agreement, NCM paid the Company approximately $174,001 upon modification of the Exhibitor Services Agreement on February 13, 2007, the proceeds of which were recorded as deferred revenue on the Company’s condensed consolidated balance sheet. The Company believes this payment approximates the fair value of the Exhibitor Services Agreement modification. The deferred revenue is being amortized into other revenues over the life of the agreement using the units of revenue method. Regal and AMC similarly amended their exhibitor service agreements with NCM.

In consideration for NCM’s exclusive access to the Company’s theatre attendees for on-screen advertising and use of off-screen locations within the Company’s theatres for the lobby entertainment network and lobby promotions, the

CINEMARK, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)

6Company will receive a monthly theatre access fee under the Exhibitor Services Agreement. ~~Goodwill~~The theatre access fee is composed of a fixed payment per patron, initially seven cents, and ~~Other~~a ~~Intangible~~fixed ~~Assets~~payment per digital screen, which may be adjusted for certain enumerated reasons. The payment per theatre patron will increase by 8% every five years, with the first such increase taking effect after the end of fiscal 2011, and the payment per digital screen, initially eight hundred dollars per digital screen per year, will increase annually by 5%, beginning after 2007. The theatre access fee paid in the aggregate to Regal, AMC and the Company will not be less than 12% of NCM’s Aggregate Advertising Revenue (as defined in the Exhibitor Services Agreement), or it will be adjusted upward to reach this minimum payment. Additionally, with respect to any on-screen advertising time provided to the Company’s beverage consessionaire, the Company is required to purchase such time from NCM at a negotiated rate. The Exhibitor Services Agreement has, except with respect to certain limited services, a term of 30 years.

~~The~~Prior to the initial public offering of NCM Inc. common stock, the Company’s ~~goodwill~~ownership interest in NCM was approximately 25% and subsequent to the completion of the offering the Company held a 14% interest in NCM. Subsequent to NCM, Inc.’s initial public offering, the Company continues to account for its investment in NCM under the equity method of accounting due to its ability to exercise significant control over NCM. The Company has substantial rights as ~~follows:~~a founding member, including the right to designate a total of two nominees to the ten-member board of directors of NCM Inc., the sole manager. So long as the Company owns at least 5% of NCM’s membership interests, approval of at least 90% (80% if the board has less than 10 directors) will be required before NCM, Inc. may take certain actions including but not limited to mergers and acquisitions, issuance of common or preferred shares, approval of NCM, Inc.’s budget, incurrence of indebtedness, entering into or terminating material agreements, and modifications to its articles of incorporation or bylaws. Additionally, if any of the Company’s director designees are not appointed to the Board of Directors of NCM, Inc., nominated by NCM, Inc. or elected by NCM, Inc.’s stockholders, then the Company (so long as the Company continues to own at least 5% of NCM’s membership interest) will be entitled to approve certain actions of NCM including without limitation, approval of the budget, incurrence of indebtedness, consummating or amending material agreements, approving dividends, amending the NCM operating agreement, hiring or termination of the chief executive officer, chief financial officer, chief technology officer or chief marketing officer of NCM and the dissolution or liquidation of NCM.

			Tax Impact of			Foreign Currency
	Balance at		Tax Deductible			Translation			Balance at
	December 31, 2005		Goodwill			Adjustment			June 30, 2006
United States	$	4,265	$	—		$	—		$	4,265
Brazil		29,730		(63	)		1,656			31,323
Mexico		1,830		—			(113	)		1,717
Argentina		231		—			(4	)		227
Chile		3,490		—			(360	)		3,130
Peru		2,561		—			18			2,579
Total	$	42,107	$	(63	)	$	1,197		$	43,241

During the six months ended June 30, 2007 and 2006, the Company recorded equity losses of $1,284 and $1,299, respectively. The Company recognized $4,402 and $10,444 of other revenue from NCM during the six months ended June 30, 2007 and 2006, respectively. The Company had a receivable due from NCM of $13,386 and $121 as of December 31, 2006 and June 30, 2007, respectively, related to screen advertising and other ancillary revenue. The Company is entitled to receive mandatory quarterly distributions of excess cash from NCM. During May 2007, the Company received its first quarterly distribution of approximately $1,362, which was in excess of the carrying value of its investment in NCM and is reflected as distributions from NCM on the condensed consolidated statement of income for the three and six months ended June 30, 2007.

~~Intangible~~As ~~assets~~of ~~consisted~~June 30, 2007, the Company owned 13,145,349 common units of NCM. Each common unit is convertible into one share of NCM, Inc. common stock. As of June 30, 2007, the ~~following:~~fair market value of the Company’s shares in NCM was approximately $368,201 based on a closing price of $28.01 per share of NCM, Inc. common stock on June 29, 2007.

							Foreign Currency
	Balance at						Translation			Balance at
	December 31, 2005			Additions			Adjustment			June 30, 2006
Intangible assets with finite lives:
Capitalized licensing fees:
Gross carrying amount	$	8,250		$	—		$	—		$	8,250
Accumulated amortization		(2,591	)		(276	)		—			(2,867	)
Net carrying amount	$	5,659		$	(276	)	$	—		$	5,383
Vendor contracts:
Gross carrying amount		3,217			—			68			3,285
Accumulated amortization		(1,703	)		(682	)		—			(2,385	)
Net carrying amount	$	1,514		$	(682	)	$	68		$	900
Net favorable leases:
Gross carrying amount		1,392			—			42			1,434
Accumulated amortization		(232	)		(86	)		—			(318	)
Net carrying amount	$	1,160		$	(86	)	$	42		$	1,116
Other intangible assets:
Gross carrying amount		429			—			(3	)		426
Accumulated amortization		(79	)		(16	)		—			(95	)
Net carrying amount	$	350		$	(16	)	$	(3	)	$	331
Total net intangible assets with finite lives	$	8,683		$	(1,060	)	$	107		$	7,730
Intangible assets with indefinite lives:
Tradename		1,259			—			(78	)		1,181
Other unamortized intangible assets		16			—			—			16
Total intangible assets — net	$	9,958		$	(1,060	)	$	29		$	8,927

7. Investment in Digital Cinema Implementation Partners

On February 12, 2007, the Company, AMC and Regal entered into a joint venture known as Digital Cinema Implementation Partners LLC (“DCIP”) to explore the possibility of implementing digital cinema in the Company’s theatres and to establish agreements with major motion picture studios for the implementation and financing of digital cinema. DCIP has also entered into a digital cinema services agreement with NCM for purposes of assisting DCIP in the development of digital cinema systems. Future digital cinema developments will be managed by DCIP, subject to the Company’s approval along with the Company’s partners, AMC and Regal. During the six months ended June 30, 2007, the Company invested $1,500 for a one-third ownership interest in DCIP. The Company is accounting for its investment in DCIP under the equity method of accounting. During the six months ended June 30, 2007, the Company recorded an equity loss of approximately $235 relating to this investment. The Company’s investment basis in DCIP was $1,265 at June 30, 2007, which is included in investments in and advances to affiliates on the condensed consolidated balance sheet.

CINEMARK, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)

~~Aggregate~~8. ~~amortization~~Sale ~~expense~~ of ~~$1,133~~Investment ~~for~~in ~~the six months ended June 30~~Fandango, ~~2006 consisted of $1,060 of amortization of intangible assets and $73 of amortization of other assets~~Inc. ~~Estimated~~ ~~aggregate future amortization expense for intangible assets is as follows:~~

For the six months ended December 31, 2006	$	608
For the twelve months ended December 31, 2007		1,203
For the twelve months ended December 31, 2008		953
For the twelve months ended December 31, 2009		724
For the twelve months ended December 31, 2010		692
Thereafter		3,550
Total	$	7,730

In May 2007, Fandango, Inc., an on-line ticketing distributor, executed a merger agreement, which resulted in the Company selling its investment in stock of Fandango, Inc. for approximately $14,147 of consideration (the “Fandango Transaction”). Approximately $1,535 of the consideration was held in escrow to secure certain indemnification obligations contained in the merger agreement, which is included in accounts receivable on the condensed consolidated balance sheet. The Company paid $2,800 of the cash consideration to Syufy Enterprises, LP in accordance with the terms of agreements entered into as part of the Century Acquisition. The carrying value of the Company’s investment in stock of Fandango, Inc. was $2,142. As a result of the sale of its investment, the Company recorded a gain of $9,205 in the condensed consolidated statement of income for the three and six months ended June 30, 2007.

7 As part of the sale of its investment in stock of Fandango, Inc., ~~Impairment~~the Company amended its exclusive ticketing and distribution agreement with Fandango, Inc. Certain sections of ~~Long-Lived~~the agreement ~~Assets~~were modified in which the Company no longer is entitled to receive additional shares of stock in Fandango, Inc. nor share in future adjusted profits of Fandango, Inc. In exchange for the amendment, Fandango, Inc. paid the Company $5,000. The proceeds of $5,000 were recorded as deferred revenue on the Company’s condensed consolidated balance sheet and are being amortized over the term of the amended ticketing and distribution agreement.

In accordance with ~~SFAS~~the ~~No. 144,~~terms ~~“Accounting~~of ~~for~~its ~~the~~new ~~Impairment~~senior orsecured ~~Disposal~~credit ~~of Long-Lived Assets~~facility,” the Company ~~reviews~~used ~~long-lived~~approximately ~~assets~~$9,914 ~~for~~of ~~impairment~~the onnet aproceeds ~~quarterly~~to ~~basis~~pay ordown ~~whenever~~its ~~events~~term orloan. ~~changes~~The inpayment ~~circumstances~~was ~~indicate~~made ~~the~~on ~~carrying~~August 10, ~~amount~~2007 ofand was applied against the ~~assets~~current ~~may~~portion ~~not~~of belong-term ~~fully recoverable~~debt.

The Company considers actual theatre level cash flows, future years budgeted theatre level cash flows, theatre property and equipment carrying values, goodwill carrying values, the age of a recently built theatre, competitive theatres in the marketplace, the sharing of a market with other Company theatres, changes in foreign currency exchange rates, the impact of recent ticket price changes, available lease renewal options and other factors in its assessment of impairment of individual theatre assets9. ~~Long-lived~~Income ~~assets are evaluated for impairment on an individual theatre~~Taxes basis or a group basis if the group of theatres shares the same marketplace, which the Company believes is the lowest applicable level for which there are identifiable cash flows. The impairment evaluation is based on the estimated undiscounted cash flows from continuing use through the remainder of the theatre’s useful life. The remainder of the useful life correlates with the available remaining lease period for leased properties, which includes the probability of renewal periods, and a period of twenty years for fee owned properties. If the estimated undiscounted cash flows are not sufficient to recover a long-lived asset’s carrying value, the Company then compares the carrying value of the asset with its estimated fair value. Fair value is determined based on a multiple of cash flows, which was seven times for the evaluation performed during the three month and six month periods ended June 30, 2006. When estimated fair value is determined to be lower than the carrying value of the long-lived asset, the asset is written down to its estimated fair value and the impairment loss is recognized in the Company’s condensed consolidated statements of income. During the six months ended June 30, 2006, the Company recorded asset impairment charges of $923 to write-down six United States theatres to their estimated fair values.

8 On May 18, 2006, the State of Texas enacted legislation to replace the current franchise tax with a new margin tax to be effective January 1, 2008. ~~Foreign~~The ~~Currency~~Company ~~Translation~~estimates the new margin tax will not have a significant impact on its income tax expense or its deferred tax assets and liabilities.

The ~~accumulated~~ ~~other~~Company ~~comprehensive~~adopted ~~loss~~FASB ~~account~~Interpretation inNo. 48, ~~stockholders’~~“Accounting ~~equity~~for ofUncertainty ~~$62,196~~in ~~and~~Income Taxes” ~~$60~~(“FIN 48”),~~185~~ aton ~~June~~January 301, ~~2006~~2007. ~~and~~As ~~December 31,~~a ~~2005,~~result ~~respectively,~~of ~~primarily~~the ~~relates~~implementation toof FIN 48, the ~~cumulative~~Company recognized ~~foreign~~an ~~currency~~increase ~~adjustments~~to ~~from~~its ~~translating~~liability ~~the~~for ~~financial~~uncertain ~~statements~~tax positions of ~~Cinemark~~approximately ~~Argentina~~$1, ~~S.A.~~093, which was ~~Cinemark~~accounted ~~Brasil~~for Sas a cumulative effect on beginning retained earnings on January 1, 2007.A. At the adoption date, ~~Cinemark~~the deCompany ~~Mexico~~had approximately $12,084 ~~S.A.~~of detotal Cunrecognized tax benefits.V. ~~and~~Of ~~Cinemark~~this total, ~~Chile~~$7,931 ~~S.A.~~represents ~~into~~the ~~U.S.~~amount ~~dollars~~of unrecognized tax benefits that, if recognized, would favorably affect the effective income tax rate in future periods.

InThe ~~2006 and 2005, all foreign countries where the~~ Company’s ~~has~~practice ~~operations,~~is ~~including~~to ~~Argentina, Brazil,~~recognize ~~Mexico~~interest and/or ~~Chile~~penalties ~~were~~related ~~deemed~~to ~~non-highly~~income ~~inflationary.~~tax ~~Thus, any fluctuation in the~~matters ~~currency results~~ in aincome ~~cumulative~~tax ~~foreign~~expense. ~~currency~~As ~~translation~~of ~~adjustment~~January 1, to2007, the ~~accumulated~~Company ~~other comprehensive~~had ~~loss~~$1,572 ~~account~~accrued ~~recorded~~for asinterest ~~an increase in,~~ and/or ~~reduction~~ ~~of, stockholders’ equity~~penalties.

OnThe ~~June 30,~~Company ~~2006,~~or ~~the~~one ~~exchange~~of ~~rate~~its ~~for~~subsidiaries ~~the~~files ~~Brazilian~~income ~~real~~tax ~~was~~returns ~~2.22~~in ~~reais to~~ the U.S. ~~dollar~~federal ~~(the~~jurisdiction, ~~exchange~~and ~~rate~~multiple ~~was~~state ~~2.34~~and ~~reais~~foreign tojurisdictions, and the ~~U.S.~~Company ~~dollar~~is atroutinely ~~December 31,~~under audit ~~2005)~~by many different tax authorities. AsManagement abelieves ~~result,~~that ~~the~~its accrual for tax liabilities ~~effect~~is adequate for all open audit years based on its assessment of ~~translating~~many ~~the~~factors ~~June 30,~~including ~~2006~~past experience ~~Brazilian~~and ~~financial~~interpretations ~~statements~~of ~~into~~tax Ulaw.S. ~~dollars~~This isassessment relies on estimates and assumptions and ~~reflected~~may asinvolve a ~~cumulative~~series ~~foreign~~of ~~currency~~complex ~~translation~~judgments ~~adjustment~~about future events. The Company is no longer subject to income tax audits from the ~~accumulated~~Internal ~~other~~Revenue Service for years before 2002. The Company is no ~~comprehensive~~longer ~~loss~~subject ~~account~~to asstate anincome ~~increase~~tax inexaminations ~~stockholders’~~by ~~equity~~tax ofauthorities ~~$4,688.~~in Atits ~~June 30,~~major ~~2006,~~state ~~the~~jurisdictions ~~total~~for ~~assets~~years ofbefore ~~the~~2002. The Company’s ~~Brazilian~~is ~~subsidiaries~~no ~~were~~longer subject to non-U.S. ~~$110,197~~income tax examinations by tax authorities in its major non-U.S. tax jurisdictions for years before 1998.

Income tax expense of $8,937 was recorded for the six months ended June 30, 2007. The effective tax rate was 5.1% for the six months ended June 30, 2007. Income tax provisions for interim (quarterly) periods are based on estimated annual income tax rates and are adjusted for the effects of significant, infrequent or unusual items occurring during the interim period. As a result of the full inclusion in the interim rate calculation of these items, the interim rate may vary significantly from the normalized annual rate. The Company’s income tax rate for the six months ended June 30, 2007 includes the impact of the gain on the NCM transaction and the Fandango transaction as discreet items. The tax rate on the gains was 38.4%, which resulted in $84,509 of income tax expense. The tax rate without the NCM Transaction and the Fandango Transaction is 163.6% resulting in a benefit of $75,572 for the six months ended June 30, 2007. This rate is reflective of permanent differences such as goodwill impairment, which is recorded for financial statement purposes but not deductible for income tax purposes.

10. Stock Options

During September 2004, Cinemark, Inc.’s board of directors approved the 2004 Long Term Incentive Plan (the “2004 Plan”), under which 9,097,360 shares of Class A common stock are available for issuance to selected employees, directors and consultants of the Company. The 2004 Plan provided for restricted share grants, incentive option grants and nonqualified option grants.

CINEMARK, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)

On ~~June~~September 30, ~~2006~~2004, the ~~exchange~~Company ~~rate~~granted ~~for~~options ~~the~~to ~~Mexican~~purchase ~~peso~~6,986,731 ~~was~~shares ~~11.41~~of ~~pesos~~its tocommon stock under the ~~U.S.~~2004 ~~dollar (the~~Plan ~~exchange~~at ~~rate~~an ~~was~~exercise 10price of $7.7163 ~~pesos~~per option (equal to the ~~U.S.~~market ~~dollar~~value at the ~~December 31,~~date ~~2005~~of grant). AsOptions ato ~~result~~purchase 692,976 shares vested immediately and the remaining options ~~effect~~granted ofin ~~translating~~2004 vest daily over the ~~June~~period ending April 301, ~~2006~~2009 ~~Mexican~~and ~~financial~~expire ~~statements~~ten ~~into~~years ~~U.S.~~from ~~dollars~~the ~~is reflected~~grant asdate. aOn ~~cumulative~~January 28, ~~foreign~~2005, ~~currency~~the ~~translation~~Company ~~adjustment~~granted options to ~~the~~purchase ~~accumulated~~12,055 ~~other~~shares ~~comprehensive~~of ~~loss~~its common ~~account~~stock asunder athe ~~reduction~~2004 inPlan ~~stockholders’~~at ~~equity~~an exercise price of $~~4,894~~7.63 Atper ~~June 30,~~option ~~2006,~~(equal to the ~~total~~market ~~assets~~value ofat the ~~Company’s~~date ~~Mexican~~of ~~subsidiaries~~grant). ~~were~~The ~~U.S.~~options ~~$86,965~~granted during January 2005 vest daily over five years and the options expire ten years from the grant date.

OnFor ~~June 30,~~each ~~2006,~~2004 ~~the~~and ~~exchange~~2005 ~~rate~~grant, ~~for~~ the ~~Argentine~~fair ~~peso~~values ~~was~~of ~~3.09 pesos to~~ the ~~U.S.~~options ~~dollar (the~~were ~~exchange~~estimated ~~rate~~on ~~was 3.03 pesos to~~ the ~~U.S.~~dates ~~dollar at December 31, 2005). As a result, the effect~~ of ~~translating the June 30, 2006 Argentine financial statements into U.S. dollars is~~ ~~reflected~~grant asusing ~~a cumulative foreign currency translation adjustment to~~ the ~~accumulated~~Black-Scholes ~~other comprehensive~~option-pricing ~~loss~~model ~~account~~with ~~as a reduction in stockholders’ equity of $289. At June 30, 2006,~~ the ~~total~~ ~~assets~~following ~~of the Company’s Argentine subsidiaries were U.S. $17,222.~~assumptions:

On June 30, 2006, the exchange rate for the Chilean peso was 573.27 pesos to the U.S. dollar (the exchange rate was 514.21 pesos to the U.S. dollar at December 31, 2005). As a result, the effect of translating the June 30, 2006 Chilean financial statements into U.S. dollars is reflected as a cumulative foreign currency translation adjustment to the accumulated other comprehensive loss account as a reduction in stockholders’ equity of $1,241. At June 30, 2006, the total assets of the Company’s Chilean subsidiaries were U.S. $23,388.


	September 30, 2004			January 28, 2005
	Grant			Grant
Expected life	6.5		years	6.5		years
Expected volatility ⁽¹⁾		39	%		44	%
Risk-free interest rate		3.79	%		3.93	%
Dividend yield		0	%		0	%

9.(1) ~~Comprehensive~~Expected ~~Income~~ volatility is based on historical volatility of the common stock price of comparable public companies.

~~SFAS~~Forfeitures ~~No. 130,~~were ~~“Reporting~~estimated ~~Comprehensive~~based ~~Income,”~~on ~~establishes standards for~~ the ~~reporting and display of comprehensive income and its components in the condensed consolidated financial statements. The~~ Company’s ~~comprehensive~~historical ~~income~~stock ~~was~~option ~~as follows:~~activity.

	Three Months Ended					Six Months Ended
	June 30,					June 30,
	2006			2005		2006			2005
Net income	$	13,923		$	8,139	$	21,093		$	14,038
Foreign currency translation adjustment		(4,466	)		15,955		(2,011	)		15,225
Comprehensive income	$	9,457		$	24,094	$	19,082		$	29,263

On August 2, 2006, Cinemark Holdings, Inc. was formed as the Delaware holding company of Cinemark, Inc. Under a share exchange agreement dated August 8, 2006, each outstanding share of Cinemark, Inc.’s common stock was exchanged for an equivalent number of shares of Cinemark Holdings, Inc. common stock. The share exchange was completed on October 5, 2006.

10 In November 2006, Cinemark Holdings, Inc.’s ~~Supplemental~~board ~~Cash~~of ~~Flow~~directors ~~Information~~amended the 2004 Plan to provide that no additional awards may be granted under the 2004 Plan. At that time, the board of directors of Cinemark Holdings, Inc. and the majority of its stockholders approved the Cinemark Holdings, Inc. 2006 Long Term Incentive Plan (the “2006 Plan”) and all options to purchase shares of Cinemark, Inc.’s common stock under the 2004 Plan were exchanged for an equal number of options to purchase shares of Cinemark Holdings, Inc.’s common stock under the 2006 Plan. The 2006 Plan is substantially similar to the 2004 Plan.

~~The~~All ~~following~~stock isoption ~~provided~~information ashas ~~supplemental~~been ~~information~~adjusted to ~~the~~give ~~condensed~~effect ~~consolidated~~to ~~statements~~a 2.9585-for-1 stock split ofeffected ~~cash~~by ~~flows:~~Cinemark Holdings, Inc. on April 9, 2007.

