UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FormFORM 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, 2010

2011

Commission File Number001-33401

CINEMARK HOLDINGS, INC.

(Exact Name of Registrant as Specified in its Charter)

Delaware 20-5490327
Delaware20-5490327

(State or other jurisdiction

of
incorporation or organization)

 

(I.R.S. Employer

Identification No.)

3900 Dallas Parkway

Suite 500

Plano, Texas

 75093
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

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

None

Title of each class

Name of each exchange on which registered

Common Stock, par value $0.001 per shareNew York Stock Exchange

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

None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.    Yes  ox    No  þ¨

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15 (d) of the Act.    Yes  o¨    No  þx

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  þx     No  o¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Website,Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 ofRegulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes  ox    No  o¨

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 ofRegulation S-K (§229.405 of this chapter) 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 thisForm 10-K or any amendment to thisForm 10-K.  ¨o

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

Large accelerated filerþxAccelerated filero¨

Non-accelerated filero

¨(Do not check if a smaller reporting company)Smaller reporting companyo¨
                                                         (Do not check if a smaller reporting company)

Indicate by check mark whether the registrant is a shell company (as defined inRule 12b-2 of the Act).    Yes  o¨    No  þx

The aggregate market value of the voting and non-voting common equity owned by non-affiliates of the registrant on June 30, 2010,2011, computed by reference to the closing price for the registrant’s common stock on the New York Stock Exchange on such date was $814,952,327 (61,973,561$1,924,984,352 (92,949,510 shares at a closing price per share of $13.15)$20.71).

As of February 25, 2011, 113,780,79924, 2012, 114,201,937 shares of common stock were outstanding.

DOCUMENTS INCORPORATED BY REFERENCE

Certain portions of the registrant’s definitive proxy statement, in connection with its 2011 Annual Meeting2012 annual meeting of Stockholders,stockholders, to be filed within 120 days of December 31, 2010,2011, are incorporated by reference into Part III,Items 10-14, of this annual report onForm 10-K.


Table of Contents

    PagePage
 

Cautionary Statement Regarding Forward-Looking Statements

   1  

PART I

Item 1.

  

Item 1.

Business   2  

Item 1A.

  Risk Factors   13  

Item 1B.

  Unresolved Staff Comments20
Item 2.Properties20
Item 3.Legal Proceedings20
Item 4.Reserved   21  

Item 2.

Properties

22  
PART II

Item 5.3.

  Legal Proceedings22

Item 4.

Mine Safety Disclosures22

PART II

Item 5.

Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

   2223  

Item 6.

  Selected Financial Data   24  

Item 7.

  Management’s Discussion and Analysis of Financial Condition and Results of Operations   26  

Item 7A.

  Quantitative and Qualitative Disclosures About Market Risk   4448  

Item 8.

  Financial Statements and Supplementary Data   4549  

Item 9.

  Changes in and Disagreements With Accountants on Accounting and Financial Disclosure   4549  

Item 9A.

  Controls and Procedures   4550  

Item 9B.

Other Information51  
PART III
Item 10.

PART III

  

Item 10.

Directors, Executive Officers and Corporate Governance   4853  

Item 11.

  Executive Compensation   4853  

Item 12.

  

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

   4853  

Item 13.

  Certain Relationships and Related Transactions, and Director Independence   4853  

Item 14.

  Principal Accounting Fees and Services   4853  

PART IV

Item 15.

  

Item 15.

Exhibits, Financial Statement Schedules   4854  

SIGNATURES

   4955  
EX-12
EX-21
EX-23.1
EX-31.1
EX-31.2
EX-32.1
EX-32.2


Cautionary Statement Regarding Forward-Looking Statements

This annual report onForm 10-K includes “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended.amended, or the Exchange Act. The “forward looking statements” include our current expectations, assumptions, estimates and projections about our business and our industry. They include statements relating to:

future revenues, expenses and profitability;

the future development and expected growth of our business;

• 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 defendants.

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 defendants.

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

Certain Definitions

Unless the context otherwise requires, all references to “we,” “our,” “us,” the “issuer” or “Cinemark” relate to Cinemark Holdings, Inc. and its consolidated subsidiaries. Unless otherwise specified, all operating and other statistical data for the U.S. include one theatre in Canada (that was sold during November 2010). All references to Latin America are to Brazil, Mexico, Argentina, Chile, Colombia, Argentina, Peru, Ecuador, Honduras, El Salvador, Nicaragua, Costa Rica, Panama and Guatemala. Unless otherwise specified, all operating and other statistical data are as of and for the year ended December 31, 2010.


12011.


PART I

Item 1. Business

Item 1.Business

Our Company

Cinemark Holdings, Inc. and subsidiaries, or the Company, is a leader in the motion picture exhibition industry, with theatres in the United States, (“or U.S.”), Brazil, Mexico, Argentina, Chile, Colombia, Argentina, Peru, Ecuador, Honduras, El Salvador, Nicaragua, Costa Rica, Panama and Guatemala. We also managed additional theatres in the U.S., Brazil and Colombia during the year ended December 31, 2010.

2011.

As of December 31, 2010,2011, we managed our business under two reportable operating segments — U.S. markets and international markets. See Note 23 to the consolidated financial statements.

Cinemark Holdings, Inc. is a Delaware corporation incorporated on August 2, 2006. 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 websiteWeb site atwww.cinemark.com.Our annual reports onForm 10-K, quarterly reports onForm 10-Q and current reports onForm 8-K, and any amendments, are available on our websiteWeb site free of 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.

Description of Business

We are a leader in the motion picture exhibition industry in terms of both attendance and the number of screens in operation. WeAs of December 31, 2011, we operated 430456 theatres and 4,9455,152 screens in the U.S. and Latin America as of December 31, 2010, and approximately 241.2247.4 million patrons attended our theatres worldwide during the year ended December 31, 2010.2011. Our circuit is the third largest in the U.S. with 293297 theatres and 3,8323,878 screens in 39 states. We are the most geographically diverse circuit in Latin America with 137159 theatres and 1,1131,274 screens in 13 countries. Our modern theatre circuit features stadium seating in approximately 86%87% of our first-run auditoriums.

We selectively build or acquire new theatres in markets where we can establish and maintain a strong market position. We believe our portfolio of modern theatres provides a preferred destination for moviegoers and contributes to our significantsolid cash flows from operating activities. Our significant presence in the U.S. and Latin America has made us an important distribution channel for movie studios, particularly as they look to capitalize on the expanding worldwide box office. Our market leadership is attributable in large part to our senior executives, whose years of industry experience range from 1415 to 5253 years and who have successfully navigated us through multiplemany industry and economic cycles.

Revenues, operating income and net income attributable to Cinemark Holdings, Inc. for the year ended December 31, 2010,2011, were $2,141.1$2,279.6 million, $292.8$308.6 million and $146.1$130.6 million, respectively. At December 31, 20102011 we had cash and cash equivalents of $465.0$521.4 million and long-term debt of $1,532.5$1,572.2 million. Approximately $422.8$285.3 million, or 27.6%18%, of our long-term debt accrues interest at variable rates and approximately $10.8$12.1 million of our long-term debt matures in 2011.

2012.

During 2009, we began converting our circuit from film based to digital projection technology. Digital projection technology gives us greater flexibility in programming and facilitates the exhibition of live and pre-recorded alternative entertainment. As of December 31, 2011, 100% of our first run domestic theatres are fully digital and we continue to convert our international theatres to digital. We also developed a premium experience auditorium concept utilizing large screens and the latest in digital projection and sound technologies, which we call our Cinemark XD Extreme Digital Cinema, or XD. The XD experience includeswall-to-wall andceiling-to-floor screens, wrap-around sound and a maximum comfort entertainment environment for an intense sensory experience. We charge a premium price for the XD experience. The XD technology does not require special format movie prints, which allows us the flexibility to play any available digital print we choose, including3-D content, in the XD auditorium. We currently have 4781 XD auditoriums in our theatrescircuit and have plans to install 3520 to 4030 more XD auditoriums during 2011.

2012.

During late 2010, we introduced our NextGen concept, which featureswall-to-wall andceiling-to-floor screens and the latest digital projection and sound technologies in all of the auditoriums of a complex. These theatres generally also have an XD auditorium, which offers the wall-to-wall and ceiling-to-floor screen in a larger


2


auditorium with enhanced sound and seating. Most of our future domestic theatres will incorporate this NextGen concept. We also plan to convertAs of December 31, 2011 five theatres with 55 screens have the NextGen concept.

During 2011, we converted our six existing film-based IMAX screens to digital projection technology and purchaseinstalled two additional digital IMAX systems to convert two of our existing screens during 2011, in conjunction with our recent settlement with IMAX.

systems.

Motion Picture Exhibition Industry Overview

The motion picture exhibition industry began its transition to digital projection technology during 2009. Digital projection technology allows filmmakers the ability to showcase imaginative works of art exactly as they were intended, with incredible realism and detail and in a range of up to 35 trillion colors. Because digital features aren’t susceptible to scratching and fading, digital presentations will always remain clear and sharp every time they are shown. A digitally produced or digitally converted movie can be distributed to theatres via satellite, physical media, or fiber optic networks. The digitized movie is stored on a computer/server which “serves” it to a digital projector for each screening of the movie and due to its format, it enables us to more efficiently move films between auditoriums within a theatre as demand increases or decreases for each film.

Digital In addition, the transition to digital technology may reduce production and distribution costs as it will eliminate the need to produce and transport multiple film reels.

Further, digital projection also allows the presentation of3-D content and alternative entertainment such as live and pre-recorded sports programs, concert events, the opera sports programs and special live documentaries. Twenty-twoThirty-five films released wide during 20102011 were available in3-D format and at least 3435 3-D films are currently expected to be released during 2011.2012. Three-dimensional technology offers a premium experience with crisp, bright, ultra-realistic images that immerse the patron into a film. A premium is generally charged for a 3-D presentation. In addition, digital projection systems are a more eco-friendly technology since the hard drives require less materials to manufacture and can be used more than once, unlike 35 millimeter film reels.

3-D presentation.

Domestic Markets

The U.S. motion picture exhibition industry has a track record of long-term growth, with box office revenues growing at an estimated CAGR of 3.6% from 2000 to 2010. 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.

While 2011 industry statistics have not yet been published, industry sources estimate that 2011 U.S. box office revenues were approximately $10.2 billion.

The following table represents the results of a survey by Motion Picture Association of America, or MPAA, published during February 2011, outlining the historical trends in U.S. box office performance for the ten year period from 2001 to 2010:

             
  U.S. Box
   Average Ticket
Year
 Office Revenues Attendance Price
  ($ in billions) (In billions)  
 
2001 $8.1   1.43  $5.66 
2002 $9.1   1.57  $5.81 
2003 $9.2   1.52  $6.03 
2004 $9.3   1.50  $6.21 
2005 $8.8   1.38  $6.41 
2006 $9.2   1.40  $6.55 
2007 $9.6   1.40  $6.88 
2008 $9.6   1.34  $7.18 
2009 $10.6   1.42  $7.50 
2010 $10.6   1.34  $7.89 

Year

  U.S. Box
Office Revenues
($ in billions)
   Attendance
(in billions)
   Average Ticket
Price
 

2001

  $8.1     1.43    $5.66  

2002

  $9.1     1.57    $5.81  

2003

  $9.2     1.52    $6.03  

2004

  $9.3     1.50    $6.21  

2005

  $8.8     1.38    $6.41  

2006

  $9.2     1.40    $6.55  

2007

  $9.6     1.40    $6.88  

2008

  $9.6     1.34    $7.18  

2009

  $10.6     1.42    $7.50  

2010

  $10.6     1.34    $7.89  

Films leading the box office during the year ended December 31, 20102011 included the carryover ofAvatar,Riowhich grossed approximately $475 million in U.S. box office revenues during 2010 and new releases such as,Toy Story 3, Alice in Wonderland, Harry Potter and the Deathly Hallows: Part 1, Iron Man 2, The Twilight Saga: Eclipse, Inception, Despicable Me, How to Train Your Dragon, Shrek Forever After, Clash of the Titans, The Karate Kid, Tangled, Grown Ups, Megamind, Tron: Legacy, Little Fockers, The FighterandTrue Grit.

The film slate for 2011 currently includesRango, Fast Five, Thor, Pirates of the Caribbean: On Stranger Tides, The Hangover Part II, Kung Fu Panda 2: The Kaboom of Doom, Cars 2, X Men: First Class, Super 8, Bridesmaids, Transformers: Dark of the Moon, Harry Potter and the Deathly Hollows:Hallows: Part 2, Twilight: Breaking Dawn, Captain America: The First Avenger, Cowboys and Aliens, Puss in Boots, Happy Feet 2,Twilight: Breaking Dawn Part One, Paranormal Activity 3, Mission: Impossible — Ghost Protocol, Sherlock Holmes 2Holmes: A Game of Shadows, The Adventures of Tintin, The Girl with the Dragon Tattoo, War HorseandAlvin and the Chipmunks: Chipwrecked, among other films.


3


The film slate for 2012 currently includes sequels such asMen in Black 3, Madagascar 3: Europe’s Most Wanted, Ice Age: Continental Drift, The Dark Knight Rises, The Bourne Legacy, Wrath of the Titans,andThe Twilight Saga: Breaking Dawn Part 2and original titles such asDr. Suess’ The Lorax, The Hunger Games, The Avengers, The Hobbit: An Unexpected Journey, World War Z,and Life of Pi,among other films.

International Markets

International box office revenue continues to grow. According to MPAA, international box office revenues were $21.2 billion for the year ended December 31, 2010, which is a result of increasing acceptance of movie going as a popular form of entertainment throughout the world,strong economies, ticket price increases and new theatre construction. According to MPAA, Latin American box office revenues were $2.1 billion for the year ended December 31, 2010, representing a 25% increase from 2009.

(As of the date of this report, 2011 industry data was not yet available.)

Growth in Latin America is expected to continue to be fueled by a combination of robust economies, growing populations, attractive demographics (i.e., a significant teenage population), substantial retail development, and quality product from Hollywood, including an increasing number of 3-D films. In many Latin American countries, particularly Mexico and Brazil, successful local film product can also provide incremental growth opportunities.

We 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, and film product offerings continue to expand.

expand and the local economies continue to grow, resulting in the expansion of the middle class.

Drivers of Continued Industry Success

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

Importance of Theatrical Success in Establishing Movie Brands and Subsequent Markets.Theatrical exhibition is the 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 the Internet.

Increased Importance of International Markets for Box Office Success.Success. International markets continue to be an increasingly important component of the overall box office revenues generated by Hollywood films, accounting for $21.2 billion, or approximately 67% of 2010 total worldwide box office revenues according to MPAA. (As of the date of this report, 2011 industry data was not yet available.) With the continued growth of the international motion picture exhibition industry, we believe the relative contribution of markets outside North America will become even more significant. Many of the top U.S. films released recently also performed exceptionally well in international markets. Such films includedAvatar, which grossed approximately $1.5 billion in international markets andHarry Potter and the Deathly Hallows: Part 12, which grossed approximately $610$947.1 million in international markets,Pirates of the Caribbean: On Stranger Tides, which grossed approximately $800.0 million in international markets andTransformers: Dark of the Moon, which grossed approximately $765.0 million in international markets.

Stable Long-Term Attendance Trends.We believe that long-term trends in motion picture attendance in the U.S. will continue to benefit the industry. Even during the recent recessionary period, attendance levels remained stable as consumers selected the theatre as a preferred value for their discretionary income. Although domestic attendance declined slightly in 2010, patronage trends during 2010 reflected increasing demand for products unique to the exhibition industry such as 3-D. With the motion picture exhibition industry’s transition to digital projection technology, the products offered by motion picture exhibitors continue to expand, attracting a broader base of patrons.

Convenient and Affordable Form ofOut-Of-Home Entertainment.Movie going continues to be one of the most convenient and affordable forms ofout-of-home entertainment, with an estimated average ticket price in the U.S. of $7.89 in 2010. Average prices in 2010 for other forms ofout-of-home entertainment in the U.S., including sporting events and theme parks, range from approximately $25.00 to $77.00 per ticket according to MPAA.

(As of the date of this report, 2011 industry data was not yet available.)

Innovation with Digital Technology. Our industry began its conversion to digital projection technology during 2009, which has allowed exhibitors to expand their product offerings. Digital technologyprojection allows the presentation of3-D content and alternative entertainment such as live and pre-recorded sports programs, concert events, the opera concert events and special live documentaries. These additional programming alternatives may expand the industry’s customer base and increase patronage for exhibitors.


4


Competitive Strengths

We believe the following strengths allow us to compete effectively:

Disciplined Operating Philosophy.We generated operating income and net income attributable to Cinemark Holdings, Inc. of $292.8$308.6 million and $146.1$130.6 million, respectively, for the year ended December 31, 2010.2011. 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, controlling operating costs and effectively reacting to economic and market changes.

Leading Position in Our U.S. Markets.We have a leading market share in the U.S. metropolitan and suburban markets we serve. For the year ended December 31, 2010,2011, we ranked either first or second based on box office revenues in 2524 out of our top 30 U.S. markets, including the San Francisco Bay Area, Dallas, Houston and Salt Lake City.

Strategically Located in Heavily Populated Latin American Markets.Since 1993, we have invested throughout Latin America in response to the continued growth of the region. We currently operate 137159 theatres and 1,1131,274 screens in 13 countries. Our international screens generated revenues of $564.2$696.1 million, or 26.4%30.5% of our total revenue, for the year ended December 31, 2010.2011. We have successfully established a significant presence in major cities in the region, with theatres in twelve of the fifteen largest metropolitan areas. We are the largest exhibitor in Brazil, Argentina and Chile. With a geographically diverse circuit, we are an important distribution channel to the movie studios. Approximately 84%87% of our international screens offer stadium seating. We are well-positioned with our modern, large-format theatres to take advantage of these factors for further growth and diversification of our revenues.

State-of-the-Art Theatre Circuit.We offerstate-of-the-art theatres, which we believe makes our theatres a preferred destination for moviegoers in our markets. We feature stadium seating in approximately 86%87% of our first run auditoriums. During 2010,2011, we increased the size of our circuit by adding138 249 state-of-the-art screens worldwide. We currently have commitments to build 196open 246 additional new screens over the next three years. We have installed digital projection technology in 100% of our first run U.S. auditoriums and plan to install digital projection technology in 100% of our international auditoriums. Approximately 48% of our U.S. screens are 3-D compatible and 37% of our international auditoriums of which40-50% will bescreens are 3-D compatible. We also plan to convertconverted our six existing film-based IMAX screens to digital projection technology and purchaseinstalled two additional digital IMAX systems to convert two of our existing screens during 2011. We currently have 4781 XD auditoriums in our theatres and have plans to install 3520 to 4030 more XD

auditoriums during 2011.2012. Our new NextGen theatre concept provides further credence to our commitment to provide a continuingstate-of-the-art movie-viewing experience to our patrons.

Solid Balance Sheet with Significant Cash Flow from Operating Activities. We generate significant cash flow from operating activities as a result of several factors, including a geographically diverse and modern theatre circuit and management’s ability to control costs and effectively react to economic and market changes. Additionally, owning land and buildings for 4241 of our theatres is a strategic advantage that enhances our cash flows. We believe our expected level of cash flow generation will provide us with the financial flexibility to continue to pursue growth opportunities, support our debt payments and continue to make dividend payments to our stockholders. In addition, as of December 31, 2010,2011, we owned approximately 16.917.5 million shares of National CineMedia and had approximately 1.11.2 million options to purchase shares in Real D,RealD, both of which offer us an additional source of cash flows. As of December 31, 2010,2011, we had cash and cash equivalents of $465.0$521.4 million.

Experienced Management.Led by Chairman and founder Lee Roy Mitchell, Chief Executive Officer, Alan Stock, President;President and Chief Operating Officer TimothyTim Warner, Chief Financial Officer Robert Copple and President-International Valmir Fernandes, our management team has many years of theatre operating experience, ranging from 1415 to 5253 years, executing a focused strategy that has led to consistent operating results. This management team has successfully navigated us through many industry and economic cycles.


5


Our Strategy

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 our strategy include:

Establish 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 focus on establishing and maintaining a leading position in the markets we currently serve. We also monitor economic and market trends to ensure we offer a broad range of products and prices that satisfy our patrons.

Continue to Focus on Operational Excellence.We will continue to focus on achieving operational excellence by controlling theatre operating costs and adequately training our staff while continuing to provide leading customer service. Our margins reflect our track record of operating efficiency.

Selectively Build in Profitable, Strategic Latin American Markets.Our continued international expansion will remain focused primarily on Latin America through construction of modern,state-of-the-art theatres in growing urban markets. We have commitments to build eightsix new theatres with 5143 screens during 20112012 and fivethree new theatres with 3422 screens subsequent to 2011,2012, investing an additional $63$72 million in our Latin American markets. We also plan to install digital projection technology in all of our international auditoriums, which allows us to present3-D and alternative content in these markets. Approximately 37% of our international auditoriums are 3-D compatible. We have also installed eight26 of our proprietary XD auditoriums in our international theatres and have plans to install approximately 20 to 2515 additional XD auditoriums internationally during 2011.

2012.

Commitment to Digital Innovation. Our commitment to technological innovation has resulted in us having 1,3633,530 digital auditoriums in the U.S. as of December 31, 2010, 1,1362011, 1,844 of which are 3-D compatible. We also had 201477 digital auditoriums in our international markets as of December 31, 2010,2011, all of which are 3-D compatible. See further discussion of our digital expansion at “Conversion to Digital Projection Technology”. We are planning to convert 100% of our worldwide circuit to digital projection technology, approximately40-50% of which will be 3-D compatible. We also plan to expand our XD auditorium footprint in various markets throughout the U.S. and in select international markets, which offers our patrons a premium movie-viewing experience.

Theatre Operations

As of December 31, 2010,2011, we operated 430456 theatres and 4,9455,152 screens in 39 states and 13 Latin American countries. Our theatres in the U.S. are primarily located in mid-sized U.S. markets, including suburbs of major metropolitan areas. We believe these markets are generally less competitive and generate high, stable margins. Our theatres in Latin America are primarily located in major metropolitan markets, which we believe are generally underscreened. The following tables summarize the geographic locations of our theatre circuit as of December 31, 2010.

2011.

United States Theatres

         
  Total
 Total
State
 Theatres Screens
 
Texas  79   1,030 
California  61   740 
Ohio  19   213 
Utah  14   177 
Nevada  10   154 
Illinois  9   128 
Colorado  8   127 
Arizona  7   106 
Oregon  7   102 
Kentucky  7   87 
Pennsylvania  6   89 
Oklahoma  6   71 


6


State

  Total
Theatres
   Total
Screens
 

Texas

   79     1,036  

California

   62     741  

Ohio

   19     213  

Utah

   16     203  

Nevada

   10     154  

Illinois

   9     128  

Colorado

   8     127  

Oregon

   7     102  

Pennsylvania

   7     101  

Kentucky

   7     87  

Arizona

   6     90  

Oklahoma

   6     71  

Florida

   5     98  

Louisiana

   5     74  

Indiana

   5     48  

New Mexico

   4     54  

Virginia

   4     54  

North Carolina

   4     41  

Mississippi

   3     41  

Iowa

   3     37  

Arkansas

   3     36  

South Carolina

   3     34  

Washington

   2     30  

Georgia

   2     27  

New York

   2     27  

South Dakota

   2     26  

West Virginia

   2     22  

Maryland

   1     24  

Kansas

   1     20  

Alaska

   1     16  

Michigan

   1     16  

New Jersey

   1     16  

Missouri

   1     15  

Massachusetts

   1     15  

Tennessee

   1     14  

Wisconsin

   1     14  

Delaware

   1     10  

Minnesota

   1     8  

Montana

   1     8  
  

 

 

   

 

 

 

Total

   297     3,878  
  

 

 

   

 

 

 

         
  Total
 Total
State
 Theatres Screens
 
Florida  5   98 
Louisiana  5   74 
Indiana  5   48 
New Mexico  4   54 
Virginia  4   52 
North Carolina  4   41 
Mississippi  3   41 
Iowa  3   37 
Arkansas  3   36 
Washington  2   30 
Georgia  2   27 
New York  2   27 
South Dakota  2   26 
South Carolina  2   22 
West Virginia  2   22 
Maryland  1   24 
Kansas  1   20 
Alaska  1   16 
Michigan  1   16 
New Jersey  1   16 
Missouri  1   15 
Tennessee  1   14 
Wisconsin  1   14 
Massachusetts  1   12 
Delaware  1   10 
Minnesota  1   8 
Montana  1   8 
         
Total
  293   3,832 
         
International Theatres
         
  Total
 Total
Country
 Theatres Screens
 
Brazil  49   409 
Mexico  31   296 
Central America(1)  12   83 
Colombia  12   68 
Chile  11   87 
Argentina  10   80 
Peru  8   64 
Ecuador  4   26 
         
Total
  137   1,113 
         

Country

  Total
Theatres
   Total
Screens
 

Brazil

   53     434  

Mexico

   31     294  

Argentina

   20     175  

Colombia

   16     88  

Chile

   12     92  

Central America (1)

   12     83  

Peru

   10     76  

Ecuador

   5     32  
  

 

 

   

 

 

 

Total

   159     1,274  
  

 

 

   

 

 

 

(1)
(1)

Includes Honduras, El Salvador, Nicaragua, Costa Rica, Panama and Guatemala.

We first entered Latin America when we began operating movie theatres in Chile in 1993 and Mexico in 1994. Since then, through our focused international strategy, we have developed into the most geographically diverse theatre circuit in the region. We have balanced our risk through a diversified international portfolio, currently operating theatres in twelve of the fifteen largest metropolitan areas in Latin America. In addition, we have achieved significant scale in Brazil, where we are the largest exhibitor, and Mexico, the two largest Latin American economies, with 409434 screens in Brazil and 296294 screens in Mexico as of December 31, 2010.

7

2011. We are also the largest exhibitor in Argentina and Chile.


We believe that certain markets within Latin America continue to be underserved as penetration of movie screens per capita in Latin American 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 cash flow exposure to currency fluctuations by using local currencies to collect a majority of our revenues and fund a majority of the costs of our international operations. 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 $696.1 million during 2011 compared to $564.2 million during 2010 compared to $421.8 million during 2009.
2010.

Film Licensing

In the domestic marketplace, the Company’s film department negotiates with film distributors, which are made up of the traditional major film companies, specialized and art divisions of some of these major film companies, and many other independent film distributors. The film distributors are responsible for determining film release dates, the related marketing campaigns and the expenditures related to marketing materials, television spots and other advertising outlets. The marketing campaign of each movie may include tours of the actors in the movies and coordination of articles and features about each movie. The Company is responsible for booking the films in negotiated film zones, which are either free zones or competitive zones. In free zones, movies can be booked without regard to the location of another exhibitor within that area. In competitive zones, the distributor allocates their movies to the exhibitors located in that area generally based on demographics and grossing potential of that particular area. We are the sole exhibitor in approximately 91% of the 247229 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 that we believe will be the most successful from those offered to us by film distributors.

Internationally, our local film personnel negotiate with local offices of major film distributors as well as local film distributors to license films for our international theatres. In the international marketplace, films are not allocated to a single theatre in a geographic film zone, but played by competitive theatres simultaneously.

Our theatre personnel focus on providing excellent customer service, and we provide a modern facility with the mostup-to-date sound systems, comfortable stadium style seating and other amenities typical of modern American-style multiplexes, which we believe gives us a competitive advantage in markets where competing theatres play the same films. Of the 1,1131,274 screens we operate in international markets, approximately 75%79% have no direct competition from other theatres.

Our film rental fees in the U.S. are generally based on a film’s box office receipts and either mutually agreed upon firm terms, a sliding scale formula, or a mutually agreed upon settlement, subject to the film licensing agreement. Under a firm terms formula, we pay the distributor a mutually agreed upon specified percentage of box office receipts. Under a sliding scale formula, we pay a percentage of box office revenues using a pre-determined matrix that is 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. Internationally, our film rental fees are primarily based on mutually agreed upon firm terms that are based upon a specified percentage of box office receipts.

We regularly play art and independent films at many of our U.S. theatres, providing a variety of film choices to our patrons. Bringing art and independent films to our theatres allows us to benefit from the growth in the art and independent market driven by the more mature patron and increased interest in art, foreign and documentary films. High profile film festivals, such as the Sundance Film Festival, have contributed to interest in this genre. Recent hitsThe performance of films such asMidnight in Paris, The Kids are Alright, Black Swan,Descendants,andThe King’s SpeechIron Ladyhave demonstrated the box office potential of art and independent films.


8


Food, Beverages and Amusements

Concession sales are our second largest revenue source, representing approximately 30% of total revenues for each of the years ended December 31, 2008, 2009, 2010 and 2010.2011. 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 offer concession products that primarily include various sizes and types of popcorn, soft drinks, coffees, juices, candy and quickly-prepared food, such as hot dogs, nachos and ice cream. Different varieties and flavors of candy and drinks are offered at theatres based on preferences in that particular market. Our point of sale system allows us to monitor product sales and make changes to product mix when necessary, which also allows us to quickly take advantage of national as well as regional product launches. Specially priced combos and promotions are introduced on a regular basis to increase average concession purchases as well as to attract new buyers. We periodically offer our loyal patrons opportunities to receive a discount on certain products by offering reusable popcorn tubs and soft drink cups that can be refilled at a discount off the regular price.

 

Staff training.Employees are continually trained in “suggestive-selling” and “upselling”proper sales techniques. Consumer promotions conducted at the concession stand usually include a motivational element that rewards theatre staff for exceptional sales of certain promotional items.

 

Theatre design.Our theatres are designed to optimize efficiencies at the concession stands, which include multiple service stations throughout a theatre to facilitate serving more customers more quickly. We strategically place large concession stands within theatres to heighten visibility, reduce the length of concession lines, and improve traffic flow around the concession stands. We have self-service concession areas in many of our domestic theatres, which allow customers to select their own refreshments and proceed to the cash register when they are ready. This design allows for efficient service, enhanced choices and superior visibility of concession items. Concession designs in many of our new domestic theatres have incorporated the self-service model.

 

Cost control.We negotiate prices for concession supplies directly with concession vendors and manufacturers to obtain volume rates. Concession supplies are distributed through a national distribution network. The concession distributor supplies and distributes inventory to the theatres, who

place orders directly with the vendors to replenish stock. We conduct a weekly inventory of all concession products at each theatre to ensure proper stock levels are maintained for business.

Pre-Feature Screen Advertising

In our domestic markets, our theatres are part of the in-theatre digital network operated by National CineMedia, LLC, or NCM. NCM’s primary activities that impact our theatres include: advertising through its branded “First Look” pre-feature entertainment program, lobby promotions and displays; live and pre-recorded networked and single-site meetings and events; and live and pre-recorded concerts, sporting events and other non-film entertainment programming. We believe that the reach, scope and digital delivery capability of NCM’s network provides an effective platform for national, regional and local advertisers to reach an engaged audience. We receive a monthly theatre access fee for participation in the NCM network. In addition, we are entitled to receive mandatory quarterly distributions of excess cash from NCM. As of December 31, 2010,2011, we had an approximate 15%16% ownership interest in NCM. See Note 6 to the consolidated financial statements.

