CINEMARK, INC. MEETS THE CONDITIONS SET FORTH IN GENERAL INSTRUCTION
(I)(1)(a) AND (b) OF FORM 10-K AND THEREFORE IS FILING THIS FORM WITH THE
REDUCED DISCLOSURE FORMAT.

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

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

For the Fiscal Year Ended December 31, ~~2004~~ 2008

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

CINEMARK, INC.

(Exact Name of Registrant as Specified in its Charter)


Delaware		01-0687923
(State or other jurisdiction		(I.R.S. Employer
of incorporation or organization)		Identification No.)

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

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

Registrant’s corporate website: www.cinemark.com

Securities registered pursuant to Section 12(b) of the Act:

None ~~(Title of Class)~~

Securities registered pursuant to Section 12(g) of the Act:

None ~~(Title of Class)~~

Indicate by check mark ~~whether~~if the registrant ~~(1) has~~is ~~filed~~a ~~all~~well-known ~~reports~~seasoned ~~required~~issuer, toas ~~be filed~~defined byin ~~Section~~Rule 13405 ~~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)~~Yes ~~has been~~o ~~subject to such filing requirements for the past 90~~No ~~days.~~þ

~~Yes~~Indicate þby Nocheck mark if the registrant is not required to file reports pursuant to Section 13 or Section 15 (d) of the Act. Yes o No þ

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 if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. þ

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, ~~(as~~a ~~defined~~non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act). (Check one):

~~Yes~~Large accelerated filer o NoAccelerated filer o Non-accelerated filer þ (Do not check if a smaller reporting company) Smaller reporting company o

AsIndicate ofby ~~February 28,~~check ~~2005,~~mark ~~27,674,916~~whether ~~shares~~the ofregistrant ~~Class A~~is ~~common~~a ~~stock~~shell ~~were~~company ~~outstanding~~(as defined in Rule 12b-2 of the Act). Yes o No þ

~~Table~~As of ~~Contents~~February 28, 2009, 27,896,316 shares of common stock were outstanding.

The registrant is privately held and there is no public trading market for its equity securities; therefore the registrant is unable to calculate the aggregate market value of the voting and non-voting common equity held by non-affiliates.

Table of Contents

PART I		3
			Page
Item 1. Business		3
Cautionary Statement Regarding Forward-Looking Statements			1
Item 2. Properties		14
PART I
Item 3. Legal Proceedings		14
Item 1.	Business		2
Item 4. Submission of Matters to a Vote of Security Holders		15
Item 1A.	Risk Factors		12
PART II		15
Item 2.	Properties		17
Item 5. Market for Registrant’s Common Equity, Related Stockholders’ Matters and Issuer Purchases of Equity Securities		15
Item 3.	Legal Proceedings		17
Item 6. Selected Financial Data		15
PART II
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations		18
Item 5.	Market for Registrant’s Common Equity and Related Stockholder Matters		18
Item 7A. Quantitative and Qualitative Disclosures About Market Risk		31
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		19
Item 8. Financial Statements and Supplementary Data		32
Item 8.	Financial Statements and Supplementary Data		30
Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure		32
Item 9.	Changes in and Disagreements With Accountants on Accounting and Financial Disclosure		30
Item 9A. Controls and Procedures		32
Item 9A.	Controls and Procedures		31
PART III		33
Item 10. Directors and Executive Officers of the Registrant		33
Item 14.	Principal Accounting Fees and Services		33
Item 11. Executive Compensation		36
PART IV
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholders’ Matters		42
Item 15.	Exhibits, Financial Statement Schedules		33
Item 13. Certain Relationships and Related Transactions		44
SIGNATURES
Item 14. Principal Accounting Fees and Services		47
EX-12
PART IV		48
EX-23.1
Item 15. Exhibits and Financial Statement Schedules		48
EX-31.1
Calculation of Earnings to Fixed Charges
EX-31.2
Subsidiaries
EX-32.1
Certification of CEO Pursuant to Section 302
EX-32.2
Certification of CFO Pursuant to Section 302
Certification of CEO Pursuant to Section 906
Certification of CFO Pursuant to Section 906

Cautionary Statement Regarding Forward-Looking Statements

This annual report on Form 10-K includes “forward-looking statements” ~~based~~within onthe ~~our~~meaning ~~current~~of ~~expectations,~~Section 27A ~~assumptions,~~of ~~estimates~~the ~~and~~Securities ~~projections~~Act ~~about~~of ~~our~~1933, ~~and~~as ~~our~~amended, ~~subsidiaries’ business~~ and ~~industry.~~ WeSection 21E ~~intend that this annual report be governed by the “safe harbor” provision~~ of the ~~Private~~ Securities ~~Litigation Reform~~ Exchange Act of ~~1995~~1934, ~~(the~~as ~~“PSLR~~amended, ~~Act”)~~based ~~with~~on ~~respect~~our tocurrent ~~statements~~expectations, ~~that may~~assumptions, beestimates ~~deemed~~and toprojections about beour ~~forward-looking~~business ~~statements~~and ~~under~~our ~~the PSLR Act~~industry. 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; •and our ability to successfully license and exhibit popular films; • national and international growth in our industry; • competition from other exhibitors and alternative forms of entertainment; and • determinations in lawsuits in which we are ~~a defendant~~defendants.

You can identify forward-looking statements by the use of words such as “may,” “should,” “~~will,” “~~could,” “estimates,” “predicts,” “potential,” “continue,” “anticipates,” “believes,” “plans,” “expects,” “future” and “intends” and similar expressions which are intended to identify forward-looking statements. These statements are not guarantees of future performance and are subject to risks, uncertainties and other factors, some of which are beyond our control and difficult to predict and could cause actual results to differ materially from those expressed or forecasted in the forward-looking statements. In evaluating ~~these~~ forward-looking statements, you ~~should~~ should carefully consider the risks and uncertainties described in ~~this~~the ~~report.~~“Risk ~~These forward-looking~~Factors” ~~statements~~section ~~reflect~~in ~~our view only as~~ Item 1A of ~~the date of~~ this ~~report.~~Form ~~Actual results could differ materially from those indicated by such forward~~10-~~looking~~K ~~statements~~and ~~due~~elsewhere toin athis ~~number~~Form ~~of factors~~10-K. All forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by ~~this~~the cautionary statements ~~statement~~and risk factors contained in this Form 10-K. Forward-looking statements contained in this Form 10-K reflect our view only as of the date of this Form 10-K. We undertake no ~~current~~ obligation, other tothan ~~publicly~~as required by law, to update ~~such~~or revise any forward-looking statements, towhether ~~reflect~~as ~~subsequent~~a result of new information, future events or ~~circumstances~~ otherwise.

Certain Definitions

Unless the context otherwise requires, all references to “we,” “our,” “us,” the “issuer” or “Cinemark” relate to Cinemark, Inc. and its consolidated subsidiaries, including Cinemark USA, Inc. and Century Theatres, Inc. Unless otherwise specified, all operating and other statistical data for the U.S. include one theatre in Canada. All references to Latin America are to Argentina, Brazil, Chile, Colombia, Costa Rica, Ecuador, El Salvador, Honduras, Mexico, Nicaragua, Panama and Peru. Unless otherwise specified, all operating and other statistical data are as of and for the year ended December 31, 2008.

PART I

Item 1. Business

~~The~~Our Company

Cinemark, ~~Inc.,~~ ~~a Delaware corporation, incorporated on May 16, 2002, is the parent company of CNMK Holding,~~ Inc., ~~which~~and issubsidiaries (the ~~parent~~ ~~company~~“Company”) ~~of Cinemark USA, Inc. We~~ are a holding company with no business operations or assets other than the capital stock of CNMK Holding, Inc., which is itself a holding company with no operations or assets of its own other than the capital stock of Cinemark USA, Inc. We and our subsidiaries are leaders in the motion picture exhibition industry in terms of both revenues and the number of screens in operation~~. As of December 31~~, ~~2004,~~with ~~we operated an aggregate of 3,172 screens in 292~~ theatres ~~located~~ in 32the United ~~states~~States (“U.S.”), Canada, Mexico, Argentina, Brazil, Chile, Ecuador, Peru, Honduras, El Salvador, Nicaragua, Costa Rica, Panama and Colombia. WeThe ~~have~~Company ~~2,832 screens~~also inmanaged ~~254 first run~~ theatres ~~and 340 screens~~ in ~~38 discount theatres. Our overall ratio of~~the ~~screens to theatres is 10~~U.~~9 to 1~~S., ~~Any~~Brazil ~~references~~and toColombia ~~North~~during ~~America~~the oryear ~~domestic~~ended ~~operations~~December 31, ~~contained in this report refer to the U~~2008.~~S. and Canada.~~

On ~~March~~August 122, ~~2004~~2006, weCinemark ~~entered~~Holdings, ~~into~~Inc. anwas ~~agreement~~formed ~~and~~as ~~plan~~the ofDelaware ~~merger~~holding ~~with~~company ~~a newly formed subsidiary~~ of ~~Madison Dearborn Partners~~ Cinemark, ~~LLC (“Madison”)~~Inc. ~~The~~On ~~transaction was completed on April 2~~August 7, ~~2004~~2006, ~~at which time~~ the ~~newly~~Cinemark, ~~formed~~Inc. ~~subsidiary~~stockholders ofentered ~~Madison was merged with and~~ into ~~us,~~a ~~with~~share ~~our~~exchange ~~Company~~agreement ~~continuing~~pursuant asto ~~the~~which ~~surviving~~they ~~corporation.~~agreed ~~Simultaneously,~~to anexchange ~~affiliate~~their ~~of Madison purchased~~ shares of Class A common stock ~~and~~for ~~became~~an equal ~~our~~number ~~controlling~~of ~~stockholder~~shares ~~owning approximately 83%~~ of ~~our capital~~common stock. ~~Lee~~of ~~Roy~~Cinemark ~~Mitchell~~Holdings, ~~our~~Inc. ~~Chief~~(“Cinemark ~~Executive~~Share ~~Officer,~~Exchange”). ~~and the Mitchell Special Trust~~The ~~collectively~~Cinemark ~~retained~~Share ~~approximately~~Exchange ~~16%~~was ~~ownership~~completed ofon ~~our~~October 5, ~~capital~~2006 ~~stock~~and ~~with~~facilitated ~~certain~~the ~~members~~acquisition of Century ~~management~~Theatres, ~~owning~~Inc. ~~the~~(“Century ~~remaining 1%~~Acquisition”). ~~Since~~On ~~April~~October 25, ~~2004~~2006, ~~Madison~~Cinemark, ~~sold approximately 10% of its stock in our Company to outside investors~~Inc. Asbecame ofa ~~the~~wholly ~~date of this report, Madison~~ owned ~~approximately~~subsidiary ~~75%~~ of ~~our~~Cinemark ~~capital stock~~Holdings, ~~outside investors owned approximately 8%, Lee Roy Mitchell and the Mitchell Special Trust owned approximately 16% and certain members of management owned the remaining 1%~~Inc.

3 As of December 31, 2008, we managed our business under two operating segments — U.S. markets and international markets, in accordance with Statement of Financial Accounting Standards (“SFAS”) No. 131 “Disclosures about Segments of an Enterprise and Related Information.” See Note 22 to the consolidated financial statements.

~~Table~~ Our principal executive offices are at 3900 Dallas Parkway, Suite 500, Plano, Texas 75093. Our telephone number is (972) 665-1000. We maintain a corporate website at www.cinemark.com. Our annual reports on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K, and any amendments, are available on our website free of ~~Contents~~charge under the heading “Investor Relations — SEC Filings” as soon as practicable after such reports are filed or furnished electronically to the Securities and Exchange Commission.

~~Our~~Description principal executive offices are at 3900 Dallas Parkway, Suite 500, Plano, Texas 75093. Our telephone number is (972) 665-1000. We maintain a corporate website at www.cinemark.com. Our annual reports on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K, and any amendments, are available on our website free of ~~charge under the heading “Company/Employment –~~Business Investor Relations” as soon as practicable after such reports are filed or furnished electronically to the Securities and Exchange Commission. Copies can also be obtained by mail from the Public Reference Section of the Securities and Exchange Commission at 450 Fifth Street, N.W., Washington, D.C. 20549. You may also obtain information on the operation of the Public Reference Room by calling the Securities and Exchange Commission at 1-800-SEC-0330.

~~Description~~ We ofare ~~Business~~a leader in the motion picture exhibition industry with 420 theatres and 4,783 screens in the U.S. and Latin America. Our circuit is the third largest in the U.S. with 293 theatres and 3,742 screens in 38 states and one Canadian province. We are the most geographically diverse circuit in Latin America with 127 theatres and 1,041 screens in 12 countries. During the year ended December 31, 2008, approximately 211.3 million patrons attended our theatres. Our modern theatre circuit features stadium seating in approximately 83% of our first-run auditoriums.

We ~~are~~selectively ~~one~~build ofor ~~the~~acquire ~~leaders~~new theatres in ~~the~~markets ~~motion~~where ~~picture~~we ~~exhibition~~can ~~industry,~~establish inand ~~terms~~maintain ~~of both revenues~~a ~~and~~leading ~~the~~market ~~number of screens in operation~~position. We believe weour ~~operate~~portfolio ~~one~~ of ~~the most~~ modern ~~theatre circuits~~theatres inprovides ~~the~~a ~~industry,~~preferred destination ~~with~~for ~~2,088~~moviegoers ~~screens~~and ~~(or~~contributes ~~66%~~to of our ~~3,172~~significant ~~screens)~~cash ~~having~~flows ~~been~~from ~~built by us since 1996. We had total revenues of $1,024.2 million,~~ operating ~~income of $121~~activities.~~7 million and net~~ ~~income~~Our ofsignificant ~~$26.6 million~~presence ~~for~~in the ~~year ended December 31, 2004~~U.S. ~~Our scale~~ and ~~geographic diversity within North America and~~ Latin America has ~~allowed~~made us toan ~~maintain~~important ~~consistent revenue growth. We~~distribution ~~have~~channel ~~increased~~for ~~total~~movie ~~revenues~~studios, byparticularly aas ~~compound~~they ~~annual~~look ~~growth~~to ~~rate~~increase ofrevenues ~~6.8%~~generated ~~since~~in ~~the beginning of 2000.~~Latin America. Our ~~North~~market ~~American~~leadership ~~theatres,~~is ~~located~~attributable in 32large ~~states~~part ~~and~~to ~~one~~our ~~Canadian~~senior ~~province~~executives, ~~are~~who ~~primarily located~~average inapproximately ~~mid-sized~~34 years ~~domestic markets, including suburbs~~ of ~~major~~industry ~~metropolitan~~experience ~~areas. We believe these markets are generally less competitive~~ and ~~generate~~have ~~high,~~successfully ~~stable~~navigated ~~margins.~~us ~~Our~~through ~~theatres outside of~~multiple ~~North~~industry ~~America are primarily located in major Latin American metropolitan markets, which we believe are generally underscreened~~ and ~~have~~economic ~~significant growth potential~~cycles.

~~Domestic~~ We ~~Developments~~grew our total revenue per patron at a compound annual growth rate (“CAGR”) during the last three fiscal years of 10.2%. Revenues, operating income and net loss for the year ended December 31, 2008, were $1,742.3 million, $61.2 million and $(48.9) million, respectively. At December 31, 2008 we had cash and cash equivalents of $313.7 million and long-term debt of $1,508.5 million. Approximately $797.0 million of our long-term debt accrues interest at variable rates.

~~During 2004, we opened 11 new theatres with 132 screens and added four screens to existing theatres. As of December 31, 2004, we operated~~ 2~~,303 screens in 191 theatres in North America. We~~ operated 1,963 screens in 153 first run theatres (12.8 screens per theatre) and 340 screens in 38 discount theatres (8.9 screens per theatre). Our overall ratio of screens to theatres in North America is 12.1 to 1. All but one theatre, with 12 screens located in Vancouver, Canada, are located in the U.S. Approximately 71% of our first run screens in North America feature stadium seating.

InternationalTable Developments of Contents

~~During~~Motion ~~2004,~~Picture weIndustry ~~opened six new theatres with 43 screens. As of December 31, 2004, we operated~~Overview 869 screens in 101 first run theatres in Mexico, Argentina, Brazil, Chile, Ecuador, Peru, Honduras, El Salvador, Nicaragua, Costa Rica, Panama and Colombia. All of our international theatres are first run theatres. Our ratio of screens to theatres in these international markets is 8.6 to 1. All of our international theatres have been built by us since 1993, which we believe makes our international operations among the most modern in the international market. Approximately 78% of our international screens feature stadium seating.

~~Competitive~~ Domestic ~~Strategy~~Markets

WeThe ~~believe~~U.S. ~~our~~motion ~~operating~~picture ~~philosophy~~exhibition ~~provides~~industry ushas a track record of long-term growth, with abox office ~~competitive~~revenues ~~advantage~~growing at an estimated CAGR of 5.1% from 1992 to 2007. Against this background of steady long-term growth, the exhibition industry has experienced periodic short-term increases and decreases in attendance, and consequently box office revenues. According to industry sources, in 2008, the motion picture exhibition industry experienced one of its best performances in history, with total box office almost equaling the record breaking 2007 box office. One of the films released during 2008, The Dark Knight, which grossed over $500 million in domestic box office, broke several box office records, including the single day box office record on its opening day and the single film three-day weekend record during its opening weekend. We ~~will~~believe box office revenues will continue to ~~focus~~perform onwell in 2009 with a solid slate of films, including Harry Potter and the ~~following~~Half ~~key~~Blood ~~components~~Prince, Transformers: Revenge of ~~our~~the ~~business~~Fallen, ~~plan.~~Angels & Demons, X-Men Origins: Wolverine, Night at the Museum II: Escape from the Smithsonian, and Watchmen and the release of 3-D movies such as Monsters vs. Aliens, Ice Age: Dawn of the Dinosaurs, Avatar, A Christmas Carol, and Disney’s next Pixar installment, Up.

~~Focus~~As onof ~~Less~~the ~~Competitive~~date ~~Domestic~~of ~~Markets~~this ~~and~~report, ~~Target~~MPAA ~~Profitable,~~Worldwide ~~High~~Market ~~Growth~~Research ~~International~~(“MPAA”) had not yet released ~~Markets.~~the We2008 ~~will~~box ~~continue~~office toinformation. ~~seek~~The ~~growth~~following ~~opportunities~~table inrepresents ~~underserved,~~the ~~mid-sized~~results ~~domestic~~of ~~markets and~~a ~~major~~survey ~~international~~by ~~metropolitan~~MPAA published ~~areas~~during March 2008, byoutlining ~~building~~the orhistorical ~~acquiring~~trends ~~modern~~in ~~theatres~~U.S. ~~that~~box ~~meet~~office ~~our~~revenues for the ~~strategic,~~ten ~~financial~~year ~~and~~period ~~demographic~~from ~~criteria.~~1997 to 2007:

Maximize Profitability Through Continued Focus on Operational Excellence. We will continue to focus on achieving operational excellence while controlling theatre operating costs. We believe that our operating efficiency is evidenced by our high operating margins.


	U.S. Box
	Office Revenues		Attendance		Average Ticket
Year	($ in millions)		(in millions)		Price
1997	$	6,216		1,354	$	4.59
1998	$	6,760		1,438	$	4.69
1999	$	7,314		1,440	$	5.08
2000	$	7,468		1,383	$	5.39
2001	$	8,125		1,438	$	5.66
2002	$	9,272		1,599	$	5.81
2003	$	9,165		1,521	$	6.03
2004	$	9,215		1,484	$	6.21
2005	$	8,832		1,376	$	6.41
2006	$	9,138		1,395	$	6.55
2007	$	9,629		1,400	$	6.88

4International Markets

~~Table~~ International growth also continues to be consistent. (As of ~~Contents~~the date of this report, MPAA had not yet released the 2008 box office information.) According to MPAA, international box office revenues grew steadily at a CAGR of 11.9% from 2003 to 2007 as a result of the increasing acceptance of moviegoing as a popular form of entertainment throughout the world, ticket price increases and new theatre construction.

~~Pursue~~Growth ~~Additional~~in ~~Revenue~~Latin ~~Opportunities.~~America Weis ~~will~~expected to continue to ~~pursue~~be ~~additional~~fueled ~~growth opportunities~~ by ~~developing~~a ~~and~~combination ~~expanding~~of ~~other~~continued development ~~revenue~~of ~~streams~~modern ~~such~~theatres, asgrowing ~~advertising~~populations, attractive demographics (i.e., Wea ~~offer~~significant ~~advertisers~~teenage ~~national~~population), ~~regional~~quality ~~and~~product ~~local~~from ~~coverage~~Hollywood inand athe ~~variety~~emergence of ~~formats~~a tolocal ~~reach~~film ~~our~~industry. ~~patrons,~~In ~~which~~many ~~numbered~~Latin ~~approximately~~American ~~179.3 million~~countries ~~during~~ the ~~year~~local ~~ended~~film ~~December 31,~~industry ~~2004.~~had Webeen ~~continue~~dormant ~~to explore~~because ~~additional~~of ~~revenue~~the ~~sources~~lack ~~such~~of sufficient astheatres ~~digital~~to ~~video~~exhibit ~~monitor~~the ~~advertising,~~film ~~third~~product. ~~party~~The ~~branding, and~~development ~~the~~of ~~use~~new ofmodern multiplex theatres has ~~for~~revitalized ~~non-film~~the ~~events.~~local Wefilm ~~have~~industry ~~used~~and, ~~theatres~~in ~~during~~Mexico, ~~non-peak~~Brazil ~~hours~~and ~~for simulcast concerts~~Argentina, ~~pay-per-view~~successful ~~sporting~~local ~~events,~~film product ~~corporate~~often ~~meetings~~provides ~~and~~incremental ~~cultural~~growth ~~events~~opportunities.

~~Competitive~~ We ~~Strengths~~believe many international markets for theatrical exhibition have historically been underserved and that certain of these markets, especially those in Latin America, will continue to experience growth as additional modern stadium-styled theatres are introduced.

WeDrivers ~~believe~~of ~~the~~Continued ~~following~~Industry ~~strengths allow us to compete effectively:~~Success

~~Strong~~We ~~Balance~~believe ~~Sheet~~the ~~with~~following ~~Significant~~market ~~Cash~~trends ~~Flow.~~will ~~Our~~drive ~~business~~the ~~strategy~~continued growth and ~~disciplined building~~strength ~~program allowed us to generate $121.7 million~~ of ~~operating income for the year ended~~our ~~December 31, 2004.~~industry:

~~Focused Philosophy Resulting in Strong Financial Performance. We focus on negotiating~~3 favorable theatre property economics, providing a superior viewing experience and controlling both corporate and theatre operating costs. As a result of this philosophy, we generated $26.6 million of net income for the year ended December 31, 2004.

StrongTable Management Team. Led by Mr. Mitchell, our management team has an average of approximately 21 years of theatre operating experience and a proven track record of superior performance. The team has successfully navigated us through many industry cycles. Mr. Mitchell and the other members of our management team retained their positions after the Recapitalization. Contents

~~Selective~~Importance ~~Building~~of Theatrical Success in ~~Less~~Establishing ~~Competitive~~Movie ~~Domestic~~Brands and Subsequent Markets. Theatrical ~~and~~exhibition ~~Heavily~~is ~~Populated~~the ~~International Markets~~primary distribution channel for new motion picture releases. A successful theatrical release which “brands” a film is one of the major factors in determining its success in “downstream” markets, such as DVDs, network and syndicated television, video on-demand, pay-per-view television and downloading from the Internet.

~~Less~~Increased ~~Competitive~~Importance ~~Domestic~~of International Markets: Wefor ~~have~~Box ~~historically~~Office ~~built~~Success. ~~modern~~International ~~theatres in mid-sized~~markets ~~U.S.~~continue ~~markets,~~to ~~including~~be ~~suburbs~~an ofincreasingly ~~major~~important ~~metropolitan~~component ~~areas,~~of ~~which~~the weoverall ~~believe~~box ~~were~~office ~~underserved.~~revenues Wegenerated by ~~believe~~Hollywood ~~our~~films, ~~targeting~~accounting offor ~~these markets~~$17.1 billion, ~~together~~or ~~with~~64% ~~the~~of ~~high~~2007 ~~quality~~total ofworldwide ~~our~~box ~~theatre~~office ~~circuit, has~~revenues ~~protected~~according usto ~~from~~MPAA. ~~the~~(As ~~negative~~of ~~financial~~the ~~impact~~date of ~~overbuilding~~this ~~and~~report, ~~reduces~~MPAA ~~the~~had ~~risk~~not ofyet ~~competition from~~released ~~new entrants. As~~ the ~~sole~~2008 ~~exhibitor~~industry information.) inWith ~~approximately~~continued ~~85%~~growth of the ~~first~~international ~~run~~motion ~~film~~picture ~~zones~~exhibition ~~in which we operate~~industry, we believe ~~have~~the ~~maximum~~relative ~~access~~contribution toof ~~film~~markets ~~product.~~outside ~~This~~North ~~enables~~America ~~us to select the films that we believe~~ will ~~deliver~~become ~~the~~even ~~highest returns in those markets~~more significant.

~~Heavily~~Stable ~~Populated,~~Long-Term ~~High~~Attendance ~~Growth~~Trends. ~~International Markets:~~ We ~~have~~believe ~~directed~~that ~~our~~long-term ~~activities~~trends in ~~international~~ ~~markets~~motion ~~primarily~~picture attendance ~~toward~~in ~~Latin~~the ~~America~~U.S. ~~due~~will continue to benefit the ~~growth~~industry. ~~potential~~Despite inhistorical ~~these~~economic ~~markets.~~and Weindustry ~~have~~cycles, ~~successfully~~domestic ~~established~~attendance ahas ~~significant~~grown ~~presence~~at ina ~~most~~1.6% ofCAGR over the ~~major~~last ~~cities~~15 years into ~~Latin~~an ~~America~~estimated ~~with~~1.4 billion ~~theatres~~patrons in ~~twelve~~2007. (As of the ~~fifteen~~date ~~largest~~of ~~metropolitan~~this ~~areas.~~report, WeMPAA ~~generally~~had ~~fund~~not ~~our~~yet released ~~operating~~the ~~and~~2008 ~~capital~~industry ~~expenditures~~information.) inAccording ~~local~~to ~~currencies~~Nielsen Entertainment/NRG, ~~thereby~~77% ~~matching~~of ~~our~~moviegoers ~~expenses with~~stated ~~revenues.~~their Weoverall ~~have~~theatre ~~also~~experience ~~geographically diversified our international portfolio~~ in an2007 ~~effort~~was ~~to balance~~time ~~risk~~ and ~~become~~money ~~one~~well ~~of the predominant Pan American motion picture exhibition companies~~spent.

~~Modern~~Convenient ~~Theatre~~and ~~Circuit.~~Affordable WeForm ~~have~~of ~~built~~Out-Of-Home ~~our~~Entertainment. ~~modern~~Moviegoing ~~theatre~~continues ~~circuit~~to ~~primarily~~be ~~through~~one ~~targeted~~of ~~worldwide~~the ~~new~~most ~~theatre~~convenient ~~development,~~and ~~which~~affordable weforms ~~believe~~of ~~provides~~out-of-home aentertainment, ~~preferred~~with ~~destination~~an ~~for~~estimated ~~moviegoers~~average ticket price in ~~our~~the ~~markets~~U.S. ~~Since~~of ~~1996,~~$6.88 wein ~~have~~2007. ~~built~~(As ~~2,088~~of ~~screens~~the date of this report, orMPAA ~~66%~~had ofnot ~~our~~yet released ~~total~~the ~~screen~~2008 ~~count~~box office information.) ~~Our ratio~~Average ofprices ~~screens~~in to2007 ~~theatres~~for isother ~~one~~forms of ~~the~~out-of-home entertainment ~~highest~~ in the ~~industry: 12~~U.1S., toincluding 1sporting inevents ~~North~~and ~~America~~theme ~~and~~parks, range from approximately 8$23.650 to 1$65.25 ~~internationally~~per ticket according to MPAA. ~~Approximately~~Movie ~~71%~~ticket prices have risen at approximately the rate of ~~our~~inflation, ~~North~~while ~~America~~ticket ~~first~~prices ~~run~~for ~~screens~~other ~~and~~forms ~~78%~~of out-of-home ~~our international~~entertainment ~~screens~~have ~~feature~~increased at ~~stadium~~higher ~~seating~~rates.

5 Innovation with Digital Technology. The industry has begun to convert to the use of digital projection technology, which will allow exhibitors to expand their product offerings. Digital technology will allow the presentation of 3-D content and alternative entertainment venues such as live sports programs, the opera and concert events. These additional programming alternatives may enhance the level of patronage for exhibitors.

~~Table~~Competitive ~~of Contents~~Strengths

~~Motion~~ We ~~Picture~~believe ~~Industry~~the ~~Overview~~following strengths allow us to compete effectively:

~~Domestic~~Disciplined ~~Markets~~Operating Philosophy. We generated operating income and net loss of $61.2 million and $(48.9) million, respectively, for the year ended December 31, 2008. (Our net loss for the year ended December 31, 2008 was primarily due to $113.5 million of non-cash impairment charges.) Our solid operating performance is a result of our disciplined operating philosophy that centers on building high quality assets, while negotiating favorable theatre level economics and controlling theatre operating costs. As a result, we grew our admissions and concession revenues per patron at the highest CAGR during the last five fiscal years among the three largest motion picture exhibitors in the U.S.

~~The~~Leading ~~U.S.~~Position ~~motion~~in ~~picture~~Our ~~exhibition industry has enjoyed revenue growth at a compound annual growth rate of 6.3% from 1995 to 2004, according to the Motion Picture Association of America. In 2002, single year~~ U.S. ~~motion picture box office revenues exceeded the $9~~Markets.~~0 billion~~ ~~mark~~We ~~for~~have ~~the first time in history, reaching~~ a ~~total~~leading ofmarket ~~$9.52 billion.~~share ~~U.S.~~in ~~box~~the ~~office revenues for 2004 reached an all time high at $9.54 billion. The strong~~ U.S. ~~box office performance over the past decade has~~metropolitan ~~been primarily driven by an increase in attendance~~ and ~~steady~~suburban ~~increases~~markets inwe ~~average ticket prices~~serve. ~~Other~~ ~~factors~~For ~~contributing to~~ the ~~continued~~year ~~success~~ended ofDecember 31, ~~the~~2008, ~~industry~~we ~~include~~ranked aeither ~~strong~~first ~~movie slate,~~or ~~the~~second ~~improvement~~based ofon ~~theatre~~box ~~circuits~~office ~~resulting~~revenues ~~from~~in ~~the~~21 ~~creation~~out of ~~modern~~our ~~multiplex~~top ~~formats,~~25 ~~the screen~~U.S. ~~rationalization during 2001 and 2002~~markets, ~~and~~including the ~~improved timing of film releases. During~~San ~~2004,~~Francisco ~~one~~Bay ~~film grossed over $400 million~~Area, ~~two films grossed over $350 million~~Dallas, ~~two~~Houston ~~films grossed over $200 million~~ and 16Salt ~~films~~Lake ~~grossed over $100 million in the U~~City.S.

~~The~~Strategically ~~following~~Located ~~table~~in ~~represents~~Heavily Populated Latin American Markets. Since 1993, we have invested throughout Latin America due to the ~~results~~continued growth of athe ~~survey~~region. byWe ~~Motion~~operate ~~Picture~~127 theatres ~~Association~~and 1,041 screens in 12 countries, generating revenues of $385.8 million for the year ~~America~~ended ~~Worldwide~~December 31, ~~Market~~2008. ~~Research~~We ~~outlining~~have successfully established a significant presence in major cities in the ~~historical~~region, ~~trends~~with theatres in Uthirteen of the fifteen largest metropolitan areas.S. ~~theatre~~With ~~attendance~~a geographically diverse circuit, we are an important distribution channel to the movie studios. The ~~average~~projected ~~ticket~~annual ~~prices~~population ~~and~~growth ~~box~~for ~~office~~the ~~sales~~Latin American countries in which we operate ranges from 1% to 2% for each of the ~~last~~next ~~ten~~three years. We are well-positioned with our modern, large-format theatres to take advantage of these factors for further growth and diversification of our revenues.

Year	U.S. Attendance		% Change Since 1995			Average Ticket Price		% Change Since 1995			U.S. Box Office Sales		% Change Since 1995
	(in millions)										($ in millions)
1995		1,263		—		$	4.35		—		$	5,493	—
1996		1,339		6.0	%	$	4.42		1.6	%	$	5,912		7.6	%
1997		1,388		9.9	%	$	4.59		5.5	%	$	6,366		15.9	%
1998		1,481		17.3	%	$	4.69		7.8	%	$	6,949		26.5	%
1999		1,465		16.0	%	$	5.08		16.8	%	$	7,448		35.6	%
2000		1,421		12.5	%	$	5.39		23.9	%	$	7,661		39.5	%
2001		1,487		17.7	%	$	5.66		30.1	%	$	8,413		53.2	%
2002		1,639		29.8	%	$	5.81		33.6	%	$	9,520		73.3	%
2003		1,574		24.6	%	$	6.03		38.6	%	$	9,489		72.7	%
2004		1,536		21.6	%	$	6.21		42.8	%	$	9,539		73.7	%

State-of-the-Art Theatre Circuit. We offer state-of-the-art theatres, which we believe makes our theatres a preferred destination for moviegoers in our markets. We feature stadium seating in approximately 83% of our first run auditoriums. During 2008, we continued our expansion by adding 203 new screens. We currently have commitments to build 147 additional screens over the next three years.

~~International Markets~~4

TheTable international motion picture exhibition industry has also grown significantly over the past several years. According to the Motion Picture Association of America, global box office revenues increased 48% from $17.0 billion in 2001 to $25.2 billion in 2004. This growth is the result of the strong box office showings from both local and U.S. film product, ticket price increases and new theatre construction. Contents

~~Growth~~Solid inBalance ~~Latin~~Sheet ~~America~~with isSignificant ~~expected~~Cash toFlow befrom ~~fueled~~Operating byActivities. We generate significant cash flow from operating activities as a ~~combination~~result of ~~continued~~several ~~development~~factors, ofincluding ~~modern~~management’s ~~theatres~~ability to contain costs, ~~attractive~~predictable ~~demographics~~revenues (iand a geographically diverse, modern theatre circuit.e. Additionally, a ~~significant~~strategic ~~teenage~~advantage ~~population)~~that enhances our cash flows, ~~strong~~is ~~product~~our ownership ~~from~~of ~~Hollywood~~land and ~~the~~buildings ~~emergence~~for 43 of aour ~~local film industry~~theatres. InWe ~~many~~believe ~~Latin~~our ~~American~~expected ~~countries~~level ~~the local~~of ~~film~~cash ~~industry~~flow ~~had~~generation will ~~been~~provide ~~dormant~~us ~~because~~with of the ~~lack~~strategic ofand ~~sufficient~~financial ~~theatres~~flexibility to ~~screen~~pursue ~~the~~growth ~~film~~opportunities, ~~product.~~support ~~The~~our ~~development~~debt ofpayments ~~new~~and ~~modern~~make ~~multiplex~~dividend ~~theatres~~payments ~~has~~to ~~awakened~~our ~~the~~stockholders. ~~local~~As ~~film~~of ~~industry~~December 31, ~~and~~2008, inwe ~~Mexico~~had ~~and~~cash ~~Brazil,~~of ~~local~~$313.7 million. ~~film~~Our ~~product~~senior ~~often~~debt ~~plays~~and asenior ~~significant~~subordinated ~~role~~debt indo ~~driving~~not ~~attendance~~mature until ~~growth~~2013 and 2014, respectively.

WeExperienced ~~believe~~Management. ~~many~~Led ~~international~~by ~~markets~~Chairman ~~for~~and ~~theatrical~~founder ~~exhibition~~Lee ~~have~~Roy ~~historically~~Mitchell, ~~been underserved~~Chief ~~due~~Executive toOfficer Alan ~~antiquated~~Stock, orPresident, ~~run-down~~Chief ~~theatres,~~Operating ~~among~~Officer ~~other~~Timothy ~~things,~~Warner and ~~that~~Chief ~~international~~Financial Officer Robert ~~markets~~Copple, ~~especially~~our ~~those~~management inteam ~~Latin~~has ~~America,~~an ~~will~~average ~~continue~~of toapproximately 34 years of theatre operating experience ~~growth~~executing asa ~~additional~~focused ~~modern~~strategy which has led to consistent operating results. This ~~stadium-styled~~management ~~theatres~~team ~~are~~has ~~introduced~~successfully navigated us through many industry and economic cycles.

6Our Strategy

~~Table~~ We believe our disciplined operating philosophy and experienced management team will enable us to continue to enhance our leading position in the motion picture exhibition industry. Key components of ~~Contents~~our strategy include:

~~Prior~~Establish ~~History~~and Maintain Leading Market Positions. We will continue to seek growth opportunities by building or acquiring modern theatres that meet our strategic, financial and demographic criteria. We will continue to focus on establishing and maintaining a leading position in the markets we serve.

~~During~~Continue ~~1999~~to ~~and~~Focus ~~2000,~~on ~~the~~Operational UExcellence.S. ~~exhibition~~We ~~industry~~will ~~felt~~continue ~~the~~to ~~impact~~focus ~~of rapid overbuilding by the largest industry players, high levels of overall capital expenditures and high leverage. As a result of the financial burden imposed~~ on ~~theatre operators by these three factors, the industry~~achieving ~~entered~~operational aexcellence ~~period of significant industry rationalization. Many industry players had already begun the rationalization process in 2000~~ by ~~closing~~controlling ~~hundreds of smaller, less profitable theatres. The pace of~~ theatre ~~closings~~operating ~~increased~~costs ~~during~~while ~~2001~~continuing ~~as a number of companies took advantage of the protections provided by the bankruptcy process~~ to ~~reject~~provide ~~long-term leases on many underperforming~~leading ~~theatres.~~customer ~~According to the Motion Picture Association of America, the total number of screens in the U~~service.S. ~~reached~~Our anmargins ~~all-time~~reflect ~~high~~our oftrack ~~37,396~~record ~~in 2000, and then declined in both 2001 and 2002. There were 35,786 screens at the end~~ of ~~2003~~operating ~~and 36,594 screens at the end of 2004~~efficiency.

~~Market~~ Selectively ~~Trends~~Build in Profitable, Strategic Latin American Markets. Our international expansion will continue to focus primarily on Latin America through construction of modern, state-of-the-art theatres in growing urban markets.

~~We believe the following market trends will drive the continued growth and strength of our~~5 ~~industry:~~

IncreasedTable Investment in Film Production and Marketing. Theatrical exhibition is the primary distribution channel for new motion picture releases. The success of a theatrical release, which “brands” a film, is one of the primary factors in determining its success in “downstream” distribution channels, such as home video, DVD, and network, syndicated and pay-per-view television. The growing importance of downstream distribution channels has enabled studios to increase production and marketing expenditures. Production and marketing costs per new film in the U.S. have increased by compound annual growth rates of 6.4% and 7.9%, respectively from 1994 to 2004, according to the Motion Picture Association of America. This has led to an increase in “blockbuster” features, which attract larger audiences to theatres. Contents

~~Increased~~Theatre ~~Importance of International Markets for Ensuring Box Office Success. International~~Operations markets are becoming an increasingly important component of the overall box office revenues generated by Hollywood films. For example, box office revenues in markets outside of North America exceeded domestic box office revenues for five of the top ten domestic movies during 2004. With the continued growth of the international motion picture exhibition industry, the relative contribution of markets outside North America should become even more significant.

~~Favorable~~As ~~Attendance~~of ~~Trends.~~December 31, ~~Increased~~2008, ~~movie~~we ~~going~~operated ~~frequency~~420 theatres and ~~attendance~~4,783 ~~from~~screens ~~key demographic~~in ~~groups~~38 ~~have~~states, ~~benefited~~one ~~the~~Canadian province ~~industry.~~and ~~According~~12 toLatin ~~the~~American ~~Motion~~countries. ~~Picture~~Our ~~Association~~theatres ~~of America,~~in ~~annual~~the ~~admissions~~U.S. ~~per~~are ~~capita~~primarily located in mid-sized ~~the~~ U.S. ~~increased~~markets, ~~from~~including ~~4.5x~~suburbs toof 5major metropolitan areas.~~2x,~~ ~~between~~We ~~1991~~believe ~~and~~these markets are ~~2004.~~generally ~~Additionally,~~less ~~the~~competitive ~~U.S.~~and ~~teenage~~generate ~~segment~~high, ~~defined~~stable asmargins. ~~12-17 year~~Our ~~olds,~~theatres ~~represented~~in ~~19%~~Latin ofAmerica are ~~admissions~~primarily located in ~~2004~~major metropolitan markets, upwhich ~~from~~we ~~14%~~believe inare ~~1997~~generally underscreened. The following tables summarize the geographic locations of our theatre circuit as of December 31, 2008.

~~Reduced~~United ~~Seasonality~~States ~~of Revenues. Historically, industry revenues have been highly seasonal,~~Theatres coinciding with the timing of film releases by the major distributors. The most marketable motion pictures were generally released during the summer, extending from Memorial Day to Labor Day, and during the holiday season, extending from Thanksgiving through year-end. However, the seasonality of motion picture exhibition has become less pronounced in recent years. Studios have begun to release films more evenly throughout the year, and hit films have emerged during traditionally weaker periods. This benefits exhibitors by allowing them to more effectively cover their fixed cost base throughout the year.

Convenient and Affordable Form of Out-of-Home Entertainment. Movie-going continues to be one of the most convenient and affordable forms of out-of-home entertainment, with an average ticket price in the U.S. of $6.21 in 2004. Average prices for other forms of out-of-home entertainment in the U.S., including sporting events, theme parks, musical concerts and plays, range from approximately $20.00 to $66.00 per ticket in 2004. Movie ticket prices have risen at approximately the rate of inflation, while ticket prices for other forms of out-of-home entertainment have increased at higher rates.


	Total		Total
State	Theatres		Screens

Texas		79		1,024
California		64		760
Ohio		20		223
Utah		13		169
Nevada		10		154
Illinois		9		122
Colorado		8		127
Kentucky		8		95
Arizona		7		106
Oregon		7		102
Oklahoma		6		67
Indiana		6		58
Louisiana		5		74
Pennsylvania		5		73
New Mexico		4		54
Virginia		4		52
North Carolina		4		41
Iowa		4		39
Mississippi		3		41
Arkansas		3		30
Florida		2		40
Washington		2		30
Georgia		2		27
New York		2		27
South Carolina		2		22
Kansas		1		20
Michigan		1		16
Alaska		1		16
New Jersey		1		16
Missouri		1		15
South Dakota		1		14
Tennessee		1		14
Wisconsin		1		14
Massachusetts		1		12
Delaware		1		10
West Virginia		1		10
Minnesota		1		8
Montana		1		8

Total United States		292		3,730
Canada		1		12

Total		293		3,742

~~Increasing Other Revenue. Advertising revenues represent a small, but growing portion of~~6 revenues for motion picture exhibitors. The proliferation in broadcast and cable channels, as well as new recording devices that allow audiences to skip television commercials, has eroded broadcast media’s advertising effectiveness. As a result,

7 Table of Contents

~~Table~~ International ~~of Contents~~Theatres

captive and attentive theatre audiences are becoming more attractive to advertisers. The Cinema Advertising Council, a trade group formed in 2003, reported that spending on theatre advertising came to $356 million in 2003, up 37% from 2002.


Country	Total Theatres		Total Screens

Brazil		44		368
Mexico		31		300
Chile		12		91
Central America⁽¹⁾		12		79
Colombia		10		60
Argentina		9		74
Peru		5		43
Ecuador		4		26

Total		127		1,041

~~Theatre~~(1) ~~Operations~~ Includes Honduras, El Salvador, Nicaragua, Costa Rica and Panama.