	Six months ended
	June 30,
	2006			2005
Cash paid for interest	$	26,196		$	21,892
Net cash paid (refunds received) for income taxes	$	19,567		$	(6,056	)
Noncash investing and financing activities:
Change in construction lease obligations related to construction of theatres	$	(2,151	)	$	8,315
Changes in accounts payable and accrued expenses for the acquisition of theatre properties and equipment	$	(2,356	)	$	2,081

CINEMARK, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)

~~11.~~ A ~~Financial~~summary ~~Information~~of ~~About~~Plan ~~Geographic~~activity ~~Areas~~and related information for the year ended December 31, 2006 and the six months ended June 30, 2007 is as follows:

The Company operates in one business segment as a motion picture exhibitor. The Company has operations in the U.S., Canada, Mexico, Argentina, Brazil, Chile, Ecuador, Peru, Honduras, El Salvador, Nicaragua, Costa Rica, Panama and Colombia, which are reflected in the condensed consolidated financial statements. Below is a breakdown of select financial information by geographic area:


				Weighted
				Average
	Number of			Exercise
	Options			Price
Outstanding at 1/1/06		6,998,786		$	7.63
Granted		—		$	—
Exercised		(4,603	)	$	7.63
Forfeited		(13,590	)	$	7.63

Outstanding at 12/31/06		6,980,593		$	7.63

Granted		—		$	—
Exercised		(15,387	)	$	7.63
Forfeited		(65,002	)	$	7.63

Outstanding at 6/30/07		6,900,204		$	7.63


Options exercisable at 6/30/07		4,498,973		$	7.63

	Six months ended
	June 30,
Revenues	2006			2005
U.S. and Canada	$	396,996		$	367,616
Brazil		64,417			51,084
Mexico		36,295			36,049
Other foreign countries		44,250			36,719
Eliminations		(864	)		(760	)
Total	$	541,094		$	490,708

The Company recorded compensation expense of $1,449 and a tax benefit of approximately $502 during the six months ended June 30, 2007 and recorded compensation expense of $1,432 and a tax benefit of approximately $502 during the six months ended June 30, 2006. As of June 30, 2007, the unrecognized compensation expense related to outstanding stock options was $5,012 and the weighted average period over which this remaining compensation expense will be recognized is approximately 1.75 years. All options outstanding at June 30, 2007 have an average remaining contractual life of approximately 7.25 years.

	June 30,		December 31,
Theatre Properties and Equipment-net	2006		2005
U.S. and Canada	$	645,985	$	634,938
Brazil		52,591		52,371
Mexico		51,015		55,366
Other foreign countries		47,019		47,891
Total	$	796,610	$	790,566

11. Early Retirement of Long-Term Debt

12 On March 6, 2007, the Company commenced an offer to purchase for cash, on the terms and subject to the conditions set forth in an Offer to Purchase and Consent Solicitation Statement, any and all of its 9% senior subordinated notes, of which $332,250 aggregate principal amount remained outstanding. ~~Related~~In ~~Party~~connection ~~Transactions~~with the tender offer, the Company solicited consents for certain proposed amendments to the indenture to remove substantially all restrictive covenants and certain events of default provisions. On March 20, 2007, the early settlement date, approximately $332,000 aggregate principal amount of the 9% senior subordinated notes were tendered and repurchased by the Company for approximately $360,164, including accrued interest and premiums paid. The Company funded the repurchase with the net proceeds received from the NCM Transaction (see Note 6).

~~The~~On ~~Company~~March 20, ~~manages one theatre for Laredo Theatre~~2007, ~~Ltd.~~the ~~(“Laredo”). The~~ Company ~~is the sole general partner~~ and ~~owns 75% of~~ the ~~limited~~Bank ~~partnership interests~~ of ~~Laredo.~~New ~~Lone~~York ~~Star~~Trust ~~Theatres~~Company, ~~Inc.~~ ~~owns the remaining 25% of the limited partnership interests in Laredo and is 100% owned by Mr~~N. ~~David Roberts, Lee Roy Mitchell’s son-in-law~~A. ~~Under~~as ~~the~~trustee ~~agreement, management fees are paid by Laredo~~ to the Indenture ~~Company~~dated atFebruary 11, ~~a rate of 5% of annual theatre revenues up to $50~~2003,~~000~~ ~~and~~executed 3%the ofFourth ~~annual theatre~~Supplemental ~~revenues in excess of $50,000~~Indenture. The ~~Company recorded $106 of management fee revenues and~~Fourth ~~received~~Supplemental ~~$300~~Indenture inbecame ~~dividends~~effective ~~from~~on ~~Laredo during the six months ended June~~March 3020, ~~2006.~~2007 ~~All~~and ~~such~~it ~~amounts are~~amends ~~included in~~ the ~~Company’s~~Indenture ~~condensed~~by eliminating ~~consolidated~~substantially ~~financial~~all ~~statements~~restrictive ~~with~~covenants ~~the~~and ~~intercompany amounts~~certain ~~eliminated~~events inof ~~consolidation~~default provisions.

~~The~~On ~~Company~~April 3, ~~leases~~2007, ~~one~~the ~~theatre~~Company ~~from~~repurchased ~~Plitt~~an ~~Plaza~~additional ~~Joint~~$66 ~~Venture~~aggregate ~~(“Plitt~~principal ~~Plaza”).~~amount ~~Plitt~~of ~~Plaza is~~the ~~indirectly~~9% ~~owned~~senior bysubordinated ~~Lee~~notes ~~Roy~~tendered ~~Mitchell.~~after ~~Annual~~the ~~rent~~early issettlement ~~approximately $118 plus certain taxes, maintenance expenses and insurance~~date. ~~The~~As ~~Company recorded $70~~ of ~~facility~~June 30, ~~lease~~2007, ~~expense payable to~~the ~~Plitt~~Company ~~Plaza~~had ~~joint~~outstanding ~~venture~~$184 ~~during~~aggregate ~~the~~principal ~~six~~amount ~~months~~of ~~ended~~9% ~~June 30,~~senior ~~2006~~subordinated notes.

The Company ~~entered~~recorded ~~into~~a anloss ~~amended and restated profit participation agreement~~ on ~~March 12, 2004~~early ~~with~~retirement ~~its~~of ~~President,~~debt ~~Alan~~of ~~Stock~~$7,952 ~~which~~during ~~became effective on April 2, 2004, and amends a profit participation agreement with Mr. Stock in effect since May 2002. Under~~ the ~~agreement, Mr. Stock receives a profit interest in two theatres once the Company has recovered its capital investment in these theatres plus its borrowing costs. During the~~ six months ended June 30, ~~2006,~~2007 ~~the~~related ~~Company recorded $267 in profit participation expense payable~~ to ~~Mr. Stock~~the repurchases, which isconsisted ~~included in general and administrative expenses on the Company’s condensed consolidated statements~~ of ~~income.~~tender Asoffer ~~of June 30,~~repurchase ~~2006~~costs, including ~~the~~premiums ~~amount~~paid ~~owed~~and toother ~~Mr. Stock~~fees, ~~under~~and ~~this agreement was approximately $165. In~~ the ~~event~~ ~~that~~write-off ~~Mr. Stock’s~~of ~~employment~~unamortized isdebt ~~terminated~~issue ~~without cause~~costs, ~~profits will be distributed~~ ~~according~~partially tooffset aby ~~formula~~the ~~set~~write-off ~~forth~~of in the ~~profit~~unamortized ~~participation~~bond ~~agreement~~premium.

The loss on early retirement of debt of $3,315 recorded by the Company during the six months ended June 30, 2006 related to the repurchase of $10,000 aggregate principal amount of 9% senior subordinated notes and the repurchase of $39,775 aggregate principal amount at maturity of 9 ³/4% senior discount notes in May 2006.

CINEMARK, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)

1312. ~~Litigation~~Interest Rate Swap Agreements

~~From~~During ~~time~~March 2007, the Company entered into two interest rate swap agreements with effective dates of August 13, 2007 and terms of five years each. The interest rate swaps were designated to hedge ~~time~~approximately $500,000 of the Company’s isvariable ~~involved~~rate indebt ~~other~~obligations ~~various~~under ~~legal~~its ~~proceedings~~senior secured ~~arising~~credit ~~from~~facility. Under the ~~ordinary~~ ~~course~~terms of ~~its~~the ~~business~~interest ~~operations~~rate swap agreements, ~~such~~the asCompany ~~personal~~pays fixed ~~injury~~rates ~~claims,~~of ~~employment~~4.918% ~~matters~~and 4.922% on $375,000 and ~~contractual~~ ~~disputes~~$125,000, ~~most~~respectively, of ~~which~~variable ~~are~~rate ~~covered~~debt byand receives ~~insurance~~interest at a variable rate based on the 3-month LIBOR. The 3-month LIBOR rate on each reset date determines the variable portion of the interest rate swaps for the three-month period following the reset date. No premium or discount was incurred upon the Company ~~believes~~entering ~~its~~into ~~potential~~the ~~liability~~interest rate swaps because the pay and receive rates on the interest rate swaps represented prevailing rates for each counterparty at the time the interest rate swaps were consummated. The interest rate swaps qualify for cash flow hedge accounting treatment in accordance with ~~respect~~SFAS toNo. 133, ~~proceedings~~“Accounting ~~currently~~for ~~pending~~Derivative isInstruments ~~not~~and ~~material~~Hedging Activities,” ~~individually~~and oras such, the Company has effectively hedged its exposure to variability in the future cash flows attributable to the 3-month ~~aggregate~~LIBOR on $500,000 toof variable rate debt. The change in the fair values of the interest rate swaps is recorded on the Company’s ~~financial~~condensed ~~position,~~consolidated ~~results~~balance sheet as an asset or liability with the effective portion of ~~operations~~the interest rate swaps’ gains or losses reported as a component of other comprehensive income (loss) and ~~cash~~the ~~flows~~ineffective portion reported in earnings.

14 As of June 30, 2007, the interest rate swaps were an asset with an aggregate fair value of approximately $10,426, which has been recorded as a component of deferred charges and other assets - net with a corresponding amount of $10,426 ($6,422 net of deferred taxes) recorded as an increase in accumulated other comprehensive income on the Company’s condensed consolidated balance sheet. The ~~Subsequent~~interest ~~Event~~rate swaps exhibited no ineffectiveness during the six months ended June 30, 2007.

~~On August 2, 2006, Cinemark Holdings Inc~~13. ~~(“Cinemark Holdings”)~~Goodwill ~~was~~and ~~formed~~Other toIntangible ~~be the Delaware holding company of~~Assets ~~Cinemark, Inc.~~

~~On August 7, 2006, Cinemark USA, Inc. announced it has entered into a definitive purchase agreement in which it will acquire all of the outstanding stock of Century Theatres, Inc.~~ The equity purchase price is approximately $681,000 in addition to the assumption of debt. To finance the acquisition, Cinemark USA, Inc. plans to refinance its existing senior secured credit facility of $254,150 and CenturyCompany’s ~~senior~~goodwill ~~credit~~was ~~facility~~as ~~of $360,000 with a new~~follows: $1,120,000 senior secured term loan and will issue to the Century shareholders $150,000 of common stock in Cinemark Holdings. Cinemark USA, Inc. will utilize approximately $50,000 of its current cash to fund the payment of transaction expenses and the balance of the cash purchase price. Cinemark USA, Inc. also plans to increase its senior secured revolving credit line capacity to $150,000 with no amount drawn at closing.


	U.S.			International
	Operating			Operating
	Segment			Segment			Total
Balance at December 31, 2006	$	1,056,816		$	148,607		$	1,205,423
Purchase price allocation adjustment for Century Acquisition (see Note 5)		(18,110	)		—			(18,110	)
Impairment charges		(41,322	)		(3,786	)		(45,108	)
Foreign currency translation adjustments and other		—			8,086			8,086

Balance at June 30, 2007	$	997,384		$	152,907		$	1,150,291

In accordance with SFAS No. 142, “Goodwill and Other Intangible Assets”, the Company reviews goodwill for impairment on an annual basis at fiscal year-end or whenever events or changes in circumstances indicate the carrying value of goodwill might exceed its estimated fair value.

As a result of the NCM Transaction discussed in Note 6, and more specifically the modification of the NCM Exhibitor Services Agreement with the Company, which significantly reduced the contractual amounts paid to the Company, the Company evaluated the carrying value of its goodwill as of March 31, 2007 resulting in the majority of the goodwill impairment charges reflected above in the table.

The Company evaluates goodwill for impairment at the reporting unit level (generally a theatre) and has allocated goodwill to the reporting unit based on an estimate of its relative fair value. The evaluation is a two-step approach requiring the Company to compute the estimated fair value of a theatre and compare it with its carrying value. If the carrying value exceeds estimated fair value, a second step is performed to measure the potential goodwill impairment. Fair values are determined based on a multiple of undiscounted cash flows, which was eight times for the evaluation performed as of March 31, 2007. Significant judgment is involved in estimating cash flows and fair value. Management’s estimates are based on historical and projected operating performance as well as recent market transactions. The Company’s policy

~~Item 2~~CINEMARK, INC. AND SUBSIDIARIES ~~Management’s~~NOTES ~~Discussion~~TO ~~and~~CONDENSED ~~Analysis~~CONSOLIDATED ofFINANCIAL ~~Financial~~STATEMENTS (IN ~~Condition~~THOUSANDS, ~~and~~EXCEPT ~~Results~~SHARE ofAND ~~Operations~~PER SHARE DATA)

~~The~~of ~~following~~allocating ~~discussion~~goodwill ~~and~~at the ~~analysis~~theatre ~~should~~level beresults ~~read~~ in ~~conjunction~~more ~~with~~volatile ~~our~~impairment ~~condensed consolidated~~charges ~~financial~~on ~~statements~~an annual basis due to changes in market conditions and ~~related~~box ~~notes~~office performance and ~~schedules~~the ~~included~~resulting ~~elsewhere~~impact inon ~~this report~~individual theatres.

WeIntangible ~~are~~assets ~~one~~consisted of the leaders in the motion picture exhibition industry, in terms of both revenues and the number of screens in operation, with theatres in the U.S., Canada, Mexico, Argentina, Brazil, Chile, Ecuador, Peru, Honduras, El Salvador, Nicaragua, Costa Rica, Panama and Colombia. We generate revenues primarily from box office receipts and concession sales with additional revenues from screen advertising sales and other revenue streams, such as vendor marketing programs, pay phones, ATM machines and electronic video games located in some of our theatres. We expect our recent investment in National CineMedia to assist us in expanding our offerings to advertisers, exploring ancillary revenue sources such as digital video monitor advertising, third party branding, and the use of theatres for non-film events. In addition, we are able to use theatres during non-peak hours for concerts, sporting events, and other cultural events. Highly successful films released during the six months ended June 30, 2006 included Ice Age 2following: ~~The~~ Meltdown, The Da Vinci Code, X Men 3, Cars and Superman Returns. Film releases scheduled for the remainder of 2006 include high profile films such as Pirates of the Carribean: Dead Man’s Chest, Talladega Nights, Casino Royal and Happy Feet. Our revenues are affected by changes in attendance and average admissions and concession revenues per patron. Attendance is primarily affected by the quality and quantity of films released by motion picture studios.

Film rental costs are variable in nature and fluctuate with our admissions revenues. Film rental costs as a percentage of revenues are generally higher for periods in which more blockbuster films are released. Film rental costs can also vary based on the length of a film’s run. Generally, a film that runs for a longer period results in lower film rental costs as a percentage of revenues. Film rental rates are negotiated on a film-by-film and theatre-by-theatre basis. Advertising costs, which are expensed as incurred, are primarily fixed at the theatre level as daily movie directories placed in newspapers represent the largest component of advertising costs. The monthly cost of these advertisements is based on, among other things, the size of the directory and the frequency and size of the newspaper’s circulation.


										Foreign
										Currency
										Translation
	Balance at									Adjustments			Balance at
	December 31,									and			June 30,
	2006			Amortization			Impairment			Other			2007
Intangible assets with finite lives:
Capitalized licensing fees:
Gross carrying amount	$	5,138		$	—		$	—		$	—		$	5,138
Accumulated amortization		(1,139	)		(213	)		—			—			(1,352	)

Net carrying amount	$	3,999		$	(213	)	$	—		$	—		$	3,786

Vendor contracts:
Gross carrying amount	$	56,526			—			—			362			56,888
Accumulated amortization		(19,924	)		(1,739	)		—			—			(21,663	)

Net carrying amount	$	36,602		$	(1,739	)	$	—		$	362		$	35,225

Net favorable leases:
Gross carrying amount		21,999			—			(3,700	)		3,115			21,414
Accumulated amortization		(12,023	)		(1,559	)		—			(489	)		(14,071	)

Net carrying amount	$	9,976		$	(1,559	)	$	(3,700	)	$	2,626		$	7,343

Other intangible assets:
Gross carrying amount		70			—			—			2			72
Accumulated amortization		(16	)		(2	)		—			—			(18	)

Net carrying amount	$	54		$	(2	)	$	—		$	2		$	54

Total net intangible assets with finite lives	$	50,631		$	(3,513	)	$	(3,700	)	$	2,990		$	46,408
Intangible assets with indefinite lives:
Tradename		310,118			—			—			338			310,456
Other unamortized intangible assets		3			—			—			—			3

Total intangible assets — net	$	360,752		$	(3,513	)	$	(3,700	)	$	3,328		$	356,867

~~Concession~~Aggregate ~~supplies~~amortization expense isof ~~variable~~$3,588 infor ~~nature~~the ~~and~~six ~~fluctuates~~months ~~with~~ended ~~our~~June 30, ~~concession~~2007 ~~revenues.~~consisted Weof ~~purchase~~$3,513 ~~concession~~of ~~supplies~~amortization toof ~~replace~~intangible ~~units~~assets ~~sold.~~and We$75 ~~negotiate~~of ~~prices~~amortization ~~for~~of ~~concession supplies~~other ~~directly~~assets. ~~with~~Estimated aggregate ~~concession~~future ~~vendors~~amortization ~~and~~expense ~~manufacturers~~for tointangible ~~obtain~~assets ~~bulk~~is ~~rates.~~as follows:

Although salaries and wages include a fixed cost component (i.e. the minimum staffing costs to operate a theatre facility during non-peak periods), salaries and wages move in relation to revenues as theatre staffing is adjusted to handle changes in attendance.


For the six months ended December 31, 2007	$	4,112
For the twelve months ended December 31, 2008		6,462
For the twelve months ended December 31, 2009		5,664
For the twelve months ended December 31, 2010		5,266
For the twelve months ended December 31, 2011		4,698
Thereafter		20,206

Total	$	46,408

Facility lease expense is primarily a fixed cost at the theatre level as most of our facility leases require a fixed monthly minimum rent payment. Certain of our leases are subject to percentage rent only while others are subject to percentage rent in addition to their fixed monthly rent if a target annual revenue level is achieved. Facility lease expense as a percentage of revenues is also affected by the number of leased versus fee owned facilities.

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

Critical Accounting Policies

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

~~Revenue~~CINEMARK, ~~and~~INC. ~~Expense~~AND ~~Recognition~~SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)

~~Revenues are recognized when admissions and concession sales are received at the box office~~14. We ~~record~~Impairment ~~proceeds from the sale~~ of ~~gift cards and other advanced sale~~Long-~~type~~Lived ~~certificates in current~~Assets liabilities and recognize admissions and concession revenue when a holder redeems the card or certificate. We recognize unredeemed gift cards and other advanced sale-type certificates as revenue only after such a period of time indicates, based on historical experience, the likelihood of redemption is remote, and based on applicable laws and regulations. In evaluating the likelihood of redemption, we consider the period outstanding, the level and frequency of activity, and the period of inactivity. Other revenues primarily consist of screen advertising. Screen advertising revenues are recognized over the period that the related advertising is delivered on-screen or in-theatre pursuant to the specific terms of the agreements with the advertisers.

~~Film~~In ~~rental~~accordance ~~costs~~with ~~are~~SFAS ~~accrued~~No. 144, ~~based~~“Accounting onfor the ~~applicable~~Impairment ~~box office receipts and either the mutually agreed upon firm terms established prior to the opening of the picture~~ or ~~estimates~~Disposal of ~~the~~Long-Lived ~~final mutually agreed upon settlement~~Assets,” ~~which occurs at~~ the ~~conclusion~~Company ofreviews ~~the~~long-lived ~~picture~~assets ~~run,~~for ~~subject to~~impairment ~~the film licensing arrangement. Estimates are based~~ on ~~the expected success of~~ a ~~film~~quarterly ~~over~~basis ~~the length~~or ~~of its run in theatres. The success of a film can typically be determined a few weeks after~~whenever aevents ~~film~~or ischanges released when initial box office performance of the film is known. Accordingly, final settlements typically approximate estimates since box office receipts are known at the time the estimate is made and the expected success of a film over the length of its run in ~~theatres~~circumstances ~~can typically~~indicate ~~be estimated early in~~ the ~~film’s~~carrying ~~run. The final film settlement~~ amount ~~is negotiated at the conclusion~~ of the ~~film’s~~assets ~~run~~may ~~based~~not ~~upon~~be ~~how a film actually performs. If actual settlements are~~fully ~~higher than those estimated, additional film rental costs are recorded at that time~~recoverable. ~~We recognize~~ ~~advertising costs and any sharing arrangements with film distributors in the same accounting period. Our advertising costs are expensed as incurred.~~

~~Facility~~The ~~lease~~Company ~~expense~~considers isactual ~~primarily~~theatre alevel ~~fixed~~cash ~~cost~~flows, atfuture ~~the~~years budgeted theatre level cash asflows, ~~most~~theatre ofproperty ~~our~~and ~~facility leases~~equipment ~~require~~carrying avalues, ~~fixed~~theatre ~~monthly~~goodwill ~~minimum~~carrying ~~rent~~values, amortizing ~~payment.~~intangible ~~Certain~~assets ofcarrying ~~our~~values, ~~leases~~the ~~are~~age ~~subject~~of toa ~~monthly percentage~~recently ~~rent~~built ~~only~~theatre, ~~which~~competitive theatres isin ~~accrued~~the ~~each~~marketplace, ~~month~~changes ~~based~~in onforeign ~~actual~~currency ~~revenues.~~exchange ~~Certain~~rates, the impact of ~~our~~recent ticket price changes, available lease renewal options and other ~~theatres~~ ~~require~~factors ~~payment~~in its assessment of impairment ~~percentage~~of ~~rent~~individual intheatre ~~addition~~assets. toLong-lived ~~fixed~~assets ~~monthly~~are ~~rent~~evaluated iffor aimpairment ~~target~~on ~~annual~~an ~~revenue~~individual ~~level~~theatre isbasis, ~~achieved.~~which ~~Percentage~~the ~~rent~~Company ~~expense~~believes is ~~recorded~~the lowest applicable level for ~~these~~which ~~theatres~~there are identifiable cash flows. The impairment evaluation is based on athe ~~monthly~~estimated undiscounted cash ~~basis~~flows iffrom continuing use through the remainder of the theatre’s ~~historical~~useful ~~performance~~life. orThe ~~forecasted~~remainder ~~performance~~of ~~indicates~~the useful ~~that~~life correlates with the ~~annual~~available remaining lease period, which includes the probability of ~~target~~renewal ~~will~~periods befor ~~reached.~~leased ~~The~~properties ~~estimate~~and a period of ~~percentage~~twenty ~~rent~~years ~~expense~~for ~~recorded~~fee ~~during~~owned properties. If the estimated ~~year~~undiscounted iscash ~~based on~~flows are not sufficient to recover a ~~trailing~~long-lived ~~twelve~~asset’s ~~months~~carrying value, the Company then compares the carrying value of ~~revenues~~the asset with its estimated fair value. Fair ~~Once~~value ~~annual~~is ~~revenues~~determined ~~are~~based ~~known~~on a multiple of undiscounted cash flows, which iswas ~~generally~~eight attimes for the evaluation performed as of June 30, 2007. When estimated fair value is determined to be lower ~~end~~than the carrying value of the ~~year~~long-lived asset, the ~~percentage~~asset ~~rent~~is ~~expense~~written down to its estimated fair value. Significant judgment is ~~adjusted~~involved in estimating cash flows and fair value. Management’s estimates are based on ~~actual~~historical ~~revenues~~and projected operating performance as well as recent market transactions.