In manycertain of our international markets, we outsource our screen advertising to local companies who have established relationships with local advertisers that provide similar benefits as NCM. The terms of our international screen advertising contracts vary by country. In some of these locations, we earn a percentage of the screen advertising revenues collected by our partners and in other locations we are paid a fixed annual fee for access to our screens.

screens, while at our other locations, our in-house marketing personnel handle screen advertising. We recently took the screen advertising function in-house in Brazil, which is being handled by a newly formed wholly-owned subsidiary Flix Media Publicidade E Entretenimento, Ltda., or Flix Media. Our Flix Media marketing personnel work directly with local advertisers to generate screen advertising.

Conversion to Digital Projection Technology

The motion picture exhibition industry began its conversion to digital projection technology during 2009.


9


Participation in Digital Cinema Implementation Partners

During 2007, we, AMC Entertainment Inc., or AMC, and Regal Entertainment Group, or Regal, entered into a joint venture known as Digital Cinema Implementation Partners LLC, or DCIP, to facilitate the implementation of digital cinema in our U.S. theatres and to establish agreements with major motion picture studios for the financing of digital cinema. Digital cinema developments are managed by DCIP, subject to certain approvals by us, AMC and Regal with each of us having an equal voting interest in DCIP. DCIP’s wholly-owned subsidiary Kasima executed long-term deployment agreements with all of the major motion picture studios, under which Kasima receives a virtual print fee from such studios for each digital presentation. In accordance with these agreements, the digital projection systems deployed by Kasima comply with the technology and security specifications developed by the Digital Cinema Initiatives studio consortium. Kasima leases digital projection systems to us, AMC and Regal under master lease agreements that have an initial term of 12 years.

On March 10, 2010, we signed a master lease agreement and other related agreements (collectively the “agreements”) with Kasima. Upon signing these agreements, we contributed cash and the majority of our existing U.S. digital projection systems to DCIP. SubsequentSubsequently during 2010 and 2011, we sold additional U.S. digital projection systems to the contributions,DCIP. As of December 31, 2011, we continue to havehad a 33% voting interest in DCIP and have a 24.3% economic interest in DCIP. As of December 31, 2010,2011, we had 1,3633,530 digital auditoriums in the U.S., 1,1363,460 of which are leased from Kasima and 1,844 of which are capable of exhibiting 3-D content. We ultimately expect to install digital projection systems in all of our auditoriums, with approximately

40-50% being 3-D compatible.

International Markets

In our international markets, we continue to convert our auditoriums to digital projection technology. The digital projection systems we deploy are generally funded with operating cash flows generated by each

international country. As of December 31, 2010,2011, we had 201477 digital auditoriums in our international markets, all of which are capable of exhibiting 3-D content. Similar to our domestic markets, we expect to install digital projection systems in all of our international auditoriums.

Marketing

In the U.S., we rely on Internet advertising and also newspaper directory film schedules. Radio and television advertising spots are used to promote certain motion pictures and special events. We exhibit previews of coming attractions and films we are currently playing as part of our pre-feature program. We offer patrons access to movie times, the ability to buy and print their tickets at home and purchase gift cards at our Web sitewww.cinemark.com. Customers subscribing to our weekly email receive targeted information about current and upcoming films at their preferred Cinemark theatre(s), including details about advanced tickets, special events, concerts and live broadcasts; as well as contests, promotions, and exclusive coupons for concession savings. We partner with film distributors to use monthly web contests to drive traffic to our Web site and to ensure that customers visit often. In addition, we work with all of the film distributors on a regular basis 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 the media and third parties and other means to increase patronage for a particular film showing at one of our theatres. We are also developinghave an iPhone application in the U.S. that will allowallows patrons to find theatres, check showtimes and purchase tickets.

Internationally, we exhibit upcoming and current film previews on screen, we partner with film distributors for certain promotions and advertise our new locations through various forms of media and events. We partner with large multi-national corporations in the large metropolitan areas in which we have theatres to promote our brand, our image and to increase attendance levels at our theatres. Our customers are encouraged to register on our Web site to receive weekly information by email for showtime information, invitations to special screenings, sponsored events and promotional information. In addition, our customers can request to receive showtime information on their cell phones. We also have loyalty programs in some 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. In addition, the Company has just introduced an iPhone application in Brazil ranking among the top ten downloads in Brazil’s local Apple stores.Brazil. The application allows consumers to check showtimes and purchase tickets for our Brazil theatres.


10


Our domestic and international 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 for certain of our locations at our theatres or online through our Web site,www.cinemark.com. SuperSavers are also sold online atwww.cinemark.comor via phone, fax or email by our local corporate offices and are also available at certain retailers in the U.S.

Online and Mobile Sales

Our patrons may purchase advance tickets for all of our domestic screens and approximately seventy-five percenta majority of our international screens by accessing our corporate Web site atwww.cinemark.com.Advance tickets may also be purchased for our domestic screens atwww.fandango.com.Our iPhone application in Brazil currently offers,mobile phone and the iPhone application we are developing in the U.S. willtablet applications offer patrons the ability to purchase tickets. Our Internet initiatives help improve customer satisfaction, allowing patrons who purchase tickets over the Internet to often bypass lines at the box office by printing their tickets at home, or picking up their tickets at kiosks located at the theatre.

theatre, or scanning a barcode confirmation from their mobile device at the usher stand.

Point of Sale Systems

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. The point of sale system provides corporate management with real-time admissions and concession revenues data and

reports to allow for 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, as well as Reserved Seating,reserved 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 by product, provides in-theatre inventory reports for efficient inventory management and control, offers numerous ticket pricing options, connects with digital concession signage for real-time pricing modifications, 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 and provide print at homeprint-at-home and mobile ticketing. In our international locations, we currently use other point of sale systems that have been developed by third parties, which have been certified as compliant with applicable governmental regulations and provide generally the same capabilities as our proprietary point of sale system.

Competition

We are a leader in the motion picture exhibition industry in terms of both attendance and the number of screens in operation. We compete against local, regional, national and international exhibitors with respect to attracting patrons, licensing films and developing new theatre sites.

Our domestic competitors include Regal, AMC and Carmike Cinemas, Inc. and our international competitors, which vary by country, include Cinépolis, Cinemex and National Amusements.

We are the sole exhibitor in approximately 91% of the 247229 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 that we believe will be the most successful from those offered to us by film distributors. Where there is competition, the distributor allocates their movies to the exhibitors located in that area generally based on demographics, the conditions, capacity and grossing potential of that particular area.each theatre, and licensing terms. Of the 1,1131,274 screens we operate outside of the U.S., approximately 75%79% 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, theatre capacity, quality of projection and sound equipment, film showtime availability, customer service quality, and ticket prices. The competition for film licensing in the U.S. is dependent upon factors such as the theatre’s location and its demographics, the condition, capacity and revenue potential of each theatre, and licensing terms.

We compete for new theatre sites with other movie theatre exhibitors as well as other entertainment venues, with securing a potential site being dependent upon factors such as committed investment and resources, theatre design and capacity, revenue and patron potential, and financial stability.


11


We also face competition from a number of other motion picture exhibition delivery systems, such as DVDs, network and syndicated television, video on-demand,pay-per-view television and 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.

Corporate Operations

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 our executive team and department heads in charge of film licensing, concessions, theatre operations, theatre construction and maintenance, real estate, human resources, marketing, legal, finance and accounting, audit and information systems support and marketing.support. Our U.S. operations are divided into sixteen regions, primarily organized geographically, each of which is headed by a region leader.

International personnel at our corporate headquarters include our President of Cinemark International, L.L.C. and department heads in charge of film licensing, concessions,marketing, theatre operations, theatre construction, real estate,

legal, audit, accounting and information systems and accounting.systems. We have eight regional offices in Latin America responsible for the local management of theatres in thirteen individual countries (Honduras, El Salvador, Nicaragua, Costa Rica, Panama and Guatemala are operated out of one Central American regional office). Each regional office is headed by a general manager and includes personnel in film licensing, marketing, human resources, information systems, operations and accounting. We have a chief financial officer in both Brazil, Mexico and Mexico,Argentina, which are our twothree largest international markets. The regional offices are staffed with experienced personnel from the region to mitigate cultural and operational barriers.

Employees

We have approximately 14,60014,000 employees in the U.S., approximately 10% of whom are full time employees and 90% of whom are part time employees. We have approximately 7,4008,000 employees in our international markets, approximately 63%51% of whom are full time employees and approximately 37%49% of whom are part time employees. Some of our U.S. employees are represented by 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.

Regulations

The distribution of motion pictures is largely regulated by federal and state antitrust laws and has been the subject of 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 films of such distributors to be offered and licensed to exhibitors, including us, on atheatre-by-theatre andfilm-by-film basis. Consequently, exhibitors cannot enter into long-term arrangements with major distributors, but must negotiate for licenses on atheatre-by-theatre andfilm-by-film basis.

We are subject to various general regulations applicable to our operations including the Americans with Disabilities Act of 1990, or the ADA. We develop new theatres to be accessible to the disabled and we believe we are substantially compliant with current regulations relating to accommodating the disabled. Although we believe that our theatres comply with the ADA, we 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.

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.

Financial Information About Geographic Areas

We currently have operations in the U.S., Brazil, Mexico, Argentina, Chile, Colombia, Argentina, Peru, Ecuador, Honduras, El Salvador, Nicaragua, Costa Rica, Panama and Guatemala, which are reflected in the consolidated


12


financial statements. See Note 23 to the consolidated financial statements for segment information and financial information by geographic area.

Item 1A.

Item 1A. Risk Factors

Risk Factors

Our business depends on film production and performance.

Our business depends on both the availability of suitable films for exhibition in our theatres and the success of those films in our markets. Poor performance of films, the disruption in the production of films due to events such as a strike by directors, writers or actors, a reduction in financing options for the film distributors, or a reduction in the marketing efforts of the film distributors to promote their films could have an adverse effect on our business by resulting in fewer patrons and reduced revenues.

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

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 82.7%83% of U.S. box office revenues and 4746 of the top 50 grossing films during 2010.2011. Numerous antitrust cases and consent decrees resulting from these antitrust cases impact the distribution of films. The consent decrees bind certain major film distributors to license films to exhibitors on atheatre-by-theatre andfilm-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.

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

Our results of operations vary from period to period based upon the quantity and quality of the motion pictures that we show in our theatres. The major film distributors generally release the films they anticipate will be most successful during the summer and holiday seasons. Consequently, we typically generate higher revenues during these periods. Due to the dependency on the success of films released from one period to the next, results of operations for one period may not be indicative of the results for the following period or the same period in the following year.

We face intense competition for patrons and films which may adversely affect our business.

The motion picture industry is highly competitive. We compete against local, regional, national and international exhibitors. We compete for both patrons and licensing of films. The competition for patrons is dependent upon such factors as location, theatre capacity, quality of projection and sound equipment, film showtime availability, customer service quality, and ticket prices. The principal competitive factors with respect to film licensing include the theatre’s location and its demographics, the condition, capacity and revenue potential of each theatre and licensing terms. If we are unable to attract patrons or to license successful films, our business may be adversely affected.

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

We face competition for patrons from a number of alternative film distribution channels, such as DVDs, network and syndicated television, video on-demand,pay-per-view television and the Internet. We also compete with other forms of entertainment, such as concerts, theme parks and sporting events, for our patrons’ leisure time and disposable income. A significant increase in popularity of these alternative film distribution channels or competing forms of entertainment could have an adverse effect on our business and results of operations.


13


Our results of operations may be impacted by shrinking video release windows.

Over 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 three to four months. If patrons choose to wait for a DVD release rather than attend a theatre for viewing the film, it may adversely impact our business and results of operations, financial condition and cash flows. Film studios have announced their intentionstarted to offer consumers a premium video on demand option for certain films 60 days following the theatrical release, which would also causecaused the release window to shrink further.further for certain films. We cannot assure you that these release windows, which are 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.

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.

We have, and will continue to have, significant long-term debt service obligations and long-term lease obligations. As of December 31, 2010,2011, we had $1,532.5$1,572.2 million in long-term debt obligations, $140.2$141.2 million in capital lease obligations and $1,795.2$1,904.0 million in long-term operating lease obligations. We incurred interest expense of $112.4$123.1 million for the year ended December 31, 2010.2011. We incurred $255.7$276.3 million of facility lease expense under operating leases for the year ended December 31, 20102011 (the terms under these operating leases, excluding optional renewal periods, range from one to 2725 years). Our substantial lease and debt obligations pose risk to you by:

making it more difficult for us to satisfy our obligations;

requiring us to dedicate a substantial portion of our cash flows to payments on our lease and debt obligations, thereby reducing the availability of our cash flows from operations to fund working capital, capital expenditures, acquisitions and other corporate requirements and to pay dividends;

• making it more difficult for us to satisfy our obligations;
• requiring us to dedicate a substantial portion of our cash flows to payments on our lease and debt obligations, thereby reducing the availability of our cash flows from operations to fund working capital, capital expenditures, acquisitions and other corporate requirements and to pay dividends;
• impeding our ability to obtain additional financing in the future for working capital, capital expenditures, acquisitions and general corporate purposes;
• subjecting us to the risk of increased sensitivity to interest rate increases on our variable rate debt, including our borrowings under our senior secured credit facility; and
• making us more vulnerable to a downturn in our business and competitive pressures and limiting our flexibility to plan for, or react to, changes in our industry or the economy.

impeding our ability to obtain additional financing in the future for working capital, capital expenditures, acquisitions and general corporate purposes;

subjecting us to the risk of increased sensitivity to interest rate increases on our variable rate debt, including our borrowings under our senior secured credit facility; and

making us more vulnerable to a downturn in our business and competitive pressures and limiting our flexibility to plan for, or react to, changes in our industry or the economy.

Our ability to make scheduled payments of principal and interest with respect to our indebtedness will depend on our ability to generate positive cash flows and on our future financial results. Our ability to generate positive cash flows is subject to general economic, financial, competitive, regulatory and other factors that are beyond our control. We cannot assure you that we will continue to generate cash flows at current levels, or that future borrowings will be available under our senior secured credit facility, in an amount sufficient to enable us to pay our indebtedness. If our cash flows and capital resources are insufficient to fund our lease and debt service obligations, we may be forced to reduce or delay capital expenditures, sell assets or operations, seek additional capital or restructure or refinance our indebtedness. We may not be able to take any of these actions, and these actions may not be successful or permit us to meet our scheduled debt service obligations and these actions may be restricted under the terms of our existing or future debt agreements, including our senior secured credit facility. The senior secured credit facility restricts our ability to dispose of assets and use the proceeds from the disposition. We may not be able to consummate those dispositions or the proceeds may not be adequate to meet our debt service obligations.

If we fail to make any required payment under the agreements governing our leases and indebtedness or fail to comply with the financial and operating covenants contained in them, we would be in default, and as a result, our debt holders would have the ability to require that we immediately repay our outstanding indebtedness and the lenders under our senior secured credit facility could terminate their commitments to lend us money and foreclose against the assets securing their borrowings. We could be forced into bankruptcy or liquidation, which could result in the loss of your investment. The acceleration of our indebtedness under one agreement may permit acceleration


14


of indebtedness under other agreements that contain cross-default and cross-acceleration provisions. If our indebtedness is accelerated, we may not be able to repay our indebtedness or borrow sufficient funds to refinance it. Even if we are able to obtain new financing, it may not be on commercially reasonable terms or on terms that are acceptable to us. If our debt holders require immediate payment, we may not have sufficient assets to satisfy our obligations under our indebtedness.

General political, social and economic conditions can adversely affect our attendance.

Our results of operations are dependent on general political, social and economic conditions, and the impact of 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 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 operations could be adversely affected. Political events, such as terrorist attacks, and health-related epidemics, such as flu outbreaks, could cause people to avoid our theatres or other public places where large crowds are in attendance. In addition, a natural disaster, such as a hurricane or an earthquake, could impact our ability to operate certain of our theatres, which could adversely affect our results of operations.

Our foreign operations are subject to adverse regulations, economic instability and currency exchange risk.

We have 137159 theatres with 1,1131,274 screens in thirteen countries in Latin America. Brazil and Mexico represented approximately 14.8% and 3.3%15.7% of our consolidated 2010 revenues, respectively.2011 revenues. 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. Our international operations are subject to certain political, economic and other uncertainties not encountered by our domestic operations, including risks of severe economic downturns and high inflation. We also 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.

We may not be able to generate additional revenues or continue to realize value from our investment in NCM.

In 2005, we joined Regal and AMC as founding members of NCM, a provider of digital advertising content and digital non-film event content. As of December 31, 2010,2011, we had an ownership interest in NCM of approximately 15%16%. 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, 20092010 and 2010,2011, the Company received approximately $5.7$5.0 million and $5.0$5.9 million in other revenues from NCM, respectively, and $20.8$23.4 million and $23.4$24.2 million in cash distributions in excess of our investment in 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 theatre patrons. If NCM is unable to continue to generate consistent advertising revenues, its results of operations may be adversely affected and our investment in and distributions and revenues from NCM may be adversely impacted.

We are subject to uncertainties related to digital cinema, including insufficient financing to obtain digital projectors and insufficient supply of digital projectors.projectors for our international locations.

We along with some of our competitors, began a roll-out of digital projection equipment for exhibiting feature filmsin our international theatres during 2009 and plan to continue our domestic roll-out through our joint venture DCIP. However, significant obstacles may exist that impact such a roll-out plan including the cost of digital projectors and the supply of projectorswhich has been funded by manufacturers. During 2010, DCIP completed its formation and a $660 million financing to facilitate


15


the deployment of digital projectors in approximately 71% of our domestic theatres. We cannot assure you that DCIP will be able to obtain sufficient additional financing to be able to purchase and lease to us the number of digital projectors needed for our domestic roll-out or that the manufacturers will be able to supply the volume of projectors needed for our worldwide roll-out. As a result, our roll-out of digital equipment could be delayed. Additionally, thereoperating cash flows. There is no local financing available to finance the deployment of digital projectors for our international theatres. Accordingly, the cost of digital projection systems and manufacturer limitations may delay our international deployment.

We are subject to uncertainties relating to future expansion plans, including our ability to identify suitable acquisition candidates or site locations, and to obtain financing for such activities on favorable terms or at all.

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. Acquisitions and expansion opportunities may divert a significant amount of management’s time away from the operation of our business. Growth by acquisition also involves risks relating to difficulties in integrating the operations and personnel of acquired companies and the potential loss of key employees of acquired companies. 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 operating cash flows. We cannot assure you that we will be able to obtain such financing or that such financing will be available to us on acceptable terms or at all.

If we do not comply with the Americans with Disabilities Act of 1990 and the safe harbor framework included in the consent order we entered into with the Department of Justice, or the DOJ, we could be subject to further litigation.

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,On November 15, 2004, we and 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 andentered into a consent order, which was entered byfiled with the U.S. District Court for the Northern District of Ohio, Eastern Division, on November 15, 2004.Division. Under the consent order, we were 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 were completed by November 2009. Upon completion of these modifications, these theatres 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 movie theatres then under construction and also created a safe harbor framework for us to construct all of 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.

We depend on key personnel for our current and future performance.

Our current and future performance depends to a significant degree upon the continued contributions of our senior management team and other key personnel. The loss or unavailability to us of any member of our senior


16


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.

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

We review 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. We assess many factors when determining whether to impair individual theatre assets, including actual theatre level cash flows, future years budgeted theatre level cash flows, theatre property and equipment carrying values, amortizing intangible asset carrying values, the age of a recently built theatre, competitive theatres in the marketplace, 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. Long-lived assets are evaluated for impairment on an individual theatre basis, which we believe is the lowest applicable level for which there are identifiable cash flows. When estimated fair value is determined to be lower than the carrying value of the theatre assets, the theatre assets are written down to their estimated fair value. Fair value is determined based on a multiple of cash flows, which was eight times for the evaluations performed during the first, second and third quarters of 2008 and six and a half times for the evaluation performed during the fourth quarter of 2008 and the evaluations performed during 2009, 2010 and 2010.2011. Significant judgment is involved in estimating cash flows and fair value. Management’s estimates, which fall under Level 3 of the U.S. GAAP fair value hierarchy as defined by Financial Accounting Standards Board, or FASB, Accounting Standards Codification, or ASC, Topic820-10-35, are based on historical and projected operating

performance, recent market transactions and current industry trading multiples. Since we evaluate long-lived assets for impairment at the theatre level, if a theatre is directly and individually impacted by increased competition, adverse changes in market demographics or adverse changes in the development or condition of the areas surrounding the theatre, we may record impairment charges to reflect the decline in estimated fair value of that theatre.

We have a significant amount of goodwill. We evaluate goodwill for impairment at the reporting unit level at least annually during the fourth quarter or whenever events or changes in circumstances indicate the carrying value of goodwill may not be fully recoverable. Goodwill impairment is evaluated for impairment using a two-step approach requiring us tounder which we 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 fair value, a second step would be performed to measure the potential goodwill impairment. Fair values are determined based on a multiple of cash flows, which was six and a half times for the evaluations performed during 2008, 2009 and 2010.2010 and seven and a half times for the evaluation performed during 2011. Significant judgment is involved in estimating cash flows and fair value. Management’s estimates, which fall under Level 3 of the U.S. GAAP fair value hierarchy as defined by FASB ASC Topic820-10-35, are based on historical and projected operating performance, recent market transactions and current industry trading multiples. Declines in our stock price or market capitalization, declines in our attendance due to increased competition in certain regionsand/or countries or economic factors that lead to a decline in attendance in any given region or country could negatively affect our estimated fair values and could result in further impairments of goodwill. As of December 31, 2010,2011, the carryingfair value of goodwill allocated tofor all of our reporting units where theexceeded their estimated fair value was less thancarrying values by at least 10% more than the carrying value was approximately $77 million.

.

We also have a significant amount of tradename intangible assets. 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 fully recoverable. We estimate the fair value of our tradenames by applying an estimated market royalty rate that could be charged for the use of our tradename to forecasted future revenues, with an adjustment for the present value of such royalties. If the estimated fair value is less than the carrying value, the tradename intangible asset is written down to its estimated fair value. Significant judgment is involved in estimating market royalty rates and long-term revenue forecasts. Management’s estimates, which fall under Level 3 of the U.S. GAAP fair value hierarchy as defined by FASB ASC Topic820-10-35, are based on historical and projected revenue performance and industry trends. As of December 31, 2010,2011, the carryingfair value of our tradename intangible assets where theexceeded their estimated fair value was less thancarrying values by at least 10% more than the carrying value was approximately $136 million.


17

.


We recorded asset impairment charges, including goodwill and intangible asset impairment charges, of $113.5 million, $11.8 million, $12.5 million and $12.5$7.0 million for the years ended December 31, 2008, 2009, 2010 and 2010,2011, respectively. We cannot assure you that additional impairment charges will not be required in the future, and such charges may have an adverse effect on our financial condition and results of operations. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and Notes 10 and 11 to the consolidated financial statements.

A failure to adapt to future technological innovations could impact our ability to compete effectively and could adversely affect our results of operations.

While we are continuing to transition our theatres to digital projection technology, new technological innovations continue to impact our industry. If we are unable to respond to or invest in changes in technology and the technological preferences of our customers, we may not be able to compete with other exhibitors or other entertainment venues, which could adversely affect our results of operations.

The impairment or insolvency of other financial institutions could adversely affect us.

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 a default by one or more of our counterparties to such

agreements. We also have exposure to financial institutions used as depositories of our corporate cash balances. If our counterparties or financial institutions become impaired or insolvent, this could have an adverse impact on our results of operations or impair our ability to access our cash.

A credit market crisis may adversely affect our ability to raise capital and may materially impact our operations.

Severe dislocations and liquidity disruptions in the credit markets could materially impact our ability to obtain debt financing on reasonable terms or at all. The inability to access debt financing on reasonable terms could materially impact our ability to make acquisitions or significantly expand our business in the future.

We may be subject to liability under environmental laws and regulations.

We own and operate a large number of theatres and other properties within the United States and internationally, which may be subject to various foreign, federal, state and local laws and regulations relating to the protection of the environment or human health. Such environmental laws and regulations include those that impose liability for the investigation and remediation of spills or releases of hazardous materials. We may incur such liability, including for any currently or formerly owned, leased or operated property, or for any site, to which we may have disposed, or arranged for the disposal of, hazardous materials or wastes. Certain of these laws and regulations may impose liability, including on a joint and several liability, which can result in a liable party being obliged to pay for greater than its share, regardless of fault or the legality of the original disposal. Environmental conditions relating to our properties or operations could have an adverse effect on our business and results of operations and cash flows.

The interests of Madison Dearborn Capital Partners IV, L.P., or MDCP, may not be aligned with yours.

MDCP beneficially owns approximately 21% of our common stock and under a director nomination agreement, is entitled to designate nominees for five members of our board of directors. Accordingly, MDCP has influence and effectively controls our corporate and management policies and has significant influence over 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. MDCP could seek to take other actions that might be desirable to MDCP but that might not be desirable for other stockholders.
Our ability to pay dividends may be limited or otherwise restricted.

Our ability to pay dividends is limited by our status as a holding company and the terms of our senior notes indenture, our senior subordinated notes indenture, and our senior secured credit facility, which restrict our ability to pay dividends and the ability of certain of our subsidiaries to pay dividends, directly or indirectly, to us. Under our debt instruments, we may pay a cash dividend up to a specified amount, provided we have satisfied certain financial covenants in, and are not in default under, our debt instruments. The declaration of future dividends on our common stock, par value $0.001 per share, or Common Stock, will be at the discretion of our board of directors and will depend upon many factors, including our results of operations, financial condition, earnings, capital requirements, limitations in our debt agreements and legal requirements.


18


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

Provisions in our amended and restated certificate of incorporation and bylaws, as well as provisions of the Delaware General Corporation Law, could discourage unsolicited proposals to acquire us, even though such proposals may be beneficial to you. These provisions include:

authorization of our board of directors to issue shares of preferred stock without stockholder approval;

a board of directors classified into three classes of directors with the directors of each class having staggered, three-year terms;

• authorization of our board of directors to issue shares of preferred stock without stockholder approval;
• a board of directors classified into three classes of directors with the directors of each class, subject to shorter initial terms for some directors, having staggered, three-year terms;
• provisions regulating the ability of our stockholders to nominate directors for election or to bring matters for action at annual meetings of our stockholders; and
• provisions of Delaware law that restrict many business combinations and provide that directors serving on classified boards of directors, such as ours, may be removed only for cause.

provisions regulating the ability of our stockholders to nominate directors for election or to bring matters for action at annual meetings of our stockholders; and

provisions of Delaware law that restrict many business combinations and provide that directors serving on classified boards of directors, such as ours, may be removed only for cause.

Certain provisions of our 8.625% senior notes indenture, our 7.375% senior subordinated notes indenture and our 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 8.625% senior 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”, as defined in the senior subordinated notes indenture, would require us to make an offer to repurchase the senior subordinated notes at a price equal to 101% of the aggregate principal amount outstanding plus accrued and unpaid interest, if any, through the date of repurchase. A “change of control” would also be an event of default under our senior secured credit facility.

The market price of our common stockCommon Stock may be volatile.

There can be no assurance that an active trading market for our common stockCommon Stock will continue. The securities markets have experienced extreme price and volume fluctuations in recent years and the market prices of the securities of companies have been particularly volatile. This market volatility, as well as general economic or political conditions, could reduce the market price of our common stockCommon Stock regardless of our operating performance. In addition, our operating results could be below the expectations of investment analysts and investors and, in response, the market price of our common stockCommon Stock may decrease significantly and prevent investors from reselling their shares of our common stockCommon Stock at or above a market price that is favorable to other stockholders. In the past, companies that have experienced volatility in the market price of their stock have been the subject of securities class action litigation. If we were the subject of securities class action litigation, it could result in substantial costs, liabilities and a diversion of management’s attention and resources.

Future sales of our common stockCommon Stock may adversely affect the prevailing market price.

If a large number of shares of our common stockCommon Stock is sold in the open market, or if there is a perception that such sales will occur, the trading price of our common stockCommon Stock could decrease. In addition, the sale of these shares could impair our ability to raise capital through the sale of additional common stock.Common Stock. As of December 31, 2010,2011, we had an aggregate of 182,889,297181,286,739 shares of our common stockCommon Stock authorized but unissued and not reserved for specific purposes. In general, we may issue all of these shares without any action or approval by our stockholders. We may issue shares of our common stockCommon Stock in connection with acquisitions.

As of December 31, 2010,2011, we had 113,750,844114,201,737 shares of our common stockCommon Stock outstanding. Of these shares, approximately 75,573,390102,447,116 shares were freely tradable. The remaining shares of our common stockCommon Stock were “restricted securities” as that term is defined in Rule 144 under the Securities Act. Restricted securities may not be resold in a public distribution except in compliance with the registration requirements of the Securities Act or pursuant to an exemption therefrom, including the exemptions provided by Regulation S and Rule 144 promulgated under the Securities Act.

We cannot predict whether substantial amounts of our common stockCommon Stock will be sold in the open market in anticipation of, or following, any divestiture by any of our existing stockholders, our directors or executive officers of their shares of common stock.

Common Stock.

As of December 31, 2010,2011, there were 9,786,6739,214,191 shares of our common stockCommon Stock reserved for issuance under our Amended and Restated 2006 Long Term Incentive Plan, of which 140,35682,166 shares of common stockCommon Stock were issuable


19


upon exercise of options outstanding as of December 31, 2010.2011. The sale of shares issued upon the exercise of stock options could further dilute your investment in our common stockCommon Stock and adversely affect our stock price.

Legislative or regulatory initiatives related to global warming/climate change concerns may negatively impact our business.

Recently, there has been an increasing focus and continuous debate on global climate change including increased attention from regulatory agencies and legislative bodies. This increased focus may lead to new initiatives directed at regulating an as yet unspecified array of environmental matters. Legislative, regulatory or

other efforts in the United States to combat climate change could result in future increases in the cost of raw materials, taxes, transportation and utilities for our vendors and for us which would result in higher operating costs for the Company. Also, compliance of our theatres and accompanying real estate with new and revised environmental, zoning, land-use or building codes, laws, rules or regulations, could have a material and adverse effect on our business. However, we are unable to predict at this time, the potential effects, if any, that any future environmental initiatives may have on our business.

Item 1B.

Item 1B. Unresolved Staff Comments

None.

Item 2. Properties

Unresolved Staff Comments

None.
Item 2.Properties
United States

As of December 31, 2010,2011, in the U.S., we operated 251256 theatres with 3,2413,291 screens pursuant to leases and own the land and building for 4241 theatres with 591587 screens. Our leases are generally entered into on a long-term basis with terms, including optional renewal periods, generally ranging from 20 to 45 years. As of December 31, 2010,2011, approximately 10%8% of our theatre leases in the U.S., covering 2420 theatres with 198142 screens, have remaining terms, including optional renewal periods, of less than six years. Approximately 10%12% of our theatre leases in the U.S., covering 2431 theatres with 199260 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 203205 theatres with 2,8442,889 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 also lease an office building in Plano, Texas for our corporate headquarters.

We also lease office space in Frisco, Texas for our theatre support group.