AsWe offirst ~~December 31,~~entered ~~2004,~~Latin weAmerica ~~operated~~operating ~~3,172~~movie ~~screens~~theatres in ~~292~~Chile ~~theatres~~in ~~located~~1993 inand 32Mexico ~~states,~~in ~~one~~1994. ~~Canadian~~Since ~~province~~then, ~~and~~through 12our ~~Latin~~focused ~~American~~international ~~countries. We operated 2~~strategy,~~832~~ ~~screens~~we inhave ~~254~~developed ~~first~~into ~~run~~the most ~~theatres~~geographically ~~and~~diverse ~~340~~theatre ~~screens~~circuit in 38the ~~discount theatres~~region. ~~Our~~We ~~North~~have ~~American~~balanced ~~theatres,~~our ~~located~~risk inthrough ~~32 states~~a ~~and~~diversified ~~one~~international ~~Canadian province~~portfolio, ~~are~~currently ~~primarily~~operating ~~located~~theatres in ~~mid-sized~~thirteen ~~U.S.~~of ~~markets,~~the ~~including suburbs of~~fifteen ~~major~~largest metropolitan areas. Wein ~~believe~~Latin ~~these~~America. ~~markets~~In ~~are generally less competitive and generate high~~addition, ~~stable~~we ~~margins.~~have ~~Our~~achieved ~~theatres~~significant ~~outside~~scale ofin Mexico ~~North~~and ~~America~~Brazil, ~~are~~the ~~primarily~~two ~~located~~largest ~~in major~~ Latin American ~~metropolitan markets~~economies, ~~which~~with we300 ~~believe~~screens ~~have~~in ~~significant~~Mexico ~~growth~~and ~~potential. The following~~368 ~~tables~~screens ~~summarize~~in ~~the~~Brazil ~~geographic locations of our theatre circuit~~ as of December 31, ~~2004~~2008.

~~North~~We believe that certain markets within Latin America continue to be underserved as penetration of movie screens per capita in Latin American ~~Theatres~~markets is substantially lower than in the U.S. and European markets. We will continue to build and expand our presence in underserved international markets, with emphasis on Latin America, and fund our expansion primarily with cash flow generated in those markets. We are able to mitigate exposure to currency fluctuations by using local currencies to fund substantially all costs of our international operations, including film and facility lease expense. Our geographic diversity throughout Latin America has allowed us to maintain consistent revenue growth, notwithstanding currency and economic fluctuations that may affect any particular market. Our international revenues were approximately $385.8 million during 2008 versus $333.6 million during 2007.

State	Total Theatres		Total Screens
Texas		61		798
Ohio		20		213
California		18		172
Utah		10		123
Kentucky		7		75
Illinois		6		72
Oklahoma		6		67
Colorado		5		79
Louisiana		5		68
Indiana		5		46
Pennsylvania		4		55
Virginia		4		52
Oregon		4		50
North Carolina		4		41
Mississippi		3		41
Arkansas		3		30
Iowa		3		19
Florida		2		40
Michigan		2		36
Georgia		2		27
New York		2		27
South Carolina		2		22
New Mexico		2		16
Arizona		2		14
Kansas		1		20
New Jersey		1		16
Missouri		1		14
Tennessee		1		14
Wisconsin		1		14
Massachusetts		1		12
Delaware		1		10
Minnesota		1		8
Total United States		190		2,291
Canada		1		12
Total North America		191		2,303

Film Licensing

8 In the U.S., we license films on a theatre-by-theatre and film-by-film basis from film distributors that are owned by major film production companies or from independent film distributors that distribute films for smaller production companies. For new release films, film distributors typically establish geographic zones and offer each available film to one theatre in each zone. The size of a film zone is generally determined by the population density, demographics and box office revenues potential of a particular market or region. We currently operate theatres in 242 first run film zones in the U.S. New film releases are licensed at the discretion of the film distributors. As the sole exhibitor in approximately 86% of the first run film zones in which we operate, we have maximum access to film product, which allows us to select those pictures we believe will be the most successful in our markets from those offered to us by distributors. We usually license films on an allocation basis in film zones where we face competition.

~~Table~~ In the international markets in which we operate, distributors do not allocate film to a single theatre in a geographic film zone, but allow competitive theatres to play the same films simultaneously. In these markets, films are still licensed on a theatre-by-theatre and film-by-film basis. Our theatre personnel focus on providing excellent customer service, and we provide a modern facility with the most up-to-date sound systems, comfortable stadium style seating and other amenities typical of ~~Contents~~modern American-style multiplexes, which we believe gives us a competitive advantage in markets where competing theatres play the same films. Of the 1,041 screens we operate in international markets, approximately 73% have no direct competition from other theatres.

~~International~~Our ~~Theatres~~film rental licenses in the U.S. typically specify that rental fees are based on the applicable box office receipts and either the mutually agreed upon firm terms or a sliding scale formula, which are established prior to the opening of the film, or a mutually agreed upon settlement, which occurs at the conclusion of the film run, subject to the film licensing agreement. Under a firm terms formula, we pay the distributor a specified percentage of box office receipts, which reflects either a mutually agreed upon aggregate rate for the life of the film or rates that decline over the term of the run. Under the sliding scale formula, film rental is paid as a percentage of box office revenues using a pre-determined

Country	Total Theatres		Total Screens
Brazil		34		295
Mexico		27		264
Chile		12		91
Central America(1)		9		59
Argentina		8		73
Colombia		5		34
Peru		3		30
Ecuador		3		23
Total		101		869

(1)Table Includesof Honduras, El Salvador, Nicaragua, Costa Rica and Panama.Contents

Wematrix ~~have~~based ~~been~~upon ~~successfully~~box ~~introducing~~office ~~American-style~~performance ~~modern~~of ~~multiplex~~the ~~theatres to underserved international markets since 1993~~film. ~~Our~~The ~~activities~~settlement inprocess ~~international~~allows ~~markets have been primarily~~for ~~directed~~negotiation ~~toward~~of ~~Latin~~film ~~America,~~rental ~~where~~fees weupon ~~have~~the ~~successfully~~conclusion ~~established~~of athe ~~significant~~film ~~presence~~run ~~in most~~based ofupon how the ~~major~~film performs. ~~cities~~Internationally, inour ~~Latin~~film ~~America.~~rental Welicenses ~~presently~~are ~~have~~primarily ~~theatres in~~based ~~twelve~~on ofmutually ~~the~~agreed ~~fifteen largest~~upon ~~metropolitan~~firm ~~areas~~terms inestablished ~~Latin~~prior ~~America.~~to Wethe ~~have~~opening ~~become one~~ of the ~~predominant~~picture. ~~Pan~~The ~~American~~film ~~exhibition companies~~rental ~~while~~percentages ~~balancing~~paid ~~our~~by ~~risk through a diversified~~ our international ~~portfolio.~~locations Inare ~~addition,~~generally ~~we have~~lower ~~achieved~~than ~~significant~~in ~~scale~~the inU.S. ~~Mexico~~markets and ~~Brazil,~~gradually ~~the~~decline ~~two~~over ~~largest~~a period ~~Latin~~of ~~American~~several ~~economies~~weeks.

We ~~believe~~operate ~~that~~six ~~Latin~~art ~~America~~theatres iswith ~~one~~21 ofscreens under the ~~fastest~~CineArts ~~growing~~brand. ~~international~~We ~~markets~~also inregularly ~~terms~~play art and independent films at many of ~~box~~ ~~office~~our ~~revenues.~~other ~~Penetration~~theatres, providing a variety of ~~movie~~film ~~screens~~choices ~~per~~to ~~capita~~our patrons. inOperating ~~Latin~~under ~~American~~the ~~markets~~CineArts isbrand and bringing art and independent films to our other ~~substantially~~brands, ~~lower~~allows ~~than~~us to benefit from the growth in the ~~U.S.~~art and ~~European~~independent ~~markets.~~market ~~Our~~driven ~~geographic~~by ~~diversity~~the ~~throughout~~more ~~Latin~~mature ~~America~~patron ~~has~~and ~~allowed~~the usincreased tointerest ~~maintain~~in ~~consistent~~art, ~~revenue~~foreign and ~~operating~~documentary ~~margin~~films. High profile film festivals, such as the Sundance Film Festival, have contributed to growth and interest in this ~~notwithstanding~~genre. ~~currency~~Recent ~~fluctuations~~hits ~~that~~such ~~may~~as ~~affect~~Slumdog ~~any~~Millionaire ~~particular~~and ~~market~~Doubt have demonstrated the box office potential of art and independent films.

~~We will continue to consider selective opportunities for development of modern multiplex~~Concessions theatres in underserved international markets, emphasizing Latin America, funded primarily with cash flow generated in those markets. We are able to mitigate exposure to currency fluctuations by using local currencies to fund substantially all aspects of our operations, including facility lease expense.

~~Corporate~~ Concession ~~Operations~~sales are our second largest revenue source, representing approximately 31% of total revenues for the year ended December 31, 2008. Concession sales have a much higher margin than admissions sales. We have devoted considerable management effort to increase concession sales and improve operating margins. These efforts include implementation of the following strategies:

• Optimization of product mix. We ~~maintain~~offer aconcession ~~corporate~~products ~~office~~that inprimarily ~~Plano~~include various sizes of popcorn, ~~Texas~~soft ~~that~~drinks ~~provides~~and ~~oversight~~candy. ~~for~~Different ~~our~~varieties ~~domestic~~and flavors of candy and ~~international~~ soft drinks are offered at theatres based on preferences in that particular geographic region. ~~Domestic~~Our ~~operations~~point ~~includes~~of ~~theatre~~sale ~~operations~~system ~~support,~~allows ~~film~~us ~~licensing~~to monitor product sales and ~~settlements,~~ ~~human~~make ~~resources,~~changes ~~legal,~~to ~~finance~~product mix as necessary. Specially priced combos and ~~accounting,~~promotions ~~operational~~are ~~audit,~~launched ~~theatre~~on ~~maintenance~~ a regular basis to increase average concession purchases as well as to attract new buyers. • Staff training. Employees are continually trained in “suggestive-selling” and ~~construction~~“upselling” techniques. Consumer promotions conducted at the concession stand usually include a motivational element that rewards theatre staff for exceptional combo sales during the period. • Theatre design. Our theatres are designed to optimize efficiencies at the concession stands, ~~internet~~which ~~and~~include ~~information~~multiple ~~systems~~service stations to facilitate serving more customers more quickly. We strategically place large concession stands within theatres to heighten visibility, ~~real~~reduce ~~estate~~the length of concession lines, and ~~marketing~~improve traffic flow around the concession stands. ~~Our~~Some ~~North~~of ~~American operations~~our concession areas are ~~divided~~designed ~~into~~as ~~eleven~~self-service ~~regions~~stations which allow customers to select their own refreshments and proceed to the cash register when they are ready. This design presents efficient service, ~~each~~enhanced choice and superior visibility of ~~which~~concession isitems. ~~headed~~Concession bydesigns in many of our new theatres have incorporated the benefits experienced with the self-service model. • Cost control. We negotiate prices for concession supplies directly with concession vendors and manufacturers to obtain bulk rates. Concession supplies are distributed through a ~~region~~national ~~leader~~distribution network. The concession distributor supplies and distributes inventory to the theatres, who place orders directly with the vendors to replenish stock.

~~International~~Participation ~~operations function relatively autonomously. International personnel~~ in ~~the corporate~~National ~~office include the International President and directors/vice presidents in charge of~~CineMedia film licensing, marketing, concessions, theatre operations support, theatre maintenance and construction, real estate, legal, operational audit, information systems and accounting. We have eight regional offices in Latin America responsible for the local management of operations in 12 individual countries. Each regional office is headed by a general manager and includes personnel in film licensing, marketing, operations and accounting. We employ three “super-regional” chief financial officers in Brazil, Chile and Mexico. The regional offices are staffed with nationals from the region to overcome cultural and operational barriers. Training is conducted at the corporate office to establish consistent standards throughout our international operations.

9 In March 2005, Regal Entertainment, Inc., (“Regal”), and AMC Entertainment, Inc., (“AMC”), formed National CineMedia, LLC, (“NCM”), and on July 15, 2005, we joined NCM, as one of the founding members. NCM operates an in-theatre digital network in the U.S. The digital network consists of projectors used to display advertising and other non-film events. NCM’s primary activities that impact us include:

~~Table~~• ofadvertising ~~Contents~~through its branded “First Look” pre-feature entertainment program, and lobby promotions and displays, • live and pre-recorded networked and single-site meetings and events, • live and pre-recorded concerts, sporting events and other non-film entertainment programming.

~~Film Licensing~~8

InTable North America, we license films from film distributors that are owned by major film production companies or from independent film distributors that distribute films for smaller production companies. For new release films, film distributors typically establish geographic zones and offer each available film to one theatre in each zone. The size of a film zone is generally determined by the population density, demographics and box office potential of a particular market or region. A film zone can range from a radius of three to five miles in major metropolitan and suburban areas to up to fifteen miles in small towns. We currently operate theatres in 148 first run film zones in North America. New film releases are licensed at the discretion of the film distributors. As the sole exhibitor in approximately 85% of the first run film zones in which we operate, we have maximum access to film product, which allows us to select those pictures that we believe will be the most successful in our markets from those offered to us by distributors. We usually license films on an allocation basis in film zones where we face competition. Films are released to discount theatres once the attendance levels substantially drop off at the first run theatres. For discount films, film distributors generally establish availability on a market-by-market basis after the completion of exhibition at first run theatres and permit each theatre within a market to exhibit such films without regard to film zones. Contents

~~Unlike~~We ~~our~~believe ~~North~~that ~~American~~the ~~operations~~reach, ~~distributors~~scope inand ~~our~~digital ~~international~~delivery ~~markets~~capability doof ~~not allocate~~NCM’s ~~film~~network toprovides aan effective ~~single~~platform ~~theatre~~for ~~in a geographic film zone. Rather~~national, ~~competitive~~regional ~~theatres~~and ~~can~~local ~~play the~~advertisers ~~same~~to ~~films~~reach atan ~~the~~engaged ~~same time as other theatres~~audience. ~~Our theatre personnel focus on providing~~We ~~excellent~~receive ~~customer~~a ~~service,~~monthly ~~and~~theatre weaccess ~~provide~~fee afor ~~modern~~participation ~~facility~~in ~~with~~ the ~~most~~NCM ~~up-to-date~~network. ~~sound systems~~In addition, ~~comfortable~~we ~~stadium~~are entitled ~~style~~to ~~seating~~receive ~~and~~mandatory ~~other~~quarterly ~~amenities~~distributions ~~typical~~ of ~~modern~~excess ~~American-style multiplexes~~cash ~~which~~from weNCM. ~~believe~~We ~~gives~~currently ushave aan approximate ~~competitive~~14.1% ~~advantage~~interest in ~~markets~~NCM. ~~where~~See ~~there~~Note ~~are~~6 ~~competing theatres.~~to Of the ~~101~~consolidated ~~theatres~~financial ~~we operate in international markets, approximately 85% of those theatres have no direct competition~~statements.

In ~~North America,~~ our ~~film~~international ~~rental~~markets, ~~licenses~~we ~~typically~~generally ~~state~~outsource ~~that~~our ~~rental~~screen ~~fees~~advertising ~~are~~to ~~based~~local oncompanies ~~either~~who ~~mutually~~have ~~agreed upon firm terms~~ established ~~prior~~relationships towith ~~the~~local ~~opening~~advertisers of the picture or on a mutually agreed upon settlement at the conclusion of the picture run. Under a firm terms formula, we pay the distributor a specified percentage of box office receipts, which reflects either a mutually agreed upon aggregate rate for the life of the film or rates that ~~decline~~provide ~~over~~similar ~~the~~benefits ~~term of the run. Firm term film rental fees that decline over the term of the run generally start at 60% or 70% of box office receipts, gradually declining to~~ as ~~low as 30% over a period of four to seven weeks~~NCM. ~~The settlement process allows for negotiation of film rental fees upon the conclusion of the~~ ~~film run based upon how the film performs. In international markets, film rental percentages are generally lower than in North American markets and gradually decline over a period of several weeks.~~

WeParticipation ~~also operate discount theatres~~ in ~~North~~Digital ~~America,~~Cinema ~~with~~Implementation ~~admissions ranging from $0.50 to $2~~Partners per ticket, to serve an alternative market of patrons that extends the life of a film past the first run screening. By serving this alternative market of patrons in our discount theatres, we have been able to increase the number of potential customers beyond traditional first run moviegoers. Our discount theatres offer many of the same amenities as our first run theatres, including wall-to-wall screens, comfortable seating with cup holder armrests, digital sound and multiple concession stands. Discount film rental percentages typically begin at 35% of box office receipts and often decline to 30% after the first week.

~~Film~~On ~~rental~~February 12, ~~costs~~2007, ~~are~~we, ~~accrued~~AMC ~~based on the applicable box office receipts~~ and ~~either~~Regal, ~~the mutually~~entered ~~agreed~~into ~~upon~~a ~~firm~~joint ~~terms~~venture ~~established~~known ~~prior~~as toDigital ~~the opening of the picture or estimates of the~~Cinema ~~final~~Implementation ~~mutually~~Partners ~~agreed upon settlement~~LLC, ~~which occurs at the conclusion of the picture run~~(“DCIP”), ~~subject~~ to ~~the~~facilitate ~~film licensing arrangement. Estimates are based on~~ the ~~expected~~implementation ~~success~~ of adigital ~~film~~cinema ~~over the length of its run~~ in ~~the~~ our theatres. ~~The~~and ~~success~~to ofestablish aagreements ~~film~~with ~~can~~major ~~typically~~motion bepicture ~~determined~~studios afor ~~few weeks after a film is released when initial box office performance of~~ the ~~film~~financing ~~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 can~~digital ~~typically be estimated early in the film’s run~~cinema. ~~The~~Future ~~final~~digital ~~film~~cinema ~~settlement~~developments ~~amount~~will isbe ~~negotiated~~managed ~~at the~~by ~~conclusion~~DCIP, ofsubject ~~the~~to ~~film’s~~certain ~~run~~approvals ~~based upon how a film actually performs. If actual settlements are~~by ~~higher than those estimated~~us, ~~additional~~AMC ~~film~~and ~~rental costs are recorded at that time~~Regal.

~~Film~~As ~~distribution~~of isthe ~~highly~~date ~~concentrated~~of inthis ~~North America~~report, DCIP had signed long-term agreements with five studios for the deployment ~~major~~of ~~film~~digital ~~distributors~~projection systems in movie theatres in North America. These agreements are ~~accounting~~the ~~for~~first ~~approximately~~of ~~95%~~a number of ~~industry~~agreements ~~box~~that ~~office~~DCIP ~~revenue~~intends ~~during~~to ~~2004.~~enter ~~Our~~into ~~revenue~~with all of the major studios ~~attributable~~and independent distribution companies to ~~any~~ensure ~~one~~the widespread roll-out of digital technology. In accordance with these agreements, the digital projection systems deployed by DCIP will comply with the technology and security specifications developed by the Digital Cinema Initiatives studio consortium. DCIP is currently working with lenders and equity sources to finance the planned deployment of digital systems.

10Marketing

~~Table~~ In the U.S., we rely on newspaper display advertisements, paid for by film distributors, newspaper directory film schedules, generally paid for by us, and Internet advertising, which has emerged as the primary media source to inform patrons of ~~Contents~~film titles and showtimes. Radio and television advertising spots, generally paid for by film distributors, are used to promote certain motion pictures and special events. We also exhibit previews of coming attractions and films presently playing on the other screens in our theatres or markets. We offer patrons access to movie times, the ability to buy and print their tickets at home and purchase gift cards and other advanced sale-type certificates at our website www.cinemark.com. The Internet is becoming a popular way to view movie previews. We use monthly web contests with film distributor partners to drive traffic to our website and to ensure that customers visit often. In addition, we work on a regular basis with all of the film distributors to promote their films with local, regional and national programs that are exclusive to our theatres. These programs may involve customer contests, cross-promotions with third parties, media on-air tie-ins and other means to increase traffic to a particular film showing at one of our theatres.

~~distributors~~ Internationally, ~~varies~~we ~~from~~exhibit ~~year~~upcoming toand ~~year~~current ~~depending~~film previews on ~~the~~screen, ~~number~~we implement co-promotions with film distributors and ~~commercial~~promote ~~success~~and advertise our new locations through various forms of media and events. We partner with large multi-national corporations in the large ~~films~~metropolitan ~~released~~areas ~~during~~in ~~any~~which ~~given~~we ~~year.~~have ~~During~~theatres, ~~2004~~to promote our brand, noour ~~single~~image ~~distributor~~and ~~accounted~~to increase attendance levels at our theatres. Our customers are encouraged to register on our website to receive weekly information by email for ~~more~~showtime ~~than~~information, invitations to special screenings, ~~14%~~sponsored ofevents Uand promotional information.S. ~~box~~In ~~office~~addition, ~~receipts~~our customers can request to receive showtime information on their cell phones. We also have loyalty programs in certain of our international markets that allow customers to pay a nominal fee for a membership card that provides them with certain admissions and concession discounts.

~~Concessions~~Our marketing departments also focus on maximizing ancillary revenue, which includes the sale of our gift cards and our SuperSaver discount tickets. We market these programs to such business representatives as realtors, human resource managers, incentive program managers and hospital and pharmaceutical personnel. Gift cards can be purchased at our theatres or online through our website. SuperSavers are also sold online at our website or over the phone, fax or email by our local corporate offices and are also available at certain retailers in the U.S.

~~Concession~~Online ~~sales are our second largest revenue source, representing approximately 31% of~~Sales total revenues for 2004. Concession sales have a much higher margin than admissions sales. We have devoted considerable management effort to increase concession sales and improve operating margins. These efforts include implementation of the following strategies:

• Our ~~Optimization~~patrons ofmay ~~product~~purchase ~~mix.~~advance ~~Concession~~tickets ~~products~~for ~~are~~all ~~primarily comprised~~ of ~~various~~our ~~sizes~~domestic ofscreens ~~popcorn, soft drinks~~ and ~~candy.~~approximately ~~Different~~one third ~~varieties~~of ~~and~~our ~~flavors~~international ofscreens ~~candy~~by ~~and~~accessing ~~soft~~our ~~drinks~~corporate ~~are~~website ~~offered~~ at ~~theatres based on preferences in that particular geographic region~~www. ~~Specially priced “combo-meals” have been implemented for all patrons as well as “movie meals” targeted toward children and senior citizens~~cinemark. ~~We periodically introduce new concession products designed to generate additional concession sales~~com. •Advance tickets ~~Staff~~may ~~training.~~also ~~Employees~~be ~~are~~purchased ~~continually~~for ~~trained in “suggestive-selling” and “upselling” techniques. This training occurs through situational role-playing conducted at~~ our ~~“Customer~~domestic ~~Satisfaction~~screens ~~University” as well as continued on-the-job training. Individual theatre managers receive additional compensation based on concession sales~~ at ~~their theatres and are therefore motivated to maximize concession sales~~www. ~~• Theatre design~~fandango.com. Our ~~theatres~~Internet initiatives ~~are~~help designed to optimize efficiencies at the concession stands, which include multiple service stations to facilitate serving more customers quicker. We strategically place large concession stands within theatres to heighten visibility, reduce the length of concession lines, and improve ~~traffic~~customer flow around the concession stands. • Cost control. We negotiate prices for concession supplies directly with concession vendors and manufacturers to obtain bulk rates. Concession supplies are distributed through a national distribution network. The concession distributor supplies and distributes inventory to the theatressatisfaction, which place volume orders directly with the vendors to replenish stock. The concession distributor is paid a percentage fee for this service. We believe that utilizing a concession distributor is more cost effective than operating a concession warehousing network.allowing

~~Marketing~~9

InTable order to attract customers, we rely on newspaper display advertisements, substantially paid for by film distributors, newspaper directory film schedules, generally paid for by the exhibitor, and internet advertising which has emerged as a strong media source to inform patrons of film titles and showtimes. Radio and television advertising spots, generally paid for by film distributors, are used to promote certain motion pictures and special events. We also exhibit previews of coming attractions and films presently playing on the other screens which we operate in the same theatre or market. We have successfully used the internet to provide patrons access to movie times, the ability to buy and print their tickets at home and purchase gift cards and other advanced sale-type certificates. The internet is becoming the primary way to check movie showtimes, replacing the traditional newspaper advertisements. In addition, many newspapers also add an internet component to their advertising and add movie showtimes to their internet offerings. Over time, the internet may allow us to reduce our advertising costs associated with newspaper directory advertisements. Contents

~~Our~~patrons ~~marketing~~who ~~department~~purchase ~~also~~tickets ~~focuses~~over onthe ~~maximizing~~Internet ~~revenue~~to ~~generating~~often ~~opportunities,~~bypass ~~which~~lines at the box office by ~~include~~printing their tickets at home or picking up their tickets at kiosks in the ~~following:~~theatre lobby.

•Point ~~Advertising. We believe the advertising industry recognizes the value~~ of ~~in-theatre~~Sale advertising as an important medium due to the demographics of theatre patrons. The “Arbitron Cinema Advertising Study”, which was released in 2003, measured consumer awareness of on-screen advertising in the U.S., and indicated that 86% of all theatre audiences (representing 40% of the U.S. population) remembered on-screen ads a month after seeing them. In order to effectively realize and manage this opportunity, we entered into advertising contracts for rolling stock and screen slide advertising. We deliver advertising through “lights-up” on-screen slide advertising in the auditoriums, audio advertisements paired with musicSystems

11 We have developed our own proprietary point of sale system to enhance our ability to maximize revenues, control costs and efficiently manage operations. The system is currently installed in all of our U.S. theatres and our one Canadian theatre. The point of sale system provides corporate management with real-time admissions and concession revenues reports that allow us to make timely changes to movie schedules, including extending film runs, increasing the number of screens on which successful movies are being played, or substituting films when gross receipts do not meet expectations. Real-time seating and box office information is available to box office personnel, preventing overselling of a particular film and providing faster and more accurate responses to customer inquiries regarding showtimes and available seating. The system tracks concession sales, provides in-theatre inventory reports for efficient inventory management and control, offers numerous ticket pricing options, integrates Internet ticket sales and processes credit card transactions. Barcode scanners, pole displays, touch screens, credit card readers and other equipment are integrated with the system to enhance its functions. In our international locations, we currently use other point of sale systems that have either been developed internally or by third parties, which have been certified as compliant with applicable governmental regulations.

~~Table of Contents~~Competition

~~played throughout the theatre and rolling stock advertisements.~~ We ~~also advertise on digital lobby monitors located in concessions stands and game rooms. We~~ are ~~also~~one ~~exploring~~of ~~additional revenue sources such as digital video monitor advertising, third party branding, and~~ the ~~use~~leading ofmotion ~~theatres~~picture ~~for~~exhibitors non-film events. We have used theatres during non-peak hours for simulcast concerts, pay-per-view sporting events, corporate meetings and cultural events. We are able to offer advertisers national, regional or local coverage in aterms ~~variety~~ of ~~formats~~both torevenues reach our patrons, which numbered approximately 179.3 million during the year ended December 31, 2004. We currently carry advertising for several large advertisers. We also generate other revenue from “imaging” in the lobby, including mini-billboards and ~~displays, and distributing coupons and samples to patrons passing through~~ the ~~theatre complex. • Sales. We have a sales department that oversees the development and implementation~~ number of ascreens ~~comprehensive~~in ~~theatre rental and group sales effort~~operation. This department is responsible for increasing theatre rental income during periods when the theatre is normally closed and maximizing group film bookings to specialized groups such as schools, daycare centers and religious organizations. We ~~believe~~compete ~~the~~against ~~large lobbies~~local, ~~comfortable seating~~regional, ~~big~~national ~~screens~~ and ~~sound~~international ~~capabilities~~exhibitors with ~~make~~respect ~~our theatres an attractive venue~~ to ~~hold~~attracting ~~corporate events~~patrons, ~~private~~licensing ~~parties,~~films ~~private screenings~~ and ~~team~~developing ~~building~~new ~~meetings and can generate additional revenues. Our theatres have been used for simulcast concerts, pay-per-view sporting events, corporate meetings and cultural events. We believe the trend to use~~ theatre ~~auditoriums for non-film events during non-peak times will increase, which will add revenue and attract new audiences to our theatres while not significantly increasing costs~~sites. ~~In addition, targeted efforts to sell niche films to particular groups will also increase overall revenues.~~

~~Online~~We ~~Sales~~are the sole exhibitor in approximately 86% of the 242 first run film zones in which our first run U.S. theatres operate. In film zones where there is no direct competition from other theatres, we select those films we believe will be the most successful from among those offered to us by film distributors. Where there is competition, we usually license films based on an allocation process. Of the 1,041 screens we operate outside of the U.S., approximately 73% of those screens have no direct competition from other theatres. In areas where we face direct competition, our success in attracting patrons depends on location, accessibility and capacity of an exhibitor’s theatre, theatre comfort, quality of projection and sound equipment, film showtime availability, level of customer service, and ticket prices. The competition for film licensing in the U.S. is dependent upon factors such as the location, condition and capacity of an exhibitor’s theatre, revenue potential and licensing terms.

~~Our~~We ~~patrons~~compete ~~may purchase advance tickets~~ for ~~128~~new oftheatre ~~our~~sites ~~domestic~~with ~~theatres~~other ~~(1,747~~movie ~~screens)~~theatre ~~and 17~~exhibitors ofas ~~our~~well ~~international~~as ~~theatres (143 screens) by accessing our corporate website at~~other ~~www.cinemark.com.~~entertainment ~~Additionally~~venues, ~~patrons~~which ~~may~~is ~~purchase~~dependent ~~advance~~upon ~~tickets~~factors tosuch ~~our~~as ~~internet-enabled domestic~~committed ~~theatres~~investment byand ~~accessing Fandango’s website at www.fandango.com. Our internet initiatives~~resources, ~~help~~theatre ~~improve~~design ~~customer~~and ~~satisfaction~~capacity, ~~allowing~~revenue ~~patrons~~and ~~who~~patron ~~purchase~~potential, ~~tickets~~and ~~over~~financial ~~the internet to often bypass lines at the box office by printing their tickets at home or picking up their tickets at kiosks in the theatre lobby~~stability.

~~Point~~We also face competition from a number of ~~Sale~~other ~~Systems~~motion picture exhibition delivery systems, such as DVDs, network and syndicated television, video on-demand, pay-per-view television and downloading from the Internet. We also face competition from other forms of entertainment competing for the public’s leisure time and disposable income, such as concerts, theme parks and sporting events.

WeCorporate ~~developed our own proprietary point of sale system to further enhance our ability to~~Operations maximize revenues, control costs and efficiently manage operations. The system, which is installed in all of our domestic theatres, provides corporate management with real-time admissions and concession revenue reports that allow managers to make real-time adjustments to movie schedules, extend runs or increase the number of screens on which successful movies are being played and substitute films when gross receipts cease to meet expectations. Real-time seating and box office information is available to box office personnel, allowing theatre management to avoid overselling a particular film and providing faster and more accurate responses to customer inquiries regarding showtimes and available seating. The system tracks concession sales and provides in-theatre inventory reports allowing for efficient inventory management and control, has multiple language capabilities, offers numerous ticket pricing options, integrates internet ticket sales and processes credit card transactions. Barcode scanners, pole displays, touch screens, credit card readers and other equipment can be integrated with the system to enhance its functions. In our international theatres we use our system or point of sale systems which have been developed by third parties for the motion picture industry and which have been certified as compliant with applicable governmental regulations.

~~Competition~~ Our corporate headquarters is located in Plano, Texas. Personnel at our corporate headquarters provide oversight for our domestic and international theatres. Domestic personnel at our corporate headquarters include concessions, theatre operations support, film licensing, human resources, legal, finance and accounting, operational audit, theatre maintenance and construction, Internet and information systems support, real estate and marketing. Our U.S. operations are divided into sixteen regions, primarily organized geographically, each of which is headed by a region leader.

WeInternational ~~are~~personnel ~~one~~at our corporate headquarters include our President of ~~the~~Cinemark International, ~~leading~~L.L.C. ~~motion~~and ~~picture~~department ~~exhibitors~~heads in ~~terms~~charge of film licensing, concessions, theatre operations, theatre construction, real estate, legal, operational audit, information systems and accounting. We have a chief financial officer in both ~~revenues~~Brazil and Mexico, which are our two largest international markets. We have eight regional offices in Latin America responsible for the ~~number~~local management of ~~screens~~theatres in ~~operation~~twelve individual countries. WeEach ~~compete~~regional ~~against~~office ~~local~~is headed by a general manager and includes personnel in film licensing, ~~national~~marketing, human resources, information systems, operations and ~~international~~accounting. ~~exhibitors~~The regional offices are staffed with experienced personnel from the region to mitigate cultural and operational barriers.

~~We are the sole exhibitor in approximately 85% of the first run film zones in which our first~~10 run North American theatres operate. In film zones where there is no direct competition, we select those films we believe will be the most successful from among those offered to us by film distributors. Where there is competition, we usually license films based on an allocation process. We currently operate in 148 first run film zones in North America. Of

12 Table of Contents

~~Table of Contents~~Employees

We have approximately 12,900 employees in the ~~101~~U.S., ~~theatres~~approximately we10% ~~operate~~of ~~outside~~whom are full time employees and 90% of ~~North~~whom ~~America~~are part time employees. We have approximately 5,400 employees in our international markets, approximately 8565% of ~~those~~whom ~~theatres~~are ~~have~~full time employees and approximately 35% of nowhom ~~direct~~are ~~competition~~part time employees. ~~The~~Some ~~principal~~of ~~competitive~~our ~~factors~~U.S. ~~with~~employees ~~respect~~are torepresented ~~film~~by ~~licensing~~unions under collective bargaining agreements, and some of our international locations are: subject to union regulations. We regard our relations with our employees to be satisfactory.

~~• capacity and location of an exhibitor’s theatre; • theatre comfort; • quality of projection and sound equipment; • level of customer service; and • licensing terms.~~Regulations

The ~~competition~~distribution ~~for~~of ~~customers~~motion pictures is ~~dependent~~largely ~~upon~~regulated ~~factors~~by ~~such~~federal asand state antitrust laws and has been the ~~availability~~subject of ~~popular~~ numerous antitrust cases. The manner in which we can license films, from certain major film distributors is subject to consent decrees resulting from these cases. Consent decrees bind certain major film distributors and require the ~~location~~films of ~~theatres,~~such ~~the~~distributors ~~comfort~~to be offered and ~~quality~~licensed ofto ~~theatres~~exhibitors, including us, on a theatre-by-theatre and ~~ticket~~film-by-film ~~prices~~basis. Consequently, ~~Our~~exhibitors ~~ticket prices~~cannot atassure ~~first~~themselves ~~run~~a ~~and~~supply ~~discount~~of ~~theatres~~films ~~are~~by ~~competitive~~entering long-term arrangements with ~~ticket~~major ~~prices~~distributors, ofbut ~~competing~~must ~~theatres~~negotiate for licenses on a theatre-by-theatre and film-by-film basis.

We ~~also~~are ~~face~~subject ~~competition~~to ~~from~~various ageneral ~~number~~regulations ofapplicable ~~other~~to ~~motion~~our ~~picture~~operations ~~exhibition~~including ~~delivery systems,~~the ~~such~~Americans aswith ~~home~~Disabilities ~~video,~~Act ~~DVD,~~of ~~and network~~1990, ~~syndicated~~or ~~and~~the ~~pay-per-view television~~ADA. We dodevelop ~~not~~new ~~believe~~theatres to be accessible to ~~that~~the ~~these~~disabled ~~additional~~and ~~distribution~~we ~~channels~~believe ~~have~~we ~~adversely~~are ~~affected~~in ~~theatre~~substantial ~~attendance;~~compliance ~~however,~~with wecurrent regulations relating to ~~can~~accommodating ~~give~~the nodisabled. ~~assurance~~Although ~~that~~we ~~existing~~believe orthat ~~future~~our ~~alternative~~theatres ~~delivery~~comply ~~systems~~with ~~will~~the ~~not~~ADA, we have ~~an adverse~~been ~~impact~~a onparty ~~attendance.~~to Welawsuits ~~also~~which ~~face~~claim ~~competition~~that ~~from~~our ~~other~~handicapped ~~forms~~seating ofarrangements ~~entertainment~~do ~~competing~~not ~~for~~comply with the ~~public’s~~ADA ~~leisure~~or ~~time~~that ~~and~~we ~~disposable~~are ~~income~~required to provide captioning for patrons who are deaf or are severely hearing impaired.

~~Seasonality~~ Our theatre operations are also subject to federal, state and local laws governing such matters as wages, working conditions, citizenship, health and sanitation requirements and licensing.

~~Our~~Financial ~~revenues~~Information ~~have~~About ~~historically~~Geographic ~~been seasonal, coinciding with the timing of releases of motion~~Areas 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 blockbuster film during other periods can alter this seasonality trend. The timing of such film releases can have a significant effect on our results of operations, and the results of one quarter are not necessarily indicative of results for the next quarter or for the same period in the following year. The seasonality of the release of successful films, however, has become less pronounced in recent years with the release of major motion pictures occurring more evenly throughout the year.

~~Employees~~ We have 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 consolidated financial statements. See Note 22 to the consolidated financial statements for segment information and financial information by geographic area.

~~We have approximately 8,800 employees in North America, approximately 10% of whom are full~~11 time employees and 90% of whom are part time employees. We have approximately 4,400 employees in our international markets. Approximately 25 North American employees are represented by unions under collective bargaining agreements. Some of our international operations utilize union labor. We regard our relations with our employees to be satisfactory.

Regulations Table of Contents

~~The distribution of motion pictures is largely regulated by federal and state antitrust laws and has been the subject of numerous antitrust cases~~Item 1A. WeRisk ~~have not been a party to any of such~~Factors cases, but the manner in which we can license films from certain major film distributors is subject to consent decrees resulting from these cases. Consent decrees bind certain major film distributors and require the films of such distributors to be offered and licensed to exhibitors, including us, on a theatre-by-theatre and film-by-film basis. Consequently, exhibitors cannot assure themselves of a supply of films by entering long-term arrangements with major distributors, but must negotiate for licenses on a film-by-film and theatre-by-theatre basis.

WeOur ~~are~~business ~~subject~~depends toon ~~various~~film ~~general~~production ~~regulations applicable to our operations including the Americans with Disabilities Act (the “ADA”). We develop new theatres to be accessible to the disabled~~ and ~~we believe we are in substantial compliance with current regulations relating to accommodating the disabled~~performance. ~~Although we believe that our theatres comply with the ADA, we are, or~~ have been, a party to lawsuits which claim that our handicapped seating arrangements do not comply with the ADA or that we are required to provide captioning for patrons who are deaf or are severely hearing impaired. See Item 3 — Legal Proceedings.

Our ~~theatre~~business ~~operations~~depends ~~are~~on ~~also~~both ~~subject~~the toavailability ~~federal,~~of ~~state~~suitable films for exhibition in our theatres and ~~local~~the ~~laws~~success ~~governing~~of ~~such~~those films in our markets. Poor performance of films, the disruption in the ~~matters~~production of films due to events such as ~~wages~~a strike by directors, ~~working~~writers ~~conditions~~or actors, ~~citizenship~~a reduction in financing options for the film distributors, ~~health~~or ~~and~~a ~~sanitation~~reduction ~~requirements~~in ~~and~~the marketing efforts of the film ~~licensing~~distributors to promote their films could have an adverse effect on our business by resulting in fewer patrons and reduced revenues.

13 A deterioration in relationships with film distributors could adversely affect our ability to obtain commercially successful films.

~~Table~~ We rely on the film distributors to supply the films shown in our theatres. The film distribution business is highly concentrated, with six major film distributors accounting for approximately 81% of ~~Contents~~U.S. box office revenues and 47 of the top 50 grossing films during 2008. Numerous antitrust cases and consent decrees resulting from these anti-trust cases impact the distribution of films. The consent decrees bind certain major film distributors to license films to exhibitors on a theatre-by-theatre and film-by-film basis. Consequently, we cannot guarantee a supply of films by entering into long-term arrangements with major distributors. We are therefore required to negotiate licenses for each film and for each theatre. A deterioration in our relationship with any of the six major film distributors could adversely affect our ability to obtain commercially successful films and to negotiate favorable licensing terms for such films, both of which could adversely affect our business and operating results.

~~Financial~~ We ~~Information~~face ~~About~~intense ~~Geographic~~competition ~~Areas~~for patrons and films which may adversely affect our business.

WeThe ~~operate~~motion inpicture aindustry ~~single~~is ~~business~~highly ~~segment~~competitive. asWe acompete ~~motion~~against ~~picture~~local, ~~exhibitor~~regional, national and international exhibitors. We ~~are~~compete afor ~~multinational~~both patrons and licensing of films. The ~~corporation~~competition ~~with~~for ~~consolidated~~patrons ~~operations,~~is asdependent ofupon ~~December 31,~~such ~~2004,~~factors inas the ~~U.S.,~~availability ~~Canada,~~of ~~Mexico~~popular films, the ~~Argentina,~~location ~~Brazil,~~and ~~Chile,~~number ~~Ecuador,~~of ~~Peru,~~theatres ~~Honduras,~~and Elscreens ~~Salvador,~~in ~~Nicaragua~~a market, ~~Costa~~the ~~Rica~~comfort and quality of the theatres, levels ~~Panama~~of customer service, and ~~Colombia~~ pricing. ~~See~~The ~~Note~~principal 18competitive offactors ~~the~~with ~~Notes~~respect to ~~our~~film licensing ~~Consolidated~~include ~~Financial~~licensing ~~Statements~~terms, number of seats and screens available for ~~information~~a onparticular ~~our~~picture, ~~revenues~~revenue potential and ~~theatre~~the ~~properties~~location and ~~equipment~~condition inof ~~the~~an Uexhibitor’s theatres.S. ~~and~~If ~~Canada,~~we ~~Mexico~~are unable to attract patrons or to license successful films, ~~Brazil~~our ~~and~~business ~~other international~~may ~~countries~~be adversely affected.

~~Available~~ An ~~Information~~increase in the use of alternative or “downstream” film distribution channels and other competing forms of entertainment may reduce movie theatre attendance and limit ticket price growth.

We ~~file~~face ~~reports,~~competition ~~information~~for ~~statements~~patrons ~~and~~from ~~other~~a ~~information,~~number ~~including~~of ~~this~~alternative ~~Annual~~film ~~Report~~distribution onchannels, such ~~Form~~as ~~10-K~~DVDs, ~~with~~network ~~the Securities~~ and ~~Exchange~~syndicated ~~Commission.~~television, ~~Copies~~video ofon-demand, ~~such~~pay-per-view ~~materials~~television ~~can be accessed~~and bydownloading ~~visiting~~from ~~our~~the ~~corporate website at www~~Internet.~~cinemark.com~~ ~~and~~We ~~selecting~~also ~~the~~compete ~~link~~with toother ~~SEC~~forms ~~filings. Copies~~of ~~can~~entertainment ~~also~~such beas ~~obtained~~concerts, amusement byparks ~~mail~~and ~~from~~sporting ~~the~~events, ~~Public~~for ~~Reference~~our ~~Section~~patrons’ ofleisure ~~the~~time ~~Securities~~ and ~~Exchange~~ ~~Commission~~disposable atincome. ~~450~~A significant ~~Fifth~~increase ~~Street,~~in ~~N.W.,~~popularity ~~Washington,~~of ~~D.C.~~these ~~20549.~~alternative ~~You~~film ~~may~~distribution ~~also~~channels ~~obtain~~and competing ~~information~~forms ~~on the operation~~ of ~~the~~entertainment ~~Public~~could ~~Reference~~have ~~Room~~an byadverse ~~calling~~effect ~~the~~on ~~Securities~~our business and ~~Exchange Commission~~results atof ~~1-800-SEC-0330~~operations.

~~Item~~ Our 2.results ~~Properties~~of operations may be impacted by shrinking video release windows.

~~North~~ Over ~~America~~the last decade, the average video release window, which represents the time that elapses from the date of a film’s theatrical release to the date a film is available on DVD, an important downstream market, has decreased from approximately six months to approximately four months. We cannot assure you that this release window, which is determined by the film studios, will not shrink further or be eliminated altogether, which could have an adverse impact on our business and results of operations.