~~Theatre~~The ~~properties~~Company’s ~~and equipment are depreciated using the straight~~long-~~line~~lived ~~method~~asset ~~over~~impairment ~~their estimated~~losses ~~useful~~for ~~lives. In estimating~~ the ~~useful~~six ~~lives~~months ofended ~~our theatre properties and equipment~~June 30, ~~we have~~2007 ~~relied upon our experience with such assets and our historical replacement period. We~~were ~~periodically evaluate these estimates and assumptions and adjust them~~ as ~~necessary. Adjustments to~~follows: ~~the expected lives of assets are accounted for on a prospective basis through depreciation expense.~~

Impairment of Long-Lived Assets


United States theatre properties	$	7,941
International theatre properties		17

Subtotal	$	7,958
Intangible assets (see Note 13)		3,700
Goodwill (see Note 13)		45,108

Impairment of long-lived assets	$	56,766

WeAs ~~review~~a ~~long-lived~~result ~~assets~~of ~~for~~the ~~impairment~~NCM onTransaction adiscussed ~~quarterly~~in ~~basis~~Note or6, ~~whenever~~and ~~events~~more orspecifically ~~changes~~the inmodification ~~circumstances~~of ~~indicate~~the NCM Exhibitor Services Agreement with the ~~carrying~~Company, ~~amount~~which ofsignificantly reduced the ~~assets~~contractual ~~may~~amounts ~~not~~paid beto ~~fully~~the ~~recoverable.~~Company, Wethe ~~assess~~Company evaluated the carrying value of its ~~many~~goodwill ~~factors~~as ~~including~~of March 31, 2007 resulting in the ~~following~~majority toof ~~determine~~the ~~whether~~goodwill toimpairment ~~impair~~charges reflected ~~individual~~above ~~theatre~~in ~~assets:~~the table.

•15. ~~actual~~Foreign ~~theatre~~Currency level cash flows; • future years budgeted theatre level cash flows; • theatre property and equipment carrying values; • goodwill carrying values; • the age of a recently built theatre; • competitive theatres in the marketplace; • the sharing of a marketplace with our other theatres;Translation

The accumulated other comprehensive income account in stockholders’ equity of $11,463 and $35,013 at December 31, 2006 and June 30, 2007, respectively, includes the cumulative foreign currency adjustments from translating the financial statements of the Company’s international subsidiaries into U.S. dollars.

In 2007 and 2006, all foreign countries where the Company has operations were deemed non-highly inflationary. Thus, any fluctuation in the currency results in a foreign currency translation adjustment to the accumulated other comprehensive income account recorded as an increase in, or reduction of, stockholders’ equity.

On June 30, 2007, the exchange rate for the Brazilian real was 1.93 reais to the U.S. dollar (the exchange rate was 2.14 reais to the U.S. dollar at December 31, 2006). As a result, the effect of translating the June 30, 2007 Brazilian financial statements into U.S. dollars is reflected as a foreign currency translation adjustment to the accumulated other comprehensive income account as an increase in stockholders’ equity of $15,859. At June 30, 2007, the total assets of the Company’s Brazilian subsidiaries were U.S. $184,669.

On June 30, 2007, the exchange rate for the Mexican peso was 10.80 pesos to the U.S. dollar (the exchange rate was 10.82 pesos to the U.S. dollar at December 31, 2006). As a result, the effect of translating the June 30, 2007 Mexican financial statements into U.S. dollars is reflected as a foreign currency translation adjustment to the accumulated other

•CINEMARK, ~~changes~~INC. inAND ~~foreign~~SUBSIDIARIES NOTES ~~currency~~TO ~~exchange~~CONDENSED ~~rates;~~CONSOLIDATED •FINANCIAL ~~the~~STATEMENTS (IN ~~impact~~THOUSANDS, ofEXCEPT ~~recent~~SHARE ~~ticket~~AND ~~price~~PER ~~changes;~~SHARE ~~• available lease renewal options; and • other factors considered relevant in our assessment of impairment of individual theatre assets.~~DATA)

~~Long-lived~~comprehensive ~~assets~~income ~~are~~account as ~~evaluated for impairment on~~ an ~~individual~~increase ~~theatre~~in ~~basis~~stockholders’ orequity ~~a group basis if the group~~ of ~~theatres~~$183. ~~shares~~At ~~the same marketplace~~June 30, which we believe is the lowest applicable level for which there are identifiable cash flows. The evaluation is based on the estimated undiscounted cash flows from continuing use through the remainder of the theatre’s useful life. The remainder of the useful life correlates with the available remaining lease period2007, ~~which includes~~ the ~~possibility~~total ofassets ~~renewal periods, for leased properties and a period~~ of ~~twenty years for fee owned properties. If~~ the ~~estimated undiscounted cash flows are not sufficient to recover a~~ ~~long-lived asset~~Company’s ~~carrying~~Mexican ~~value,~~subsidiaries wewere ~~then compare the carrying value of the asset with its estimated fair value~~U. ~~Fair values are determined based on a multiple of cash flows, which was seven times for the evaluation performed during the three month and six month periods ended June 30, 2006~~S. ~~When estimated fair value is determined to be lower than the carrying value of the long-lived asset~~$159, ~~the asset is written down to its estimated fair value~~555.

~~Goodwill~~16. Comprehensive Income

~~Our~~SFAS ~~recorded goodwill was $43~~No.2 ~~million at June 30~~130, ~~2006.~~“Reporting WeComprehensive ~~evaluate~~Income,” ~~goodwill~~establishes ~~for~~standards ~~impairment annually at fiscal year-end and any time events or circumstances indicate the carrying amount of the goodwill may not be fully recoverable. We evaluate goodwill~~ for ~~impairment on an individual theatre basis, which is~~ the ~~lowest~~reporting ~~level of identifiable cash flows~~ and ~~the level at which goodwill~~ isdisplay ~~recorded. The evaluation is a two-step approach requiring us to compute the fair value~~ of ~~a theatre~~comprehensive income and ~~compare it with~~ its ~~carrying~~components ~~value.~~in If the ~~carrying~~condensed ~~value~~consolidated ~~exceeds fair value, a second~~financial ~~step would be performed to measure the potential goodwill impairment~~statements. ~~Fair~~The ~~value~~Company’s iscomprehensive ~~determined based~~income ~~on a multiple of cash flows, which~~ was ~~seven~~as ~~times for the most recent evaluation performed~~follows: ~~during the year ended December 31, 2005. When estimated fair value is determined to be lower than the carrying value of the asset, the asset is written down to its estimated fair value.~~

Acquisitions


	Three Months Ended					Six Months Ended
	June 30,					June 30,
	2007 (Successor)		2006 (Predecessor)			2007 (Successor)		2006 (Predecessor)

Net income	$	46,539	$	13,923		$	164,843	$	21,093
Fair value adjustments on interest rate swap agreements (see Note 12)		7,629		—			6,422		—
Foreign currency translation adjustment		15,257		(4,466	)		17,127		(2,011	)

Comprehensive income	$	69,425	$	9,457		$	188,392	$	19,082

~~We account for acquisitions under the purchase method of accounting~~17. ~~The~~Supplemental ~~purchase~~Cash ~~method requires~~Flow ~~that we estimate the fair value of the assets and liabilities acquired and allocate~~Information consideration paid accordingly. For significant acquisitions, we obtain independent third party valuation studies for certain of the assets and liabilities acquired to assist us in determining fair value. The estimation of the fair values of the assets and liabilities acquired involves a number of estimates and assumptions that could differ materially from the actual amounts.

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

We use an asset and liability approach to financial accounting and reporting for income taxes. Deferred income taxes are provided when tax laws and financial accounting standards differ with respect to the amount of income for a year and the bases of assets and liabilities. A valuation allowance is recorded to reduce the carrying amount of deferred tax assets unless it is more likely than not those assets will be realized. Income taxes are provided on unremitted earnings from foreign subsidiaries unless such earnings are expected to be indefinitely reinvested. Income taxes have also been provided for potential tax assessments. The related tax accruals are recorded in accordance with SFAS No. 5, “Accounting for Contingencies”. To the extent contingencies are probable and estimable, an accrual is recorded within current liabilities in the condensed consolidated balance sheet. To the extent tax accruals differ from actual payments or assessments, the accruals will be adjusted.


	Six Months Ended
	June 30,
	2007 (Successor)			2006 (Predecessor)

Cash paid for interest	$	69,477		$	26,196
Cash paid for income taxes, net of refunds received	$	80,158		$	19,567

Noncash investing and financing activities:
Change in construction lease obligations related to construction of theatres	$	(2,429	)	$	(2,151	)
Change in accounts payable and accrued expenses for the acquisition of theatre properties and equipment	$	(845	)	$	(2,356	)
Equipment acquired under capital lease	$	2,943		$	—

18. Segments

The Company identifies its international market and its U.S. market as separate reportable operating segments. The international segment consists of operations in Mexico, Argentina, Brazil, Chile, Ecuador, Peru, Honduras, El Salvador, Nicaragua, Costa Rica, Panama and Colombia. The U.S. segment includes U.S. and Canada operations. Each segment’s revenue is derived from admissions and concession sales and other ancillary revenues, primarily screen advertising. Adjusted EBITDA, as defined below in the reconciliation table, is the primary measure of segment profit and loss the Company uses to evaluate performance and allocate its resources. The Company’s management evaluates the performance of its assets on a consolidated basis.

~~Results~~CINEMARK, INC. AND SUBSIDIARIES ofNOTES ~~Operations~~TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)

~~The~~Below ~~following~~is ~~table~~a ~~sets~~breakdown ~~forth,~~of ~~for~~selected ~~the~~financial ~~periods~~information ~~indicated, the percentage of revenues represented~~ by ~~certain~~reportable ~~items~~operating ~~reflected in our condensed consolidated statements of income~~segment:

	% of Revenues
	Three Months Ended June 30,						Six Months Ended June 30,
	Three Months Ended						Six Months Ended
	2007			2006			2007			2006
	June 30,						June 30,
	(Successor)			(Predecessor)			(Successor)			(Predecessor)
	2006			2005			2006			2005
Revenues
Admissions		62.0	%		62.3	%		62.2	%		63.0	%
U.S.	$	349,043		$	215,956		$	655,418		$	396,996
Concession		31.1	%		31.7	%		31.4	%		31.4	%
International		91,790			79,638			164,051			144,962
Other		6.9	%		6.0	%		6.4	%		5.6	%
Eliminations		(797	)		(489	)		(1,411	)		(864	)
Total revenues		100.0	%		100.0	%		100.0	%		100.0	%
Total Revenues	$	440,036		$	295,105		$	818,058		$	541,094
Cost of operations 1		71.8	%		74.7	%		73.1	%		74.6	%
Adjusted EBITDA
General and administrative expenses		5.2	%		4.8	%		5.4	%		5.0	%
U.S.	$	74,895		$	51,071		$	141,689		$	89,389
Depreciation and amortization		6.8	%		7.8	%		7.4	%		7.8	%
International		20,871			17,836			34,264			29,136
Impairment of long-lived assets		0.2	%		0.0	%		0.2	%		0.0	%
Total Adjusted EBITDA	$	95,766		$	68,907		$	175,953		$	118,525
Loss on sale of assets and other		0.3	%		0.1	%		0.3	%		0.2	%
Capital Expenditures
Total costs and expenses		84.3	%		87.4	%		86.4	%		87.6	%
U.S.	$	28,148		$	21,566		$	53,045		$	45,399
Operating income		15.7	%		12.6	%		13.6	%		12.4	%
International		12,935			5,251			20,103			9,665
Total Capital Expenditures	$	41,083		$	26,817		$	73,148		$	55,064

1 The ~~Excludes~~following ~~depreciation~~table ~~and~~sets ~~amortization.~~forth a reconciliation of net income to Adjusted EBITDA:

Three months ended June 30, 2006 and 2005


	Three Months Ended June 30,					Six Months Ended June 30,
	2007			2006		2007			2006
	(Successor)			(Predecessor)		(Successor)			(Predecessor)

Net income	$	46,539		$	13,923	$	164,843		$	21,093
Add (deduct):
Income taxes		(26,456	)		7,349		8,937			4,881
Interest expense ⁽¹⁾		35,301			22,904		76,798			45,967
Gain on NCM transaction		—			—		(210,773	)		—
Gain on Fandango transaction		(9,205	)		—		(9,205	)		—
Other (income) expense		(2,577	)		2,004		2,769			1,511
Termination of profit participation agreement		6,952			—		6,952			—
Depreciation and amortization		36,720			19,968		73,595			40,094
Amortization of net favorable leases		625			43		1,559			86
Impairment of long-lived assets		7,036			647		56,766			923
(Gain) loss on sale of assets and other		(1,864	)		815		(1,559	)		1,543
Deferred lease expenses		1,704			237		3,311			413
Amortization of long-term prepaid rents		275			301		511			582
Stock option compensation expense		716			716		1,449			1,432

Adjusted EBITDA	$	95,766		$	68,907	$	175,953		$	118,525

~~Revenues. Total revenues for the three months ended June 30, 2006~~ (~~“second quarter of 2006”~~1) ~~increased~~ toIncludes ~~$295.1 million~~amortization ~~from $253.0 million for the three months ended June 30, 2005 (“second quarter~~ of ~~2005”),~~debt ~~representing~~issue ~~a 16~~costs.~~6% increase. The table below summarizes our year-over-year revenue performance and certain key performance indicators that impact our revenues.~~

	Three Months Ended
	June 30,
	2006		2005		% Change
Admissions revenues (in millions)	$	182.9	$	157.7		16.0	%
Concession revenues (in millions)	$	91.9	$	80.3		14.4	%
Other revenues (in millions)	$	20.3	$	15.0		35.3	%
Total revenues (in millions)	$	295.1	$	253.0		16.6	%
Attendance (in millions)		44.9		40.4		11.3	%
Average ticket price	$	4.07	$	3.91		4.2	%
Concession revenues per patron	$	2.05	$	1.99		2.8	%
Revenues per screen	$	87,225	$	78,849		10.6	%

The increase in admissions revenues was attributable to an 11.3% increase in attendance from 40.4 million patrons for the second quarter of 2005 to 44.9 million patrons for the second quarter of 2006 and a 4.2% increase in average ticket price, which increased from $3.91 for the second quarter of 2005 to $4.07 for the second quarter of 2006. The increase in concession revenues was attributable to the 11.3% increase in attendance and a 2.8% increase in concession revenues per patron, which increased from $1.99 for the second quarter of 2005 to $2.05 for the second quarter of 2006. The increase in attendance was attributable to the solid slate of films released during the second quarter of 2006 and new theatre openings. The increases in average ticket prices and concession revenues per patron were primarily due to price increases successfully implemented during the fourth quarter of 2005 and also due to favorable exchange rates in certain countries in which we operate. The 35.3% increase in other revenues was primarily attributable to the incremental screen advertising

~~revenues~~CINEMARK, ~~resulting~~INC. ~~from~~AND ~~the~~SUBSIDIARIES NOTES ~~Company’s~~TO ~~participation~~CONDENSED inCONSOLIDATED ~~the~~FINANCIAL ~~joint~~STATEMENTS ~~venture~~(IN ~~with~~THOUSANDS, ~~National~~EXCEPT ~~CineMedia.~~SHARE AND PER SHARE DATA)

~~Cost~~Financial ofInformation ~~Operations.~~About ~~Cost~~Geographic ~~of operations was $212.0 million, or 71.8% of revenues, for the~~Areas second quarter of 2006 compared to $189.1 million, or 74.7% of revenues, for the second quarter of 2005. The decrease, as a percentage of revenues, was primarily due to the 16.6% increase in revenues and the fixed nature of some of our theatre operating costs, such as components of salaries and wages, facility lease expense, and utilities and other costs.

~~Film~~The ~~rentals~~Company ~~and~~has ~~advertising~~operations ~~costs~~in ~~were~~the ~~$100~~U.~~3 million~~S., orCanada, ~~54.8%~~Mexico, ofArgentina, ~~admissions~~Brazil, ~~revenues~~Chile, ~~for~~Ecuador, ~~the~~Peru, ~~second~~Honduras, ~~quarter~~El ofSalvador, ~~2006 compared to $88.3 million~~Nicaragua, orCosta ~~56.0% of admissions revenues~~Rica, ~~for~~Panama ~~the second quarter of 2005. The decrease in film rentals~~ and ~~advertising~~Colombia, ~~costs~~which asare areflected ~~percentage of admissions revenues was due to a more favorable mix of films resulting~~ in ~~lower average film rental rates in~~ the ~~second quarter of 2006 compared with the second quarter of 2005 which had certain~~ ~~films~~condensed ~~with~~consolidated ~~higher~~financial ~~than average film rental rates~~statements. ~~Concession~~Below ~~supplies~~is expense was $14.8 million, or 16.1% of concession revenues, for the second quarter of 2006 period compared to $12.7 million, or 15.7% of concession revenues, for the second quarter of 2005. The increase in concession supplies expense as a ~~percentage~~breakdown of ~~concession~~selected ~~revenues~~financial ~~was primarily due to increased costs of~~information ~~certain~~by ~~concession~~geographic ~~products sold.~~area:

Salaries and wages increased to $27.0 million for the second quarter of 2006 from $25.4 million for the second quarter of 2005 primarily due to the 11.3% increase in attendance and new theatre openings. Facility lease expense increased to $36.6 million for the second quarter of 2006 from $32.9 million for the second quarter of 2005 primarily due to new theatre openings. Utilities and other costs increased to $33.3 million for the second quarter of 2006 from $29.7 million for the second quarter of 2005 primarily due to higher utility and janitorial supplies costs and new theatre openings.


	Three Months Ended June 30,						Six Months Ended June 30,
Revenues	2007			2006			2007			2006
	(Successor)			(Predecessor)			(Successor)			(Predecessor)

U.S. and Canada	$	349,043		$	215,956		$	655,418		$	396,996
Brazil		41,613			35,589			76,025			64,417
Mexico		21,209			19,770			37,888			36,295
Other foreign countries		28,968			24,279			50,138			44,250
Eliminations		(797	)		(489	)		(1,411	)		(864	)

Total	$	440,036		$	295,105		$	818,058		$	541,094

General and Administrative Expenses. General and administrative expenses increased to $15.4 million for the second quarter of 2006 from $12.2 million for the second quarter of 2005. The increase was primarily due to increased incentive compensation expense and stock option compensation expense related to the adoption of SFAS No. 123 (R). See Note 4 to the condensed consolidated financial statements.


	June 30,		December 31,
Theatre Properties and Equipment-net	2007		2006

U.S. and Canada	$	1,172,530	$	1,169,456
Brazil		69,884		55,749
Mexico		49,864		51,272
Other foreign countries		46,288		48,095

Total	$	1,338,566	$	1,324,572

~~Depreciation and Amortization. Depreciation and amortization expense was $20.0 million for the second quarter of 2006 compared to $~~19.~~7 million~~ ~~for~~Related ~~the~~Party ~~second quarter of 2005. The increase is~~Transactions ~~primarily due to new theatre openings.~~

~~Impairment~~The ofCompany ~~Long-Lived~~entered ~~Assets.~~into Wean ~~recorded~~amended ~~asset~~and ~~impairment~~restated ~~charges~~profit participation agreement on ~~assets~~March 12, 2004 ~~held~~with its CEO, Alan Stock, which became effective on April 2, 2004, and ~~used~~amended the profit participation agreement with Mr. Stock in effect since May 2002. Under the agreement, Mr. Stock received a profit interest in two theatres once the Company recovered its capital investment in these theatres plus its borrowing costs. Upon consummation of $0Cinemark Holdings, Inc.6’s initial public offering on April ~~million~~24, ~~for~~2007, the ~~second~~Company ~~quarter~~exercised its option to terminate the amended and restated profit participation agreement and purchased Mr. Stock’s interest in the theatres on May 3, 2007 for a price of ~~2006~~$6,853 pursuant to the terms of the agreement. ~~Impairment~~The ~~charges~~Company ~~included~~also paid payroll taxes of approximately $99 related to the ~~write-down~~payment made to terminate the amended and restated profit participation agreement. The aggregate amount paid of $6,952 is reflected within cost of operations in the Company’s condensed consolidated statement of income for the three ~~theatres~~and insix months ended June 30, 2007 and the ~~United~~agreement ~~States~~with toMr. Stock ~~their~~has ~~fair~~been ~~values~~terminated.

~~Loss~~The onCompany ~~Sale~~leases 25 theatres and two parking facilities from Syufy Enterprises, LP (“Syufy”) or affiliates of ~~Assets~~Syufy, which owns approximately 7.7% of Cinemark Holdings, Inc.’s issued and ~~Other~~outstanding shares of common stock as of June 30, 2007. WeRaymond ~~recorded~~Syufy ais ~~loss~~one onof ~~sale~~Cinemark Holdings, Inc.’s directors and is an officer of ~~assets~~the general partner of Syufy. Of these 27 leases, 22 have fixed minimum annual rent in an aggregate amount of approximately $23,500. Of these 22 leases with fixed minimum annual rent, 17 have a remaining lease term plus extension option(s) that exceed 30 years, four have a remaining lease term plus extension option(s) that exceed 18 years, and ~~other~~one has a remaining lease term of approximately three years. Three of these 22 leases have triggering events that allow the Company to convert the fixed minimum rent to a fixed percentage of gross sales as defined in the lease with the further right to terminate the lease if the theatre level cash flow drops below $0.8 Five of these 22 leases have triggering events that allow the Company to ~~million~~terminate ~~during~~the lease prior to expiration of the ~~second~~term. ~~quarter~~The five leases without minimum annual rent have rent based upon a specified percentage of ~~2006~~gross ~~compared~~sales as defined in the lease with no minimum annual rent. Four of these percentage rent leases have remaining terms of 3 months plus automatic 12 month renewal options, and the Company has the right to terminate the lease if the theatre level cash flow drops below $0.2 One of these percentage rent leases has a remaining term of 15 ~~million~~months, and ~~during~~Syufy has the ~~second~~right ~~quarter~~to terminate this lease prior to the end of ~~2005~~ the term.

~~Interest~~The ~~Expense.~~Company ~~Interest~~also ~~costs~~has ~~incurred,~~an ~~including~~office ~~amortization~~lease ofwith ~~debt~~Syufy ~~issue costs, was $22.9 million~~ for ~~the~~corporate ~~second~~office ~~quarter~~space ofin ~~2006~~San ~~compared to $21~~Rafael, California.~~5 million~~ ~~for~~The ~~the~~lease ~~second~~will ~~quarter~~expire ~~of 2005~~in September 2008. The ~~increase~~lease ~~was~~has ~~due~~a tofixed ~~increased~~minimum ~~interest~~annual ~~rates~~rent onof approximately ~~our variable rate debt outstanding~~$300.