International

As of December 31, 2010,2011, internationally, we operated 137159 theatres with 1,1131,274 screens, all of which are leased. Our international leases are generally entered into on a long term basis with terms, including optional renewal periods, generally ranging from 5 to 40 years. The leases generally provide for contingent rental based upon operating results with an annual minimum. As of December 31, 2010,2011, approximately 6%4% of our international theatre leases, covering eight7 theatres with 6259 screens, have a remaining term,terms, including optional renewal periods, of less than six years. Approximately 39%43% of our international theatre leases, covering 5468 theatres and 446560 screens, have remaining terms, including optional renewal periods, of between six and 15 years and approximately 55%53% of our international theatre leases, covering 7584 theatres and 605655 screens, have remaining terms, including optional renewal periods, of more than 15 years. We also lease office space in eight regions in Latin America for our local management.

See Note 22 to the consolidated financial statements for information regarding our minimum lease commitments. We periodically review the profitability of each of our theatres, particularly those whose lease terms are nearing expiration, to determine whether to continue its operations.

Item 3.Legal Proceedings
On December 10, 2010, we were made a party to a putative class action claim in the United States District Court for the Northern District of California. The claim has been filed by a disability rights group and two individuals for injunctive relief, damages and attorney’s fees concerning captioning the movie exhibitions at our


20


Item 3. Legal Proceedings

theatres in California. Monetary damages are also sought on behalf of all hearing-disabled patrons of our theatres in California. This case is in an early pretrial phase. We intend to vigorously defend this suit. We are currently unable to estimate a possible loss or range of loss related to this matter.
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, patent claims and contractual disputes, some of which are covered by insurance or by indemnification from vendors. We believe our potential liability, with respect to these types of proceedings currently pending, is not material, individually or in the aggregate, to our financial position, results of operations and cash flows.
Item 4.Reserved


21


Item 4. Mine Safety Disclosures

Not applicable.

PART II

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

Item 5.

Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
Market Information and Holders of Our Common Stock

Our common equity consists of common stock, which has traded on the New York Stock Exchange since April 24, 2007 under the symbol “CNK.” The following table sets forth the historical high and low sales prices per share of our common stock as reported by the New York Stock Exchange for the fiscal periods indicated.

             ��   
  Fiscal 2009 Fiscal 2010
  High Low High Low
 
First Quarter (January 1 — March 31) $10.26  $6.75  $18.47  $14.08 
Second Quarter (April 1 — June 30) $11.49  $8.63  $19.80  $13.09 
Third Quarter (July 1 — September 30) $11.65  $9.50  $16.89  $12.73 
Fourth Quarter (October 1 — December 31) $14.85  $10.08  $18.81  $15.95 

   Fiscal 2010   Fiscal 2011 
   High   Low   High   Low 

First Quarter (January 1 — March 31)

  $18.47    $14.08    $20.56    $16.70  

Second Quarter (April 1 — June 30)

  $19.80    $13.09    $22.09    $18.65  

Third Quarter (July 1 — September 30)

  $16.89    $12.73    $21.25    $17.10  

Fourth Quarter (October 1 — December 31)

  $18.81    $15.95    $21.00    $17.78  

On February 25, 2011,24, 2012, there were 117143 stockholders of record of our common stock.

Dividend Policy

In August 2007, we initiated a quarterly dividend policy, which was amended in November 2010. Below is a summary of dividends paiddeclared for the fiscal periods indicated:

Date

Declared

  

Date of

Record

  

Date

Paid

  

Amount per

Common

    Share(1)    

  

Total

Dividends

(in millions)

02/13/09

  03/05/09  03/20/09  $0.18  $19.6

05/13/09

  06/02/09  06/18/09  $0.18    19.7

07/29/09

  08/17/09  09/01/09  $0.18    19.7

11/04/09

  11/25/09  12/10/09  $0.18    19.8
        

 

Total — Year ended December 31, 2009(2)

  $78.8
        

 

02/25/10

  03/05/10  03/19/10  $0.18  $20.1

05/13/10

  06/04/10  06/18/10  $0.18    20.3

07/29/10

  08/17/10  09/01/10  $0.18    20.5

11/02/10

  11/22/10  12/07/10  $0.21    24.2
        

 

Total — Year ended December 31, 2010(2)

  $85.1
        

 

02/24/11

  03/04/11  03/16/11  $0.21  $24.0

05/12/11

  06/06/11  06/17/11  $0.21    24.1

08/04/11

  08/17/11  09/01/11  $0.21    24.2

11/03/11

  11/18/11  12/07/11  $0.21    24.2
        

 

Total — Year ended December 31, 2011(2)

  $96.5
        

 

(1)
Amount per
Date
Date of
Date
Common
Total
DeclaredRecordPaidShare(1)Dividends
02/13/0903/05/0903/20/09$0.18$19.6 million
05/13/0906/02/0906/18/09$0.18$19.7 million
07/29/0908/17/0909/01/09$0.18$19.7 million
11/04/0911/25/0912/10/09$0.18$19.7 million
02/25/1003/05/1003/19/10$0.18$20.1 million
05/13/1006/04/1006/18/10$0.18$20.2 million
07/29/1008/17/1009/01/10$0.18$20.4 million
11/02/1011/22/1012/07/10$0.21$23.8 million
(1)

Beginning with the dividend declared on November 2, 2010, our board of directors raised the quarterly dividend to $0.21 per common share.

(2)

Includes amounts related to restricted stock unit awards that will not be paid until such awards vest.

We, at the discretion of the board of directors and subject to applicable law, anticipate paying regular quarterly dividends on our common stock. The amount, if any, of the dividends to be paid in the future will depend upon our then available cash, anticipated cash needs, overall financial condition, loan agreement restrictions, future prospects for earnings and cash flows, as well as other relevant factors. See Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operation — Liquidity and Capital Resources — Financing Activitiesfor a discussion of dividend restrictions under our debt agreements.

Performance Graph
The following graph compares the cumulative total stockholder return on our common stock for the period December 31, 2007 through December 31, 2010 (our fiscal year end) with the Standard and Poor’s Corporation Composite 500 Index and a self-determined peer group of two public companies engaged in the motion picture exhibition industry. The peer group consists of Regal Entertainment Group and Carmike Cinemas, Inc.


22


Item 6. Selected Financial Data

CUMULATIVE TOTAL RETURN
Based upon initial investment of $100 on December 31, 2007
with dividends reinvested
Source: Yahoo! Finance & Company
                                                                  
   12/31/2007  3/31/2008  6/30/2008  9/30/2008  12/31/2008  3/31/2009  6/30/2009  9/30/2009  12/31/2009  3/31/2010  6/30/2010  9/30/2010  12/31/2010
Cinemark Holdings, Inc.   $100   $75   $77   $81   $44   $56   $68   $62   $86   $110   $79   $97   $104 
S&P© 500
   100    90    87    79    62    54    63    72    76    80    70    78    86 
Peer Group (2 Stocks)*   100    105    84    78    56    65    89    92    91    80    79    91    81 
                                                                  
*The 2-Stock Peer Group consists of Regal Entertainment Group and Carmike Cinemas Inc.
Securities Authorized for Issuance under Equity Compensation Plans
The following table provides information about the securities authorized for issuance under the Company’s equity compensation plans as of December 31, 2010:
             
  Number of
  Weighted Average
  Number of Securities
 
  Securities to be
  Exercise
  Remaining Available for
 
  Issued upon
  Price of
  Future Issuance Under
 
  Exercise of
  Outstanding
  Equity Compensation Plans
 
  Outstanding
  Options, Warrants
  (Excluding Securities
 
  Options, Warrants
  and
  Reflected in the First
 
Plan Category
 and Rights  Rights  Column) 
 
Equity compensation plans approved by security holders  140,356  $7.63   9,786,673 
Equity compensation plans not approved by security holders         
             
Total  140,356  $7.63   9,786,673 
             


23


Item 6.Selected Financial Data
The following table provides 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, 2010. On October 5, 2006, we completed our acquisition of Century Theatres, Inc., or Century. Results of operations reflect the inclusion of the Century theatres beginning on the date of acquisition.2011. 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 our audited consolidated financial statements and related notes appearing elsewhere in this report.
                     
  Year Ended December 31, 
  2006  2007  2008  2009  2010 
  (Dollars in thousands, except per share data) 
 
Statement of Operations Data:
                    
Revenues:                    
Admissions $760,275  $1,087,480  $1,126,977  $1,293,378  $1,405,389 
Concession  375,798   516,509   534,836   602,880   642,326 
Other  84,521   78,852   80,474   80,242   93,429 
                     
Total revenues $1,220,594  $1,682,841  $1,742,287  $1,976,500  $2,141,144 
Film rental and advertising  405,987   589,717   612,248   708,160   769,698 
Concession supplies  59,020   81,074   86,618   91,918   97,484 
Salaries and wages  118,616   173,290   180,950   203,437   221,246 
Facility lease expense  161,374   212,730   225,595   238,779   255,717 
Utilities and other  144,808   191,279   205,814   222,660   239,470 
General and administrative expenses  67,768   79,518   90,788   96,497   109,045 
Termination of profit participation agreement     6,952          
Total depreciation and amortization  99,470   151,716   158,034   149,515   143,508 
Impairment of long-lived assets  28,537   86,558   113,532   11,858   12,538 
(Gain) loss on sale of assets and other  7,645   (2,953)  8,488   3,202   (431)
                     
Total cost of operations  1,093,225   1,569,881   1,682,067   1,726,026   1,848,275 
                     
Operating income $127,369  $112,960  $60,220  $250,474  $292,869 
                     
Interest expense $109,328  $145,596  $116,058  $102,505  $112,444 
                     
Net income (loss) $2,310  $89,712  $(44,430) $100,756  $149,663 
                     
Net income (loss) attributable to Cinemark Holdings, Inc.  $841  $88,920  $(48,325) $97,108  $146,120 
                     
Net income (loss) attributable to Cinemark Holdings, Inc. per share:                    
Basic $0.01  $0.87  $(0.45) $0.89  $1.30 
                     
Diluted $0.01  $0.85  $(0.45) $0.87  $1.29 
                     


24


   Year Ended December 31, 
   2007  2008  2009   2010  2011 
   (Dollars in thousands, except per share data) 

Statement of Operations Data:

       

Revenues:

       

Admissions

  $1,087,480   $1,126,977   $1,293,378    $1,405,389   $1,471,627  

Concession

   516,509    534,836    602,880     642,326    696,754  

Other

   78,852    80,474    80,242     93,429    111,232  
  

 

 

  

 

 

  

 

 

   

 

 

  

 

 

 

Total revenues

  $1,682,841   $1,742,287   $1,976,500    $2,141,144   $2,279,613  

Film rentals and advertising

   589,717    612,248    708,160     769,698    798,606  

Concession supplies

   81,074    86,618    91,918     97,484    112,122  

Salaries and wages

   173,290    180,950    203,437     221,246    226,475  

Facility lease expense

   212,730    225,595    238,779     255,717    276,278  

Utilities and other

   191,279    205,814    222,660     239,470    259,703  

General and administrative expenses

   79,518    90,788    96,497     109,045    127,621  

Termination of profit participation agreement

   6,952    —      —       —      —    

Total depreciation and amortization

   151,716    158,034    149,515     143,508    154,449  

Impairment of long-lived assets

   86,558    113,532    11,858     12,538    7,033  

(Gain) loss on sale of assets and other

   (2,953  8,488    3,202     (431  8,792  
  

 

 

  

 

 

  

 

 

   

 

 

  

 

 

 

Total cost of operations

   1,569,881    1,682,067    1,726,026     1,848,275    1,971,079  
  

 

 

  

 

 

  

 

 

   

 

 

  

 

 

 

Operating income

  $112,960   $60,220   $250,474    $292,869   $308,534  
  

 

 

  

 

 

  

 

 

   

 

 

  

 

 

 

Interest expense

  $145,596   $116,058   $102,505    $112,444   $123,102  
  

 

 

  

 

 

  

 

 

   

 

 

  

 

 

 

Net income (loss)

  $89,712   $(44,430 $100,756    $149,663   $132,582  
  

 

 

  

 

 

  

 

 

   

 

 

  

 

 

 

Net income (loss) attributable to Cinemark Holdings, Inc.

  $88,920   $(48,325 $97,108    $146,120   $130,557  
  

 

 

  

 

 

  

 

 

   

 

 

  

 

 

 

Net income (loss) attributable to Cinemark Holdings, Inc. per share:

       

Basic

  $0.87   $(0.45 $0.89    $1.30   $1.15  
  

 

 

  

 

 

  

 

 

   

 

 

  

 

 

 

Diluted

  $0.85   $(0.45 $0.87    $1.29   $1.14  
  

 

 

  

 

 

  

 

 

   

 

 

  

 

 

 

Dividends declared per common share

  $0.31   $0.72   $0.72    $0.75   $0.84  
  

 

 

  

 

 

  

 

 

   

 

 

  

 

 

 

   Year Ended December 31, 
   2007  2008  2009  2010  2011 

Other Financial Data:

      

Ratio of earnings to fixed charges (1)

   1.96x    —      1.84x    2.10x    2.00x  

Cash flow provided by (used for):

      

Operating activities

  $276,036   $257,294   $176,763   $264,751   $391,201  

Investing activities

   93,178    (94,942  (183,130  (136,067  (247,067

Financing activities

   (183,715  (135,091  78,299    (106,650  (78,414

Capital expenditures

   (146,304  (106,109  (124,797  (156,102  (184,819

   As of December 31, 
   2007   2008   2009   2010   2011 
   (Dollars in thousands) 

Balance Sheet Data:

          

Cash and cash equivalents

  $338,043    $349,603    $437,936    $464,997    $521,408  

Theatre properties and equipment, net

   1,314,066     1,208,283     1,219,588     1,215,446     1,238,850  

Total assets

   3,296,892     3,065,708     3,276,448     3,421,478     3,522,408  

Total long-term debt and capital lease obligations, including current portion

   1,644,915     1,632,174     1,684,073     1,672,601     1,713,393  

Equity

   1,035,385     824,227     914,628     1,033,152     1,023,639  

                     
  Year Ended December 31,
  2006 2007 2008 2009 2010
 
Other Financial Data:
                    
Ratio of earnings to fixed charges(1)  1.09x  1.96x     1.84x  2.10x
Cash flow provided by (used for):                    
Operating activities $155,662  $276,036  $257,294  $176,763  $264,751 
Investing activities(2)  (631,747)  93,178   (94,942)  (183,130)  (136,067)
Financing activities  439,977   (183,715)  (135,091)  78,299   (106,650)
Capital expenditures  (107,081)  (146,304)  (106,109)  (124,797)  (156,102)
                     
  As of December 31,
  2006 2007 2008 2009 2010
  (Dollars in thousands)
 
Balance Sheet Data:
                    
Cash and cash equivalents $147,099  $338,043  $349,603  $437,936  $464,997 
Theatre properties and equipment, net  1,324,572   1,314,066   1,208,283   1,219,588   1,215,446 
Total assets  3,171,582   3,296,892   3,065,708   3,276,448   3,421,478 
Total long-term debt and capital lease obligations, including current portion  2,027,480   1,644,915   1,632,174   1,684,073   1,672,601 
Equity  705,910   1,035,385   824,227   914,628   1,033,152 
                     
  Year Ended December 31,
  2006 2007 2008 2009 2010
 
Operating Data:
                    
United States(3)                    
Theatres operated (at period end)  281   287   293   294   293 
Screens operated (at period end)  3,523   3,654   3,742   3,830   3,832 
Total attendance (in 000s)  118,714   151,712   147,897   165,112   161,174 
International(4)                    
Theatres operated (at period end)  115   121   127   130   137 
Screens operated (at period end)  965   1,011   1,041   1,066   1,113 
Total attendance (in 000s)  59,550   60,958   63,413   71,622   80,026 
Worldwide(3)(4)                    
Theatres operated (at period end)  396   408   420   424   430 
Screens operated (at period end)  4,488   4,665   4,783   4,896   4,945 
Total attendance (in 000s)  178,264   212,670   211,310   236,734   241,200 

   Year Ended December 31, 
   2007   2008   2009   2010   2011 

Operating Data:

          

United States (2)

          

Theatres operated (at period end)

   287     293     294     293     297  

Screens operated (at period end)

   3,654     3,742     3,830     3,832     3,878  

Total attendance (in 000s)

   151,712     147,897     165,112     161,174     158,486  

International (3)

          

Theatres operated (at period end)

   121     127     130     137     159  

Screens operated (at period end)

   1,011     1,041     1,066     1,113     1,274  

Total attendance (in 000s)

   60,958     63,413     71,622     80,026  ��  88,889  

Worldwide (2)(3)

          

Theatres operated (at period end)

   408     420     424     430     456  

Screens operated (at period end)

   4,665     4,783     4,896     4,945     5,152  

Total attendance (in 000s)

   212,670     211,310     236,734     241,200     247,375  

(1)
(1)

For the purposes of calculating the ratio of earnings to fixed charges, earnings consist of income (loss) from continuing operations before income taxes plus fixed charges excluding capitalized interest. Fixed charges consist of interest expense, capitalized interest, amortization of debt issue costs and that portion of rental expense which we believe to be representative of the interest factor. For the year ended December 31, 2008, earnings were insufficient to cover fixed charges by $27.1 million.

(2)Includes the cash portion of the Century acquisition purchase price of $531.2 million during the year ended December 31, 2006.
(3)

The data excludes certain theatres operated by us in the U.S. pursuant to management agreements that are not part of our consolidated operations.

(4)(3)

The data excludes certain theatres operated internationally through our affiliates that are not part of our consolidated operations.

25


Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Item 7.Management’s Discussion and Analysis of Financial Condition and Results of Operations
The following discussion and analysis should be read in conjunction with the financial statements and accompanying notes included in this report. This discussion contains forward-looking statements. See “Cautionary Statement Regarding Forward-Looking Statements” and “Risk Factors” for a discussion of the uncertainties and risk associated with these statements.

Overview

We are a leader in the motion picture exhibition industry, with theatres in the U.S., Brazil, Mexico, Argentina, Chile, Colombia, Ecuador, Peru, Honduras, El Salvador, Nicaragua, Costa Rica, Panama and Guatemala. As of December 31, 2010,2011, we managed our business under two reportable operating segments — U.S. markets and international markets. See Note 23 to the consolidated financial statements.

Revenues and Expenses

We generate revenues primarily from box office receipts and concession sales with additional revenues from screen advertising sales and other revenue streams, such as vendor marketing promotions and electronic video games located in some of our theatres. Our contracts with NCM have assisted us in expanding our offerings to domestic advertisers and broadening ancillary revenue sources such as digital video monitor advertising, third party branding, and the use of our domestic theatres for alternative entertainment, such as live and pre-recorded sports programs, concert events, the opera, sports programs,special live documentaries and other cultural events. Films leading the box office during the year ended December 31, 20102011 includedRio,Fast Five, Thor, Pirates of the carryoverCaribbean: On Stranger Tides, The Hangover Part II, Kung Fu Panda 2: The Kaboom ofAvatar,which grossed approximately $475 million in U.S. box office revenues during 2010 and new releases such asToy Story 3, Alice in Wonderland, Doom, Cars 2, X Men: First Class, Super 8, Bridesmaids, Transformers: Dark of the Moon, Harry Potter and the Deathly Hallows: Part 1, Iron Man 2, Captain America: The Twilight Saga: Eclipse, Inception, Despicable Me, How to Train YourFirst Avenger, Twilight: Breaking Dawn Part One, Paranormal Activity 3, Mission: Impossible — Ghost Protocol, Sherlock Holmes: A Game of Shadows, The Adventures of Tintin, The Girl with the Dragon Shrek Forever After, Clash of the Titans, The Karate Kid, Tangled, Grown Ups, Megamind, Tron: Legacy, Little Fockers, The FighterTattoo, War Horse,andTrue Grit. Alvin and the Chipmunks: Chipwrecked, among other films. Our revenues are affected by changes in attendance and concession revenues per patron. Attendance is primarily affected by the quality and quantity of films released by motion picture studios. Films currently scheduled for release in 20112012 include sequels such asRango, Fast Five, Thor, PiratesMen in Black 3, Madagascar 3: Europe’s Most Wanted, Ice Age: Continental Drift, The Dark Knight Rises, The Bourne Legacy, Wrath of the Caribbean: On Stranger Tides, Kung Fu Panda 2: Titans,andThe Kaboom of Doom, Cars 2, X Men: First Class, Transformers: Dark of the Moon, Harry Potter and the Deathly Hollows:Twilight Saga: Breaking Dawn Part 2 Twilight: Breaking Dawn, Captain America:and original titles such asDr. Suess’ The First Avenger, Cowboys and Aliens, Puss in Boots, Happy Feet 2, Sherlock Holmes 2Lorax, The Hunger Games, The Avengers, The Hobbit: An Unexpected Journey, World War Z,andAlvin and the Chipmunks: Chipwrecked Life of Pi,, among other films.

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

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

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

Facility lease expense is primarily a fixed cost at the theatre level as most of our facility leases require a fixed monthly minimum rent payment. Certain of our leases are subject to percentage rent only while others are

subject to percentage rent in addition to their fixed monthly rent if a target annual revenue level is achieved. Facility lease expense as a percentage of revenues is also affected by the number of theatres under operating leases, the number of theatres under capital leases and the number of fee-owned theatres.

Utilities and other costs include certain costs that have both fixed and variable components such as utilities, property taxes, janitorial costs, repairs and maintenance and security services.


26


Critical Accounting Policies

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

Revenue and Expense Recognition

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

Film rental costs are accrued based on the applicable box office receipts and either mutually agreed upon firm terms or a sliding scale formula, which are generally 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, we pay 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 a sliding scale formula, we pay a percentage of box office revenues using a pre-determined matrix that is 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. 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 can typically be estimated early in the film’s run. If actual settlements are different than those estimates, film rental costs are adjusted at that time. Our advertising costs are expensed as incurred.

Facility lease expense is primarily a fixed cost at the theatre level as most of our facility leases require a fixed monthly minimum rent payment. Certain of our leases are subject to monthly percentage rent only, which is accrued each month based on actual revenues. Certain of our other theatres require payment of percentage rent in addition to fixed monthly rent if aan annual target annual revenue level is achieved. Percentage rent expense is estimated and recorded for these theatres on a monthly basis if the theatre’s historical performance or forecasted performance indicates that the annual target revenue level will be reached. The estimate of percentage rent expense recorded during the year is based on historical and forecasted annual revenues. Once annual revenues are known, which is generally at the end of the year, the percentage rent expense is adjusted based on actual revenues.at that time. We record the fixed minimum rent payments on a straight-line basis over the lease term.

Theatre properties and equipment are depreciated using the straight-line method over their estimated useful lives. In estimating the useful lives of our theatre properties and equipment, we have relied upon our experience with such assets and our historical replacement period. We periodically evaluate these estimates and assumptions

and adjust them as necessary. Adjustments to the expected lives of assets are accounted for on a prospective basis through depreciation expense. Leasehold improvements for which we pay and to which we have title are amortized over the lease term.


27


Impairment of Long-Lived Assets

We review 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. 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;

• actual theatre level cash flows;
• future years budgeted theatre level cash flows;
• theatre property and equipment carrying values;
• amortizing intangible asset carrying values;
• the age of a recently built theatre;
• competitive theatres in the marketplace;
• 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.

theatre property and equipment carrying values;

amortizing intangible asset carrying values;

the age of a recently built theatre;

competitive theatres in the marketplace;

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.

Long-lived assets are evaluated for impairment on an individual theatre basis, which we believe 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 theatre’s useful life correlates with the available remaining lease period, which includes the probability of renewal periods for leased properties and a period of approximately 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 group (theatre) with its estimated fair value. 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, which fall under Level 3 of the U.S. GAAP fair value hierarchy as defined by FASB ASC Topic820-10-35, are based on historical and projected operating performance, recent market transactions and current industry trading multiples. Fair value is determined based on a multiple of cash flows, which was eight times for the evaluations performed during the first, second and third quarters of 2008 and six and a half times for the evaluation performed during the fourth quarter of 2008 and the evaluations performed during 2009, 2010 and 2010. We reduced the multiple we used to determine fair value during the fourth quarter of 2008 due to the dramatic decline in estimated market values that resulted from a significant decrease in our stock price and the declines in our and our competitors’ market capitalizations that occurred during the fourth quarter of 2008.2011. The long-lived asset impairment charges related to theatre properties recorded during each of the periods presented are specific to theatres that were directly and individually impacted by increased competition, adverse changes in market demographics, or adverse changes in the development or the conditions of the areas surrounding the theatre.

Impairment of Goodwill and Intangible Assets

We evaluate goodwill for impairment annually during the fourth quarter or whenever events or changes in circumstances indicate the carrying value of the goodwill may not be fully recoverable. We evaluate goodwill for impairment at the reporting unit level and have allocated goodwill to the reporting unit based on an estimate of its relative fair value. Management considers the reporting unit to be each of our sixteen regions in the U.S. and each of our eight international countries (Honduras, El Salvador, Nicaragua, Costa Rica, Panama and Guatemala are considered one reporting unit). 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 of the reporting unit exceeds its estimated fair value, a second step is performed to measure the potential goodwill impairment. Significant judgment is involved in estimating cash flows and fair value. Management’s estimates, which fall under Level 3 of the U.S. GAAP fair value hierarchy as defined by FASB ASC Topic820-10-35, are based on historical and

projected operating performance, recent market transactions and current industry trading multiples. Fair value is determined based on a multiple of cash flows, which was six and a half times for the evaluations performed during 2008, 2009


28


and 2010.2010 and seven and a half times for the evaluation performed during 2011. As of December 31, 2010,2011, the carryingfair value of goodwill allocated tofor all of our reporting units where the estimated fair value was less than 10% more than theexceeded their carrying value was approximately $77 million. Declines in our stock price or market capitalization, declines in our attendance due to increased competition in certain regionsand/or countries or economic factors that lead to a decline in attendance in any given region or country could negatively affect our estimated fair values and could result in further impairments of goodwill.
by at least 10%.

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 fully recoverable. We estimate the fair value of our tradenames by applying an estimated market royalty rate that could be charged for the use of our tradename to forecasted future revenues, with an adjustment for the present value of such royalties. If the estimated fair value is less than the carrying value, the tradename intangible asset is written down to its estimated fair value. Significant judgment is involved in estimating market royalty rates and long-term revenue forecasts. Management’s estimates, which fall under Level 3 of the U.S. GAAP fair value hierarchy as defined by FASB ASC Topic820-10-35, are based on historical and projected revenue performance and industry trends. As of December 31, 2010,2011, the carryingfair value of our tradename intangible assets where the estimated fair value was less thanexceeded their carrying values by at least 10% more than the carrying value was approximately $136 million.

.

Income Taxes

We use an asset and liability approach to financial accounting and reporting for income taxes. Deferred income taxes are provided when tax laws and financial accounting standards differ with respect to the amount of income for a year and the 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 evaluation of an uncertain tax position is a two-step process. The first step is recognition: We determine whether it is more likely than not that a tax position will be sustained upon examination, including resolution of any related appeals or litigation processes, based on the technical merits of the position. In evaluating whether a tax position has met the more-likely-than-not recognition threshold, we 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 than 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). We accrue interest and penalties on uncertain tax positions.

Accounting for Investment in National CineMedia, LLC and Related Agreements

We have an investment in National CineMedia, LLC (“NCM”). NCM operates a digital in-theatre network in the U.S. for providing cinema advertising and non-film events. Upon joining NCM, the Company and NCM entered into an Exhibitor Services Agreement, pursuant to which NCM provides advertising, promotion and event services to the Company’s theatres. On February 13, 2007, National CineMedia, Inc., or “NCM Inc.”, a newly formed entity that serves as a member and the sole manager of NCM, completed an initial public offering of its common stock. In connection with the NCM Inc. initial public offering, the Company amended its operating agreement and the Exhibitor Services Agreement (“ESA”) with NCM and received proceeds related to the modification of the ESA and the Company’s sale of certain of its shares in NCM. The ESA modification reflected a shift from circuit share expense under the prior Exhibitor Services Agreement, which obligated NCM to pay the Company a percentage of revenue, to a monthly theatre access fee, which significantly reduced the contractual amounts paid to the Company by NCM. The Company recorded the proceeds related to the ESA modification as deferred revenue, which is being amortized into other revenues over the life of the agreement using the units of revenue method. As a result of the proceeds received as part of the NCM, Inc. initial public offering, the Company had a negative basis in its original membership units in NCM (referred to herein as its

Tranche 1 Investment). The Company does not recognize undistributed equity in the earnings on its Tranche 1 Investment until NCM’s future net earnings, less distributions received, surpass the amount of the excess distribution. The Company recognizes equity in earnings on its Tranche 1 Investment only to the extent it receives cash distributions from NCM. The Company believes that the accounting model provided by ASC 323-10-35-22 for recognition of equity investee losses in excess of an investor’s basis is analogous to the accounting for equity income subsequent to recognizing an excess distribution.

Pursuant to a Common Unit Adjustment Agreement dated as of February 13, 2007 between NCM, Inc. and Cinemark, AMC and Regal, collectively referred to as its Founding Members, annual adjustments to the common membership units are made primarily based on increases or decreases in the number of theatre screens operated and theatre attendance generated by each Founding Member. To account for the receipt of additional common units under the Common Unit Adjustment Agreement, the Company follows the guidance in ASC 323-10-35-29 (formerly EITF 02-18,Accounting for Subsequent Investments in an Investee after Suspension of Equity Loss Recognition) by analogy, which also refers to AICPA Technical Practice Aid 2220.14, which indicates that if a subsequent investment is made in an equity method investee that has experienced significant losses, the investor must determine if the subsequent investment constitutes funding of prior losses. The Company concluded that the construction or acquisition of new theatres that has led to the common unit adjustments equates to making additional investments in National CineMedia. The Company evaluated the receipt of the additional common units in National CineMedia and the assets exchanged for these additional units and has determined that the right to use its incremental new screens would not be considered funding of prior losses. The Company accounts for these additional common units (referred to herein as its Tranche 2 Investment) as a separate investment than its Tranche 1 Investment. The common units received are recorded at fair value as an increase in the Company’s investment in NCM with an offset to deferred revenue. The deferred revenue is amortized over the remaining term of the ESA. The Tranche 2 Investment is accounted for following the equity method, with undistributed equity earnings related to its Tranche 2 Investment included as a component of equity in income (loss) of affiliates and distributions received related to its Tranche 2 Investment are recorded as a reduction of its investment basis.

Recent Developments

Dividend Declaration

On February 24, 20113, 2012 our board of directors declared a cash dividend infor the amountfourth quarter of 2011 of $0.21 per common share payable to stockholders of record on March 4, 2011.2, 2012. The dividend will be paid on March 16, 2011.


292012.