As of December 31, 2004, we operated 157 theatres, with 1,795 screens, pursuant to leases and own the land and building for 34 theatres, with 508 screens, in North America. During 2004, we opened 11 new theatres with 132 screens and added four screens to existing theatres. Our North America leases are generally entered into on a long term basis with terms generally ranging from 15 to 25 years. The ~~exercise~~oversupply of ~~available renewal options can generally extend these leases by another 5 to 20 years. As of December 31, 2004, approximately 8% of our theatre leases in North America, covering 97~~ screens, ~~had remaining terms, including optional renewal periods, of less than five years and approximately 80% of our theatre leases~~ in ~~North~~the ~~America,~~motion ~~covering~~picture ~~1,487~~exhibition ~~screens,~~industry ~~have remaining~~may ~~terms,~~adversely ~~including~~affect ~~optional renewal periods, of more than 15 years. The leases generally~~the ~~provide~~performance for a fixed monthly minimum rent payment, with certain leases also subject to additional percentage rent if a target annual revenue level is achieved. We lease an office building in Plano, Texas as our corporate office. See Note 17 of ~~our~~some ~~Notes to Consolidated Financial Statements for information regarding our lease commitments. We periodically review the profitability~~ of ~~each of~~ our ~~North American~~ theatres~~, particularly those whose lease terms are nearing expiration, to determine whether to continue its operations~~.

~~International~~ During the period between 1996 and 2000, theatre exhibitors focused on the development of large multiplexes. The strategy of aggressively building multiplexes was adopted throughout the industry during that time and resulted in an oversupply of screens in the North American exhibition industry and negatively impacted many older multiplex theatres, leading to financial difficulty for some of the exhibitors. According to MPAA, screen counts have increased each year

~~As of December 31, 2004, we operated 101 theatres, with 869 screens, internationally, all of~~12 which are leased pursuant to ground or building leases. During 2004, we opened six new theatres with 43 screens. Our international leases are generally entered into on a long term basis with terms generally ranging from 10 to 20 years. The leases generally provide for contingent rental based upon operating results (some of which are subject to an annual minimum). Generally, these leases include renewal options for various periods at stipulated rates. No international theatre leases have remaining terms, including optional renewal periods, of less than five years, and approximately 70% of our international theatre leases, covering 614 screens, have remaining terms, including optional renewal periods, of more than 15 years. We periodically review the profitability of each of our international theatres, particularly those whose lease terms are about to expire, to determine whether to continue its operations.

ItemTable 3.of Legal ProceedingsContents

~~DOJ~~since ~~Litigation - In March 1999, the Department of Justice (“DOJ”) filed suit in the U~~2003.S. ~~District Court,~~If ~~Northern~~exhibitors ~~District~~continue ~~of Ohio, Eastern Division, against Cinemark USA, Inc. alleging certain violations of the Americans with Disabilities Act of 1990 (the “ADA”) relating~~ to ~~Cinemark~~build ~~USA, Inc.’s~~theatres ~~wheelchair seating arrangements~~ and ~~seeking~~demand ~~remedial~~for ~~action.~~such Antheatres ~~order~~does ~~granting summary~~not ~~judgment~~grow toat ~~Cinemark USA, Inc. was issued in November 2001. The Department of Justice appealed~~ the ~~district~~ ~~court’s~~same ~~ruling with the Sixth Circuit Court of Appeals. On November 7~~rate, ~~2003,~~ the ~~Sixth Circuit~~performance ~~Court~~ of ~~Appeals~~some reversed the summary judgment and sent the case back to the district court for further review without deciding whether wheelchair seating at Cinemark USA, Inc.’s theatres comply with the ADA. The Sixth Circuit Court of ~~Appeals~~our ~~also stated that if the district court found that the~~ theatres ~~did~~could ~~not comply with the ADA, any remedial action should~~ be ~~prospective only.~~adversely ~~Cinemark USA, Inc~~affected. ~~and the United States have resolved this lawsuit. A Consent Order was~~ ~~entered by the U.S. District Court for the Northern District of Ohio, Eastern Division, on November 17, 2004. This Consent Order fully and finally resolves the United States~~

14 We have substantial long-term lease and debt obligations, which may restrict our ability to fund current and future operations and that restrict our ability to enter into certain transactions.

~~Table~~ We have significant long-term debt service obligations and long-term lease obligations. As of December 31, ~~Contents~~2008, we had $1,516.6 million in long-term debt obligations, $123.7 million in capital lease obligations and $1,839.1 million in long-term operating lease obligations. We incurred $116.1 million of interest expense for the year ended December 31, 2008. We incurred $225.6 million of rent expense for the year ended December 31, 2008 under operating leases (with terms, excluding renewal options, ranging from one to 28 years). Our substantial lease and debt obligations pose risk to you by:

v.• ~~Cinemark~~making ~~USA,~~it ~~Inc.~~more ~~lawsuit,~~difficult ~~and~~for ~~all~~us ~~claims~~to ~~asserted~~satisfy ~~against~~our ~~Cinemark~~obligations; ~~USA,~~• ~~Inc.~~requiring inus ~~that~~to ~~lawsuit have~~dedicate ~~been~~a ~~dismissed~~substantial ~~with~~portion ~~prejudice.~~of ~~Under~~our ~~the~~cash ~~Consent~~flow ~~Order, over the next five years, Cinemark USA, Inc. will make modifications~~ to ~~wheelchair~~payments ~~seating~~on ~~locations~~our inlease ~~fourteen stadium-style movie theatres within the Sixth Circuit~~ and ~~elsewhere~~debt obligations, ~~and~~thereby ~~spacing~~reducing ~~and~~the ~~companion~~availability ~~seating~~of ~~modifications~~our ~~in 67~~cash ~~auditoriums~~flow atto ~~other~~fund ~~stadium-styled~~working ~~movie~~capital, ~~theatres.~~capital ~~Upon completion of these modifications~~expenditures, ~~such theatres~~acquisitions ~~will comply with all existing~~ and ~~pending~~other ~~ADA~~corporate ~~wheelchair seating~~ requirements, and ~~no further modifications will be necessary~~ to ~~remaining~~pay ~~stadium-style~~dividends; ~~movie~~• ~~theatres~~impeding inour ~~the~~ability ~~United States~~ to ~~comply~~obtain ~~with~~additional ~~the~~financing ~~wheelchair~~in ~~seating requirements of~~ the ~~ADA.~~future ~~Under~~for ~~the~~working ~~Consent Order~~capital, ~~the DOJ~~capital ~~approved the seating plans for nine stadium-styled movie theatres under construction. Cinemark USA~~expenditures, ~~Inc.~~acquisitions and ~~the~~general ~~DOJ~~corporate ~~have~~purposes; ~~also~~• ~~created~~subjecting aus ~~safe~~to ~~harbor~~the ~~framework~~risk ~~for~~of ~~Cinemark~~increased ~~USA,~~sensitivity ~~Inc.~~ to ~~construct all~~interest ofrate ~~its~~increases ~~future~~on ~~stadium-style~~our ~~movie~~variable ~~theatres.~~rate ~~The~~debt, ~~DOJ~~including ~~has~~our ~~stipulated~~borrowings ~~that~~under ~~all~~our ~~theatres~~senior ~~built~~secured ~~in compliance~~credit ~~with~~facility; ~~the~~and ~~Consent~~• ~~Order~~making ~~will~~us ~~comply~~more ~~with~~vulnerable ~~the~~to ~~wheelchair~~a ~~seating~~downturn ~~requirements~~in ofour ~~the~~business ~~ADA. Management~~and ~~believes~~competitive ~~that~~pressures ~~its~~and ~~obligations~~limiting ~~under~~our ~~the~~flexibility ~~Consent~~to ~~Order~~plan ~~are~~for, ~~not~~or ~~material~~react ~~in the aggregate~~ to ~~its financial position~~, ~~results~~changes ofin ~~operations~~our ~~and~~industry ~~cash~~or ~~flows~~the economy.

~~Mission,~~ Our ~~Texas~~ability ~~Litigation~~to -make Inscheduled ~~July 2001,~~payments ~~Sonia~~of ~~Rivera-Garcia~~principal and ~~Valley~~interest ~~Association~~with ~~for~~respect to our ~~Independent~~indebtedness ~~Living~~and ~~filed~~service ~~suit~~our inlease ~~the~~obligations ~~93rd~~will ~~Judicial~~depend ~~District~~on ~~Court~~our ofability ~~Hidalgo~~to ~~County, Texas~~generate ~~against~~cash ~~Cinemark~~flow from ~~USA,~~our ~~Inc~~operations. ~~alleging~~To a certain ~~violations~~extent, ofour ~~the~~ability ~~Human~~to ~~Resources~~generate ~~Code,~~cash ~~the~~flow ~~Texas~~is ~~Architectural~~subject ~~Barriers~~to general ~~Act~~economic, ~~the~~financial, ~~Texas~~competitive, ~~Accessibility~~regulatory ~~Standards~~ and ~~the~~other ~~Deceptive~~factors ~~Trade~~that ~~Practices~~are ~~Act~~beyond ~~relating~~our tocontrol. We ~~accessibility~~cannot ofassure ~~movie~~you ~~theatres~~that ~~for~~we ~~patrons~~will ~~using~~continue ~~wheelchairs~~to generate cash flow at ~~one~~current ~~theatre~~levels. inIf ~~the~~we ~~Mission,~~fail ~~Texas~~to make ~~market.~~any ~~The~~required ~~plaintiffs~~payment ~~are~~under ~~seeking~~the ~~remedial~~agreements ~~action~~governing ~~and~~our ~~unspecified~~indebtedness ~~damages.~~or Afail ~~jury~~to incomply awith ~~similar~~the ~~case~~financial and operating covenants contained in ~~Austin~~them, ~~Texas~~we ~~found~~would ~~that~~be ~~Cinemark~~in ~~USA,~~default ~~Inc.~~and ~~did~~our ~~not~~lenders ~~violate~~would have the ~~Human~~ability ~~Resources~~to ~~Code,~~require ~~the~~that we immediately repay our outstanding indebtedness. Any such ~~Texas~~defaults ~~Architectural~~could ~~Barriers~~materially ~~Act~~impair orour ~~the~~financial ~~Texas~~condition ~~Accessibility~~and ~~Standards~~liquidity. ~~The~~We ~~judge~~cannot inassure ~~that~~you ~~case~~that ~~dismissed~~we ~~the~~would ~~claim~~be ~~under~~able ~~the~~to ~~Deceptive~~refinance ~~Trade~~our ~~Practices~~outstanding ~~Act~~indebtedness if debt holders require repayments as a result of a default. ~~Cinemark~~In ~~USA~~addition, ~~Inc.~~we ~~has~~may ~~filed~~need anto ~~answer denying~~refinance ~~the~~all ~~allegations~~or ~~and~~a isportion ~~vigorously~~of ~~defending~~our ~~this~~outstanding indebtedness ~~suit.~~prior ~~Cinemark~~to ~~USA~~its scheduled maturity; however, ~~Inc.~~we ismay ~~unable~~not be able to ~~predict~~ ~~the~~refinance ~~outcome~~all or any portion of ~~this~~our ~~litigation~~indebtedness on commercially reasonable terms or ~~the~~at ~~range~~all. ofIf ~~potential~~we ~~loss,~~fail ~~however,~~to ~~management~~make ~~believes~~any ~~that~~required ~~based~~payment ~~upon~~under ~~current~~our ~~precedent~~leases, ~~its~~we ~~potential~~would ~~liability~~be ~~with~~in ~~respect~~default toand ~~such~~our ~~proceeding~~landlords iswould ~~not~~have the ability ~~material~~to interminate ~~the~~our ~~aggregate~~leases toand ~~its~~re-enter ~~financial~~the ~~position,~~premises. ~~results~~The ofinvoluntary ~~operations~~termination ~~and~~of ~~cash~~a ~~flows.~~substantial ~~Accordingly,~~number ~~Cinemark~~of ~~USA,~~our ~~Inc.~~leases ~~has~~could ~~not~~have ~~established~~ a ~~reserve~~material ~~for~~adverse ~~loss~~impact inon ~~connection~~our ~~with~~business ~~this~~and results of ~~proceeding~~operations.

~~From~~General ~~time to time~~political, wesocial ~~are involved in other various legal proceedings arising from the ordinary course of our business operations, such as personal injury claims, employment matters~~ and ~~contractual~~ ~~disputes,~~economic ~~most~~conditions ofcan ~~which~~adversely ~~are~~affect ~~covered by insurance. We believe~~ our ~~potential liability with respect to proceedings currently pending is not material, individually or in the aggregate, to our financial position, results of operations and cash flows~~attendance.

~~Item~~ Our 4.results ~~Submission~~of operations are dependent on general political, social and economic conditions, and the impact of ~~Matters~~such conditions on our theatre operating costs and on the willingness of consumers to spend money at movie theatres. If consumers’ discretionary income declines as a ~~Vote~~result of an economic downturn, our operations could be adversely affected. If theatre operating costs, such as utility costs, increase due to political or economic changes, our results of ~~Security~~operations could ~~Holders~~be adversely affected. Political events, such as terrorist attacks, could cause people to avoid our theatres or other public places where large crowds are in attendance.

~~A majority~~Our offoreign ~~our~~operations ~~stockholders~~are ~~executed~~subject ato ~~written~~adverse ~~consent~~regulations, ineconomic ~~lieu~~instability ofand acurrency ~~stockholders~~exchange ~~meeting electing Mr~~risk. ~~Peter Ezersky to serve as a member~~ ~~of our Board of Directors.~~

~~PART~~ We IIhave 127 theatres with 1,041 screens in twelve countries in Latin America. Brazil and Mexico represented approximately 10.7% and 4.5% of our consolidated 2008 revenues, respectively. Governmental regulation of the motion picture industry in foreign markets differs from that in the United States. Changes in regulations affecting prices, quota systems requiring the exhibition of locally-produced films and restrictions on ownership of property may adversely affect our international operations in foreign markets. Our international operations are subject to certain political, economic and

~~Item 5. Market for Registrant’s Common Equity, Related Stockholders’ Matters and Issuer Purchases of Equity Securities~~13

ThereTable is no established public trading market for our common stock. As of December 31, 2004 there were 13 holders of record of our common stock. We have not paid dividends on our common stock and do not expect to pay dividends on our common stock in the foreseeable future. Our senior discount notes indenture, Cinemark USA, Inc.’s senior subordinated notes indentures and senior secured credit facility, each contain restrictions on our ability to pay dividends on our common stock. Contents

~~Item~~other 6uncertainties not encountered by our domestic operations, including risks of severe economic downturns and high inflation. ~~Selected~~We ~~Financial~~also ~~Data~~face risks of currency fluctuations, hard currency shortages and controls of foreign currency exchange and transfers abroad, all of which could have an adverse effect on the results of our international operations.

~~The~~We ~~following~~may ~~tables~~not ~~set~~be ~~forth~~able our selected consolidated financial and operating data for the periods and at the dates indicated for each of the five most recent years ended December 31, 2004. Certain reclassifications have been made to ~~the~~generate ~~2000,~~additional ~~2001,~~revenues ~~2002~~or ~~and~~continue ~~2003 consolidated financial statements~~ to ~~conform~~realize tovalue ~~the~~from 2004 presentation. You should read the selected consolidated financial and operating data set forth below in conjunction with Management’s Discussion and Analysis of Financial Condition and Results of Operations and with our ~~Consolidated Financial~~ ~~Statements~~investment ~~and related notes and schedules thereto, appearing elsewhere~~ in ~~this report~~NCM.

15 We joined Regal and AMC as founding members of NCM in 2005 and currently have an approximate 14.1% interest in NCM. We receive a monthly theatre access fee under our Exhibitor Services Agreement with NCM and we are entitled to receive mandatory quarterly distributions of excess cash from NCM. During the years ended December 31, 2007 and 2008, the Company received approximately $5.7 million and $1.8 million in other revenues from NCM, respectively and $11.5 million and $18.8 million in cash distributions from NCM, respectively. Cinema advertising is a small component of the U.S. advertising market and therefore, NCM competes with larger, established and well known media platforms such as broadcast radio and television, cable and satellite television, outdoor advertising and Internet portals. NCM also competes with other cinema advertising companies and with hotels, conference centers, arenas, restaurants and convention facilities for its non-film related events to be shown or held in our auditoriums. In-theatre advertising may not continue to attract advertisers or NCM’s in-theatre advertising format may not continue to be received favorably by the theatre-going public. If NCM is unable to continue to generate expected sales of advertising, its results of operations may be adversely affected and our investment in and distributions and revenues from NCM may be adversely impacted.

~~Table~~ We are subject to uncertainties related to digital cinema, including potentially high costs of re-equipping ~~Contents~~theatres with projectors to show digital movies.

~~SELECTED~~ Digital ~~CONSOLIDATED~~cinema ~~FINANCIAL~~is ~~AND~~still ~~OPERATING~~in ~~DATA~~an early conversion stage in our industry. We, along with some of our competitors, have commenced a roll-out of digital equipment for exhibiting feature films. However, significant obstacles exist that impact such a roll-out plan including the cost of digital projectors, the substantial investment in re-equipping theatres and determining who will be responsible for such costs. We cannot assure you that we will be able to obtain financing arrangements to fund our portion of the digital cinema roll-out nor that such financing will be available to us on acceptable terms, if at all.

	Year Ended December 31,
	2000			2001			2002			2003			2004
	(In thousands, except theatres and screen data)
Statement of Operations Data (Consolidated)(1):
Revenues	$	786,264		$	853,658		$	935,854		$	950,872		$	1,024,242
Theatre operating costs		504,519			531,967			570,947			582,574			618,626
Facility lease expense		108,489			114,737			115,588			119,517			126,643
General and administrative expenses		39,013			42,597			47,953			44,285			51,672
Stock option compensation and change of control expenses related to the Recapitalization		—			—			—			—			31,995
Depreciation and amortization		66,111			73,079			66,583			65,085			67,051
Impairment of long-lived assets		3,872			20,723			3,869			5,049			1,667
(Gain) loss on sale of assets and other		912			12,408			470			(1,202	)		4,851
Total costs and expenses		722,916			795,511			805,410			815,308			902,505
Operating income		63,348			58,147			130,444			135,564			121,737
Interest expense(2)		74,037			70,931			57,793			54,163			72,942
Income (loss) from continuing operations before cumulative effect of an accounting change		(10,423	)		(3,462	)		40,407			47,389			23,041
Income (loss) from discontinued operations, net of taxes		—			(559	)		(1,542	)		(2,740	)		3,584
Net income (loss)(3)	$	(10,423	)	$	(4,021	)	$	35,476		$	44,650		$	26,625
Other Financial Data (Consolidated):
Ratio of earnings to fixed charges(4)		—			—			1.75x			1.80x			1.36x
Cash flow provided by (used for):
Operating activities	$	54,796		$	87,122		$	150,119		$	135,522		$	123,087
Investing activities		(94,886	)		(33,799	)		(34,750	)		(47,151	)		(116,947	)
Financing activities		51,280			(21,513	)		(96,140	)		(45,738	)		(14,444	)
Capital expenditures		113,081			40,352			38,032			51,002			81,008
Balance Sheet Data (Consolidated):
Cash and cash equivalents	$	19,840		$	50,199		$	63,719		$	107,322		$	100,248
Theatre properties and equipment, net		950,135			866,406			791,731			775,880			785,595
Total assets		1,060,576			996,544			916,814			960,736			1,016,757
Total long-term debt, including current portion.		810,323			780,956			692,587			658,431			1,013,675
Stockholders’ equity (deficiency)		48,910			25,337			27,664			76,947			(202,724	)
Operating Data:
North America(5)(7)
Theatres operated (at period end)		190			188			188			189			191
Screens operated (at period end)		2,217			2,217			2,215			2,244			2,303
Total attendance(1)		92,425			100,022			111,959			112,581			113,646

We are subject to uncertainties relating to future expansion plans, including our ability to identify suitable acquisition candidates or site locations.

16 We have greatly expanded our operations over the last decade through targeted worldwide theatre development and acquisitions. We will continue to pursue a strategy of expansion that will involve the development of new theatres and may involve acquisitions of existing theatres and theatre circuits both in the U.S. and internationally. There is significant competition for new site locations and for existing theatre and theatre circuit acquisition opportunities. As a result of such competition, we may not be able to acquire attractive site locations, existing theatres or theatre circuits on terms we consider acceptable. We cannot assure you that our expansion strategy will result in improvements to our business, financial condition, profitability, or cash flows. Further, our expansion programs may require financing above our existing borrowing capacity and internally generated funds. We cannot assure you that we will be able to obtain such financing nor that such financing will be available to us on acceptable terms.

~~Table~~ If we do not comply with the Americans with Disabilities Act of ~~Contents~~1990 and a consent order we entered into with the Department of Justice, we could be subject to further litigation.

	Year Ended December 31,
	2000		2001		2002		2003		2004
	(In thousands, except theatres and screen data)
International(6)
Theatres operated (at period end)		80		88		92		97		101
Screens operated (at period end)		695		783		816		852		869
Total attendance(1)		46,152		53,853		60,109		60,553		65,695
Worldwide(5)(6)(7)
Theatres operated (at period end)		270		276		280		286		292
Screens operated (at period end)		2,912		3,000		3,031		3,096		3,172
Total attendance(1)		138,577		153,875		172,068		173,134		179,341

Our theatres must comply with Title III of the ADA and analogous state and local laws. Compliance with the ADA requires among other things that public facilities “reasonably accommodate” individuals with disabilities and that new construction or alterations made to “commercial facilities” conform to accessibility guidelines unless “structurally impracticable” for new construction or technically infeasible for alterations. In March 1999, the Department of Justice, or DOJ, filed suit against us in Ohio alleging certain violations of the ADA relating to wheelchair seating arrangements in certain of our stadium-style theatres and seeking remedial action. We and the DOJ have resolved this lawsuit and a consent order was entered by the U.S. District Court for the Northern District of Ohio, Eastern Division, on November 15, 2004. Under the consent order, we are required to make modifications to wheelchair seating locations in fourteen stadium-style movie theatres and spacing and companion seating modifications in 67 auditoriums at other stadium-styled movie theatres. These modifications must be completed by November 2009. We are currently in compliance with the consent order. Upon completion of these modifications, these theatres will comply with wheelchair seating requirements, and no further modifications will be required to our other stadium-style movie theatres in the United States existing on the date of the consent order. In addition, under the consent order, the DOJ approved the seating plans for nine stadium-styled

(1)		Statement of Operations Data and attendance data exclude the results of the two United Kingdom theatres and the eleven Interstate theatres for all periods presented as these theatres were sold during 2004. The results of operations for these theatres are presented as discontinued operations. (See Note 5 to the consolidated financial statements.)
(2)		Includes amortization of debt issue costs and excludes capitalized interest for all periods presented.
(3)		In 2002, a cumulative effect of a change in accounting principle charge of $3.4 million (net of tax benefit) was recorded as a transitional impairment adjustment in connection with the adoption of Statement of Financial Accounting Standards No. 142 requiring that goodwill and other intangible assets with indefinite useful lives no longer be amortized but instead be tested for impairment at least annually.
(4)		For the purposes of calculating the ratio of earnings to fixed charges, earnings consist of income (loss) from continuing operations before taxes and cumulative effect of an accounting change plus fixed charges excluding capitalized interest. Fixed charges consist of interest expense, capitalized interest, amortization of debt issue cost and that portion of rental expense which we believe to be representative of the interest factor. For the years ended December 31, 2000 and 2001, earnings were insufficient to cover fixed charges by $10.4 million and $17.9 million, respectively.
(5)		The data as of period end 2000, 2001, 2002, 2003 and 2004 excludes certain theatres operated by us in North America pursuant to management agreements that are not part of our consolidated operations.
(6)		The data as of period end 2000, 2001, 2002, 2003 and 2004 excludes certain theatres operated internationally through our affiliates that are not part of our consolidated operations.
(7)		Figures for 2003 exclude theatres, screens and attendance for eight theatres and 46 screens acquired on December 31, 2003, as the results of operations for these theatres are not included in our 2003 consolidated results of operations.

17 Table of Contents

~~Table~~movie theatres then under construction and also created a safe harbor framework for us to construct all of ~~Contents~~our future stadium-style movie theatres. The DOJ has stipulated that all theatres built in compliance with the consent order will comply with the wheelchair seating requirements of the ADA. If we fail to comply with the ADA, remedies could include imposition of injunctive relief, fines, awards for damages to private litigants and additional capital expenditures to remedy non-compliance. Imposition of significant fines, damage awards or capital expenditures to cure non-compliance could adversely affect our business and operating results.

~~Item~~ We 7.depend ~~Management’s~~on ~~Discussion~~key ~~and~~personnel ~~Analysis~~for ofour ~~Financial~~current ~~Condition~~ and ~~Results~~future ~~of Operations~~performance.

~~The~~Our ~~following~~current ~~discussion~~ and ~~analysis~~future ~~should~~performance bedepends ~~read~~to ina ~~conjunction~~significant ~~with~~degree ~~our~~upon ~~Consolidated~~the continued ~~Financial~~contributions ~~Statements~~of ~~and~~our ~~related~~senior ~~notes~~management team and ~~schedules~~other ~~included~~key ~~elsewhere~~personnel. inThe ~~this~~loss ~~report~~or unavailability to us of any member of our senior management team or a key employee could significantly harm us. We cannot assure you that we would be able to locate or employ qualified replacements for senior management or key employees on acceptable terms.

~~Revenues~~ We ~~and~~are ~~Expenses~~subject to impairment losses due to potential declines in the fair value of our assets.

We ~~are~~review ~~one~~long-lived ofassets ~~the~~for ~~leaders~~impairment indicators on a quarterly basis or whenever events or changes in circumstances indicate the ~~motion~~carrying ~~picture~~amount ~~exhibition~~of ~~industry~~the assets may not be fully recoverable. We assess many factors when determining whether to impair individual theatre assets, including inactual ~~terms~~theatre oflevel ~~both~~cash ~~revenues~~flows, future years budgeted theatre level cash flows, theatre property and equipment carrying values, amortizing intangible assets carrying values, the ~~number~~age of ~~screens~~a recently inbuilt ~~operation~~theatre, ~~with~~competitive theatres in the ~~U.S.~~marketplace, ~~Canada,~~changes ~~Mexico,~~in ~~Argentina,~~foreign currency ~~Brazil,~~exchange ~~Chile~~rates, ~~Ecuador,~~the ~~Peru,~~impact ~~Honduras,~~of Elrecent ~~Salvador,~~ticket ~~Nicaragua~~price changes, ~~Costa~~available ~~Rica,~~lease ~~Panama~~renewal ~~and~~options ~~Colombia.~~and Weother ~~generate~~factors ~~revenues~~considered ~~primarily~~relevant ~~from~~in ~~box~~our ~~office~~assessment ~~receipts~~of ~~and~~impairment ~~concession~~of ~~sales~~individual ~~with~~theatre ~~additional~~assets. ~~revenues~~Long-lived ~~from~~assets ~~screen~~are ~~advertising~~evaluated ~~sales~~for ~~and~~impairment ~~other~~on ~~revenue~~an ~~streams~~individual theatre basis, ~~such~~which aswe ~~vendor~~believe ~~marketing~~is ~~programs,~~the ~~pay~~lowest ~~phones,~~applicable ~~ATM~~level ~~machines~~for ~~and~~which ~~electronic~~there ~~video~~are ~~games~~identifiable ~~located~~cash inflows. ~~some~~The ofimpairment ~~our theatres.~~evaluation ~~Our~~is ~~revenues~~based ~~are~~on ~~affected~~the byestimated ~~changes~~undiscounted incash ~~attendance~~flows ~~and~~from ~~average~~continuing ~~admissions~~use ~~and~~through ~~concession~~the ~~revenues~~remainder of the ~~per~~theatre’s ~~patron~~useful life. ~~Attendance~~The isremainder ~~primarily~~of ~~affected~~the byuseful life correlates with the ~~quality~~available ~~and~~remaining lease ~~quantity~~period, which includes the probability of ~~films~~renewal ~~released~~periods, byfor leased properties and a period ~~motion~~of ~~picture~~twenty ~~studios.~~years ~~Film~~for ~~releases~~fee ~~during~~owned ~~2004~~properties. ~~included~~If the ~~blockbusters~~estimated ~~Shrek~~undiscounted 2,cash ~~which~~flows are not ~~generated~~sufficient ~~domestic~~to ~~box~~recover ~~office~~a ~~receipts~~long-lived inasset’s ~~excess~~carrying value, we then compare the carrying value of the ~~$400~~asset group (theatre) ~~million,~~with ~~The~~its ~~Passion~~estimated offair ~~the~~value. ~~Christ~~Fair ~~and~~value is determined based on a ~~Spider-Man~~multiple 2of cash flows, which ~~generated~~was ~~domestic~~eight ~~box~~times ~~office~~for ~~receipts~~the inevaluations ~~excess~~performed ofduring ~~$350 million each~~2006, 2007 and ~~Harry~~the ~~Potter~~first, second and ~~the~~third ~~Prisoner~~quarters of ~~Azkaban~~2008 and ~~The~~six ~~Incredibles,~~and ~~which~~a ~~generated~~half ~~domestic~~times ~~box~~for ~~office~~the evaluation performed ~~receipts~~during inthe ~~excess~~fourth quarter of ~~$200 million each~~2008. ~~Film~~When ~~releases~~estimated ~~scheduled~~fair ~~for~~value ~~2005~~is ~~include~~determined ~~the~~to ~~highly anticipated~~be ~~Star~~lower ~~Wars:~~than ~~Episode~~the carrying ~~III~~value ~~Revenge~~ of the ~~Sith~~asset ~~and~~group ~~other~~(theatre), ~~high-profile~~the ~~films~~asset ~~such~~group as(theatre) is ~~Harry Potter~~written ~~and~~down ~~the~~to ~~Goblet~~its estimated offair ~~Fire,~~value. ~~War~~Significant ofjudgment ~~the~~is ~~Worlds,~~involved ~~King~~in ~~Kong~~estimating cash flows and ~~Batman~~fair ~~Begins~~value. Management’s estimates are based on historical and projected operating performance as well as recent market transactions.

~~Film~~We ~~rental~~evaluate ~~costs~~goodwill ~~are~~for ~~variable~~impairment at the reporting unit level at least annually during the fourth quarter or whenever events or changes in ~~nature~~circumstances ~~and~~indicate ~~fluctuate~~the ~~with~~carrying ~~our~~value ~~admissions~~of goodwill ~~revenues~~might exceed its estimated fair value. ~~Film~~Goodwill impairment is evaluated using a two-step ~~rental~~approach ~~costs~~requiring asus to compute the fair value of a ~~percentage~~reporting unit and compare it with its carrying value. If the carrying value of ~~revenues~~the ~~are~~theatre ~~generally~~exceeds ~~higher~~its ~~for~~fair ~~periods~~value, ina ~~which~~second ~~successful~~step ~~films~~would be ~~are~~performed ~~released.~~to ~~Film~~measure ~~rental~~the ~~costs~~potential ~~can~~goodwill ~~also~~impairment. ~~vary~~Fair values are determined based on a multiple of cash flows, which was eight times for the ~~length~~evaluations ofperformed during 2006 and 2007 and six and a ~~film~~half times for the evaluation performed during 2008. Significant judgment is involved in estimating cash flows and fair value. Management’s ~~run~~estimates are based on historical and projected operating performance as well as recent market transactions. ~~Generally~~Prior to January 1, a2008, we ~~film~~considered ~~that~~our ~~runs~~theatres reporting units for apurposes ~~longer~~of ~~period~~evaluating ~~results~~goodwill for impairment. Recent changes in ~~lower~~the ~~film~~organization, ~~rental~~including ~~costs~~changes asin athe ~~percentage~~structure of ~~revenues~~the executive management team, the initial public offering of Cinemark Holdings, Inc.’s common stock, the resulting changes in the ~~Film~~level ~~rental~~at ~~rates~~which ~~are~~the ~~negotiated~~management team evaluates the business on a ~~film-by-film~~regular basis, and the Century Acquisition that increased the size of our theatre- base by~~-theatre~~ ~~basis.~~approximately ~~Advertising costs~~25%, ~~which~~led ~~are~~management ~~expensed~~to conclude asthat ~~incurred,~~its ~~are~~U.S. ~~primarily~~regions ~~fixed~~and atinternational ~~the~~countries ~~theatre~~are ~~level~~now asmore ~~daily~~reflective ~~movie~~of how we manage ~~directories~~and ~~placed~~operate inour ~~newspapers~~business. ~~represent~~Accordingly, the ~~largest~~U.S. ~~component~~regions ofand ~~advertising~~international ~~costs.~~countries ~~The~~represent ~~monthly~~the ~~cost~~appropriate reporting units for purposes of ~~these~~evaluating ~~advertisements~~goodwill isfor ~~based~~impairment. onConsequently, effective ~~among~~January 1, ~~other things~~2008, management changed the ~~size~~reporting ofunit ~~the~~to ~~directory~~sixteen ~~and~~regions in the U.S. and ~~frequency~~each of eight countries internationally (Honduras, El Salvador, Nicaragua, Costa Rica and ~~size~~Panama are ofconsidered ~~the~~one ~~newspaper’s~~reporting ~~circulation~~unit) from approximately four hundred theatres. The ~~internet~~goodwill impairment istest ~~becoming~~performed during December 2007 that resulted in the ~~primary~~recording ~~way~~of toimpairment charges ~~check~~during ~~movie~~the ~~showtimes~~year ended December 31, ~~replacing~~2007 reflected the ~~traditional~~final ~~newspaper~~calculation ~~advertisements~~utilizing theatres as reporting units.

~~Concession supplies expense is variable in nature and fluctuates with our concession revenues.~~15 ~~We purchase concession supplies to replace units sold. We negotiate prices for concession supplies directly with concession vendors and manufacturers to obtain bulk rates.~~

AlthoughTable salariesof 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. Contents

~~Facility~~Tradename ~~lease~~intangible ~~expense~~assets isare ~~primarily~~tested afor ~~fixed~~impairment ~~cost~~ at least annually during the ~~theatre~~fourth quarter ~~level~~or aswhenever ~~most~~events ofor ~~our~~changes ~~facility leases~~in ~~require~~circumstances aindicate ~~fixed~~the ~~monthly~~carrying ~~minimum~~value ~~rent~~may ~~payment~~not be recoverable. ~~Certain~~We estimate the fair value of our ~~leases~~tradenames ~~are~~by ~~subject~~applying ~~to percentage~~an ~~rent~~estimated ~~only~~market ~~while~~royalty rate ~~others~~that ~~are~~could ~~subject~~be tocharged ~~percentage~~for ~~rent~~the inuse ~~addition~~of our tradename to ~~their~~forecasted ~~fixed~~future ~~monthly rent~~revenues, ifwith aan adjustment ~~target~~for ~~annual~~the ~~revenue~~present ~~level~~value isof ~~achieved~~such royalties. ~~Facility~~If ~~lease~~the ~~expense~~estimated asfair avalue ~~percentage~~is ofless than the ~~revenues~~carrying isvalue, ~~also~~the ~~affected~~tradename byintangible ~~the~~asset ~~number~~is ofwritten ~~leased~~down ~~versus~~to ~~fee~~the ~~owned~~estimated ~~facilities~~fair value.

~~Utilities~~We ~~and~~recorded ~~other~~asset ~~costs~~impairment ~~include~~charges, ~~certain~~including ~~costs~~goodwill ~~that~~impairment ~~are~~charges, ~~fixed~~of ~~such~~$28.5 million, $86.6 million asand ~~property~~$113.5 ~~taxes~~for the years ended December 31, ~~certain~~2006, 2007 and 2008, respectively. We ~~costs~~cannot ~~which~~assure ~~are~~you ~~variable~~that ~~such~~additional asimpairment ~~liability~~charges ~~insurance~~will not be required in the future, and ~~certain~~such charges ~~costs~~may ~~that~~have ~~possess~~an ~~both~~adverse ~~fixed~~effect on our financial condition and results of operations. See ~~variable~~“Management’s ~~components~~Discussion ~~such~~and asAnalysis ~~utilities,~~of ~~repairs~~Financial Condition and ~~maintenance~~Results of Operations” and ~~security~~Notes 10 ~~services~~and 11 to the consolidated financial statements.

~~Critical~~ Our ~~Accounting~~results ~~Policies~~of operations vary from period to period based upon the quantity and quality of the motion pictures that we show in our theatres.

WeOur ~~prepare~~results ~~our~~of ~~consolidated~~operations ~~financial~~vary ~~statements~~from inperiod ~~conformity~~to ~~with~~period ~~accounting~~based ~~principles generally~~upon ~~accepted in~~ the ~~United~~quantity ~~States~~and quality of the ~~America.~~motion Aspictures ~~such,~~that we ~~are~~show ~~required~~in toour ~~make~~theatres. ~~certain estimates~~The ~~and~~major ~~assumptions~~film ~~that~~distributors wegenerally ~~believe~~release ~~are~~the films ~~reasonable~~they ~~based~~anticipate ~~upon~~will ~~the~~be ~~information~~most ~~available. These~~successful ~~estimates~~during the summer and ~~assumptions~~holiday ~~affect~~seasons. ~~the~~Consequently, we ~~reported~~typically ~~amounts~~generate ofhigher ~~assets~~revenues ~~and~~during ~~liabilities~~these atperiods. ~~the~~Due ~~date of~~to the ~~financial~~dependency ~~statements~~on ~~and~~ the ~~reported~~success ~~amounts~~ of films ~~revenues~~released ~~and~~from ~~expenses~~one ~~during~~period to the ~~periods presented.~~next, ~~The~~results ~~significant~~of ~~accounting~~operations ~~policies,~~for ~~which~~one weperiod ~~believe~~may ~~are~~not ~~the~~be indicative ~~most~~of ~~critical~~the toresults ~~aid~~for ~~in fully~~the ~~understanding~~following ~~and~~period ~~evaluating~~or ~~our~~the ~~reported~~same ~~consolidated~~period ~~financial~~in ~~results~~the ~~include~~following ~~the~~year. ~~following:~~

18 The interests of Madison Dearborn Partners (“MDP”) may not be aligned with yours.

~~Table~~ We are controlled by an affiliate of ~~Contents~~MDP. MDP beneficially owns approximately 47% of our common stock and under a director nomination agreement, are entitled to designate nominees for five members of our board of directors. Accordingly, MDP has influence and effectively controls our corporate and management policies and determines, without the consent of our other stockholders, the outcome of any corporate transaction or other matters submitted to our stockholders for approval, including potential mergers or acquisitions, asset sales and other significant corporate transactions. MDP could take other actions that might be desirable to MDP but not to other stockholders.

~~Revenue~~ Provisions in our corporate documents and ~~Expense~~certain ~~Recognition~~agreements, as well as Delaware law, may hinder a change of control.

~~Revenues~~Provisions ~~are~~in ~~recognized~~our ~~when~~amended ~~admissions~~ and ~~concession~~restated ~~sales~~certificate ~~are received at the box office and screen advertising is shown in the theatres. We record proceeds from the sale~~ of ~~gift~~incorporation ~~cards~~ and ~~other~~ ~~advanced~~bylaws, ~~sale-type~~as ~~certificates~~well ~~in current liabilities and recognize admissions and~~as ~~concession~~provisions ~~revenue~~of ~~when~~the aDelaware ~~holder~~General ~~redeems~~Corporation ~~the~~Law, ~~card~~could ordiscourage ~~certificate.~~unsolicited Weproposals ~~recognize unredeemed gift~~to ~~cards~~acquire ~~and~~us, ~~other~~even ~~advanced~~though ~~sale-type certificates as revenue only after~~ such aproposals ~~period~~may ofbe ~~time indicates,~~beneficial ~~based~~to onyou. ~~historical~~These ~~experience,~~provisions ~~the likelihood of redemption is remote.~~include:

~~Film~~• ~~rental~~authorization ~~costs~~of ~~are~~our ~~accrued~~board ~~based~~of ondirectors ~~the~~to ~~applicable~~issue ~~box~~shares ~~office~~of ~~receipts~~preferred ~~and~~stock ~~either~~without ~~the mutually~~stockholder ~~agreed~~approval; ~~upon~~• ~~firm~~a ~~terms~~board ~~established prior to the opening~~ of ~~the~~directors ~~picture~~classified orinto ~~estimates~~three classes of ~~the final~~directors ~~mutually~~with ~~agreed upon settlement, which occurs at~~ the ~~conclusion~~ directors of ~~the~~each ~~picture run~~class, subject to ~~the~~ ~~film~~shorter ~~licensing~~initial ~~arrangement.~~terms ~~Estimates~~for ~~are~~some ~~based~~directors, onhaving ~~the~~staggered, ~~expected~~three-year ~~success~~terms; of• aprovisions ~~film~~regulating ~~over~~ the ~~length~~ ofability ~~its run in the theatres. The success~~ of aour ~~film~~stockholders ~~can~~to ~~typically~~nominate bedirectors ~~determined~~for aelection ~~few~~or ~~weeks after~~to abring ~~film~~matters isfor ~~released~~action ~~when~~at ~~initial~~annual ~~box~~meetings ~~office performance~~ of ~~the~~our ~~film~~stockholders; ~~is known. Accordingly, final settlements typically approximate estimates since box office receipts are known at the time the estimate is made~~ and ~~the~~• ~~expected~~provisions ~~success~~ of aDelaware ~~film~~law ~~over~~that ~~the~~restrict ~~length~~many ofbusiness ~~its~~combinations ~~run~~and inprovide ~~theatres~~that ~~can typically~~directors beserving ~~estimated~~on ~~early~~classified inboards ~~the film’s run. The final film settlement amount is negotiated at the conclusion~~ of ~~the~~directors, ~~film’s~~such ~~run~~as ~~based upon how a film actually performs. If actual settlements are higher than those estimated~~ours, ~~additional~~may ~~film~~be ~~rental~~removed ~~costs~~only ~~are~~for ~~recorded at that time~~cause. ~~We recognize advertising costs and any sharing arrangements with film distributors in the same accounting period. Our advertising costs are expensed as incurred.~~

~~Impairment~~ Certain provisions of ~~Long-Lived~~the ~~Assets~~9 3/4% senior discount notes indenture and the senior secured credit facility may have the effect of delaying or preventing future transactions involving a “change of control.” A “change of control” would require us to make an offer to the holders of our 9 3/4% senior discount notes to repurchase all of the outstanding notes at a purchase price equal to 101% of the aggregate principal amount outstanding plus accrued unpaid interest to the date of the purchase. A “change of control” would also be an event of default under our senior secured credit facility.

WeThe Impairment ~~review long-lived assets for impairment on a quarterly basis~~ or ~~whenever~~Insolvency ~~events or changes in circumstances indicate the carrying amount~~ of ~~the~~Other ~~assets~~Financial ~~may~~Institutions ~~not~~Could beAdversely ~~fully~~Affect ~~recoverable~~Us. ~~We assess~~ ~~many factors including the following to determine whether to impair individual theatre assets:~~

• actual theatre level cash flows; • future years budgeted theatre level cash flows; • theatre property and equipment carrying values; • goodwill carrying values; • the age of a recently built theatre; • competitive theatres in the marketplace; • the sharing of a market with our other theatres; • changes in foreign currency exchange rates; • the impact of recent ticket price changes; • available lease renewal options; and • other factors considered relevant in our assessment of impairment of individual theatre assets.16

Long-livedTable assets are evaluated for impairment on an individual theatre basis or a group basis if the group of theatres shares the same marketplace, 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 period 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’s carrying value, we then compare the carrying value of the asset with its estimated fair value, which is determined based on a multiple of cash flows. 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. Contents

~~Goodwill~~ We have exposure to different counterparties with regard to our interest rate swap agreements. These transactions expose us to credit risk in the event of default of our counterparties to such agreements. We also have exposure to financial institutions used as depositories of our corporate cash balances. If our counterparties and financial institutions become impaired or insolvent, this could have a material impact on our results of operations or impair our ability to access our cash.