~~Loss~~Prior onto ~~Early~~the ~~Retirement~~completion of ~~Debt. During~~ the ~~second~~Century ~~quarter~~Acquisition, ofCentury ~~2006~~Theatres, weInc. ~~recorded~~owned ~~a loss on~~certain ~~early~~shares ~~retirement~~ of ~~debt~~Fandango, ~~of $3~~Inc.~~3 million~~, asan aon-line ~~result~~ticketing ~~of the repurchase of $10~~distributor.~~0 million~~ ~~aggregate principal~~In ~~amount~~connection ofwith ~~our 9% senior subordinated notes and~~ the ~~repurchase of $39.8 million aggregate~~Century ~~principal~~Acquisition, ~~amount~~the atCompany ~~maturity~~agreed ~~of our 9 3/4% senior discount notes. See Note 5~~ to ~~the~~pay ~~condensed~~Syufy ~~consolidated financial statements.~~

Income Taxes. Income tax expense of $7.3 million was recorded for the second quarter of 2006 compared to $2.3 million recorded for the second quarter of 2005. The effective tax rate was 34.5% for the second quarter of 2006 versus 22.1% for the second quarter of 2005. Income tax provisions for interim (quarterly) periods are based on estimated annual income tax rates and are adjusted for the effect of significant infrequent or unusual items occurring during the interim period. As a result of the full inclusion in the interim rate calculation of these items, the interim rate may vary significantly from the normalized annual rate.

~~Six~~CINEMARK, ~~months~~INC. ~~ended~~AND ~~June 30~~SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (IN THOUSANDS, ~~2006~~EXCEPT ~~and~~SHARE ~~2005~~AND PER SHARE DATA)

~~Revenues.~~ ~~Total~~the ~~revenues~~cash ~~for~~proceeds received by the ~~six~~Company ~~months~~in ~~ended~~connection ~~June 30~~with any sale of such shares of Fandango, ~~2006~~Inc. ~~(“the~~up ~~2006~~to ~~period”)~~a ~~increased~~maximum amount toof $~~541~~2,800.~~1 million~~ ~~from~~As ~~$490.7 million~~discussed ~~for~~in Note 8, the ~~six~~Company ~~months~~sold ~~ended~~all ~~June 30,~~of ~~2005~~its ~~(“the~~shares ~~2005~~of ~~period”)~~Fandango, Inc. stock ~~representing~~during aMay 2007 ~~10.3%~~for ~~increase.~~approximately ~~The~~$14,147 ~~table~~of ~~below~~consideration ~~summarizes~~and ~~our~~paid ~~year-over-year~~$2,800 ~~revenue~~of ~~performance~~the cash ~~and~~consideration ~~certain~~to ~~key~~Syufy ~~performance~~in ~~indicators~~accordance ~~that~~with ~~impact~~the ~~our~~Century ~~revenues~~Acquisition agreement.

	Six Months Ended
	June 30,
	2006		2005		% Change
Admissions revenues (in millions)	$	336.5	$	308.9		8.9	%
Concession revenues (in millions)	$	170.0	$	154.1		10.3	%
Other revenues (in millions)	$	34.6	$	27.7		24.9	%
Total revenues (in millions)	$	541.1	$	490.7		10.3	%
Attendance (in millions)		83.4		80.4		3.8	%
Average ticket price	$	4.03	$	3.84		5.0	%
Concession revenues per patron	$	2.04	$	1.92		6.3	%
Revenues per screen	$	161,026	$	153,442		4.9	%

The Company manages one theatre for Laredo Theatre, Ltd. (“Laredo”). The Company is the sole general partner and owns 75% of the limited partnership interests of Laredo. Lone Star Theatres, Inc. owns the remaining 25% of the limited partnership interests in Laredo and is 100% owned by Mr. David Roberts, Lee Roy Mitchell’s son-in-law. Under the agreement, management fees are paid by Laredo to the Company at a rate of 5% of annual theatre revenues up to $50,000 and 3% of annual theatre revenues in excess of $50,000. The Company recorded $39 of management fee revenues during the six months ended June 30, 2007. All such amounts are included in the Company’s condensed consolidated financial statements with the intercompany amounts eliminated in consolidation.

The ~~increase~~Company inleases ~~admissions~~one ~~revenues~~theatre ~~was attributable to a 3.8% increase in attendance~~ from ~~80.4 million~~ ~~patrons~~Plitt ~~for~~Plaza ~~the~~Joint ~~2005~~Venture ~~period~~(“Plitt ~~to 83~~Plaza”).~~4 million~~ ~~patrons~~Plitt ~~for~~Plaza ~~the 2006 period and a 5.0%~~is ~~increase~~indirectly inowned ~~average~~by ~~ticket~~Lee ~~price,~~Roy ~~which increased from $3~~Mitchell.84 ~~for~~Annual ~~the~~rent ~~2005~~is ~~period~~approximately to $~~4.03~~118 ~~for~~plus ~~the 2006~~certain ~~period. The increase in concession revenues was attributable to the 3.8% increase in attendance and a 6.3% increase in concession revenues per patron~~taxes, ~~which increased from $1.92 for~~ ~~the~~maintenance ~~2005~~expenses ~~period to $2.04 for the 2006 period. The increase in attendance was attributable to the solid slate of films released during the 2006 period~~ and ~~new theatre openings~~insurance. The ~~increases~~Company inrecorded ~~average ticket~~$62 ~~price and concession revenues per patron were primarily due to price increases successfully implemented during the fourth quarter~~ of ~~2005~~facility ~~and~~lease ~~also~~expense ~~due~~payable to ~~favorable exchange rates in certain~~ ~~countries~~Plitt inPlaza ~~which~~joint weventure ~~operate.~~during ~~The 24.9% increase in other revenues was primarily attributable to~~ the ~~incremental~~six ~~screen~~months ~~advertising~~ended ~~revenues~~June 30, ~~resulting from the Company’s participation in the joint venture with National CineMedia~~2007.

~~Cost of Operations~~20. ~~Cost~~Commitments of operations was $395.5 million, or 73.1% of revenues, for the 2006 period compared to $366.1 million, or 74.6% of revenues, for the 2005 period. The decrease, as a percentage of revenues, was primarily due to the 10.3% increase in revenues and ~~the fixed nature of some of our~~Contingencies ~~theatre operating costs, such as components of salaries and wages, facility lease expense, and utilities and other costs.~~

~~Film~~From ~~rentals~~time ~~and~~to ~~advertising costs were $179.2 million~~time, ~~or 53.3% of admissions revenues, for~~ the ~~2006~~Company ~~period~~is ~~compared~~involved toin ~~$167.2 million,~~various orlegal ~~54.1%~~proceedings ofarising ~~admissions~~from ~~revenues, for~~ the ~~2005 period.~~ ~~The~~ordinary ~~decrease~~course inof ~~film~~its ~~rentals~~business ~~and~~operations, ~~advertising~~such ~~costs~~ as apersonal ~~percentage~~injury ofclaims, ~~admissions~~employment ~~revenues~~matters ~~was due~~and tocontractual adisputes, ~~more~~most ~~favorable mix~~ of ~~films resulting~~which inare ~~lower~~covered ~~average~~by ~~film~~insurance. ~~rental~~The ~~rates~~Company inbelieves ~~the~~its ~~2006 period~~potential ~~compared~~liability with ~~the~~respect ~~2005~~to ~~period~~proceedings ~~which~~currently ~~had~~pending ~~certain~~is ~~films~~not ~~with~~material, ~~higher~~individually ~~than~~or ~~average~~in ~~film rental rates.~~the ~~Concession supplies expense was $26.8 million~~aggregate, orto ~~15.8% of concession revenues, for~~ the ~~2006 period~~Company’s ~~compared~~financial ~~to $24.4 million~~position, orresults ~~15.8%~~ of ~~concession~~operations ~~revenues,~~and ~~for~~cash ~~the 2005 period~~flows.

~~Salaries and wages increased to $51~~21.~~5 million~~ ~~for~~Subsequent ~~the~~Event ~~2006~~– ~~period~~Dividend ~~from $49.7 million for the~~Declaration 2005 period primarily due to the 3.8% increase in attendance and new theatre openings. Facility lease expense increased to $72.5 million for the 2006 period from $65.8 million for the 2005 period primarily due to new theatre openings. Utilities and other costs increased to $65.5 million for the 2006 period from $58.9 million for the 2005 period primarily due to higher utility and janitorial supplies costs and new theatre openings.

~~General~~On August 13, ~~and~~2007, ~~Administrative~~Cinemark ~~Expenses~~Holdings, Inc., ~~General~~the ~~and~~Company’s parent, ~~administrative~~declared ~~expenses~~a ~~increased~~dividend toof $290.513 ~~million~~per ~~for~~common ~~the~~share ~~2006~~payable ~~period~~to ~~from~~stockholders ~~$24.6 million~~of ~~for~~record ~~the~~on ~~2005~~September 4, ~~period~~2007. The ~~increase~~dividend ~~was~~will ~~primarily~~be ~~due~~paid toon ~~increased incentive compensation expense and stock option compensation expense related to the adoption of SFAS No.~~September ~~123~~18, ~~(R)~~2007. ~~See Note 4 to the condensed consolidated financial statements.~~

~~Depreciation and Amortization~~22. ~~Depreciation~~Subsequent ~~and~~Event ~~amortization~~– ~~expense~~Repurchase ~~was~~of ~~$40.2 million~~Senior ~~for~~Discount ~~the~~Notes ~~2006 period~~

During July and August 2007, as part of six open market purchases, the Company repurchased $47,000 aggregate principal amount at maturity of its 9 ³/4% senior discount notes for approximately $42,758. The Company funded the transactions with proceeds from Cinemark Holdings, Inc.’s initial public offering. As a result of the transactions, the Company will record a loss on early retirement of debt of approximately $3,484, which includes premiums paid and the write-off of unamortized debt issue costs related to the repurchased notes.

~~compared to $37.9~~Item ~~million~~2. ~~for~~Management’s ~~the~~Discussion ~~2005~~and ~~period.~~Analysis ~~The~~of ~~increase~~Financial isCondition ~~primarily~~and ~~due~~Results toof ~~new~~Operations ~~theatre openings.~~

~~Impairment~~The offollowing ~~Long-Lived~~discussion ~~Assets. We recorded asset impairment charges on assets held~~ and ~~used of~~analysis ~~$0.9 million~~should ~~for~~be ~~the~~read ~~2006~~in ~~period~~conjunction ~~compared~~with toour ~~$0.2 million for the 2005 period. Impairment~~condensed ~~charges~~consolidated ~~for~~financial ~~2006~~statements ~~included~~and ~~the~~related ~~write-down~~notes ofand ~~six theatres~~schedules ~~in the United States to their fair values. Impairment charges for 2005~~ included ~~the write-down~~elsewhere ~~of two theatres~~ in ~~the United States to their fair values~~this report.

~~Loss~~Results ~~on Sale~~ of ~~Assets and Other. We recorded a loss on sale of assets and other of $1.5~~Operations ~~million during the 2006 period compared to $0.8 million during the 2005 period.~~

~~Interest~~On ~~Expense. Interest costs incurred~~October 5, ~~including amortization of debt issue costs~~2006, ~~was $46.0 million~~we ~~for~~completed the ~~2006~~Century ~~period~~Acquisition. ~~compared~~Results toof ~~$42.3 million~~operations for the ~~2005~~three months ~~period.~~and ~~The~~six ~~increase~~months ~~was due~~ended toJune 30, ~~increased~~2006 ~~interest~~do ~~rates~~not onreflect ~~our~~the ~~variable~~inclusion ~~rate~~of ~~debt~~the ~~outstanding~~Century theatres.

Loss on Early Retirement of Debt. During the 2006 period, we recorded a loss on early retirement of debt of $3.3 million as a result of the repurchase of $10.0 million aggregate principal amount of our 9% senior subordinated notes and the repurchase of $39.8 million aggregate principal amount at maturity of our 9 3/4% senior discount notes. See Note 5 to the condensed consolidated financial statements.


	Three Months Ended						Six Months Ended
	June 30,						June 30,
Operating data (in millions)	2007			2006			2007			2006

Revenues
Admissions	$	283.1		$	182.9		$	527.1		$	336.5
Concession		138.4			91.9			253.5			170.0
Other		18.5			20.3			37.4			34.6

Total revenues	$	440.0		$	295.1		$	818.0		$	541.1


Theatre operating costs ⁽¹⁾
Film rentals and advertising	$	159.1		$	100.3		$	287.4		$	179.2
Concession supplies		22.7			14.8			40.1			26.8
Salaries and wages		45.4			27.0			85.6			51.5
Facility lease expense		53.3			36.6			104.9			72.5
Utilities and other		48.2			33.3			92.4			65.5

Total theatre operating costs	$	328.7		$	212.0		$	610.4		$	395.5


Operating data as a percentage of revenues ⁽²⁾
Revenues
Admissions		64.3	%		62.0	%		64.4	%		62.2	%
Concession		31.5	%		31.1	%		31.0	%		31.4	%
Other		4.2	%		6.9	%		4.6	%		6.4	%

Total revenues		100.0	%		100.0	%		100.0	%		100.0	%


Theatre operating costs ^{(1) (2)}
Film rentals and advertising		56.2	%		54.8	%		54.5	%		53.3	%
Concession supplies		16.4	%		16.1	%		15.8	%		15.8	%
Salaries and wages		10.3	%		9.1	%		10.5	%		9.5	%
Facility lease expense		12.1	%		12.4	%		12.8	%		13.4	%
Utilities and other		11.0	%		11.3	%		11.3	%		12.1	%
Total theatre operating costs		74.7	%		71.8	%		74.6	%		73.1	%

Average screen count (month end average)		4,521			3,383			4,504			3,360

Revenues per average screen (in dollars)	$	97,326		$	87,225		$	181,612		$	161,026

Income Taxes. Income tax expense of $4.9 million was recorded for the 2006 period compared to $5.5 million recorded for the 2005 period. The effective tax rate was 18.8% for the 2006 period versus 28.1% for the 2005 period. Income tax provisions for interim (quarterly) periods are based on estimated annual income tax rates and are adjusted for the effect of significant infrequent or unusual items occurring during the interim period. As a result of the full inclusion in the interim rate calculation of these items, the interim rate may vary significantly from the normalized annual rate. The interim tax rate for the 2006 period reflects the release of the valuation allowance on our Brazilian deferred tax assets.


⁽¹⁾		Excludes depreciation and amortization expense.

⁽²⁾		All costs are expressed as a percentage of total revenues, except film rentals and advertising, which are expressed as a percentage of admissions revenues, and concession supplies, which are expressed as a percentage of concession revenues.

Liquidity and Capital Resources

Operating Activities

We primarily collect our revenues in cash, mainly through box office receipts and the sale of concession supplies. We also continue to expand the number of theatres that provide the patron a choice of using a credit card, in place of cash, which we convert to cash in approximately three to four days. Because our revenues are received in cash prior to the payment of related expenses, we have an operating “float” and historically have not required traditional working capital financing. Cash provided by operating activities, as reflected in the condensed consolidated statements of cash flows, amounted to $57.1 million for the six months ended June 30, 2006 compared to $65.0 million for the six months ended June 30, 2005.

Investing Activities

Our investing activities have been principally related to the development and acquisition of additional theatres. New theatre openings and acquisitions historically have been financed with internally generated cash and by debt financing, including borrowings under our amended senior secured credit facility. Cash used for investing activities, as reflected in the condensed consolidated statements of cash flows, amounted to $54.6 million for the six months ended June 30, 2006 compared to $26.3 million for the six months ended June 30, 2005. The increase in cash used for investing activities in 2006 was primarily related to increased capital expenditures. Capital expenditures for the six months ended June 30, 2006 included capital expenditures for new theatres of $33.7 million and capital expenditures for existing theatres of $21.4 million.

We continue to expand our U.S. theatre circuit. We opened nine new theatres with 106 screens during the six months ended June 30, 2006. At June 30, 2006, our total domestic screen count was 2,469 screens (12 of which are in Canada). At June 30, 2006, we had signed commitments to open five new theatres with 73 screens in domestic markets by the end of 2006 and open six new theatres with 88 screens subsequent to 2006. We estimate the remaining capital expenditures for

~~the development~~Three ofmonths ~~these~~ended ~~161 screens will be approximately $30~~June ~~million.~~30, ~~Actual~~2007 ~~expenditures for continued theatre development~~ and ~~acquisitions are subject to change based upon the availability of~~2006 ~~attractive opportunities.~~

WeRevenues. ~~also~~Total ~~continue~~revenues toincreased ~~expand~~$144.9 million ~~our~~to ~~international theatre circuit~~$440.0 million Wefor ~~opened~~the three ~~new theatres with 20 screens during the six~~ months ended June 30, ~~2006,~~2007 ~~bringing~~(“second ~~our~~quarter ~~total~~of ~~international~~2007”) ~~screen count~~from to$295.1 million ~~932~~for ~~screens.~~the Atthree months ended June 30, 2006, we(“second ~~had~~quarter ~~signed commitments to open four new theatres with 33 screens in international markets by the end~~ of 2006”), ~~and~~a ~~open~~49.1% ~~five new theatres with 42 screens subsequent to 2006~~increase. WeThe ~~estimate~~table ~~the~~below, ~~remaining~~presented ~~capital~~by ~~expenditures for the development of these 75~~reportable ~~screens~~operating insegment, ~~international~~summarizes ~~markets~~our ~~will~~year-over-year berevenue ~~approximately~~performance ~~$35 million.~~and ~~Actual~~certain ~~expenditures~~key ~~for~~performance ~~continued~~indicators ~~theatre~~that ~~development~~impact ~~and~~our ~~acquisitions are subject to change based upon the availability of attractive opportunities~~revenues.

We plan to fund capital expenditures for our continued development with cash flow from operations, borrowings under our amended senior secured credit facility, subordinated note borrowings, proceeds from sale-leaseback transactions and/or sales of excess real estate.


								International Operating
	U.S. Operating Segment							Segment							Consolidated
	Three Months Ended							Three Months Ended							Three Months Ended
	June 30,							June 30,							June 30,
					%							%							%
	2007		2006		Change			2007		2006		Change			2007		2006		Change
Admissions revenues (in millions)	$	225.2	$	131.4		71.4	%	$	57.9	$	51.5		12.4	%	$	283.1	$	182.9		54.8	%
Concession revenues (in millions)	$	112.7	$	70.3		60.3	%	$	25.7	$	21.6		19.0	%	$	138.4	$	91.9		50.6	%
Other revenues (in millions) ⁽¹⁾	$	10.3	$	13.8		(25.4	)%	$	8.2	$	6.5		26.2	%	$	18.5	$	20.3		(8.9	)%
Total revenues (in millions) ⁽¹⁾	$	348.2	$	215.5		61.6	%	$	91.8	$	79.6		15.3	%	$	440.0	$	295.1		49.1	%
Attendance (in millions)		38.9		28.3		37.5	%		16.8		16.6		1.2	%		55.7		44.9		24.1	%
Revenues per screen (in dollars) ⁽¹⁾	$	97,870	$	87,659		11.6	%	$	95,317	$	86,072		10.7	%	$	97,326	$	87,225		11.6	%

~~Financing~~(1) ~~Activities~~ U.S. operating segment revenues include eliminations of intercompany transactions with the international operating segment. See Note 18 of our condensed consolidated financial statements.

Cash used for financing activities, as reflected in the condensed consolidated statements of cash flows, amounted to $44.5 million for the six months ended June 30, 2006 compared to $3.0 million for the six months ended June 30, 2005. The increase in cash used for financing activities in 2006 was primarily related to the early retirement of long term debt in May 2006. The Company repurchased $10.0 million aggregate principal amount of its 9% senior subordinated notes and repurchased $39.8 million aggregate principal amount at maturity of its 9 3/4% senior discount notes (see Note 5).

•		Consolidated. The increase in admissions revenues of $100.2 million was attributable to a 24.1% increase in attendance from 44.9 million patrons for the second quarter of 2006 to 55.7 million patrons for the second quarter of 2007, which contributed $49.6 million, and a 25.1% increase in average ticket price from $4.07 for the second quarter of 2006 to $5.09 for the second quarter of 2007, which contributed $50.6 million. The increase in concession revenues of $46.5 million was attributable to the 24.1% increase in attendance, which contributed $26.5 million, and a 21.5% increase in concession revenues per patron from $2.05 for the second quarter of 2006 to $2.49 for the second quarter of 2007, which contributed $20.0 million. The increases in admissions revenues, concession revenues, attendance, average ticket prices and concession revenues per patron were primarily a result of the 77 Century theatres acquired during the fourth quarter of 2006. The $1.8 million, or 8.9% decrease in other revenues was primarily attributable to reduced screen advertising revenues which resulted from the NCM transaction and related Exhibitor Services Agreement amendment.

•		U.S. The increase in admissions revenues of $93.8 million was attributable to a 37.5% increase in attendance from 28.3 million patrons for the second quarter of 2006 to 38.9 million patrons for the second quarter of 2007, which contributed $49.2 million, and a 24.8% increase in average ticket price from $4.64 for the second quarter of 2006 to $5.79 for the second quarter of 2007, which contributed $44.6 million. The increase in concession revenues of $42.4 million was attributable to the 37.5% increase in attendance, which contributed $26.4 million, and a 16.5% increase in concession revenues per patron from $2.49 for the second quarter of 2006 to $2.90 for the second quarter of 2007, which contributed $16.0 million. The increases in admissions revenues, concession revenues, attendance, average ticket prices and concession revenues per patron were primarily a result of the 77 Century theatres acquired. The $3.5 million, or 25.4% decrease in other revenues was primarily attributable to reduced screen advertising revenues which resulted from the NCM transaction and related Exhibitor Services Agreement amendment.

We may from time to time, subject to compliance with our debt instruments, purchase on the open market our debt securities depending upon the availability and prices of such securities.

As of June 30, 2006, our long-term debt obligations, scheduled interest payments on long-term debt, future minimum lease obligations under non-cancelable operating leases, outstanding letters of credit, obligations under employment agreements and purchase commitments for each period indicated are summarized as follows:

	Payments Due by Period
	(in millions)
			Less Than						After
Contractual Obligations	Total		One Year		1 - 3 Years		4 - 5 Years		5 Years
Long-term debt1	$	1,141.5	$	5.4	$	9.9	$	248.1	$	878.1
Scheduled interest payments on long-term debt2		562.1		48.0		109.9		185.5		218.7
Lease obligations		1,534.7		125.5		258.4		243.4		907.4
Letters of credit		0.1		0.1		—		—		—
Employment agreements		9.3		3.1		6.2		—		—
Purchase commitments3		71.4		26.7		42.9		1.2		0.6
Total obligations	$	3,319.1	$	208.8	$	427.3	$	678.2	$	2,004.8

1		Includes the 9 3/4% senior discount notes in the principal amount at maturity of $535.6 million.
2		Amounts include scheduled interest payments on fixed rate and variable rate debt agreements. Estimates for the variable rate interest payments were based on interest rates in effect on June 30, 2006.
3		Includes estimated capital expenditures associated with the construction of new theatres to which we were committed as of June 30, 2006.