Results of Operations

The following table sets forth, for the periods indicated, the percentage of revenues represented by certain items reflected in our consolidated statements of operations:

             
  Year Ended December 31, 
  2008  2009  2010 
 
Operating data (in millions):
            
Revenues            
Admissions $1,127.0  $1,293.4  $1,405.4 
Concession  534.8   602.9   642.3 
Other  80.5   80.2   93.4 
             
Total revenues  1,742.3   1,976.5   2,141.1 
Cost of operations            
Film rentals and advertising  612.2   708.2   769.7 
Concession supplies  86.6   91.9   97.5 
Salaries and wages  181.0   203.4   221.2 
Facility lease expense  225.6   238.8   255.7 
Utilities and other  205.8   222.7   239.5 
General and administrative expenses  90.8   96.5   109.1 
Depreciation and amortization  158.1   149.5   143.5 
Impairment of long-lived assets  113.5   11.8   12.5 
(Gain) loss on sale of assets and other  8.5   3.2   (0.4)
             
Total cost of operations  1,682.1   1,726.0   1,848.3 
             
Operating income $60.2  $250.5  $292.8 
             
Operating data as a percentage of total revenues:
            
Revenues            
Admissions  64.7%  65.4%  65.6%
Concession  30.7%  30.5%  30.0%
Other  4.6%  4.1%  4.4%
             
Total revenues  100.0%  100.0%  100.0%
             
Cost of operations(1)            
Film rentals and advertising  54.3%  54.8%  54.8%
Concession supplies  16.2%  15.2%  15.2%
Salaries and wages  10.4%  10.3%  10.3%
Facility lease expense  12.9%  12.1%  11.9%
Utilities and other  11.8%  11.3%  11.2%
General and administrative expenses  5.2%  4.9%  5.1%
Depreciation and amortization  9.1%  7.6%  6.7%
Impairment of long-lived assets  6.5%  0.6%  0.6%
(Gain) loss on sale of assets and other  0.5%  0.2%  (0.0)%
Total cost of operations  96.5%  87.3%  86.3%
Operating income  3.5%  12.7%  13.7%
             
Average screen count (month end average)  4,703   4,860   4,909 
             
Revenues per average screen (dollars) $370,469  $406,681  $436,181 
             
income. On August 25, 2011, we purchased ten theatres with 95 screens in Argentina. The results of operations for these theatres are included in our results beginning on the date of acquisition.

   Year Ended December 31, 
   2009  2010  2011 

Operating data (in millions):

    

Revenues

    

Admissions

  $1,293.4   $1,405.4   $1,471.6  

Concession

   602.9    642.3    696.8  

Other

   80.2    93.4    111.2  
  

 

 

  

 

 

  

 

 

 

Total revenues

   1,976.5    2,141.1    2,279.6  

Cost of operations

    

Film rentals and advertising

   708.2    769.7    798.6  

Concession supplies

   91.9    97.5    112.1  

Salaries and wages

   203.4    221.2    226.5  

Facility lease expense

   238.8    255.7    276.3  

Utilities and other

   222.7    239.5    259.7  

General and administrative expenses

   96.5    109.1    127.6  

Depreciation and amortization

   149.5    143.5    154.4  

Impairment of long-lived assets

   11.8    12.5    7.0  

(Gain) loss on sale of assets and other

   3.2    (0.4  8.8  
  

 

 

  

 

 

  

 

 

 

Total cost of operations

   1,726.0    1,848.3    1,971.0  
  

 

 

  

 

 

  

 

 

 

Operating income

  $250.5   $292.8   $308.6  
  

 

 

  

 

 

  

 

 

 

Operating data as a percentage of total revenues:

    

Revenues

    

Admissions

   65.4  65.6  64.6

Concession

   30.5  30.0  30.6

Other

   4.1  4.4  4.8
  

 

 

  

 

 

  

 

 

 

Total revenues

   100.0  100.0  100.0
  

 

 

  

 

 

  

 

 

 

Cost of operations(1)

    

Film rentals and advertising

   54.8  54.8  54.3

Concession supplies

   15.2  15.2  16.1

Salaries and wages

   10.3  10.3  9.9

Facility lease expense

   12.1  11.9  12.1

Utilities and other

   11.3  11.2  11.4

General and administrative expenses

   4.9  5.1  5.6

Depreciation and amortization

   7.6  6.7  6.8

Impairment of long-lived assets

   0.6  0.6  0.3

(Gain) loss on sale of assets and other

   0.2  (0.0%)   0.4

Total cost of operations

   87.3  86.3  86.5

Operating income

   12.7  13.7  13.5
  

 

 

  

 

 

  

 

 

 

Average screen count (month end average)

   4,860    4,909    5,021  
  

 

 

  

 

 

  

 

 

 

Revenues per average screen (dollars)

  $406,681   $436,181   $454,051  
  

 

 

  

 

 

  

 

 

 

(1)
(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.

Comparison of Years Ended December 31, 2011 and December 31, 2010

Revenues.Total revenues increased $138.5 million to $2,279.6 million for 2011 from $2,141.1 million for 2010, representing a 6.5% increase. The table below, presented by reportable operating segment, summarizes our year-over-year revenue performance and certain key performance indicators that impact our revenues.

  U.S. Operating Segment  International
Operating Segment
  Consolidated 
  Year Ended
December 31,
  Year Ended
December 31,
  Year Ended
December 31,
 
  2011  2010  %
Change
  2011  2010  %
Change
  2011  2010  %
Change
 

Admissions revenues(1)

 $1,033.6   $1,044.7    (1.1)%  $438.0   $360.7    21.4 $1,471.6   $1,405.4    4.7

Concession revenues(1)

 $503.4   $487.9    3.2 $193.4   $154.4    25.3 $696.8   $642.3    8.5

Other revenues(1)(2)

 $46.5   $44.3    5.0 $64.7   $49.1    31.8 $111.2   $93.4    19.1

Total revenues(1)(2)

 $1,583.5   $1,576.9    0.4 $696.1   $564.2    23.4 $2,279.6   $2,141.1    6.5

Attendance(1)

  158.5    161.2    (1.7)%   88.9    80.0    11.1  247.4    241.2    2.6

Revenues per average screen(2)

 $411,618   $411,708    0.0 $593,142   $523,078    13.4 $454,051   $436,181    4.1

(1)

Amounts in millions.

(2)

U.S. operating segment revenues include eliminations of intercompany transactions with the international operating segment. See Note 23 of our consolidated financial statements.


30

Consolidated.The increase in admissions revenues of $66.2 million was primarily attributable to a 2.6% increase in attendance and a 2.1% increase in average ticket price from $5.83 for 2010 to $5.95 for 2011. The increase in concession revenues of $54.5 million was primarily attributable to the 2.6% increase in attendance and a 6.0% increase in concession revenues per patron from $2.66 for 2010 to $2.82 for 2011. The increase in average ticket price was primarily due to incremental 3-D and premium pricing and other price increases and the favorable impact of exchange rates in certain countries in which we operate. The increase in concession revenues per patron was primarily due to price increases and the favorable impact of exchange rates in certain countries in which we operate. The 19.1% increase in other revenues was primarily due to increases in international ancillary revenue.

U.S.The decrease in admissions revenues of $11.1 million was primarily attributable to a 1.7% decrease in attendance for 2011, partially offset by a 0.6% increase in average ticket price from $6.48 for 2010 to $6.52 for 2011. The increase in concession revenues of $15.5 million was primarily attributable to a 5.0% increase in concession revenues per patron from $3.03 for 2010 to $3.18 for 2011, partially offset by the 1.7% decrease in attendance for 2011. The increase in average ticket price was primarily due to incremental 3-D and premium pricing and other price increases, and the increase in concession revenues per patron was primarily due to incremental sales and price increases.

International.The increase in admissions revenues of $77.3 million was primarily attributable to an 11.1% increase in attendance and a 9.3% increase in average ticket price from $4.51 for 2010 to $4.93 for 2011. The increase in concession revenues of $39.0 million was primarily attributable to the 11.1% increase in attendance and a 13.0% increase in concession revenues per patron from $1.93 for 2010 to $2.18 for 2011. The increase in average ticket price was primarily due to incremental 3-D and premium pricing and other price increases and the favorable impact of exchange rates in certain countries in which we operate. The increase in concession revenues per patron was primarily due to price increases and the favorable impact of exchange rates in certain countries in which we operate. The 31.8% increase in other revenues was primarily due to increases in ancillary revenue.


Cost of Operations. The table below summarizes certain of our theatre operating costs by reportable operating segment (in millions).

   U.S.
Operating Segment
   International
Operating Segment
   Consolidated 
   Year Ended
December  31,
   Year Ended
December  31,
   Year Ended
December  31,
 
   2011   2010   2011   2010   2011   2010 

Film rentals and advertising

  $574.2    $586.6    $224.4    $183.1    $798.6    $769.7  

Concession supplies

   64.0     59.1     48.1     38.4     112.1     97.5  

Salaries and wages

   167.5     174.1     59.0     47.1     226.5     221.2  

Facility lease expense

   185.8     181.9     90.5     73.8     276.3     255.7  

Utilities and other

   174.5     161.5     85.2     78.0     259.7     239.5  

Consolidated. Film rentals and advertising costs were $798.6 million, or 54.3% of admissions revenues, for 2011 compared to $769.7 million, or 54.8% of admissions revenues, for 2010. The increase in film rentals and advertising costs of $28.9 million was primarily due to the $66.2 million increase in admissions revenues, partially offset by the decrease in our film rentals and advertising rate. The decrease in the film rentals and advertising rate was primarily due to lower film rental rates in the U.S. segment. Concession supplies expense was $112.1 million, or 16.1% of concession revenues, for 2011 compared to $97.5 million, or 15.2% of concession revenues, for 2010. The increase in the concession supplies rate was primarily due to increases in inventory procurement costs and the increased weighting of our international segment, which generally has higher procurement costs.

Salaries and wages increased to $226.5 million for 2011 from $221.2 million for 2010 primarily due to increases in our international segment. Facility lease expense increased to $276.3 million for 2011 from $255.7 million for 2010 primarily due to new theatres, increased percentage rent related to the 6.5% increase in revenues and the impact of exchange rates in certain countries in which we operate. Utilities and other costs increased to $259.7 million for 2011 from $239.5 million for 2010 primarily due to new theatres, increased expenses related to digital and 3-D equipment, increased utility expenses and the impact of exchange rates in certain countries in which we operate.

U.S.Film rentals and advertising costs were $574.2 million, or 55.6% of admissions revenues, for 2011 compared to $586.6 million, or 56.2% of admissions revenues, for 2010. The decrease in film rentals and advertising costs of $12.4 million was primarily due to the $11.1 million decrease in admissions revenues and a decrease in the film rentals and advertising rate primarily due to fewer blockbuster films released in 2011. Concession supplies expense was $64.0 million, or 12.7% of concession revenues, for 2011, compared to $59.1 million, or 12.1% of concession revenues, for 2010. The increase in the concession supplies rate was primarily due to increases in inventory procurement costs.

Salaries and wages decreased to $167.5 million for 2011 from $174.1 million for 2010 primarily due to the 1.7% decline in attendance and operating efficiencies achieved with reduced staffing levels. Facility lease expense increased to $185.8 million for 2011 from $181.9 million for 2010 primarily due to new theatres. Utilities and other costs increased to $174.5 million for 2011 from $161.5 million for 2010 primarily due to new theatres and increased expenses related to digital and 3-D equipment.

International.Film rentals and advertising costs were $224.4 million, or 51.2% of admissions revenues, for 2011 compared to $183.1 million, or 50.8% of admissions revenues, for 2010. The increase in film rentals and advertising costs of $41.3 million was primarily due to the $77.3 million increase in admissions revenues and an increase in our film rentals and advertising rate. Concession supplies expense was $48.1 million for 2011 compared to $38.4 million for 2010, both of which represented 24.9% of concession revenues.

Salaries and wages increased to $59.0 million for 2011 from $47.1 million for 2010 primarily due to new theatres, increased wage rates, increased staffing levels to support the 11.1% increase in attendance and the impact of exchange rates in certain countries in which we operate. Facility lease expense increased to $90.5

million for 2011 from $73.8 million for 2010 primarily due to new theatres, increased percentage rent due to the 23.4% increase in revenues and the impact of exchange rates in certain countries in which we operate. Utilities and other costs increased to $85.2 million for 2011 from $78.0 million for 2010 primarily due to new theatres, increased expenses related to 3-D equipment and the impact of exchange rates in certain countries in which we operate.

General and Administrative Expenses.General and administrative expenses increased to $127.6 million for 2011 from $109.1 million for 2010. The increase was primarily due to increased salaries and incentive compensation expense of $5.0 million, increased share based awards compensation expense of $1.3 million, increased professional fees of $2.1 million, increased service charges of $1.0 million related to increased credit card activity and the impact of exchange rates in certain countries in which we operate.

Depreciation and Amortization.Depreciation and amortization expense, including amortization of favorable/ unfavorable leases, was $154.4 million for 2011 compared to $143.5 million for 2010. The increase was primarily due to new theatres, the impact of accelerated depreciation taken on our domestic 35 millimeter projection systems that were replaced with digital projection systems and the impact of exchange rates in certain countries in which we operate. We recorded approximately $10.6 million of depreciation expense related to our domestic 35 millimeter projection systems during 2011. Our domestic 35 millimeter projection systems have been fully depreciated as of December 31, 2011.

Impairment of Long-Lived Assets.We recorded asset impairment charges on assets held and used of $7.0 million for 2011 compared to $12.5 million for 2010. Impairment charges for 2011 were related to theatre properties, impacting fourteen of our twenty-four reporting units. Impairment charges for 2010 consisted of $10.8 million of theatre properties and $1.5 million of intangible assets, impacting eighteen of our twenty-four reporting units, and $0.2 million related to an equity investment that was written down to its estimated fair value. The long-lived asset impairment charges recorded during each of the periods presented were specific to theatres that were directly and individually impacted by increased competition, adverse changes in market demographics, or adverse changes in the development or the conditions of the areas surrounding the theatre. See Notes 10 and 11 to our consolidated financial statements.

(Gain) Loss on Sale of Assets and Other.We recorded a loss on sale of assets and other of $8.8 million during 2011 compared to a gain on sale of assets and other of $0.4 million during 2010. The loss recorded during 2011 included a loss of $2.3 million related to a settlement for a previously terminated interest rate swap agreement, a loss of $1.0 million related to the sale of digital projection systems to DCIP and the write-off of theatre properties and equipment primarily as a result of theatre remodels. The gain recorded during 2010 included a gain of $7.0 million related to the sale of a theatre in Canada and a gain of $8.5 million related to the sale of our interest in a profit sharing agreement related to another previously sold property in Canada, which were partially offset by a loss of $5.8 million for the write-off of an intangible asset associated with a vendor contract in Mexico that was terminated, a loss of $2.3 million for the write-off of intangible assets associated with our original IMAX license agreement that was terminated, a loss of $2.0 million that was recorded upon the contribution and sale of digital projection systems to DCIP and a loss of $0.9 million related to storm damage to a U.S. theatre. See Note 7 to our consolidated financial statements for discussion of DCIP.

Interest Expense.Interest costs incurred, including amortization of debt issue costs, were $123.1 million for 2011 compared to $112.4 million for 2010. The increase was primarily due to increases in interest rates on our variable rate debt related to the amendment and extension of our senior secured credit facility in March 2010 and the refinancing in June 2011 of the unextended portion of our term loan debt outstanding with 7.375% senior subordinated notes due 2021. See Note 13 to our consolidated financial statements for further discussion of our long-term debt.

Loss on Early Retirement of Debt. We recorded a loss on early retirement of debt of $4.9 million during 2011 related to the prepayment of approximately $157.2 million of the unextended portion of our term loan debt. The loss included the write-off of $2.2 million of unamortized debt issue costs related to the portion of the term

loan debt that was prepaid and the reclassification of $2.7 million from accumulated other comprehensive loss to earnings as a result of our determination that quarterly interest payments hedged by certain of our interest rate swap agreements are no longer probable to occur. See Note 13 to our consolidated financial statements.

Distributions from NCM.We recorded distributions received from NCM of $24.2 million during 2011 and $23.4 million during 2010, which were in excess of the carrying value of our Tranche 1 Investment. See Note 6 to our consolidated financial statements.

Loss on Marketable Securities — RealD.We recorded a loss on our investment in RealD of $12.6 million due to an other-than-temporary impairment of our investment. The loss recorded represented the cumulative net unrealized holding losses we had previously recorded in accumulated other comprehensive income (loss). These cumulative net unrealized holding losses were recognized as a loss during 2011 due to the length of time and extent to which RealD’s stock price had been below our basis in the stock. See Note 8 to our consolidated financial statements.

Equity in Income (Loss) of Affiliates.We recorded equity in income of affiliates of $5.7 million during 2011 compared to a loss of $3.4 million during 2010. The equity in income of affiliates recorded during 2011 primarily included approximately $5.4 million of income related to our equity investment in NCM (see Note 6 to our consolidated financial statements) and approximately $0.5 million of income related to our equity investment in DCIP (see Note 7 to our consolidated financial statements). The equity in loss of affiliates recorded during 2010 primarily included a loss of approximately $7.9 million related to our equity investment in DCIP (see Note 7 to our consolidated financial statements), offset by income of approximately $4.5 million related to our equity investment in NCM (see Note 6 to our consolidated financial statements).

Income Taxes.Income tax expense of $73.1 million was recorded for 2011 compared to $57.8 million recorded for 2010. The effective tax rate for 2011 was 35.5%. The effective tax rate for 2010 was 27.9%. See Note 21 to our consolidated financial statements.

Comparison of Years Ended December 31, 2010 and December 31, 2009

Revenues.Total revenues increased $164.6 million to $2,141.1 million for 2010 from $1,976.5 million for 2009, representing an 8.3% increase. The table below, presented by reportable operating segment, summarizes our year-over-year revenue performance and certain key performance indicators that impact our revenues.

                                     
  U.S. Operating
 International Operating
  
  Segment Segment Consolidated
  Year Ended
 Year Ended
 Year Ended
  December 31, December 31, December 31,
      %
     %
     %
  2010 2009 Change 2010 2009 Change 2010 2009 Change
 
Admissions revenues(1) $1,044.7  $1,025.9   1.8% $360.7  $267.5   34.8% $1,405.4  $1,293.4   8.7%
Concession revenues(1) $487.9  $485.2   0.6% $154.4  $117.7   31.2% $642.3  $602.9   6.5%
Other revenues(1)(2) $44.3  $43.6   1.6% $49.1  $36.6   34.2% $93.4  $80.2   16.5%
Total revenues(1)(2) $1,576.9  $1,554.7   1.4% $564.2  $421.8   33.8% $2,141.1  $1,976.5   8.3%
Attendance(1)  161.2   165.1   (2.4)%  80.0   71.6   11.7%  241.2   236.7   1.9%
Revenues per average screen(2) $411,708  $408,017   0.9% $523,078  $401,828   30.2% $436,181  $406,681   7.3%

  U.S. Operating Segment  International
Operating Segment
  Consolidated 
  Year Ended
December 31,
  Year Ended
December 31,
  Year Ended
December 31,
 
  2010  2009  %
Change
  2010  2009  %
Change
  2010  2009  %
Change
 

Admissions revenues(1)

 $1,044.7   $1,025.9    1.8 $360.7   $267.5    34.8 $1,405.4   $1,293.4    8.7

Concession revenues(1)

 $487.9   $485.2    0.6 $154.4   $117.7    31.2 $642.3   $602.9    6.5

Other revenues(1)(2)

 $44.3   $43.6    1.6 $49.1   $36.6    34.2 $93.4   $80.2    16.5

Total revenues(1)(2)

 $1,576.9   $1,554.7    1.4 $564.2   $421.8    33.8 $2,141.1   $1,976.5    8.3

Attendance(1)

  161.2    165.1    (2.4)%   80.0    71.6    11.7  241.2    236.7    1.9

Revenues per average screen(2)

 $411,708   $408,017    0.9 $523,078   $401,828    30.2 $436,181   $406,681    7.3

(3)
(1)

Amounts in millions.

(2)(4)

U.S. operating segment revenues include eliminations of intercompany transactions with the international operating segment. See Note 23 of our consolidated financial statements.

 • 

Consolidated.Consolidated.The increase in admissions revenues of $112.0 million was primarily attributable to a 1.9% increase in attendance and a 6.8% increase in average ticket price from $5.46 for 2009 to $5.83 for 2010. The increase in concession revenues of $39.4 million was primarily attributable to the 1.9% increase in

attendance and a 4.3% increase in concession revenues per patron from $2.55 for 2009 to $2.66 for 2010. The increase in average ticket price was primarily due to incremental3-D and premium pricing and other price increases and the favorable impact of exchange rates in certain countries in which we operate. The increase in concession revenues per patron was primarily due to price increases and the favorable impact of exchange rates in certain countries in which we operate. The 16.5% increase in other revenues was primarily due to increases in international ancillary revenue.

 • 

U.S.U.S.The increase in admissions revenues of $18.8 million was primarily attributable to a 4.3% increase in average ticket price from $6.21 for 2009 to $6.48 for 2010, partially offset by a 2.4% decrease in attendance for 2010. The increase in concession revenues of $2.7 million was primarily attributable to a 3.1% increase in concession revenues per patron from $2.94 for 2009 to $3.03 for 2010, partially offset by the 2.4% decrease in attendance for 2010. The increase in average ticket price was primarily due to incremental3-D and premium pricing and other price increases, and the increase in concession revenues per patron was primarily due to price increases.

 • 

International.International.The increase in admissions revenues of $93.2 million was primarily attributable to an 11.7% increase in attendance and a 20.6% increase in average ticket price from $3.74 for 2009 to $4.51 for 2010. The increase in concession revenues of $36.7 million was primarily attributable to the 11.7% increase in attendance and a 17.7% increase in concession revenues per patron from $1.64 for 2009 to $1.93 for 2010. The increase in average ticket price was primarily due to incremental3-D and premium pricing and other price increases and the favorable impact of exchange rates in certain countries in which we operate. The increase in concession revenues per patron was primarily due to price increases and the favorable impact of exchange rates in certain countries in which we operate. The 34.2% increase in other revenues was primarily due to increases in ancillary revenue.


31


Cost of Operations. The table below summarizes certain of our theatre operating costs by reportable operating segment (in millions).
                         
  U.S.
 International Operating
  
  Operating Segment Segment Consolidated
  Year Ended
 Year Ended
 Year Ended
  December 31, December 31, December 31,
  2010 2009 2010 2009 2010 2009
 
Film rentals and advertising $586.6  $572.3  $183.1  $135.9  $769.7  $708.2 
Concession supplies  59.1   61.9   38.4   30.0   97.5   91.9 
Salaries and wages  174.1   168.8   47.1   34.6   221.2   203.4 
Facility lease expense  181.9   178.8   73.8   60.0   255.7   238.8 
Utilities and other  161.5   163.5   78.0   59.2   239.5   222.7 

   U.S.
Operating Segment
   International
Operating Segment
   Consolidated 
   Year Ended
December 31,
   Year Ended
December 31,
   Year Ended
December 31,
 
       2010           2009           2010           2009           2010           2009     

Film rentals and advertising

  $586.6    $572.3    $183.1    $135.9    $769.7    $708.2  

Concession supplies

   59.1     61.9     38.4     30.0     97.5     91.9  

Salaries and wages

   174.1     168.8     47.1     34.6     221.2     203.4  

Facility lease expense

   181.9     178.8     73.8     60.0     255.7     238.8  

Utilities and other

   161.5     163.5     78.0     59.2     239.5     222.7  

 • 

Consolidated.Film rentals and advertising costs were $769.7 million for 2010 compared to $708.2 million for 2009, both of which represented 54.8% of admissions revenues. The increase in film rentals and advertising costs of $61.5 million was primarily due to the $112.0 million increase in admissions revenues. Concession supplies expense was $97.5 million for 2010 compared to $91.9 million for 2009, both of which representrepresented 15.2% of concession revenues. The increase in concession supplies expense of $5.6 million was primarily due to the $39.4 million increase in concession revenues.

Salaries and wages increased to $221.2 million for 2010 from $203.4 million for 2009 primarily due to increased minimum wages in both our U.S. and international segments, increased staffing levels to support the 1.9% increase in attendance, new theatre openings and the impact of exchange rates in certain countries in which we operate. Facility lease expense increased to $255.7 million for 2010 from $238.8 million for 2009 primarily due to new theatres, increased percentage rent related to the 8.3% increase in revenues and the impact of exchange rates in certain countries in which we operate. Utilities and other costs increased to $239.5 million for 2010 from $222.7 million for 2009 primarily due to increased variable costs related to the 1.9% increase in attendance, increased costs related to new theatres, increased3-D equipment rental fees and the impact of exchange rates in certain countries in which we operate.

 • 

U.S.Film rentals and advertising costs were $586.6 million, or 56.2% of admissions revenues, for 2010 compared to $572.3 million, or 55.8% of admissions revenues, for 2009. The increase in film rentals and advertising costs of $14.3 million was primarily due to the $18.8 million increase in admissions revenues and an increase in our film rentals and advertising rate. The increase in the film rentals and advertising rate was primarily due to higher film rental rates associated with certain blockbuster films released in 2010, including the carryover ofAvatar. Concession supplies expense was $59.1 million, or 12.1% of concession revenues, for 2010, compared to $61.9 million, or 12.8% of concession revenues, for 2009. The decrease in concession supplies expense was primarily due to a decrease in the concession supplies rate due to favorable inventory procurement costs along with the successful implementation of sales price increases.

Salaries and wages increased to $174.1 million for 2010 from $168.8 million for 2009 primarily due to increased minimum wage rates and new theatre openings. Facility lease expense increased to $181.9 million for 2010 from $178.8 million for 2009 primarily due to new theatres. Utilities and other costs decreased to $161.5 million for 2010 from $163.5 million for 2009 primarily due to lower utility costs and property taxes, offset by increased3-D equipment rental fees.

 • 

International.Film rentals and advertising costs were $183.1 million for 2010 compared to $135.9 million for 2009, both of which represented 50.8% of admissions revenues. The increase in film rentals and advertising costs of $47.2 million was primarily due to the $93.2 million increase in admissions revenues. Concession supplies expense was $38.4 million, or 24.9% of concession revenues, for 2010 compared to $30.0 million, or 25.5% of concession revenues, for 2009. The increase in concession supplies expense of $8.4 million was primarily due to the $36.7 million increase in concession revenues, partially offset by a lower concession supplies rate.


32


Salaries and wages increased to $47.1 million for 2010 from $34.6 million for 2009 primarily due to increased staffing levels to support the 11.7% increase in attendance, increased minimum wage rates, new theatre openings and the impact of exchange rates in certain countries in which we operate. Facility lease expense increased to $73.8 million for 2010 from $60.0 million for 2009 primarily due to new theatres, increased percentage rent related to the 33.8% increase in revenues and the impact of exchange rates in certain countries in which we operate. Utilities and other costs increased to $78.0 million for 2010 from $59.2 million for 2009 primarily due to increased variable costs related to the 11.7% increase in attendance, increased costs related to new theatres, increased3-D equipment rental fees and the impact of exchange rates in certain countries in which we operate.

General and Administrative Expenses.General and administrative expenses increased to $109.1 million for 2010 from $96.5 million for 2009. The increase was primarily due to increased service charges of $4.1 million related to increased credit card activity, increased share based awards compensation expense of $4.1 million, increased professional fees of $2.2 million and the impact of exchange rates in certain countries in which we operate.

Depreciation and Amortization.Depreciation and amortization expense, including amortization of favorable/ unfavorable leases, was $143.5 million for 2010 compared to $149.5 million for 2009. The decrease was primarily due to a significant amount of the equipment acquired in the Century Acquisition becoming fully depreciated during the fourth quarter of 2009, partially offset by the impact of accelerated depreciation taken on our domestic 35 millimeter projection systems that will be replaced with digital projection systems. We recorded approximately $9.4 million of depreciation expense related to these 35 millimeter projection systems during 2010.

Impairment of Long-Lived Assets.We recorded asset impairment charges on assets held and used of $12.5 million for 2010 compared to $11.8 million for 2009. Impairment charges for 2010 consisted of $10.8 million of theatre properties and $1.5 million of intangible assets, impacting eighteen of our twenty-four reporting units, and $0.2 million related to an equity investment that was written down to its estimated fair value. Impairment charges for 2009 consisted of $11.4 million of theatre properties and $0.3 million of intangible assets associated

with theatre properties, impacting nineteen of our twenty-four reporting units, and $0.1 million related to an equity investment that was written down to its estimated fair value. The long-lived asset impairment charges recorded during each of the periods presented were specific to theatres that were directly and individually impacted by increased competition, adverse changes in market demographics, or adverse changes in the development or the conditions of the areas surrounding the theatre. See Notes 10 and 11 to our consolidated financial statements.

(Gain) Loss on Sale of Assets and Other.We recorded a gain on sale of assets and other of $0.4 million during 2010 compared to a loss on sale of assets and other of $3.2 million during 2009. The gain recorded during 2010 included a gain of $7.0 million related to the sale of a theatre in Canada and a gain of $8.5 million related to the sale of our interest in a profit sharing agreement related to another previously sold property in Canada, which were partially offset by a loss of $5.8 million for the write-off of an intangible asset associated with a vendor contract in Mexico that was terminated, a loss of $2.3 million for the write-off of intangible assets associated with our original IMAX license agreement that was terminated, a loss of $2.0 million that was recorded upon the contribution and sale of digital projection systems to DCIP and a loss of $0.9 million related to storm damage to a U.S. theatre. See Note 7 to our consolidated financial statements for discussion of DCIP. The loss recorded during 2009 was primarily related to the write-off of theatre equipment that was replaced.

Interest Expense.Interest costs incurred, including amortization of debt issue costs, were $112.4 million for 2010 compared to $102.5 million for 2009. The increase was primarily due to increases in interest rates on our variable rate debt related to the amendment and extension of our senior secured credit facility. See Note 13 to our consolidated financial statements for further discussion of our long-term debt.

Interest Income.We recorded interest income of $6.1 million during 2010 compared to interest income of $4.9 million during 2009. The increase in interest income was primarily due to higher interest rates earned on our cash investments.

Loss on Early Retirement of Debt.Debt. During 2009, we recorded a loss on early retirement of debt of $27.9 million as a result of the tender and call premiums paid and other fees related to the repurchase of


33


approximately $419.4 million aggregate principal amount at maturity of Cinemark, Inc.’s 93/4%9.75% senior discount notes and the write-off of unamortized debt issue costs associated with these notes. See Note 13 to our consolidated financial statements.

Distributions from NCM.We recorded distributions received from NCM of $23.4 million during 2010 and $20.8 million during 2009, which were in excess of the carrying value of our investment.Tranche 1 Investment. See Note 6 to our consolidated financial statements.

Equity in Loss of Affiliates.We recorded equity in loss of affiliates of $3.4 million during 2010 compared to $0.9 million during 2009. The equity in loss of affiliates recorded during 2010 included a loss of approximately $7.9 million related to our equity investment in DCIP (see Note 7 to our consolidated financial statements) offset by income of approximately $4.5 million related to our equity investment in NCM (see Note 6 to our consolidated financial statements). The equity in loss of affiliates recorded during 2009 included a loss of approximately $2.8 million related to our equity investment in DCIP offset by income of approximately $1.9 million related to our equity investment in NCM.

Income Taxes.Income tax expense of $57.8 million was recorded for 2010 compared to $44.8 million recorded for 2009. The effective tax rate for 2010 was 27.9%. The effective tax rate for 2009 was 30.8%. See Note 21 to our consolidated financial statements.