~~Our recorded goodwill was $45.0~~Item ~~million at December 31, 2004~~2. ~~We evaluate goodwill for~~Properties 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 level of identifiable cash flows and the level at which goodwill is recorded. The evaluation is a two-step approach requiring us to compute the fair value of a reporting unit and compare it with its carrying value. If the carrying value exceeds fair value, a second step would be performed to measure the potential goodwill impairment. Fair value is

19 United States

~~Table~~ As of ~~Contents~~December 31, 2008, we operated 250 theatres, with 3,135 screens, pursuant to leases and own the land and building for 43 theatres, with 607 screens, in the U.S. During 2008, we acquired two theatres with 28 screens and built ten new theatres with 128 screens. Our leases are generally entered into on a long-term basis with terms, including renewal options, generally ranging from 20 to 45 years. As of December 31, 2008, approximately 8% of our theatre leases in the U.S., covering 21 theatres with 167 screens, have remaining terms, including optional renewal periods, of less than five years. Approximately 12% of our theatre leases in the U.S., covering 30 theatres with 229 screens, have remaining terms, including optional renewal periods, of between six and 15 years and approximately 80% of our theatre leases in the U.S., covering 199 theatres with 2,739 screens, have remaining terms, including optional renewal periods, of more than 15 years. The leases generally provide for a fixed monthly minimum rent payment, with certain leases also subject to additional percentage rent if a target annual revenue level is achieved. We lease an office building in Plano, Texas for our corporate office.

~~determined based on a multiple of cash flows. When estimated fair value is determined to be~~ International ~~lower than the carrying value of the asset, the asset is written down to its estimated fair value.~~

~~Acquisitions~~ As of December 31, 2008, internationally, we operated 127 theatres, with 1,041 screens, all of which are leased pursuant to ground or building leases. In 2008, we acquired two theatres with 16 screens and built five new theatres with 31 screens in Latin America. Our international leases are generally entered into on a long term basis with terms generally ranging from 10 to 20 years. The leases generally provide for contingent rental based upon operating results (some of which are subject to an annual minimum). Generally, these leases include renewal options for various periods at stipulated rates. Five international theatres with 40 screens have a remaining term, including optional renewal periods, of less than five years. Approximately 27% of our international theatre leases, covering 34 theatres and 290 screens, have remaining terms, including optional renewal periods, of between six and 15 years and approximately 69% of our international theatre leases, covering 88 theatres and 711 screens, have remaining terms, including optional renewal periods, of more than 15 years.

WeSee ~~account~~Note ~~for~~21 ~~acquisitions~~to ~~under~~ the ~~purchase~~consolidated ~~method~~financial ofstatements accounting. The purchase method requires that we estimate the fair value of the assets and liabilities acquired and allocate consideration paid accordingly. For significant acquisitions, we obtain independent third party valuation studies for ~~certain~~information ofregarding ~~the~~our ~~assets~~ domestic and ~~liabilities~~international ~~acquired~~lease ~~to assist us in determining fair value~~commitments. ~~The~~We ~~estimation~~periodically ofreview the ~~fair~~profitability ~~values~~ of ~~the~~each ~~assets and liabilities acquired involves a number~~ of ~~estimates and assumptions that could differ materially from the actual amounts. We~~our ~~completed~~theatres, ~~acquisitions~~particularly inthose ~~2003~~whose ~~and~~lease ~~2004~~terms asare ~~discussed~~nearing inexpiration, ~~Note 4~~ to ~~our~~determine ~~consolidated~~whether ~~financial~~to ~~statements~~continue its operations.

~~Income~~Item 3. ~~Taxes~~Legal Proceedings

We ~~use~~resolved ana ~~asset~~lawsuit ~~and~~filed ~~liability~~by ~~approach~~the toDOJ ~~financial~~in ~~accounting~~March 1999 ~~and~~which ~~reporting~~alleged ~~for~~certain ~~income~~violations ~~taxes.~~of the ~~Deferred~~ADA ~~income~~relating ~~taxes~~to ~~are~~wheelchair ~~provided~~seating ~~when~~arrangements ~~tax~~in ~~laws~~certain ~~and~~of ~~financial~~our ~~accounting~~stadium-style ~~standards~~theatres. ~~differ~~We ~~with~~and ~~respect~~the DOJ agreed to ~~the~~a ~~amount~~consent oforder ~~income~~which ~~for~~was aentered ~~year~~by ~~and~~the U.S. District Court for the ~~bases~~Northern District of ~~assets~~Ohio, ~~and~~Eastern ~~liabilities~~Division, on November 15, 2004. AUnder ~~valuation~~the consent order, we are required ~~allowance~~to ismake ~~recorded~~modifications to ~~reduce~~wheelchair seating locations in fourteen stadium-style movie theatres and spacing and companion seating modifications in 67 auditoriums at other stadium-styled movie theatres. These modifications must be completed by November 2009. We are currently in compliance with the ~~carrying~~consent ~~amount~~order. ofUpon ~~deferred~~completion ~~tax~~of ~~assets~~these ~~unless~~modifications, itthese istheatres ~~more~~will ~~likely~~comply with ~~than~~wheelchair ~~not~~seating ~~that~~requirements, ~~such~~and ~~assets~~no further modifications will be ~~realized.~~required ~~Income~~to ~~taxes~~our ~~are~~other stadium-style ~~provided~~movie theatres in the United States existing on ~~unremitted~~the ~~earnings~~date ~~from~~of the consent order. In ~~foreign~~addition, ~~subsidiaries~~under ~~unless~~the ~~such~~consent ~~earnings~~order, ~~are~~the ~~expected~~DOJ toapproved bethe ~~indefinitely~~seating ~~reinvested.~~plans ~~Income~~for ~~taxes~~nine stadium-styled movie ~~have~~theatres then under construction and also ~~been~~created ~~provided~~a safe harbor framework for ~~potential~~us ~~tax~~to ~~assessments~~construct ~~and~~all of ~~the~~our ~~related~~future ~~tax~~stadium-style ~~accruals~~movie ~~are~~theatres. The DOJ has stipulated that all theatres built in compliance with the ~~consolidated~~ ~~balance~~consent ~~sheets.~~order Towill comply with the ~~extent~~wheelchair ~~tax~~seating ~~accruals~~requirements ~~differ~~of ~~from~~the ~~actual~~ADA. We ~~payments~~do ornot ~~assessments,~~ believe that our requirements under the ~~accruals~~consent order will bematerially ~~adjusted~~affect our business or financial condition.

20 From time to time, we are involved in other various legal proceedings arising from the ordinary course of our business operations, such as personal injury claims, employment matters, landlord-tenant disputes and contractual

~~Table of Contents~~17

ResultsTable of Operations Contents

~~Set~~disputes, ~~forth~~some ~~below~~of iswhich aare ~~summary~~covered ofby ~~consolidated~~insurance. ~~operating~~We ~~revenues~~believe ~~and~~our ~~expenses~~potential liability, ~~certain income~~with ~~statement~~respect ~~items~~to ~~expressed~~proceedings ascurrently apending, ~~percentage~~is ofnot ~~revenues~~material, ~~average~~individually ~~screen~~or ~~count~~in ~~and revenues per average screen for~~ the ~~three~~aggregate, ~~most~~to ~~recent~~our financial ~~years ended December 31~~position, ~~2002,~~results ~~2003~~of operations and ~~2004~~cash flows.

	Year Ended December 31,
	2002			2003			2004
Operating Data (in millions)(1):
Revenues:
Admissions	$	595.3		$	597.5		$	647.0
Concession		291.8			300.6			321.6
Other		48.8			52.8			55.6
Total revenues	$	935.9		$	950.9		$	1,024.2
Cost of operations:
Film rentals and advertising	$	320.7		$	324.9		$	348.8
Concession supplies		50.4			49.7			53.8
Salaries and wages		96.7			97.2			103.1
Facility lease expense		115.6			119.5			126.6
Utilities and other		103.1			110.8			113.0
Total cost of operations	$	686.5		$	702.1		$	745.3
Operating data as a percentage of total revenues (1):
Revenues:
Admissions		63.6	%		62.8	%		63.2	%
Concession		31.2			31.6			31.4
Other		5.2			5.6			5.4
Total revenues		100.0	%		100.0	%		100.0	%
Cost of operations(2):
Film rentals and advertising		53.9	%		54.4	%		53.9	%
Concession supplies		17.3			16.5			16.7
Salaries and wages		10.3			10.2			10.1
Facility lease expense		12.4			12.6			12.4
Utilities and other		11.0			11.7			11.0
Total cost of operations		73.4	%		73.8	%		72.8	%
Average screen count (month end average)		2,998			3,027			3,135
Revenues per average screen	$	312,183		$	314,178		$	326,664

PART II

(1)		Certain reclassifications have been made to the 2002 and 2003 consolidated financial statements to conform to the 2004 presentation. Results exclude the results of our two United Kingdom theatres and our eleven Interstate theatres sold during 2004. The results of operations for these theatres are included as discontinued operations for all periods presented.
(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.

Item 5. Market for Registrant’s Common Equity and Related Stockholder Matters

21Market Information and Holder

~~Table~~ There is no established public trading market for our common stock. As of ~~Contents~~December 31, 2008, we had 27,896,316 shares of Class A common stock outstanding, all of which were held by Cinemark Holdings, Inc.

~~Comparison of Years Ended December 31, 2004 and December 31, 2003~~Dividends

~~Revenues.~~We ~~Total~~have ~~revenues~~never ~~for~~declared ~~2004~~or ~~increased~~paid toany ~~$1,024.2 million~~dividends ~~from~~on ~~$950~~our common stock.~~9 million~~ ~~for~~Our ~~2003,~~ability to pay dividends ~~representing~~is alimited ~~7.7%~~by ~~increase.~~the ~~Admissions~~terms ~~revenues~~of ~~increased~~our ~~8.3%~~indentures toand ~~$647.0 million~~Cinemark ~~for~~USA, ~~2004~~Inc’s ~~from $597.5 million~~senior ~~for~~secured ~~2003.~~credit ~~Concession~~facility, which ~~revenues~~restrict ~~increased~~our ~~7.0%~~ability to ~~$321.6 million~~pay ~~for~~dividends ~~2004~~and ~~from~~the ~~$300.6 million~~ability ~~for~~of ~~2003.~~certain ~~The~~of ~~increased~~our ~~revenues~~subsidiaries ~~were~~to ~~partially~~pay dividends. ~~attributable~~Under toour adebt ~~3.6%~~instruments, ~~increase~~we ~~in attendance~~may ~~from~~pay ~~173.1 million~~a ~~patrons~~cash ~~for~~dividend ~~2003~~up to ~~179.3 million~~a ~~patrons~~specified ~~for 2004.~~amount, ~~The~~provided ~~increase~~we inhave ~~attendance~~satisfied ~~for~~certain ~~2004~~financial ~~was~~covenants ~~primarily~~in, ~~due~~and toare ~~new~~not ~~theatre~~in ~~openings~~default ~~and~~under, ~~quality~~our ~~film~~debt ~~product~~instruments. Furthermore, ~~including~~certain ~~the successful release~~ of ~~Shrek~~our 2,foreign ~~The~~subsidiaries ~~Passion~~currently ofhave ~~the~~a ~~Christ,~~deficit ~~Spider-Man~~in 2,retained ~~Harry~~earnings ~~Potter~~which ~~and~~prevents ~~the~~them ~~Prisoner~~from ofdeclaring ~~Azkaban~~ and ~~The~~paying ~~Incredibles~~dividends ~~during~~from ~~2004~~those subsidiaries. InThe declaration ~~addition,~~of ~~our~~future ~~average ticket~~dividends ~~price~~will ~~increased~~be ~~from~~at ~~$3.45~~the ~~for~~discretion ~~2003~~of toour ~~$3.61~~board ~~for~~of ~~2004~~directors and ~~our~~will ~~concession revenues per patron~~depend ~~increased~~upon ~~from~~many ~~$1.74~~factors, ~~for~~including ~~2003~~our toresults ~~$1.79~~of ~~for~~operations, ~~2004.~~financial ~~Revenues~~condition, ~~per~~earnings, ~~screen~~capital requirements, ~~increased~~limitations ~~4.0%~~in toour ~~$326,664~~debt ~~for 2004~~agreements ~~from~~and ~~$314,178~~legal ~~for 2003~~requirements.

~~Cost~~Securities ofAuthorized ~~Operations. Cost of operations was $745.3 million, or 72.8% of revenues,~~ for ~~2004 compared~~Issuance tounder ~~$702.1 million,~~Equity orCompensation ~~73.8% of revenues, for 2003. The decrease in cost of operations as a~~Plans percentage of revenues was primarily due to the 7.7% 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 rentals~~The ~~and~~following ~~advertising~~table ~~costs~~provides ~~were~~information ~~$348.8 million,~~about orthe ~~53.9%~~securities ofauthorized ~~admissions~~for ~~revenues,~~issuance ~~for~~under ~~2004~~the ~~compared~~equity tocompensation ~~$324.9 million,~~plans ~~or 54.4%~~ of ~~admissions~~Cinemark ~~revenues~~Holdings, ~~for 2003~~Inc. ~~The decrease in film rentals and advertising costs~~ as ~~a percentage~~ of ~~admissions revenues was due in part to the increase in international business~~December 31, ~~which generally has lower film rental rates, and also due to the long~~2008: successful run of certain high-grossing films during 2004. Concession supplies expense increased to 16.7% of concession revenues for 2004 from 16.5% for 2003 primarily due to an increase in international business, which generally has higher concession supplies costs.

Salaries and wages increased to $103.1 million for 2004 from $97.2 million for 2003 primarily due to new theatre openings and the increase in attendance. Facility lease expense increased to $126.6 million for 2004 from $119.5 million for 2003 primarily due to new theatre openings and increased percentage rent expense. Utilities and other costs increased to $113.0 million for 2004 from $110.8 million for 2003 primarily due to new theatre openings and increased utility rates in certain regions in which we operate.

Number of

Securities Remaining

Number of

Weighted

Available for Future

Securities to be

Average Exercise

Issuance Under

Issued upon

Price of

Equity

Exercise of

Outstanding

Compensation Plans

Outstanding

Options,

(Excluding

Options, Warrants

Warrants and

Securities Reflected

Plan Category

and Rights

Rights

in the First Column)

Equity compensation plans approved by security holders

6,139,670

7.63

11,629,044

Equity compensation plans not approved by security holders

—

Total

6,139,670

7.63

11,629,044

~~General and Administrative Expenses. General and administrative expenses, excluding the stock~~18 option compensation and change of control expenses related to the Recapitalization, increased to $51.7 million for 2004 from $44.3 million for 2003. The increase was primarily due to increases in salary and bonus expense of approximately $4.7 million and legal fees of approximately $2.2 million.

StockTable option compensation expense of $16.3 million and change of control fees of $15.7 million were recorded during 2004 as a result of the Recapitalization. See Note 3 to the consolidated financial statements. Contents

~~Depreciation and Amortization. Depreciation and amortization expense was $67.1~~Item ~~million for 2004 compared to $65~~7.~~1 million~~ ~~for~~Management’s ~~2003.~~Discussion ~~The~~and ~~increase~~Analysis isof ~~primarily~~Financial ~~due~~Condition toand ~~new~~Results ~~theatre openings the latter part~~ of ~~2003 and 2004.~~Operations

~~Impairment~~The offollowing ~~Long-Lived~~discussion ~~Assets.~~and Weanalysis ~~recorded~~should ~~asset~~be ~~impairment~~read ~~charges~~in onconjunction ~~assets~~with ~~held~~the ~~and used~~financial ofstatements ~~$1.7 million~~and inaccompanying ~~2004~~notes ~~and~~included ~~$5.0 million~~ in ~~2003,~~this ~~as follows:~~report.

	Years Ended December 31,
	2004		2003
U.S.	$	1.7	$	3.0
Mexico		—		1.2
Chile		—		0.7
Other		—		0.1
Total	$	1.7	$	5.0

Overview

~~(Gain)~~On ~~Loss~~August 2, on2006, ~~Sale~~Cinemark Holdings, Inc. was formed as the Delaware holding company of Cinemark, ~~Assets~~Inc. ~~and~~On ~~Other~~August 7, 2006, the Cinemark, Inc. Westockholders ~~recorded~~entered into a ~~loss~~share onexchange agreement ~~sale~~pursuant ofto ~~assets~~which ~~and~~they ~~other~~agreed to exchange their shares of ~~$4.9~~ Class ~~million~~A incommon ~~2004~~stock ~~compared~~for toan equal anumber ~~gain~~of onshares ~~sale~~of common stock of ~~assets~~Cinemark Holdings, Inc. (“Cinemark Share Exchange”). The Cinemark Share Exchange was completed on October 5, 2006 and ~~other~~facilitated the acquisition of $1Century Theatres, Inc.2 (“Century Acquisition”). On October ~~million~~5, ~~during~~2006, ~~2003~~Cinemark, Inc. became a wholly owned ~~The~~subsidiary ~~loss~~of ~~recorded~~Cinemark ~~during~~Holdings, ~~2004~~Inc. ~~consisted~~Due ofto a ~~loss~~change onin ~~sale~~reporting ofentity that occurred as a result ~~land~~of ~~parcel~~the Cinemark Share Exchange, Cinemark Holdings, Inc.’s accounting basis has been pushed down to us effective on the ~~write-off~~date of ~~a license~~the ~~agreement~~Cinemark ~~that~~Share ~~was~~Exchange, ~~terminated~~October 5, ~~the~~2006. ~~write-off~~The following presents results of ~~theatre~~operations for the periods preceding the Cinemark Share Exchange as Predecessor and the periods subsequent to the Cinemark Share Exchange as Successor. See Note 4 to the consolidated financial statements.

As of December 31, 2008, we managed our business under two operating segments — U.S. markets and international markets, in accordance with SFAS No. 131 “Disclosures about Segments of an Enterprise and Related Information.” See Note 22 to the consolidated financial statements.

~~Table of Contents~~19

equipmentTable that was replaced, and the write-off of theatre equipment and goodwill associated with theatres that closed during the year. Contents

~~Interest~~Results ~~Expense. Interest costs incurred, including amortization~~ of ~~debt issue costs, was~~Operations $72.9 million for 2004 compared to $54.2 million for 2003. The increase is primarily due to the issuance of the 9 3/4% senior discount notes on March 31, 2004 and the amortization of the related debt issue costs. See Note 3 to the consolidated financial statements.

~~Loss~~On onOctober 5, ~~Early Retirement of Debt. During 2004~~2006, we ~~recorded~~completed aour ~~loss~~acquisition ~~on early retirement~~ of ~~debt of~~Century ~~$6.0 million~~Theatres, ~~which~~Inc. ~~represented~~Our ~~the~~results ~~write-off~~ of ~~unamortized debt issue costs, unamortized bond~~ ~~discount,~~operations ~~tender~~reflect ~~offer repurchase costs, including premiums paid, and other fees associated with~~ the ~~repurchase~~inclusion ~~and subsequent retirement~~ of ~~our 8 1/2% senior subordinated notes and a portion of our 9% senior subordinated notes related to~~ the ~~Recapitalization.~~Century ~~During~~theatres ~~the~~beginning ~~2003 period, we recorded a loss~~ on ~~early~~the ~~retirement~~date of ~~debt of $7~~acquisition.~~5 million,~~ ~~which related to the write-off of unamortized~~See ~~debt~~Note issue costs, unamortized bond premiums/discounts and tender offer repurchase costs, including premiums paid, and other fees associated with the retirement of certain debt agreements, including our former 9 5~~/8%~~ ~~senior~~to ~~subordinated notes, and~~ the ~~refinancing~~consolidated offinancial ~~our then existing credit facility~~statements.

~~Income~~The ~~Taxes.~~following ~~Income~~table ~~tax~~sets ~~expense~~forth, ~~of $17.3 million was recorded~~ for ~~2004~~the ~~compared~~periods toindicated, ~~$25.0 million~~the ~~recorded~~percentage ~~for~~of ~~2003. The effective tax rate was 42.9% for 2004~~revenues ~~versus~~represented ~~34.6%~~by ~~for~~certain ~~2003.~~items ~~The increase~~reflected in ~~the~~our ~~effective~~consolidated ~~tax~~statements ~~rate~~of ~~was primarily due to adjustments made to the inflation adjusted~~operations: ~~tax accumulated depreciation in Mexico.~~

Income (Loss) from Discontinued Operations, Net of Taxes. We recorded income from discontinued operations, net of taxes, of $3.6 million during 2004 and a loss from discontinued operations, net of taxes, of $2.7 million during 2003. The income for 2004 includes the results of operations of our two United Kingdom theatres that were sold on April 30, 2004, the loss on sale of the United Kingdom theatres, the results of operations of the eleven Interstate theatres that were sold on December 23, 2004 and the gain on sale of the Interstate theatres, all of which are presented net of taxes. The loss recorded for 2003 primarily includes the results of operations of our United Kingdom theatres, including an asset impairment charge of $2.5 million. See Note 5 to the consolidated financial statements.


	Period from
	January 1, 2006			October 5, 2006
	to			to			Year Ended December 31,
	October 4, 2006			December 31, 2006			2007			2008
	(Predecessor)			(Successor)			(Successor)			(Successor)

Operating data (in millions):
Revenues
Admissions	$	514.2		$	246.1		$	1,087.5		$	1,127.0
Concession		260.2			115.6			516.5			534.8
Other		54.7			29.8			78.8			80.5

Total revenues	$	829.1		$	391.5		$	1,682.8		$	1,742.3

Theatre operating costs⁽²⁾
Film rentals and advertising	$	275.0		$	131.0		$	589.7		$	612.2
Concession supplies		41.9			17.1			81.1			86.6
Salaries and wages		79.0			39.6			173.3			181.0
Facility lease expense		109.5			48.3			212.7			225.6
Utilities and other		100.9			43.9			191.3			205.8

Total theatre operating costs	$	606.3		$	279.9		$	1,248.1		$	1,311.2

Operating data as a percentage of total revenues:
Revenues
Admissions		62.0	%		62.9	%		64.6	%		64.7	%
Concession		31.4			29.5			30.7			30.7
Other		6.6			7.6			4.7			4.6

Total revenues		100.0	%		100.0	%		100.0	%		100.0	%

Theatre operating costs⁽¹⁾⁽²⁾
Film rentals and advertising		53.5	%		53.2	%		54.2	%		54.3	%
Concession supplies		16.1			14.8			15.7			16.2
Salaries and wages		9.5			10.1			10.3			10.4
Facility lease expense		13.2			12.3			12.6			12.9
Utilities and other		12.2			11.2			11.4			11.8
Total theatre operating costs		73.1	%		71.5	%		74.2	%		75.3	%

Average screen count (month end average)		3,375			4,207			4,558			4,703

Revenues per average screen	$	245,649		$	93,072		$	369,200		$	370,469

Comparison of Years Ended December 31, 2003 and December 31, 2002


⁽¹⁾		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.

⁽²⁾		Excludes depreciation and amortization expense.

~~Revenues. Total revenues for 2003 increased to $950.9 million from $935.9 million in 2002,~~20 representing a 1.6% increase. Admissions revenues increased 0.4% to $597.5 million for 2003 from $595.3 million for 2002. Concession revenues increased 3.0% to $300.6 million for 2003 from $291.8 million for 2002. The increased revenues were partially attributable to a 0.6% increase in attendance from 172.1 million patrons for 2002 to 173.1 million patrons for 2003. Average ticket prices for 2003 were consistent with 2002. Concession revenues per patron increased from $1.70 for 2002 to $1.74 for 2003. The increase in concession revenues per patron was primarily a result of the successful implementation of a domestic concession price increase during the fourth quarter of 2002. Revenues per average screen increased 0.6% to $314,178 for 2003 from $312,183 for 2002.

CostTable of Operations. Cost of operations was $702.1 million, or 73.8% of revenues, for 2003 compared to $686.5 million, or 73.4% of revenues, for 2002. Contents

~~Film~~Comparison ~~rentals~~of ~~and~~Years ~~advertisings~~Ended ~~costs were $324.9~~December ~~million~~31, or2008 ~~54.4%~~and ~~of admissions revenues, for 2003 compared to $320.7~~December ~~million~~31, ~~or 53.9% of admissions revenues, for 2002. The increase is due to~~2007 increased film rental costs and promotional activities during 2003. Concession supplies expense decreased to 16.5% of concession revenues for 2003 from 17.3% for 2002 primarily as a result of the successful implementation of a domestic concession price increase during the fourth quarter of 2002.

~~Salaries~~Revenues. ~~and~~Total ~~wages~~revenues increased to $9759.25 million ~~for 2003 from $96.7 million for 2002. Facility lease expense increased~~ to $~~119~~1,742.53 million for ~~2003~~2008 from $~~115~~1,682.6 8 million for ~~2002~~2007, ~~primarily~~representing ~~due~~a ~~to new~~3.5% ~~theatre openings and increased percentage rent expense~~increase. ~~Utilities~~The ~~and~~table ~~other~~below, ~~costs~~presented ~~increased~~by toreportable operating ~~$110.8 million~~segment, ~~for~~summarizes ~~2003~~our ~~from~~year-over-year ~~$103.1 million~~revenue ~~for~~performance ~~2002~~and ~~primarily~~certain ~~due~~key toperformance ~~increased utility costs,~~indicators ~~insurance~~that ~~and~~impact ~~repairs~~our ~~and maintenance expense~~revenues.


	U.S. Operating Segment							International Operating Segment							Consolidated
	Year Ended							Year Ended							Year Ended
	December 31,							December 31,							December 31,
					%							%							%
	2007		2008		Change			2007		2008		Change			2007		2008		Change
Admissions revenues (in millions)	$	879.1	$	889.1		1.1	%	$	208.4	$	237.9		14.2	%	$	1,087.5	$	1,127.0		3.6	%
Concession revenues (in millions)	$	424.4	$	426.5		0.5	%	$	92.1	$	108.3		17.6	%	$	516.5	$	534.8		3.5	%
Other revenues (in millions) ⁽¹⁾	$	45.6	$	40.9		(10.3	%)	$	33.2	$	39.6		19.3	%	$	78.8	$	80.5		2.2	%
Total revenues (in millions) ⁽¹⁾	$	1,349.1	$	1,356.5		0.5	%	$	333.7	$	385.8		15.6	%	$	1,682.8	$	1,742.3		3.5	%
Attendance (in millions)		151.7		147.9		(2.5	%)		61.0		63.4		3.9	%		212.7		211.3		(0.7	%)
Revenues per average screen ⁽¹⁾	$	376,771	$	368,313		(2.2	%)	$	341,451	$	378,252		10.8	%	$	369,200	$	370,469		0.3	%

~~Table~~(1) U.S. operating segment revenues include eliminations of ~~Contents~~intercompany transactions with the international operating segment. See Note 22 of our consolidated financial statements.

~~General~~• ~~and Administrative Expenses~~Consolidated. ~~General~~The ~~and~~increase ~~administrative~~in ~~expenses,~~admissions asrevenues aof ~~percentage~~$39.5 ~~of revenues,~~million ~~decreased~~was attributable to a 4.73% increase in ~~2003~~average ticket price from $5.111 for 2007 to $5.33 for 2008, partially offset by a 0.7% decline in ~~2002~~attendance. ~~General~~The ~~and~~increase ~~administrative~~in ~~expenses decreased~~concession torevenues of $4418.3 million ~~for~~was ~~2003~~attributable to a 4.1% increase in concession revenues per patron from $482.~~0 million~~43 for ~~2002~~2007 to $2.53 for 2008, partially offset by the decline in attendance. The ~~decrease~~increases isin ~~primarily~~average ~~related~~ ticket price and concession revenues per patron were due to ~~the~~price ~~write-off~~increases and favorable exchange rates during most of $3the year in certain countries in which we operate.~~1 million~~ ofThe ~~legal,~~2.2% ~~accounting~~increase ~~and~~in other ~~professional~~revenues ~~fees~~was primarily attributable to increased screen advertising and ~~costs~~other ancillary revenues in ~~2002,~~ ~~associated~~certain ~~with~~of our ~~proposed~~international ~~initial~~locations ~~public~~and ~~offering~~the ~~which was~~favorable ~~subsequently~~impact ~~postponed~~of ~~due~~exchange torates ~~unfavorable~~during ~~market~~most ~~conditions~~of the year in certain countries in which we operate.

~~Depreciation~~• ~~and Amortization~~U.S. ~~Depreciation~~The ~~and~~increase ~~amortization~~in ~~decreased~~admissions torevenues of $6510.1 0 million was attributable to a 3.8% increase in ~~2003~~ average ticket price from $665.~~6 million~~79 infor ~~2002~~2007 to $6.01 ~~Depreciation~~for ~~and~~2008, ~~amortization~~partially asoffset by a ~~percentage~~2.5% ofdecrease in attendance. The increase in concession revenues ~~decreased~~ of $2.1 million was attributable to 6a 2.89% increase in ~~2003~~concession revenues per patron from 7$2.180 for 2007 to $2.88 for 2008, partially offset by the decline in attendance. The increases in average ticket price and concession revenues per patron were due to price increases. The 10.3% decrease in ~~2002~~other revenues was primarily attributable to reduced screen advertising revenues earned under the exhibitor services agreement with NCM. See Note 6 to the consolidated financial statements.

~~Impairment~~• International. The increase in admissions revenues of ~~Long-Lived~~$29.5 ~~Assets~~million was attributable to a 9.6% Weincrease ~~recorded~~in ~~asset~~average ~~impairment~~ticket ~~charges~~price onfrom ~~assets~~$3.42 ~~held~~for 2007 to $3.75 for 2008 and ~~used~~ a 3.9% increase in attendance. The increase in concession revenues of $516.0 2 million was attributable to a 13.2% increase in ~~2003~~concession ~~and~~revenues per patron from $31.~~9 million~~51 for 2007 to $1.71 for 2008 and the increase in ~~2002,~~attendance. asThe ~~follows:~~ increases in average ticket price and concession revenues per patron were due to price increases and favorable exchange rates during most of the year in certain countries in which we operate. The 19.3% increase in other revenues was primarily due to increased screen advertising and other ancillary revenues and the favorable impact of exchange rates during most of the year in certain countries in which we operate.

	Years Ended December 31,
	2003		2002
U.S.	$	3.0	$	1.8
Mexico		1.2		—
Chile		0.7		1.3
Other		0.1		0.8
Total	$	5.0	$	3.9

(Gain)Table Loss on Sale of Assets and Other. We recorded a gain on sale of assets and other of $1.2 million in 2003 compared to a loss on sale of assets and other of $0.5 million in 2002. The gain on sale of assets recorded during 2003 was primarily due to gains on the sale of land parcels and recovery of a construction deposit previously written off. Contents

~~Interest~~Theatre ~~Expense.~~Operating ~~Interest~~Costs ~~costs~~(excludes ~~incurred,~~depreciation ~~including~~and amortization ofexpense). ~~debt~~Theatre ~~issue costs,~~operating ~~decreased~~costs ~~6.3%~~were to $541,311.2 million, inor ~~2003~~75.3% ~~from~~of ~~$57.8 million~~revenues, infor ~~2002.~~2008 ~~The~~compared ~~decrease~~to in$1,248.1 million, ~~interest~~or ~~costs~~74.2% ~~incurred~~of ~~during~~revenues, ~~2003~~for ~~was~~2007. ~~primarily~~The ~~due~~table tobelow, apresented ~~decrease~~by inreportable ~~average~~operating ~~debt~~segment, ~~outstanding~~summarizes ~~during the year~~our ~~under~~year-over-year ~~our~~theatre ~~long-term~~operating ~~debt~~costs ~~facilities~~(in millions).

Foreign Currency Exchange Loss. We recorded a foreign currency exchange loss of $0.2 million in 2003 compared to a foreign currency exchange loss of $5.1 million in 2002. The loss recorded during 2002 was due to the translation of Cinemark Brasil S.A.’s assets and liabilities denominated in other than local currency and the devaluation of the real during 2002.


					International Operating
	U.S. Operating Segment				Segment				Consolidated
	Year Ended				Year Ended				Year Ended
	December 31,				December 31,				December 31,
	2007		2008		2007		2008		2007		2008

Film rentals and advertising	$	485.2	$	494.6	$	104.5	$	117.6	$	589.7	$	612.2
Concession supplies		57.8		58.5		23.3		28.1	$	81.1	$	86.6
Salaries and wages		146.7		149.5		26.6		31.5	$	173.3	$	181.0
Facility lease expense		161.7		166.8		51.0		58.8	$	212.7	$	225.6
Utilities and other		149.0		151.8		42.3		54.0	$	191.3	$	205.8

Total theatre operating costs	$	1,000.4	$	1,021.2	$	247.7	$	290.0	$	1,248.1	$	1,311.2

~~Loss~~• onConsolidated. ~~Early~~Film ~~Retirement~~rentals ofand ~~Debt~~advertising costs were $612.2 Wemillion, ~~recorded~~or a54.3% ~~loss~~of onadmissions ~~early~~revenues, ~~retirement~~for 2008 compared to $589.7 million, or 54.2% of ~~debt~~admissions revenues, for 2007. The increase in film rentals and advertising costs for 2008 of $722.5 million ~~during~~was ~~2003~~primarily ~~that~~due ~~included~~to a $139.5 million increase in admissions revenues. Concession supplies expense was $86.6 million, ~~loss~~or ~~resulting~~16.2% ~~from~~of ~~the~~concession ~~write-off~~revenues, for 2008 compared to $81.1 million, or 15.7% of ~~unamortized debt~~concession ~~issue~~revenues, ~~costs~~for ~~associated~~2007. ~~with~~The ~~the~~increase ~~retirement~~in concession supplies expense of ~~our~~$5.5 ~~then~~million ~~existing~~was ~~credit~~primarily ~~facility~~due to an $18.3 million increase in concession revenues and an increase in the ~~Cinema Properties~~concession ~~Facility~~supplies ~~that~~rate. ~~occurred~~The ~~during~~increased rate was primarily due to the ~~first~~relative ~~quarter~~increase in concession revenues from our international operations and increases in product costs from some of ~~2003~~our international concession suppliers. Salaries and wages increased to $181.0 million for 2008 from $173.3 million for 2007, afacility lease expense increased to $5225.6 million ~~loss~~for ~~resulting~~ 2008 from ~~the~~$212.7 ~~write-off~~million offor ~~unamortized~~2007 ~~debt~~and ~~issue~~utilities and other costs increased to $205.8 million for 2008 from $191.3 million for 2007, ~~unamortized~~all ~~bond~~of ~~premiums/discounts~~which increased primarily due to increased revenues, new theatre openings and ~~tender offer~~the ~~repurchase~~impact of exchange rates in certain countries in which we operate. • U.S. Film rentals and advertising costs ~~associated~~were ~~with~~$494.6 ~~the~~million, ~~tender~~or ~~offer~~55.6% of admissions revenues, for 2008 compared to ~~repurchase~~$485.2 million, or 55.2% of admissions revenues, for 2007. The increase in film rentals and ~~subsequent~~advertising ~~retirement~~costs for 2008 of ~~approximately~~ $~~233~~ 9.4 million ~~aggregate~~was ~~principal~~primarily ~~amount~~due ofto ~~outstanding~~the 9increase in admissions revenues and higher film rentals and advertising rates. Concession supplies expense was $58.5/8 million, or 13.7% ~~senior subordinated~~of ~~notes~~concession ~~that~~revenues, ~~occurred~~for ~~during~~2008 ~~the~~compared ~~second~~to ~~quarter~~$57.8 million, or 13.6% of ~~2003~~concession revenues, for 2007. Salaries and awages increased to $0149.3 5 million ~~loss resulting~~for 2008 from ~~the~~$146.7 ~~write-off~~million offor ~~unamortized~~2007, ~~debt~~facility ~~issue~~lease expense increased to $166.8 million for 2008 from $161.7 million for 2007 and utilities and other costs increased to $151.8 million for 2008 from $149.0 million for 2007, ~~unamortized~~all ~~bond~~of ~~premiums/discounts~~ which increased primarily due to new theatre openings. • International. Film rentals and ~~other~~advertising ~~fees~~costs ~~associated~~were ~~with~~$117.6 ~~the~~million, ~~redemption~~or 49.4% of ~~the~~admissions ~~remaining~~revenues, for 2008 compared to $42 104.5 million, ~~aggregate~~or ~~principal amount~~50.1% of admissions revenues, for 2007. The increase in film rentals and advertising costs of $13.1 million was due to a $29.5 million increase in admissions revenues, partially offset by a decrease in our film rental and advertising rate. Concession supplies expense was $28.1 million, or 25.9% ~~5/8~~of concession revenues, for 2008 compared to $23.3 million, or 25.3% ~~senior~~of ~~subordinated~~concession ~~notes~~revenues, for 2007. The increase in concession supplies expense of $4.8 million was primarily due ~~2008~~to ~~that~~the ~~occurred~~$16.2 ~~during~~million increase in concession revenues and the ~~third~~increased ~~quarter~~rate due to increases in product costs from some of ~~2003~~ our concession suppliers. Salaries and wages increased to $31.5 million for 2008 from $26.6 million for 2007, facility lease expense increased to $58.8 million for 2008 from $51.0 million for 2007 and utilities and other costs increased to $54.0 million for 2008 from $42.3 million for 2007, all of which increased primarily due to increased revenues, new theatre openings and the impact of exchange rates in certain countries in which we operate.

~~Income Taxes. Income tax expense of $25.0 million was recorded in 2003 compared to income tax~~22 expense of $29.1 million in 2002. Our effective tax rate for 2003 was 34.6% as compared to 41.9% in 2002. The change in the effective tax rate is primarily due to a decrease in foreign losses not offset by a valuation allowance.

24 Table of Contents

~~Table~~ General and Administrative Expenses. General and administrative expenses increased to $89.8 million for 2008 from $78.9 million for 2007. The increase was primarily due to increased incentive compensation expense of ~~Contents~~$4.4 million, increased share based award compensation expense of $1.8 million, increased service charges of $1.7 million related to increased credit card activity, increased professional fees of $0.5 million, including audit fees related to Sarbanes-Oxley (“SOX”) compliance, and increased legal fees of $2.2 million.

~~Liquidity~~ Termination of Profit Participation Agreement. Upon consummation of Cinemark Holdings, Inc.’s initial public offering on April 24, 2007, we exercised our option to terminate the amended and restated ~~Capital~~profit ~~Resources~~participation agreement with our CEO Alan Stock and purchased Mr. Stock’s profit interest in two theatres during May 2007 for $6.9 million pursuant to the terms of the amended and restated profit participation agreement. In addition, we incurred $0.1 million of payroll taxes related to the termination. See Note 23 to our consolidated financial statements.

~~Operating~~ Depreciation ~~Activities~~and Amortization. Depreciation and amortization expense, including amortization of favorable leases, was $158.0 million for 2008 compared to $151.7 million for 2007 primarily due to new theatre openings.

WeImpairment ~~primarily~~of ~~collect~~Long-Lived ~~our~~Assets. ~~revenues~~We inrecorded ~~cash,~~asset ~~mainly~~impairment ~~through~~charges ~~box~~on ~~office~~assets ~~sales~~held and ~~the sale of~~used ~~concession~~of ~~supplies~~$113.5 million Wefor ~~are~~2008 ~~expanding~~compared ~~the~~to ~~number~~$86.6 million offor ~~theatres~~2007. ~~that~~Impairment ~~provide~~charges ~~the~~for ~~patron a choice of~~2008 ~~using~~consisted ~~a credit card, in place~~ of ~~cash, which we convert to cash in approximately three to four days~~$34.6 million ~~Because our revenues are received in cash prior to the payment~~ of ~~related~~theatre ~~expenses~~properties, ~~we have an operating “float” and historically have not required traditional working capital financing~~$78.6 million ~~We typically~~of ~~operate~~goodwill associated with ~~a negative working capital position for our ongoing~~ theatre ~~operations~~ ~~throughout the year~~properties, ~~primarily~~and ~~because~~$0.3 million of ~~the~~intangible ~~lack~~assets ofassociated ~~significant~~with ~~inventory~~theatre ~~and~~properties. ~~accounts~~Impairment ~~receivable.~~charges ~~Cash~~for ~~flow~~2007 ~~provided~~consisted ~~by operating activities, as reflected in the consolidated statements~~ of ~~cash flows, amounted to~~ $~~150~~14.12 million, ~~$135.5 million~~of ~~and~~theatre properties, $~~123~~67.17 million inof ~~2002,~~goodwill ~~2003~~associated ~~and~~with ~~2004~~theatre properties, ~~respectively~~and $4.7 million ~~The~~of ~~decrease~~intangible inassets ~~cash~~associated ~~provided~~with bytheatre properties. ~~operating~~See ~~activities~~Notes in10 ~~2004~~and ~~is primarily~~11 ~~due~~ to ~~the~~our ~~Recapitalization~~consolidated ~~charges~~financial ~~of $32~~statements.~~0 million.~~

~~Investing~~ (Gain) ~~Activities~~Loss on Sale of Assets and Other. We recorded a loss on sale of assets and other of $8.5 million during 2008 compared to a gain on sale of assets and other of $3.0 million during 2007. The loss recorded during 2008 was primarily related to the write-off of theatre equipment that was replaced, the write-off of prepaid rent for an international theatre, and damages to certain of our theatres in Texas related to Hurricane Ike. The gain recorded during 2007 primarily related to the sale of real property associated with one theatre in the U.S.

~~Our~~Interest ~~investing~~Expense. ~~activities~~Interest ~~have~~costs ~~been~~incurred, ~~principally~~including ~~related~~amortization ~~to the development and acquisition~~ of ~~additional~~ ~~theatres~~debt ~~and~~issue ~~in 2004~~costs, ~~purchases~~was $116.1 million offor ~~minority~~2008 ~~partner~~compared ~~shares~~to in$145.6 million ~~Brazil~~for ~~and Mexico~~2007. ~~New theatre~~The ~~openings~~decrease ~~and~~was ~~acquisitions~~primarily ~~historically~~due ~~have~~to ~~been financed with internally generated cash~~the ~~and~~repurchase byof ~~debt~~substantially ~~financing,~~all ~~including~~of ~~borrowings under~~ our ~~amended~~outstanding 9% senior ~~secured~~subordinated ~~credit~~notes ~~facility.~~that ~~Cash~~occurred ~~flow~~during ~~used~~March ~~for~~and ~~investing activities~~April 2007, ~~as reflected in~~ the ~~consolidated~~repurchase ~~statements~~ of ~~cash~~a ~~flows, amounted~~portion toof ~~$34.7 million,~~our ~~$47.2 million and $116.~~9 ~~million~~ in3/4% ~~2002,~~senior ~~2003~~discount ~~and~~notes ~~2004,~~during ~~respectively.~~the ~~The~~second ~~increase~~half inof ~~cash~~2007 ~~used~~and ~~for~~2008, ~~investing~~and ~~activities~~a reduction in ~~2004~~the isvariable ~~primarily due~~interest torates ~~the~~on ~~funding~~a portion of our ~~the~~long-term ~~$45~~debt.~~0 million~~ ~~purchase~~In ~~price~~addition, ~~for~~during the ~~acquisition~~2008 ofperiod, ~~the~~we ~~shares~~recorded ofa ~~our Brazilian~~gain ~~operations owned by our Brazilian partners, the funding~~ of ~~the~~approximately $5.4 million ~~purchase price~~as ~~for~~a ~~the~~component ~~acquisition~~ of ~~the~~interest ~~shares~~expense ofrelated ~~Cinemark~~to ~~Mexico~~the ~~USA,~~change ~~Inc.~~in ~~owned~~fair byvalue ~~our~~of ~~Mexican~~one ~~partners~~of our ~~and~~interest arate ~~$30.0 million~~swap ~~increase~~agreements inthat ~~capital~~was ~~expenditures,~~deemed ~~and~~not ~~was~~highly ~~partially~~effective. ~~offset~~See byNote ~~increased~~14 to our consolidated ~~proceeds~~financial ~~from~~statements ~~sales~~for further discussion of ~~theatre~~our ~~properties~~interest ~~and~~rate ~~equipment~~swap agreements.