As of June 30, 2006, we were in full compliance with all agreements governing our outstanding debt.

Recent Developments

On August 2, 2006, Cinemark Holdings, Inc. (“Cinemark Holdings”) was formed to be the Delaware holding company of Cinemark, Inc.

On August 7, 2006, Cinemark USA, Inc. announced it has entered into a definitive purchase agreement in which it will acquire all of the outstanding stock of Century Theatres, Inc. The equity purchase price is approximately $681.0 million in addition to the assumption of debt. To finance the acquisition, Cinemark USA, Inc. plans to refinance its existing senior secured credit facility of $254.2 million and Century’s senior credit facility of $360.0 million with a new $1,120.0 million senior secured term loan and will issue to the Century shareholders $150.0 million of common stock in Cinemark Holdings. Cinemark USA, Inc. will utilize approximately $50.0 million of its current cash to fund the payment of transaction expenses and the balance of the cash purchase price. Cinemark USA, Inc. also plans to increase its senior secured revolving credit line capacity to $150.0 million with no amount drawn at closing.

~~Senior~~• ~~Discount~~International. ~~Notes~~ The increase in admissions revenues of $6.4 million was attributable to an 11.6% increase in average ticket price from $3.10 for the second quarter of 2006 to $3.46 for the second quarter of 2007, which contributed $6.0 million, and a 1.2% increase in attendance, which contributed $0.4 million. The increase in concession revenues of $4.1 million was attributable to an 18.5% increase in concession revenues per patron from $1.30 for the second quarter of 2006 to $1.54 for the second quarter of 2007, which contributed $4.0 million, and a 1.2% increase in attendance, which contributed $0.1 million. The increases in average ticket price and concession revenues per patron were primarily due to price increases and exchange rates. The increase in attendance was primarily due to new theatre openings.

OnTheatre ~~March 31,~~Operating ~~2004,~~Costs we(excludes ~~issued~~depreciation ~~approximately~~and ~~$577.2 million~~amortization ~~aggregate principal amount at maturity of 9 3/4% senior discount notes due 2014~~expense). ~~The~~Theatre ~~gross proceeds at issuance of~~operating ~~approximately~~costs were $~~360~~328.07 million, ~~were~~or ~~used~~74.7% ~~to fund in part the merger between us and a subsidiary~~ of ~~Madison~~ ~~Dearborn Partners~~revenues, ~~LLC~~for ~~that occurred on April 2, 2004. Interest on~~ the ~~notes~~second ~~accretes until~~quarter ~~March 15,~~of ~~2009,~~2007 upcompared to ~~their aggregate principal amount~~$212. ~~Cash interest will accrue and be~~0 ~~payable semi-annually in arrears on March 15 and September 15~~million, ~~commencing~~or ~~on September 15, 2009~~71. ~~Due~~8% toof ~~our~~revenues, ~~holding~~for ~~company~~the ~~status,~~second ~~payments~~quarter of ~~principal~~2006. ~~and~~The ~~interest~~table ~~under~~below, ~~these~~presented ~~notes will be~~by ~~dependent~~reportable onoperating ~~loans~~segment, ~~dividends~~summarizes ~~and~~our ~~other~~year-over-year ~~payments~~theatre ~~from~~operating ~~our subsidiaries~~costs.

On September 22, 2005, we repurchased $1.8 million aggregate principal amount at maturity of our 9 3/4% senior discount notes as part of an open market purchase for approximately $1.3 million, including accreted interest.


					International Operating
	U.S. Operating Segment				Segment				Consolidated
	Three Months Ended				Three Months Ended				Three Months Ended
	June 30,				June 30,				June 30,
	2007		2006		2007		2006		2007		2006
Film rentals and advertising	$	129.7	$	73.9	$	29.4	$	26.4	$	159.1	$	100.3
Concession supplies		16.3		9.2		6.4		5.6		22.7		14.8
Salaries and wages		38.6		21.3		6.8		5.7		45.4		27.0
Facility lease expense		40.3		25.5		13.0		11.1		53.3		36.6
Utilities and other		36.3		24.2		11.9		9.1		48.2		33.3

Total theatre operating costs	$	261.2	$	154.1	$	67.5	$	57.9	$	328.7	$	212.0

During May 2006, as part of four open market purchases, we repurchased $39.8 million aggregate principal amount at maturity of our 9 3/4% senior discount notes for approximately $31.7 million. We funded these transactions upon receipt of a $31.7 million dividend from Cinemark USA, Inc. that was paid with available cash from its operations. As a result of these transactions, we recorded a loss on early retirement of debt of approximately $2.4 million during the six months ended June 30, 2006, which included premiums paid and the write-off of unamortized debt issue costs related to the retired senior discount notes.

•		Consolidated. Film rentals and advertising costs were $159.1 million, or 56.2% of admissions revenues, for the second quarter of 2007 compared to $100.3 million, or 54.8% of admissions revenues, for the second quarter of 2006. The increase in film rentals and advertising costs of $58.8 million is due to a $100.2 million increase in admissions revenues, and an increase in our film rentals and advertising rate. The increase in film rentals and advertising costs as a percentage of admissions revenues was due to higher film rental rates on certain blockbuster films released during the second quarter of 2007, three of which grossed over $100 million domestically during their opening weekends. Concession supplies expense was $22.7 million, or 16.4% of concession revenues, for the second quarter of 2007, compared to $14.8 million, or 16.1% of concession revenues, for the second quarter of 2006. The increase in concession supplies expense was primarily due to the 77 Century theatres acquired.

		Salaries and wages increased to $45.4 million for the second quarter of 2007 from $27.0 million for the second quarter of 2006. Facility lease expense increased to $53.3 million for the second quarter of 2007 from $36.6 million for the second quarter of 2006. Utilities and other costs increased to $48.2 million for the second quarter of 2007 from $33.3 million for the second quarter of 2006. Increases in salaries and wages, facility lease expense and utilities and other costs were primarily due to the additional costs related to the 77 Century theatres acquired and new theatre openings. Salaries and wages expense was also impacted by minimum wage increases in certain U.S. states in which we operate.

•		U.S. Film rentals and advertising costs were $129.7 million, or 57.6% of admissions revenues, for the second quarter of 2007 compared to $73.9 million, or 56.2% of admissions revenues, for the second quarter of 2006. The increase in film rentals and advertising costs of $55.8 million is due to a $93.8 million increase in admissions revenues, and an increase in our film rentals and advertising rate. The increase in film rentals and advertising costs as a percentage of admissions revenues was due to higher film rental rates on certain blockbuster films released during the second quarter of 2007, three of which grossed over $100 million domestically during their opening weekends. Concession supplies expense was $16.3 million, or 14.5% of concession revenues, for the second quarter of 2007 compared to $9.2 million, or 13.1% of concession revenues, for the second quarter of 2006. The increase in concession supplies expense was primarily due to the 77 Century theatres acquired.

		Salaries and wages increased to $38.6 million for the second quarter of 2007 from $21.3 million for the second quarter of 2006. Facility lease expense increased to $40.3 million for the second quarter of 2007 from $25.5 million

As of June 30, 2006, the accreted principal balance of the notes was approximately $413.9 million and the aggregate principal amount at maturity will be approximately $535.6 million.

The indenture governing the senior discount notes contain covenants that limit, among other things, dividends, transactions with affiliates, investments, sale of assets, mergers, repurchases of our capital stock, liens and additional indebtedness. Upon a change of control of Cinemark, Inc., we would be required to make an offer to repurchase all of the 9 3/4% senior discount notes at a price equal to 101% of the accreted value of the notes plus accrued and unpaid interest, if any, through the date of purchase. We have no obligation, contingent or otherwise, to pay the amounts due under the 9 3/4% senior discount notes or to make funds available to pay those amounts. The 9 3/4% senior discount notes are general, unsecured senior obligations of ours that are effectively subordinated to the indebtedness and other liabilities of our subsidiaries.

Senior Subordinated Notes

As of June 30, 2006, Cinemark USA, Inc. had outstanding approximately $332.3 million aggregate principal amount of 9% senior subordinated notes due 2013. Interest is payable on February 1 and August 1 of each year. Cinemark USA, Inc. may redeem all or part of the existing 9% notes on or after February 1, 2008.

During May 2006, as part of three open market purchases, Cinemark USA, Inc. repurchased $10.0 million aggregate principal amount of its 9% senior subordinated notes for approximately $11.0 million, including accrued and unpaid interest. The transactions were funded by Cinemark USA, Inc. with available cash from operations. As a result of the transactions, Cinemark USA, Inc. recorded a loss on early retirement of debt of $0.9 million during the six months ended June 30, 2006, which included premiums paid and the write-off of unamortized debt issue costs related to the retired senior subordinated notes.

The senior subordinated notes are general, unsecured obligations and are subordinated in right of payment to the amended senior secured credit facility or other senior indebtedness. The notes are guaranteed by certain of Cinemark USA, Inc.’s domestic subsidiaries. The guarantees are subordinated to the senior debt of the subsidiary guarantors and rank pari passu with the senior subordinated debt of its guarantor subsidiaries. The notes are effectively subordinated to the indebtedness and other liabilities of Cinemark USA, Inc.’s non-guarantor subsidiaries.

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

Senior Secured Credit Facility

		for the second quarter of 2006. Utilities and other costs increased to $36.3 million for the second quarter of 2007 from $24.2 million for the second quarter of 2006. Increases in salaries and wages, facility lease expense and utilities and other costs, were primarily due to the additional costs related to the 77 Century theatres acquired and new theatre openings. Salaries and wages expense was also impacted by minimum wage increases in certain U.S. states in which we operate.

•		International. Film rentals and advertising costs were $29.4 million, or 50.8% of admissions revenues, for the second quarter of 2007 compared to $26.4 million, or 51.3% of admissions revenues, for the second quarter of 2006. The increase in film rentals and advertising costs is primarily due to increased admissions revenues. Concession supplies expense was $6.4 million, or 24.9% of concession revenues, for the second quarter of 2007 compared to $5.6 million, or 25.9% of concession revenues, for the second quarter of 2006. The increase in concession supplies expense was primarily due to increased concession revenues.

		Salaries and wages increased to $6.8 million for the second quarter of 2007 from $5.7 million for the second quarter of 2006 primarily due to new theatre openings. Facility lease expense increased to $13.0 million for the second quarter of 2007 from $11.1 million for the second quarter of 2006 primarily due to new theatre openings. Utilities and other costs increased to $11.9 million for the second quarter of 2007 from $9.1 million for the second quarter of 2006 primarily due to new theatre openings.

AtGeneral ~~June 30,~~and ~~2006,~~Administrative ~~there~~Expenses. ~~was~~General ~~approximately~~and ~~$254.2 million~~administrative ~~outstanding~~expenses ~~under~~increased ~~Cinemark~~to ~~USA, Inc~~$18.’s3 million ~~amended~~for ~~term loan and no borrowings outstanding under~~ the ~~amended~~second ~~revolving~~quarter ~~credit~~of ~~line. Approximately~~2007 from $9915.94 million ~~was available~~ for ~~borrowing under~~ the ~~amended~~second ~~revolving~~quarter ~~credit~~of ~~line,~~2006. The ~~giving~~increase ~~effect~~was toprimarily adue ~~$0.1 million~~to ~~letter~~increased ofsalaries, ~~credit~~consulting ~~outstanding.~~fees, ~~The~~and ~~average~~increased ~~interest~~service ~~rate on~~charges ~~outstanding~~related ~~borrowings~~to ~~under~~credit ~~the~~card ~~amended~~activity, ~~senior~~all ~~secured~~of ~~credit~~which ~~facility~~increased, atin ~~June 30~~part, ~~2006~~as ~~was~~a ~~6.9% per~~result ~~annum~~of the Century Acquisition.

OnTermination ~~July~~of Profit Participation Agreement. Upon consummation of our initial public offering on April 724, ~~2006~~2007, ~~Cinemark~~we ~~USA,~~exercised ~~Inc.’s~~our ~~amended~~option ~~senior~~to ~~secured~~terminate ~~credit~~the ~~facility~~amended ~~was~~and ~~amended~~restated ~~again~~profit participation agreement with anour ~~effective~~CEO ~~date~~Alan ofStock ~~June~~and purchased Mr. 30Stock’s interest in the theatres on May 3, ~~2006~~2007 for a price of $6.9 million ~~Certain~~pursuant ~~debt~~to ~~covenant~~the ~~ratios~~terms ~~and~~of the ~~restricted~~agreement. ~~payment~~In addition, ~~provision~~the Company incurred $0.1 million of payroll taxes related to the ~~agreement,~~termination. ~~among~~See ~~other~~Note ~~things,~~19 ~~were~~to ~~amended~~our condensed atconsolidated ~~this~~financial ~~time~~statements.

~~Under~~Depreciation ~~the~~and ~~amended~~Amortization. ~~term~~Depreciation ~~loan,~~and ~~principal~~amortization ~~payments~~expense, ofincluding ~~approximately $0.7 million are due each~~amortization ~~calendar~~of ~~quarter~~favorable ~~through March 31~~leases, ~~2010~~increased ~~and increase~~ to $6137.13 million ~~each~~for ~~calendar quarter from June 30, 2010 to maturity at March 31, 2011. The amended term loan bears interest, at Cinemark USA, Inc.’s option, at: (A)~~ the ~~base~~second ~~rate~~quarter ~~equal to the higher~~ of ~~(i) the~~2007 ~~prime lending rate as set forth on the British Banking Association Telerate page 5 or (ii) the federal funds effective rate~~ from ~~time to time plus 0~~$20.~~50%, plus a margin that ranges from~~ 0~~.75% to 1.00% per annum, or (B)~~ ~~a “eurodollar rate” plus a~~million ~~margin~~for ~~that~~the ~~ranges~~second ~~from~~quarter ~~1.75% to 2.00% per annum, both~~ of ~~which~~2006 ~~will~~primarily bedue ~~adjusted~~to ~~based~~the ~~upon~~77 ~~our achieving~~Century ~~certain~~theatres ~~performance targets~~acquired.

~~Borrowings~~Impairment ~~under~~of ~~the~~Long-Lived ~~amended~~Assets. ~~revolving~~We ~~credit~~recorded ~~line~~asset ~~bear~~impairment ~~interest,~~charges aton ~~Cinemark~~assets ~~USA,~~held ~~Inc.’s~~and used ~~option,~~of ~~at: (A)~~$7.0 amillion ~~base~~for ~~rate~~the ~~equal~~second toquarter ~~the~~of ~~higher~~2007 ofcompared ~~(i)~~to $0.6 ~~the~~million ~~prime~~during ~~lending~~the ~~rate~~second asquarter of ~~set~~2006. ~~forth~~Impairment oncharges for the ~~British~~ ~~Banking~~second ~~Association~~quarter ~~Telerate~~of ~~page~~2007 5consisted orof ~~(ii)~~$1.6 ~~the~~million ~~federal~~of ~~funds~~theatre properties, ~~effective~~$4.3 million ~~rate~~of ~~from~~goodwill ~~time~~associated ~~to time~~with ~~plus~~theatre ~~0.50%,~~properties ~~plus~~and a$1.1 million ~~margin~~of intangible ~~that~~assets ~~ranges~~associated ~~from~~with 1theatre properties.~~00%~~ toWe ~~1.50%~~record ~~per~~goodwill ~~annum,~~at orthe ~~(B) a~~theatre ~~“eurodollar~~level, ~~rate”~~which ~~plus~~results ain ~~margin~~more ~~that~~volatile ~~ranges~~impairment ~~from~~charges ~~2.00%~~on toan ~~2.50%~~annual ~~per~~basis ~~annum,~~due ~~both~~to ofchanges ~~which~~in ~~will~~market conditions beand ~~adjusted~~box ~~based upon~~office ~~our~~performance ~~achieving~~and ~~certain~~the ~~performance~~resulting ~~targets.~~impact Weon ~~are~~individual ~~required~~theatres. toSignificant judgment ~~pay~~is ainvolved ~~commitment~~in ~~fee~~estimating ~~calculated at~~cash ~~the~~flows ~~rate~~and offair 0value.~~50%~~ ~~per~~Management’s ~~annum~~estimates are based on historical ~~the~~and ~~average~~projected ~~daily~~operating ~~unused~~performance ~~portion~~as ofwell ~~the~~as ~~amended~~recent ~~revolving~~market ~~credit~~transactions. See notes 13 ~~line,~~and ~~payable~~14 ~~quarterly~~to inour ~~arrears~~condensed consolidated financial statements.

~~Cinemark~~(Gain) ~~USA,~~Loss ~~Inc.’s~~on ~~obligations~~Sale ~~under~~of ~~the~~Assets ~~amended~~and ~~senior~~Other. ~~secured~~We ~~credit~~recorded ~~facility~~a ~~are guaranteed~~gain byon ussale ~~and certain~~ of ~~our~~assets ~~subsidiaries~~ and ~~are~~other ~~secured by mortgages on certain fee and~~of ~~leasehold~~$1.9 million ~~properties~~during ~~and~~the ~~security~~second ~~interests~~quarter ~~in substantially all~~ of ~~Cinemark~~2007 ~~USA,~~compared ~~Inc.’s~~to ~~domestic personal~~a ~~and~~loss ~~intangible property, including without limitation, pledges~~ of ~~all~~$0.8 million ofduring the ~~capital stock~~second quarter of ~~Cinemark~~2006. ~~USA,~~The ~~Inc.,~~gain ~~all~~recorded ofduring the ~~capital~~second ~~stock~~quarter of ~~CNMK~~2007 ~~Holding,~~was ~~Inc.~~primarily ~~and~~due ~~certain~~to ofa ~~Cinemark USA,~~gain ~~Inc.’s~~recorded ~~domestic~~on ~~subsidiaries and 65% of~~ the ~~voting~~sale ~~stock~~ of ~~certain~~two ofU.S. ~~its foreign subsidiaries~~theatres.

~~Cinemark~~ Interest ~~Chile~~Expense. ~~Note~~Interest ~~Payable~~costs incurred, including amortization of debt issue costs, was $35.3 million for the second quarter of 2007 compared to $22.9 million for the second quarter of 2006. The increase was primarily due to the increased long-term debt related to the financing of the Century Acquisition during the fourth quarter of 2006.

OnGain ~~March 26,~~on ~~2002,~~Fandango ~~Cinemark Chile S~~transaction.A. ~~entered~~We ~~into~~recorded a ~~Debt~~gain Acknowledgment, Rescheduling and Joint Guarantee and Co-Debt Agreement with Scotiabank Sud Americano and three local banks. Under this agreement, Cinemark Chile S.A. borrowed the U.S. dollar equivalent of ~~approximately~~ $109.6 2 million inas ~~Chilean~~a ~~pesos~~result ~~(adjusted for inflation pursuant to the Unidades de Fomento). On September 29, 2004, Cinemark Chile S.A. refinanced the outstanding debt under an amended debt agreement with two~~ of the ~~original~~sale ~~local banks, Corpbanca and Banco Security. The amended~~of ~~agreement~~our ~~requires~~investment 24in ~~equal~~stock ~~quarterly installments~~ of ~~principal plus accrued and unpaid interest~~Fandango, ~~which~~ ~~commenced December 31, 2004~~Inc. ~~The~~See ~~agreement~~Note ~~requires~~8 ~~Cinemark Chile S.A.~~ to ~~maintain~~our ~~certain financial~~condensed ~~ratios~~consolidated ~~and contains other restrictive covenants typical for agreements of this type such~~financial ~~as a limitation on dividends~~statements. ~~Funds borrowed under this agreement bear interest at the 90 day TAB~~ Banking rate as published by the Association of Banks and Financial Institutions Act plus 1.5%. At June 30, 2006, approximately US$5.3 million was outstanding and the average interest rate on outstanding borrowings was 7.4% under this agreement.

~~Seasonality~~ Loss on Early Retirement of Debt. We recorded a loss on early retirement of debt of approximately $3.3 million during the second quarter of 2006 related to the repurchase of $10 million aggregate principal amount of our 9% senior subordinated notes and $39.8 million aggregate principal amount at maturity of our 9 3/4% senior discount notes. See Note 11 to our condensed consolidated financial statements.

Our revenues have historically been seasonal, coinciding with the timing of releases of motion pictures by the major distributors. Generally, the most successful motion pictures have been released during the summer, extending from Memorial Day to Labor Day, and during the holiday season, extending from Thanksgiving through year-end. The unexpected emergence of a hit film during other periods can alter this seasonality trend. The timing of such film releases

~~can~~ Distributions ~~have~~from aNCM. ~~significant~~We ~~effect~~recorded ondistributions ~~our~~received ~~results~~from NCM of ~~operations,~~$1.4 million ~~and~~during the second ~~results~~quarter of ~~one~~2007 ~~quarter~~as ~~are~~a ~~not necessarily~~result ~~indicative~~ of ~~results~~the ~~for~~mandatory ~~the~~quarterly ~~next~~distribution ~~quarter~~required orunder ~~for~~our agreements ~~the~~with ~~same~~NCM. ~~period~~See inNote ~~the~~6 ~~following year~~to our condensed consolidated financial statements.

Income Taxes. We recorded an income tax benefit of $26.5 million for the second quarter of 2007 compared to income tax expense of $7.3 million recorded for the second quarter of 2006. Income tax provisions for interim (quarterly) period are based on estimated annual income tax rates and are adjusted for the effects of significant, infrequent or unusual items occurring during the interim period. As a result, the interim rate may vary significantly from the normalized annual rate. See Note 9 to our condensed consolidated financial statements.

Six months ended June 30, 2007 and 2006

Revenues. Total revenues increased $276.9 million to $818.0 million for the six months ended June 30, 2007 (“the 2007 period”) from $541.1 million for the six months ended June 30, 2006 (“the 2006 period”), a 51.2% increase. The table below, presented by reportable operating segment, summarizes our year-over-year revenue performance and certain key performance indicators that impact our revenues.


								International Operating
	U.S. Operating Segment							Segment							Consolidated
	Six Months Ended							Six Months Ended							Six Months Ended
	June 30,							June 30,							June 30,
					%							%							%
	2007		2006		Change			2007		2006		Change			2007		2006		Change
Admissions revenues (in millions)	$	422.7	$	242.4		74.4	%	$	104.4	$	94.1		10.9	%	$	527.1	$	336.5		56.6	%
Concession revenues (in millions)	$	208.2	$	130.7		59.3	%	$	45.3	$	39.3		15.3	%	$	253.5	$	170.0		49.1	%
Other revenues (in millions) ⁽¹⁾	$	23.1	$	23.0		0.4	%	$	14.3	$	11.6		23.3	%	$	37.4	$	34.6		8.1	%
Total revenues (in millions) ⁽¹⁾	$	654.0	$	396.1		65.1	%	$	164.0	$	145.0		13.1	%	$	818.0	$	541.1		51.2	%
Attendance (in millions)		73.9		52.9		39.7	%		31.0		30.5		1.6	%		104.9		83.4		25.8	%
Revenues per screen (in dollars) ⁽¹⁾	$	184,569	$	162,302		13.7	%	$	170,709	$	157,641		8.3	%	$	181,612	$	161,026		12.8	%


⁽¹⁾		U.S. operating segment revenues include eliminations of intercompany transactions with the international operating segment. See Note 18 of our condensed consolidated financial statements.