Comparison of Years Ended December 31, 2009 and December 31, 2008
Revenues.  Total revenues increased $234.2 million to $1,976.5 million for 2009 from $1,742.3 million for 2008, representing a 13.4% increase. The table below, presented by reportable operating segment, summarizes our year-over-year revenue performance and certain key performance indicators that impact our revenues.
                                     
  U.S. Operating
 International Operating
  
  Segment Segment Consolidated
  Year Ended
 Year Ended
 Year Ended
  December 31, December 31, December 31,
      %
     %
     %
  2009 2008 Change 2009 2008 Change 2009 2008 Change
 
Admissions revenues(1) $1,025.9  $889.1   15.4% $267.5  $237.9   12.4% $1,293.4  $1,127.0   14.8%
Concession revenues(1) $485.2  $426.5   13.8% $117.7  $108.3   8.7% $602.9  $534.8   12.7%
Other revenues(1)(2) $43.6  $40.9   6.6% $36.6  $39.6   (7.6)% $80.2  $80.5   (0.4)%
Total revenues(1)(2) $1,554.7  $1,356.5   14.6% $421.8  $385.8   9.3% $1,976.5  $1,742.3   13.4%
Attendance(1)  165.1   147.9   11.6%  71.6   63.4   12.9%  236.7   211.3   12.0%
Revenues per average screen(2) $408,017  $368,313   10.8% $401,828  $378,252   6.2% $406,681  $370,469   9.8%
(1)Amounts in millions.
(2)U.S. operating segment revenues include eliminations of intercompany transactions with the international operating segment. See Note 23 of our consolidated financial statements.
• Consolidated.The increase in admissions revenues of $166.4 million was primarily attributable to a 12.0% increase in attendance and a 2.4% increase in average ticket price from $5.33 for 2008 to $5.46 for 2009. The increase in concession revenues of $68.1 million was primarily attributable to the 12.0% increase in attendance and a 0.8% increase in concession revenues per patron from $2.53 for 2008 to $2.55 for 2009. The increase in average ticket price was primarily due to incremental3-D and premium pricing and other price increases, and the increase in concession revenues per patron was primarily due to price increases.
• U.S.The increase in admissions revenues of $136.8 million was primarily attributable to an 11.6% increase in attendance and a 3.3% increase in average ticket price from $6.01 for 2008 to $6.21 for 2009. The increase in concession revenues of $58.7 million was primarily attributable to the 11.6% increase in attendance and a 2.1% increase in concession revenues per patron from $2.88 for 2008 to $2.94 for 2009. The


34


increase in average ticket price was primarily due to incremental3-D and premium pricing and other price increases, and the increase in concession revenues per patron was primarily due to price increases.
• International.The increase in admissions revenues of $29.6 million was primarily attributable to a 12.9% increase in attendance, partially offset by a 0.3% decrease in average ticket price from $3.75 for 2008 to $3.74 for 2009. The increase in concession revenues of $9.4 million was primarily attributable to the 12.9% increase in attendance, partially offset by a 4.1% decrease in concession revenues per patron from $1.71 for 2008 to $1.64 for 2009. The decreases in average ticket price and concession revenues per patron were due to the unfavorable impact of exchange rates during most of the year in certain countries in which we operate. The 7.6% decrease in other revenues was primarily due to the unfavorable impact of exchange rates during most of the year in certain countries in which we operate.
Cost of Operations.  The table below summarizes certain of our theatre operating costs by reportable operating segment (in millions).
                         
  U.S.
 International Operating
  
  Operating Segment Segment Consolidated
  Year Ended
 Year Ended
 Year Ended
  December 31, December 31, December 31,
  2009 2008 2009 2008 2009 2008
 
Film rentals and advertising $572.3  $494.6  $135.9  $117.6  $708.2  $612.2 
Concession supplies  61.9   58.5   30.0   28.1   91.9   86.6 
Salaries and wages  168.8   149.5   34.6   31.5   203.4   181.0 
Facility lease expense  178.8   166.8   60.0   58.8   238.8   225.6 
Utilities and other  163.5   151.8   59.2   54.0   222.7   205.8 
• Consolidated.  Film rentals and advertising costs were $708.2 million, or 54.8% of admissions revenues, for 2009 compared to $612.2 million, or 54.3% of admissions revenues, for 2008. The increase in film rentals and advertising costs of $96.0 million was primarily due to the $166.4 million increase in admissions revenues. The increase in the film rentals and advertising rate was primarily due to higher film rental rates associated with the increased number of blockbuster films released in 2009. Concession supplies expense was $91.9 million, or 15.2% of concession revenues, for 2009, compared to $86.6 million, or 16.2% of concession revenues, for 2008. The decrease in the concession supplies rate was primarily related to the benefit of our new U.S. beverage agreement that was effective at the beginning of 2009.
Salaries and wages increased to $203.4 million for 2009 from $181.0 million for 2008 primarily due to increased staffing levels to support the 12.0% increase in attendance, increased minimum wage rates and new theatre openings. Facility lease expense increased to $238.8 million for 2009 from $225.6 million for 2008 primarily due to new theatres and increased percentage rent related to the 13.4% increase in revenues. Utilities and other costs increased to $222.7 million for 2009 from $205.8 million for 2008 primarily due to increased variable costs related to the 12.0% increase in attendance, increased costs related to new theatres, increased repairs and maintenance expense and increased3-D equipment rental fees.
• U.S.   Film rentals and advertising costs were $572.3 million, or 55.8% of admissions revenues, for 2009 compared to $494.6 million, or 55.6% of admissions revenues, for 2008. The increase in film rentals and advertising costs of $77.7 million was primarily due to the $136.8 million increase in admissions revenues. The increase in the film rentals and advertising rate was primarily due to higher film rental rates associated with the increased number of blockbuster films released in 2009. Concession supplies expense was $61.9 million, or 12.8% of concession revenues, for 2009, compared to $58.5 million, or 13.7% of concession revenues, for 2008. The decrease in the concession supplies rate was primarily related to the benefit of our new U.S. beverage agreement that was effective at the beginning of 2009.
Salaries and wages increased to $168.8 million for 2009 from $149.5 million for 2008 primarily due to increased staffing levels to support the 11.6% increase in attendance, increased minimum wage rates and new theatre openings. Facility lease expense increased to $178.8 million for 2009 from $166.8 million for 2008 primarily due to new theatres and increased percentage rent related to the 14.6% increase in revenues.


35


Utilities and other costs increased to $163.5 million for 2009 from $151.8 million for 2008 primarily due to increased variable costs related to the 11.6% increase in attendance, increased costs related to new theatres, increased repairs and maintenance expense and increased3-D equipment rental fees.
• International.  Film rentals and advertising costs were $135.9 million, or 50.8% of admissions revenues, for 2009 compared to $117.6 million, or 49.4% of admissions revenues, for 2008. The increase in the film rentals and advertising rate was primarily due to higher film rental rates associated with the increased number of blockbuster films released in 2009. Concession supplies expense was $30.0 million, or 25.5% of concession revenues, for 2009 compared to $28.1 million, or 25.9% of concession revenues, for 2008.
Salaries and wages increased to $34.6 million for 2009 from $31.5 million for 2008 primarily due to increased staffing levels to support the 12.9% increase in attendance, increases in minimum wage rates and new theatre openings. Facility lease expense increased to $60.0 million for 2009 from $58.8 million for 2008 primarily due to new theatres and increased percentage rent related to the 9.3% increase in revenues. Utilities and other costs increased to $59.2 million for 2009 from $54.0 million for 2008 primarily due to increased variable costs related to the 12.9% increase in attendance, increased costs related to new theatres, increased repairs and maintenance expense and increased3-D equipment rental fees.
General and Administrative Expenses.  General and administrative expenses increased to $96.5 million for 2009 from $90.8 million for 2008. The increase was primarily due to increased salaries and incentive compensation expense of $4.3 million and increased service charges of $1.7 million related to increased credit card activity.
Depreciation and Amortization.  Depreciation and amortization expense, including amortization of favorable/ unfavorable leases, was $149.5 million for 2009 compared to $158.1 million for 2008. The decrease was primarily due to a reduction in the depreciable basis of certain of our U.S. assets in 2009 due to a significant amount of the equipment acquired in the Century Acquisition becoming fully depreciated in 2009, the impact on current depreciation from prior impairment charges and the impact of exchange rates in certain countries in which we operate.
Impairment of Long-Lived Assets.  We recorded asset impairment charges on assets held and used of $11.8 million for 2009 compared to $113.5 million for 2008. Impairment charges for 2009 consisted of $11.4 million of theatre properties and $0.3 million of intangible assets associated with theatre properties, impacting nineteen of our twenty-four reporting units, and $0.1 million related to an equity investment that was written down to estimated fair value. Impairment charges for 2008 consisted of $34.6 million of theatre properties, $78.6 million of goodwill associated with theatre properties, and $0.3 million of intangible assets associated with theatre properties, impacting twenty of our twenty-four reporting units. The long-lived asset impairment charges recorded during each of the periods presented were specific to theatres that were directly and individually impacted by increased competition, adverse changes in market demographics, or adverse changes in the development or the conditions of the areas surrounding the theatre. The goodwill impairment charges taken during the year ended December 31, 2008 were primarily a result of our determination that the multiple used to estimate the fair value of our reporting units should be reduced to reflect the dramatic decline in the market value of our stock price and the declines in our and our competitors’ market capitalizations that occurred during the fourth quarter of 2008. We reduced the multiple from eight times cash flows to six and a half times cash flows, which significantly reduced our estimated fair values. See Notes 10 and 11 to our consolidated financial statements.
Loss on Sale of Assets and Other.  We recorded a loss on sale of assets and other of $3.2 million during 2009 compared to $8.5 million during 2008. The loss recorded during 2009 was primarily related to the write-off of theatre equipment that was replaced. 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.
Interest Expense.  Interest costs incurred, including amortization of debt issue costs, were $102.5 million for 2009 compared to $116.1 million for 2008. The decrease was primarily due to decreases in interest rates on our debt. See Note 13 to our consolidated financial statements for further discussion of our long term debt. In addition, during the 2008 period, we recorded a gain of approximately $5.4 million as a component of interest expense related to the


36


change in fair value of one of our interest rate swap agreements that was deemed not highly effective. See Note 14 to our consolidated financial statements for further discussion of our interest rate swap agreements.
Interest Income.  We recorded interest income of $4.9 million during 2009 compared to interest income of $13.3 million during 2008. The decrease in interest income was primarily due to lower interest rates earned on our cash investments.
(Gain) Loss on Early Retirement of Debt.  During 2009, we recorded a loss on early retirement of debt of $27.9 million as a result of the tender and call premiums paid and other fees related to the repurchase of approximately $419.4 million aggregate principal amount at maturity of Cinemark, Inc.’s 93/4% senior discount notes and the write-off of unamortized debt issue costs associated with these notes. During 2008, we recorded a gain on early retirement of debt of $1.7 million as a result of the repurchase of $47.0 million aggregate principal amount at maturity of Cinemark, Inc.’s 93/4% senior discount notes partially offset by the write-off of unamortized debt issue costs. See Note 13 to our consolidated financial statements.
Distributions from NCM.  We recorded distributions received from NCM of $20.8 million during 2009 and $18.8 million during 2008, which were in excess of the carrying value of our investment. See Note 6 to our consolidated financial statements.
Income Taxes.  Income tax expense of $44.8 million was recorded for 2009 compared to $21.1 million recorded for 2008. The effective tax rate for 2009 was 30.8%, which reflects the benefit of a capital loss. The effective tax rate of (90.1)% 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 41.0%. See Note 21 to our consolidated financial statements.
Liquidity and Capital Resources

Operating Activities

We primarily collect our revenues in cash, mainly through box office receipts and the sale of concessions. In addition, a majority of our theatres provide the patron a choice of using a credit card or debit card in place of cash. Because our revenues are received in cash prior to the payment of related expenses, we have an operating “float” and historically have not required traditional working capital financing. Cash provided by operating activities amounted to $257.3 million, $176.8 million, $264.8 million and $264.8$391.2 million for the years ended December 31, 2008, 2009, 2010 and 2010,2011, respectively. The decrease in the level of cashCash provided by operating activities for the year ended December 31, 2009 was primarilylower due to the repurchase of approximately $419.4 million of our 93/4% senior discount notes, which included payment of $158.3 million of interest that had accreted on the senior discount notes since issuance during 2004. The principal portion of the repurchase is reflected as a financing activity.

Cash provided by operating activities for the year ended December 31, 2010 is also lower due to a higher film rental liability at December 31, 2009 attributable to the record-breaking domestic box office performance during the latter part of December 2009 whenAvatar was released.

Investing Activities

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

Our investing activities have been principally related to the development and acquisition of theatres. New theatre openings and acquisitions historically have been financed with internally generated cash and by debt financing, including borrowings under our senior secured credit facility. Cash used for investing activities amounted to $94.9 million, $183.1 million, $136.1 million and $136.1$247.1 million for the years ended December 31, 2008, 2009, 2010 and 2010,2011, respectively. The increase in cashCash used for investing activities for the year ended December 31, 2009 was primarily due toincluded the acquisition of four theatres in the U.S. for approximately $49.0 million (see Note 5 to the consolidated financial statements) and the acquisition of one theatre in Brazil for approximately $9.1 million.


37

Cash used for investing activities for the year ended December 31, 2011 included the acquisition of ten theatres in Argentina for approximately $67.0 million (see Note 5 to the consolidated financial statements) and a higher level of capital expenditures.


Capital expenditures for the years ended December 31, 2008, 2009, 2010 and 20102011 were as follows (in millions):
             
  New
 Existing
  
Period
 Theatres Theatres Total
 
Year Ended December 31, 2008 $69.9  $36.2  $106.1 
Year Ended December 31, 2009 $36.5  $88.3  $124.8 
Year Ended December 31, 2010 $54.5  $101.6  $156.1 

Period

  New
Theatres
   Existing
Theatres
   Total 

Year Ended December 31, 2009

  $36.5    $88.3    $124.8  

Year Ended December 31, 2010

  $54.5    $101.6    $156.1  

Year Ended December 31, 2011

  $73.5    $111.3    $184.8  

We continue to invest in our U.S. theatre circuit. We built five new theatres and 63 screens, acquired one theatretwo theatres with eight13 screens and closed seventhree theatres with 6930 screens during the year ended December 31, 2010,2011, bringing our total domestic screen count to 3,832.3,878. At December 31, 2010,2011, we had signed commitments to open fourfive new theatres and 5174 screens in domestic markets during 20112012 and open foureight new theatres with 60107 screens subsequent to 2011.2012. We estimate the remaining capital expenditures for the development of these 111181 domestic screens will be approximately $48$110 million. Actual expenditures for continued theatre development and acquisitions are subject to change based upon the availability of attractive opportunities.

We also continue to expandinvest in our international theatre circuit. We built nine12 new theatres and 6772 screens, acquired eleven theatres with 101 screens and closed two theatresone theatre and 2012 screens during the year ended December 31, 2010,2011, bringing our total international screen count to 1,113.1,274. At December 31, 2010,2011, we had signed commitments to open eightsix new theatres with 5143 screens in international markets during 20112012 and open fivethree new theatres with 3422 screens subsequent to 2011.2012. We estimate the remaining capital expenditures for the development of these 8565 international screens will be approximately $63$72 million. Actual expenditures for continued theatre development and acquisitions are subject to change based upon the availability of attractive opportunities.

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

Financing Activities

Cash provided by (used for) financing activities was $(135.1) million, $78.3 million, $(106.7) million and $(106.7)$(78.4) million during the years ended December 31, 2008, 2009, 2010 and 2010,2011, respectively. Cash provided by financing activities for the year ended December 31, 2009 includes the net proceeds of $458.5 million from the issuance of our $470 million 8.625% senior notes, partially offset by $261.1 million used for the repurchase of approximatelythe principal portion of our $419.4 million of our 93/4%9.75% senior discount notes. The accreted interest portion of the repurchase of $158.3 million is reflected as an operating activity.

Below is a summary of dividends paiddeclared during 2008, 2009, 2010 and 2010:

2011:

Date Declared

 

Date of Record

 

Date Paid

 

Amount per

Common Share(1)

 

Total Dividends

(in millions)

02/13/09

 03/05/09 03/20/09 $ 0.18 $ 19.6

05/13/09

 06/02/09 06/18/09 $ 0.18 $ 19.7

07/29/09

 08/17/09 09/01/09 $ 0.18 $ 19.7

11/04/09

 11/25/09 12/10/09 $ 0.18 $ 19.8
    

 

Total — Year ended December 31, 2009(2)

 $ 78.8
    

 

02/25/10

 03/05/10 03/19/10 $ 0.18 $ 20.1

05/13/10

 06/04/10 06/18/10 $ 0.18 $ 20.3

07/29/10

 08/17/10 09/01/10 $ 0.18 $ 20.5

11/02/10

 11/22/10 12/07/10 $ 0.21 $ 24.2
    

 

Total — Year ended December 31, 2010(2)

 $ 85.1
    

 

02/24/11

 03/04/11 03/16/11 $ 0.21 $ 24.0

05/12/11

 06/06/11 06/17/11 $ 0.21 $ 24.1

08/04/11

 08/17/11 09/01/11 $ 0.21 $ 24.2

11/03/11

 11/18/11 12/07/11 $ 0.21 $ 24.2
    

 

Total — Year ended December 31, 2011(2)

 $ 96.5
    

 

(1)
Date of
Date
Amount per
Total
Date Declared
RecordPaidCommon Share(1)Dividends
02/26/0803/06/0803/14/08$0.18$19.3 million
05/09/0805/30/0806/12/08$0.18$19.3 million
08/07/0808/25/0809/12/08$0.18$19.3 million
11/06/0811/26/0812/11/08$0.18$19.6 million
02/13/0903/05/0903/20/09$0.18$19.6 million
05/13/0906/02/0906/18/09$0.18$19.7 million
07/29/0908/17/0909/01/09$0.18$19.7 million
11/04/0911/25/0912/10/09$0.18$19.7 million
02/25/1003/05/1003/19/10$0.18$20.1 million
05/13/1006/04/1006/18/10$0.18$20.2 million
07/29/1008/17/1009/01/10$0.18$20.4 million
11/02/1011/22/1012/07/10$0.21$23.8 million
(1)

Beginning with the dividend declared on November 2, 2010, the Company’sour board of directors raised the quarterly dividend to $0.21 per common share.

(2)

Includes amounts related to restricted stock unit awards that will not be paid until such awards vest.

We, at the discretion of the board of directors and subject to applicable law, anticipate paying regular quarterly dividends on our common stock. The amount, if any, of the dividends to be paid in the future will depend upon our


38


then available cash, anticipated cash needs, overall financial condition, loan agreement restrictions as discussed below, future prospects for earnings and cash flows, as well as other relevant factors.

We may from time to time, subject to compliance with our debt instruments, purchase our debt securities on the open market depending upon the availability and prices of such securities. Long-term debt consisted of the following as of December 31, 20092010 and 2010:

         
  December 31, 2009  December 31, 2010 
 
Cinemark USA, Inc. term loan $1,083.6  $1,072.8 
Cinemark USA, Inc. 85/8% senior notes due 2019(1)
  458.9   459.7 
Cinemark USA, Inc. 9% senior subordinated notes due 2013  0.2    
Other long-term debt  1.0    
         
Total long-term debt $1,543.7  $1,532.5 
Less current portion  12.2   10.8 
         
Long-term debt, less current portion $1,531.5  $1,521.7 
         
2011 (in millions):

   December 31,
2010
   December 31,
2011
 

Cinemark USA, Inc. term loan

  $1,072.8    $905.9  

Cinemark USA, Inc. 8.625% senior notes due 2019(1)

   459.7     460.5  

Cinemark USA, Inc. 7.375% senior subordinated notes due 2021

   —       200.0  

Hoyts General Cinema (Argentina) bank loan due 2013(2)

   —       5.8  
  

 

 

   

 

 

 

Total long-term debt

  $1,532.5    $1,572.2  

Less current portion

   10.8     12.1  
  

 

 

   

 

 

 

Long-term debt, less current portion

  $1,521.7    $1,560.1  
  

 

 

   

 

 

 

(1)
(1)

Includes the $470.0 million aggregate principal amount of the 8.625% senior notes net of the original issue discount, which was $11.1$10.3 million and $10.3$9.5 million as of December 31, 20092010 and 2010,2011, respectively.

(2)

See Note 5 to our consolidated financial statements.

As of December 31, 2010,2011, we had $150.0 million in available borrowing capacity on our revolving credit line.

As of December 31, 2010,2011, our long-term debt obligations, scheduled interest payments on long-term debt, future minimum lease obligations under non-cancelable operating and capital leases, scheduled interest payments under capital leases and other obligations for each period indicated are summarized as follows:

                     
  Payments Due by Period 
     Less than
        After
 
Contractual Obligations
 Total  One Year  1 - 3 Years  4 - 5 Years  5 Years 
        (In millions)       
 
Long-term debt(1) $1,542.8  $10.8  $174.6  $18.4  $1,339.0 
Scheduled interest payments on long-term debt(2)  580.7   91.4   175.8   164.7   148.8 
Operating lease obligations  1,795.2   200.1   396.5   370.9   827.7 
Capital lease obligations  140.2   7.3   17.6   22.5   92.8 
Scheduled interest payments on capital leases  100.4   13.9   25.3   21.3   39.9 
Employment agreements  11.4   3.8   7.6       
Purchase commitments(3)  121.8   44.8   75.1   0.5   1.4 
Current liability for uncertain tax positions(4)  1.9   1.9          
                     
Total obligations $4,294.4  $374.0  $872.5  $598.3  $2,449.6 
                     

   Payments Due by Period
(in millions)
 

Contractual Obligations

  Total   Less Than
One Year
   1 -
3 Years
   3 - 5 Years   After 5
Years
 

Long-term debt(1)

  $1,581.7    $12.1    $21.4    $878.2    $670.0  

Scheduled interest payments on long-term debt (2)

  $642.8     101.3     199.9     176.2     165.4  

Operating lease obligations

  $1,904.0     219.7     434.2     403.0     847.1  

Capital lease obligations

  $141.2     9.6     21.6     26.3     83.7  

Scheduled interest payments on capital leases

  $89.2     13.6     24.3     19.6     31.7  

Employment agreements

  $11.5     3.8     7.7     —       —    

Purchase commitments (3)

  $217.6     119.9     96.9     0.5     0.3  

Current liability for uncertain tax positions (4)

  $—       —       —       —       —    
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total obligations

  $4,588.0    $480.0    $806.0    $1,503.8    $1,798.2  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

(1)
(1)

Includes the 8.625% senior notes in the aggregate principal amount of $470.0 million excluding the discount of $10.3$9.5 million.

(2)

Amounts include scheduled interest payments on fixed rate and variable rate debt agreements. Estimates for the variable rate interest payments were based on interest rates in effect on December 31, 2010.2011. The average interest rates in effect on our fixed rate and variable rate debt are 7.0% and 3.1%3.9%, respectively, as of December 31, 2010.2011.

(3)

Includes estimated capital expenditures associated with the construction of new theatres to which we were committed as of December 31, 2010.2011.

(4)

The contractual obligations table excludes the long-term portion of our liability for uncertain tax positions of $17.8$22.4 million because we cannot make a reliable estimate of the timing of the related cash payments.


39


Cinemark USA, Inc. Senior Secured Credit Facility

On October 5, 2006, in connection with the Century Acquisition, Cinemark USA, Inc. entered into a senior secured credit facility that provided for a $1.12 billion term loan and a $150 million revolving credit line. On March 2, 2010, Cinemark USA, Inc. completed an amendment and extension to the senior secured credit facility to primarily extend the maturities of the facility and make certain other modifications. Approximately $924.4 million of Cinemark USA, Inc.’s then remaining outstanding $1,083.6 million term loan debt was extended from an original maturity date of October 2013 to a maturity date of April 2016. The then remaining term loan debt of $159.2 million that was not extended matures on the originalcontinued to have a maturity date of October 2013. PaymentsOn June 3, 2011, Cinemark USA, Inc. prepaid the remaining $157.2 million of its unextended term loan debt utilizing a portion of the proceeds from the issuance of the Cinemark USA, Inc. 7.375% senior subordinated notes discussed below. There were no prepayment penalties incurred upon the prepayment of the term loan debt. Subsequent to the prepayment, the quarterly payments due on the extended amountterm loan are due in equal quarterly installments of approximately $2.3 million beginning March 31, 2010per quarter through March 31, 2016 with the remaining principal amount of approximately $866.6 million due April 30, 2016. Payments onThe prepayment did not impact the original amount that was not extended are due in equal quarterly installments of approximately $0.4 million beginning March 31, 2010 through September 30, 2012 and increaseinterest rate applicable to $37.4 million each calendar quarter from December 31, 2012 to June 30, 2013, with one final payment of approximately $42.6 million due at maturity on October 5, 2013. The amendment also imposed a 1.0% prepayment premium for one year on certain prepayments of the extendedremaining portion of the term loan debt.

The interest rate on the original term loan debt, that was not extended accrues interest, at Cinemark USA, Inc.’s option, at: (A) the base rate equal to the higher of (1) the prime lending rate as set forth on the British Banking Association Telerate page 5, or (2) the federal funds effective rate from time to time plus 0.50% (the “base rate”), plus a margin that ranges from 0.50% to 0.75% per annum, or (B) a “eurodollar rate” plus a margin that ranges from 1.50% to 1.75%, per annum. The margin of the original term loan debt that was not extended is determined by the applicable corporate credit rating. The interest rate on the extended portion of the term loan debtwhich accrues interest at Cinemark USA, Inc.’s option at: (A) the base rate equal to the higher of (1) the prime lending rate as set forth on the British Banking Association Telerate page 5, or (2) the federal funds effective rate from time to time plus 0.50%, plus a 2.25% margin per annum, or (B) a “eurodollar rate” plus a 3.25% margin per annum.

The prepayment did not impact the interest rates applicable to or the maturity of Cinemark USA, Inc.’s revolving credit line. The maturity date of $73.5 million of Cinemark USA, Inc.’s $150.0 million revolving credit line was extended from October 2012 to March 2015. The maturity date of the remaining $76.5 million of Cinemark USA, Inc.’s revolving credit line did not change and remains October 2012. The interest rate on the original revolving credit line accrues interest, at Cinemark USA, Inc.’s option, at: (A) a base rate equal to the higher of (1) the prime lending rate as set forth on the British Banking Association Telerate page 5 and (2) the federal funds effective rate from time to time plus 0.50%, plus a margin that ranges from 0.50% to 1.00% per annum, or (B) a “eurodollar rate” plus a margin that ranges from 1.50% to 2.00% per annum. The interest rate on the extended revolving credit line accrues interest, at Cinemark USA, Inc.’s option at: (A) the base rate equal to the higher of (1) the prime lending rate as set forth on the British Banking Association Telerate page 5, or (2) the federal funds effective rate from time to time plus 0.50%, plus a margin that ranges from 1.75% to 2.0% per annum, or (B) a “eurodollar rate” plus a margin that ranges from 2.75% to 3.0% per annum. The margin of the revolving credit line is determined by the consolidated net senior secured leverage ratio as defined in the credit agreement.

At December 31, 2010,2011, there was $1,072.8$905.9 million outstanding under the term loan and no borrowings outstanding under the revolving credit line. Cinemark USA, Inc. had $150.0 million in available borrowing capacity on the revolving credit line. The average interest rate on outstanding term loan borrowings under the senior secured credit facility at December 31, 20102011 was approximately 4.8%5.0% per annum.

Cinemark USA, Inc.’s obligations under the senior secured credit facility are guaranteed by Cinemark Holdings, Inc., and certain of Cinemark USA, Inc.’s domestic subsidiaries and are secured by mortgages on certain fee and leasehold properties and security interests in substantially all of Cinemark USA, Inc.’s and the guarantors’ personal property, including, without limitation, pledges of all of Cinemark USA, Inc.’s capital stock, all of the capital stock of certain of Cinemark USA, Inc.’s domestic subsidiaries and 65% of the voting stock of certain of its foreign subsidiaries.

The senior secured credit facility contains usual and customary negative covenants for agreements of this type, including, but not limited to, restrictions on Cinemark USA, Inc.’s ability, and in certain instances, its subsidiaries’ and Cinemark Holdings, Inc.’s ability, to consolidate or merge or liquidate;liquidate, wind up or dissolve; substantially change the nature of its business; sell, transfer or dispose of assets; create or incur indebtedness; create liens; pay


40


dividends and repurchase stock; and make capital expenditures and investments. The senior securedIf Cinemark

USA, Inc. has borrowings outstanding on the revolving credit facility also requires Cinemark USA, Inc.line, it is required to satisfy a consolidated net senior secured leverage ratio covenant as determined in accordance with the senior secured credit facility.

The dividend restriction contained in the senior secured credit facility prevents us and any of our subsidiaries from paying a dividend or otherwise distributing cash to its stockholders unless (1) we are not in default, and the distribution would not cause us to be in default, under the senior secured credit facility; and (2) the aggregate amount of certain dividends, distributions, investments, redemptions and capital expenditures made since October 5, 2006, including dividends declared by the board of directors, is less than the sum of (a) the aggregate amount of cash and cash equivalents received by Cinemark Holdings, Inc. or Cinemark USA, Inc. as common equity since October 5, 2006, (b) Cinemark USA, Inc.’s consolidated EBITDA minus 1.75 times its consolidated interest expense, each as defined in the senior secured credit facility, since October 1, 2006, (c) $150 million and (d) certain other amounts specified in the senior secured credit facility, subject to certain adjustments specified in the senior secured credit facility. The dividend restriction is subject to certain exceptions specified in the senior secured credit facility.

The senior secured credit facility also includes customary events of default, including, among other things, payment default, covenant default, breach of representation or warranty, bankruptcy, cross-default, material ERISA events, certain types of change of control, material money judgments and failure to maintain subsidiary guarantees. If an event of default occurs, all commitments under the senior secured credit facility may be terminated and all obligations under the senior secured credit facility could be accelerated by the lenders, causing all loans outstanding (including accrued interest and fees payable thereunder) to be declared immediately due and payable.

See discussion of interest rate swap agreements under Item 7A. Quantitative and Qualitative Disclosures About Market Risk.

Cinemark USA, Inc. 85/8%8.625% Senior Notes

On June 29, 2009, Cinemark USA, Inc. issued $470.0 million aggregate principal amount of 8.625% senior notes due 2019 with an original issue discount of approximately $11.5 million, resulting in proceeds of approximately $458.5 million. The proceeds were primarily used to fund the repurchase of the remaining $419.4 million aggregate principal amount at maturity of Cinemark, Inc.’s 93/4%9.75% senior discount notes discussed below. Interest is payable on June 15 and December 15 of each year. The senior notes mature on June 15, 2019. As of December 31, 2010,2011, the carrying value of the senior notes was approximately $459.7$460.5 million.

Cinemark USA, Inc. filed a registration statement with the Securities and Exchange Commission on September 24, 2009 pursuant to which it offered to exchange the senior notes for substantially similar registered senior notes. The registration statement became effective on December 17, 2009. The exchanged registered senior notes do not have transfer restrictions.