AsGain aon ~~result~~NCM ofTransaction. ~~the~~During ~~Recapitalization~~2007, ~~our~~we ~~Brazilian~~recorded ~~partners~~a ~~exercised~~gain ~~their~~of ~~option~~$210.8 million toon ~~cause~~the ~~us to~~sale ~~purchase~~of ~~all~~a portion of ~~their~~our ~~shares~~equity ofinvestment ~~common~~in ~~stock~~NCM ofin ~~Cinemark~~conjunction ~~Brasil~~with ~~S.A.,~~the ~~which~~initial ~~represented~~public ~~47.2%~~offering of NCM, ~~total~~Inc. common stock. ofOur ~~Cinemark~~ownership ~~Brasil~~interest ~~S.A.~~in WeNCM ~~purchased~~was ~~the~~reduced ~~partners’~~from ~~shares~~approximately of25% ~~Cinemark Brasil~~to ~~S.A.~~approximately ~~for~~14% ~~$44,957,502~~as ~~with~~part ~~available~~of ~~cash~~this onsale ~~August 18,~~of ~~2004~~stock in the offering. See Note 46 to ~~the~~our consolidated financial statements ~~for further discussion of this acquisition~~.

OnGain ~~September 15,~~on ~~2004,~~Fandango weTransaction. ~~purchased~~During ~~shares~~2007, ofwe ~~common~~recorded ~~stock~~a gain of ~~Cinemark~~$9.2 million ~~Mexico~~as ~~USA,~~a ~~Inc.~~result ~~from~~of ~~our~~the ~~Mexican~~sale ~~partners,~~of ~~increasing~~ our ~~ownership~~investment ~~interest~~ in ~~this~~stock ~~subsidiary~~of ~~from 95.0% to 99.4%. The purchase price was $5~~Fandango,~~378,768~~ ~~and was funded with available cash and borrowings on our revolving credit line~~Inc. See Note 48 to ~~the~~our consolidated financial ~~statements for further discussion~~ ~~of this acquisition~~statements.

We(Gain) ~~are~~Loss ~~continuing~~on toEarly ~~expand~~Retirement ~~our~~of ~~domestic theatre circuit~~Debt. InDuring ~~2004~~2008, we ~~opened~~recorded 11a ~~new~~gain ~~theatres with~~on ~~132~~early ~~screens~~retirement of ~~and~~debt ~~added~~of ~~four~~$1.7 million ~~screens~~as toa ~~existing~~result ~~theatres.~~of Asthe repurchase of ~~December~~ ~~31,~~$47.0 million ~~2004,~~aggregate weprincipal ~~had~~amount ~~signed~~at ~~commitments~~maturity toof ~~build~~our 129 ~~new~~3/4% ~~theatres~~senior ~~with~~discount ~~140~~notes ~~screens~~partially ~~scheduled~~offset toby ~~open in~~ the ~~U.S.~~write-off inof ~~2005~~unamortized debt ~~and~~issue ~~thereafter~~costs. WeDuring ~~estimate~~2007, ~~the~~we ~~remaining~~recorded ~~capital~~a ~~expenditures~~loss ~~for the~~on ~~development~~early retirement of ~~these~~debt ~~140~~of ~~screens~~$13.5 million inas a result of the Urepurchase of $332.S.1 million ~~will~~aggregate beprincipal amount of our 9% senior subordinated ~~approximately~~notes and the repurchase of $3469.2 million. ~~Actual~~aggregate ~~expenditures~~principal ~~for~~amount ~~continued~~at ~~theatre~~maturity of our 9 3/4% senior ~~development~~discount notes, and ~~acquisitions~~the ~~are~~related ~~subject~~write-off toof ~~change~~unamortized ~~based~~debt ~~upon~~issue costs and the ~~availability~~payment of ~~attractive~~ ~~opportunities~~premiums, fees and expenses. See Note 13 to our consolidated financial statements.

WeDistributions ~~are~~from ~~continuing to expand our international theatre circuit~~NCM. InWe ~~2004,~~recorded wedistributions ~~opened~~received ~~six~~from ~~new theatres~~NCM ~~with~~of ~~43 screens~~$18.8 million ~~As of December 31, 2004, we had signed~~during ~~commitments~~2008 toand ~~build~~ $11.5 million ~~new theatres~~during ~~with~~2007, 87which ~~screens~~were ~~scheduled to open~~ in ~~international~~excess ~~markets~~of ~~in 2005 and thereafter. We estimate~~ the ~~remaining~~carrying ~~capital~~value ~~expenditures for the development~~ of ~~these~~ 87our ~~screens will be approximately $42 million~~investment. ~~Actual expenditures for continued theatre development and acquisitions~~ ~~are~~See ~~subject~~Note 6 to ~~change~~our ~~based~~consolidated ~~upon~~financial ~~the availability of attractive opportunities~~statements.

~~We plan to fund capital expenditures for our continued development with cash flow from~~23 operations, borrowings under our amended senior secured credit facility, proceeds from sale leaseback transactions and/or sales of excess real estate. Additionally, we may from time to time, subject to compliance with our debt instruments, purchase on the open market our debt securities depending upon the availability and prices of such securities.

25 Table of Contents

~~Table~~ Income Taxes. Income tax expense of ~~Contents~~$20.7 million was recorded for 2008 compared to $109.5 million recorded for 2007. The effective tax rate of (73.3)% for 2008 reflects the impact of our 2008 goodwill impairment charges, which are not deductible for income tax purposes. The effective tax rate in 2008 net of the impact from the goodwill impairment charges would have been approximately 41.1%. The effective tax rate of 56.3% for 2007 reflects the impact of our 2007 goodwill impairment charges, which are not deductible for income tax purposes. The effective tax rate in 2007 net of the impact from the goodwill impairment charges would have been approximately 41.8%.

~~Financing~~Analysis ~~Activities~~of Year Ended December 31, 2007

~~Cash flow~~Revenues. ~~used~~Total ~~for~~revenues ~~financing~~were ~~activities amounted to~~ $~~96.~~1 ~~million~~, ~~$45~~682.78 million, ~~and~~for ~~$14~~the year ended December 31, 2007.4 The table ~~million~~below, inpresented ~~2002~~by reportable operating segment, ~~2003~~summarizes our revenue performance and ~~2004~~certain key performance indicators that impact our revenues for the year ended December 31, ~~respectively~~2007.

As of December 31, 2004 our long-term debt obligations, future minimum lease obligations under non-cancelable operating leases, outstanding letters of credit, obligations under employment agreements and purchase commitments were as follows:


	U.S.		International
	Operating		Operating
	Segment		Segment		Consolidated

Admissions revenues (in millions)	$	879.1	$	208.4	$	1,087.5
Concession revenues (in millions)	$	424.4	$	92.1	$	516.5
Other revenues (in millions) ⁽¹⁾	$	45.6	$	33.2	$	78.8
Total revenues (in millions) ⁽¹⁾	$	1,349.1	$	333.7	$	1,682.8
Attendance (in millions)		151.7		61.0		212.7
Revenues per screen (in dollars) ⁽¹⁾	$	376,771	$	341,451	$	369,200

	Payments Due by Period
	(in millions)
			Less Than						After
Contractual Obligations	Total		One Year		1 - 3 Years		4 - 5 Years		5 Years
Long-term debt (1) (2)	$	1,204.1	$	6.5	$	11.6	$	7.9	$	1,178.1
Lease obligations (3)		1,473.3		111.6		233.7		224.0		904.0
Letters of credit		0.1		0.1		—		—		—
Employment agreements (3)		8.4		2.8		5.6		—		—
Purchase commitments (4)		81.7		43.4		36.4		1.2		0.7
Total obligations	$	2,767.6	$	164.4	$	287.3	$	233.1	$	2,082.8


⁽¹⁾		U.S. operating segment revenues include eliminations of intercompany transactions with the international operating segment. See Note 22 of our consolidated financial statements.

(1)		These amounts are included in our consolidated balance sheet as of December 31, 2004. See Note 10 to the consolidated financial statements for additional information about our long-term debt obligations and related matters.
(2)		Includes the 9 3/4% senior discount notes in the aggregate principal amount at maturity of $577.2 million.
(3)		See Note 17 to the consolidated financial statements for additional information about our lease obligations and employment agreements.
(4)		Includes estimated capital expenditures associated with the construction of new theatres to which we were committed as of December 31, 2004.

•		Consolidated. Admissions revenues of $1,087.5 million was attributable to attendance of 212.7 million patrons and an average ticket price of $5.11. Concession revenues of $516.5 million was attributable to attendance of 212.7 million patrons and a concession revenues per patron rate of $2.43. The 2007 period was the first full year of operations of the 77 Century theatres acquired during the period from October 5, 2006 to December 31, 2006. See Note 5 to the consolidated financial statements for discussion of the Century Acquisition. The attendance levels were reflective of the solid slate of films released during 2007 and new theatre openings. Average ticket prices and concession revenues per patron were reflective of price increases and favorable exchange rates in certain countries in which we operate.

•		U.S. Admissions revenues of $879.1 million was attributable to attendance of 151.7 million patrons for 2007 and an average ticket price of $5.79. Concession revenues of $424.4 million was attributable to attendance of 151.7 million patrons and a concession revenues per patron rate of $2.80. The 2007 period was the first full year of operations of the 77 Century theatres acquired during the period from October 5, 2006 to December 31, 2006. See Note 5 to the consolidated financial statements for discussion of the Century Acquisition. The attendance levels were reflective of the solid slate of films released during 2007 and new theatre openings. Average ticket prices and concession revenues per patron were reflective of price increases.

•		International. Admissions revenues of $208.4 million was attributable to attendance of 61.0 million patrons and an average ticket price of $3.42. Concession revenues of $92.1 million was attributable to attendance of 61.0 million patrons and a concession revenues per patron rate of $1.51. Attendance levels were reflective of new theatre openings and average ticket prices and concession revenues per patron were reflective of price increases and favorable exchange rates in certain countries in which we operate.

	Amount of Commitment Expiration Per Period
	(in millions)
			Less Than						After
Other Commercial Commitments	Total		One Year		1 - 3 Years		4 - 5 Years		5 Years
Revolving Line of Credit1	$	99.9	$	—	$	—	$	99.9	$	—
Total commercial commitments	$	99.9	$	—	$	—	$	99.9	$	—

1Table Represents availability under our revolving line of credit as of December 31, 2004 after giving effect to the $0.1 million letter of credit outstanding.Contents

~~Recapitalization~~ Theatre Operating Costs (excludes depreciation and ~~Issuance~~amortization expense). Theatre operating costs were $1,248.1 million, or 74.2% of ~~Senior~~revenues, ~~Discount~~for ~~Notes~~2007. The table below, presented by reportable operating segment, summarizes our theatre operating costs for 2007 (in millions).

On March 12, 2004, we entered into an agreement and plan of merger with a newly formed subsidiary of Madison Dearborn Partners, LLC (“Madison”). The transaction was completed on April 2, 2004, at which time the newly formed subsidiary of Madison was merged with and into us, with our Company continuing as the surviving corporation. Simultaneously, an affiliate of Madison purchased shares of our common stock for approximately $518.3 million in cash and became our controlling stockholder owning approximately 83% of our capital stock. Lee Roy Mitchell, our Chief Executive Officer, and the Mitchell Special Trust collectively retained approximately 16% ownership of our capital stock with certain members of management owning the remaining 1%. Based on the terms of the transaction, including Mr. Mitchell’s ownership retention, the transaction was accounted for as a recapitalization, which resulted in us and our subsidiaries retaining our historical book values. Since April 2, 2004, Madison sold approximately 10% of its stock in Cinemark, Inc. to outside investors. As of the date of this report, Madison owned approximately 75% of our capital stock, outside investors owned approximately 8%, Lee Roy


	U.S.		International
	Operating		Operating
	Segment		Segment		Consolidated


Film rentals and advertising	$	485.2	$	104.5	$	589.7
Concession supplies	$	57.8	$	23.3	$	81.1
Salaries and wages	$	146.7	$	26.6	$	173.3
Facility lease expense	$	161.7	$	51.0	$	212.7
Utilities and other	$	149.0	$	42.3	$	191.3

Total theatre operating costs	$	1,000.4	$	247.7	$	1,248.1

• Consolidated. Film rentals and advertising costs were $589.7 million representing 54.2% of admissions revenues. Our film rental and advertising rate is reflective of higher than average rates on certain blockbuster sequels that were released during 2007. Concession supplies expense was $81.1 million representing 15.7% of concession revenues. Salaries and wages were $173.3 million, which represents 10.3% of total revenues and is reflective of salaries and wages related to the 77 Century theatres acquired during the period from October 5, 2006 to December 31, 2006, an increase in minimum wages in the U.S., and new theatre openings. Facility lease expense was $212.7 million, which represented 12.6% of total revenues and included expenses related to the 77 Century theatres acquired during the period from October 5, 2006 to December 31, 2006, percentage rent related to the increased revenues and new theatre openings. Utilities and other costs was $191.3 million, which represented 11.4% of total revenues and included expenses related to the 77 Century theatres acquired during the period from October 5, 2006 to December 31, 2006 and new theatre openings. See Note 5 to the consolidated financial statements for discussion of the Century Acquisition. • U.S. Film rentals and advertising costs were $485.2 million representing 55.2% of admissions revenues. Film rentals and advertising costs reflected higher than average rates due to certain blockbuster sequels released during 2007. Concession supplies expense was $57.8 million representing 13.6% of concession revenues. Salaries and wages was $146.7 million, which represented 10.9% of total revenues and was reflective of salaries and wages related to the 77 Century theatres acquired during the period from October 5, 2006 to December 31, 2006, an increase in minimum wages in the U.S., and new theatre openings. Facility lease expense was $161.7 million, which represented 12.0% of total revenues, and included expenses related to the 77 Century theatres acquired during the period from October 5, 2006 to December 31, 2006, percentage rent related to the increased revenues and new theatre openings. Utilities and other costs were $149.0 million, which represented 11.0% of total revenues and included expenses related to the 77 Century theatres acquired during the period from October 5, 2006 to December 31, 2006 and new theatre openings. See Note 5 to the consolidated financial statements for discussion of the Century Acquisition. • International. Film rentals and advertising costs were $104.5 million, representing 50.1% of admissions revenues. Concession supplies expense was $23.3 million, representing 25.3% of concession revenues. Salaries and wages were $26 .6 million, representing 8.0% of total revenues, facility lease expense was $51.0 million, representing 15.3% of total revenues, and utilities and other costs was $42.3 million, representing 12.7% of total revenues, all of which included expenses related to new theatre openings.

~~Table~~ General and Administrative Expenses. General and administrative expenses were $78.9 million and included salaries, wages and related costs of ~~Contents~~$45.8 million, professional fees of $7.9 million, and service charges related to credit card activity of $7.4 million, all of which were reflective of the 77 Century theatres acquired during the period from October 5, 2006 to December 31, 2006. See Note 5 to the consolidated financial statements for discussion of the Century Acquisition.

~~Mitchell and the Mitchell Special Trust owned approximately 16% and certain members of~~25 ~~management owned the remaining 1%.~~

OnTable March 31, 2004, we issued $577,173,000 aggregate principal amount at maturity of 9 3/4% senior discount notes due 2014. The gross proceeds at issuance of $360,000,115 were used to fund in part the Recapitalization. Interest on the notes accretes until March 15, 2009 up to the aggregate principal amount of $577,173,000. Cash interest will accrue and be payable semi-annually in arrears on March 15 and September 15, commencing on September 15, 2009. Due to our holding company status, payments of principal and interest under these notes will be dependent on loans, dividends and other payments from our subsidiaries. At December 31, 2004, the accreted principal balance of the notes was $386,731,442. Upon a change of control, 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. Our subsidiaries 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. Contents

~~Historical~~ Termination ~~Financings~~of Profit Participation Agreement. Upon consummation of Cinemark Holdings, Inc.’s 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 profit interest in two theatres on May 3, 2007 for a price of $6.9 million pursuant to the terms of the amended and restated profit participation agreement. In addition, we incurred $0.1 million of payroll taxes related to the termination. See Note 23 to our consolidated financial statements.

~~Senior~~Depreciation ~~Subordinated~~and ~~Notes~~Amortization. Depreciation and amortization expense, including amortization of favorable leases, was $151.7 million and included the impact of the Century Acquisition and new theatre openings. See Note 5 to the consolidated financial statements for discussion of the Century Acquisition.

OnImpairment ~~March 16,~~of ~~2004,~~Long-Lived ~~in connection with the Recapitalization, Cinemark USA, Inc~~Assets. ~~initiated~~We ~~a tender~~recorded ~~offer~~asset ~~for~~impairment ~~its~~charges ~~then~~on ~~outstanding~~assets ~~$105 million~~held ~~aggregate principal amount 8 1/2% senior subordinated notes due 2008~~ and ~~a consent solicitation to remove substantially all restrictive~~used ~~covenants~~of ~~in the indenture governing those notes~~$86. ~~On March~~6 25million, ~~2004,~~which aconsisted ~~supplemental indenture removing substantially all~~ of ~~the covenants was executed and became effective on the date of the Recapitalization. On April 2, 2004, Cinemark USA, Inc. redeemed~~ $9414.12 million ~~aggregate principal amount~~ of 8theatre ~~1/2% senior subordinated notes that were tendered~~properties, ~~pursuant to the tender offer, utilizing a portion of the proceeds from its amended senior secured credit facility~~$67. ~~On April~~7 ~~14, 2004,~~million ~~after the expiration~~ of ~~the tender offer, Cinemark USA, Inc. redeemed an additional $50,000~~goodwill ~~aggregate~~associated ~~principal~~with ~~amount~~theatre ~~of 8 1/2% senior subordinated notes that were tendered~~properties, ~~leaving outstanding~~and $104.87 million ~~aggregate principal amount~~ of 8intangible ~~1/2%~~assets ~~senior~~associated ~~subordinated~~with ~~notes~~theatre properties.

OnGain ~~April 6,~~on ~~2004,~~Sale ~~as a result~~ of ~~the~~Assets ~~consummation of the Recapitalization~~ and ~~in accordance with the terms of the indenture governing its 9% senior subordinated notes due 2013, Cinemark USA, Inc~~Other. ~~made~~We arecorded ~~change of control offer to purchase the 9% senior subordinated notes at~~ a ~~purchase price~~gain ofon ~~101%~~sale of ~~the~~assets ~~aggregate principal amount, plus accrued~~ and ~~unpaid~~other ~~interest, if any, at the date~~ of ~~purchase. Approximately~~ $173.~~8 million in aggregate principal amount of the 9% senior~~0 ~~subordinated notes were tendered and not withdrawn in the change of control offer~~million, which ~~expired~~primarily ~~on May 26,~~related ~~2004.~~to ~~Payment of~~ the ~~change~~sale of ~~control~~real ~~price~~property ~~was~~associated ~~made~~ with ~~available~~one ~~cash~~theatre byin ~~Cinemark USA,~~the ~~Inc~~U. ~~on June 1, 2004~~S.

OnInterest ~~July 28,~~Expense. ~~2004,~~Interest ~~Cinemark~~costs ~~USA~~incurred, ~~Inc.~~including ~~provided~~amortization ~~notice~~of todebt ~~the~~issue ~~holders~~costs, ~~of its remaining~~was ~~outstanding~~$145.6 million. 8See ~~1/2%~~Note ~~senior~~13 ~~subordinated notes due 2008 of its election~~ to ~~redeem~~our ~~all~~consolidated ~~outstanding~~financial ~~notes at~~statements for a ~~redemption~~discussion ~~price~~ of ~~102.833% of the aggregate principal amount plus accrued interest. On~~our ~~August 27,~~long-term ~~2004,~~debt ~~Cinemark USA, Inc. redeemed the remaining notes utilizing available cash~~ and ~~borrowings~~ ~~under~~related ~~its~~interest ~~revolving credit line~~rates.

~~As of~~Gain ~~December 31,~~on ~~2004,~~NCM ~~Cinemark~~Transaction. ~~USA,~~We ~~Inc.~~recorded ~~had~~a ~~outstanding~~gain of $~~342~~210.38 million ~~aggregate~~on ~~principal~~the ~~amount~~sale of ~~9% senior~~a ~~subordinated~~portion ~~notes~~of ~~due~~our equity ~~2013.~~investment ~~Interest~~in isNCM ~~payable~~in onconjunction ~~February~~with 1the ~~and~~initial ~~August~~public 1offering of ~~each year. Cinemark USA~~NCM, Inc. ~~may~~during ~~redeem all or part of the existing 9% notes on or after February 1, 2008~~2007. ~~Prior~~Our toownership ~~February 1,~~interest ~~2006,~~in ~~Cinemark~~NCM ~~USA,~~was ~~Inc.~~reduced ~~may~~from ~~redeem~~approximately up25% to 35approximately 14% ofas ~~the~~part ~~aggregate principal~~of ~~amount~~this sale of ~~the~~stock ~~existing~~in 9%the ~~notes~~offering. ~~from~~See ~~the~~Note ~~proceeds~~6 ofto ~~certain~~our ~~equity~~consolidated ~~offerings~~financial statements.

~~The~~Gain ~~senior~~on ~~subordinated~~Fandango ~~notes~~Transaction. ~~are~~We ~~general,~~recorded ~~unsecured~~a ~~obligations~~gain ~~and are subordinated in right~~ of ~~payment to the amended senior secured credit facility or other senior indebtedness~~$9.2 million ~~The~~as ~~notes are~~a ~~guaranteed~~result ~~by certain~~ of ~~our domestic subsidiaries. The guarantees are subordinated to~~ the ~~senior~~ ~~debt~~sale of our ~~the~~investment ~~subsidiary~~in ~~guarantors~~stock ~~and rank pari passu with the senior subordinated debt~~ of ~~our~~ ~~guarantor~~Fandango, ~~subsidiaries~~Inc. ~~The~~See ~~notes~~Note ~~are~~8 ~~effectively subordinated~~ to ~~the indebtedness and other liabilities of~~ our ~~non-guarantor~~consolidated ~~subsidiaries~~financial statements.

27 Loss on Early Retirement of Debt. During 2007, we recorded a loss on early retirement of debt of $13.5 million which was a result of the repurchase of $332.1 million aggregate principal amount of our 9% senior subordinated notes and the repurchase of $69.2 million aggregate principal amount at maturity of our 9 3/4% senior discount notes, all of which resulted in the write-off of unamortized debt issue costs and the payment of premiums, fees and expenses. See Notes 12 and 13 to our consolidated financial statements.

~~Table~~ Distributions from NCM. We recorded distributions received from NCM of ~~Contents~~$11.5 million during 2007, which were in excess of the carrying value of our investment. See Note 6 to our consolidated financial statements.

~~The~~Income ~~indentures~~Taxes. ~~governing~~We ~~the~~recorded ~~senior~~income ~~subordinated~~tax ~~notes~~expense ~~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~~$109. ~~Upon a change of control~~5 million, ~~Cinemark~~ ~~USA,~~which ~~Inc.~~represented ~~would be required to make~~ an ~~offer to repurchase the senior subordinated notes~~effective attax arate ~~price equal to 101%~~ of ~~the principal amount outstanding plus accrued and unpaid interest through the date of repurchase~~56.3% The ~~indenture~~effective ~~governing~~tax ~~the senior subordinated notes allows Cinemark USA~~rate, ~~Inc.~~net ~~to incur~~of ~~additional~~the ~~indebtedness~~impact iffrom ~~it satisfies~~ the ~~coverage~~goodwill ~~ratio specified~~impairment ~~in the indenture~~charges, ~~after~~ ~~giving~~would ~~effect~~have tobeen ~~the~~approximately ~~incurrence~~41.8%. ofSee ~~the~~Note ~~additional~~20 ~~indebtedness,~~to ~~and~~our inconsolidated ~~certain~~financial ~~other circumstances~~statements.

~~Senior Secured Credit Facility~~26

OnTable February 14, 2003, Cinemark USA, Inc. entered into a senior secured credit facility consisting of a $75 million five year revolving credit line and a $125 million term loan with Lehman Commercial Paper, Inc. for itself and as administrative agent for a syndicate of lenders. The net proceeds from the senior secured credit facility were used to repay, in full, certain debt agreements, including its then existing credit facility. Contents

OnAnalysis ~~August 18,~~of ~~2003,~~Period ~~Cinemark~~from ~~USA, Inc. amended the senior secured credit facility to provide a $165~~January ~~million term loan expiring on March 31~~1, ~~2008.~~2006 ~~The net proceeds of the $165 million term loan and additional borrowings under the $75 million five year revolving credit line were used~~ to ~~(i) repay $124.7~~October ~~million of term loans outstanding under its senior secured credit facility entered into February 14~~4, ~~2003 and (ii) redeem the remaining $42 million aggregate principal amount of its~~2006 ~~then outstanding 9 5/8% senior subordinated notes on September 18, 2003.~~

~~On April 2, 2004, Cinemark USA, Inc~~Revenues. ~~amended~~Total ~~its~~revenues ~~senior~~were ~~secured credit facility in connection with the Recapitalization. The amended senior secured credit facility provides for a~~ $~~260~~829.1 million ~~seven~~ ~~year~~for ~~term~~the ~~loan~~period ~~and~~from ~~a $100~~January ~~million~~1, ~~six~~2006 ~~and~~to ~~one-half year revolving credit line~~October 4, 2006. The ~~net proceeds~~table ~~from~~below, ~~the~~presented ~~amended~~by ~~senior~~reportable ~~secured~~operating ~~credit~~segment, ~~facility~~summarizes ~~were~~our ~~used to repay the existing term loan~~revenue ofperformance ~~approximately $163.8 million~~ and tocertain ~~redeem~~key ~~the~~performance ~~approximately~~indicators ~~$94.2 million~~that ~~aggregate~~impact ~~principal amount~~our ofrevenues ~~its~~for ~~then~~the ~~outstanding~~period ~~$105 million aggregate principal~~from ~~amount 8~~ January 1~~/2%~~, ~~senior~~2006 ~~subordinated notes due 2008 that were tendered pursuant~~ to ~~the~~October 4, ~~tender offer.~~2006:

The amended senior secured credit facility was further amended on August 18, 2004 to, among other things, reduce the interest rate applicable to the term loan. Under the amended term loan, principal payments of $650,000 are due each calendar quarter through March 31, 2010 and increase to $61,100,000 each 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 rate equal to the higher of (i) the prime lending rate as set forth on the British Banking Association Telerate page 5 or (ii) the federal funds effective rate from time to time plus 0.50%, plus a margin of 1.00% per annum, or (B) a “eurodollar rate” plus a margin of 2.00% per annum. After the completion of two fiscal quarters after the closing date, the margin under the amended term loan applicable to base rate loans ranges from 0.75% per annum to 1.00% per annum and the margin applicable to eurodollar rate loans ranges from 1.75% per annum to 2.00% per annum, and will be adjusted based upon Cinemark USA, Inc. achieving certain performance targets.


	U.S.		International
	Operating		Operating
	Segment		Segment		Consolidated


Admissions revenues (in millions)	$	370.4	$	143.8	$	514.2
Concession revenues (in millions)	$	199.1	$	61.1	$	260.2
Other revenues (in millions) ⁽¹⁾	$	36.8	$	17.9	$	54.7
Total revenues (in millions) ⁽¹⁾	$	606.3	$	222.8	$	829.1
Attendance (in millions)		81.6		46.9		128.5
Revenues per screen (in dollars) ⁽¹⁾	$	247,564	$	240,583	$	245,649

~~Borrowings under the amended revolving credit line bear interest, at Cinemark USA, Inc.’s option, at:~~ (A1) a ~~base rate equal to the higher of (i) the prime lending rate as set forth on the British Banking Association Telerate page 5 or (ii) the federal funds effective rate from time to time plus 0~~U.~~50%, plus a margin of 1~~S.~~50%~~ ~~per~~operating ~~annum,~~segment orrevenues ~~(B) a~~include ~~“eurodollar~~eliminations ~~rate” plus a margin~~ of ~~2.50%~~ ~~per~~intercompany ~~annum.~~transactions ~~After~~with the ~~completion~~international ofoperating ~~two fiscal quarters after the closing date, the margin under the amended revolving credit line applicable to base rate loans ranges from 1~~segment.~~00%~~ ~~per~~See ~~annum to~~Note ~~1.50%~~22 per annum and the margin applicable to eurodollar rate loans ranges from 2.00% per annum to 2.50% per annum, and will be adjusted based upon Cinemark USA, Inc. achieving certain performance targets. Cinemark USA, Inc. is required to pay a commitment fee calculated at the rate of ~~0.50%~~our ~~per~~consolidated ~~annum~~financial ~~on the average daily unused portion of the amended revolving credit line, payable quarterly in arrears~~statements.

~~Cinemark~~• ~~USA, Inc~~Consolidated.’s ~~obligations~~Admissions ~~under~~revenues ~~the~~of ~~amended~~$514.2 ~~senior~~million ~~secured~~was ~~credit~~attributable ~~facility~~to ~~are guaranteed~~attendance byof us128.5 million patrons and ~~certain~~an average ticket price of ~~our~~$4.00. ~~subsidiaries~~Concession ~~and~~revenues ~~are~~of ~~secured~~$260.2 bymillion ~~mortgages~~was onattributable ~~certain~~to ~~fee~~attendance ~~and leasehold~~of ~~properties~~128.5 million patrons and ~~security~~a ~~interests~~concession inrevenues ~~substantially~~per ~~all~~patron rate of ~~its~~$2.03. ~~domestic~~• ~~personal~~U.S. ~~and intangible~~Admissions ~~property,~~revenues ~~including~~of ~~without~~$370.4 ~~limitation,~~million ~~pledges~~was ofattributable ~~all~~to attendance of ~~the~~81.6 ~~capital~~million ~~stock~~patrons and an average ticket price of ~~Cinemark USA,~~$4.54. ~~Inc~~Concession revenues of $199.,1 ~~all~~million was attributable to attendance of ~~the~~81.6 ~~capital~~million ~~stock~~patrons and a concession revenues per patron rate of ~~CNMK~~$2.44. ~~Holding,~~• ~~Inc~~International. ~~and~~Admissions ~~certain~~revenues of ~~Cinemark~~$143.8 ~~USA,~~million ~~Inc~~was attributable to attendance of 46.~~’s domestic~~9 ~~subsidiaries~~million patrons and ~~65%~~an average ticket price of ~~the~~$3.06. ~~voting~~Concession ~~stock~~revenues of ~~certain~~$61.1 million was attributable to attendance of ~~its~~46.9 ~~foreign~~million ~~subsidiaries~~patrons and a concession revenues per patron rate of $1. 30.

28 Theatre Operating Costs (excludes depreciation and amortization expense). Theatre operating costs were $606.3 million, or 73.1% of revenues, for the period from January 1, 2006 to October 4, 2006. The table below, presented by reportable operating segment, summarizes our theatre operating costs for the period from January 1, 2006 to October 4, 2006 (in millions):


	U.S.		International
	Operating		Operating
	Segment		Segment		Consolidated


Film rentals and advertising	$	203.1	$	71.9	$	275.0
Concession supplies	$	26.3	$	15.6	$	41.9
Salaries and wages	$	62.2	$	16.8	$	79.0
Facility lease expense	$	75.9	$	33.6	$	109.5
Utilities and other	$	72.3	$	28.6	$	100.9

Total theatre operating costs	$	439.8	$	166.5	$	606.3

At• ~~December 31, 2004, there was approximately $258~~Consolidated.~~1 million~~ ~~outstanding~~Film ~~under~~rentals ~~the amended term loan~~ and noadvertising ~~borrowings~~costs ~~outstanding~~were ~~under the amended revolving credit line. Approximately~~ $99275.~~9 million~~0 ~~was available for borrowing under the amended revolving credit line~~million, ~~giving~~representing ~~effect to a $0~~53.~~1 million~~5% ~~letter~~ of ~~credit~~admissions ~~outstanding~~revenues. ~~The~~Concession ~~average~~supplies ~~interest~~expense ~~rate~~was on$41.9 ~~outstanding borrowings under the amended senior secured credit facility at December 31~~million, ~~2004~~representing ~~was 4~~16.41% ~~per~~of ~~annum~~concession revenues.

~~Cinemark Brasil Notes Payable~~27

AsTable of December 31, 2004, Cinemark Brasil S.A. had four main types of funding sources executed as follows: Contents

(1) Banco Nacional de Desenvolvimento Econômico e Social (“BNDES”, the Brazilian National Development Bank) credit line in the U.S. dollar equivalent in Brazilian reais of US$3.8 million. Interest accrues at a BNDES basket rate, which is a multiple currency rate based on the rate at which the bank borrows, plus a spread amounting to 11.4%. At December 31, 2004, there was approximately US$0.2 million outstanding, which matures in April 2005.

		Salaries and wages was $79.0 million, representing 9.5% of total revenues, facility lease expense was $109.5 million, representing 13.2% of total revenues, and utilities and other costs were $100.9 million, representing 12.2% of total revenues.

•		U.S. Film rentals and advertising costs were $203.1 million, representing 54.8% of admissions revenues. Concession supplies expense was $26.3 million, representing 13.2% of concession revenues.

		Salaries and wages were $62.2 million, representing 10.3% of total revenues, facility lease expense was $75.9 million, representing 12.5% of total revenues, and utilities and other costs were $72.3 million, representing 11.9% of total revenues, all of which reflected the impact of new theatre openings.

•		International. Film rentals and advertising costs were $71.9 million, representing 50.0% of admissions revenues. Concession supplies expense was $15.6 million, representing 25.5% of concession revenues.

		Salaries and wages were $16.8 million, representing 7.5% of total revenues, facility lease expense was $33.6 million, representing 15.1% of total revenues, and utilities and other costs were $28.6 million, representing 12.8% of total revenues, all of which reflected the impact of new theatre openings.

~~(2) BNDES~~ General ~~credit~~and ~~line~~Administrative ~~in the U~~Expenses.S. ~~dollar~~General ~~equivalent~~and inadministrative ~~Brazilian~~expenses ~~reais~~were ~~of US~~$146.90 million ~~executed~~and inincluded ~~November 2001~~salaries, ~~with~~wages aand ~~maturity~~related ~~date~~costs of ~~October 2006~~$28.1 million, ~~Interest~~professional ~~accrues~~fees atof ~~a BNDES basket~~$3.4 million, ~~rate~~and ~~plus~~service acharges ~~spread~~related ~~amounting~~ to ~~11.2%.~~credit Atcard ~~December 31,~~activity ~~2004,~~of ~~there was approximately US~~$03.9 2 million ~~outstanding under this credit line~~.

~~(3) Project~~ Depreciation ~~developer~~and ~~financing~~Amortization. ~~executed~~Depreciation ~~with~~and ~~two~~amortization ~~engineering~~expense, ~~companies~~including ~~in September 2000 in~~amortization ~~the amount~~ of ~~US$1.8 million~~favorable ~~with a maturity date of September 2005. Interest accrues at a rate of TJLP+5% (Taxa de Juros de Longo Prazo (a long-term interest rate published by the Brazilian government)). At December 31~~leases, ~~2004, there~~ was ~~approximately US~~$060.40 million ~~outstanding under this financing arrangement~~.

~~(4) Project~~ Impairment ~~developer~~of ~~financing~~Long-Lived ~~executed~~Assets. ~~with~~We arecorded ~~mall~~asset ~~developer~~impairment incharges ~~February 2004~~on inassets ~~the~~held ~~amount~~and used of US$05.7 million ~~with a maturity date of February 2009. Interest accrues at a rate of TJLP + 5.5% (Taxa de Juros de Longo Prazo (a long-term interest rate published by the Brazilian government)). At December 31~~, ~~2004,~~which ~~there~~ was ~~approximately~~for ~~US$0.7 million~~theatre ~~outstanding under this financing arrangement~~properties.

~~These~~Loss ~~sources~~on ~~are~~Sale ~~secured~~of byAssets and Other. We recorded a ~~variety~~loss ofon ~~instruments,~~sale ~~including~~of ~~comfort~~assets ~~letters~~and ~~from~~other ~~Cinemark International,~~of L$2.~~L.C.~~9 million, ~~promissory~~which ~~notes~~primarily ~~for~~related up to ~~130%~~a ofloss on the ~~value,~~exchange of a ~~revenue~~theatre ~~reserve~~in ~~account~~the ~~and~~United States with a ~~equipment~~third ~~collateral.~~party, Asthe write-off of ~~December 31,~~intangible ~~2004~~assets for closed theatres, anlease ~~aggregate~~termination fees incurred due to theatre closures and the replacement of ~~approximately~~certain ~~US$2.2 million~~theatre ~~was outstanding~~assets.

~~Cinemark~~Interest ~~Chile~~Expense. Interest costs incurred, including amortization of debt issue costs, was $69.2 million. See Note ~~Payable~~13 to our consolidated financial statements for a discussion of our long-term debt and related interest rates.

OnLoss ~~March 26,~~on ~~2002,~~Early ~~Cinemark~~Retirement ~~Chile~~of SDebt.A. ~~entered~~We ~~into~~recorded a ~~Debt~~loss ~~Acknowledgment,~~on ~~Rescheduling~~early ~~and Joint~~retirement ~~Guarantee~~of ~~and~~debt ~~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 $103.6 3 million inrelated ~~Chilean pesos (adjusted for inflation pursuant~~ to the ~~Unidades~~repurchase ~~de Fomento). Cinemark Chile S.A. was required to make 24 equal quarterly installments~~ of ~~principal plus accrued and unpaid interest, commencing March 27, 2002~~$10. ~~On September~~0 ~~29,~~million ~~2004,~~aggregate ~~Cinemark~~principal ~~Chile~~amount ~~S.A. refinanced~~of ~~the~~our ~~outstanding~~9% ~~debt~~senior ~~under~~subordinated annotes ~~amended debt agreement with two of the original local banks, Corpbanca~~ and ~~Banco Security~~$39.8 million ~~The~~aggregate ~~amended~~principal ~~debt~~amount ~~agreement~~at ~~requires~~maturity 24of ~~equal~~our ~~quarterly installments~~9 of3/4% ~~principal~~senior ~~plus~~discount ~~accrued and unpaid interest, commencing December 31, 2004~~notes. ~~The~~See ~~agreement requires~~Note ~~Cinemark~~13 ~~Chile S.A.~~ to ~~maintain~~our ~~certain~~consolidated financial ~~ratios and contains other restrictive covenants typical for agreements of this type such 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 December 31, 2004, US$7.3 million was outstanding under this agreement.

~~Ratings~~ Income Taxes. We recorded income tax expense of $9.1 million, which represented an effective tax rate of 24.0%. See Note 20 to our consolidated financial statements.

~~We are rated by nationally recognized rating agencies. The significance of individual ratings~~28 varies from agency to agency. However, companies assigned ratings at the top end of the range have, in the opinion of certain rating agencies, the strongest capacity for repayment of debt or payment of claims, while companies at the bottom end of the range have the weakest capability. Ratings are always subject to change and there can be no assurance that our

29 Table of Contents

~~Table~~Analysis of ~~Contents~~Period from October 5, 2006 to December 31, 2006

~~current~~ Revenues. ~~ratings~~Total ~~will~~revenues ~~continue~~were $391.5 million for ~~any~~the ~~given~~ period offrom ~~time.~~October 5, A2006 ~~downgrade~~to ofDecember 31, ~~our~~2006. ~~debt~~The ~~ratings~~table below, ~~depending~~ onpresented ~~the~~by ~~extent~~reportable operating segment, ~~could~~summarizes ~~increase~~our ~~the~~revenue performance ~~cost~~and tocertain ~~borrow~~key ~~funds.~~performance ~~Below~~indicators ~~are~~that impact our ~~latest~~revenues ~~ratings~~for ~~per~~the period from ~~category~~October 5, ~~which~~2006 ~~were~~to ~~current as of February~~December 31, ~~28, 2005.~~2006:

Category	Moody’s		Standard and Poor’s
	U.S.			International
Cinemark, Inc. 9 3/4% Senior Discount Notes	B-		Caa1
	Operating			Operating
Cinemark USA, Inc. Senior Secured Credit Facility	Ba3		BB-
	Segment			Segment		Consolidated
Cinemark USA, Inc. 9% Senior Subordinated Notes	B3		B-
Admissions revenues (in millions)	$	207.6		$	38.5	$	246.1
Concession revenues (in millions)	$	98.3		$	17.3	$	115.6
Other revenues (in millions) (1)	$	22.5		$	7.3	$	29.8
Total revenues (in millions) (1)	$	328.4		$	63.1	$	391.5
Attendance (in millions)		37.2			12.6		49.8
Revenues per screen (in dollars) (1)	$	100,939		$	66,203	$	93,072

~~New~~(1) ~~Accounting~~U.S. ~~Pronouncements~~ operating segment revenues include eliminations of intercompany transactions with the international operating segment. See Note 22 of our consolidated financial statements.

In• ~~January 2003,~~Consolidated. ~~the~~Admissions ~~Financial~~revenues ~~Accounting~~of ~~Standards~~$246.1 ~~Board~~million ~~(“FASB”)~~was ~~issued~~attributable ~~Interpretation~~to Noattendance of 49. 468 ~~(“FIN~~million ~~46”),~~patrons ~~“Consolidation~~and ofan ~~Variable~~average ~~Interest~~ticket ~~Entities~~price —of an$4.94. ~~Interpretation~~Concession revenues of ~~Accounting Research~~$115.6 ~~Bulletin~~million ~~(“ARB”)~~was Noattributable to attendance of 49. ~~51.”~~8 ~~FIN~~million 46patrons ~~addresses~~and ~~consolidation~~concession byrevenues ~~business~~per ~~enterprises~~patron rate of ~~variable~~ ~~interest~~$2.32. ~~entities~~• U.S. ~~FIN~~Admissions 46revenues ~~requires~~of a$207.6 ~~variable~~million ~~interest~~was ~~entity~~attributable to beattendance ~~consolidated~~of by37.2 ~~a company~~million ifpatrons ~~that~~and ~~company~~an isaverage ~~subject~~ticket toprice aof ~~majority~~$5.59. Concession revenues of ~~the~~$98.3 ~~risk~~million was attributable to attendance of ~~loss~~37.2 ~~from~~million ~~the~~patrons ~~variable~~and ~~interest entity’s~~a ~~activities~~concession orrevenues ~~entitled~~per topatron ~~receive~~rate aof ~~majority~~$2.65. • International. Admissions revenues of ~~the~~$38.5 ~~entity’s~~million ~~residual~~was ~~returns~~attributable orto ~~both~~attendance of 12.6 ~~We adopted~~million ~~FIN~~patrons 46and onan ~~January 1,~~average ~~2004~~ticket price of $3.05. ~~The~~Concession ~~adoption~~revenues of ~~FIN~~$17.3 46million ~~did~~was ~~not~~attributable ~~have~~to attendance of 12.6 million patrons and a ~~material~~concession ~~impact~~revenues onper ~~our consolidated~~patron ~~financial~~rate ~~statements~~of $1. 37.

InTheatre ~~December 2004,~~Operating ~~the~~Costs ~~FASB~~(excludes ~~issued~~depreciation ~~Statement~~and ofamortization ~~Financial Accounting Standards (“SFAS”~~expense) No. ~~153,~~ ~~Exchanges~~Theatre ofoperating costs ~~Non-monetary~~were ~~Assets-Amendment of APB Opinion No~~$279.9 ~~29.~~million, ~~SFAS~~or No71. ~~153~~5% ~~amends Accounting Principles Board (“APB”) Opinion No. 29 to eliminate the exception for nonmonetary exchanges~~ of ~~similar~~revenues, ~~productive assets and replaces it with a general exception~~ for ~~exchanges~~the ~~of nonmonetary~~period ~~assets~~from ~~that do not have commercial substance~~October 5, ~~defined~~2006 asto ~~transactions that are not~~December ~~expected~~31, to2006. ~~result~~The intable ~~significant~~below, ~~changes~~presented inby ~~the~~reportable ~~cash~~operating ~~flows~~segment, ofsummarizes ~~the~~our ~~reporting entity. This statement~~theatre isoperating ~~effective~~costs for ~~exchanges~~the ofperiod ~~non-monetary~~from ~~assets occurring after June~~October 155, ~~2005.~~2006 ~~The~~to ~~adoption of SFAS No.~~December ~~153~~31, is2006 ~~not~~(in ~~expected to have a material impact on our consolidated financial statements.~~millions):

In December 2004, the FASB issued SFAS No. 123(R), Share-Based Payment, which establishes accounting standards for all transactions in which an entity exchanges its equity instruments for goods and services. SFAS No. 123(R) focuses primarily on accounting for transactions with employees, and carries forward without change prior guidance for share-based payments for transactions with non employees. SFAS No. 123(R) eliminates the intrinsic value measurement objective in APB Opinion No. 25 and generally requires us 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 cost 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 us to estimate the number of instruments that will ultimately be issued, rather than accounting for forfeitures as they occur. We are required to apply SFAS No. 123(R) to all awards granted, modified or settled in our first annual reporting period after December 15, 2005. We will be required to use the “modified prospective method’’, under which we must recognize compensation cost for all awards granted after we adopt the standard and for the unvested portion of previously granted awards that are outstanding on that date. We have commenced our analysis of the impact of SFAS 123(R), but cannot predict with reasonable certainty the number of options that will be unvested and outstanding on December 31, 2005. Accordingly, we cannot currently quantify with precision the effect that this standard will have on our financial position or results of operations.