•		Consolidated. The increase in admissions revenues of $190.6 million was attributable to a 25.8% increase in attendance from 83.4 million patrons for the 2006 period to 104.9 million patrons for the 2007 period, which contributed $97.4 million, and a 24.8% increase in average ticket price from $4.03 for the 2006 period to $5.03 for the 2007 period, which contributed $93.2 million. The increase in concession revenues of $83.5 million was attributable to the 25.8% increase in attendance, which contributed $52.4 million, and an 18.6% increase in concession revenues per patron from $2.04 for the 2006 period to $2.42 for the 2007 period, which contributed $31.1 million. The increases in admissions revenues, concession revenues, attendance, average ticket prices and concession revenues per patron were primarily due to the 77 Century theatres acquired during the fourth quarter of 2006. The 8.1% increase in other revenues was primarily attributable to incremental screen advertising revenues resulting from the 77 Century theatres acquired.

•		U.S. The increase in admissions revenues of $180.3 million was attributable to a 39.7% increase in attendance from 52.9 million patrons for the 2006 period to 73.9 million patrons for the 2007 period, which contributed $95.8 million, and a 24.9% increase in average ticket price from $4.58 for the 2006 period to $5.72 for the 2007 period, which contributed $84.5 million. The increase in concession revenues of $77.5 million was attributable to the 39.7% increase in attendance, which contributed $51.7 million, and a 14.2% increase in concession revenues per patron from $2.47 for the 2006 period to $2.82 for the 2007 period, which contributed $25.8 million. The increase in admissions revenues, concession revenues, attendance, average ticket prices and concession revenues per patron were primarily a result of the 77 Century theatres acquired.

•

International. The increase in admissions revenues of $10.3 million was attributable to a 9.1% increase in average ticket price from $3.09 for the 2006 period to $3.37 for the 2007 period, which contributed $8.7 million, and a 1.6% increase in attendance, which contributed $1.6 million. The increase in concession revenues of $6.0 million was attributable to a 13.2% increase in concession revenues per patron from $1.29 for the 2006 period to $1.46 for the 2007 period, which contributed $5.3 million, and a 1.6% increase in attendance, which contributed $0.7 million. The increases in average ticket price and concession revenues per patron were primarily due to price increases and exchange rates. The increase in attendance was primarily due to new theatre openings.

Theatre Operating Costs (excludes depreciation and amortization expense). Theatre operating costs were $610.4 million, or 74.6% of revenues, for the 2007 period compared to $395.5 million, or 73.1% of revenues, for the 2006 period. The table below, presented by reportable operating segment, summarizes our year-over-year theatre operating costs.


					International Operating
	U.S. Operating Segment				Segment				Consolidated
	Six Months Ended				Six Months Ended				Six Months Ended
	June 30,				June 30,				June 30,
	2007		2006		2007		2006		2007		2006
Film rentals and advertising	$	235.2	$	132.1	$	52.2	$	47.1	$	287.4	$	179.2
Concession supplies		28.7		16.8		11.4		10.0		40.1		26.8
Salaries and wages		73.0		40.5		12.6		11.0		85.6		51.5
Facility lease expense		80.2		50.6		24.7		21.9		104.9		72.5
Utilities and other		70.6		47.2		21.8		18.3		92.4		65.5

Total theatre operating costs	$	487.7	$	287.2	$	122.7	$	108.3	$	610.4	$	395.5

•		Consolidated. Film rentals and advertising costs were $287.4 million, or 54.5% of admissions revenues, for the 2007 period compared to $179.2 million, or 53.3% of admissions revenues, for the 2006 period. The increase in film rentals and advertising costs of $108.2 million is due to a $190.6 million increase in admissions revenues and an increase in our film rentals and advertising rate. The increase in film rentals and advertising costs as a percentage of admissions revenues was due to higher film rental rates on certain films in the 2007 period compared with the 2006 period. Concession supplies expense was $40.1 million, or 15.8% of concession revenues, for the 2007 period, compared to $26.8 million, or 15.8% of concession revenues, for the 2006 period. The increase in concession supplies expense was primarily due to the 77 Century theatres acquired.

		Salaries and wages increased to $85.6 million for the 2007 period from $51.5 million for the 2006 period. Facility lease expense increased to $104.9 million for the 2007 period from $72.5 million for the 2006 period. Utilities and other costs increased to $92.4 million for the 2007 period from $65.5 million for the 2006 period. Increases in salaries and wages, facility lease expense and utilities and other costs were primarily due to the additional costs related to the 77 Century theatres acquired and new theatre openings. Salaries and wages expense was also impacted by minimum wage increases in certain U.S. states in which we operate.

•		U.S. Film rentals and advertising costs were $235.2 million, or 55.6% of admissions revenues, for the 2007 period compared to $132.1 million, or 54.5% of admissions revenues, for the 2006 period. The increase in film rentals and advertising costs of $103.1 million is due to a $180.3 million increase in admissions revenues, and an increase in our film rentals and advertising rate. The increase in film rentals and advertising costs as a percentage of admissions revenues was due to higher film rental rates on certain films in the 2007 period compared with the 2006 period. Concession supplies expense was $28.7 million, or 13.8% of concession revenues, for the 2007 period compared to $16.8 million, or 12.9% of concession revenues, for the 2006 period. The increase in concession supplies expense was primarily due to the 77 Century theatres acquired.

		Salaries and wages increased to $73.0 million for the 2007 period from $40.5 million for the 2006 period. Facility lease expense increased to $80.2 million for the 2007 period from $50.6 million for the 2006 period. Utilities and other costs increased to $70.6 million for the 2007 period from $47.2 million for the 2006 period. Increases in salaries and wages, facility lease expense and utilities and other costs were primarily due to the additional costs

		related to the 77 Century theatres acquired and new theatre openings. Salaries and wages expense was also impacted by minimum wage increases in certain U.S. states in which we operate.

•		International. Film rentals and advertising costs were $52.2 million, or 50.0% of admissions revenues, for the 2007 period compared to $47.1 million, or 50.1% of admissions revenues, for the 2006 period. The increase in film rentals and advertising costs is primarily due to increased admissions revenues. Concession supplies expense was $11.4 million, or 25.2% of concession revenues, for the 2007 period compared to $10.0 million, or 25.4% of concession revenues, for the 2006 period. The increase in concession supplies expense is primarily due to increased concession revenues.

		Salaries and wages increased to $12.6 million for the 2007 period from $11.0 million for the 2006 period primarily due to new theatre openings. Facility lease expense increased to $24.7 million for the 2007 period from $21.9 million for the 2006 period primarily due to new theatre openings. Utilities and other costs increased to $21.8 million for the 2007 period from $18.2 million for the 2006 period primarily due to new theatre openings.

General and Administrative Expenses. General and administrative expenses increased to $36.9 million for the 2007 period from $29.5 million for the 2006 period. The increase was primarily due to increased salaries, consulting fees, and increased service charges related to credit card activity, all of which increased, in part, as a result of the Century Acquisition.

Termination of Profit Participation Agreement. Upon consummation of our initial public offering on April 24, 2007, we exercised our option to terminate the amended and restated profit participation agreement with our CEO Alan Stock and purchased Mr. Stock’s interest in the theatres on May 3, 2007 for a price of $6.9 million pursuant to the terms of the agreement. In addition, the Company incurred $0.1 million of payroll taxes related to the termination. See Note 19 to our condensed consolidated financial statements.

Depreciation and Amortization. Depreciation and amortization expense, including amortization of favorable leases, was $75.2 million for the 2007 period compared to $40.2 million for the 2006 period primarily due to the 77 Century theatres acquired.

Impairment of Long-Lived Assets. We recorded asset impairment charges on assets held and used of $56.8 million for the 2007 period compared to $0.9 million during the 2006 period. Impairment charges for the 2007 period consisted of $8.0 million of theatre properties, $45.1 million of goodwill associated with theatre properties and $3.7 million of intangible assets associated with theatre properties. We record goodwill at the theatre level, which results in more volatile impairment charges on an annual basis due to changes in market conditions and box office performance and the resulting impact on individual theatres. Significant judgment is involved in estimating cash flows and fair value. Management’s estimates are based on historical and projected operating performance as well as recent market transactions. See notes 6, 13 and 14 to our condensed consolidated financial statements. See also discussion of gain on NCM Transaction.

(Gain) Loss on Sale of Assets and Other. We recorded a gain on sale of assets and other of $1.6 million during the 2007 period compared to a loss of $1.5 million during the 2006 period. The gain for the 2007 period was primarily due to a gain recorded on the sale of two U.S. theatres.

Interest Expense. Interest costs incurred, including amortization of debt issue costs, was $76.8 million for the 2007 period compared to $46.0 million for the 2006 period. The increase was primarily due to the increased long-term debt related to the financing of the Century Acquisition during the fourth quarter of 2006.

Gain on NCM transaction. We recorded a gain of $210.8 million on the sale of a portion of our equity investment in NCM in conjunction with the initial public offering of NCM, Inc. during the 2007 period. Our ownership interest in NCM was reduced from approximately 25% to approximately 14% as part of this sale of stock in the offering. See Note 6 to our condensed consolidated financial statements.

Gain on Fandango transaction. We recorded a gain of $9.2 million as a result of the sale of our investment in stock of Fandango, Inc. See Note 8 to our condensed consolidated financial statements.

Loss on Early Retirement of Debt. We recorded a loss on early retirement of debt of $8.0 million during the 2007 period, which consisted of tender offer repurchase costs, including premiums paid and other fees, and the write-off of unamortized debt issue costs, partially offset by the write-off of the unamortized bond premium, associated with the repurchase of a total of $332.1 million aggregate principal amount of our 9% senior subordinated notes during March and April 2007. We recorded a loss on early retirement of debt of approximately $3.3 million during the 2006 period related to the repurchase of $10 million aggregate principal amount of our 9% senior subordinated notes and $39.8 million aggregate principal amount at maturity of our 9 ³/4% senior discount notes. See Note 11 to our condensed consolidated financial statements.

Distributions from NCM. We recorded distributions received from NCM of $1.4 million during the 2007 period as a result of the mandatory quarterly distribution required under our agreements with NCM. See Note 6 to our condensed consolidated financial statements.

Income Taxes. We recorded income tax expense of $8.9 million for the 2007 period compared to $4.9 million recorded for the 2006 period. The effective tax rate was 5.1% for the 2007 period and 18.8% for the 2006 period. See Note 9 to our condensed consolidated financial statements.

Cautionary Statement Regarding Forward-Looking Statements

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

	•		future revenues, expenses and profitability;

	•		the future development and expected growth of our business;

	•		projected capital expenditures;

	•		attendance at movies generally, or in any of the markets in which we operate;

	•		the number or diversity of popular movies released;

	•		our ability to successfully license and exhibit popular films;

	•		competition from other exhibitors; and

	•		determinations in lawsuits in which we are a defendant.

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

~~Item 3. Quantitative and Qualitative Disclosures About Market Risk~~28

We have exposure to financial market risks, including changes in interest rates, foreign currency exchange rates and other relevant market prices.

Interest Rate Risk

An increase or decrease in interest rates would affect interest costs relating to our variable rate debt facilities. Our subsidiaries are currently parties to variable rate debt facilities. At June 30, 2006, there was an aggregate of approximately $263.3 million of variable rate debt outstanding under these facilities. Based on the interest rate levels in effect on the variable rate debt outstanding at June 30, 2006, a 100 basis point increase in market interest rates would not increase our annual interest expense or fair value by a material amount. Changes in interest rates do not have a direct impact on interest expense relating to the remaining fixed rate debt facilities.

The tables below provide information about our fixed rate and variable rate long-term debt agreements as of June 30, 2006 and December 31, 2005:

Expected Maturity as of June 30, 2006 (in millions)

																	Average
	June 30,														Fair		Interest
	2007		2008		2009		2010		2011		Thereafter		Total		Value		Rate
Fixed rate	$	0.1	$	—	$	—	$	—	$	—	$	878.1	$	878.2	$	769.4		9.5	%
Variable rate		5.3		5.7		4.2		64.5		183.6		—		263.3		265.2		6.9	%
Total debt	$	5.4	$	5.7	$	4.2	$	64.5	$	183.6	$	878.1	$	1,141.5	$	1,034.6

Expected Maturity as of December 31, 2005 (in millions)

																	Average
	December 31,														Fair		Interest
	2006		2007		2008		2009		2010		Thereafter		Total		Value		Rate
Fixed rate	$	0.1	$	—	$	—	$	—	$	—	$	928.7	$	928.8	$	792.8		9.5	%
Variable rate		6.8		5.5		4.3		4.1		185.1		61.1		266.9		268.4		6.6	%
Total debt	$	6.9	$	5.5	$	4.3	$	4.1	$	185.1	$	989.8	$	1,195.7	$	1,061.2

Foreign Currency Exchange Rate Risk

We are also exposed to market risk arising from changes in foreign currency exchange rates as a result of our international operations. Generally, we export from the U.S. certain of the equipment and construction interior finish items and other operating supplies used by our international subsidiaries. Principally all the revenues and operating expenses of our international subsidiaries are transacted in the country’s local currency. Generally accepted accounting principles in the U.S. require that our subsidiaries use the currency of the primary economic environment in which they operate as their functional currency. If our subsidiaries operate in a highly inflationary economy, generally accepted accounting principles in the U.S. require that the U.S. dollar be used as the functional currency for the subsidiary. Currency fluctuations result in us reporting exchange gains (losses) or foreign currency translation adjustments relating to our international subsidiaries depending on the inflationary environment of the country in which we operate. Based upon our equity ownership in our international subsidiaries as of June 30, 2006, holding everything else constant, a 10% immediate unfavorable change in each of the foreign currency exchange rates to which we are exposed would decrease the net fair value of our investments in our international subsidiaries by approximately $17 million.

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

We ~~have~~maintain ~~established~~ a system of controls and other procedures designed to ensure that ~~information~~ information required to be disclosed in our periodic reports filed under the Securities Exchange Act of 1934 (the “Exchange Act”), as amended, is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms. These disclosure controls and procedures have been evaluated under the direction of our Chief Executive Officer and Chief Financial Officer for the period covered by this report. Based on such evaluations, the Chief Executive Officer and Chief Financial Officer have concluded that the disclosure controls and procedures are effective in alerting them in a timely basis to material information relating to the Company and its consolidated subsidiaries required to be included in our reports filed or submitted under the Exchange Act.

Changes in Internal Controls

There have been no ~~significant~~material changes in our system of internal controls or in other factors that could significantly affect internal controls within the period covered by this report ~~or subsequent to the evaluation by the Chief Executive Officer and Chief Financial Officer~~.

2629

PART II — OTHER INFORMATION

Item 1. Legal Proceedings

~~Reference~~Previously isreported ~~made~~under to Item 3 of the Company’s Annual Report on Form 10-K for the fiscal ~~year~~ year ended December 31, ~~2005~~2006.

Item 1A. Risk Factors

There have been no material changes from risk factors previously disclosed in Item 1A. to Part I of the Company’s Form 10-K for the year ended December 31, ~~2005~~2006.

Item 5. Other Information

Supplemental Schedules specified by the senior discount notes Indenture:


	Page
Supplemental Schedules Specified by the senior discount notes Indenture:

Condensed Consolidating Balance Sheet Information as of June 30, 2007 (unaudited)		31
Condensed Consolidating Statements of Income Information for the six months ended June 30, 2007 (unaudited)		32
Condensed Consolidating Statements of Cash Flows Information for the six months ended June 30, 2007 (unaudited)		33

CINEMARK, INC. AND SUBSIDIARIES ~~CONDENSED CONSOLIDATING BALANCE SHEETS AS OF JUNE 30, 2006 (In thousands, unaudited)~~

	Restricted			Unrestricted
	Group			Group		Eliminations			Consolidated
ASSETS
CURRENT ASSETS
Cash and cash equivalents	$	139,373		$	8	$	—		$	139,381
Other current assets		31,632			1		—			31,633
Total current assets		171,005			9		—			171,014
THEATRE PROPERTIES AND EQUIPMENT — net		796,610			—		—			796,610
OTHER ASSETS		115,737			5,759		(8,225	)		113,271
TOTAL ASSETS	$	1,083,352		$	5,768	$	(8,225	)	$	1,080,895
LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIENCY)
CURRENT LIABILITIES
Current portion of long-term debt	$	5,361		$	—	$	—		$	5,361
Income tax payable		4,093			—		—			4,093
Accounts payable and accrued expenses		129,151			—		—			129,151
Total current liabilities		138,605			—		—			138,605
LONG-TERM LIABILITIES
Long-term debt, excluding current portion		1,014,473			—		—			1,014,473
Other long-term liabilities		49,548			—		—			49,548
Total long-term liabilities		1,064,021			—		—			1,064,021
COMMITMENTS AND CONTINGENCIES		—			—		—			—
MINORITY INTERESTS IN SUBSIDIARIES		16,237			—		—			16,237
STOCKHOLDERS’ EQUITY (DEFICIENCY)		(135,511	)		5,768		(8,225	)		(137,968	)
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIENCY)	$	1,083,352		$	5,768	$	(8,225	)	$	1,080,895

CONDENSED CONSOLIDATING BALANCE SHEETS

AS OF JUNE 30, 2007

(In thousands, unaudited)


	Restricted		Unrestricted
	Group		Group			Eliminations			Consolidated
ASSETS

CURRENT ASSETS
Cash and cash equivalents	$	123,177	$	15,091		$	—		$	138,268
Other current assets		53,446		(1,338	)		—			52,108

Total current assets		176,623		13,753			—			190,376

THEATRE PROPERTIES AND EQUIPMENT — net		1,338,566		—			—			1,338,566

OTHER ASSETS		1,591,230		1,265			(8,225	)		1,584,270


TOTAL ASSETS	$	3,106,419	$	15,018		$	(8,225	)	$	3,113,212


LIABILITIES AND STOCKHOLDERS’ EQUITY

CURRENT LIABILITIES
Current portion of long-term debt	$	13,954	$	—		$	—		$	13,954
Current portion of capital lease obligations		3,944		—			—			3,944
Income tax payable		35,436		(279	)		—			35,157
Accounts payable and accrued expenses		189,078		—			—			189,078

Total current liabilities		242,412		(279	)		—			242,133

LONG-TERM LIABILITIES
Long-term debt, excluding current portion		1,561,227		—			—			1,561,227
Other long-term liabilities		510,457		—			(95,916	)		414,541

Total long-term liabilities		2,071,684		—			(95,916	)		1,975,768

COMMITMENTS AND CONTINGENCIES

MINORITY INTERESTS IN SUBSIDIARIES		17,300		—			—			17,300

STOCKHOLDERS’ EQUITY		775,023		15,297			87,691			878,011


TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	3,106,419	$	15,018		$	(8,225	)	$	3,113,212

Note: “Restricted Group” and “Unrestricted Group” are defined in the Indenture for the senior discount notes.

2831

CINEMARK, INC. AND SUBSIDIARIES ~~CONDENSED CONSOLIDATING STATEMENTS OF INCOME FOR THE SIX MONTHS ENDED JUNE 30, 2006 (In thousands, unaudited)~~

	Restricted			Unrestricted
	Group			Group			Eliminations			Consolidated
REVENUES	$	541,094		$	—		$	—		$	541,094
COSTS AND EXPENSES
Cost of operations		395,486			—			—			395,486
General and administrative expenses		29,510			—			—			29,510
Depreciation and amortization		40,180			—			—			40,180
Impairment of long-lived assets		923			—			—			923
Loss on sale of assets and other		1,543			—			—			1,543
Total costs and expenses		467,642			—			—			467,642
OPERATING INCOME		73,452			—			—			73,452
OTHER EXPENSE		(45,021	)		(1,290	)		(1,167	)		(47,478	)
INCOME (LOSS) BEFORE INCOME TAXES		28,431			(1,290	)		(1,167	)		25,974
Income taxes		4,881			—			—			4,881
NET INCOME (LOSS)	$	23,550		$	(1,290	)	$	(1,167	)	$	21,093

CONDENSED CONSOLIDATING STATEMENTS OF INCOME

SIX MONTHS ENDED JUNE 30, 2007

(In thousands, unaudited)


	Restricted			Unrestricted
	Group			Group			Eliminations			Consolidated
REVENUES	$	818,058		$	—		$	—		$	818,058

COST OF OPERATIONS
Theatre operating costs		610,439			—			—			610,439
General and administrative expenses and other		43,871			18			—			43,889
Depreciation and amortization		75,154			—			—			75,154
Impairment of long-lived assets		56,766			—			—			56,766
Gain on sale of assets and other		(1,559	)		—			—			(1,559	)

Total cost of operations		784,671			18			—			784,689


OPERATING INCOME (LOSS)		33,387			(18	)		—			33,369

OTHER INCOME		48,524			211,887			(120,000	)		140,411


INCOME BEFORE TAXES		81,911			211,869			(120,000	)		173,780

Income taxes		22,918			81,935			(95,916	)		8,937


NET INCOME	$	58,993		$	129,934		$	(24,084	)	$	164,843

Note: “Restricted Group” and “Unrestricted Group” are defined in the Indenture for the senior discount notes.