The senior notes are fully and unconditionally guaranteed on a joint and several senior unsecured basis by certain of our subsidiaries that guarantee, assume or become liable with respect to any of our or our guarantor’s debt. The senior notes and the guarantees are senior unsecured obligations and rank equally in right of payment with all of our and our guarantor’s existing and future senior unsecured debt and senior in right of payment to all of our and our guarantor’s existing and future subordinated debt. The senior notes and the guarantees are effectively subordinated to all of our and our guarantor’s existing and future secured debt to the extent of the value of the assets securing such debt, including all borrowings under our senior secured credit facility. The senior notes and the guarantees are structurally subordinated to all existing and future debt and other liabilities of our subsidiaries that do not guarantee the senior notes.

The indenture to the senior notes contains covenants that limit, among other things, the ability of Cinemark USA, Inc. and certain of its subsidiaries to (1) consummate specified asset sales, (2) make investments or other restricted payments, including paying dividends, making other distributions or repurchasing subordinated debt or

equity, (3) incur additional indebtedness and issue preferred stock, (4) enter into transactions with affiliates, (5) enter new lines of business, (6) merge or consolidate with, or sell all or substantially all of its assets to another person and (7) create liens. Upon a change of control of Cinemark Holdings, Inc. or Cinemark USA, Inc., Cinemark


41


USA, Inc. would be required to make an offer to repurchase the senior notes at a price equal to 101% of the aggregate principal amount outstanding plus accrued and unpaid interest through the date of repurchase. Certain asset dispositions are considered triggering events that may require Cinemark USA, Inc. to use the proceeds from those asset dispositions to make an offer to purchase the notes at 100% of their principal amount, plus accrued and unpaid interest, if any, to the date of repurchase if such proceeds are not otherwise used within 365 days as described in the indenture. The indenture governing the senior notes allows Cinemark USA, Inc. to incur additional indebtedness if we satisfy the coverage ratio specified in the indenture, after giving effect to the incurrence of the additional indebtedness, and in certain other circumstances. The required minimum coverage ratio is 2 to 1 and our actual ratio as of December 31, 20102011 was 5.045.1 to 1.

Prior to June 15, 2014, Cinemark USA, Inc. may redeem all or any part of the senior notes at its option at 100% of the principal amount plus a make-whole premium. After June 15, 2014, Cinemark USA, Inc. may redeem the senior notes in whole or in part at redemption prices described in the senior notes. In addition, Cinemark USA, Inc. may redeem up to 35% of the aggregate principal amount of the senior notes from the net proceeds of certain equity offerings at the redemption price set forth in the senior notes.

Cinemark USA, Inc. 7.375% Senior Subordinated Notes

On June 3, 2011, Cinemark USA, Inc. issued $200 million aggregate principal amount of 7.375% senior subordinated notes due 2021, at par value. The proceeds, after payment of fees, were primarily used to fund the prepayment of the remaining $157.2 million of Cinemark USA’s unextended portion of term loan debt under its senior secured credit facility. Interest on the senior subordinated notes is payable on June 15 and December 15 of each year beginning on December 15, 2011. The senior subordinated notes mature on June 15, 2021.

The senior subordinated notes are fully and unconditionally guaranteed on a joint and several senior subordinated unsecured basis by certain of Cinemark USA, Inc.’s subsidiaries that guarantee, assume or become liable with respect to any of Cinemark USA, Inc.’s or a guarantor’s other debt. The senior subordinated notes and the guarantees are senior subordinated unsecured obligations and rank equally in right of payment with all of Cinemark USA, Inc.’s and a guarantor’s future senior subordinated indebtedness; are subordinate in right of payment to all of Cinemark USA, Inc.’s and a guarantor’s existing and future senior indebtedness, whether secured or unsecured, including Cinemark USA, Inc.’s obligations under its senior secured credit facility and its 8.625% senior notes; and structurally subordinate to all existing and future indebtedness and other liabilities of Cinemark USA, Inc.’s non-guarantor subsidiaries.

The indenture to the senior subordinated notes contains covenants that limit, among other things, the ability of Cinemark USA, Inc. and certain of its subsidiaries to (1) make investments or other restricted payments, including paying dividends, making other distributions or repurchasing subordinated debt or equity, (2) incur additional indebtedness and issue preferred stock, (3) enter into transactions with affiliates, (4) enter new lines of business, (5) merge or consolidate with, or sell all or substantially all of its assets to, another person and (6) create liens. Upon a change of control, as defined in the Indenture, Cinemark USA, Inc. would be required to make an offer to repurchase the senior subordinated notes at a price equal to 101% of the aggregate principal amount outstanding plus accrued and unpaid interest, if any, through the date of repurchase. The indenture governing the senior subordinated notes allows Cinemark USA, Inc. to incur additional indebtedness if we satisfy the coverage ratio specified in the indenture, after giving effect to the incurrence of the additional indebtedness, and in certain other circumstances. The required minimum coverage ratio is 2 to 1, and our actual ratio as of December 31, 2011 was 5.1 to 1.

Prior to June 15, 2016, Cinemark USA, Inc. may redeem all or any part of the senior subordinated notes at its option at 100% of the principal amount plus a make-whole premium plus accrued and unpaid interest on the senior subordinated notes to the date of redemption. After June 15, 2016, Cinemark USA, Inc. may redeem the

senior subordinated notes in whole or in part at redemption prices specified in the indenture. In addition, prior to June 15, 2014, Cinemark USA, Inc. may redeem up to 35% of the aggregate principal amount of the senior subordinated notes from the net proceeds of certain equity offerings at the redemption price set forth in the indenture.

Cinemark USA, Inc. and its guarantor subsidiaries filed a registration statement with the Securities and Exchange Commission (the “Commission”) on July 27, 2011 pursuant to which Cinemark USA, Inc. offered to exchange the senior subordinated notes for substantially similar registered senior subordinated notes. The registration statement became effective August 4, 2011 and approximately $199.5 million of the notes were exchanged on September 7, 2011. The registered senior subordinated notes, issued in the exchange, do not have transfer restrictions. Approximately $0.5 million of the notes were not exchanged as of December 31, 2011.

Cinemark, Inc. 93/4%9.75% Senior Discount Notes

On March 31, 2004, Cinemark, Inc. issued approximately $577,173$577.2 million aggregate principal amount at maturity of 93/4%9.75% senior discount notes due 2014. Interest on the notes accreted until March 15, 2009 up to their aggregate principal amount. Subsequently, cash interest accrued and was payable semi-annually in arrears on March 15 and September 15, commencing on September 15, 2009.

Prior to 2008,2009, Cinemark, Inc. repurchased on the open market $110,770approximately $157.8 million aggregate principal amount at maturity of its 93/4%9.75% senior discount notes for approximately $96,741$138.9 million including accreted interest of $22,147approximately $37.3 million and net cash premiums of $5,380.approximately $2.8 million. Cinemark, Inc. funded these repurchases with available cash from its operations and with proceeds from our initial public offering.

During 2008, in ten open market purchases, Cinemark, Inc. repurchased $47,000 aggregate principal amount at maturity of its 93/4% senior discount notes for approximately $42,208, including accreted interest of $15,186offering and a discount of $2,537. Cinemark, Inc. funded the transactions with proceedsavailable cash from our initial public offering.
operations.

On June 15, 2009, Cinemark, Inc. commenced a cash tender offer for any and all of its 93/4%9.75% senior discount notes due 2014, of which $419,403approximately $419.4 million aggregate principal amount at maturity remained outstanding. In connection with the tender offer, Cinemark, Inc. solicited consents to adopt proposed amendments to the indenture to eliminate substantially all restrictive covenants and certain events of default provisions. On June 29, 2009, approximately $402,459$402.5 million aggregate principal amount at maturity of the 93/4%9.75% senior discount notes were tendered and repurchased by Cinemark, Inc. for approximately $433,415,$433.4 million, including accrued interest of $11,336approximately $11.3 million and tender premiums paid of $19,620.approximately $19.6 million. Cinemark, Inc. funded the repurchase with the proceeds from the issuance of the Cinemark USA, Inc. senior notes discussed above. On August 3, 2009, Cinemark, Inc. delivered to the Bank of New York Trust Company N.A., as trustee, a notice to redeem the $16,944$16.9 million aggregate principal amount at maturity of its 93/4%9.75% senior discount notes remaining outstanding. The notice specified September 8, 2009 as the redemption date, at which time Cinemark, Inc. paid approximately $18,564,$18.6 million, consisting of a redemption price of 104.875% of the face amount of the discount notes remaining outstanding plus accrued and unpaid interest to, but not including, the redemption date. Cinemark, Inc. funded the redemption with proceeds from the issuance of the Cinemark USA, Inc. senior notes discussed above.

Cinemark USA, Inc. 9% Senior Subordinated Notes

On February 11, 2003, Cinemark USA, Inc. issued $150 million aggregate principal amount of 9% senior subordinated notes due 2013 and on May 7, 2003, Cinemark USA, Inc. issued an additional $210 million aggregate principal amount of 9% senior subordinated notes due 2013, collectively referred to as the 9% senior subordinated notes. Interest was payable on February 1 and August 1 of each year.

Prior to 2009, Cinemark USA, Inc. repurchased a total of $359.8 million aggregate principal amount of its 9% senior subordinated notes. The transactions were funded by Cinemark USA, Inc. with proceeds from its sale of a


42


portion of its investment in NCM during 2007 and available cash from operations. Cinemark USA, Inc. also executed a supplemental indenture removing substantially all of the restrictive covenants and certain events of default.

On October 14, 2010, Cinemark USA, Inc. redeemed all of itsthe $0.2 million remaining outstanding 9% senior subordinated notes for approximately $0.2 million, including accrued interest and premiums.

notes.

Covenant Compliance

As of December 31, 2010,2011, we arebelieve we were in full compliance with all agreements, including all related covenants, governing our outstanding debt.

Ratings

We are rated by nationally recognized rating agencies. The significance of individual ratings 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 current ratings will continue for any given period of time. A downgrade of our debt ratings, depending on the extent, could increase the cost to borrow funds. Below are our latest ratings per category, which were current as of February 28, 2011.

24, 2012.

Category

  Moody’s  Standard and
Poor’s
Category
Moody’sStandard and Poor’s

Cinemark USA, Inc. 8.625% Senior Notes

B2B

Cinemark USA, Inc. 7.375% Senior Subordinated Notes

  B3  B-B

Cinemark USA, Inc. Senior Secured Credit Facility

  Ba3Ba2  BB-BB

New Accounting Pronouncements

In December 2009,May 2011, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”)No. 2009-17,Consolidations2011-04, “Fair Value Measurement (Topic 810) — Improvements820): Amendments to Financial Reporting by Enterprises Involved with Variable Interest EntitiesAchieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRS” (“ASUNo. 2009-17”2011-04”). ASU No. 2011-04 provides guidance which is expected to result in common fair value measurement and disclosure requirements between U.S. GAAP and IFRS. It changes the wording used to describe many of the requirements in U.S. GAAP for measuring fair value and for disclosing information about fair value measurements. It is not intended for this update to result in a change in the application of the requirements in Topic 820. The amendments in ASU No. 2011-04 are to be applied prospectively. ASU No. 2011-04 is effective for public companies for interim and annual periods beginning after December 15, 2011. Early application is not permitted. This update changes howis not expected to have a reporting entity determines whenmaterial impact on our consolidated financial statements.

In June 2011, the FASB issued ASU No. 2011-05, “Comprehensive Income (Topic 220): Presentation of Comprehensive Income” (“ASU No. 2011-05”). In ASU No. 2011-05, an entity that is insufficiently capitalizedhas the option to present the total of comprehensive income, the components of net income, and the components of other comprehensive income either in a single continuous statement of comprehensive income or is not controlled through voting (or similar rights) should be consolidated. The determination of whether a reportingin two separate but consecutive statements. In both choices, an entity is required to consolidate another entity is based on, amongpresent each component of net income along with total net income, each component of other things, the other entity’s purpose and design and the reporting entity’s ability to direct the activities of the other entity that most significantly impact the other entity’s economic performance. ASUNo. 2009-17 requires a reporting entity to provide additional disclosures about its involvement with variable interest entities and any significant changes in risk exposure due to that involvement. A reporting entity is required to disclose how its involvementcomprehensive income along with a variable interest entity affectstotal for other comprehensive income, and a total amount for comprehensive income. The amendments in ASU No. 2011-05 do not change the reporting entity’s financial statements.items that must be reported in other comprehensive income or when an item of other comprehensive income must be reclassified to net income. They also do not change the presentation of related tax effects or the portrayal or calculation of earnings per share. The amendments in ASUNo. 2009-172011-05 should be applied retrospectively. The amendment is effective for fiscal years, beginning after November 15, 2009, and interim periods within those years, beginning after December 15, 2011. Early adoption is permitted, because compliance with the amendments is already permitted. ASU No. 2011-05 also required an entity to present on the face of the financial statements adjustments for items that are reclassified from accumulated other comprehensive income to net income, however, in December 2011 the FASB issued ASU No. 2011-12,Deferral of the Effective Date for Amendments to the Presentation of Reclassifications of ItemsOut of Accumulated Other Comprehensive Income in ASU No. 2011-05. The update defers the specific

requirement to present items that are reclassified from accumulated other comprehensive income to net income separately with their respective components of net income and other comprehensive income. We elected to adopt ASU No. 2011-05 and ASU No. 2011-12 for our fiscal years. We adopted2011 and amendments have been applied retrospectively for all prior periods presented. The amendments do not require any transition disclosures.

In September 2011, the FASB issued ASUNo. 2009-172011-08, “Intangibles — Goodwill and Other (Topic 350)” (“ASU No. 2011-08”). In ASU No. 2011-08, an entity is permitted to make a qualitative assessment of whether it is more likely than not that a reporting unit’s fair value is less than its carrying amount before applying the two-step goodwill impairment test. If an entity concludes that it is not more likely than not that the fair value of a reporting unit is less than its carrying amount, it would not be required to perform the two-step impairment test for that reporting unit. The ASU’s objective is to simplify how an entity tests goodwill for impairment. The amendments in ASU No. 2011-08 are effective for annual and interim goodwill and impairment tests performed for fiscal years beginning after December 15, 2011. Early adoption is permitted, including for annual and interim goodwill impairment tests performed as of January 1, 2010, and its application had noa date before September 15, 2011, if an entity’s financial statements for the most recent annual or interim period have not yet been issued. The adoption of ASU No. 2011-08 is not expected to have a material impact on our consolidated financial statements.

In January 2010, the FASB issued ASUNo. 2010-06,Fair Value Measurements and Disclosures: Improving Disclosures about Fair Value Measurements” (“ASUNo. 2010-06”), which amends FASB ASC Topic820-10,Fair Value Measurements and Disclosures”. This update requires additional disclosures for transfers in and out of Levels 1 and 2 and for activity in Level 3 and clarifies certain other existing disclosure requirements. We adopted ASUNo. 2010-06 beginning January 1, 2010. This update did not have a significant impact on our disclosures.
In August 2010, the FASB issued ASUNo. 2010-21,Accounting for Technical Amendments to Various SEC Rules and Schedules” (“ASUNo. 2010-21”). This update amends various SEC paragraphs in the FASB Accounting Standards Codification pursuant to SEC Final Rule, “Technical Amendments to Rules Forms, Schedules and Codification of Financial Reporting Policies”. The adoption of ASUNo. 2010-21 did not affect our consolidated financial statements.
In August 2010, the FASB issued ASUNo. 2010-22,Accounting for Various Topics” (“ASUNo. 2010-22”), which amends various SEC paragraphs based on external comments received and the issuance of Staff Accounting Bulletin (“SAB”) 112. SAB 112 was issued to bring existing SEC guidance into conformity with ASC Topic 805,


43


Business Combinations” and ASC Topic 810 “Consolidation”. The adoption of ASUNo. 2010-22 did not affect our consolidated financial statements.
Seasonality

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

Item 7A.Quantitative and Qualitative Disclosures About Market Risk

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

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

Interest Rate Risk

We are currently party to variable rate debt facilities. An increase or decrease in interest rates would affect our interest expense relating to our variable rate debt facilities. At December 31, 2010,2011, there was an aggregate of approximately $422.8$285.3 million of variable rate debt outstanding under these facilities, which excludes $650.0$620.6 million of Cinemark USA, Inc.’s term loan debt that is hedged with the Company’s interest rate swap agreements as discussed below. Based on the interest rates in effect on the variable rate debt outstanding at December 31, 2010,2011, a 100 basis point increase in market interest rates would increase our annual interest expense by approximately $4.2$2.9 million.

Our

A majority of our current interest rate swap agreements qualify for cash flow hedge accounting. The fair values of the interest rate swaps are recorded on our consolidated balance sheet as an asset or liability with the effective portion of the interest rate swaps’ gains or losses reported as a component of accumulated other comprehensive income (loss) and the ineffective portion reported in earnings.

Below is a summary of our current interest rate swap agreements:

             
Amount Hedged
  Effective Date Pay Rate  Receive Rate Expiration Date
 
$125,000  August 2007  4.9220% 3-month LIBOR August 2012
$100,000  November 2008  3.6300% 1-month LIBOR November 2011
$75,000  November 2008  3.6300% 1-month LIBOR November 2012
$175,000  December 2010  1.3975% 1-month LIBOR September 2015
$175,000  December 2010  1.4000% 1-month LIBOR September 2015
agreements as of December 31, 2011:

Nominal

Amount

(in millions)

  Amount
Designated

as a Hedge
(in millions)
  Effective Date  Pay Rate Receive Rate   Expiration Date
$125.0  $106.6  August 2007  4.9220%  3-month LIBOR    August 2012

$  75.0

  $  64.0  November 2008  3.6300%  1-month LIBOR    November 2012

$175.0

  $175.0  December 2010  1.3975%  1-month LIBOR    September 2015

$175.0

  $175.0  December 2010  1.4000%  1-month LIBOR    September 2015

$100.0

  $100.0  November 2011  1.7150%  1-month LIBOR    April 2016

 

  

 

       

$650.0

  $620.6       

The table below provides information about our fixed rate and variable rate long-term debt agreements as of December 31, 2010:

                                     
                          Average
 
  Expected Maturity for the Twelve-Month Periods Ending December 31,  Interest
 
  2011  2012  2013  2014  2015  Thereafter  Total  Fair Value  Rate 
  (In millions) 
 
Fixed rate(1)(2)
 $  $  $  $  $  $1,120.0  $1,120.0  $1,159.2   7.0%
Variable rate  10.8   47.9   126.7   9.2   9.2   219.0   422.8   422.8   3.1%
                                     
Total debt $10.8  $47.9  $126.7  $9.2  $9.2  $1,339.0  $1,542.8  $1,582.0     
                                     
2011:

   Expected Maturity for the Twelve-Month Periods Ending December 31,    
    (in millions)    
     2012     2013     2014     2015     2016     Thereafter     Total     Fair 
Value
   Average
Interest
Rate

Fixed rate(1)(2)

  $2.9    $2.9    $—      $—      $620.6    $670.0    $1,296.4    $1,338.4    7.0%

Variable rate

   9.2     9.2     9.3     9.3     248.3     —       285.3     283.8    3.9%
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

Total debt

  $12.1    $12.1    $9.3    $9.3    $868.9    $670.0    $1,581.7    $1,622.2    
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

(1)
(1)

Includes $650.0$620.6 million of the Cinemark USA, Inc. term loan, which represents the debt currently hedged with the Company’s interest rate swap agreements.

(2)

Includes the 8.625% senior notes in the aggregate principal amount of $470.0 million, excluding the discount of $10.3$9.5 million.


44


Foreign Currency Exchange Rate Risk

We are also exposed to market risk arising from changes in foreign currency exchange rates as a result of our international operations. Generally, we export from the U.S. certain of the equipment and construction interior finish items and other operating supplies used by our international subsidiaries. A majority of the revenues and operating

expenses of our international subsidiaries are transacted in the country’s local currency. Generally accepted accounting principles in the U.S., or U.S. GAAP, require that our subsidiaries use the currency of the primary economic environment in which they operate as their functional currency. If our subsidiaries operate in a highly inflationary economy, U.S. GAAP requires that the U.S. dollar be used as the functional currency for the subsidiary. Currency fluctuations in the countries in which we operate result in us reporting exchange gains (losses) or foreign currency translation adjustments. Based upon our equity ownership in our international subsidiaries as of December 31, 2010,2011, holding everything else constant, a 10% immediate, simultaneous, unfavorable change in all of the foreign currency exchange rates to which we are exposed, would decrease the aggregate net book value of our investments in our international subsidiaries by approximately $47$50 million and would decrease the aggregate net income of our international subsidiaries for the years ended December 31, 20092010 and 20102011 by approximately $4$8 million and $8$9 million, respectively.

Item 8.Financial Statements and Supplementary Data

Item 8. Financial Statements and Supplementary Data

The financial statements and supplementary data are listed on the Index onpage F-1 of thisForm 10-K. Such financial statements and supplementary data are included herein beginning onpage F-3.

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

None.

Item 9A. Controls and Procedures

Item 9.

Changes in and Disagreements With Accountants on Accounting and Financial Disclosure
None.
Item 9A.Controls and Procedures
Evaluation of the Effectiveness of Disclosure Controls and Procedures

As of December 31, 2010,2011, under the supervision and with the participation of our principal executive officer and principal financial officer, we carried out an evaluation required by the Securities Exchange Act of 1934, as amended, or the 1934 Act of the effectiveness of the design and operation of our disclosure controls and procedures, as defined inRule 13a-15(e) of the 1934Exchange Act. Based on this evaluation, our principal executive officer and principal financial officer concluded that, as of December 31, 2010,2011, our disclosure controls and procedures were effective to provide reasonable assurance that information required to be disclosed by us in the reports that we file or submit under the 1934Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms and were effective to provide reasonable assurance that such information is accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosures.

Management’s Report on Internal Control over Financial Reporting

Management is responsible for establishing and maintaining adequate internal control over financial reporting, as defined inRule 13a-15(f) of the 1934Exchange Act. The Company’s internal control framework and processes are designed to provide reasonable assurance to management and the board of directors regarding the reliability of financial reporting and the preparation of the Company’s consolidated financial statements in accordance with the accounting principles generally accepted in the United States of America.U.S. Management has assessed the effectiveness of our internal control over financial reporting as of December 31, 20102011 based on criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission, or COSO, inInternal Control — Integrated Framework. As a result of this assessment, management concluded that, as of December 31, 2010,2011, our internal control over financial reporting was effective.

Certifications of our Chief Executive Officer and our Chief Financial Officer, which are required in accordance withRule 13a-14 of the Exchange Act, are attached as exhibits to this Annual Report. This “Controls and


45


Procedures” section 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,registered public accounting firm, Deloitte & Touche LLP, with direct access to the Company’s board of directors through its Audit Committee, have audited the consolidated financial statements prepared by the Company. Their report on the consolidated financial statements is included in Part II, Item 8. Financial Statements and Supplementary Data. Deloitte & Touche LLP has issued an attestation report on the Company’s internal control over financial reporting. Deloitte & Touche LLP’s report on the Company’s internal control over financial reporting is included herein.

Changes in Internal Control Over Financial Reporting

There have been no changes in our internal control over financial reporting identified in connection with the evaluation required by paragraph (d) of Exchange ActRules 13a-15 that occurred during the quarter ended December 31, 20102011 that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Limitations on Controls

Management does not expect that our disclosure controls and 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.


46


Item 9B. Other Information

None.

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors of

Cinemark Holdings, Inc.

Plano, Texas

We have audited the internal control over financial reporting of Cinemark Holdings, Inc. and subsidiaries (the “Company”) as of December 31, 2010,2011, based on criteria established inInternal Control — Integrated Frameworkissued by the Committee of Sponsoring Organizations of the Treadway Commission. The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying management’s report on internal control over financial reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit.

We 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.

A company’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. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the 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.

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.

In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2010,2011, based on the criteria established inInternal Control — Integrated Frameworkissued by the Committee of Sponsoring Organizations of the Treadway Commission.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated financial statements and financial statement schedule as of and for the year ended December 31, 20102011 of the Company and our report dated February 28, 20112012 expressed an unqualified opinion on those financial statements and financial statement schedule.

schedule and included an explanatory paragraph regarding the Company’s adoption of FASB Accounting Standards Update No. 2011-05, “Presentation of Comprehensive Income.”

/s/Deloitte & Touche LLP

Dallas, Texas

February 28, 2011


472012


PART III

Item 10. Directors, Executive Officers and Corporate Governance

Item 10.Directors, Executive Officers and Corporate Governance

Incorporated by reference to the Company’s Proxy Statementproxy statement for its Annual Stockholders Meetingannual stockholders meeting (under the headings “Election of Directors”, “Section 16(a) Beneficial Ownership Reporting Compliance”, “Corporate Governance” and “Executive Officers”) to be held on May 12, 201110, 2012 and to be filed with the Securities and Exchange CommissionSEC within 120 days after December 31, 2010.

Item 11.Executive Compensation
2011.

Item 11. Executive Compensation

Incorporated by reference to the Company’s Proxy Statementproxy statement for its Annual Stockholders Meetingannual stockholders meeting (under the heading “Executive Compensation”) to be held on May 12, 201110, 2012 and to be filed with the Securities and Exchange CommissionSEC within 120 days after December 31, 2010.

Item 12.Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
2011.

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

Incorporated by reference to the Company’s Proxy Statementproxy statement for its Annual Stockholders Meetingannual stockholders meeting (under the headings “Security Ownership of Certain Beneficial Owners and Management”) to be held on May 12, 201110, 2012 and to be filed with the Securities and Exchange CommissionSEC within 120 days after December 31, 2010.

Item 13.Certain Relationships and Related Transactions, and Director Independence
2011.

Item 13. Certain Relationships and Related Transactions, and Director Independence

Incorporated by reference to the Company’s Proxy Statementproxy statement for its Annual Stockholders Meetingannual stockholders meeting (under the heading “Certain Relationships and Related Party Transactions” and “Corporate Governance”) to be held on May 12, 201110, 2012 and to be filed with the Securities and Exchange CommissionSEC within 120 days after December 31, 2010.

Item 14.Principal Accounting Fees and Services
2011.

Item 14. Principal Accounting Fees and Services

Incorporated by reference to the Company’s Proxy Statementproxy statement for its Annual Stockholders Meetingannual stockholders meeting (under the heading “Board Committees — Audit Committee — Fees Paid to Independent Registered Public Accounting Firm”) to be held on May 12, 201110, 2012 and to be filed with the Securities and Exchange CommissionSEC within 120 days after December 31, 2010.

2011.

PART IV

Item 15. Exhibits, Financial Statement Schedules

Item 15.Exhibits, Financial Statement Schedules

(a)

Documents Filed as Part of this Report

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 Reportreport.
1. The financial statement schedules and related data listed in the accompanying Index beginning onpage F-1 are filed as a part of this report.
2. The exhibits listed in the accompanying Index beginning onpage E-1 are filed as a part of this report.

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

(b)Exhibits

See the accompanying Index beginning onpage E-1.

(c)Financial Statement Schedules

(c)  Financial Statement Schedules

Schedule I — Condensed Financial Information of Registrant beginning onpage F-46.

F-50.

All schedules not identified above have been omitted because they are not required, are not applicable or the information is included in the consolidated financial statements or notes contained in this report.


48


SIGNATURES

SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act, of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Dated: February 28, 2011
CINEMARK HOLDINGS, INC.

Dated: February 29, 2012CINEMARK HOLDINGS, INC.
 BY:  

/s/ Alan W. StockTim Warner

Alan W. Stock
Chief Executive Officer
Tim Warner
Chief Executive Officer
 BY:  

/s/ Robert Copple

Robert Copple
Chief Financial Officer and
Principal Accounting Officer
Robert Copple
Chief Financial Officer and
Principal Accounting Officer

POWER OF ATTORNEY

Each person whose signature appears below hereby severally constitutes and appoints Alan W. StockTim Warner and Robert Copple his true and lawful attorney-in-fact and agent, each with the power of substitution and resubstitution, for him in any and all capacities, to sign any and all amendments to this Annual Report onForm 10-K and to file the same, with accompanying exhibits and other related documents, with the Securities and Exchange Commission, and ratify and confirm all that said attorney-in-fact and agent, or his substitute or substitutes, may lawfully do or cause to be done by virtue of said appointment.

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

Name
Title
Date

/s/ Lee Roy Mitchell


Lee Roy Mitchell

 Chairman of the Board of Directors and Director February 28, 201129, 2012

/s/ Tim Warner

Tim Warner

 
/s/  Alan W. Stock

Alan W. Stock

Chief Executive Officer

(principal executive officer)

 February 28, 201129, 2012

/s/ Robert Copple


Robert Copple

 Executive Vice President; Treasurer and Chief Financial Officer (principal financial and accounting officer) February 28, 201129, 2012

/s/ Benjamin D. Chereskin


Benjamin D. Chereskin

 Director February 28, 201129, 2012

/s/ Vahe A. Dombalagian


Vahe A. Dombalagian

 Director February 28, 2011


49


29, 2012
Name
Title
Date

/s/ Peter R. Ezersky


Peter R. Ezersky

 Director February 28, 201129, 2012

Name

 

Title

 

Date

/s/ Enrique F. Senior

Enrique F. Senior

 Director February 28, 201129, 2012

/s/ Raymond W. Syufy


Raymond W. Syufy

 Director February 28, 201129, 2012

/s/ Carlos M. Sepulveda


Carlos M. Sepulveda

 Director February 28, 201129, 2012

/s/ Roger T. Staubach


Roger T. Staubach

 Director February 28, 201129, 2012

/s/ Donald G. Soderquist


Donald G. Soderquist

 Director February 28, 201129, 2012

/s/ Steven Rosenberg


Steven Rosenberg

 Director February 28, 201129, 2012


50


SUPPLEMENTAL INFORMATION TO BE FURNISHED WITH REPORTS FILED PURSUANT TO

SECTION 15(d) OF THE ACT BY REGISTRANTS WHICH HAVE NOT REGISTERED

SECURITIES PURSUANT TO SECTION 12 OF THE ACT.

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 thisForm 10-K. We shall furnish to the Securities and Exchange CommissionSEC copies of any annual report or proxy material that is sent to our stockholders.


51



REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors of

Cinemark Holdings, Inc.

Plano, Texas

We have audited the accompanying consolidated balance sheets of Cinemark Holdings, Inc. and subsidiaries (the “Company”) as of December 31, 20092010 and 2010,2011, and the related consolidated statements of operations, equity andincome, comprehensive income, (loss),equity, and cash flows for each of the three years in the period ended December 31, 2010.2011. Our audits also included the financial statement schedule listed in the Index at Item 15. These financial statements and financial statement schedule are the responsibility of the Company’s management. Our responsibility is to express an opinion on the financial statements and financial statement schedule based on our audits.

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.

In our opinion, such consolidated financial statements present fairly, in all material respects, the financial position of Cinemark Holdings, Inc. and subsidiaries as of December 31, 20092010 and 2010,2011, and the results of their operations and their cash flows for each of the three years in the period ended December 31, 2010,2011, in conformity with accounting principles generally accepted in the United States of America. Also, in our opinion, such financial statement schedule, when considered in relation to the basic consolidated financial statements taken as a whole, presents fairly, in all material respects, the information set forth therein.

As discussed in Note 2 to the consolidated financial statements, the Company has changed its method of presenting comprehensive income in 2011 due to the adoption of FASB Accounting Standards Update No. 2011-05, “Presentation of Comprehensive Income.” The change in presentation has been applied retrospectively to all periods presented.