	U.S.		International
	Operating		Operating
	Segment		Segment		Consolidated

Film rentals and advertising	$	112.3	$	18.7	$	131.0
Concession supplies	$	12.4	$	4.7	$	17.1
Salaries and wages	$	33.6	$	6.0	$	39.6
Facility lease expense	$	38.6	$	9.7	$	48.3
Utilities and other	$	36.0	$	7.9	$	43.9

Total theatre operating costs	$	232.9	$	47.0	$	279.9

~~FASB~~• ~~Staff Position (“FSP”) No~~Consolidated. ~~109-2,~~ ~~“Accounting~~Film rentals and ~~Disclosure~~advertising ~~Guidance~~costs ~~for~~were ~~the~~$131.0 ~~Foreign Earnings~~million, ~~Repatriation~~representing ~~Provision~~53.2% ~~within the American Jobs Creation Act~~ of ~~2004”~~admissions ~~(the~~revenues. ~~“Jobs~~Concession ~~Act”) provides~~supplies ~~guidance on enterprises’ income tax~~ expense ~~and~~was ~~deferred tax liability~~$17.1 ~~The~~million, ~~Jobs~~representing ~~Act~~14.8% ~~was enacted~~of onconcession ~~October 22, 2004~~revenues. ~~FSP~~Salaries ~~109-2~~and ~~states~~wages ~~that~~were an$39.6 ~~enterprise~~million, isrepresenting ~~allowed~~10.1% ~~time~~of ~~beyond~~total ~~the financial~~revenues, ~~reporting~~facility ~~period~~lease ofexpense ~~enactment~~was to$48.3 ~~evaluate~~million, ~~the~~representing ~~effect~~12.3% of ~~the~~total ~~Jobs~~revenues, ~~Act~~and onutilities ~~its~~and ~~plan~~other ~~for reinvestment~~costs orwere ~~repatriation~~$43.9 ofmillion, ~~foreign~~representing ~~earnings~~11.2% ~~for purposes~~ of ~~applying~~total ~~SFAS No~~revenues. ~~109~~

3029

“Accounting for Income Taxes”. We have not yet completed evaluating the impact of the repatriation provisions. We are currently performing an earnings and profit study to enable us to model and evaluate the impact. Results cannot be estimated at this time. Accordingly, as provided for in FSP 109-2, we have not adjusted our tax expense or deferred tax liability to reflect the repatriation provisions of the Jobs Act. We expect to complete our evaluation in 2005.

•		U.S. Film rentals and advertising costs were $112.3 million, representing 54.1% of admissions revenues. Concession supplies expense was $12.4 million, representing 12.6% of concession revenues.

		Salaries and wages were $33.6 million, representing 10.2% of total revenues, facility lease expense was $38.6 million, representing 11.8% of total revenues, and utilities and other costs were $36.0 million, representing 11.0% of total revenues, all of which reflected the impact of new theatre openings.

•		International. Film rentals and advertising costs were $18.7 million, representing 48.6% of admissions revenues. Concession supplies expense was $4.7 million, representing 27.2% of concession revenues.

		Salaries and wages were $6.0 million, representing 9.5% of total revenues, facility lease expense was $9.7 million, representing 15.4% of total revenues, and utilities and other costs were $7.9 million, representing 12.5% of total revenues, all of which reflected the impact of new theatre openings.

~~Item~~ General 7Aand Administrative Expenses. ~~Quantitative~~General and ~~Qualitative~~administrative ~~Disclosures~~expenses ~~About~~were ~~Market~~$21.8 million and ~~Risk~~included salaries, wages and related costs of $12.3 million, professional fees of $2.3 million, and service charges related to credit card activity of $1.6 million.

WeDepreciation ~~have~~and ~~exposure~~Amortization. toDepreciation ~~financial~~and ~~market~~amortization ~~risks~~expense, including ~~changes~~amortization of infavorable ~~interest rates~~leases, ~~foreign currency~~was ~~exchange rates and other relevant market prices~~$34.9 million.

~~Interest~~ Impairment ~~Rate~~of ~~Risk~~Long-Lived Assets. We recorded asset impairment charges on assets held and used of $23.3 million, which consisted of $8.4 million of theatre properties, $13.6 million of goodwill associated with theatre properties, and $1.3 million of intangible assets associated with theatre properties. See Notes 10 and 11 to our consolidated financial statements.

AnLoss ~~increase~~on orSale ~~decrease~~of inAssets ~~interest~~and ~~rates would affect interest costs relating to our variable rate debt facilities~~Other. We ~~and~~recorded ~~our~~a ~~subsidiaries~~loss ~~are~~on ~~currently~~sale ~~parties~~of toassets ~~such~~and ~~variable~~other ~~rate debt facilities. At December 31, 2004, there was an aggregate~~ of ~~approximately~~ $~~271~~2.8 3 million, ~~of variable~~which ~~rate~~primarily ~~debt~~related ~~outstanding~~to ~~under~~the ~~these~~sale ~~facilities.~~of ~~Based~~real onproperty ~~interest~~associated ~~rates~~with inone ~~effect~~of on our ~~variable~~ ~~rate debt outstanding at December 31, 2004, a 10% increase in these rates would not increase our annual interest expense by a material amount~~U. ~~Changes in interest rates do not have a~~S. ~~direct impact on interest expense relating to the remaining fixed rate debt facilities~~theatres.

~~The~~Interest ~~tables~~Expense. ~~below~~Interest ~~provide~~costs ~~information~~incurred, ~~about~~including amortization of debt issue costs, was $42.2 million. See Note 13 to our ~~fixed~~consolidated ~~rate~~financial ~~and~~statements ~~variable~~for ~~rate~~a discussion of our long-term debt ~~agreements~~ asand ofrelated ~~December 31,~~interest ~~2004 and 2003:~~rates.

	Expected Maturity As of December 31, 2004
	(in millions)																Average
	December 31,														Fair		Interest
	2005		2006		2007		2008		2009		Thereafter		Total		Value		Rate
Fixed rate	$	0.1	$	0.1	$	—	$	—		—	$	932.1	$	932.3	$	741.0		9.5	%
Variable rate		6.4		6.5		5.0		4.0		3.9		246.0		271.8		271.4		4.5	%
Total debt	$	6.5	$	6.6	$	5.0	$	4.0	$	3.9	$	1,178.1	$	1,204.1	$	1,012.4

Loss on Early Retirement of Debt. We recorded a loss on early retirement of debt of approximately $5.8 million related to the refinancing of our existing term loan in connection with the Century Acquisition. See Notes 5 and 13 to our consolidated financial statements.

	Expected Maturity As of December 31, 2003
	(in millions)																Average
	December 31,														Fair		Interest
	2004		2005		2006		2007		2008		Thereafter		Total		Value		Rate
Fixed rate	$	0.1	$	—	$	0.1	$	—	$	104.5	$	374.2	$	478.9	$	474.4		8.9	%
Variable rate		6.6		6.9		4.4		121.8		39.8		—		179.5		179.2		4.1	%
Total debt	$	6.7	$	6.9	$	4.5	$	121.8	$	144.3	$	374.2	$	658.4	$	653.6

Income Taxes. We recorded income tax expense of $3.1 million, which represented an effective tax rate of (18.1%). See Note 20 to our consolidated financial statements.

~~Foreign~~Item 8. ~~Currency~~Financial ~~Exchange~~Statements ~~Rate~~and ~~Risk~~Supplementary Data

WeThe ~~are~~financial ~~also~~statements ~~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~~supplementary ~~interior~~data ~~finish items and other operating supplies used by our international subsidiaries. Principally all the revenues and operating expenses of our international subsidiaries~~ are ~~transacted~~listed inon the ~~country’s~~Index ~~local~~on ~~currency.~~page ~~Generally~~F-1 ~~accepted accounting principles in the U.S. require that our subsidiaries use the currency~~ of ~~the primary~~this ~~economic~~Form ~~environment in which they operate as their functional currency~~10-K. IfSuch ~~our~~financial ~~subsidiaries operate~~statements inand asupplementary ~~highly~~data ~~inflationary~~are ~~economy,~~included ~~generally~~herein ~~accepted~~beginning 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~~page ~~the country in which we operate~~F-3. ~~Based upon our equity ownership in our international subsidiaries~~ ~~as of December 31, 2004, holding everything else constant, a 10% immediate unfavorable change in each of the foreign currency~~

31Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure

~~Table of Contents~~ None.

~~exchange rates to which we are exposed would decrease the net fair value of our investments in~~30 ~~our international subsidiaries by approximately $13 million.~~

TheTable accumulated other comprehensive loss account in stockholders’ equity of $86,544,422 and $77,121,825 at December 31, 2003 and December 31, 2004, respectively, primarily relates to the cumulative foreign currency adjustments from translating the financial statements of Cinemark Argentina, S.A., Cinemark Brasil S.A. and Cinemark de Mexico, S.A. de C.V. into U.S. dollars. Contents

InItem 9A. ~~2003~~Controls and ~~2004, all foreign countries where we have operations, including Argentina, Brazil~~Procedures and Mexico were deemed non-highly inflationary. Thus, any fluctuation in the currency results in a cumulative foreign currency translation adjustment to the accumulated other comprehensive loss account recorded as an increase in, or reduction of, stockholders’ equity.

OnEvaluation ~~December 31, 2004, the exchange rate for the Brazilian real was 2.65 reais to the U.S. dollar (the exchange rate was 2.89 reais to the U.S. dollar at December 31, 2003). As a result, the effect~~ of ~~translating~~Disclosure ~~the~~Controls ~~December 31,~~and ~~2004 Brazilian financial statements into U.S. dollars is~~Procedures reflected as a cumulative foreign currency translation adjustment to the accumulated other comprehensive loss account as an increase in stockholders’ equity of $8,711,434. At December 31, 2004, the total assets of our Brazilian subsidiaries were U.S. $101,268,957.

OnAs of December 31, ~~2004~~2008, ~~the~~we ~~exchange~~carried ~~rate~~out ~~for~~an evaluation required by the ~~Mexican~~1934 ~~peso~~Act, ~~was~~under ~~11.22~~the supervision ~~pesos~~and towith the ~~U.S.~~participation of our principal executive officer and principal financial ~~dollar~~officer, (of the ~~exchange~~effectiveness ~~rate~~of ~~was~~the ~~11.20~~design ~~pesos~~and tooperation ~~the~~of ~~U.S.~~our ~~dollar~~disclosure atcontrols ~~December 31~~and procedures, ~~2003~~as defined in Rule 13a-15(e) of the 1934 Act. ~~The~~Based ~~effect~~on ofthis evaluation, our principal ~~translating~~executive ~~the~~officer and principal financial officer concluded that, as of December 31, ~~2004~~2008, ~~Mexican~~our disclosure ~~financial~~controls ~~statements~~and ~~into~~procedures ~~U.S.~~were ~~dollars~~effective ~~was~~to ~~immaterial~~provide toreasonable assurance that information ~~the~~required ~~change~~to be disclosed by us in the ~~accumulated~~reports ~~other~~that ~~comprehensive~~we ~~loss~~file ~~account.~~or Atsubmit ~~December 31~~under the 1934 Act is recorded, ~~2004~~processed, summarized, and reported within the ~~total~~time periods specified in the SEC’s rules ~~assets~~and offorms and were effective to provide reasonable assurance that such information is accumulated and communicated to our ~~Mexican~~management, ~~subsidiaries~~including ~~were~~our ~~U.S.~~principal ~~$100~~executive officer and principal financial officer,~~886,012~~ as appropriate to allow timely decisions regarding required disclosures.

OnManagement’s ~~December 31,~~Report ~~2004,~~on ~~the~~Internal ~~exchange~~Control ~~rate~~over ~~for~~Financial ~~the Argentine peso was 2.97 pesos to the U.S.~~Reporting dollar (the exchange rate was 2.94 pesos to the U.S. dollar at December 31, 2003). The effect of translating the December 31, 2004 Argentine financial statements into U.S. dollars was immaterial to the change in the accumulated other comprehensive loss account. At December 31, 2004, the total assets of our Argentine subsidiaries were U.S. $16,880,777.

~~During~~Management ~~2004,~~is weresponsible ~~sold~~for ~~our~~establishing ~~United~~and ~~Kingdom~~maintaining ~~theatres~~adequate internal control over financial reporting, ~~which~~as ~~resulted~~defined in aRule 13a-15(f) ~~reduction~~ of ~~stockholders~~ the 1934 Act. The Company’s ~~equity~~internal ~~upon~~control framework and processes are designed to provide reasonable assurance to management and the ~~realization~~board of directors ~~$1,075,684~~regarding the reliability of ~~cumulative~~financial ~~foreign~~reporting ~~currency~~and ~~translation~~the preparation of the Company’s ~~adjustments~~consolidated ~~previously~~financial ~~recorded~~statements in accordance with the ~~accumulated~~accounting ~~other~~principles ~~comprehensive~~generally ~~loss~~accepted in ~~account~~the United States of America. Management has assessed the effectiveness of our internal control over financial reporting as of December 31, 2008 based on criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) in Internal Control—Integrated Framework. As a result of this assessment, management concluded that, as of December 31, 2008, our internal control over financial reporting was effective.

~~Item~~ Certifications 8of our CEO and our CFO, which are required in accordance with Rule 13a-14 of the Exchange Act, are attached as exhibits to this Annual Report. ~~Financial~~This ~~Statements~~“Controls and ~~Supplementary~~Procedures” section ~~Data~~includes the information concerning the controls evaluation referred to in the certifications, and it should be read in conjunction with the certifications for a more complete understanding of the topics presented.

The Company’s independent auditors, Deloitte & Touche LLP, with direct access to the Company’s board of directors through its Audit Committee, have audited the consolidated financial statements prepared ~~and~~by ~~supplementary~~the ~~data~~Company. ~~are~~Their ~~listed~~report on the ~~Index~~consolidated onfinancial ~~page~~statements ~~F-1.~~is ~~Such~~included in Part ~~financial~~II, ~~statements~~Item 8. Financial Statements and ~~supplementary~~Supplementary ~~data~~Data. ~~are~~Deloitte ~~included~~& ~~herein~~Touche ~~beginning~~LLP has issued an attestation report on ~~page~~the ~~F-3~~Company’s internal control over financial reporting. Deloitte & Touche LLP’s report on the Company’s internal control over financial reporting is included herein.

~~Item 9.~~ Changes in ~~and~~Internal ~~Disagreements~~Control ~~With~~Over ~~Accountants on Accounting and~~ Financial ~~Disclosure~~Reporting

~~None.~~There were no changes in our internal control over financial reporting identified in connection with the evaluation required by paragraph (d) of Exchange Act Rules 13a-15 that occurred during the quarter ended December 31, 2008 that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

~~Item~~ Limitations ~~9A.~~on Controls ~~and Procedures~~

~~Evaluation~~ Management ofdoes ~~Disclosure~~not ~~Controls~~expect that our disclosure controls and ~~Procedures~~procedures or our internal control over financial reporting will prevent or detect all errors or fraud. Any control system, no matter how well designed and operated, is based upon certain assumptions and can provide only reasonable, not absolute, assurance that its objectives will be met. Further, no evaluation of controls can provide absolute assurance that misstatements due to error or fraud will not occur or that all control issues and instances of fraud, if any, within the Company have been detected.

~~We have established a system of controls and other procedures designed to ensure that~~31 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

32 Table of Contents

~~Table~~Attestation Report of ~~Contents~~Deloitte & Touche, LLP

~~Company~~REPORT ~~and~~OF ~~its~~INDEPENDENT ~~consolidated~~REGISTERED ~~subsidiaries~~PUBLIC ~~required~~ACCOUNTING ~~to be included in our reports filed or~~FIRM ~~submitted under the Exchange Act.~~

~~Changes~~To inthe ~~Internal~~Board ~~Controls~~of Directors of Cinemark, Inc. Plano, Texas

~~There~~We have ~~been~~audited nothe ~~significant~~internal ~~changes~~control inover ~~our~~financial ~~system~~reporting of ~~internal~~Cinemark, ~~controls~~Inc. orand subsidiaries (the “Company”) as of December 31, 2008, based on criteria established in ~~other~~Internal Control ~~factors~~— Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway ~~that~~Commission. ~~could~~The ~~significantly~~Company’s ~~affect~~management is responsible for maintaining effective internal ~~controls~~control over ~~within~~financial reporting and for its assessment of the ~~period~~effectiveness ~~covered~~of byinternal ~~this~~control over financial reporting, included in the accompanying management’s report oron internal control over ~~subsequent~~financial reporting. Our responsibility is to ~~the~~express ~~evaluation~~an byopinion on the ~~Chief~~Company’s ~~Executive~~internal ~~Officer~~control over ~~and~~financial ~~Chief~~reporting ~~Financial~~based ~~Officer~~on our audit.

~~PART~~ We ~~III~~conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

~~Item~~ A 10company’s internal control over financial reporting is a process designed by, or under the supervision of, the company’s principal executive and principal financial officers, or persons performing similar functions, and effected by the company’s board of directors, management, and other personnel to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. ~~Directors~~A company’s internal control over financial reporting includes those policies and ~~Executive~~procedures ~~Officers~~that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the ~~Registrant~~transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Name	Age		Position
Lee Roy Mitchell		68	Chairman of the Board; Chief Executive Officer; Director
Tandy Mitchell		54	Executive Vice President; Assistant Secretary
Alan Stock		44	President; Chief Operating Officer
Robert Copple		46	Senior Vice President; Treasurer; Chief Financial Officer; Assistant Secretary
Tim Warner		60	Senior Vice President; President of Cinemark International, L.L.C.
Robert Carmony		47	Senior Vice President-Operations
Margaret Richards		46	Vice President-Real Estate; Assistant Secretary
John Lundin		55	Vice President-Film Licensing
Walter Hebert, III		59	Vice President-Purchasing
Don Harton		47	Vice President-Construction
Michael Cavalier		38	Vice President-General Counsel; Secretary
Terrell Falk		54	Vice President-Marketing and Communications
Tom Owens		48	Vice President-Development
Benjamin D Chereskin		46	Director
James N Perry, Jr		44	Director
Robin P Selati		39	Director
Vahe A Dombalagian		31	Director
Enrique F Senior		61	Director
Peter R Ezersky		44	Director

Because of the inherent limitations of internal control over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may not be prevented or detected on a timely basis. Also, projections of any evaluation of the effectiveness of the internal control over financial reporting to future periods are subject to the risk that the controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

~~As a~~In ~~result~~our ofopinion, the ~~Recapitalization~~Company maintained, ~~which~~in ~~occurred~~all onmaterial ~~April 2~~respects, ~~2004,~~ ~~the~~effective ~~following~~internal ~~directors~~control over ~~resigned~~financial ~~from~~reporting ~~Cinemark~~as ~~USA~~of December 31, ~~Inc.’s~~2008, ~~Board~~based ofon ~~Directors:~~the ~~Mrs. Tandy Mitchell,~~criteria ~~Mr. Alan~~established ~~Stock,~~in ~~Mr. Robert~~Internal Control ~~Copple,~~— ~~Mr. W.~~Integrated ~~Bryce~~Framework ~~Anderson,~~issued ~~Mr. Heriberto~~by ~~Guerra,~~the ~~Jr.,~~Committee ~~Mr. James~~of ~~Stern,~~Sponsoring ~~Mr. Denny~~Organizations ~~Rydberg,~~of ~~and~~the MrTreadway Commission. ~~William Spiegel.~~

~~The~~We ~~Company~~have ~~has~~also ~~adopted~~audited, ain ~~code~~accordance with the standards of ~~ethics~~the ~~applicable~~Public toCompany ~~its~~Accounting Oversight ~~principal~~Board ~~executive~~(United ~~officer~~States), the consolidated financial statements as of and ~~its~~for the year ended ~~principal~~December 31, 2008 and our report dated March 10, 2009 expressed an unqualified opinion on those financial ~~officer~~statements.

~~The~~/s/ ~~following~~Deloitte is& aTouche ~~brief description of the business experience of each of our current~~LLP ~~directors and executive officers.~~

~~Lee~~Dallas, ~~Roy Mitchell has served as Chairman of the Board since March 1996 and as Chief Executive~~Texas ~~Officer and a Director since our inception in 1987. Since~~ March ~~1999~~10, ~~Mr. Mitchell has served as a~~2009 ~~director of Texas Capital Bancshares, Inc., a bank holding company. Mr. Mitchell has served on the~~ ~~Board of Directors of the National Association of Theatre Owners since 1991. Mr. Mitchell is the husband of Tandy Mitchell.~~

3332

~~Tandy~~PART Mitchell has served as Executive Vice President since October 1989 and Assistant Secretary since December 2003. Mrs. Mitchell also served as Vice Chairman of the Board from March 1996 to April 2004. Mrs. Mitchell is the wife of Lee Roy Mitchell and sister of Walter Hebert, III.

~~Alan Stock has served as President since March~~Item ~~1993 and as Chief Operating Officer since March 1992~~14. ~~Mr. Stock~~Principal ~~also~~Accounting ~~served~~Fees asand ~~a Director from April 1992 until April 2004.~~Services

~~Robert~~For ~~Copple~~the ~~has~~years ~~served~~ended ~~as Senior Vice President~~December 31, ~~Treasurer,~~2007 ~~Chief Financial Officer~~ and ~~Assistant~~ ~~Secretary~~2008, ~~since~~Deloitte ~~August 2000~~& ~~and~~Touche, ~~also~~LLP, ~~served~~our ~~as a Director from September 2001 to April~~independent ~~2004.~~auditor, ~~Mr. Copple~~billed ~~was~~the ~~acting~~aggregate ~~Chief~~fees ~~Financial~~listed ~~Officer~~in ~~from~~the ~~March 2000~~table tobelow ~~August 2000.~~(in millions):

Tim Warner has served as Senior Vice President since May 2002 and President of Cinemark International, L.L.C. since April 1996. Mr. Warner has served on the Board of Directors of the National Association of Theatre Owners since 1982 and was the Chairman of the National Association of Theatre Owners International Committee from 2002 through 2004.


Fees	2007		2008
Audit	$	1.5	$	2.0
Audit Related		0.1		—
Tax ⁽¹⁾		0.2		0.2
Other ⁽²⁾		1.7		—

Total	$	3.5	$	2.2

Robert Carmony has served as Senior Vice President-Operations since July 1997.


⁽¹⁾		Fees for assistance with our federal, state, local and foreign jurisdiction income tax returns and consultation and advice related to various tax compliance planning projects.

⁽²⁾		Fees for review of our SEC filings associated with the Century Acquisition and Cinemark Holdings, Inc.’s initial public offering.

~~Margaret~~PART ~~Richards has served as Vice President-Real Estate since March 1994 and as Vice~~IV ~~President and Assistant Secretary since October 1989.~~

~~John Lundin has served as Vice President-Film Licensing since September~~Item ~~2000~~15. ~~and~~Exhibits, asFinancial ~~Head~~Statement ~~Film~~Schedules ~~Buyer from September 1997 to September 2000.~~

~~Walter~~(a) ~~Hebert,~~Documents ~~III~~Filed ~~has served~~ as ~~Vice~~Part ~~President–Purchasing since July 1997. Mr. Hebert is the brother~~ of ~~Tandy~~this ~~Mitchell.~~Report

Don Harton has served as Vice President-Construction since July 1997.

	1.		The financial statement schedules and related data listed in the accompanying Index beginning on page F-1 are filed as a part of this report.

	2.		The exhibits listed in the accompanying Index beginning on page E-1 are filed as a part of this report.

~~Michael~~(b) ~~Cavalier has served as Vice President-General Counsel since July 1999, as Assistant~~Exhibits ~~Secretary from December 2002 to December 2003 and as Secretary since December 2003.~~

~~Terrell~~See ~~Falk has served as Vice President-Marketing and Communications since April 2001. From March 1998 to April 2001, Ms. Falk was Director of Large Format Theatres, overseeing~~ the ~~marketing and~~accompanying ~~operations~~Index ofbeginning ~~our~~on ~~IMAX~~page ~~theatres~~E-1.

~~Tom~~(c) ~~Owens~~Financial ~~has~~Statement ~~served as Vice President-Development since December 2003 and as Director of Real~~Schedules Estate since April 2001. From 1998 to April 2001, Mr. Owens was President of NRE, a company he founded that specialized in the development and financing of motion picture theatres. From 1996 to 1998, Mr. Owens served as President of Silver Cinemas International, Inc., a motion picture exhibitor. In May 2002, Silver Cinemas International, Inc., filed for bankruptcy protection under Chapter 11 of the United States Bankruptcy Code.

~~Benjamin~~See D.the ~~Chereskin~~accompanying ~~has~~Index ~~served~~beginning ason apage ~~Director~~F-1 ~~since~~for ~~April 2004. Mr. Chereskin is~~ a ~~Managing Director~~list of ~~Madison Dearborn Partners, LLC and co-founded~~ the ~~firm~~financial ~~in 1993. Previously, Mr.~~statements ~~Chereskin~~included ~~was~~in ~~with~~this ~~First Chicago Venture Capital for nine years~~report. ~~Mr. Chereskin also serves on the~~ ~~Board of Directors of Cornerstone Brands, Inc., Tuesday Morning Corporation, NWL Holdings, Inc., Family Christian Stores, Inc. and Carrols Holdings Corp.~~

~~James~~All N.schedules ~~Perry,~~not ~~Jr.~~identified ~~has~~above ~~served~~have ~~as a Director since April 2004. Mr. Perry is a Managing Director of Madison Dearborn Partners, LLC and has~~ been ~~employed~~omitted bybecause ~~the~~they ~~firm~~are ~~since~~not ~~1993. Previously~~required, ~~Mr. Perry~~are ~~was with First Chicago Venture Capital for eight years. Mr. Perry currently~~not ~~serves~~applicable onor the ~~Board~~information ofis ~~Directors~~included ofin ~~Nextel~~the ~~Partners,~~consolidated ~~Inc.,~~financial ~~Cbeyond~~statements ~~Communications,~~or ~~LLC, Madison~~notes ~~River~~contained ~~Telephone~~in ~~Company,~~this ~~Intelsat, Ltd~~report.~~, and Band-X.~~

~~Robin P. Selati has served as a Director since April 2004. Mr. Selati is a Managing Director~~33 ~~of Madison Dearborn Partners, LLC and has been employed by the firm since 1993. Previously, Mr. Selati was with Alex,~~

34 Table of Contents

~~Table of Contents~~SIGNATURES

~~Brown~~ Pursuant &to ~~Sons~~the ~~Incorporated,~~requirements anof ~~investment bank. Mr.~~Section ~~Selati~~13 ~~currently~~or ~~serves~~15(d) onof the ~~Board~~Securities ~~of Directors~~Exchange Act of ~~Tuesday Morning Corporation~~1934, the ~~Peter~~registrant ~~Piper,~~has ~~Inc.,~~duly ~~NWL~~caused ~~Holdings,~~this ~~Inc.,~~report ~~Carrols~~to ~~Holdings Corporation,~~be ~~Family~~signed ~~Christian~~on ~~Stores,~~its ~~Inc.,~~behalf ~~Ruth’s~~by ~~Chris~~the ~~Steak House~~undersigned, ~~Inc., Beverages & More, Inc.,~~thereunto ~~and~~duly ~~Pierre Foods, Inc~~authorized.

Vahe A. Dombalagian has served as a Director since April 2004. Mr. Dombalagian is a Director of Madison Dearborn Partners, LLC and has been employed by the firm since July 2001. From August 1997 to August 1999, Mr. Dombalagian was an Associate with Texas Pacific Group, a private equity firm. Mr. Dombalagian currently serves on the Board of Directors of Outsourcing Solutions, Inc.


Dated: March 12, 2009	CINEMARK, INC.
	BY:	/s/ Alan W. Stock
		Alan W. Stock
		Chief Executive Officer


	BY:	/s/ Robert Copple
		Robert Copple
		Chief Financial Officer and Principal Accounting Officer

~~Enrique F.~~POWER ~~Senior~~OF ~~has served as a Director since July 2004. Mr. Senior is a Managing~~ATTORNEY Director of Allen & Company LLC, formerly Allen & Company Incorporated, and has been employed by the firm since 1973. Previously Mr. Senior was with White, Weld & Company for three years. Mr. Senior currently serves on the Board of Directors of Grupo Televisa S.A. de C.V., Coca Cola FEMSA S.A. de C.V., and Premiere Retail Networks, Inc.

~~Peter R.~~Each ~~Ezersky~~person ~~has~~whose ~~served~~signature asappears abelow ~~Director~~hereby ~~since~~severally ~~December 2004.~~constitutes ~~Mr. Ezersky~~and isappoints aAlan ~~Managing~~W. ~~Principal~~Stock ofand ~~Quadrangle~~Robert ~~Group~~Copple ~~LLC~~his true and colawful attorney-~~founded~~in-fact and agent, each with the ~~firm~~power inof substitution ~~2000.~~and ~~Previously~~resubstitution, ~~Mr. Ezersky~~for ~~was~~him ~~with Lazard~~in ~~Freres~~any &and ~~Co.~~all capacities, ~~LLC~~to ~~for~~sign ~~ten~~any ~~years~~and all amendments to this Annual Report on Form 10-K and ~~The~~to ~~First~~file ~~Boston~~the ~~Corporation~~same, ~~for~~with ~~four~~accompanying ~~years.~~exhibits ~~Mr. Ezersky~~and other ~~also~~related ~~serves~~documents, onwith the ~~Board~~Securities ofand ~~Directors~~Exchange ofCommission, GTand ~~Brands~~ratify ~~Holdings~~and ~~LLC~~confirm all that said attorney-in-fact and ~~Publishing~~agent, ~~Group~~or his substitute or substitutes, may lawfully do or cause to be done by virtue of ~~America~~said appointment.

35 Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.


Name	Title	Date

/s/ Lee Roy Mitchell	Chairman of the Board of Directors and Director	March 12, 2009
Lee Roy Mitchell

/s/ Alan W. Stock	Chief Executive Officer	March 12, 2009
Alan W. Stock	(principal executive officer)

/s/ Robert Copple	Executive Vice President; Treasurer and Chief	March 12, 2009
Robert Copple	Financial Officer (principal financial and accounting officer)

/s/ Benjamin D. Chereskin	Director	March 12, 2009
Benjamin D. Chereskin

/s/ Vahe A. Dombalagian	Director	March 12, 2009
Vahe A. Dombalagian

/s/ Peter R. Ezersky	Director	March 12, 2009
Peter R. Ezersky

/s/ Enrique F. Senior	Director	March 12, 2009
Enrique F. Senior

/s/ Raymond W. Syufy	Director	March 12, 2009
Raymond W. Syufy

/s/ Carlos M. Sepulveda	Director	March 12, 2009
Carlos M. Sepulveda

/s/ Roger T. Staubach	Director	March 12, 2009
Roger T. Staubach

/s/ Donald G. Soderquist	Director	March 12, 2009
Donald G. Soderquist

/s/ Steven Rosenberg	Director	March 12, 2009
Steven Rosenberg

ItemTable 11.of Executive CompensationContents

~~The~~SUPPLEMENTAL ~~following~~INFORMATION ~~Summary~~TO ~~Compensation~~BE ~~Table~~FURNISHED ~~sets~~WITH ~~forth~~REPORTS ~~the~~FILED ~~compensation~~PURSUANT ~~earned~~TO SECTION by15(d) ~~the~~OF ~~Company’s Chief~~THE ~~Executive~~ACT ~~Officer~~BY ~~and~~REGISTRANTS ~~the~~WHICH ~~four~~HAVE ~~most~~NOT ~~highly~~REGISTERED SECURITIES ~~compensated~~PURSUANT ~~executive~~TO ~~officers:~~SECTION 12 OF THE ACT.

								Long-Term
								Compensation
			Annual Compensation					Awards
								Securities			All Other
			Salary(1)		Bonus			Underlying			Compensation
Name and Principal Position	Year		($)		($)			Options/SAR			($)
Lee Roy Mitchell,		2004	$	716,625	$	417,526	(2)		—		$	2,532,271	(5)
Chairman of the Board		2003		682,500		652,740	(3)		—			132,020	(6)
and Chief Executive Officer		2002		572,870		975,000	(4)		—			124,309	(7)
Alan Stock, President		2004		424,086		247,084	(2)		307,499	(13)		4,315,751	(8)
and Chief Operating		2003		403,891		98,826	(3)		—			10,500	(9)
Officer		2002		384,658		230,795	(4)		—			9,750	(9)
Tim Warner, Senior Vice		2004		343,901		200,366	(2)		307,499	(13)		3,929,017	(10)
President and President -		2003		327,525		80,140	(3)		—			10,500	(9)
Cinemark International, L.L.C.		2002		311,929		187,157	(4)		—			9,750	(9)
Robert Copple, Senior		2004		309,665		180,419	(2)		307,499	(13)		3,162,632	(11)
Vice President and		2003		294,919		72,162	(3)		—			10,500	(9)
Chief Financial Officer		2002		280,875		168,525	(4)		—			9,750	(9)
Robert Carmony, Senior		2004		298,529		173,931	(2)		199,874	(13)		1,814,225	(12)
Vice President –		2003		284,313		69,567	(3)		—			9,035	(9)
Operations		2002		270,775		162,465	(4)		—			9,750	(9)

No annual report or proxy material has been sent to our stockholders. An annual report and proxy material may be sent to our stockholders subsequent to the filing of this Form 10-K. We shall furnish to the Securities and Exchange Commission copies of any annual report or proxy material that is sent to our stockholders.

(1)		Amounts shown include cash and non-cash compensation earned and received by executive officers.
(2)		Bonuses were earned in 2004 but were paid in 2005.
(3)		Bonuses were earned in 2003 but were paid in 2004.
(4)		Bonuses were earned in 2002 but were paid in 2003.
(5)		Represents a $10,762 annual contribution to our 401(k) savings plan, $22,665 representing the value of the use of a company vehicle for one year and $98,844 of life insurance premiums paid by us for the benefit of Mr. Mitchell and a $2,400,000 bonus payment made to Mr. Mitchell under Mr. Mitchell’s new employment agreement upon the Recapitalization of Cinemark, Inc.
(6)		Represents a $10,500 annual contribution to our 401(k) savings plan, $22,665 representing the value of the use of a company vehicle for one year and $98,855 of life insurance premiums paid by us for the benefit of Mr. Mitchell.

36INDEX TO CONSOLIDATED FINANCIAL STATEMENTS


	Page

CINEMARK, INC. AND SUBSIDIARIES CONSOLIDATED FINANCIAL STATEMENTS:

Report of Independent Registered Public Accounting Firm		F-2

Consolidated Balance Sheets, December 31, 2007 (Successor) and 2008 (Successor)		F-3

Consolidated Statements of Operations for the Period from January 1, 2006 to October 4, 2006 (Predecessor), the Period from October 5, 2006 to December 31, 2006 (Successor) and Years Ended December 31, 2007 (Successor) and 2008 (Successor)		F-4

Consolidated Statements of Stockholders’ Equity (Deficiency) and Comprehensive Income (Loss) for the Period from January 1, 2006 to October 4, 2006 (Predecessor), the Period from October 5, 2006 to December 31, 2006 (Successor) and Years Ended December 31, 2007 (Successor) and 2008 (Successor)		F-5

Consolidated Statements of Cash Flows for the Period from January 1, 2006 to October 4, 2006 (Predecessor), the Period from October 5, 2006 to December 31, 2006 (Successor) and Years Ended December 31, 2007 (Successor) and 2008 (Successor)		F-6

Notes to Consolidated Financial Statements		F-7

FINANCIAL STATEMENTS OF 50-PERCENT-OR-LESS-OWNED INVESTEE		F-43

SUPPLEMENTARY SCHEDULES REQUIRED BY THE INDENTURE FOR THE SENIOR DISCOUNT NOTES		S-1

Condensed Consolidating Balance Sheet Information, December 31, 2008		S-2

Condensed Consolidating Statement of Operations Information for the Year Ended December 31, 2008		S-3

Condensed Consolidating Statement of Cash Flows Information for the Year Ended December 31, 2008		S-4

(7)		Represents a $2,800 annual contribution to our 401(k) savings plan, $22,665 representing the value of the use of a company vehicle for one year and $98,844 of life insurance premiums paid by us for the benefit of Mr. Mitchell.
(8)		Represents a $10,762 contribution to our 401(k) savings plan, $364,699 payment under Mr. Stock’s profit participation agreement for certain of our theatres, and, upon the Recapitalization a $1,742,391 payment made to Mr. Stock under a sale bonus agreement, a $1,159,640 change of control compensation payment under Mr. Stock’s prior employment agreement, a $50,000 bonus payment under Mr. Stock’s new employment agreement and $988,259 net consideration paid for options that were acquired as part of the Recapitalization.
(9)		Represents an annual contribution to our 401(k) savings plan.
(10)		Represents a $10,762 contribution to our 401(k) savings plan, and, upon the Recapitalization, a $1,939,614 payment made to Mr. Warner under a sale bonus agreement, a $940,382 change of control compensation payment under Mr. Warner’s prior employment agreement, a $50,000 bonus payment under Mr. Warner’s new employment agreement and $988,259 net consideration paid for options that were acquired as part of the Recapitalization.
(11)		Represents a $10,762 contribution to our 401(k) savings plan, and, upon the Recapitalization, a $1,733,757 payment made to Mr. Copple under a sale bonus agreement, a $846,763 change of control compensation payment under Mr. Copple’s prior employment agreement, a $50,000 bonus payment under Mr. Copple’s new employment agreement and $521,350 net consideration paid for options that were acquired as part of the Recapitalization.
(12)		Represents a $9,652 contribution to our 401(k) savings plan, and, upon the Recapitalization, a $816,314 change of control compensation payment under Mr. Carmony’s prior employment agreement and $988,259 net consideration paid for options that were acquired as part of the Recapitalization.
(13)		On September 30, 2004, we granted each of Mr. Stock, Mr. Warner, and Mr. Copple options to purchase an aggregate of 307,499 shares of Class A common stock and granted Mr. Carmony options to purchase an aggregate of 199,874 shares of Class A common stock under our Long Term Incentive Plan at an exercise price of $22.58 per share. On the date of grant, our Class A common stock had a market value of $22.58 per share. For Messrs. Stock, Warner and Copple, options to purchase 30,497 shares vested immediately and for Mr. Carmony, options to purchase 19,823 shares vested immediately. The remaining options vest daily over the period ending April 1, 2009.

F-1

37 Table of Contents

~~Table~~REPORT ofOF ~~Contents~~INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

~~Options/~~To ~~Stock~~the ~~Appreciation~~Board ~~Right~~of ~~Grants~~Directors Cinemark, inInc. Plano, ~~Last Fiscal Year~~Texas

~~There~~We ~~were~~have audited nothe ~~stock~~accompanying ~~appreciation~~consolidated ~~rights~~balance ~~granted~~sheets orof ~~exercised~~Cinemark, ~~during~~Inc. and subsidiaries (the ~~year~~“Company”) ~~ended~~as of December 31, ~~2004.~~2007 ~~The~~(Successor) ~~following~~and ~~table~~2008 ~~shows~~(Successor), ~~option~~and ~~grants~~the ~~for~~related ~~each~~consolidated statements of ~~our~~operations, ~~named~~stockholders’ ~~executive~~equity ~~officers~~(deficiency) and ~~during~~comprehensive income (loss), and cash flows for the ~~most~~period ~~recent~~from ~~fiscal~~January ~~year~~1, 2006 to October 4, 2006 (Predecessor), the period from October 5, 2006 to December 31, 2006 (Successor), and each of the two years in the period ended December 31, ~~2004~~2008 (Successor). These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

			Percent of						Potential Realizable Value at
	Number of		Total Options						Assumed Annual Rates of Stock
	Securities		Granted to						Price Appreciation for Option
	Underlying Options		Employees			Exercise		Expiration	Term (1)
Executive Officer	Granted (#)		During Fiscal Year			Price ($)		Date	5%		10%
Lee Roy Mitchell		—		—			N/A	N/A	$	—	$	—
Alan Stock		307,499		13.0	%	$	22.58	Sep. 29, 2014	$	4,019,455	$	10,371,543
Tim Warner		307,499		13.0	%	$	22.58	Sep. 29, 2014	$	4,019,455	$	10,371,543
Robert Copple		307,499		13.0	%	$	22.58	Sep. 29, 2014	$	4,019,455	$	10,371,543
Robert Carmony		199,874		8.5	%	$	22.58	Sep. 29, 2014	$	2,612,641	$	6,741,491

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

~~(1)~~ In ~~Reflects~~our ~~the~~opinion, ~~purchase~~such ~~price~~consolidated ~~paid~~financial bystatements anpresent ~~affiliate~~fairly, in all material respects, the financial position of ~~Madison~~Cinemark, toInc. ~~acquire~~and ~~our~~subsidiaries ~~stock~~as inof ~~connection~~December 31, ~~with~~2007 (Successor) and 2008 (Successor), and the ~~Recapitalization~~results of their operations and their cash flows for the ~~purchase~~period ~~price~~from ofJanuary ~~subsequent~~1, ~~sales~~2006 ofto ~~our~~October ~~common~~4, ~~stock~~2006 (Predecessor), the period from October 5, 2006 to December ~~third~~31, ~~party~~2006 ~~investors~~(Successor), ~~through~~and each of the two years in the period ended December 31, 302008 (Successor), ~~2004~~in ~~paid~~conformity bywith ~~third~~accounting ~~parties~~principles togenerally anaccepted ~~affiliate~~in the United States of ~~Madison~~America.

~~Aggregated~~ Our ~~Option~~audits were ~~Exercises~~conducted for the purpose of forming an opinion on the basic consolidated financial statements taken as a whole. The supplemental schedules listed in ~~Last~~the ~~Fiscal~~index ~~Year~~to ~~and~~the consolidated ~~Fiscal~~financial ~~Year~~statements on page F-~~End~~1 ~~Option~~are ~~Value~~presented ~~Table~~for the purpose of additional analysis and are not a required part of the basic consolidated financial statements. These schedules are the responsibility of the Company’s management. Such schedules have been subjected to the auditing procedures applied in our audits of the basic consolidated financial statements and, in our opinion, are fairly stated in all material respects when considered in relation to the basic consolidated financial statements taken as a whole.

~~The~~As ~~following~~discussed ~~table~~in ~~shows~~Note 1 to the ~~value~~consolidated ~~realized~~financial onstatements, ~~option~~in ~~exercises~~2007 ~~for~~the ~~each~~Company changed its method of ~~our~~accounting ~~named executive~~for ~~officers~~uncertainty ~~during~~in ~~the~~income ~~most~~taxes ~~recent~~to ~~fiscal~~adopt ~~year~~Financial ~~ended~~Accounting ~~December~~Standards Board Interpretation No. 3148, ~~2004~~“Accounting ~~and~~for ~~the~~Uncertainty ~~number~~in ~~of securities~~Income ~~underlying~~Taxes ~~exercised~~— ~~and~~an ~~unexercised~~interpretation ~~options~~of SFAS ~~at December~~No. ~~31, 2004~~109.”

									Value of
							Number of Securities		Unexercised In-
	Shares						Underlying		the-Money
	Acquired on						Unexercised Options		Options at FY
Executive Officer	Exercise (#)			Value Realized ($)			at FY End (#)		End (3)
Lee Roy Mitchell		—		$	—			—	$	—
Alan Stock		66,000	(1)	$	988,259	(1)		307,499	$	0
Tim Warner		66,000	(1)	$	988,259	(1)		307,499	$	0
Robert Copple		99,000	(2)	$	521,350	(2)		307,499	$	0
Robert Carmony		66,000	(1)	$	988,259	(1)		199,874	$	0

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the Company’s internal control over financial reporting as of December 31, 2008, based on the criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated March 10, 2009 expressed an unqualified opinion on the Company’s internal control over financial reporting.