2932

CINEMARK, INC. AND SUBSIDIARIES ~~CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS FOR THE SIX MONTHS ENDED JUNE 30, 2006 (In thousands, unaudited)~~

	Restricted			Unrestricted
	Group			Group			Eliminations			Consolidated
OPERATING ACTIVITIES
Net income (loss)	$	23,550		$	(1,290	)	$	(1,167	)	$	21,093
Noncash items in net income (loss)		62,899			1,299			—			64,198
Changes in assets and liabilities		(28,441	)		262			—			(28,179	)
Net cash provided by operating activities		58,008			271			(1,167	)		57,112
INVESTING ACTIVITIES
Additions to theatre properties and equipment		(55,064	)		—			—			(55,064	)
Proceeds from sale of theatre properties and equipment		178			—			—			178
Net transactions with affiliates		(633	)		271			633			271
Net cash provided by (used for) investing activities		(55,519	)		271			633			(54,615	)
FINANCING ACTIVITIES
Capital contribution from parent		—			633			(633	)		—
Retirement of senior discount notes		(30,331	)		—			—			(30,331	)
Retirement of senior subordinated notes		(10,000	)		—			—			(10,000	)
Proceeds from long-term debt		963			—			—			963
Repayments of long-term debt		(3,570	)		—			—			(3,570	)
Other		(1,601	)		(1,167	)		1,167			(1,601	)
Net cash used for financing activities		(44,539	)		(534	)		534			(44,539	)
Effect of exchange rate changes on cash and cash equivalents		(776	)		—			—			(776	)
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS		(42,826	)		8			—			(42,818	)
CASH AND CASH EQUIVALENTS:
Beginning of period		182,199			—			—			182,199
End of period	$	139,373		$	8		$	—		$	139,381

CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS

SIX MONTHS ENDED JUNE 30, 2007

(In thousands, unaudited)


	Restricted			Unrestricted
	Group			Group			Eliminations			Consolidated
OPERATING ACTIVITIES
Net income	$	58,993		$	129,934		$	(24,084	)	$	164,843
Noncash items in net income		101,635			(209,255	)		(95,916	)		(203,536	)
Changes in assets and liabilities		202,051			1,062			—			203,113

Net cash provided by (used for) operating activities		362,679			(78,259	)		(120,000	)		164,420

INVESTING ACTIVITIES
Additions to theatre properties and equipment		(73,148	)		—			—			(73,148	)
Proceeds from sale of theatre properties and equipment		13,915			—			—			13,915
Net proceeds from sale of NCM stock		—			214,842			—			214,842
Net proceeds from sale of Fandango stock		11,347			—			—			11,347
Investment in joint venture — DCIP		—			(1,500	)		—			(1,500	)

Net cash provided by (used for) investing activities		(47,886	)		213,342			—			165,456

FINANCING ACTIVITIES
Retirement of senior subordinated notes		(332,066	)		—			—			(332,066	)
Repayments of long-term debt		(7,200	)		—			—			(7,200	)
Dividends paid to parent		—			(120,000	)		120,000			—
Other		(1,968	)		—			—			(1,968	)

Net cash used for financing activities		(341,234	)		(120,000	)		120,000			(341,234	)

Effect of exchange rate changes on cash and cash equivalents		2,527			—			—			2,527


INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS		(23,914	)		15,083			—			(8,831	)

Beginning of period		147,091			8			—			147,099

End of period	$	123,177		$	15,091		$	—		$	138,268

Note: “Restricted Group” and “Unrestricted Group” are defined in the Indenture for the senior discount notes.

3033

Item 6. Exhibits

2.1		Agreement and Plan of Merger dated March 12, 2004, by and between Cinemark, Inc. and Popcorn Merger Corp. (incorporated by reference to Exhibit 2.1 to the Company’s Registration Statement on Form S-4 (File No. 333-116292) filed June 8, 2004).
Number		Exhibit Title
2.2		Stock Purchase Agreement dated as of March 12, 2004 by and between Cinemark, Inc. and Madison Dearborn Capital Partners IV, L.P. (incorporated by reference to Exhibit 2.2 to the Company’s Registration Statement on Form S-4 (File No. 333-116292) filed June 8, 2004).
2.1		Stock Contribution and Exchange Agreement, dated as of August 7, 2006, by and between Cinemark Holdings, Inc., Cinemark, Inc., Syufy Enterprises, LP and Century Theatres Holdings, LLC (incorporated by reference to Exhibit 10.2 to Cinemark USA, Inc.’s Current Report on Form 8-K, File No. 033-47040, filed August 11, 2006).
3.1		Second Amended and Restated Certificate of Incorporation of Cinemark, Inc. filed with the Delaware Secretary of State on April 2, 2004 (incorporated by reference to Exhibit 3.1 to the Company’s Registration Statement on Form S-4 (File No. 333-116292) filed June 8, 2004).
2.2		Contribution and Exchange Agreement, dated as of August 7, 2006, by and among Cinemark Holdings, Inc. and Lee Roy Mitchell, The Mitchell Special Trust, Alan W. Stock, Timothy Warner, Robert Copple, Michael Cavalier, Northwestern University, John Madigan, Quadrangle Select Partners LP, Quadrangle Capital Partners A LP, Madison Dearborn Capital Partners IV, L.P., K&E Investment Partners, LLC — 2004-B-DIF, Piola Investments Ltd., Quadrangle (Cinemark) Capital Partners LP and Quadrangle Capital Partners LP (incorporated by reference to Exhibit 10.3 to Cinemark USA, Inc.’s Current Report on Form 8-K, File No. 033-47040, filed August 11, 2006).
3.2		Amended and Restated Bylaws of Cinemark, Inc. (incorporated by reference to Exhibit 3.2 to the Company’s Registration Statement on Form S-4 (File No. 333-116292) filed June 8, 2004).
2.3		Agreement and Plan of Merger dated March 12, 2004, by and between Cinemark, Inc. and Popcorn Merger Corp. (incorporated by reference to Exhibit 2.1 to Cinemark, Inc.’s Registration Statement on Form S-4, File No. 333-116292, filed June 8, 2004).
4.1		Exchange and Registration Rights Agreement dated March 31, 2004 among Cinemark, Inc., certain subsidiary guarantors party thereto and the initial purchasers named therein (incorporated by reference to Exhibit 4.1 to the Company’s Registration Statement on Form S-4 (File No. 333-116292) filed June 8, 2004).
2.4		Stock Purchase Agreement dated as of March 12, 2004 by and between Cinemark, Inc. and Madison Dearborn Capital Partners IV, L.P. (incorporated by reference to Exhibit 2.2 to Cinemark, Inc.’s Registration Statement on Form S-4, File No. 333-116292, filed June 8, 2004).
4.2(a)		Indenture dated as of March 31, 2004 between Cinemark, Inc. and The Bank of New York Trust Company, N.A. governing the 9 3/4% senior discount notes issued thereunder (incorporated by reference to Exhibit 4.2(a) to the Company’s Registration Statement on Form S-4 (File No. 333-116292) filed June 8, 2004).
3.1		Second Amended and Restated Certificate of Incorporation of Cinemark, Inc. filed with the Delaware Secretary of State on April 2, 2004 (incorporated by reference to Exhibit 3.1 to Cinemark, Inc.’s Registration Statement on Form S-4, File No. 333-116292, filed June 8, 2004).
4.2(b)		Form of 9 3/4% senior discount notes (contained in the indenture listed as Exhibit 4.2(a) above) (incorporated by reference to Exhibit 4.2(b) to the Company’s Registration Statement on Form S-4 (File No. 333-116292) filed June 8, 2004).
3.2		Amended and Restated Bylaws of Cinemark, Inc. (incorporated by reference to Exhibit 3.2 to Cinemark, Inc.’s Registration Statement on Form S-4, File No. 333-116292, filed June 8, 2004).
4.2(c)		Indenture dated February 11, 2003 between Cinemark USA, Inc. and The Bank of New York Trust Company of Florida, N.A. governing the 9% Senior Subordinated Notes issued thereunder (incorporated by reference to Exhibit 10.2(b) to Cinemark USA, Inc.’s Annual Report on Form 10-K (File No. 033-47040) filed March 19, 2003).
4.1		Exchange and Registration Rights Agreement dated March 31, 2004 among Cinemark, Inc., certain subsidiary guarantors party thereto and the initial purchasers named therein (incorporated by reference to Exhibit 4.1 to Cinemark, Inc.’s Registration Statement on Form S-4, File No. 333-116292, filed June 8, 2004).
4.2(d)		First Supplemental Indenture dated as of May 7, 2003 between Cinemark USA, Inc., the subsidiary guarantors party thereto and The Bank of New York Trust Company of Florida, N.A. (incorporated by reference to Exhibit 4.2(i) to Cinemark USA, Inc.’s Registration Statement on Form S-4 (File No. 333-104940) filed May 28, 2003).
4.2(a)		Indenture, dated as of March 31, 2004, between Cinemark, Inc. and The Bank of New York Trust Company, N.A. governing the 9 3/4% senior discount notes issued thereunder (incorporated by reference to Exhibit 4.2(a) to Cinemark, Inc.’s Registration Statement on Form S-4, File No. 333-116292, filed June 8, 2004).
4.2(e)		Second Supplemental Indenture dated as of November 11, 2004 between Cinemark USA, Inc., the subsidiary guarantors party thereto and The Bank of New York Trust Company of Florida, N.A. (incorporated by reference to Exhibit 4.2(c) to Cinemark USA, Inc.’s Annual Report on Form 10-K (File No. 033-047040) filed March 28, 2005).
4.2(b)		Form of 9 3/4% senior discount notes (contained in the indenture listed as Exhibit 4.2(a) above) (incorporated by reference to Exhibit 4.2(b) to Cinemark, Inc.’s Registration Statement on Form S-4, File No. 333-116292, filed June 8, 2004).
4.2(d)		Form of 9% Note (contained in the Indenture listed as Exhibit 4.2(h) above) (incorporated by reference to Exhibit 10.2(b) to Cinemark USA, Inc.’s Annual Report on Form 10-K (File 033-47040) filed March 19, 2003).
4.3(a)		Indenture, dated as of February 11, 2003, between Cinemark USA, Inc. and The Bank of New York Trust Company of Florida, N.A. governing the 9% senior subordinated notes issued thereunder (incorporated by reference to Exhibit 10.2(b) to Cinemark USA, Inc.’s Annual Report on Form 10-K, File No. 033-47040, filed March 19, 2003).
10.1(a)		Management Agreement, dated as of July 28, 1993, between Cinemark USA, Inc. and Cinemark Mexico (USA) (incorporated by reference to Exhibit 10.1(a) to Cinemark, Inc.’s Registration Statement on Form S-1 (File No. 333-88618) filed May 17, 2002).
4.3(b)		First Supplemental Indenture, dated as of May 7, 2003, between Cinemark USA, Inc., the subsidiary guarantors party thereto and The Bank of New York Trust Company of Florida, N.A. (incorporated by reference from Exhibit 4.2(i) to Cinemark USA, Inc.’s Registration Statement on Form S-4/A, File No. 333-104940, filed May 28, 2003).
10.1(b)		Management Agreement, dated as of September 10, 2002, between Cinemark USA, Inc. and Cinemark de Mexico (incorporated by reference to Exhibit 10.8 to Cinemark Mexico (USA)’s Registration Statement on Form S-4 (File No. 033-72114) filed on November 24, 1994).
4.3(c)		Second Supplemental Indenture dated as of November 11, 2004, between Cinemark USA, Inc., the subsidiary guarantors party thereto and The Bank of New York Trust Company of Florida, N.A. (incorporated by reference to Exhibit 4.2(c) to Cinemark USA, Inc.’s Annual Report on Form 10-K, File No. 033-047040, filed March 28, 2005).
10.1(c)		Management Agreement, dated December 10, 1993, between Laredo Theatre, Ltd. and Cinemark USA, Inc. (incorporated by reference to Exhibit 10.14(b) to Cinemark USA, Inc.’s Annual Report on Form 10-K (File No. 033-47040) filed March 31, 1994).
4.3(d)		Third Supplemental Indenture, dated as of October 5, 2006, among Cinemark USA, Inc., the subsidiaries of Cinemark USA, Inc. named therein, and The Bank of New York Trust Company, N.A., as trustee (incorporated by reference to Exhibit 10.7 to Cinemark USA, Inc.’s Current Report on Form 8-K, File No. 033-47040, filed October 12, 2006).
10.1(d)		First Amendment to Management Agreement of Laredo Theatre, Ltd. effective as of December 10, 2003 between CNMK Texas Properties, Ltd. (successor in interest to Cinemark USA, Inc.) and Laredo Theatre Ltd. (incorporated by reference to Exhibit 10.1(d) to Cinemark, Inc.’s Registration Statement on Form S-4 (File No. 333-116292) filed June 8, 2004).
4.3(e)		Fourth Supplemental Indenture, dated March 20, 2007, among Cinemark USA, Inc. and the subsidiaries of Cinemark USA, Inc. named therein, and the Bank of New York Trust Company, N.A. (incorporated by reference to Exhibit 4.1 to the Current Report on Form 8-K, File No. 033-47040, filed by Cinemark USA, Inc. on March 26, 2007).
10.1(e)		Management Agreement, dated September 1, 1994, between Cinemark Partners II, Ltd. and Cinemark USA, Inc. (incorporated by reference to Exhibit 10.4(i) to Cinemark USA, Inc.’s Annual Report on Form 10-K (File No. 033-47040) filed March 29, 1995).
4.3(f)		Form of 9% Senior Subordinated Note, Due 2013 (contained in the Indenture listed as Exhibit 4.3(a) above) (incorporated by reference to Exhibit 10.2(b) to Cinemark USA, Inc.’s Annual Report on Form 10-K, File No. 033-47040, filed March 19, 2003).
10.1(f)		First Amendment to Management Agreement of Cinemark Partners II, Ltd. dated as of January 5, 1998 by and between Cinemark USA, Inc. and Cinemark Partners II, Ltd. (incorporated by reference to Exhibit 10.1(f) to the Company’s Registration Statement on Form S-4 (File No. 333-116292) filed June 8, 2004).
*31.1		Certification of Chief Executive Officer of Cinemark, Inc., pursuant to Section 302 of the Sarbanes Oxley Act of 2002.
10.1(g)		Management Services Agreement dated April 10, 2003 between Greeley Partners L.P. and CNMK Texas Properties, Ltd. (incorporated by reference to Exhibit 10.1(g) to the Company’s Registration Statement on Form S-4 (File No. 333-116292) filed June 8, 2004).
*31.2		Certification of Chief Financial Officer of Cinemark, Inc. pursuant to Section 302 of the Sarbanes Oxley Act of 2002.
10.1(h)		Second Amendment to Credit Agreement dated July 7, 2006, to the Amended and Restated Credit Agreement dated as of April 2, 2004 (as amended by the First Amendment dated as of August 18, 2004) by and among Cinemark, Inc., CNMK Holding, Inc., Cinemark USA, Inc. and the several banks and other financial institutions or entities thereto, and Lehman Commercial Paper, Inc., as administrative agent (incorporated by reference to Exhibit 10.1 to the Cinemark USA, Inc. Form 8-K filed on July 7, 2006).

3134

10.2		Amended and Restated Agreement to Participate in Profits and Losses, dated as of March 12, 2004, between Cinemark USA, Inc. and Alan W. Stock (incorporated by reference to Exhibit 10.2 to Cinemark USA, Inc.’s Quarterly Report on Form 10-Q (File No. 033-47040) filed May 14, 2004).
Number		Exhibit Title
10.3(a)		License Agreement, dated December 10, 1993, between Laredo Joint Venture and Cinemark USA, Inc. (incorporated by reference to Exhibit 10.14(c) to Cinemark USA, Inc.’s Annual Report on Form 10-K (File No. 033-47040) filed March 31, 1994).
*32.1		Certification of Chief Executive Officer of Cinemark, Inc. pursuant to Section 906 of the Sarbanes Oxley Act of 2002.
10.3(b)		License Agreement, dated September 1, 1994, between Cinemark Partners II, Ltd. and Cinemark USA, Inc. (incorporated by reference to Exhibit 10.10(c) to Cinemark USA, Inc.’s Annual Report on Form 10-K (File No. 033-47040) filed March 29, 1995).
*32.2		Certification of Chief Financial Officer of Cinemark, Inc. pursuant to Section 906 of the Sarbanes Oxley Act of 2002.
10.4(a)		Tax Sharing Agreement, between Cinemark USA, Inc. and Cinemark International, L.L.C. (f/k/a Cinemark II, Inc. ), dated as of June 10, 1992 (incorporated by reference to Exhibit 10.22 to Cinemark USA, Inc.’s Annual Report on Form 10-K (File No. 033-47040) filed March 31, 1993).
10.4(b)		Tax Sharing Agreement, dated as of July 28, 1993, between Cinemark USA, Inc. and Cinemark Mexico (USA) (incorporated by reference to Exhibit 10.10 to Cinemark Mexico (USA)’s Registration Statement on Form S-4 (File No. 033-72114) filed on November 24, 1993).
10.5		Form of Indemnification Agreement (incorporated by reference to Exhibit 10.6 to the Company’s Registration Statement on Form S-1 (File No. 333-88618) filed on May 17, 2002).
10.6(a)		Senior Secured Credit Agreement dated December 4, 1995 among Cinemark International, L.L.C. (f/k/a Cinemark II, Inc., Cinemark Mexico (USA) and Cinemark de Mexico (incorporated by reference to Exhibit 10.18 to Cinemark USA, Inc.’s Annual Report on Form 10-K (File No. 033-47040) filed April 1, 1996).
10.6(b)		First Amendment to Senior Secured Credit Agreement, dated as of September 30, 1996, by and among Cinemark II, Inc., Cinemark Mexico (USA), Inc. and Cinemark de Mexico, S.A. de C.V. (incorporated by reference to Exhibit 10.11(b) to Cinemark, Inc.’s Registration Statement on Form S-1 (File No. 333-88618) filed on May 17, 2002).
10.6(c)		Second Amendment to Senior Secured Credit Agreement, dated as of September 28, 2000, by and among Cinemark II, Inc., Cinemark Mexico (USA), Inc. and Cinemark de Mexico, S.A. de C.V. (incorporated by reference to Exhibit 10.11(c) to Cinemark, Inc.’s Registration Statement on Form S-1 (File No. 333-88618) filed on May 17, 2002).
10.7(a)		Employment Agreement, dated as of March 12, 2004, between Cinemark, Inc. and Lee Roy Mitchell (incorporated by reference to Exhibit 10.14(a) to Cinemark USA, Inc.’s Quarterly Report on Form 10-Q (File No. 033-47040) filed May 14, 2004).
10.7(b)		Employment Agreement, dated as of March 12, 2004, between Cinemark, Inc. and Alan Stock (incorporated by reference to Exhibit 10.14(b) to Cinemark USA, Inc.’s Quarterly Report on Form 10-Q (File No. 033-47040) filed May 14, 2004).
10.7(c)		Employment Agreement, dated as of March 12, 2004, between Cinemark, Inc. and Tim Warner (incorporated by reference to Exhibit 10.14(c) to Cinemark USA, Inc.’s Quarterly Report on Form 10-Q (File No. 033-47040) filed May 14, 2004).
10.7(d)		Employment Agreement, dated as of March 12, 2004, between Cinemark, Inc. and Robert Copple (incorporated by reference to Exhibit 10.14(d) to Cinemark USA, Inc.’s Quarterly Report on Form 10-Q (File No. 033-47040) filed May 14, 2004).
10.7(e)		Employment Agreement, dated as of March 12, 2004, between Cinemark, Inc. and Rob Carmony (incorporated by reference to Exhibit 10.14(e) to Cinemark USA, Inc.’s Quarterly Report on Form 10-Q (File No. 033-47040) filed May 14, 2004).
10.7(f)		Employment Agreement, dated as of March 12, 2004, between Cinemark, Inc. and Tandy Mitchell (incorporated by reference to Exhibit 10.14(f) to Cinemark USA, Inc.’s Quarterly Report on Form 10-Q (File No. 033-47040) filed May 14, 2004).
10.8(a)		Amended and Restated Credit Agreement, dated April 2, 2004, among Cinemark, Inc., CNMK Holdings, Inc., Cinemark USA, Inc., the several lenders from time to time parties thereto, Lehman Brothers Inc. and Goldman Sachs Credit Partners LP, as Joint Legal Arrangers, Goldman Sachs Credit Partners LP, as Syndication Agent, Deutsche Bank Securities, Inc., The Bank of New York, General Electric Capital Corporation and CIBC Inc. as Documentation Agents and Lehman Commercial Paper Inc. as Administrative Agent (incorporated by reference to Exhibit 10.15 to Cinemark USA, Inc.’s Quarterly Report on Form 10-Q (File No. 033-47040) filed May 14, 2004).
10.8(b)		First Amendment to the Amended and Restated Credit Agreement, dated August 18, 2004, among Cinemark, Inc., CNMK Holdings, Inc., Cinemark USA, Inc., the several lenders from time to time parties thereto, Lehman Brothers Inc. and Goldman Sachs Credit Partners LP, as Joint Lead Arrangers, Goldman Sachs Credit Partners LP, as Syndication Agent, Deutsche Bank Securities, Inc., The Bank of New York, General Electric Capital Corporation and CIBC Inc. as Documentation Agents and Lehman Commercial Paper Inc. as Administrative Agent (incorporated by reference to Exhibit 10.15(b) to Cinemark USA, Inc.’s Quarterly Report on Form 10-Q (File No. 033-47040) filed November 10, 2004).

10.9		Amended and Restated Guaranty and Collateral Agreement, dated April 2, 2004, among Cinemark, Inc., CNMK Holdings Inc., Cinemark USA, Inc. and certain of it subsidiaries in favor of Lehman Commercial Paper, Inc., as administrative agent (incorporated by reference to Exhibit 10.16 to Cinemark USA, Inc.’s Quarterly Report on Form 10-Q (File No. 033-47040) filed May 14, 2004).
10.10(a)		Cinemark, Inc. Stockholders Agreement dated as of March 12, 2004, among Madison Dearborn Capital Partners IV, L.P., each of the investors listed on the Schedule of Mitchell Investors and each of the executives listed on the Schedule of Executives (incorporated by reference to Exhibit 10.9 to the Company’s Registration Statement on Form S-4 (File No. 333-116292) filed June 8, 2004).
10.10(b)		Amended and Restated Stockholders Agreement dated as of December 30, 2004 among Cinemark, Inc., Madison Dearborn Partners IV, LP, Lee Roy Mitchell, The Mitchell Special Trust, Quadrangle Capital Partners LP, Quadrangle Select Partners LP, Quadrangle Capital Partners, A LP and the other stockholders party thereto (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K (File No. 333-116292) filed January 4, 2005).
10.11(a)		Registration Agreement dated as of March 12, 2004 among the Company, Madison Dearborn Capital Partners IV, L.P., Lee Roy Mitchell and The Mitchell Special Trust (incorporated by reference to Exhibit 10.10 to the Company’s Registration Statement on Form S-4 (File No. 333-116292) filed June 8, 2004).
10.11(b)		First Amendment to Registration Agreement dated as of December 30, 2004 among Cinemark, Inc., Madison Dearborn Partners IV, LP, Lee Roy Mitchell, The Mitchell Special Trust, Quadrangle Capital Partners LP, Quadrangle Select Partners LP, Quadrangle Capital Partners, A LP and the other stockholders party thereto (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K (File No. 333-116292) filed January 4, 2005).
10.12(a)		Cinemark, Inc. Long Term Incentive Plan Document, dated September 30, 2004 (incorporated by reference to Exhibit 10.19(a) to the Company’s Quarterly Report on Form 10-Q (File No. 333-116292) filed November 10, 2004).
10.12(b)		Form of Stock Option Agreement (incorporated by reference to Exhibit 10.19(b) to the Company’s Quarterly Report on Form 10-Q (File No. 333-116292) filed November 10, 2004).
10.13(a)		Stock Purchase Agreement dated as of August 18, 2004, among Cinemark Empreendimentos e Participacoes, Ltda, Venture II Equity Holdings Corporation, Inc. and Kristal Holdings Limited (incorporated by reference to Exhibit 10.20(a) to the Company’s Quarterly Report on Form 10-Q (File No. 333-116292) filed November 10, 2004).
10.13(b)		Stock Purchase Agreement dated as of August 18, 2004, among Cinemark Empreendimentos e Participacoes, Ltda, Prona Global Ltd., Messrs. Edgar Gleich, Riccardo Arduini, Moises Pinsky, Eduardo Alalou, and Robert Luis Leme Klabin (incorporated by reference to Exhibit 10.20(b) to the Company’s Quarterly Report on Form 10-Q (File No. 333-116292) filed November 10, 2004).
*31.1		Certification of Chief Executive Officer of Cinemark, Inc. Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
*31.2		Certification of Chief Financial Officer of Cinemark, Inc. Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
*32.1		Certification of the Chief Executive Officer of Cinemark, Inc. Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
*32.2		Certification of the Chief Financial Officer of Cinemark, Inc. Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.