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, 2010,2011, based on the criteria established inInternal Control — Integrated Frameworkissued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated February 28, 20112012 expressed an unqualified opinion on the Company’s internal control over financial reporting.

/s/ Deloitte & Touche LLP

Dallas, Texas

February 28, 2011


F-22012


CINEMARK HOLDINGS, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

         
  December 31,
  December 31,
 
  2009  2010 
  (In thousands, except share data) 
 
ASSETS
Current assets        
Cash and cash equivalents $437,936  $464,997 
Inventories  9,854   11,686 
Accounts receivable  33,110   50,607 
Income tax receivable  13,025   30,733 
Deferred tax asset  3,321   8,099 
Prepaid expenses and other  10,051   10,931 
         
Total current assets  507,297   577,053 
Theatre properties and equipment        
Land  94,879   91,678 
Buildings  394,654   396,158 
Property under capital lease  204,881   212,314 
Theatre furniture and equipment  639,538   677,710 
Leasehold interests and improvements  602,583   670,344 
         
Total  1,936,535   2,048,204 
Less accumulated depreciation and amortization  716,947   832,758 
         
Theatre properties and equipment, net  1,219,588   1,215,446 
Other assets        
Goodwill  1,116,302   1,122,971 
Intangible assets — net  342,998   329,204 
Investment in NCM  34,232   64,376 
Investment in DCIP  640   10,838 
Investment in Real D     27,993 
Investments in and advances to affiliates  2,889   2,619 
Deferred charges and other assets — net  52,502   70,978 
         
Total other assets  1,549,563   1,628,979 
         
Total assets
 $3,276,448  $3,421,478 
         
LIABILITIES AND EQUITY
Current liabilities        
Current portion of long-term debt $12,227  $10,836 
Current portion of capital lease obligations  7,340   7,348 
Current liability for uncertain tax positions  13,229   1,948 
Accounts payable  53,709   64,132 
Accrued film rentals  69,216   53,255 
Accrued interest  6,411   5,138 
Accrued payroll  29,928   31,191 
Accrued property taxes  22,913   23,778 
Accrued other current liabilities  65,859   74,314 
         
Total current liabilities  280,832   271,940 
Long-term liabilities        
Long-term debt, less current portion  1,531,478   1,521,605 
Capital lease obligations, less current portion  133,028   132,812 
Deferred tax liability  124,823   129,293 
Liability for uncertain tax positions  18,432   17,840 
Deferred lease expenses  27,698   30,454 
Deferred revenue — NCM  203,006   230,573 
Other long-term liabilities  42,523   53,809 
         
Total long-term liabilities  2,080,988   2,116,386 
Commitments and contingencies (see Note 22)        
Equity        
Cinemark Holdings, Inc.’s stockholders’ equity        
Common stock, $0.001 par value: 300,000,000 shares authorized; 114,222,523 shares issued and 110,917,105 shares outstanding at December 31, 2009; and 117,110,703 shares issued and 113,750,844 shares outstanding at December 31, 2010  114   117 
Additionalpaid-in-capital
  1,011,667   1,037,586 
Treasury stock, 3,305,418 and 3,359,859 common shares at cost at December 31, 2009 and 2010, respectively  (43,895)  (44,725)
Retained earnings (deficit)  (60,595)  388 
Accumulated other comprehensive income (loss)  (7,459)  28,181 
         
Total Cinemark Holdings, Inc.’s stockholders’ equity  899,832   1,021,547 
Noncontrolling interests  14,796   11,605 
         
Total equity  914,628   1,033,152 
         
Total liabilities and equity
 $3,276,448  $3,421,478 
         

(In thousands, except share data)

   December 31,
2010
  December 31,
2011
 

Assets

   

Current assets

   

Cash and cash equivalents

  $464,997   $521,408  

Inventories

   11,686    11,284  

Accounts receivable

   50,607    54,757  

Income tax receivable

   30,733    17,786  

Deferred tax asset

   8,099    10,583  

Prepaid expenses and other

   10,931    11,300  
  

 

 

  

 

 

 

Total current assets

   577,053    627,118  

Theatre properties and equipment

   

Land

   91,678    97,244  

Buildings

   396,158    397,857  

Property under capital lease

   212,314    226,522  

Theatre furniture and equipment

   677,710    677,422  

Leasehold interests and improvements

   670,344    704,882  
  

 

 

  

 

 

 

Total

   2,048,204    2,103,927  

Less accumulated depreciation and amortization

   832,758    865,077  
  

 

 

  

 

 

 

Theatre properties and equipment, net

   1,215,446    1,238,850  

Other assets

   

Goodwill

   1,122,971    1,150,637  

Intangible assets — net

   329,204    336,907  

Investment in NCM

   64,376    72,040  

Investment in DCIP

   10,838    12,798  

Investment in marketable securities — RealD

   27,993    9,709  

Investments in and advances to affiliates

   2,619    1,543  

Long-term deferred tax asset

   —      8,826  

Deferred charges and other assets — net

   70,978    63,980  
  

 

 

  

 

 

 

Total other assets

   1,628,979    1,656,440  
  

 

 

  

 

 

 

Total assets

  $3,421,478   $3,522,408  
  

 

 

  

 

 

 

Liabilities and equity

   

Current liabilities

   

Current portion of long-term debt

  $10,836   $12,145  

Current portion of capital lease obligations

   7,348    9,639  

Income tax payable

   —      6,506  

Current liability for uncertain tax positions

   1,948    —    

Accounts payable

   64,132    65,861  

Accrued film rentals

   53,255    64,373  

Accrued interest

   5,138    6,147  

Accrued payroll

   31,191    34,270  

Accrued property taxes

   23,778    24,086  

Accrued other current liabilities

   74,314    82,000  
  

 

 

  

 

 

 

Total current liabilities

   271,940    305,027  

Long-term liabilities

   

Long-term debt, less current portion

   1,521,605    1,560,076  

Capital lease obligations, less current portion

   132,812    131,533  

Deferred tax liability

   129,293    162,449  

Liability for uncertain tax positions

   17,840    22,411  

Deferred lease expenses

   30,454    34,466  

Deferred revenue — NCM

   230,573    236,310  

Other long-term liabilities

   53,809    46,497  
  

 

 

  

 

 

 

Total long-term liabilities

   2,116,386    2,193,742  

Commitments and contingencies (see Note 22)

   

Equity

   

Cinemark Holdings, Inc.’s stockholders’ equity

   

Common stock, $0.001 par value: 300,000,000 shares authorized; 117,110,703 shares issued and 113,750,844 shares outstanding at December 31, 2010 and 117,593,329 shares issued and 114,201,737 shares outstanding at December 31, 2011

   117    118  

Additional paid-in-capital

   1,037,586    1,047,237  

Treasury stock, 3,359,859 and 3,391,592 common shares at cost at December 31, 2010 and December 31, 2011, respectively

   (44,725  (45,219

Retained earnings

   388    34,423  

Accumulated other comprehensive income (loss)

   28,181    (23,682
  

 

 

  

 

 

 

Total Cinemark Holdings, Inc.’s stockholders’ equity

   1,021,547    1,012,877  

Noncontrolling interests

   11,605    10,762  
  

 

 

  

 

 

 

Total equity

   1,033,152    1,023,639  
  

 

 

  

 

 

 

Total liabilities and equity

  $3,421,478   $3,522,408  
  

 

 

  

 

 

 

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


F-3


CINEMARK HOLDINGS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS
INCOME

YEARS ENDED DECEMBER 31, 2008, 2009, 2010 AND 20102011

             
  December 31,
  December 31,
  December 31,
 
  2008  2009  2010 
  (In thousands, except per share data) 
 
Revenues
            
Admissions $1,126,977  $1,293,378  $1,405,389 
Concession  534,836   602,880   642,326 
Other  80,474   80,242   93,429 
             
Total revenues  1,742,287   1,976,500   2,141,144 
Cost of operations
            
Film rentals and advertising  612,248   708,160   769,698 
Concession supplies  86,618   91,918   97,484 
Salaries and wages  180,950   203,437   221,246 
Facility lease expense  225,595   238,779   255,717 
Utilities and other  205,814   222,660   239,470 
General and administrative expenses  90,788   96,497   109,045 
Depreciation and amortization  155,326   148,264   142,731 
Amortization of favorable/unfavorable leases  2,708   1,251   777 
Impairment of long-lived assets  113,532   11,858   12,538 
(Gain) loss on sale of assets and other  8,488   3,202   (431)
             
Total cost of operations  1,682,067   1,726,026   1,848,275 
             
Operating income
  60,220   250,474   292,869 
Other income (expense)
            
Interest expense  (116,058)  (102,505)  (112,444)
Interest income  13,265   4,909   6,105 
Foreign currency exchange gain  986   635   1,054 
Gain (loss) on early retirement of debt  1,698   (27,878)  (3)
Distributions from NCM  18,838   20,822   23,358 
Dividend income  49   51    
Equity in loss of affiliates  (2,373)  (907)  (3,438)
             
Total other expense  (83,595)  (104,873)  (85,368)
             
Income (loss) before income taxes
  (23,375)  145,601   207,501 
Income taxes  21,055   44,845   57,838 
             
Net income (loss)
  (44,430)  100,756   149,663 
Less: Net income attributable to noncontrolling interests  3,895   3,648   3,543 
             
Net income (loss) attributable to Cinemark Holdings, Inc. 
 $(48,325) $97,108  $146,120 
             
Weighted average shares outstanding
            
Basic  107,341   108,563   111,565 
             
Diluted  107,341   110,255   112,151 
             
Earnings (loss) per share attributable to Cinemark Holdings, Inc.’s common stockholders:
            
Basic $(0.45) $0.89  $1.30 
             
Diluted $(0.45) $0.87  $1.29 
             

(In thousands, except per share data)

   2009  2010  2011 

Revenues

    

Admissions

  $1,293,378   $1,405,389   $1,471,627  

Concession

   602,880    642,326    696,754  

Other

   80,242    93,429    111,232  
  

 

 

  

 

 

  

 

 

 

Total revenues

   1,976,500    2,141,144    2,279,613  

Cost of operations

    

Film rentals and advertising

   708,160    769,698    798,606  

Concession supplies

   91,918    97,484    112,122  

Salaries and wages

   203,437    221,246    226,475  

Facility lease expense

   238,779    255,717    276,278  

Utilities and other

   222,660    239,470    259,703  

General and administrative expenses

   96,497    109,045    127,621  

Depreciation and amortization

   148,264    142,731    153,738  

Amortization of favorable/unfavorable leases

   1,251    777    711  

Impairment of long-lived assets

   11,858    12,538    7,033  

(Gain) loss on sale of assets and other

   3,202    (431  8,792  
  

 

 

  

 

 

  

 

 

 

Total cost of operations

   1,726,026    1,848,275    1,971,079  
  

 

 

  

 

 

  

 

 

 

Operating income

   250,474    292,869    308,534  

Other income (expense)

    

Interest expense

   (102,505  (112,444  (123,102

Interest income

   4,909    6,105    8,108  

Foreign currency exchange gain (loss)

   635    1,054    (219

Loss on early retirement of debt

   (27,878  (3  (4,945

Distributions from NCM

   20,822    23,358    24,161  

Dividend income

   51    —      54  

Loss on marketable securities — RealD

   —      —      (12,610

Equity in income (loss) of affiliates

   (907  (3,438  5,651  
  

 

 

  

 

 

  

 

 

 

Total other expense

   (104,873  (85,368  (102,902
  

 

 

  

 

 

  

 

 

 

Income before income taxes

   145,601    207,501    205,632  

Income taxes

   44,845    57,838    73,050  
  

 

 

  

 

 

  

 

 

 

Net income

   100,756    149,663    132,582  

Less: Net income attributable to noncontrolling interests

   3,648    3,543    2,025  
  

 

 

  

 

 

  

 

 

 

Net income attributable to Cinemark Holdings, Inc.

  $97,108   $146,120   $130,557  
  

 

 

  

 

 

  

 

 

 

Weighted average shares outstanding

    

Basic

   108,563    111,565    112,736  
  

 

 

  

 

 

  

 

 

 

Diluted

   110,255    112,151    113,224  
  

 

 

  

 

 

  

 

 

 

Earnings per share attributable to Cinemark Holdings, Inc.’s common stockholders:

    

Basic

  $0.89   $1.30   $1.15  
  

 

 

  

 

 

  

 

 

 

Diluted

  $0.87   $1.29   $1.14  
  

 

 

  

 

 

  

 

 

 

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


F-4


CINEMARK HOLDINGS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF EQUITY AND COMPREHENSIVE INCOME (LOSS)

YEARS ENDED DECEMBER 31, 2008, 2009, 2010 AND 20102011

                                                     
                    Accumulated
  Total Cinemark
        Comprehensive Income (Loss) 
  Common Stock  Treasury Stock  Additional
  Retained
  Other
  Holdings, Inc.’s
           Attributable to:
    
  Shares
     Shares
     Paid-in-
  Earnings
  Comprehensive
  Stockholders’
  Noncontrolling
  Total
  Cinemark
  Noncontrolling
    
  Issued  Amount  Issued  Amount  Capital  (Deficit)  Income (Loss)  Equity  Interests  Equity  Holdings, Inc.  Interests  Total 
  (In thousands) 
 
Balance at January 1, 2008  106,984  $107     $  $939,327  $47,074  $32,695  $1,019,203  $16,182  $1,035,385  $  $  $ 
Issuance of restricted stock, net of restricted stock forfeitures  385                                     
Exercise of stock options  169            1,292         1,292      1,292          
Share based awards compensation expense              5,113         5,113      5,113          
Tax benefit related to stock option exercises              474         474      474          
Issuance of shares as a result of Central America share exchange  903   1         12,948         12,949   (3,245)  9,704          
Issuance of shares as a result of Ecuador share exchange  394   1         3,199         3,200   (1,574)  1,626          
Dividends paid to stockholders                 (77,534)     (77,534)     (77,534)         
Dividends accrued on unvested restricted stock unit awards                 (74)     (74)     (74)         
Contribution by noncontrolling interest                          585   585          
Dividends paid to noncontrolling interests                          (1,353)  (1,353)         
Comprehensive income (loss):                                                    
Net income (loss)                 (48,325)     (48,325)  3,895   (44,430)  (48,325)  3,895   (44,430)
Fair value adjustments on interest rate swap agreements, net of taxes of $2,442                    (22,063)  (22,063)     (22,063)  (22,063)     (22,063)
Amortization of accumulated other comprehensive loss on terminated swap agreement                    1,351   1,351      1,351   1,351      1,351 
Foreign currency translation adjustment                    (84,330)  (84,330)  (1,519)  (85,849)  (84,330)  (1,519)  (85,849)
                                                     
Balance at December 31, 2008  108,835  $109     $  $962,353  $(78,859) $(72,347) $811,256  $12,971  $824,227  $(153,367) $2,376  $(150,991)
                                                     
Issuance of restricted stock, net of restricted stock forfeitures  479      (30)                              
Exercise of stock options, net of stock withholdings  4,908   5   (3,275)  (43,895)  37,442         (6,448)     (6,448)         
Share based awards compensation expense              4,304         4,304      4,304          
Tax benefit related to stock option exercises              7,545         7,545      7,545          
Dividends paid to stockholders                 (78,643)     (78,643)     (78,643)         
Dividends accrued on unvested restricted stock unit awards                 (201)     (201)     (201)         
Purchase of noncontrolling interest share of an Argentina subsidiary              23         23   (117)  (94)         
Dividends paid to noncontrolling interests                          (2,322)  (2,322)         
Comprehensive income:                                                    
Net income                 97,108      97,108   3,648   100,756   97,108   3,648   100,756 
Fair value adjustments on interest rate swap agreements, net of taxes of $2,359                    3,898   3,898      3,898   3,898      3,898 
Amortization of accumulated other comprehensive loss on terminated swap agreement                    4,633   4,633      4,633   4,633      4,633 
Foreign currency translation adjustment                    56,357   56,357   616   56,973   56,357   616   56,973 
                                                     
Balance at December 31, 2009  114,222  $114   (3,305) $(43,895) $1,011,667  $(60,595) $(7,459) $899,832  $14,796  $914,628  $161,996  $4,264  $166,260 
                                                     
Colombia share exchange (see Note 9)  1,113   1         6,950      (1,086)  5,865   (5,865)            
Share based awards compensation expense              8,352         8,352      8,352          
Issuance of restricted stock, net of restricted stock forfeitures  684   1                  1      1          
Stock repurchases related to restricted stock that vested during the year ended December 31, 2010        (20)  (299)           (299)     (299)         
Exercise of stock options, net of stock withholdings  1,092   1   (35)  (531)  8,327         7,797      7,797          
Tax benefit related to stock option exercises              2,680         2,680      2,680          
Dividends paid to stockholders                 (84,502)     (84,502)     (84,502)         
Dividends accrued on unvested restricted stock unit awards                 (635)     (635)     (635)         
Purchase of noncontrolling interest share of Panama subsidiary              (390)        (390)  (498)  (888)         
Dividends paid to noncontrolling interests                          (539)  (539)         
Comprehensive income:                                                    
Net income                 146,120      146,120   3,543   149,663   146,120   3,543   149,663 
Fair value adjustments on interest rate swap agreements, net of taxes of $4,339                    7,170   7,170      7,170   7,170      7,170 
Amortization of accumulated other comprehensive loss on terminated swap agreement                    4,633   4,633      4,633   4,633      4,633 
Fair value adjustments onavailable-for-sale securities, net of taxes of $3,424
                    5,659   5,659      5,659   5,659      5,659 
Foreign currency translation adjustment                    19,264   19,264   168   19,432   19,264   168   19,432 
                                                     
Balance at December 31, 2010  117,111  $117   (3,360) $(44,725) $1,037,586  $388  $28,181  $1,021,547  $11,605  $1,033,152  $182,846  $3,711  $186,557 
                                                     

(In thousands)

   2009  2010  2011 

Net income

  $100,756   $149,663   $132,582  

Other comprehensive income, net of tax

    

Unrealized gain (loss) due to fair value adjustments on interest rate swap agreements, net of taxes of $2,359, $4,339 and $3,786

   3,898    7,170    (2,830

Unrealized gain (loss) due to fair value adjustments on available-for-sale securities, net of taxes of $0, $3,425 and $8,128

   —      5,659    (13,566

Amortization of accumulated other comprehensive loss on terminated swap agreement

   4,633    4,633    4,236  

Foreign currency translation adjustment

   56,973    19,432    (46,280
  

 

 

  

 

 

  

 

 

 

Total other comprehensive income (loss), net of tax

   65,504    36,894    (58,440
  

 

 

  

 

 

  

 

 

 

Total comprehensive income, net of tax

   166,260    186,557    74,142  

Comprehensive income attributable to noncontrolling interests

   (4,264  (3,711  (1,803
  

 

 

  

 

 

  

 

 

 

Comprehensive income attributable to Cinemark Holdings, Inc.

  $161,996   $182,846   $72,339  
  

 

 

  

 

 

  

 

 

 

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


F-5


CINEMARK HOLDINGS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWSEQUITY

YEARS ENDED DECEMBER 31, 2008, 2009, 2010 AND 20102011

             
  2008  2009  2010 
  (In thousands) 
 
Operating activities
            
Net income (loss) $(44,430) $100,756  $149,663 
Adjustments to reconcile net income (loss) to cash provided by operating activities:            
Depreciation  151,425   144,055   138,637 
Amortization of intangible and other assets and unfavorable leases  6,609   5,460   4,871 
Amortization of long-term prepaid rents  1,717   1,389   1,786 
Amortization of debt issue costs  4,696   4,775   4,716 
Amortization of deferred revenues, deferred lease incentives and other  (3,735)  (4,810)  (6,968)
Amortization of bond discount     365   780 
Amortization of accumulated other comprehensive loss related to interest rate swap agreement  1,351   4,633   4,633 
Impairment of long-lived assets  113,532   11,858   12,538 
Share based awards compensation expense  5,113   4,304   8,352 
(Gain) loss on sale of assets and other  8,488   3,202   (2,464)
Loss on contribution and sale of digital projection systems to DCIP        2,033 
Gain on change in fair value of interest rate swap agreement  (5,422)      
Write-off unamortized debt issue costs related to the early retirement of debt  839   6,337    
Accretion of interest on senior discount notes  40,294   8,085    
Deferred lease expenses  4,350   3,960   3,940 
Deferred income tax expenses  (25,975)  (12,614)  (8,603)
Equity in loss of affiliates  2,373   907   3,438 
Interest paid on repurchased senior discount notes  (15,186)  (158,349)   
Tax benefit related to stock option exercises  474   7,545   2,680 
Increase in deferred revenue related to new U.S. beverage agreement     6,550    
Distributions from equity investees  644   2,699   5,486 
Changes in other assets and liabilities  10,137   35,656   (60,767)
             
Net cash provided by operating activities  257,294   176,763   264,751 
Investing activities
            
Additions to theatre properties and equipment  (106,109)  (124,797)  (156,102)
Proceeds from sale of theatre properties and equipment and other  2,539   2,178   21,791 
Increase in escrow deposit due to like-kind exchange  (2,089)      
Return of escrow deposits  24,828       
Acquisition of theatres in the U.S.   (5,011)  (48,950)   
Acquisition of theatres in Brazil  (5,100)  (9,061)   
Investment in joint venture — DCIP, net of cash distributions  (4,000)  (2,500)  (1,756)
             
Net cash used for investing activities  (94,942)  (183,130)  (136,067)
Financing activities
            
Proceeds from stock option exercises  1,292   2,524   7,914 
Payroll taxes paid as a result of noncash stock option exercises and restricted stock withholdings     (8,972)  (416)
Dividends paid to stockholders  (77,534)  (78,643)  (84,502)
Retirement of senior discount notes  (29,559)  (261,054)   
Retirement of senior subordinated notes  (3)     (181)
Proceeds from issuance of senior notes     458,532    
Payment of debt issue costs     (13,003)  (8,858)
Repayments of other long-term debt  (10,430)  (12,605)  (11,853)
Payments on capital leases  (4,901)  (6,064)  (7,327)
Termination of interest rate swap agreement  (12,725)      
Purchase of non-controlling interest in Panama        (888)
Other  (1,231)  (2,416)  (539)
             
Net cash provided by (used for) financing activities  (135,091)  78,299   (106,650)
Effect of exchange rates on cash and cash equivalents
  (15,701)  16,401   5,027 
             
Increase in cash and cash equivalents
  11,560   88,333   27,061 
Cash and cash equivalents:
            
Beginning of year  338,043   349,603   437,936 
             
End of year $349,603  $437,936  $464,997 
             
Supplemental information (see Note 20)

(In thousands)

  

 

Common Stock

  Treasury Stock  Additional
Paid-in-
Capital
  Retained
Earnings
(Deficit)
  Accumulated
Other

Comprehensive
Income (Loss)
  Total
Cinemark
Holdings, Inc.’s

Stockholders’
Equity
  Noncontrolling
Interests
  Total
Equity
 
  Shares
Issued
  Amount  Shares
Acquired
  Amount       

Balance at January 1, 2009

  108,835   $109    —     $—     $962,353   $(78,859 $(72,347 $811,256   $12,971   $824,227  

Issuance of restricted stock, net of restricted stock forfeitures

  479    —      (30  —      —      —      —      —      —      —    

Exercise of stock options, net of stock withholdings

  4,908    5    (3,275  (43,895  37,442    —      —      (6,448  —      (6,448

Share based awards compensation expense

  —      —      —      —      4,304    —      —      4,304    —      4,304  

Tax benefit related to stock option exercises

  —      —      —      —      7,545    —      —      7,545    —      7,545  

Dividends paid to stockholders

  —      —      —      —      —      (78,643  —      (78,643  —      (78,643

Dividends accrued on unvested restricted stock unit awards

  —      —      —      —      —      (201  —      (201  —      (201

Dividends paid to noncontrolling interests

  —      —      —      —      —      —      —      —      (2,322  (2,322

Purchase of noncontrolling interest share of an Argentina subsidiary

  —      —      —      —      23    —      —      23    (117  (94

Net income

  —      —      —      —      —      97,108    —      97,108    3,648    100,756  

Other comprehensive income:

          

Fair value adjustments on interest rate swap agreements, net of taxes of $2,359

  —      —      —      —      —      —      3,898    3,898    —      3,898  

Amortization of accumulated other comprehensive loss on terminated swap agreement

  —      —      —      —      —      —      4,633    4,633    —      4,633  

Foreign currency translation adjustment

  —      —      —      —      —      —      56,357    56,357    616    56,973  
 

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

 

Balance at December 31, 2009

  114,222   $114    (3,305 $(43,895 $1,011,667   $(60,595 $(7,459 $899,832   $14,796   $914,628  

Issuance of restricted stock, net of restricted stock forfeitures

  684    1    —      —      —      —      —      1    —      1  

Exercise of stock options, net of stock withholdings

  1,092    1    (35  (531  8,327    —      —      7,797    —      7,797  

Stock withholdings related to restricted stock that vested during the year ended December 31, 2010

  —      —      (20  (299  —      —      —      (299  —      (299

Share based awards compensation expense

  —      —      —      —      8,352    —      —      8,352    —      8,352  

Tax benefit related to stock option exercises

  —      —      —      —      2,680    —      —      2,680    —      2,680  

Dividends paid to stockholders

  —      —      —      —      —      (84,502  —      (84,502  —      (84,502

Dividends accrued on unvested restricted stock unit awards

  —      —      —      —      —      (635  —      (635  —      (635

Dividends paid to noncontrolling interests

  —      —      —      —      —      —      —      —      (539  (539

Purchase of noncontrolling interest share of Panama subsidiary

  —      —      —      —      (390  —      —      (390  (498  (888

Colombia share exchange (see Note 9)

  1,113    1    —      —      6,950    —      (1,086  5,865    (5,865  —    

Net income

  —      —      —      —      —      146,120    —      146,120    3,543    149,663  

Other comprehensive income:

          

Fair value adjustments on interest rate swap agreements, net of taxes of $4,339

  —      —      —      —      —      —      7,170    7,170    —      7,170  

Amortization of accumulated other comprehensive loss on terminated swap agreement

  —      —      —      —      —      —      4,633    4,633    —      4,633  

Fair value adjustments on available-for-sale securities, net of taxes of $3,425

  —      —      —      —      —      —      5,659    5,659    —      5,659  

Foreign currency translation adjustment

  —      —      —      —      —      —      19,264    19,264    168    19,432  
 

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

 

Balance at December 31, 2010

  117,111   $117    (3,360 $(44,725 $1,037,586   $388   $28,181   $1,021,547   $11,605   $1,033,152  

Issuance of restricted stock, net of restricted stock forfeitures

  424    1    —      —      —      —      —      1    —      1  

Exercise of stock options, net of stock withholdings

  58    —      —      —      444    —      —      444    —      444  

Stock withholdings related to restricted stock that vested during the year ended December 31, 2011

  —      —      (32  (494  —      —      —      (494  —      (494

Share based awards compensation expense

  —      —      —      —      9,692    —      —      9,692    —      9,692  

Tax benefit related to stock option exercises

  —      —      —      —      917    —      —      917    —      917  

Dividends paid to stockholders

  —      —      —      —      —      (95,838  —      (95,838  —      (95,838

Dividends accrued on unvested restricted stock unit awards

  —      —      —      —      —      (684  —      (684  —      (684

Dividends paid to noncontrolling interests

  —      —      —      —      —      —      —      —      (2,120  (2,120

Purchase of noncontrolling interests’ share of Chile subsidiary

  —      —      —      —      (1,402  —      485    (917  (526  (1,443

Write-off of accumulated other comprehensive loss related to cash flow hedges, net of taxes of $723

  —      —      —      —      —      —      (2,037  (2,037  —      (2,037

Reclassification of cumulative unrealized holding losses on marketable securities to earnings due to other-than-temporary impairment, net of taxes of $4,703

  —      —      —      —      —      —      7,907    7,907    —      7,907  

Net income

  —      —      —      —      —      130,557    —      130,557    2,025    132,582  

Other comprehensive income:

          

Fair value adjustments on interest rate swap agreements, net of taxes of $3,786

  —      —      —      —      —      —      (2,830  (2,830  —      (2,830

Amortization of accumulated other comprehensive loss on terminated swap agreement

  —      —      —      —      —      —      4,236    4,236    —      4,236  

Fair value adjustments on available-for-sale securities, net of taxes of $8,128

  —      —      —      —      —      —      (13,566  (13,566  —      (13,566

Foreign currency translation adjustment

  —      —      —      —      —      —      (46,058  (46,058  (222  (46,280
 

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

 

Balance at December 31, 2011

  117,593   $118    (3,392 $(45,219 $1,047,237   $34,423   $(23,682 $1,012,877   $10,762   $1,023,639  
 

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

 

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


F-6


CINEMARK HOLDINGS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

YEARS ENDED DECEMBER 31, 2009, 2010 AND 2011

(In thousands)

  2009  2010  2011 

Operating activities

   

Net income

 $100,756   $149,663   $132,582  

Adjustments to reconcile net income to cash provided by operating activities:

   

Depreciation

  144,055    138,637    150,149  

Amortization of intangible and other assets and unfavorable leases

  5,460    4,871    4,300  

Amortization of long-term prepaid rents

  1,389    1,786    2,657  

Amortization of debt issue costs

  4,775    4,716    4,744  

Amortization of deferred revenues, deferred lease incentives and other

  (4,810  (6,968  (9,629

Amortization of bond discount

  365    780    853  

Amortization of accumulated other comprehensive loss related to interest rate swap agreement

  4,633    4,633    4,236  

Fair value change in interest rate swap agreements not designated as hedges

  —      —      (1,130

Impairment of long-lived assets

  11,858    12,538    7,033  

Share based awards compensation expense

  4,304    8,352    9,692  

(Gain) loss on sale of assets and other

  3,202    (2,464  7,754  

Loss on contribution and sale of digital projection systems to DCIP

  —      2,033    1,038  

Loss on marketable securities — RealD

  —      —      12,610  

Loss on early retirement of debt

  6,337    —      4,945  

Accretion of interest on senior discount notes

  8,085    —      —    

Deferred lease expenses

  3,960    3,940    4,155  

Deferred income tax expenses

  (12,614  (8,603  21,676  

Equity in (income) loss of affiliates

  907    3,438    (5,651

Interest paid on repurchased senior discount notes

  (158,349  —      —    

Tax benefit related to stock option exercises and restricted stock vesting

  7,545    2,680    917  

Increase in deferred revenue related to new U.S. beverage agreement

  6,550    —      —    

Distributions from equity investees

  2,699    5,486    7,125  

Changes in other assets and liabilities

  35,656    (60,767  31,145  
 

 

 

  

 

 

  

 

 

 

Net cash provided by operating activities

  176,763    264,751    391,201  

Investing activities

   

Additions to theatre properties and equipment

  (124,797  (156,102  (184,819

Proceeds from sale of theatre properties and equipment and other

  2,178    21,791    6,230  

Acquisition of theatres in the U.S.