~~(1)~~/s/ ~~Messrs.~~Deloitte ~~Stock,~~& ~~Warner~~Touche and Carmony each owned options to purchase 66,000 shares of Class A common stock with an exercise price of $7.61 per share. Upon the closing of the Recapitalization, Messrs. Stock, Warner and Carmony each received consideration of approximately $22.58 per share less the applicable exercise price. As part of the Recapitalization, Mr. Stock purchased 83,526 shares and Mr. Warner purchased 82,892 shares of Class A common stock with the net proceeds received from the sale of their respective options. (2) Mr. Copple owned options to purchase 99,000 shares of Class A common stock with an exercise price of $1.50 per share. All of these options were incentive stock options. Upon the closing of the Recapitalization, Mr. Copple exercised options and received stock for 74,272 shares of Class A common stock and received consideration of approximately $22.58 per share less the applicable exercise price for the remaining options to purchase 24,728 shares. (3) The exercise price of vested options was equal to the market value of the underlying securities at fiscal year end.LLP

38Dallas, Texas March 10, 2009

~~Table of Contents~~F-2

DirectorTable Compensation of Contents

~~Our directors~~CINEMARK, ~~are elected each year by our stockholders to serve for a one year term and until their successors are elected and qualified~~INC. ~~Directors~~AND ~~are reimbursed for expenses actually~~SUBSIDIARIES ~~incurred~~CONSOLIDATED ~~for~~BALANCE ~~each Board meeting which they attend.~~ SHEETS (In ~~addition~~thousands, ~~independent~~except ~~directors~~share ~~may receive~~data) ~~a fee for each meeting of the Board of Directors attended by such person. Our executive officers are elected by the Board of Directors to serve at the discretion of the Board.~~

Committees of the Board of Directors


	December 31,		December 31,
	2007		2008
	(Successor)		(Successor)
ASSETS

CURRENT ASSETS
Cash and cash equivalents	$	233,402	$	313,687
Inventories		7,000		8,024
Accounts receivable		34,832		24,628
Income tax receivable		18,422		6,688
Deferred tax asset		5,215		2,799
Prepaid expenses and other		10,070		9,319

Total current assets		308,941		365,145

THEATRE PROPERTIES AND EQUIPMENT
Land		97,532		96,718
Buildings		389,581		396,028
Property under capital lease		178,347		184,248
Theatre furniture and equipment		558,483		546,393
Leasehold interests and improvements		572,081		539,167
Theatres under construction		22,481		2,046

Total		1,818,505		1,764,600
Less accumulated depreciation and amortization		504,439		556,317

Theatre properties and equipment, net		1,314,066		1,208,283

OTHER ASSETS
Goodwill		1,134,689		1,039,818
Intangible assets — net		353,047		341,768
Investments in and advances to affiliates		5,071		23,952
Deferred charges and other assets — net		77,393		49,033

Total other assets		1,570,200		1,454,571

TOTAL ASSETS	$	3,193,207	$	3,027,999


LIABILITIES AND STOCKHOLDERS’ EQUITY

CURRENT LIABILITIES
Current portion of long-term debt	$	9,166	$	12,450
Current portion of capital lease obligations		4,684		5,532
Current FIN 48 liability		—		10,775
Accounts payable		50,977		54,596
Accrued film rentals		42,140		43,750
Accrued interest		8,735		4,343
Accrued payroll		21,614		23,995
Accrued property taxes		23,031		23,486
Accrued other current liabilities		57,830		52,185

Total current liabilities		218,177		231,112

LONG-TERM LIABILITIES
Long-term debt, less current portion		1,514,579		1,496,012
Capital lease obligations, less current portion		116,486		118,180
Deferred income taxes		168,475		135,417
Long-term portion FIN 48 liability		15,500		6,748
Deferred lease expenses		19,235		23,371
Deferred revenue — NCM		172,696		189,847
Other long-term liabilities		36,214		40,663

Total long-term liabilities		2,043,185		2,010,238

COMMITMENTS AND CONTINGENCIES (see Note 21)

MINORITY INTERESTS IN SUBSIDIARIES		16,182		12,971

STOCKHOLDERS’ EQUITY
Class A common stock, $0.001 par value: 40,000,000 shares authorized, 27,896,316 outstanding at December 31, 2007 and 2008		28		28
Additional paid-in-capital		806,742		870,210
Retained earnings (deficit)		76,198		(24,213	)
Accumulated other comprehensive income (loss)		32,695		(72,347	)

Total stockholders’ equity		915,663		773,678

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	3,193,207	$	3,027,999

The ~~Board~~accompanying ofnotes ~~Directors~~are ~~has established~~ an ~~audit~~integral ~~committee~~part ~~and a compensation committee. Mr. Dombalagian is serving as the initial chairman and sole member~~ of the ~~audit~~consolidated committee, and Mr. Chereskin is serving as the initial chairman of the compensation committee. The audit committee recommends the annual appointment of auditors. The audit committee reviews the scope of audit and non-audit services and related fees, accounting principles we use in financial ~~reporting, and the adequacy of our internal control procedures~~statements. ~~The compensation committee reviews and approves the~~ compensation and benefits for our executive officers, authorizes and ratifies stock option grants and other incentive arrangements, and authorizes employment and related agreements. The Board of Directors may contemplate establishing other committees.

~~Employment Agreements~~F-3

OnTable March 12, 2004, we entered into new employment agreements with certain executives which became effective upon the consummation of the Recapitalization on April 2, 2004. In addition, in connection with the Recapitalization, we paid a one-time special bonus in the amount of $2.4 million to Lee Roy Mitchell and in the amount of $50,000 to each of Alan Stock, Tim Warner and Robert Copple. Set forth below is a summary of the new agreements. Contents

~~Lee~~CINEMARK, ~~Roy~~INC. ~~Mitchell~~AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS THE PERIODS FROM JANUARY 1, 2006 TO OCTOBER 4, 2006 (PREDECESSOR) AND OCTOBER 5, 2006 TO DECEMBER 31, 2006 (SUCCESSOR) AND THE YEARS ENDED DECEMBER 31, 2007 (SUCCESSOR) AND 2008 (SUCCESSOR) (In thousands)

We entered into an employment agreement with Lee Roy Mitchell pursuant to which Mr. Mitchell serves as our Chief Executive Officer. The employment agreement became effective upon the consummation of the Recapitalization. The initial term of the employment agreement is three years, subject to an automatic extension for a one-year period, unless the employment agreement is terminated. Mr. Mitchell receives a base salary of $716,625 per year, which is subject to annual review for increase (but not decrease) each year by our Board of Directors or committee or delegate thereof. In addition, Mr. Mitchell is eligible to receive an annual cash incentive bonus upon our meeting certain performance targets established by the board or the compensation committee for the fiscal year. Mr. Mitchell is also entitled to additional fringe benefits including life insurance benefits of not less than $5 million, disability benefits of not less than 66% of base salary, a luxury automobile and a membership at a country club. The employment agreement provides for severance payments upon termination of employment, the amount and nature of which depends upon the reason for the termination of employment. If Mr. Mitchell resigns for good reason or is terminated by us without cause (as defined in the agreement), Mr. Mitchell will receive: accrued compensation (which includes base salary and a pro rata bonus) through the date of termination; any previously vested stock options and accrued benefits, such as retirement benefits, in accordance with the terms of the plan or agreement pursuant to which such options or benefits were granted; his annual base salary as in effect at the time of termination for a period of twelve months following such termination; and an amount equal to the most recent annual bonus he received prior to the date of termination. Mr. Mitchell’s equity-based or performance-based awards will become fully vested and exercisable upon such termination or resignation. Mr. Mitchell may choose to continue to participate in our benefit plans and insurance programs on the same terms as other actively employed senior executives for a one-year period. Furthermore, so long as Mr. Mitchell remains Chief Executive Officer, he will possess approval rights over certain significant transactions that may be pursued by us.


	January 1, 2006 to			October 5, 2006 to			Year Ended			Year Ended
	October 4, 2006			December 31, 2006			December 31, 2007			December 31, 2008
	(Predecessor)			(Successor)			(Successor)			(Successor)
REVENUES
Admissions	$	514,183		$	246,092		$	1,087,480		$	1,126,977
Concession		260,223			115,575			516,509			534,836
Other		54,683			29,838			78,852			80,474

Total revenues		829,089			391,505			1,682,841			1,742,287

COST OF OPERATIONS
Film rentals and advertising		275,005			130,982			589,717			612,248
Concession supplies		41,863			17,157			81,074			86,618
Salaries and wages		79,002			39,614			173,290			180,950
Facility lease expense		109,513			48,246			212,730			225,595
Utilities and other		100,924			43,884			191,279			205,814
General and administrative expenses		45,958			21,810			78,916			89,800
Termination of profit participation agreement		—			—			6,952			—
Depreciation and amortization		59,913			34,281			148,781			155,326
Amortization of favorable leases		130			667			2,935			2,708
Impairment of long-lived assets		5,741			23,337			86,558			113,532
(Gain) loss on sale of assets and other		2,938			2,345			(2,953	)		8,488

Total cost of operations		720,987			362,323			1,569,279			1,681,079


OPERATING INCOME		108,102			29,182			113,562			61,208

OTHER INCOME (EXPENSE)
Interest expense		(69,191	)		(42,220	)		(145,596	)		(116,058	)
Interest income		5,563			1,477			11,271			11,326
Gain on NCM transaction		—			—			210,773			—
Gain on Fandango transaction		—			—			9,205			—
Foreign currency exchange gain (loss)		94			(352	)		438			986
Gain (loss) on early retirement of debt		(3,315	)		(5,782	)		(13,456	)		1,698
Distributions from NCM		—			—			11,499			18,838
Dividend income		101			—			50			49
Equity in income (loss) of affiliates		(1,800	)		154			(2,462	)		(2,373	)
Minority interests in (income) loss of subsidiaries		(1,790	)		321			(792	)		(3,895	)

Total other income (expense)		(70,338	)		(46,402	)		80,930			(89,429	)


INCOME (LOSS) BEFORE INCOME TAXES		37,764			(17,220	)		194,492			(28,221	)

Income taxes		9,078			3,111			109,509			20,690


NET INCOME (LOSS)	$	28,686		$	(20,331	)	$	84,983		$	(48,911	)

InThe ~~the~~accompanying ~~event~~notes ~~Mr. Mitchell’s~~are ~~employment~~an isintegral ~~terminated~~part ~~due~~of tothe ~~his~~consolidated ~~death~~financial ~~or disability, Mr~~statements. Mitchell or his estate will receive: accrued compensation (which includes base salary and a pro rata bonus) through the date of termination; any previously vested stock options and accrued benefits, such as retirement benefits, in accordance

39F-4

~~with~~CINEMARK, ~~the~~INC. ~~terms~~AND ofSUBSIDIARIES CONSOLIDATED ~~the~~STATEMENTS ~~plan~~OF orSTOCKHOLDERS’ ~~agreement~~EQUITY ~~pursuant~~(DEFICIENCY) AND toCOMPREHENSIVE ~~which~~INCOME ~~such options or benefits were~~(LOSS) ~~granted;~~THE ~~his~~PERIODS ~~annual~~FROM ~~base~~JANUARY ~~salary~~1, as2006 inTO ~~effect~~OCTOBER at4, ~~the~~2006 ~~time~~(PREDECESSOR) AND ofOCTOBER ~~termination~~5, ~~for~~2006 aTO ~~period~~DECEMBER of31, ~~six~~2006 ~~months~~(SUCCESSOR) ~~following~~AND ~~such~~THE ~~termination;~~YEARS aENDED ~~lump~~DECEMBER ~~sum~~31, ~~payment~~2007 ~~equal~~(SUCCESSOR) toAND an2008 ~~additional six months of base salary~~(SUCCESSOR) ~~payable~~(In ~~six months after the date of termination; and any benefits payable to Mr. Mitchell and or~~thousands) ~~his beneficiaries in accordance with the terms of any applicable benefit plan.~~

In the event Mr. Mitchell’s employment is terminated by us for cause or under a voluntary termination (as defined in the agreement), Mr. Mitchell will receive: accrued base salary through the date of termination; and any previously vested rights under a stock option or similar incentive compensation plan in accordance with the terms of such plan.


	Class A									Accumulated
	Common Stock				Additional		Retained			Other
	Shares				Paid-in		Earnings			Comprehensive						Comprehensive
	Issued		Amount		Capital		(Deficit)			Income (Loss)			Total			Income (Loss)


Predecessor balance at January 1, 2006		27,896	$	28	$	604,443	$	(702,768	)	$	(60,185	)	$	(158,482	)

Net income								28,686						28,686		$	28,686
Share based awards compensation expense						2,148								2,148
Foreign currency translation adjustment											3,872			3,872			3,872

Predecessor balance at October 4, 2006		27,896	$	28	$	606,591	$	(674,082	)	$	(56,313	)	$	(123,776	)	$	32,558


Successor balance at October 5, 2006		27,896	$	28	$	534,747	$	12,639		$	(734	)	$	546,680
Net loss								(20,331	)					(20,331	)	$	(20,331	)
Non cash capital contribution from Cinemark Holdings, Inc. related to the Century Acquisition						150,000								150,000
Share based awards compensation expense						716								716
Foreign currency translation adjustment											12,197			12,197			12,197

Successor balance at December 31, 2006		27,896	$	28	$	685,463	$	(7,692	)	$	11,463		$	689,262		$	(8,134	)


Net income								84,983						84,983		$	84,983
Capital contributions from Cinemark Holdings, Inc. related to bond repurchases						63,694								63,694
Non cash capital contribution from Cinemark Holdings, Inc. related to income taxes						53,351								53,351
Tax adjustment related to the adoption of FIN48								(1,093	)					(1,093	)
Share based awards compensation expense						2,881								2,881
Tax benefit related to stock option exercises						1,353								1,353
Fair value adjustments on interest rate swap agreements, net of taxes of $7,074											(11,348	)		(11,348	)		(11,348	)
Foreign currency translation adjustment											32,580			32,580			32,580

Successor balance at December 31, 2007		27,896	$	28	$	806,742	$	76,198		$	32,695		$	915,663		$	106,215


Net loss								(48,911	)					(48,911	)	$	(48,911	)
Share based awards compensation expense						4,638								4,638
Tax benefit related to stock option exercises						474								474
Capital contribution from Cinemark Holdings, Inc. related to bond repurchases						42,207								42,207
Noncash capital contribution from Cinemark Holdings, Inc. related to the Central America share exchange						12,949								12,949
Noncash capital contribution from Cinemark Holdings, Inc. related to the Ecuador share exchange						3,200								3,200
Dividends paid to Cinemark Holdings, Inc.								(51,500	)					(51,500	)
Fair value adjustments on interest rate swap agreements, net of taxes of $2,442											(22,063	)		(22,063	)		(22,063	)
Amortizaton of accumulated other comprehensive loss on terminated swap agreement											1,351			1,351			1,351
Foreign currency translation adjustment											(84,330	)		(84,330	)		(84,330	)

Successor balance at December 31, 2008		27,896	$	28	$	870,210	$	(24,213	)	$	(72,347	)	$	773,678		$	(153,953	)

~~Mr. Mitchell~~The ~~will~~accompanying ~~also~~notes beare ~~entitled,~~an ~~for~~integral apart ~~period~~ of ~~five~~the ~~years,~~consolidated tofinancial ~~tax preparation assistance upon termination of his employment for any reason other than for cause or under a voluntary termination~~statements. ~~The employment agreement contains various covenants, including covenants related to~~ ~~confidentiality, non-competition (other than certain permitted activities as defined therein) and non-solicitation.~~

~~Tandy Mitchell, Alan Stock, Robert Copple, Timothy Warner, Robert Carmony, John Lundin and~~F-5 ~~Michael Cavalier~~

WeTable entered into executive employment agreements with each of Tandy Mitchell, Alan Stock, Robert Copple, Timothy Warner, Robert Carmony, John Lundin and Michael Cavalier pursuant to which Mrs. Mitchell and Messrs. Stock, Copple, Warner, Carmony, Lundin and Cavalier serve, respectively, as its and our Executive Vice President, President and Chief Operating Officer, Senior Vice President and Chief Financial Officer, Senior Vice President, Senior Vice President of Operations, Vice President of Film Licensing and Vice President and General Counsel. The employment agreements became effective upon the consummation of the Recapitalization. The initial term of each employment agreement is three years, subject to automatic extensions for a one-year period at the end of each year of the term, unless the agreement is terminated. Pursuant to the employment agreements, each of these individuals receives a base salary, which is subject to annual review for increase (but not decrease) each year by our Board of Directors or committee or delegate thereof. In addition, each of these executives is eligible to receive an annual cash incentive bonus upon our meeting certain performance targets established by our Board of Directors or the compensation committee for the fiscal year. Contents

~~Our~~CINEMARK, ~~Board~~INC. ofAND ~~Directors has adopted a stock option plan and granted each executive stock~~SUBSIDIARIES ~~options~~CONSOLIDATED toSTATEMENTS ~~acquire~~OF ~~such~~CASH ~~number of shares as set forth in that executive’s employment agreement. The~~FLOWS ~~executive’s~~THE ~~stock~~PERIODS ~~options~~FROM ~~vest~~JANUARY ~~and~~1, ~~become~~2006 ~~exercisable~~TO ~~twenty~~OCTOBER ~~percent~~4, ~~per~~2006 ~~year~~(PREDECESSOR) AND onOCTOBER a5, ~~daily~~2006 ~~pro~~TO ~~rata basis~~DECEMBER ~~and shall be fully vested and exercisable five years after the date of the grant~~31, as2006 ~~long as~~(SUCCESSOR) ~~the~~AND ~~executive~~THE ~~remains~~YEARS ~~continuously~~ENDED ~~employed~~DECEMBER by31, ~~us.~~2007 ~~Upon~~(SUCCESSOR) ~~consummation~~AND of2008 ~~a sale of our company, the~~(SUCCESSOR) ~~executive’s~~(In ~~stock options will accelerate and become fully vested.~~thousands)

The employment agreement with each executive provides for severance payments on substantially the same terms as the employment agreement for Mr. Mitchell, except that if the executive resigns for good reason or is terminated by us without cause (as defined in the agreements) prior to the first anniversary of the effectiveness of the employment agreement, the executive will receive his or her annual base salary in effect at the time of termination for a period commencing on the date of termination and ending on the second anniversary of the effective date (rather than for twelve months); and an amount equal to the most recent annual bonus he or she received prior to the date of termination pro rated for the number of days between such termination and the second anniversary of the effective date (rather than a single annual bonus).


	January 1, 2006 to			October 5, 2006 to			Year Ended			Year Ended
	October 4, 2006			December 31, 2006			December 31, 2007			December 31, 2008
	(Predecessor)			(Successor)			(Successor)			(Successor)
OPERATING ACTIVITIES
Net income (loss)	$	28,686		$	(20,331	)	$	84,983		$	(48,911	)

Adjustments to reconcile net income (loss) to cash provided by operating activities:
Depreciation		58,564			33,241			144,629			151,425
Amortization of intangible and other assets		1,479			1,707			7,087			6,609
Amortization of long-term prepaid rents		816			197			1,146			1,717
Amortization of debt issue costs		3,082			1,183			4,727			4,696
Amortization of deferred revenues, deferred lease incentives and other		(582	)		(71	)		(2,508	)		(3,735	)
Amortization of debt premium		(1,173	)		(763	)		(678	)		—
Amortization of accumulated other comprehensive loss related to interest rate swap agreement											1,351
Impairment of long-lived assets		5,741			23,337			86,558			113,532
Share based awards compensation expense		2,148			716			2,881			4,638
Gain on NCM transaction		—			—			(210,773	)		—
Gain on Fandango transaction		—			—			(9,205	)		—
(Gain) loss on sale of assets and other		2,938			2,345			(2,953	)		8,488
Gain on change in fair value of interest rate swap agreement					—			—			(5,422	)
Write-off unamortized debt issue costs and debt premium related to the early retirement of debt		1,183			5,782			(15,661	)		839
Accretion of interest on senior discount notes		30,222			10,203			41,423			40,294
Deferred lease expenses		724			378			5,979			4,350
Deferred income tax expenses		(7,986	)		1,580			(34,614	)		(25,975	)
Equity in (income) loss of affiliates		1,800			(154	)		2,462			2,373
Minority interests in income (loss) of subsidiaries		1,790			(321	)		792			3,895
Tax benefit related to stock option exercises		—			—			1,353			474
Interest paid on repurchased senior discount notes		—			—			(16,592	)		(15,186	)
Increase in deferred revenues related to NCM transaction		—			—			174,001			—
Increase in deferred revenues related to Fandango transaction		—			—			5,000			—
Other		—			—			—			644
Changes in other assets and liabilities		(54,388	)		21,624			54,078			12,974

Net cash provided by operating activities		75,044			80,653			324,115			259,070
INVESTING ACTIVITIES
Additions to theatre properties and equipment		(77,902	)		(29,179	)		(146,304	)		(106,109	)
Proceeds from sale of theatre properties and equipment		1,236			5,210			37,532			2,539
Increase in escrow deposit due to like-kind exchange		—			—			(22,739	)		(2,089	)
Return of escrow deposits		—			—			—			24,828
Acquisition of Century Theatres, Inc., net of cash acquired		—			(531,383	)		—			—
Acquisition of one theatre in the U.S. and two theatres in Brazil		—			—			—			(10,111	)
Net proceeds from sale of NCM stock		—			—			214,842			—
Net proceeds from sale of Fandango stock		—			—			11,347			—
Investment in joint venture — DCIP		—			—			(1,500	)		(4,000	)
Other		271			—			—			—

Net cash provided by (used for) investing activities		(76,395	)		(555,352	)		93,178			(94,942	)
FINANCING ACTIVITIES
Capital contribution from parent to fund retirement of senior discount notes		—			—			63,694			42,207
Dividends paid to parent		—			—			—			(51,500	)
Retirement of senior discount notes		(24,950	)		—			(43,136	)		(29,559	)
Retirement of senior subordinated notes		(10,000	)		—			(332,066	)		(3	)
Proceeds from senior secured credit facility		—			1,120,000			—			—
Proceeds from other long-term debt		2,273			57			—			—
Payoff of long-term debt assumed in Century acquisition		—			(360,000	)		—			—
Payoff of former senior secured credit facility		—			(253,500	)		—			—
Repayments of other long-term debt		(5,009	)		(3,886	)		(19,438	)		(10,430	)
Payments on capital leases		—			(839	)		(3,759	)		(4,901	)
Debt issue costs		—			(22,926	)		—			—
Termination of interest rate swap agreement		—			—			—			(12,725	)
Other		(1,226	)		(52	)		(1,730	)		(1,231	)

Net cash provided by (used for) financing activities		(38,912	)		478,854			(336,435	)		(68,142	)
EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS		268			740			5,445			(15,701	)

INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS		(39,995	)		4,895			86,303			80,285
CASH AND CASH EQUIVALENTS:
Beginning of period		182,199			142,204			147,099			233,402

End of period	$	142,204		$	147,099		$	233,402		$	313,687

~~Each~~SUPPLEMENTAL ~~executive~~INFORMATION ~~will~~(see ~~also~~Note ~~be entitled to office space and support services for a period of not~~19) more than three months following the date of any termination except for termination for cause. The employment agreements contain various covenants, including covenants related to confidentiality, non-competition and non-solicitation.

~~Non-Competition,~~The ~~Non-Solicitation~~accompanying ~~and~~notes ~~Non-Disclosure~~are ~~Agreement~~an integral part of the consolidated financial statements.

Each of Lee Roy Mitchell, Tandy Mitchell, Alan Stock, Robert Copple, Timothy Warner, Robert Carmony, John Lundin, Michael Cavalier and certain trusts, in his, her or its capacity as a seller of our common stock, have entered into nonF-~~competition, non-solicitation and non-disclosure~~6 agreements with us. These agreements became effective upon the consummation of the Recapitalization. Pursuant to the agreements, each executive agreed not to compete with us for a period of two years, and each executive agreed not to solicit its customers or hire its

40 Table of Contents

~~Table~~CINEMARK, ofINC. ~~Contents~~AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS In thousands, except share and per share data

~~employees, or disparage our Company, for a period of three years~~1. ~~The~~SUMMARY ~~obligation~~OF ~~not~~SIGNIFICANT ~~to compete~~ACCOUNTING ~~will terminate prior to the two year period if we effect a sale of Cinemark, Inc. (as~~POLICIES ~~defined in the agreements). In addition, each executive agreed not to disclose confidential information for a period of three years.~~

~~401~~ Business — Cinemark, Inc. and subsidiaries (kthe “Company”) ~~Plan~~are leaders in the motion picture exhibition industry in terms of both revenues and the number of screens in operation, with theatres in the United States (“U.S.”), Canada, Mexico, Argentina, Brazil, Chile, Ecuador, Peru, Honduras, El Salvador, Nicaragua, Costa Rica, Panama and Colombia. The Company also managed additional theatres in the U.S., Brazil, and Colombia during the year ended December 31, 2008.

WeBasis ~~sponsor~~of aPresentation ~~defined~~— ~~contribution~~On ~~savings plan~~August 2, ~~or 401(k) Plan~~2006, ~~whereby~~Cinemark ~~certain employees may elect to contribute~~Holdings, inInc. ~~whole~~was ~~percentages~~formed ~~between~~as 1%the ~~and~~Delaware holding ~~50%~~company of ~~such employee’s compensation~~Cinemark, ~~provided~~ noInc. ~~employee’s~~On ~~elective~~August 7, ~~contribution~~2006, ~~shall exceed~~ the ~~amount~~Cinemark, ~~permitted~~Inc. ~~under~~stockholders ~~Section~~entered ~~402(g)~~into a ofshare ~~the~~exchange ~~Internal~~agreement ~~Revenue~~pursuant ~~Code~~to ofwhich ~~1986,~~they asagreed ~~amended~~to ~~($13,000~~exchange intheir ~~2004).~~shares Weof ~~may~~Class A ~~make an annual~~common ~~discretionary~~stock ~~matching~~for ~~contribution.~~an ~~For~~equal ~~plan~~number ~~years~~of ~~prior~~shares toof ~~2002,~~common ~~our~~stock ~~discretionary~~of ~~matching contribution~~Cinemark isHoldings, ~~subject to vesting and forfeiture~~Inc. ~~For~~(“Cinemark ~~these plan years, our discretionary matching~~Share ~~contributions~~Exchange”). ~~vest~~The toCinemark ~~individual~~Share ~~accounts~~Exchange atwas ~~the~~completed ~~rate~~on ofOctober 5, ~~20%~~2006 ~~per~~and ~~year~~facilitated ~~beginning two years from~~ the ~~date~~acquisition of ~~employment~~Century Theatres, ~~and~~Inc. ~~employees~~(“Century ~~are~~Acquisition”). ~~fully~~On ~~vested~~October 5, in2006, ~~the~~Cinemark, ~~discretionary~~Inc. became ~~matching~~a ~~contributions after~~wholly ~~six~~owned ~~years~~subsidiary of ~~employment.~~Cinemark ~~For plan years beginning in 2002~~Holdings, ~~our discretionary matching contributions immediately vest~~Inc.

~~Stock~~ Due ~~Option~~to ~~Plan~~a change in reporting entity that occurred as a result of the Cinemark Share Exchange, Cinemark Holdings, Inc.’s accounting basis has been pushed down to the Company effective on the date of the Cinemark Share Exchange, October 5, 2006. The accompanying consolidated statements of operations, cash flows and stockholders’ equity (deficiency) present the results of the Company’s operations and cash flows for the periods preceding the Cinemark Share Exchange as Predecessor and the periods subsequent to the Cinemark Share Exchange as Successor. See Note 4.

~~Upon~~On ~~consummation of the Recapitalization on~~ April 224, ~~2004~~2007, ~~all of our stock options outstanding prior to~~ the ~~Recapitalization~~Company’s ~~immediately vested and the majority were repurchased~~parent, ~~resulting~~Cinemark ~~in compensation expense of $16~~Holdings,~~245,270~~ ~~recorded by us~~Inc. ~~See~~completed ~~Note~~an 3initial ~~to the consolidated financial statements for further~~public ~~discussion~~offering of ~~the~~its ~~Recapitalization~~common stock.

OnPrinciples ~~September 30,~~of ~~2004,~~Consolidation ~~our~~— ~~Board~~The ofconsolidated ~~Directors~~financial ~~and~~statements include the ~~majority~~accounts of ~~our stockholders approved~~ ~~the~~Cinemark, ~~2004~~Inc. ~~Long~~and ~~Term~~subsidiaries. ~~Incentive~~Majority-owned ~~Plan~~subsidiaries (that the ~~“Plan”)~~Company ~~under~~has ~~which~~control ~~3,074,991 shares~~ of ~~Class A common stock~~ are consolidated ~~available~~while ~~for~~those ~~issuance~~subsidiaries ~~to selected employees, directors and consultants~~ of ~~ours.~~which ~~The~~the ~~Plan provides~~Company ~~for~~owns ~~restricted~~between ~~share~~20% ~~grants,~~and ~~incentive~~50% ~~option grants~~ and ~~nonqualified~~does ~~option grants. On~~not ~~September 30,~~control ~~2004,~~are weaccounted ~~granted~~for ~~options~~as toaffiliates ~~purchase~~under ~~2,361,590~~the ~~shares~~equity ofmethod. ~~our~~Those ~~Class A~~subsidiaries ~~common~~of ~~stock under~~which the Company ~~Plan~~owns atless anthan ~~exercise~~20% ~~price~~are ofgenerally ~~$22.58~~accounted ~~per~~for ~~option.~~as ~~The~~affiliates ~~exercise~~under ~~price~~the ~~was~~cost ~~equal~~method, to unless the ~~fair market~~Company ~~value~~is ofdeemed ~~our~~to ~~Class A~~have ~~common stock on~~ the ~~date~~ability ofto ~~grant.~~exercise ~~Options~~significant toinfluence ~~purchase~~over ~~234~~the affiliate,~~219~~ ~~shares~~in ~~vested~~which ~~immediately~~case ~~and~~ the ~~remaining~~Company ~~options~~would ~~granted~~account infor ~~2004~~its ~~vest~~investment ~~daily~~under ~~over~~ the ~~period~~equity ~~ending April 1, 2009~~method. The ~~options~~results ~~expire~~of these ~~ten~~subsidiaries ~~years~~and ~~from~~affiliates ~~the~~are ~~grant~~included ~~date.~~in ~~There~~the ~~were~~consolidated ~~options~~financial tostatements ~~purchase~~effective ~~2,361,590~~with ~~shares~~their offormation ~~our~~or ~~Class A~~from ~~common~~their ~~stock~~dates ~~outstanding~~of ~~under~~acquisition. ~~the~~Intercompany ~~Plan~~balances asand oftransactions ~~December 31,~~are eliminated ~~2004~~in consolidation.

ACash ~~participant’s~~and ~~options~~Cash ~~under~~Equivalents ~~the~~— ~~Plan~~Cash ~~are~~and ~~forfeited~~cash ifequivalents ~~the~~consist ~~participant’s service to us or any~~ of ~~our~~operating ~~subsidiaries~~funds isheld ~~terminated for cause. At any time before our Class A common stock becomes~~in ~~listed~~financial orinstitutions, ~~admitted~~petty tocash ~~unlisted~~held ~~trading privileges or a national securities exchange or designated as a national market system security on an interdealer quotation system~~ by the ~~National~~theatres ~~Association of Securities Dealers or if sale or bid~~ and ~~other~~highly ~~offer~~liquid ~~quotations~~investments ~~are~~with remaining ~~reported~~maturities ~~for that class~~ of ~~common~~ ~~stock~~three onmonths ~~the NASDAQ National Market, we~~ or aless ~~designee~~when ~~shall~~purchased. ~~have~~At ~~the right to purchase any shares of Class~~December A31, ~~common stock acquired on exercise of an option~~2008, ~~any~~cash ~~restricted shares issued~~investments ~~under~~were ~~the~~primarily ~~Plan and any exercisable options granted under the Plan. The purchase price~~ in ~~such~~money ~~event shall~~market ~~be determined as provided in the Plan~~funds.

~~Compensation~~ Inventories ~~Committee~~— ~~Interlocks~~Concession and ~~Insider~~theatre ~~Participation~~supplies inventories are stated at the lower of cost (first-in, first-out method) or market.

InTheatre ~~April 2004,~~Properties ~~our~~and ~~Board~~Equipment of— ~~Directors~~Theatre ~~established~~properties aand ~~Compensation~~equipment ~~Committee~~are tostated ~~study~~at ~~senior~~cost less ~~management~~accumulated ~~compensation~~depreciation and ~~make~~amortization. ~~recommendations~~Additions to theatre properties and equipment include the ~~Board~~capitalization of ~~Directors~~$86, as$0, a$618 ~~whole~~and ~~relating~~$270 toof interest incurred during the development and ~~said~~construction ~~compensation.~~of ~~Mr.~~theatres during the period from January ~~Chereskin~~1, ~~currently~~2006 ~~serves~~to asOctober 4, 2006, the ~~chairman~~period offrom October 5, ~~the~~2006 ~~Compensation~~to ~~Committee~~December 31, 2006, and years ended December 31, 2007 and 2008, respectively. ~~Mr. Chereskin~~Depreciation is ~~not~~provided ~~and~~using ~~has~~the ~~never~~straight-line ~~been~~method anover ~~officer~~the estimated useful lives of the assets ~~Company.~~as follows:


Category		Useful Life
Buildings on owned land		40 years
Buildings on leased land		Lesser of lease term or useful life
Buildings under capital lease		Lesser of lease term or useful life
Theatre furniture and equipment		5 to 15 years
Leasehold improvements		Lesser of lease term or useful life

~~Table~~ In accordance with Statement of ~~Contents~~Financial Accounting Standards (“SFAS”) No. 144, “Accounting for the Impairment or Disposal of Long-Lived Assets,” the Company reviews long-lived assets for impairment indicators on a quarterly basis or whenever events or changes in circumstances indicate the carrying amount of the assets may not be fully recoverable.

~~Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholders’ Matters~~F-7

EquityTable Compensationof Plan Information Contents

~~The~~CINEMARK, ~~following~~INC. ~~table~~AND ~~provides~~SUBSIDIARIES NOTES ~~information~~TO ~~about~~CONSOLIDATED ~~the~~FINANCIAL ~~securities authorized for issuance under~~STATEMENTS ~~our~~In ~~equity~~thousands, ~~compensation~~except ~~plans~~share asand ofper ~~December 31,~~share ~~2004:~~data

(c)

Number of securities

remaining available

(a)

(b)

for future issuance

Number of securities

Weighted-average

under equity

to be issued upon

exercise price of

compensation plans

exercise of

outstanding

(excluding securities

outstanding options,

options, warrants

reflected in

Plan Category

warrants and rights

and rights

column (a))

Equity compensation plans approved by security holders

2,361,590

22.58

713,401

Equity compensation plans not approved by security holders

—

Total

2,361,590

22.58

713,401

The Company considers actual theatre level cash flows, future years budgeted theatre level cash flows, theatre property and equipment carrying values, amortizing intangible assets carrying values, the age of a recently built theatre, competitive theatres in the marketplace, changes in foreign currency exchange rates, the impact of recent ticket price changes, available lease renewal options and other factors considered relevant in its assessment of impairment of individual theatre assets. Long-lived assets are evaluated for impairment on an individual theatre basis, 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, which includes the probability of 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’s carrying value, the Company then compares the carrying value of the asset group (theatre) with its estimated fair value. Fair value is determined based on a multiple of cash flows, which was eight times for the evaluations performed during 2006, 2007 and the first, second and third quarters of 2008 and six and a half times for the evaluation performed during the fourth quarter of 2008. When estimated fair value is determined to be lower than the carrying value of the asset group (theatre), the asset group (theatre) is written down to its estimated fair value. 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 Note 11.

~~Beneficial~~ Goodwill ~~Ownership~~and Other Intangible Assets — Goodwill is the excess of cost over fair value of theatre businesses acquired. In accordance with SFAS No. 142, “Goodwill and Other Intangible Assets,” goodwill is tested for impairment on an annual basis during the fourth quarter or whenever events or changes in circumstances indicate the carrying value of goodwill might exceed its estimated fair value. The Company evaluates goodwill for impairment at the reporting unit level and has allocated goodwill to the reporting unit based on an estimate of its relative fair value. Goodwill impairment is evaluated using a two-step approach requiring the Company to compute the fair value of a reporting unit and compare it with its carrying value. If the carrying value of the reporting unit exceeds its estimated fair value, a second step is performed to measure the potential goodwill impairment. Fair value is determined based on a multiple of cash flows, which was eight times for the goodwill impairment evaluations performed during 2006 and 2007 and six and a half times for the evaluation performed during 2008. 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. Prior to January 1, 2008, the Company considered its theatres reporting units for purposes of evaluating goodwill for impairment. Recent changes in the organization, including changes in the structure of the Company’s executive management team, Cinemark Holdings, Inc.’s initial public offering of common stock, the resulting changes in the level at which the Company’s management team evaluates the business on a regular basis, and the Century Acquisition that increased the size of the Company’s theatre base by approximately 25%, led the Company to conclude that its U.S. regions and international countries are now more reflective of how it manages and operates its business. Accordingly, the Company’s U.S. regions and international countries represent the appropriate reporting units for purposes of evaluating goodwill for impairment. Consequently, effective January 1, 2008, the Company changed the reporting unit to sixteen regions in the U.S. and each of its eight countries internationally (Honduras, El Salvador, Nicaragua, Costa Rica and Panama are considered one reporting unit) from approximately four hundred theatres. The goodwill impairment test performed during December 2007 that resulted in the recording of impairment charges during the year ended December 31, 2007 reflected the final calculation utilizing theatres as reporting units. See Notes 10 and 11.

Tradename intangible assets are tested for impairment at least annually during the fourth quarter or whenever events or changes in circumstances indicate the carrying value may not be recoverable. The ~~following~~Company ~~table~~estimates ~~presents~~the ~~information~~fair ~~regarding~~value ~~beneficial~~of ~~ownership~~its tradenames by applying an estimated market royalty rate that could be charged for the use of ~~our~~the ~~common~~Company’s ~~stock~~tradename asto forecasted future revenues, with an adjustment for the present value of ~~February 28~~such royalties. If the estimated fair value is less than the carrying value, ~~2005~~the ~~by:~~tradename intangible asset is written down to the estimated fair value.

• each person known by us to beneficially hold five percent or more of our common stock; • each of our directors; • each of our named executive officers; and • all of our executive officers and directors as a group.F-8

BeneficialTable ownership has been determined in accordance with the applicable rules and regulations, promulgated under the Securities Exchange Act of 1934, as amended. Unless indicated below, to our knowledge, the persons and entities named in the table have sole voting and sole investment power with respect to all shares beneficially owned, subject to community property laws where applicable. Shares of our common stock subject to options that are currently exercisable or exercisable within 60 days of February 28, 2005 are deemed to be outstanding and to be beneficially owned by the person holding the options for the purpose of computing the percentage ownership of that person but are not treated as outstanding for the purpose of computing the percentage ownership of any other person. Percentage ownership is based on 27,674,916 shares of Class A common stock issued and outstanding as of February 28, 2005. As of February 28, 2005, there were 13 holders of record of our Class A common stock. Contents

42CINEMARK, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS In thousands, except share and per share data

~~Table~~ The table below summarizes the Company’s intangible assets and the amortization method used for each type of ~~Contents~~intangible asset:

	Number of
Intangible Asset	Amortization Method
	Shares
Goodwill	Indefinite-lived
	Beneficially		Percent of
Tradename	Indefinite-lived
Names of Beneficial Owner (1)	Owned		Class
Capitalized licensing fees	Straight-line method over 15 years. The remaining terms of the underlying agreements range from 6 to 11 years.
Directors and Executive Officers
Vendor contracts	Straight-line method over the terms of the underlying contracts. The remaining terms of the underlying contracts range from 1 to 14 years.
Madison Dearborn Capital Partners IV, L.P. (1)		20,676,263		74.7	%
Net favorable leases	Based on the pattern in which the economic benefits are realized over the terms of the lease agreements. The remaining terms of the lease agreements range from 1 to 28 years.
Mitchell Special Trust (2)		2,169,713		7.8	%
Other intangible assets	Straight-line method over the terms of the underlying agreement. The remaining term of the underlying agreement is 10 years.
Lee Roy Mitchell(3)		4,427,986		16.0	%
Quadrangle Capital Partners LP (4)		2,213,993		8.0	%
Alan W. Stock(5)		149,575		*
Tim Warner (5)		148,941		*
Robert Copple(5)		140,321		*
Robert Carmony(6)		42,931		*
Benjamin D. Chereskin (7)		20,676,263		74.7	%
James N. Perry, Jr. (7)		20,676,263		74.7	%
Robin P. Selati (7)		20,676,263		74.7	%
Vahe A. Dombalagian		—		*
Enrique F. Senior (8)		—		*
Peter R. Ezersky (9)		2,213,993		8.0	%
All directors and executive officers as a group (19 persons)(10)		27,973,351		99.8	%

* Deferred ~~Represents~~Charges ~~less~~and ~~than~~Other 1%Assets — Deferred charges and other assets consist of debt issue costs, long-term prepaid rents, construction advances and other deposits, equipment to be placed in service and other assets. Debt issue costs are amortized using the straight-line method (which approximates the effective interest method) over the primary financing terms of the related debt agreement. Long-term prepaid rents represent advance rental payments on operating leases. These payments are recognized to facility lease expense over the period for which the rent was paid in advance as outlined in the lease agreements. These periods generally range from 10 to 20 years.

~~(1)~~ Lease Accounting — The ~~address~~Company accounts for leased properties under the provisions of ~~Madison~~SFAS No. 13, ~~Dearborn~~“Accounting ~~Capital~~for ~~Partners~~Leases”, IVand other authoritative accounting literature. SFAS No. 13 requires that the Company evaluate each lease for classification as either a capital lease or an operating lease. According to SFAS No. 13, Lif substantially all of the benefits and risks of ownership have been transferred to the lessee, the lessee records the lease as a capital lease at its inception.P The Company performs this evaluation at the inception of the lease and when a modification is made to a lease. If the lease agreement calls for a scheduled rent increase during the lease term, the Company, in accordance with Financial Accounting Standards Board (“FASB”) Technical Bulletin 85-3, “Accounting for Operating Leases with Scheduled Rent Increases”, recognizes the lease expense on a straight-line basis over the lease term as deferred lease expense. The Company determines the straight-line rent expense impact of an operating lease upon inception of the lease. For leases in which the Company is ~~Three~~involved ~~First~~with ~~National~~construction ~~Plaza~~of the theatre, the Company accounts for the lease during the construction period under the provisions of ~~Suite 3800~~Emerging Issues Task Force (“EITF”) 97-10, 70“The ~~West~~Effect ~~Madison~~of ~~Street~~Lessee Involvement in Asset Construction”. The landlord is typically responsible for constructing a theatre using guidelines and specifications agreed to by the Company and assumes substantially all of the risk of construction. In accordance with EITF 97-10, ~~Chicago~~if the Company concludes that it has substantially all of the construction period risks, ~~Illinois~~it ~~60602~~records a construction asset and related liability for the amount of total project costs incurred during the construction period. At the end of the construction period, the Company considers SFAS No. 98, “Accounting for Leases: Sale-leaseback Transactions Involving Real Estate”, to determine if the transaction qualifies for sale-leaseback accounting treatment in regards to lease classification.

~~(2)~~ Deferred ~~The~~Revenues ~~address~~— Advances collected on long-term screen advertising, concession and other contracts are recorded as deferred revenues. In accordance with the terms of the ~~Mitchell~~agreements, ~~Special~~the advances ~~Trust~~collected ison ~~3900~~such ~~Dallas~~contracts ~~Parkway,~~are ~~Suite 500,~~recognized ~~Plano,~~during ~~Texas~~the period in which the advances are ~~75093~~earned, which may differ from the period in which the advances are collected.