*		filed herewith.

3335

SIGNATURES

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

		CINEMARK, INC. Registrant
DATE: August 13, 2007	CINEMARK, INC. Registrant
DATE: August 14, 2006
	/s/ Alan W. Stock
		/s/ Alan W. Stock
	Alan W. Stock
		Alan W. Stock President
	Chief Executive Officer
	/s/ Robert Copple	~~/s/ Robert Copple~~
		Robert Copple Chief Financial Officer
	Robert Copple
	Chief Financial Officer

3436

EXHIBIT INDEX

2.1		Agreement and Plan of Merger dated March 12, 2004, by and between Cinemark, Inc. and Popcorn Merger Corp. (incorporated by reference to Exhibit 2.1 to the Company’s Registration Statement on Form S-4 (File No. 333-116292) filed June 8, 2004).
Number		Exhibit Title
2.2		Stock Purchase Agreement dated as of March 12, 2004 by and between Cinemark, Inc. and Madison Dearborn Capital Partners IV, L.P. (incorporated by reference to Exhibit 2.2 to the Company’s Registration Statement on Form S-4 (File No. 333-116292) filed June 8, 2004).
2.1		Stock Contribution and Exchange Agreement, dated as of August 7, 2006, by and between Cinemark Holdings, Inc., Cinemark, Inc., Syufy Enterprises, LP and Century Theatres Holdings, LLC (incorporated by reference to Exhibit 10.2 to Cinemark USA, Inc.’s Current Report on Form 8-K, File No. 033-47040, filed August 11, 2006).
3.1		Second Amended and Restated Certificate of Incorporation of Cinemark, Inc. filed with the Delaware Secretary of State on April 2, 2004 (incorporated by reference to Exhibit 3.1 to the Company’s Registration Statement on Form S-4 (File No. 333-116292) filed June 8, 2004).
2.2		Contribution and Exchange Agreement, dated as of August 7, 2006, by and among Cinemark Holdings, Inc. and Lee Roy Mitchell, The Mitchell Special Trust, Alan W. Stock, Timothy Warner, Robert Copple, Michael Cavalier, Northwestern University, John Madigan, Quadrangle Select Partners LP, Quadrangle Capital Partners A LP, Madison Dearborn Capital Partners IV, L.P., K&E Investment Partners, LLC — 2004-B-DIF, Piola Investments Ltd., Quadrangle (Cinemark) Capital Partners LP and Quadrangle Capital Partners LP (incorporated by reference to Exhibit 10.3 to Cinemark USA, Inc.’s Current Report on Form 8-K, File No. 033-47040, filed August 11, 2006).
3.2		Amended and Restated Bylaws of Cinemark, Inc. (incorporated by reference to Exhibit 3.2 to the Company’s Registration Statement on Form S-4 (File No. 333-116292) filed June 8, 2004).
2.3		Agreement and Plan of Merger dated March 12, 2004, by and between Cinemark, Inc. and Popcorn Merger Corp. (incorporated by reference to Exhibit 2.1 to Cinemark, Inc.’s Registration Statement on Form S-4, File No. 333-116292, filed June 8, 2004).
4.1		Exchange and Registration Rights Agreement dated March 31, 2004 among Cinemark, Inc., certain subsidiary guarantors party thereto and the initial purchasers named therein (incorporated by reference to Exhibit 4.1 to the Company’s Registration Statement on Form S-4 (File No. 333-116292) filed June 8, 2004).
2.4		Stock Purchase Agreement dated as of March 12, 2004 by and between Cinemark, Inc. and Madison Dearborn Capital Partners IV, L.P. (incorporated by reference to Exhibit 2.2 to Cinemark, Inc.’s Registration Statement on Form S-4, File No. 333-116292, filed June 8, 2004).
4.2(a)		Indenture dated as of March 31, 2004 between Cinemark, Inc. and The Bank of New York Trust Company, N.A. governing the 9 3/4% senior discount notes issued thereunder (incorporated by reference to Exhibit 4.2(a) to the Company’s Registration Statement on Form S-4 (File No. 333-116292) filed June 8, 2004).
3.1		Second Amended and Restated Certificate of Incorporation of Cinemark, Inc. filed with the Delaware Secretary of State on April 2, 2004 (incorporated by reference to Exhibit 3.1 to Cinemark, Inc.’s Registration Statement on Form S-4, File No. 333-116292, filed June 8, 2004).
4.2(b)		Form of 9 3/4% senior discount notes (contained in the indenture listed as Exhibit 4.2(a) above) (incorporated by reference to Exhibit 4.2(b) to the Company’s Registration Statement on Form S-4 (File No. 333-116292) filed June 8, 2004).
3.2		Amended and Restated Bylaws of Cinemark, Inc. (incorporated by reference to Exhibit 3.2 to Cinemark, Inc.’s Registration Statement on Form S-4, File No. 333-116292, filed June 8, 2004).
4.2(c)		Indenture dated February 11, 2003 between Cinemark USA, Inc. and The Bank of New York Trust Company of Florida, N.A. governing the 9% Senior Subordinated Notes issued thereunder (incorporated by reference to Exhibit 10.2(b) to Cinemark USA, Inc.’s Annual Report on Form 10-K (File No. 033-47040) filed March 19, 2003).
4.1		Exchange and Registration Rights Agreement dated March 31, 2004 among Cinemark, Inc., certain subsidiary guarantors party thereto and the initial purchasers named therein (incorporated by reference to Exhibit 4.1 to Cinemark, Inc.’s Registration Statement on Form S-4, File No. 333-116292, filed June 8, 2004).
4.2(d)		First Supplemental Indenture dated as of May 7, 2003 between Cinemark USA, Inc., the subsidiary guarantors party thereto and The Bank of New York Trust Company of Florida, N.A. (incorporated by reference to Exhibit 4.2(i) to Cinemark USA, Inc.’s Registration Statement on Form S-4 (File No. 333-104940) filed May 28, 2003).
4.2(a)		Indenture, dated as of March 31, 2004, between Cinemark, Inc. and The Bank of New York Trust Company, N.A. governing the 9 3/4% senior discount notes issued thereunder (incorporated by reference to Exhibit 4.2(a) to Cinemark, Inc.’s Registration Statement on Form S-4, File No. 333-116292, filed June 8, 2004).
4.2(e)		Second Supplemental Indenture dated as of November 11, 2004 between Cinemark USA, Inc., the subsidiary guarantors party thereto and The Bank of New York Trust Company of Florida, N.A. (incorporated by reference to Exhibit 4.2(c) to Cinemark USA, Inc.’s Annual Report on Form 10-K (File No. 033-047040) filed March 28, 2005).
4.2(b)		Form of 9 3/4% senior discount notes (contained in the indenture listed as Exhibit 4.2(a) above) (incorporated by reference to Exhibit 4.2(b) to Cinemark, Inc.’s Registration Statement on Form S-4, File No. 333-116292, filed June 8, 2004).
4.2(d)		Form of 9% Note (contained in the Indenture listed as Exhibit 4.2(h) above) (incorporated by reference to Exhibit 10.2(b) to Cinemark USA, Inc.’s Annual Report on Form 10-K (File 033-47040) filed March 19, 2003).
4.3(a)		Indenture, dated as of February 11, 2003, between Cinemark USA, Inc. and The Bank of New York Trust Company of Florida, N.A. governing the 9% senior subordinated notes issued thereunder (incorporated by reference to Exhibit 10.2(b) to Cinemark USA, Inc.’s Annual Report on Form 10-K, File No. 033-47040, filed March 19, 2003).
10.1(a)		Management Agreement, dated as of July 28, 1993, between Cinemark USA, Inc. and Cinemark Mexico (USA) (incorporated by reference to Exhibit 10.1(a) to Cinemark, Inc.’s Registration Statement on Form S-1 (File No. 333-88618) filed May 17, 2002).
4.3(b)		First Supplemental Indenture, dated as of May 7, 2003, between Cinemark USA, Inc., the subsidiary guarantors party thereto and The Bank of New York Trust Company of Florida, N.A. (incorporated by reference from Exhibit 4.2(i) to Cinemark USA, Inc.’s Registration Statement on Form S-4/A, File No. 333-104940, filed May 28, 2003).
10.1(b)		Management Agreement, dated as of September 10, 2002, between Cinemark USA, Inc. and Cinemark de Mexico (incorporated by reference to Exhibit 10.8 to Cinemark Mexico (USA)’s Registration Statement on Form S-4 (File No. 033-72114) filed on November 24, 1994).
4.3(c)		Second Supplemental Indenture dated as of November 11, 2004, between Cinemark USA, Inc., the subsidiary guarantors party thereto and The Bank of New York Trust Company of Florida, N.A. (incorporated by reference to Exhibit 4.2(c) to Cinemark USA, Inc.’s Annual Report on Form 10-K, File No. 033-047040, filed March 28, 2005).
10.1(c)		Management Agreement, dated December 10, 1993, between Laredo Theatre, Ltd. and Cinemark USA, Inc. (incorporated by reference to Exhibit 10.14(b) to Cinemark USA, Inc.’s Annual Report on Form 10-K (File No. 033-47040) filed March 31, 1994).
4.3(d)		Third Supplemental Indenture, dated as of October 5, 2006, among Cinemark USA, Inc., the subsidiaries of Cinemark USA, Inc. named therein, and The Bank of New York Trust Company, N.A., as trustee (incorporated by reference to Exhibit 10.7 to Cinemark USA, Inc.’s Current Report on Form 8-K, File No. 033-47040, filed October 12, 2006).
10.1(d)		First Amendment to Management Agreement of Laredo Theatre, Ltd. effective as of December 10, 2003 between CNMK Texas Properties, Ltd. (successor in interest to Cinemark USA, Inc.) and Laredo Theatre Ltd. (incorporated by reference to Exhibit 10.1(d) to Cinemark, Inc.’s Registration Statement on Form S-4 (File No. 333-116292) filed June 8, 2004).
4.3(e)		Fourth Supplemental Indenture, dated March 20, 2007, among Cinemark USA, Inc. and the subsidiaries of Cinemark USA, Inc. named therein, and the Bank of New York Trust Company, N.A. (incorporated by reference to Exhibit 4.1 to the Current Report on Form 8-K, File No. 033-47040, filed by Cinemark USA, Inc. on March 26, 2007).
10.1(e)		Management Agreement, dated September 1, 1994, between Cinemark Partners II, Ltd. and Cinemark USA, Inc. (incorporated by reference to Exhibit 10.4(i) to Cinemark USA, Inc.’s Annual Report on Form 10-K (File No. 033-47040) filed March 29, 1995).
4.3(f)		Form of 9% Senior Subordinated Note, Due 2013 (contained in the Indenture listed as Exhibit 4.3(a) above) (incorporated by reference to Exhibit 10.2(b) to Cinemark USA, Inc.’s Annual Report on Form 10-K, File No. 033-47040, filed March 19, 2003).
10.1(f)		First Amendment to Management Agreement of Cinemark Partners II, Ltd. dated as of January 5, 1998 by and between Cinemark USA, Inc. and Cinemark Partners II, Ltd. (incorporated by reference to Exhibit 10.1(f) to the Company’s Registration Statement on Form S-4 (File No. 333-116292) filed June 8, 2004).
*31.1		Certification of Chief Executive Officer of Cinemark, Inc., pursuant to Section 302 of the Sarbanes Oxley Act of 2002.
10.1(g)		Management Services Agreement dated April 10, 2003 between Greeley Partners L.P. and CNMK Texas Properties, Ltd. (incorporated by reference to Exhibit 10.1(g) to the Company’s Registration Statement on Form S-4 (File No. 333-116292) filed June 8, 2004).
*31.2		Certification of Chief Financial Officer of Cinemark, Inc. pursuant to Section 302 of the Sarbanes Oxley Act of 2002.
10.1(h)		Second Amendment to Credit Agreement dated July 7, 2006, to be effective as of June 30, 2006, to the Amended and Restated Credit Agreement dated as of April 2, 2004 (as amended by the First Amendment dated as of August 18, 2004) by and among Cinemark, Inc., CNMK Holding, Inc., Cinemark USA, Inc. and the several banks and other financial institutions or entities thereto, and Lehman Commercial Paper, Inc., as administrative agent (incorporated by reference to Exhibit 10.1 to the Cinemark USA, Inc. Form 8-K filed on July 7, 2006).

10.2		Amended and Restated Agreement to Participate in Profits and Losses, dated as of March 12, 2004, between Cinemark USA, Inc. and Alan W. Stock (incorporated by reference to Exhibit 10.2 to Cinemark USA, Inc.’s Quarterly Report on Form 10-Q (File No. 033-47040) filed May 14, 2004).
Number		Exhibit Title
10.3(a)		License Agreement, dated December 10, 1993, between Laredo Joint Venture and Cinemark USA, Inc. (incorporated by reference to Exhibit 10.14(c) to Cinemark USA, Inc.’s Annual Report on Form 10-K (File No. 033-47040) filed March 31, 1994).
*32.1		Certification of Chief Executive Officer of Cinemark, Inc. pursuant to Section 906 of the Sarbanes Oxley of 2002.
10.3(b)		License Agreement, dated September 1, 1994, between Cinemark Partners II, Ltd. and Cinemark USA, Inc. (incorporated by reference to Exhibit 10.10(c) to Cinemark USA, Inc.’s Annual Report on Form 10-K (File No. 033-47040) filed March 29, 1995).
*32.2		Certification of Chief Financial Officer of Cinemark, Inc. pursuant to Section 906 of the Sarbanes Oxley of 2002.
10.4(a)		Tax Sharing Agreement, between Cinemark USA, Inc. and Cinemark International, L.L.C. (f/k/a Cinemark II, Inc. ), dated as of June 10, 1992 (incorporated by reference to Exhibit 10.22 to Cinemark USA, Inc.’s Annual Report on Form 10-K (File No. 033-47040) filed March 31, 1993).
10.4(b)		Tax Sharing Agreement, dated as of July 28, 1993, between Cinemark USA, Inc. and Cinemark Mexico (USA) (incorporated by reference to Exhibit 10.10 to Cinemark Mexico (USA)’s Registration Statement on Form S-4 (File No. 033-72114) filed on November 24, 1993).
10.5		Form of Indemnification Agreement (incorporated by reference to Exhibit 10.6 to the Company’s Registration Statement on Form S-1 (File No. 333-88618) filed on May 17, 2002).
10.6(a)		Senior Secured Credit Agreement dated December 4, 1995 among Cinemark International, L.L.C. (f/k/a Cinemark II, Inc., Cinemark Mexico (USA) and Cinemark de Mexico (incorporated by reference to Exhibit 10.18 to Cinemark USA, Inc.’s Annual Report on Form 10-K (File No. 033-47040) filed April 1, 1996).
10.6(b)		First Amendment to Senior Secured Credit Agreement, dated as of September 30, 1996, by and among Cinemark II, Inc., Cinemark Mexico (USA), Inc. and Cinemark de Mexico, S.A. de C.V. (incorporated by reference to Exhibit 10.11(b) to Cinemark, Inc.’s Registration Statement on Form S-1 (File No. 333-88618) filed on May 17, 2002).
10.6(c)		Second Amendment to Senior Secured Credit Agreement, dated as of September 28, 2000, by and among Cinemark II, Inc., Cinemark Mexico (USA), Inc. and Cinemark de Mexico, S.A. de C.V. (incorporated by reference to Exhibit 10.11(c) to Cinemark, Inc.’s Registration Statement on Form S-1 (File No. 333-88618) filed on May 17, 2002).
10.7(a)		Employment Agreement, dated as of March 12, 2004, between Cinemark, Inc. and Lee Roy Mitchell (incorporated by reference to Exhibit 10.14(a) to Cinemark USA, Inc.’s Quarterly Report on Form 10-Q (File No. 033-47040) filed May 14, 2004).
10.7(b)		Employment Agreement, dated as of March 12, 2004, between Cinemark, Inc. and Alan Stock (incorporated by reference to Exhibit 10.14(b) to Cinemark USA, Inc.’s Quarterly Report on Form 10-Q (File No. 033-47040) filed May 14, 2004).
10.7(c)		Employment Agreement, dated as of March 12, 2004, between Cinemark, Inc. and Tim Warner (incorporated by reference to Exhibit 10.14(c) to Cinemark USA, Inc.’s Quarterly Report on Form 10-Q (File No. 033-47040) filed May 14, 2004).
10.7(d)		Employment Agreement, dated as of March 12, 2004, between Cinemark, Inc. and Robert Copple (incorporated by reference to Exhibit 10.14(d) to Cinemark USA, Inc.’s Quarterly Report on Form 10-Q (File No. 033-47040) filed May 14, 2004).
10.7(e)		Employment Agreement, dated as of March 12, 2004, between Cinemark, Inc. and Rob Carmony (incorporated by reference to Exhibit 10.14(e) to Cinemark USA, Inc.’s Quarterly Report on Form 10-Q (File No. 033-47040) filed May 14, 2004).
10.7(f)		Employment Agreement, dated as of March 12, 2004, between Cinemark, Inc. and Tandy Mitchell (incorporated by reference to Exhibit 10.14(f) to Cinemark USA, Inc.’s Quarterly Report on Form 10-Q (File No. 033-47040) filed May 14, 2004).
10.8(a)		Amended and Restated Credit Agreement, dated April 2, 2004, among Cinemark, Inc., CNMK Holdings, Inc., Cinemark USA, Inc., the several lenders from time to time parties thereto, Lehman Brothers Inc. and Goldman Sachs Credit Partners LP, as Joint Legal Arrangers, Goldman Sachs Credit Partners LP, as Syndication Agent, Deutsche Bank Securities, Inc., The Bank of New York, General Electric Capital Corporation and CIBC Inc. as Documentation Agents and Lehman Commercial Paper Inc. as Administrative Agent (incorporated by reference to Exhibit 10.15 to Cinemark USA, Inc.’s Quarterly Report on Form 10-Q (File No. 033-47040) filed May 14, 2004).
10.8(b)		First Amendment to the Amended and Restated Credit Agreement, dated August 18, 2004, among Cinemark, Inc., CNMK Holdings, Inc., Cinemark USA, Inc., the several lenders from time to time parties thereto, Lehman Brothers Inc. and Goldman Sachs Credit Partners LP, as Joint Lead Arrangers, Goldman Sachs Credit Partners LP, as Syndication Agent, Deutsche Bank Securities, Inc., The Bank of New York, General Electric Capital Corporation and CIBC Inc. as Documentation Agents and Lehman Commercial Paper Inc. as Administrative Agent (incorporated by reference to Exhibit 10.15(b) to Cinemark USA, Inc.’s Quarterly Report on Form 10-Q (File No. 033-47040) filed November 10, 2004).

10.9		Amended and Restated Guaranty and Collateral Agreement, dated April 2, 2004, among Cinemark, Inc., CNMK Holdings Inc., Cinemark USA, Inc. and certain of it subsidiaries in favor of Lehman Commercial Paper, Inc., as administrative agent (incorporated by reference to Exhibit 10.16 to Cinemark USA, Inc.’s Quarterly Report on Form 10-Q (File No. 033-47040) filed May 14, 2004).
10.10(a)		Cinemark, Inc. Stockholders Agreement dated as of March 12, 2004, among Madison Dearborn Capital Partners IV, L.P., each of the investors listed on the Schedule of Mitchell Investors and each of the executives listed on the Schedule of Executives (incorporated by reference to Exhibit 10.9 to the Company’s Registration Statement on Form S-4 (File No. 333-116292) filed June 8, 2004).
10.10(b)		Amended and Restated Stockholders Agreement dated as of December 30, 2004 among Cinemark, Inc., Madison Dearborn Partners IV, LP, Lee Roy Mitchell, The Mitchell Special Trust, Quadrangle Capital Partners LP, Quadrangle Select Partners LP, Quadrangle Capital Partners, A LP and the other stockholders party thereto (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K (File No. 333-116292) filed January 4, 2005).
10.11(a)		Registration Agreement dated as of March 12, 2004 among the Company, Madison Dearborn Capital Partners IV, L.P., Lee Roy Mitchell and The Mitchell Special Trust (incorporated by reference to Exhibit 10.10 to the Company’s Registration Statement on Form S-4 (File No. 333-116292) filed June 8, 2004).
10.11(b)		First Amendment to Registration Agreement dated as of December 30, 2004 among Cinemark, Inc., Madison Dearborn Partners IV, LP, Lee Roy Mitchell, The Mitchell Special Trust, Quadrangle Capital Partners LP, Quadrangle Select Partners LP, Quadrangle Capital Partners, A LP and the other stockholders party thereto (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K (File No. 333-116292) filed January 4, 2005).
10.12(a)		Cinemark, Inc. Long Term Incentive Plan Document, dated September 30, 2004 (incorporated by reference to Exhibit 10.19(a) to the Company’s Quarterly Report on Form 10-Q (File No. 333-116292) filed November 10, 2004).
10.12(b)		Form of Stock Option Agreement (incorporated by reference to Exhibit 10.19(b) to the Company’s Quarterly Report on Form 10-Q (File No. 333-116292) filed November 10, 2004).
10.13(a)		Stock Purchase Agreement dated as of August 18, 2004, among Cinemark Empreendimentos e Participacoes, Ltda, Venture II Equity Holdings Corporation, Inc. and Kristal Holdings Limited (incorporated by reference to Exhibit 10.20(a) to the Company’s Quarterly Report on Form 10-Q (File No. 333-116292) filed November 10, 2004).
10.13(b)		Stock Purchase Agreement dated as of August 18, 2004, among Cinemark Empreendimentos e Participacoes, Ltda, Prona Global Ltd., Messrs. Edgar Gleich, Riccardo Arduini, Moises Pinsky, Eduardo Alalou, and Robert Luis Leme Klabin (incorporated by reference to Exhibit 10.20(b) to the Company’s Quarterly Report on Form 10-Q (File No. 333-116292) filed November 10, 2004).
*31.1		Certification of Chief Executive Officer of Cinemark, Inc. Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
*31.2		Certification of Chief Financial Officer of Cinemark, Inc. Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
*32.1		Certification of the Chief Executive Officer of Cinemark, Inc. Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
*32.2		Certification of the Chief Financial Officer of Cinemark, Inc. Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.


*		filed herewith

Condensed Consolidating Balance Sheet Information (unaudited) as of June 30, 2006

Condensed Consolidating Statement of Income Information (unaudited) for the six months ended June 30, 2006

Condensed Consolidating Statement of Cash Flows Information (unaudited) for the six months ended June 30, 2006

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