~~(3)~~ Revenue ~~Includes~~and ~~2,169,713~~Expense ~~shares~~Recognition ~~owned~~— byRevenues ~~the~~are ~~Mitchell~~recognized ~~Special~~when ~~Trust~~admissions and concession sales are received at the box office. MrOther revenues primarily consist of screen advertising. ~~Mitchell~~ Screen advertising revenues are recognized over the period that the related advertising is delivered on-screen or in-theatre. The Company records proceeds from the cosale of gift cards and other advanced sale-~~trustee~~type certificates in current liabilities and recognizes admissions and ofconcession revenue when a holder redeems the ~~Mitchell~~card ~~Special~~or ~~Trust~~certificate. ~~Mr. Mitchell~~The ~~disclaims~~Company ~~beneficial~~recognizes ~~ownership~~unredeemed gift ofcards ~~all~~and ~~shares~~other ~~held~~advanced bysale-type certificates as revenue only after such a period of time indicates, based on historical experience, the likelihood ~~Mitchell~~of ~~Special~~redemption ~~Trust.~~is Mrremote, and based on applicable laws and regulations. ~~Mitchell’s~~ ~~address~~In isevaluating ~~c/o~~the likelihood ~~Cinemark~~of redemption, ~~Inc.~~the Company considers the period outstanding, ~~3900~~the ~~Dallas~~level ~~Parkway~~and frequency of activity, and the period of inactivity. The Company recognized unredeemed gift cards and other ~~Suite 500~~advance sale-type certificates as revenues in the amount of $1,259, ~~Plano~~$3,162, ~~Texas~~$5,516 ~~75093.~~and $7,629 during the period

~~(4) Includes 80,986 shares owned by Quadrangle Select Partners L.P. and 567,067 shares owned by~~F-9 Quadrangle Capital Partners A LP. Quadrangle GP Investors LLC is the general partner of Quadrangle GP Investors LP. Quadrangle GP Investors LP is the general partner of Quadrangle Capital Partners LP, Quadrangle Select Partners LP and Quadrangle Capital Partners A LP. Quadrangle Capital Partners LP disclaims beneficial ownership of all shares held by Quadrangle Select Partners LP and Quadrangle Capital Partners A LP. The address of Quadrangle Capital Partners LP is c/o Quadrangle Group LLC, 375 Park Avenue, New York, New York 10152.

(5)Table Includes 66,049 shares of Class A common stock issuable upon the exercise of options that may be exercised within 60 days of February 28, 2005. Contents

~~(6) Includes 42~~CINEMARK,~~931~~ ~~shares~~INC. ofAND ~~Class A~~SUBSIDIARIES NOTES ~~common~~TO ~~stock~~CONSOLIDATED ~~issuable~~FINANCIAL ~~upon the exercise of options that may~~STATEMENTS beIn ~~exercised~~thousands, ~~within~~except ~~60 days~~share ofand ~~February 28,~~per ~~2005.~~share data

~~(7)~~from ~~Messrs.~~January ~~Chereskin~~1, ~~Perry~~2006 ~~and~~to ~~Selati are Managing Directors of Madison Dearborn Partners~~October 4, ~~LLC~~2006, ~~which~~ is the ~~General~~period ~~Partner~~from ~~of Madison Dearborn Partners IV~~October 5, ~~L.P.,~~2006 ~~which~~to ~~is the General Partner of Madison Dearborn Capital Partners IV~~December 31, ~~L.P.,~~2006 and ~~they may therefore be deemed to share beneficial~~ ~~ownership~~years ofended ~~the shares owned by Madison Dearborn Capital Partners IV, L.P. Messrs.~~December ~~Chereskin~~31, ~~Perry~~ 2007 and ~~Selati expressly disclaim beneficial ownership of the shares owned by Madison Dearborn Capital Partners IV~~2008, Lrespectively.~~P. The address of Messrs. Chereskin, Perry and~~

43 Film rental costs are accrued based on the applicable box office receipts and either the mutually agreed upon firm terms or sliding scale formula, which are established prior to the opening of the film, or estimates of the final mutually agreed upon settlement, which occurs at the conclusion of the film run, subject to the film licensing arrangement. Under a firm terms formula, the Company pays the distributor a mutually agreed upon specified percentage of box office receipts, which reflects either a mutually agreed upon aggregate rate for the life of the film or rates that decline over the term of the run. Under the sliding scale formula, film rental is paid as a percentage of box office revenues using a pre-determined matrix based upon box office performance of the film. The settlement process allows for negotiation of film rental fees upon the conclusion of the film run based upon how the film performs. Estimates are based on the expected success of a film over the length of its run in theatres. The success of a film can typically be determined a few weeks after a film is released when initial box office performance of the film is known. Accordingly, final settlements typically approximate estimates since box office receipts are known at the time the estimate is made and the expected success of a film over the length of its run in theatres can typically be estimated early in the film’s run. The final film settlement amount is negotiated at the conclusion of the film’s run based upon how a film actually performs. If actual settlements are different than those estimated, film rental costs are adjusted at that time. The Company recognizes advertising costs and any cost sharing arrangements with film distributors in the same accounting period. The Company’s advertising costs are expensed as incurred. Advertising expenses for the period from January 1, 2006 to October 4, 2006, the period from October 5, 2006 to December 31, 2006 and years ended December 31, 2007 and 2008 were $11,285, $4,441, $17,252 and $16,839, respectively.

~~Table~~ Accounting for Share Based Awards — 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 ~~Contents~~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, 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 forfeited, rather than accounting for forfeitures as they occur.

~~Selati~~ The isCompany ~~c/o~~applied ~~Madison~~SFAS ~~Dearborn~~No. 123(R) ~~Partners,~~using ~~LLC~~the “modified prospective method”, ~~Three~~under ~~First~~which ~~National~~it recognized ~~Plaza~~compensation cost for all awards granted, ~~Suite~~modified or settled on or after January ~~3800~~1, 2006 70and ~~West~~for the unvested portion of previously granted awards that were outstanding on January 1, ~~Madison~~2006. ~~Street~~The Company had approximately 4,554,253 ~~Chicago~~unvested options outstanding on January 1, ~~Illinois~~2006. ~~60602~~See Note 18 for discussion of all the Company’s share based awards and related compensation expense.

~~(8)~~ Income Taxes — The ~~address~~Company participates in the consolidated return of Mrits parent, Cinemark Holdings, Inc. The Company’s provision for income taxes is computed as if it were a separate taxpayer. The Company uses 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 basis 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 that such 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 FASB Interpretation No. ~~Senior~~48, “Accounting for Uncertainty in Income Taxes — an interpretation of SFAS No. 109” (FIN 48), which the Company adopted on January 1, 2007. FIN 48 clarifies the accounting and reporting for income taxes recognized in accordance with SFAS No. 109, “Accounting for Income Taxes”, and the recognition, measurement, presentation and disclosure of uncertain tax positions taken or expected to be taken in income tax returns. The evaluation of a tax position in accordance with FIN 48 is ~~711~~a ~~Fifth~~two-step ~~Avenue~~process. The first step is recognition: The Company determines whether it is more likely than not that a tax position will be sustained upon examination, ~~New~~including ~~York~~resolution of any related appeals or litigation processes, based ~~New~~on ~~York~~the technical merits of the position. In evaluating whether a tax position has met the more-likely-than-not recognition threshold, ~~10022~~the Company should presume that the position would be examined by the appropriate taxing authority that would have full knowledge of all relevant information. The second step is measurement: A tax position that meets the more-likely-than-not recognition threshold is measured to determine the amount of benefit to recognize in the financial statements. The tax position is measured at the largest amount of benefit that is greater

~~(9) Mr. Ezersky is a Managing Member of Quadrangle GP Investors LLC, which is the general partner~~F-10 of Quadrangle GP Investors LP. Quadrangle GP Investors LP is the general partner of Quadrangle Capital Partners LP, Quadrangle Select Partners LP and Quadrangle Capital Partners A LP, and he may therefore be deemed to share beneficial ownership of the 1,565,940 shares owned by Quadrangle Capital Partners LP, the 80,986 shares owned by Quadrangle Select Partners LP and the 567,067 shares owned by Quadrangle Capital Partners A LP. Mr. Ezersky expressly disclaims beneficial ownership of the shares owned by Quadrangle Capital Partners LP, Quadrangle Select Partners LP, and Quadrangle Capital Partners A LP. The address of Mr. Ezersky is c/o Quadrangle Group LLC, 14th Floor, 375 Park Avenue, New York, New York 10152.

(10)Table Includes 355,999 shares of Class A common stock issuable upon the exercise of options that may be exercised within 60 days of February 28, 2005. Contents

~~Item~~CINEMARK, 13INC. ~~Certain~~AND ~~Relationships~~SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS In thousands, except share and ~~Related~~per ~~Transactions~~share data

~~Certain~~than ~~Agreements~~50 percent likely of being realized upon ultimate settlement. Differences between tax positions taken in a tax return and amounts recognized in the financial statements result in (1) a change in a liability for income taxes payable or (2) a change in an income tax refund receivable, a deferred tax asset or a deferred tax liability or both (1) and (2). The Company accrues interest and penalties on its FIN 48 tax provisions.

WeSegments ~~manage~~— ~~one~~As ~~theatre~~of ~~with 12 screens for Laredo Theatre~~December 31, ~~Ltd. (“Laredo”). We are the sole general partner and own 75% of the limited partnership interests of Laredo. Lone Star Theatres~~2008, ~~Inc.~~ ~~owns~~ the ~~remaining~~Company ~~25%~~managed ofits ~~the~~business ~~limited~~under ~~partnership~~two ~~interests in Laredo and is 100% owned by Mr.~~reportable ~~David~~operating ~~Roberts~~segments, ~~Lee Roy Mitchell’s son-in-law~~U. ~~Under the agreement, management fees are paid by Laredo to us at a rate of 5% of annual theatre revenues up to $50,000,000 and 3% of annual theatre revenues in excess of $50,000,000~~S. Wemarkets ~~recorded $190,834 of management fee revenues~~ and ~~received dividends~~international ~~of $562~~markets,~~500~~ ~~from Laredo during 2004. Laredo distributed dividends of $187,500 to Lone Star Theatres~~ in accordance with ~~the~~SFAS ~~terms of the limited partnership agreement~~No. ~~All such amounts~~ 131 ~~are~~”Disclosures ~~included~~About inSegments ~~our~~of ~~consolidated~~an ~~financial~~Enterprise ~~statements~~and ~~with~~Related ~~the~~Information.” ~~intercompany~~See ~~amounts~~Note ~~eliminated in consolidation~~22.

WeUse ~~lease~~of ~~one~~Estimates ~~theatre~~— ~~from~~The ~~Plitt~~preparation ~~Plaza~~of ~~Joint~~financial ~~Venture~~statements ~~(“Plitt~~in ~~Plaza”)~~conformity onwith aaccounting principles ~~month-to-month~~generally ~~basis.~~accepted in the United States of America requires the use of estimates and ~~Plitt~~assumptions ~~Plaza~~that isaffect ~~indirectly~~the ~~owned~~reported byamounts ~~Lee~~of ~~Roy~~assets ~~Mitchell.~~and ~~Annual~~liabilities ~~rent~~at isthe ~~approximately~~date ~~$118,000~~of ~~plus~~the financial ~~certain~~statements ~~taxes,~~and ~~maintenance~~the ~~expenses~~reported amounts of revenues and ~~insurance~~expenses during the periods presented. The Company’s ~~recorded~~consolidated ~~$137,723~~financial ofstatements ~~facility~~include amounts that are based on management’s best ~~expenses~~estimates ~~payable~~and tojudgments. ~~Plitt~~Actual ~~Plaza~~results ~~joint~~could ~~venture~~differ ~~during~~from ~~2004~~those estimates.

WeForeign ~~paid~~Currency ~~approximately~~Translations ~~$72,000~~— toThe ~~Addison~~assets ~~Jet~~and ~~Management,~~liabilities ~~Inc.~~of ~~for~~the ~~use~~Company’s offoreign subsidiaries anare ~~airplane~~translated ~~during 2004~~into U.S. ~~Lee~~dollars ~~Roy~~at ~~Mitchell~~current ~~owns~~exchange ~~50%~~rates as of the ~~airplane~~balance sheet date, and ~~leases~~revenues and expenses are translated at average monthly exchange rates. The resulting translation adjustments are recorded in the ~~plane~~consolidated tobalance ~~Addison~~sheet ~~Jet~~in ~~Management,~~accumulated other ~~Inc~~comprehensive income (loss).

~~Madison~~Fair ~~Dearborn~~Value ~~Partners,~~Measurements ~~LLC~~The orCompany anhas ~~affiliate~~interest ~~received~~rate swap agreements that are adjusted to fair value on a ~~fee~~recurring ofbasis ~~approximately~~(quarterly). ~~$12~~The Company’s fair value measurements are based on projected future interest rates as provided by the counterparties to the interest rate swap agreements and the fixed rates that the Company is obligated to pay under these agreements.5 Therefore, the Company’s measurements use significant unobservable inputs, which fall in Level 3 under SFAS No. ~~million~~157 “Fair Value Measurements.” Below is a reconciliation of our interest rate swap ~~plus~~values, ~~out~~as included in other long-term liabilities on the consolidated balance sheets, from the beginning of~~-pocket~~ ~~expenses~~the ~~incurred~~year atto the ~~closing~~end of the ~~Recapitalization.~~year:

In conjunction with the Recapitalization, Cinemark, Inc. paid fees of approximately $6 million to Allen & Company LLC. Mr. Enrique Senior is a Managing Director of Allen & Company LLC and is a member of our Board of Directors.


Beginning balance — January 1, 2008	$	(18,422	)
Total gains (losses):
Included in earnings (as component of interest expense)		5,422
Included in accumulated other comprehensive loss		(24,506	)
Settlements		12,725

Ending balance — December 31, 2008	$	(24,781	)

~~Profit~~ See ~~Participation~~Note 14 for further discussion of the terms of the Company’s interest rate swap agreements.

WeAcquisitions ~~entered~~— ~~into~~The anCompany ~~amended~~accounts ~~and~~for ~~restated~~acquisitions ~~profit~~under ~~participation~~the ~~agreement~~purchase onmethod ~~March 12,~~of ~~2004~~accounting in accordance with ~~our~~ ~~President~~SFAS No. 141, ~~Alan~~“Business ~~Stock,~~Combinations”. ~~which~~The ~~became~~purchase ~~effective~~method ~~upon~~requires ~~consummation~~that the Company estimate the fair value of the ~~Recapitalization~~assets acquired and ~~amends~~ aliabilities ~~profit~~assumed ~~participation~~and ~~agreement~~allocate consideration ~~with~~paid Mraccordingly. ~~Stock~~ inFor ~~effect~~significant ~~since~~acquisitions, ~~May 2002.~~the ~~Under~~Company ~~the~~obtains independent third ~~agreement,~~party ~~Mr. Stock~~valuation ~~receives~~studies afor ~~profit~~certain ~~interest~~of inthe ~~two~~assets ~~theatres~~acquired ~~once~~and weliabilities ~~have~~assumed ~~recovered~~to ~~our~~assist ~~capital~~the ~~investment~~Company in ~~these~~determining ~~theatres~~fair ~~plus~~value. ~~our~~The ~~borrowing~~estimation ~~costs.~~of ~~During~~the ~~2004,~~fair wevalues ~~recorded~~of ~~$599,818~~the inassets ~~profit~~acquired and ~~participation~~liabilities ~~expense~~assumed ~~payable~~involves toa ~~Mr. Stock,~~number ~~which~~of isestimates ~~included~~and inassumptions ~~general~~that ~~and~~could ~~administrative~~differ ~~expense~~materially infrom ~~our~~the ~~consolidated~~actual ~~statements~~amounts ~~of income~~recorded. WeThe ~~paid~~Company ~~$364~~provides the assumptions,~~699~~ ofincluding ~~this~~both quantitative ~~amount~~and qualitative information, about the specified asset or liability to ~~Mr. Stock~~the ~~during~~third party ~~2004~~valuation firms. InThe Company primarily utilizes the ~~event~~third parties to accumulate comparative data from multiple sources and assemble a report that Mrsummarizes the information obtained. ~~Stock’s~~ ~~employment~~The isCompany then ~~terminated~~uses ~~without~~the ~~cause,~~information ~~profits~~to ~~will~~determine befair value. The third party valuation firms are supervised ~~distributed~~by ~~according~~Company topersonnel awho ~~formula~~are ~~set~~knowledgeable ~~forth~~about invaluations and fair value. The Company evaluates the ~~profit~~appropriateness ~~participation~~of ~~agreement~~the valuation methodology utilized by the third party valuation firm.

44 Comprehensive Income (Loss) — Total comprehensive income (loss) for the period from January 1, 2006 to October 4, 2006, the period from October 5, 2006 to December 31, 2006 and years ended December 31, 2007 and 2008, was $32,558, ($8,134), $106,215 and $(153,953), respectively. Total comprehensive income (loss) consists of net income (loss), foreign currency translation adjustments, fair value adjustments on the Company’s interest rate swap agreements and the

~~Table of Contents~~F-11

Stockholders’Table Agreement of Contents

~~On March 12~~CINEMARK, ~~2004, Madison Dearborn Capital Partners IV, L~~INC.~~P.,~~ anAND ~~affiliate of Madison~~SUBSIDIARIES ~~Dearborn~~NOTES ~~Partners,~~TO ~~LLC,~~CONSOLIDATED orFINANCIAL ~~the “equity sponsor,” the Mitchell investors and the management~~STATEMENTS ~~investors~~In ~~entered into a stockholders agreement with us. The stockholders agreement became effective on April 2~~thousands, ~~2004~~except ~~upon~~share the consummation of the Recapitalization. Future holders of our common stock, including any permitted co-investor introduced to us by the equity sponsor that acquires a portion of the common stock which the equity sponsor has agreed to purchase, or a “co-investor,” may also be required to become parties to the agreement. On December 30, 2004, we, the equity sponsor, the Mitchell investors, the Quadrangle investors, the management investors and ~~our~~ ~~other~~per ~~stockholders~~share ~~entered into an Amended and Restated Stockholders’ Agreement. We refer to~~data ~~the equity sponsor, the Quadrangle investors, the Mitchell investors, the management investors, the other stockholders and their permitted transferees collectively as the “Stockholders.”~~

~~Voting.~~amortization ~~The~~of ~~Stockholders~~accumulated ~~will vote any voting securities over which they have control and will take all~~ other ~~reasonably~~comprehensive ~~necessary~~loss orrelated ~~desirable actions~~ to ~~elect and continue in office, members of our Board of Directors consisting of twelve members, initially composed of two persons designated by~~ the ~~Mitchell~~Company’s ~~investors,~~terminated ~~nine persons designated by the equity sponsor and one person~~swap ~~designated by the Quadrangle investors~~agreement. ~~The~~See ~~equity~~Notes ~~sponsor~~14 ~~has~~and ~~the right to assign to a co-investor, if any, the right to designate one of the ten directors the equity sponsor is entitled to designate~~15.

~~Transfer restrictions~~2. ~~Stockholders~~NEW ~~may~~ACCOUNTING ~~not transfer shares, other than in an exempt transfer,~~PRONOUNCEMENTS which includes transfers to affiliates, transfers to family members in the case of a natural person, transfers in connection with certain sales of our Company approved by our board or by the equity sponsor and transfers by the management investors to us. Any such affiliates, family members or other investors to which the Stockholders transfer our shares will agree in writing to be bound by the provisions of the stockholders agreement.

~~Rights~~In ofSeptember 2006, ~~first~~the ~~refusal.~~FASB Weissued SFAS No. 157, ~~the~~“Fair ~~equity~~Value ~~sponsor~~Measurements.” Among other requirements, ~~the~~this ~~Mitchell~~statement ~~investors~~defines ~~and~~fair ~~the~~value, ~~Quadrangle investors~~establishes ~~are~~a ~~granted~~framework ~~certain~~for ~~rights~~using offair ~~first~~value ~~refusal~~to measure inassets ~~connection~~and ~~with~~liabilities, ~~certain~~and ~~sales~~expands ofdisclosures ~~our shares~~about byfair ~~any~~value ofmeasurements. ~~the~~The statement ~~Mitchell~~applies ~~investors,~~whenever ~~the~~other ~~management~~statements ~~investors,~~require ~~the~~or ~~investors~~permit assets or ~~their~~liabilities ~~permitted~~to be measured ~~assigns~~at fair value. ~~We,~~SFAS ~~the~~No. 157 ~~Mitchell~~is ~~investors~~effective ~~and~~for the ~~Quadrangle~~Company ~~investors~~beginning ~~are~~January 1, ~~granted~~2008 ~~certain~~(January 1, ~~rights of~~2009 ~~refusal~~for innonfinancial ~~connection~~assets ~~with~~and ~~certain~~liabilities). ~~transfers~~Adoption of ~~our~~this ~~shares~~statement bydid ~~the~~not ~~equity~~have ~~sponsor~~a tosignificant impact ~~any~~on ofthe ~~our competitors~~Company’s consolidated financial statements.

~~Participation~~In ~~rights~~February 2007, the FASB issued SFAS No. 159, ~~Pursuant~~“The toFair ~~the~~Value ~~amended~~Option for Financial Assets and ~~restated~~Financial ~~stockholders~~Liabilities”. ~~agreement,~~This ~~the Quadrangle~~statement ~~investors,~~provides ~~the~~companies ~~Mitchell~~with ~~investors,~~an ~~the~~option ~~management~~to ~~investors~~report selected financial assets and ~~certain~~liabilities ~~other stockholders~~at fair value that are ~~granted~~currently ~~certain~~not ~~“tag-along”~~required ~~rights,~~to ~~which~~be ~~entitle~~measured ~~them~~at fair value. SFAS No. 159 establishes presentation and disclosure requirements designed to facilitate ~~participate~~comparisons inbetween ~~certain~~companies that choose different measurement attributes for similar ~~sales~~types byof assets and liabilities. SFAS No. 159 was effective for the ~~equity~~Company ~~sponsor~~beginning ofJanuary 1, 2008. The Company did not elect the ~~shares~~fair value option. Adoption of ~~our~~this ~~common~~statement ~~stock~~did ~~held~~not bynot have a significant impact on the ~~equity~~Company’s ~~sponsor~~consolidated financial statements.

~~Sale~~In ofDecember 2007, ~~Cinemark~~the FASB issued SFAS No. 141(R), ~~Inc~~“Business Combinations”. ~~Subject~~This statement requires all business combinations completed after the effective date to ~~certain~~be ~~exceptions,~~accounted iffor ~~our~~by applying ~~Board~~the ofacquisition ~~Directors~~method or(previously referred to as the ~~equity sponsor~~purchase ~~approves~~method); aexpands ~~sale~~the definition of ~~our~~transactions ~~company~~and events that qualify as business combinations; requires that the acquired assets and liabilities, ~~each~~including ofcontingencies, be recorded at the ~~Stockholders~~fair ~~will~~value ~~vote~~determined on the acquisition date and changes thereafter reflected in income, not goodwill; changes the recognition timing for restructuring costs; and ~~consent~~requires acquisition costs to be expensed as incurred rather than being capitalized as part of the cost of the acquisition. Adoption of SFAS No. ~~approved~~141(R) ~~sale~~is ~~and~~required ~~will~~for ~~take~~business ~~all~~combinations ~~necessary~~that occur after December 15, 2008. Early adoption and retroactive ~~desirable~~application ~~actions~~of inSFAS ~~connection~~No. 141(R) ~~with~~to fiscal years preceding the ~~consummation~~effective date is not permitted. Adoption of ~~the~~this ~~approved~~statement ~~sale~~is asnot ~~reasonably~~expected ~~requested~~to byhave ~~the~~a ~~board~~significant orimpact byon the Company’s ~~equity~~consolidated ~~sponsor~~financial statements.

~~Holdback~~In ~~agreement.~~December 2007, the FASB issued SFAS No. 160, ~~management~~“Noncontrolling ~~investor~~Interest orin ~~his~~Consolidated Financial ~~permitted~~Statements”. ~~transferee~~This ~~shall~~statement ~~sell~~establishes ~~any~~new accounting and reporting standards for the noncontrolling interest in a subsidiary and for the deconsolidation of ~~our~~a subsidiary. Specifically, this statement requires the recognition of a noncontrolling interest (minority interest) as equity in ~~securities~~the orconsolidated ~~any~~financial ~~securities~~statements ~~convertible~~and ~~into~~separate orfrom ~~exchangeable~~the orparent’s ~~exercisable~~equity. ~~for~~The ~~such~~amount of net ~~securities~~income attributable to the noncontrolling interest will no longer be shown as an expense item for all periods presented, ~~during~~but will be included in consolidated net income on the ~~period~~face ~~beginning~~of the income statement. SFAS No. 160 requires disclosure, on the ~~effective~~face ~~date~~of the consolidated income statement, of the ~~any~~amounts ~~underwritten~~of ~~demand~~consolidated net income attributable to the parent and the noncontrolling interest. ~~registration~~SFAS No. 160 clarifies that changes in a parent’s ownership interest in a subsidiary that do not result in deconsolidation are equity transactions if the parent retains its controlling financial interest. In addition, this statement requires that a parent recognize a gain or ~~any~~loss ~~underwritten~~in ~~piggyback~~net income ~~registration~~when ~~pursuant~~a tosubsidiary is deconsolidated. Such gain or loss will be measured using the fair value of the noncontrolling equity ~~registration~~investment on the deconsolidation date. SFAS No. 160 also includes ~~agreement~~expanded asdisclosure werequirements ~~and~~regarding the ~~underwriters~~interests ~~managing~~of the ~~registration~~parent ~~request~~and its noncontrolling interest. SFAS No. 160 is effective for fiscal years, and interim periods within those fiscal years, beginning on or after December 15, 2008. Earlier adoption is prohibited. Adoption of this statement is not expected to have a significant impact on the Company’s consolidated financial statements.

~~Preemptive~~In ~~rights~~March 2008, the FASB issued SFAS No. 161 If“Disclosures weabout ~~propose~~Derivative Instruments and Hedging Activities—an Amendment of FASB Statement No. 133”. This statement intends to ~~issue~~improve financial ~~any~~reporting ~~additional~~about ~~shares~~derivative ofinstruments ~~our~~and ~~common~~hedging ~~stock~~activities orby ofrequiring ~~any~~enhanced ~~other~~disclosures ~~capital~~about ~~stock~~their orimpact ~~equity~~on ~~securities~~an entity’s financial position, orfinancial ~~any~~performance, ~~securities~~and ~~convertible~~cash flows. ~~into~~SFAS orNo. 161 ~~exchangeable~~requires ~~or exercisable~~disclosures regarding the objectives for ~~shares~~using derivative instruments, the fair values of ~~our~~derivative ~~stock,~~instruments ~~subject~~and totheir ~~certain~~related ~~exceptions~~gains and losses, weand ~~will~~the ~~offer~~accounting for toderivatives ~~each~~and related hedged items. SFAS No. 161 is effective for fiscal years and interim ~~Stockholder~~periods abeginning ~~portion~~after November 15, 2008, with early adoption permitted. The adoption of SFAS No. 161 will not impact the ~~number~~Company’s orconsolidated financial ~~amount~~statements, ofand ~~such~~the ~~securities~~Company ~~proposed~~does not expect the statement to behave ~~sold~~a insignificant ~~any~~impact ~~such~~on ~~transaction~~its disclosures.

~~Anti~~F-~~takeover measures. Prior to the commencement of an initial public offering of our shares,~~12 the equity sponsor will request that our Board of Directors adopt reasonable and customary anti-takeover measures, except to the extent that our Board of Directors determines in the observance of its fiduciary duties that any such measures are

45 Table of Contents

~~Table~~CINEMARK, ofINC. ~~Contents~~AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS In thousands, except share and per share data

~~not~~ In inJune 2008, the ~~best~~FASB ~~interests~~issued ofFASB ~~our~~Staff ~~stockholders~~Position Emerging Issues Task Force 03-6-1, “Determining orWhether ~~the~~Instruments ~~underwriters~~Granted ~~managing~~in ~~the~~Share ~~initial~~Based ~~public~~Payment Transactions Are Participating ~~offering~~Securities” ~~advise~~(“FSP-EITF us03-6-1”). Under FSP-EITF 03-6-1, unvested share based payment awards that contain ~~any~~non-forfeitable ~~such~~rights ~~measures~~to ~~will~~dividends ~~adversely~~or ~~affect~~dividend ~~such~~equivalents ~~offering~~(whether paid or ~~offering~~unpaid) ~~price~~are participating securities and shall be included in the computation of earnings per share pursuant to the two-class method. FSP-EITF 03-6-1 is effective for financial statements issued for fiscal years beginning after December 15, 2008, and interim periods within those years and requires retrospective application. The adoption of FSP-EITF 03-6-1 is not expected to have a significant impact on the Company’s earnings per share calculations.

~~Approval of certain transactions~~3. SoINITIAL ~~long~~PUBLIC asOFFERING ~~the~~OF ~~Mitchell~~CINEMARK ~~investors or the Quadrangle investors and their permitted transferees own at least 5% of our outstanding common stock~~HOLDINGS, ~~they will~~INC.’S ~~possess~~COMMON ~~approval rights over certain significant transactions that may be pursued by us.~~STOCK

~~Equity~~ On ~~Registration~~April 24, ~~Agreement~~2007, the Company’s parent, Cinemark Holdings, Inc., completed an initial public offering of its common stock. Cinemark Holdings, Inc. sold 13,888,889 shares of its common stock and selling stockholders 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 $3,526 in legal, accounting and other fees, all of which are recorded in its additional paid-in-capital. The selling stockholders granted the underwriters a 30-day option to purchase up to an additional 2,800,000 shares of Cinemark Holdings, Inc.’s common stock at a price of $17.955 ($19 per share less underwriting discounts). On May 21, 2007, the underwriters purchased an additional 269,100 shares from the selling stockholders pursuant to this option. Cinemark Holdings, Inc. did not receive any proceeds from the sale of shares by the selling stockholders. Cinemark Holdings, Inc. has utilized a portion of the net proceeds that it received from the offering to repurchase a portion of its outstanding 9 3/4% senior discount notes. See Note 13. Cinemark Holdings, Inc. expects to continue to use the net proceeds to repurchase a portion of the remaining 9 3/4% senior discount notes. The 9 3/4% senior discount notes are not subject to repurchase at the Company’s option until March 15, 2009. Accordingly, if the Company is unable to repurchase the 9 3/4% senior discount notes at acceptable prices, Cinemark Holdings, Inc. will evaluate the use of a portion of the remaining 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 initial public offering. Cinemark Holdings, Inc. has invested the remaining net proceeds in money market funds.

~~On March 12, 2004, we entered into a registration agreement with the equity sponsor and the Mitchell investors~~4. ~~The~~MERGER ~~registration~~WITH ~~agreement~~MADISON ~~became~~DEARBORN ~~effective~~PARTNERS onAND ~~April 2,~~RELATED ~~2004~~CHANGE ~~upon~~IN ~~the consummation~~ACCOUNTING ~~of the Recapitalization.~~BASIS

~~Demand~~On ~~registrations. Under the registration agreement~~April 2, ~~the holders of at least a majority of the registrable securities held by the MDCP investors have the right at any time~~2004, ~~subject to certain conditions, to require us to register any or all of their common stock under the Securities Act on~~ a ~~registration~~newly ~~statement~~formed onsubsidiary ~~Form S-1 or any similar long-form registration at our expense. The holders~~ of aan ~~majority~~affiliate of ~~the~~Madison ~~registrable~~Dearborn ~~securities held by the Mitchell investors have the~~Partners ~~right, upon the first to occur of~~ (1“MDP”) ~~the~~ ~~third~~was ~~anniversary~~merged ofwith ~~the~~and ~~closing~~into of the ~~Recapitalization~~Company, ~~(2) 180 days~~ ~~after~~with the ~~completion~~Company ofcontinuing ~~an initial public offering of our common stock and (3) our achievement of certain financial targets~~ as ~~set~~the ~~forth therein for any two consecutive fiscal years~~surviving ~~prior~~corporation to (the ~~end~~“MDP ofMerger”). ~~2008~~Simultaneously, ~~subject~~an toaffiliate ~~certain conditions, to require us to register any or all~~ of ~~their~~ ~~common~~MDP ~~stock~~purchased onshares ~~a registration statement on Form S-1 or any similar long-form registration at our expense. The holders~~ of ~~a majority of~~ the ~~registrable securities held by the co-investors, if~~ ~~any,~~Company’s ~~have the right, at any time after 180 days after the completion of an initial public offering of our~~ common stock, ~~subject~~for ~~to certain conditions~~$518,245 toin ~~require~~cash us to register at a certain minimum price any or all of their common stock on a registration statement on Form S-1 or any similar long-form registration at our expense. In addition, the holders of a majority of the registrable securities held by the MDCP investors, the Mitchell investors and ~~the~~became ~~co-investors, each as a separate group, have~~ the ~~right~~Company’s ~~any~~controlling ~~time after an initial public offering~~stockholder, ~~subject to conditions, to~~ ~~require~~owning usapproximately to83% ~~register any or all~~ of ~~their~~the ~~common~~Company’s ~~stock~~capital ~~on a registration statement on Form S-3 or any similar short-form registration, if available~~stock. OnLee ~~December 30,~~Roy ~~2004~~Mitchell, wethe ~~entered~~Company’s ~~into~~then anChief ~~amendment~~Executive ~~to the registration agreement with the equity sponsor~~Officer, ~~the Mitchell investors~~ and the ~~Quadrangle~~ ~~investors.~~Mitchell ~~Under~~Special ~~the~~Trust ~~amendment,~~collectively ~~the~~retained ~~holders~~approximately of16% ~~at least a majority~~ ownership of the ~~registrable securities~~Company’s ~~held~~capital ~~by the Quadrangle investors have the right at any time after 180 days after the completion of an initial public offering of our common~~ stock, ~~subject~~with to certain ~~conditions,~~members ~~to require~~of usmanagement toowning ~~register~~the ~~their~~remaining ~~common stock on a registration statement on Form S-~~1 ~~or any similar long-form registration at our expense~~%. ~~We refer to each of these types of registrations as “demand~~ ~~registrations.”~~

WeOn ~~are not required~~April 2, ~~however~~2004, tothe ~~effect~~Company ~~any~~accounted ~~registration~~for ~~within 180 days of~~ the ~~effective~~MDP ~~date of~~Merger aas ~~previous demand registration or~~ a ~~previous~~leveraged ~~registration in~~ recapitalization, which ~~holders~~resulted ofin the ~~registrable securities~~Company ~~were~~and ~~given~~its ~~piggyback~~subsidiaries ~~rights.~~retaining Intheir ~~addition,~~historical webook ~~may~~values. ~~postpone~~Upon ~~for up to 180 days~~ the ~~filing~~ orCinemark ~~the~~Share ~~effectiveness~~Exchange ofon aOctober 5, ~~registration~~2006, ~~statement~~and ~~for~~the aresulting ~~demand~~change ~~registration no more than once~~ in ~~any twelve~~reporting ~~month period~~entity, ~~if our Board of Directors determines that~~ the ~~demand registration would~~ ~~reasonably~~Company bewas ~~expected~~required to ~~have~~prepare aits ~~material~~financial ~~adverse~~statements ~~effect~~to onreflect ~~any~~the ~~proposal~~accounting orbasis ~~plan by us or any~~ of its ~~our~~parent, ~~subsidiaries~~Cinemark toHoldings, ~~engage~~Inc. inCinemark ~~any~~Holdings, ~~acquisition~~Inc. oraccounted ~~sale~~for ofthe ~~assets,~~MDP ~~or any~~ merger, ~~consolidation,~~under the ~~tender~~purchase ~~offer,~~method ~~acquisition,~~of ~~recapitalization,~~accounting ~~reorganization~~on orApril 2, ~~similar transaction~~2004.

~~Piggyback registrations. All holders of registrable securities are entitled to request the~~F-13 inclusion of their securities in any registration statement at our expense whenever we propose to register any offering of our equity securities (other than pursuant to a demand registration). The registration form to be used may be used for the registration of such registrable securities.

HoldbackTable agreement. Each holder of registrable securities has agreed not to effect any public sale or distribution of our equity securities or any securities convertible into or exchangeable or exercisable for such securities, during the seven days prior to and the 180-day period beginning on the effective date of any underwritten demand registration or any underwritten piggyback registration (except as part of that registration or if the underwriters otherwise agree). We have agreed not to, and have agreed to cause any 5% holder of our common stock to agree not to, effect any public sale or distribution of our equity securities or any securities convertible into or exchangeable or exercisable for such securities, during the same time period. Contents

46CINEMARK, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS In thousands, except share and per share data

~~Table~~The following table represents the allocation of ~~Contents~~MDP purchase price to the proportionate share of assets acquired and liabilities assumed as of April 2, 2004:

In connection with all registrations pursuant to the registration agreement, we have agreed to indemnify the holders of registrable common stock against liabilities relating to the registration, including liabilities under the Securities Act.


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

~~Indemnification~~ Cinemark Holdings, Inc.’s accounting basis was pushed down to the Company effective October 5, 2006. The successor accounting basis reflects the MDP merger purchase accounting as of ~~Directors~~April 2, 2004 adjusted for depreciation and amortization as well as other period charges taken subsequent to April 2, 2004 that have affected the basis of the Company’s assets and liabilities. Below is a summary of the impact of this push down on the Company’s balance sheet on October 5, 2006:

We have adopted provisions in our Certificate of Incorporation and Bylaws which provide for indemnification of our officers and directors to the maximum extent permitted under the Delaware General Corporation Law. We have obtained an insurance policy providing for indemnification of our officers and directors and certain other persons against liabilities and expenses incurred by any of them in certain stated proceedings and under certain stated conditions.


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

~~Item~~ The ~~14.~~tradename, ~~Principal~~net ~~Accounting~~favorable ~~Fees~~leases and ~~Services~~vendor contracts are presented as intangible assets on the Company’s consolidated balance sheets as of December 31, 2006. The goodwill recorded as a result of the MDP Merger is not deductible for tax purposes.

~~For the years ended December 31, 2004 and 2003, Deloitte & Touche LLP, our independent~~F-14 ~~auditor, billed the aggregate fees listed in the table below:~~

	(in millions)
Category	2004		2003
Audit Fees (a)	$	0.8	$	1.0
Audit-Related Fees (b)		0.3		—
Tax Fees (c)		0.6		0.7
All Other Fees (d)		—		—
Total	$	1.7	$	1.7

~~(a) Fees for audit services billed in 2004 consisted of the audit of our annual consolidated financial statements~~CINEMARK, reviews of our quarterly consolidated financial statements, statutory audits and comfort letters, consents and other services related to Securities and Exchange Commission (“SEC”) matters, including fees and services related to our bond offeringsINC. ~~Fees~~AND ~~for~~SUBSIDIARIES NOTES ~~audit~~TO ~~services~~CONSOLIDATED ~~billed~~FINANCIAL inSTATEMENTS In ~~2003 consisted of the audit of our annual consolidated financial statements~~thousands, ~~reviews~~except ofshare ~~our quarterly consolidated financial statements, statutory audits~~ and ~~comfort~~per ~~letters,~~share consents and other services related to Securities and Exchange Commission (“SEC”) matters, including fees and services related to our bond offerings. (b) Fees for audit-related services billed in 2004 consisted of due diligence associated with mergers and acquisitions. (c) Fees for tax services billed in 2003 and 2004 consisted of assistance with our federal, state, local and foreign jurisdictions income tax returns. We have additionally sought consultation and advice related to various tax compliance planning projects. (d) No material other fees were billed in 2003 and 2004.data

Under our Audit Committee’s charter, the Audit Committee is required to give advance approval of any nonaudit services, other than those of a de minimus nature, to be performed by our auditors, provided that such services are not otherwise prohibited by law5. InACQUISITION ~~recognition~~OF ofCENTURY ~~this responsibility~~THEATRES, ~~the Audit Committee has established a policy to review and pre-approve all audit and permissible non-audit services provided by the independent auditor~~INC. ~~The~~AND ~~policy~~RELATED ~~provides~~REFINANCING ~~for the~~OF ~~general~~CERTAIN ~~pre~~LONG-~~approval~~TERM ~~of specific types of services, gives detailed guidance to management as to~~DEBT the specific services that are eligible for general pre-approval and provides specific cost limits for each such service on an annual basis. The policy also requires specific pre-approval of all other permitted services.

~~Our~~On ~~Audit~~October 5, ~~Committee~~2006, ~~has~~the ~~considered~~Company ~~and~~completed ~~concluded~~its ~~that~~acquisition of Century 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 ~~provision~~assumption of approximately $360,000 of debt of Century. Of the ~~non-audit~~total ~~services~~purchase price, $150,000 consisted of the isissuance ~~compatible~~of ~~with~~shares ~~maintaining~~of ~~auditor~~Cinemark ~~independence~~Holdings, Inc.’s common stock. The Company also incurred approximately $7,448 in transaction costs.

47 The transaction was accounted for under the purchase method of accounting in accordance with SFAS No. 141, “Business Combinations”. The following table represents the allocation of purchase price to the assets acquired and liabilities assumed:


Current assets ⁽¹⁾	$	32,635
Fixed assets		548,451
Goodwill		640,436
Tradename		136,000
Other long term assets		4,956
Net unfavorable leases		(9,360	)
Current liabilities		(74,488	)
Other long term liabilities		(229,957	)

Total	$	1,048,673

~~PART~~(1) IV Includes cash of $7,290.

~~Item~~ The 15tradename and net unfavorable leases are presented as intangible assets on the Company’s consolidated balance sheets as of December 31, 2007 and 2008. ~~Exhibits~~Goodwill represents the excess of the costs of acquiring Century over amounts assigned to assets acquired, including identifiable intangible assets, and ~~Financial~~liabilities ~~Statement~~assumed. ~~Schedules~~The goodwill recorded as a result of the Century Acquisition was not deductible for tax purposes.

( On October 5, 2006, the Company entered into a) ~~Documents~~senior ~~Filed~~secured ascredit ~~Part~~facility, which provided for a $1,120,000 term loan and a $150,000 revolving credit line. The net proceeds of ~~this~~the ~~Report~~term loan were used to finance a portion of the $531,225 cash portion of the purchase price, to repay in full the $253,500 outstanding under the former senior secured credit facility, repay approximately $360,000 of existing indebtedness of Century and to pay related fees and expenses. See Note 13 for further discussion of long-term debt.

	1.	The financial statement schedules and related data listed in the accompanying Index beginning on page F-1 are filed as a part of this report.
	2.	The exhibits listed in the accompanying Index beginning on page E-1 are filed as a part of this report, which exhibits are bound separately.

The Century Acquisition is reflected in the Company’s consolidated statements of operations for the period subsequent to the transaction date and is reported in the Company’s U.S. operating segment. The pro forma financial information presented below sets forth the Company’s pro forma consolidated statements of operations for the year ended December 31, 2006 to give effect to the Century Acquisition as if the acquisition had occurred at the beginning of the period. This information is presented for comparative purposes only and does not purport to represent what the Company’s results of operations would have been had the transaction occurred on the date indicated or to project its results of operations for any future period.

(b)	Exhibits
	See the accompanying Index beginning on page E-1, which exhibits are bound separately.
(c)	Financial Statement Schedules
	See the accompanying Index beginning on page F-1.

F-15

48 Table of Contents

~~Table~~CINEMARK, ofINC. ~~Contents~~AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS In thousands, except share and per share data

SIGNATURES


	Pro Forma
	Year Ended
	December 31, 2006
	(unaudited)

Revenues
Admissions	$	1,029,881
Concession		487,416
Other		94,807

Total revenues	$	1,612,104
Cost of operations
Film rentals and advertising		546,144
Concession supplies		75,359
Salaries and wages		160,689
Facility lease expense		203,335
Utilities and other		184,699
General and administrative expenses ⁽¹⁾		84,619
Depreciation and amortization ⁽²⁾⁽³⁾		136,936
Impairment of long-lived assets		29,485
Loss on sale of assets and other		5,345

Total cost of operations		1,426,611
Operating income		185,493
Interest expense ⁽⁴⁾		(170,134	)
Other expense		(5,370	)

Income before income taxes		9,989
Income taxes ⁽⁵⁾

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