  (48,950  —      —    

Acquisition of a theatre in Brazil

  (9,061  —      —    

Acquisition of theatres in Argentina

  —      —      (66,958

Investment in DCIP and other

  (2,500  (1,756  (1,520
 

 

 

  

 

 

  

 

 

 

Net cash used for investing activities

  (183,130  (136,067  (247,067

Financing activities

   

Proceeds from stock option exercises

  2,524    7,914    444  

Payroll taxes paid as a result of noncash stock option exercises and restricted stock withholdings

  (8,972  (416  (494

Dividends paid to stockholders

  (78,643  (84,502  (95,838

Retirement of senior discount notes

  (261,054  —      —    

Retirement of senior subordinated notes

  —      (181  —    

Proceeds from issuance of senior notes

  458,532    —      —    

Proceeds from issuance of senior subordinated notes

  —      —      200,000  

Payment of debt issue costs

  (13,003  (8,858  (4,539

Repayments of other long-term debt

  (12,605  (11,853  (166,898

Payments on capital leases

  (6,064  (7,327  (7,526

Purchases of non-controlling interests

  —      (888  (1,443

Other

  (2,416  (539  (2,120
 

 

 

  

 

 

  

 

 

 

Net cash provided by (used for) financing activities

  78,299    (106,650  (78,414

Effect of exchange rates on cash and cash equivalents

  16,401    5,027    (9,309
 

 

 

  

 

 

  

 

 

 

Increase in cash and cash equivalents

  88,333    27,061    56,411  

Cash and cash equivalents:

   

Beginning of year

  349,603    437,936    464,997  
 

 

 

  

 

 

  

 

 

 

End of year

 $437,936   $464,997   $521,408  
 

 

 

  

 

 

  

 

 

 

Supplemental information (see Note 20)

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

CINEMARK HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

In thousands, except share and per share data

1.    SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

1.  

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Business— Cinemark Holdings, Inc. and subsidiaries (the “Company”) is a leader in the motion picture exhibition industry, with theatres in the United States (“U.S.”), Brazil, Mexico, Argentina, Chile, Colombia, Argentina, Peru, Ecuador, Honduras, El Salvador, Nicaragua, Costa Rica, Panama and Guatemala. The Company also managed additional theatres in the U.S., Brazil, and Colombia during the year ended December 31, 2010.
2011 ..

Basis of Presentation —On August 2, 2006, Cinemark Holdings, Inc. was formed as the Delaware holding company of Cinemark, Inc. On April 24, 2007, Cinemark Holdings, Inc. completed an initial public offering of its common stock. Effective December 11, 2009, Cinemark, Inc. was merged into Cinemark Holdings, Inc. and Cinemark Holdings, Inc. became the holding company of Cinemark USA, Inc.

Principles of Consolidation— The consolidated financial statements include the accounts of Cinemark Holdings, Inc., its subsidiaries and its affiliates. Majority-owned subsidiaries that the Company has control of are consolidated while those affiliates of which the Company owns between 20% and 50% and does not control are accounted for under the equity method. Those affiliates of which the Company owns less than 20% are generally accounted for under the cost method, unless the Company is deemed to have the ability to exercise significant influence over the affiliate, in which case the Company would account for its investment under the equity method. The results of these subsidiaries and affiliates are included in the consolidated financial statements effective with their formation or from their dates of acquisition. Intercompany balances and transactions are eliminated in consolidation.

Cash and Cash Equivalents— Cash and cash equivalents consist of operating funds held in financial institutions, petty cash held by the theatres and highly liquid investments with remaining maturities of three months or less when purchased. At December 31, 2010,2011, cash investments were primarily in money market funds or other similar funds.

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

Theatre Properties and Equipment— Theatre properties and equipment are stated at cost less accumulated depreciation and amortization. Depreciation is provided using the straight-line method over the estimated useful lives of the assets as follows:

Category

  

Useful Life

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

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.

The Company considers actual theatre level cash flows, future years budgeted theatre level cash flows, theatre property and equipment carrying values, amortizing intangible asset carrying values, the age of a recently built theatre, competitive theatres in the marketplace, 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.

CINEMARK HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

In thousands, except share and per share data

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 theatre’s useful life correlates with the available remaining lease period, which includes the probability of renewal


F-7


CINEMARK HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
periods for leased properties and a period of approximately 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. 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, which fall under Level 3 of the U.S. GAAP fair value hierarchy as defined by Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic820-10-35, are based on historical and projected operating performance, recent market transactions and current industry trading multiples. Fair value is determined based on a multiple of cash flows, which was eight times for the evaluations performed during the first, second and third quarters of 2008 and six and a half times for the evaluation performed during the fourth quarter of 2008 and the evaluations performed during 2009, 2010 and 2010. The Company reduced the multiple it used to determine fair value during the fourth quarter of 2008 due to the dramatic decline in estimated market values that resulted from a significant decrease in its stock price and the declines in the market capitalizations of the Company and its competitors that occurred during the fourth quarter of 2008.2011. The long-lived asset impairment charges recorded during each of the periods presented are specific to theatres that were directly and individually impacted by increased competition, adverse changes in market demographics, or adverse changes in the development or the conditions of the areas surrounding the theatre. See Note 11.

Goodwill and Other Intangible Assets— Goodwill is the excess of cost over fair value of theatre businesses acquired. Goodwill is evaluated for impairment on an annual basis during the fourth quarter or whenever events or changes in circumstances indicate the carrying value of goodwill may not be fully recoverable. 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. Management considers the reporting unit to be each of its sixteen regions in the U.S. and each of its eight international countries (Honduras, El Salvador, Nicaragua, Costa Rica, Panama and Guatemala are considered one reporting unit). 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. Significant judgment is involved in estimating cash flows and fair value. Management’s estimates, which fall under Level 3 of the U.S. GAAP fair value hierarchy as defined by FASB ASC Topic820-10-35, are based on historical and projected operating performance, recent market transactions, and current industry trading multiples. Fair value is determined based on a multiple of cash flows, which was six and a half times for the evaluations performed during 2008, 2009 and 2010. See Notes 102010 and 11.

seven and a half times for the evaluation performed during 2011.

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 fully recoverable. The Company estimates the fair value of its tradenames by applying an estimated market royalty rate that could be charged for the use of the Company’s tradename to forecasted future revenues, with an adjustment for the present value of such royalties. If the estimated fair value is less than the carrying value, the tradename intangible asset is written down to its estimated fair value. Significant judgment is involved in estimating market royalty rates and long-term revenue forecasts. Management’s estimates, which fall under Level 3 of the U.S. GAAP fair value hierarchy as defined by FASB ASC Topic820-10-35, are based on historical and projected revenue performance and industry trends. If the estimated fair value is less than the carrying value, the tradename intangible asset is written down to its estimated fair value.


F-8


CINEMARK HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

In thousands, except share and per share data

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

Intangible Asset

  

Amortization Method

Intangible Asset
Amortization Method

Goodwill

  Indefinite-lived

Tradename

  Indefinite-lived

Vendor contracts

  Straight-line method over the terms of the underlying contracts. The remaining terms of the underlying contracts range from 1 to 1211 years.

Favorable/unfavorable 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 2725 years.

Other intangible assets

  Straight-line method over the terms of the underlying agreement.agreement or the expected useful life of the intangible asset. The remaining termuseful lives of the underlying agreementsthese intangible assets range from 42 to 108 years.

Deferred Charges and Other Assets— Deferred charges and other assets consist of debt issue costs, long-term prepaid rents, interest rate swap assets, construction advances and otherrelated deposits, lease deposits, equipment to be placed in service, interest rate swap assets and other assets.assets of a long-term nature. 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 paymentsprepayments of rent 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. The amortization periods generally range from 1 to 10 years. See Note 14 for discussion of interest rate swap agreements.

Lease Accounting— The Company evaluates each lease for classification as either a capital lease or an operating lease. If substantially all of the benefits and risks of ownership have been transferred to the lessee, the Company records the lease as a capital lease at its inception. 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 recognizes the lease expense on a straight-line basis over the lease term. The Company determines the straight-line rent expense impact of an operating lease upon inception of the lease. 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. If the Company concludes that it has substantially all of the construction period risks, it 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 determines if the transaction qualifies for sale-leaseback accounting treatment in regards to lease classification.

Deferred Revenues— Advances collected on long-term screen advertising, concession and other contracts are recorded as deferred revenues. In accordance with the terms of the agreements, the advances collected on such contracts are recognized during the period in which the advances are earned, which may differ from the period in which the advances are collected. Revenues related to these advances are recognized on either a straight-line basis over the term of the contracts or as such revenues are earned in accordance with the terms of the contracts.

CINEMARK HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

In thousands, except share and per share data

Casualty Insurance —The Company is self-insured for general liability claims upsubject to an annual cap. For the year ended December 31, 2011, claims were capped at $250 per occurrence with an annual cap of approximately $2,650 per policy year and$2,650. The company is also self-insured for medical claims up to $125 per occurrence. The Company is fully insured for workers compensation claims. As of December 31, 20092010 and 2010,2011, the Company maintainedCompany’s insurance reserves of $8,022were $7,447 and $7,447,$7,600, respectively, which isand are reflected in accrued other current liabilities in the consolidated balance sheets.

Revenue and Expense Recognition— Revenues are recognized when admissions and concession sales are received at the box office. Other revenues primarily consist of screen advertising. Screen advertising revenues are recognized over the period that the related advertising is delivered on-screen or in-theatre. The Company records


F-9


CINEMARK HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
proceeds from the sale of gift cards and other advanced sale-type certificates in current liabilities and recognizes admissions andor concession revenue when a holder redeems the card or certificate. The Company recognizes unredeemed gift cards and other advanced sale-type certificates as revenue only after such a period of time indicates, based on historical experience, the likelihood of redemption is remote, and based on applicable laws and regulations. In evaluating the likelihood of redemption, the Company considers the period outstanding, the level and frequency of activity, and the period of inactivity. The Company recognized unredeemed gift cards and other advanceadvanced sale-type certificates as revenues in the amount of $7,629, $7,162, $7,073 and $7,073$7,846 during the years ended December 31, 2008, 2009, 2010 and 2010,2011, respectively.

Film rental costs are accrued based on the applicable box office receipts and either mutually agreed upon firm terms or a sliding scale formula, which are generally 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 thea 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. 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 can typically be estimated early in the film’s run. If actual settlements are different than those estimates, film rental costs are adjusted at that time. Advertising costs are expensed as incurred and the Company expensed $16,839, $15,104, $16,147 and $16,147,$18,052, respectively for the years ended December 31, 2008, 2009, 2010 and 2010.

2011.

Accounting for Share Based Awards— The Company measures 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 grant date fair value is 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 are 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 Company also estimates the number of instruments that will ultimately be forfeited, rather than accounting for forfeitures as they occur. See Note 19 for discussion of the Company’s share based awards and related compensation expense.

Income Taxes —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

CINEMARK HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

In thousands, except share and per share data

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 evaluation of aan uncertain tax position is a two-step 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, including resolution of any related appeals or litigation processes, based on the technical merits of the position. In evaluating whether a tax position has met the more-likely-than-not recognition threshold, 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 as the largest amount of benefit that is greater than 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 uncertain tax positions.


F-10


CINEMARK HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
SegmentsAs ofFor the years ended December 31, 2009, 2010 and 2011, the Company managed its business under two reportable operating segments, U.S. markets and international markets. See Note 23.

Use of Estimates— The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires the use of estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the periods presented. The Company’s consolidated financial statements include amounts that are based on management’s best estimates and judgments. Actual results could differ from those estimates.

Foreign Currency Translations— The assets and liabilities of the Company’s foreign subsidiaries are translated into U.S. dollars at current exchange rates as of the balance sheet date, and revenues and expenses are translated at average monthly exchange rates. The resulting translation adjustments are recorded in the consolidated balance sheets in accumulated other comprehensive income (loss). The Company recognizes foreign currency transaction gains and losses when changes in exchange rates impact transactions, other than intercompany transactions of a long-term investment nature, that have been denominated in a currency other than the functional currency.

Fair Value Measurements — TheCompany has interest rate swap agreements that are adjusted to fair value on a recurring basis (quarterly). The Company uses the income approach to determine the fair value of its interest rate swap agreements and under this approach, the Company uses 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. According to authoritative guidance, inputs used in fair value measurements fall into three different categories; Level 1, Level 2 and Level 3. Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the reporting entity has the ability to access at the measurement date. Level 2 inputs are inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. Level 3 inputs are unobservable inputs for the asset or liability. Therefore, the Company’s measurements use significant unobservable inputs, which fall in Level 3. There were no changes in valuation techniques during the period and no transfers in or out of Level 3 and no gains or losses included in earnings that were attributable to the change in unrealized gains or losses related to the Company’s current interest rate swap agreements.3. See Note 14 for further discussion of the Company’s interest rate swap agreements and Note 15 for further discussion of the Company’s fair value measurements.

Acquisitions— The Company accounts for acquisitions under the acquisition method of accounting. The acquisition method requires that the acquired assets and liabilities, including contingencies, be recorded at fair

CINEMARK HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

In thousands, except share and per share data

value determined on the acquisition date and changes thereafter reflected in income. For significant acquisitions, the Company obtains independent third party valuation studies for certain of the assets acquired and liabilities assumed to assist the Company in determining fair value. The estimation of the fair values of the assets acquired and liabilities assumed involves a number of estimates and assumptions that could differ materially from the actual amounts recorded. The Company provides the assumptions, including both quantitative and qualitative information, about the specified asset or liability to the third party valuation firms. The Company primarily utilizes the third parties to accumulate comparative data from multiple sources and assemble a report that summarizes the information obtained. The Company then uses the information to determinerecord estimated fair value. The third party valuation firms are supervised by Company personnel who are knowledgeable about valuations and fair value. The Company evaluates the appropriateness of the valuation methodology utilized by the third party valuation firm.

2.  NEW ACCOUNTING PRONOUNCEMENTS

2.    NEW ACCOUNTING PRONOUNCEMENTS

In December 2009,May 2011, the FASB issued Accounting Standards UpdateASU No. 2011-04, “Fair Value Measurement (Topic 820): Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRS” (“ASU”)ASU No. 2009-17,Consolidations (Topic 810) — Improvements2011-04”). ASU No. 2011-04 provides guidance which is expected to Financial Reporting by Enterprises Involved with Variable Interest Entities” (“ASUNo. 2009-17”). This updateresult in common fair value measurement and disclosure requirements between U.S. GAAP and IFRS. It changes how a reporting entity determines when an entity that is insufficiently capitalized orthe wording used to describe many of the requirements in U.S. GAAP for measuring fair value and for disclosing information about fair value measurements. It is not controlled through voting (or similar rights) should be consolidated. The determination of


F-11


CINEMARK HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
whetherintended for this update to result in a reporting entity is required to consolidate another entity is based on, among other things,change in the other entity’s purpose and design and the reporting entity’s ability to direct the activitiesapplication of the other entity that most significantly impact the other entity’s economic performance.requirements in Topic 820. The amendments in ASUNo. 2009-17 requires a reporting entity2011-04 are to provide additional disclosures about its involvement with variable interest entities and any significant changes in risk exposure due to that involvement. A reporting entity is required to disclose how its involvement with a variable interest entity affects the reporting entity’s financial statements.be applied prospectively. ASUNo. 2009-172011-04 is effective for fiscal yearspublic companies for interim and annual periods beginning after NovemberDecember 15, 2009, and interim periods within those fiscal years. The Company adopted ASUNo. 2009-17 as of January 1, 2010, and its2011. Early application had nois not permitted. This update is not expected to have a material impact on the Company’s consolidated financial statements.

In January 2010,June 2011, the FASB issued ASUNo. 2010-06,Fair Value Measurements2011-05, “Comprehensive Income (Topic 220): Presentation of Comprehensive Income” (“ASU No. 2011-05”). In ASU No. 2011-05, an entity has the option to present the total of comprehensive income, the components of net income, and Disclosures: Improving Disclosures about Fair Value Measurements” (“the components of other comprehensive income either in a single continuous statement of comprehensive income or in two separate but consecutive statements. In both choices, an entity is required to present each component of net income along with total net income, each component of other comprehensive income along with a total for other comprehensive income, and a total amount for comprehensive income. The amendments in ASUNo. 2010-06”), which amends FASB ASC Topic820-10,Fair Value Measurements2011-05 do not change the items that must be reported in other comprehensive income or when an item of other comprehensive income must be reclassified to net income. They also do not change the presentation of related tax effects or the portrayal or calculation of earnings per share. The amendments in ASU No. 2011-05 should be applied retrospectively. The amendment is effective for fiscal years, and Disclosures”. This update requires additional disclosures for transfers in and out of Levels 1 and 2 and for activity in Level 3 and clarifies certain other existing disclosure requirements. The Company adoptedinterim periods within those years, beginning after December 15, 2011. Early adoption is permitted, because compliance with the amendments is already permitted. ASUNo. 2010-06 beginning January 1, 2010. This update did not have a significant impact2011-05 also required an entity to present on the Company’s disclosures.

In August 2010,face of the financial statements adjustments for items that are reclassified from accumulated other comprehensive income to net income, however, in December 2011 the FASB issued ASUNo. 2010-21,Accounting2011-12, “Deferral of the Effective Date for Technical Amendments to Various SEC Rulesthe Presentation of Reclassifications of Items Out of Accumulated Other Comprehensive Income in ASU No. 2011-05”. The update defers the specific requirement to present items that are reclassified from accumulated other comprehensive income to net income separately with their respective components of net income and Schedules” (“other comprehensive income. The Company elected to adopt ASUNo. 2010-21”). This update amends various SEC paragraphs in the FASB Accounting Standards Codification pursuant to SEC Final Rule, “Technical Amendments to Rules Forms, Schedules2011-05 and Codification of Financial Reporting Policies”.ASU No. 2011-12 for its fiscal 2011 and amendments have been applied retrospectively for all prior periods presented. The adoption of ASUNo. 2010-21 didamendments do not affect the Company’s consolidated financial statements.
require any transition disclosures.

In August 2010,September 2011, the FASB issued ASUNo. 2010-22,Accounting for Various Topics2011-08, “Intangibles — Goodwill and Other (Topic 350)” (“ASUNo. 2010-22”2011-08”),. In ASU No. 2011-08, an entity is permitted to make a qualitative assessment of whether it

CINEMARK HOLDINGS, INC. AND SUBSIDIARIES which amends various SEC paragraphs based on external comments received

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

In thousands, except share and per share data

is more likely than not that a reporting unit’s fair value is less than its carrying amount before applying the issuancetwo-step goodwill impairment test. If an entity concludes that it is not more likely than not that the fair value of Staff Accounting Bulletin (“SAB”) 112. SAB 112 was issueda reporting unit is less than its carrying amount, it would not be required to bring existing SEC guidance into conformity with ASC Topic 805, “Business Combinationsperform the two-step impairment test for that reporting unit. The ASU’s objective is to simplify how an entity tests goodwill for impairment. The amendments in ASU No. 2011-08 are effective for annual and ASC Topic 810 “Consolidation.interim goodwill and impairment tests performed for fiscal years beginning after December 15, 2011. Early adoption is permitted, including for annual and interim goodwill impairment tests performed as of a date before September 15, 2011, if an entity’s financial statements for the most recent annual or interim period have not yet been issued. The Company does not expect the adoption of ASUNo. 2010-22 did not affect the Company’s2011-08 to have a material impact on its consolidated financial statements.

3.  EARNINGS PER SHARE

3.    EARNINGS PER SHARE

The Company considers its unvested share based payment awards, which contain non-forfeitable rights to dividends, participating securities, and includes such participating securities in its computation of earnings per share pursuant to the two-class method. Basic earnings per share for the two classes of stock (common stock and unvested restricted stock) is calculated by dividing net income (loss) by the weighted average number of shares of common stock and unvested restricted stock outstanding during the reporting period. Diluted earnings per share is calculated using the weighted average number of shares of common stock and unvested restricted stock plus the potentially dilutive effect of common equivalent shares outstanding determined under both the two class method and the treasury stock method.

The following table presents computations of basic and diluted earnings (loss) per share under the two class method:

             
  Year Ended December 31, 
  2008  2009  2010 
 
Numerator:
            
Net income (loss) attributable to Cinemark Holdings, Inc.  $(48,325) $97,108  $146,120 
(Earnings) loss allocated to participating share-based awards(1)  129   (635)  (1,399)
             
Net income (loss) attributable to common stockholders $(48,196) $96,473  $144,721 
             


F-12


   Year ended December 31, 
   2009  2010  2011 

Numerator:

    

Net income attributable to Cinemark Holdings, Inc.

  $97,108   $146,120   $130,557  

Earnings allocated to participating share-based awards(1)

   (635  (1,399  (1,458
  

 

 

  

 

 

  

 

 

 

Net income attributable to common stockholders

  $96,473   $144,721   $129,099  
  

 

 

  

 

 

  

 

 

 

Denominator (shares in thousands):

    

Basic weighted average common stock outstanding

   108,563    111,565    112,736  

Common equivalent shares for stock options

   1,594    213    41  

Common equivalent shares for restricted stock units

   98    373    447  
  

 

 

  

 

 

  

 

 

 

Diluted

   110,255    112,151    113,224  
  

 

 

  

 

 

  

 

 

 

Basic earnings per share attributable to common stockholders

  $0.89   $1.30   $1.15  
  

 

 

  

 

 

  

 

 

 

Diluted earnings per share attributable to common stockholders

  $0.87   $1.29   $1.14  
  

 

 

  

 

 

  

 

 

 

CINEMARK HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
             
  Year Ended December 31, 
  2008  2009  2010 
 
Denominator(shares in thousands):
            
Basic weighted average common stock outstanding  107,341   108,563   111,565 
Common equivalent shares for stock options(2)     1,594   213 
Common equivalent shares for restricted stock units(2)     98   373 
             
Diluted  107,341   110,255   112,151 
             
Basic earnings (loss) per share attributable to common stockholders $(0.45) $0.89  $1.30 
             
Diluted earnings (loss) per share attributable to common stockholders $(0.45) $0.87  $1.29 
             
(1)
(1)

For the years ended December 31, 2008, 2009, 2010 and 2010,2011, a weighted average of approximately 287 shares, 714 shares, 1,076 shares and 1,0761,274 shares of unvested restricted stock, respectively, are considered participating securities.

(2)Diluted loss per share calculations for the year ended December 31, 2008 exclude common equivalent shares for stock options of 1,971 and common equivalent shares for restricted stock units of 47 because they were anti-dilutive.

4.  DIVIDENDS

CINEMARK HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

In thousands, except share and per share data

4.    DIVIDENDS

In August 2007, the Company initiated a quarterly dividend policy, which was amended in November 2010. Below is a summary of dividends paiddeclared for the fiscal periods indicated.

                 
        Amount per
    
  Date of
  Date
  Common
  Total
 
Date Declared
 Record  Paid  Share(2)  Dividends(1) 
 
02/26/08  03/06/08   03/14/08  $0.18  $19,270 
05/09/08  05/30/08   06/12/08  $0.18  $19,353 
08/07/08  08/25/08   09/12/08  $0.18  $19,370 
11/06/08  11/26/08   12/11/08  $0.18  $19,615 
                 
Total — Year ended December 31, 2008             $77,608 
                 
02/13/09  03/05/09   03/20/09  $0.18  $19,619 
05/13/09  06/02/09   06/18/09  $0.18  $19,734 
07/29/09  08/17/09   09/01/09  $0.18  $19,739 
11/04/09  11/25/09   12/10/09  $0.18  $19,752 
                 
Total — Year ended December 31, 2009             $78,844 
                 
02/25/10  03/05/10   03/19/10  $0.18  $20,104 
05/13/10  06/04/10   06/18/10  $0.18  $20,313 
07/29/10  08/17/10   09/01/10  $0.18  $20,519 
11/02/10  11/22/10   12/07/10  $0.21  $24,201 
                 
Total — Year ended December 31, 2010             $85,137 
                 

Date
Declared

  

Date of
Record

  

Date

Paid

  

Amount per
Common
Share(2)

  

Total
Dividends (1)

 
         02/13/09    03/05/09    03/20/09   $0.18   $19,619  
         05/13/09    06/02/09    06/18/09   $0.18    19,734  
         07/29/09    08/17/09    09/01/09   $0.18    19,739  
         11/04/09    11/25/09    12/10/09   $0.18    19,752  
    

 

 

 

 

Total — Year ended December 31, 2009

  

  $78,844  
    

 

 

 
 02/25/10    03/05/10    03/19/10   $0.18   $20,104  
 05/13/10    06/04/10    06/18/10   $0.18    20,313  
 07/29/10    08/17/10    09/01/10   $0.18    20,519  
 11/02/10    11/22/10    12/07/10   $0.21    24,201  
    

 

 

 

 

Total — Year ended December 31, 2010

  

  $85,137  
    

 

 

 
 02/24/11    03/04/11    03/16/11   $0.21   $24,056  
 05/12/11    06/06/11    06/17/11   $0.21    24,152  
 08/04/11    08/17/11    09/01/11   $0.21    24,157  
 11/03/11    11/18/11    12/07/11   $0.21    24,157  
    

 

 

 

 

Total — Year ended December 31, 2011

  

  $96,522  
    

 

 

 

(1)
(1)

Of the dividends recorded during 2008, 2009, 2010 and 2010, $74,2011, $201, $635 and $635,$684, respectively, were related to outstanding restricted stock units and will not be paid until such units vest. See Notes 19 and 20.

F-13


CINEMARK HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(2)
(2)

Beginning with the dividend declared on November 2, 2010, the Company’s board of directors raised the quarterly dividend to $0.21 per common share.

5.  ACQUISITIONS AND DISPOSITIONS

5.    ACQUISITIONS AND DISPOSITIONS

Acquisition of Theatres in the U.S.

On March 18, 2009, the Company acquired four theatres with 82 screens from Muvico Entertainment L.L.C. in an asset purchase for $48,950 in cash. The acquisition resulted in an expansion of the Company’s U.S. theatre base, as three of the theatres are located in Florida and one theatre is located in Maryland. The Company incurred approximately $113 in transaction costs, which are reflected in general and administrative expenses on the consolidated statement of operationsincome for the year ended December 31, 2009. The transaction was accounted for by applying the acquisition method. The following table represents the fair value of the identifiable assets acquired and liabilities assumed that have been recognized by the Company in its consolidated balance sheet as of the date of acquisition:

acquisition date:

Theatre properties and equipment

  $25,575  

Brandname

   3,500  

Noncompete agreement

   1,630  

Goodwill

   44,565  

Unfavorable lease

   (3,600

Capital lease liability (for one theatre)

   (22,720
  

 

 

 

Total

  $48,950  
  

 

 

 

CINEMARK HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

In thousands, except share and per share data

The brandname and noncompete agreement are presented as intangible assets and the unfavorable lease is presented as other long-term liabilities on the Company’s consolidated balance sheets. The weighted average remaining amortization period for these intangible assets and the unfavorable lease are approximately 8 years. Goodwill represents excess of the costs of acquiring these theatres over amounts assigned to assets acquired, including intangible assets, and liabilities assumed.

Acquisition of Theatres in Argentina

On August 25, 2011, the Company acquired ten theatres with 95 screens from Hoyts General Cinema South America, Inc. in a stock purchase for approximately $66,958 in cash. The goodwill recordedacquisition resulted in an expansion of the Company’s international theatre base. The Company incurred approximately $200 in transaction costs, which are reflected in general and administrative expenses on the consolidated statement of income for year ended December 31, 2011. The transaction was accounted for by applying the acquisition method. The following table represents the fair value of the identifiable assets acquired and liabilities assumed as of the acquisition date:

Theatre properties and equipment

  $24,098  

Tradename

   10,032  

Favorable leases

   3,919  

Other intangible assets

   884  

Goodwill

   43,018  

Long-term debt

   (5,993

Deferred tax liability

   (7,240

Other liabilities, net of other assets

   (1,760
  

 

 

 

Total

  $66,958  
  

 

 

 

The weighted average amortization period for the intangible assets acquired is fully deductible for tax purposes.

approximately seven years. The acquisition is subject to review by the Argentina Comisión Nacional de Defensa de la Competencia (“CNDC”).

Dispositions

During November 2010, the Company sold its one theatre in Canada for approximately $6,320 in cash proceeds. The transaction resulted inproceeds and recorded a gain on sale of assets and other of approximately $7,025, which also reflected the write-off of a deferred rent liability related to the theatre.

During November 2010, the Company also sold its interest in a profit sharing agreement related to a previously sold Canadian property. The Company received proceeds of approximately $8,493 and recorded a gain on sale of assets and other.

6.  INVESTMENT IN NATIONAL CINEMEDIA LLC AND TRANSACTION RELATED TO ITS INITIAL PUBLIC OFFERING
In March 2005, Regal Entertainment Inc. (“Regal”) and AMC Entertainment Inc. (“AMC”) formed

6.    INVESTMENT IN NATIONAL CINEMEDIA LLC

The Company has an investment in National CineMedia, LLC or “NCM”, and on July 15, 2005, the Company joined NCM, as one of the founding members.(“NCM”). NCM operates a digital in-theatre network in the U.S. for providing cinema advertising and non-film events. Upon joining NCM, the Company and NCM entered into an Exhibitor Services Agreement, or the ESA, with NCM, pursuant to which NCM provides advertising, promotion and event services to the Company’sour theatres. On February 13, 2007, National CineMedia, Inc. (“NCMI”), or “NCM Inc.”, a newly formedan entity that serves as a member and the sole manager of NCM, completed an initial public offeringIPO of its common stock. In connection with the NCM Inc.NCMI initial public offering, the Company amended its operating agreement with NCM and the Exhibitor Services Agreement (“ESA”). In connectionESA with NCM Inc.’s initial public offering and the amendment of the ESA, the Company received proceeds of $389,003, approximately $215,002 of which related to the Company’s sale of certain of its shares in NCM and $174,001 of which was related to the modification of the ESA.NCMI. The ESA modification reflected a shift from circuit share expense under the prior Exhibitor Services Agreement,ESA, which

CINEMARK HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

In thousands, except share and per share data

obligated NCM to pay the Company a percentage of revenue, to thea monthly theatre access fee, described below, which significantly reduced the


F-14


CINEMARK HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
contractual amounts paid to the Companyus by NCM. The Company recorded the $174,001 proceeds related to the ESA modification as deferred revenue, which is being amortized into other revenues over the life of the agreement using the units of revenue method.
In consideration for NCM’s exclusive access to the Company’s theatre attendees for on-screen advertising and use of off-screen locationsareas within the Company’s theatres for the lobby entertainment and lobby promotions, the Company receives a monthly theatre access fee under the modified Exhibitor Services Agreement (“modified ESA”).ESA. The theatre access fee is composed of a fixed payment per patron, initially seven cents, and a fixed payment per digital screen, which may be adjusted for certain reasons outlined in the modified ESA. The payment per theatre patron increases by 8% every five years, with the first such increase taking effect after the end of fiscal 2011, and the payment per digital screen, initially eight hundred dollars per digital screen per year, increases annually by 5%. For 2008, 2009, 2010 and 2010,2011, the annual payment per digital screen was eight hundred fortyeighty-two dollars, eightnine hundred eighty-twotwenty-six dollars and nine hundred twenty-sixseventy-two dollars, respectively. The theatre access fee paid in the aggregate to Regal, AMC and the Company will not be less than 12% of NCM’s Aggregate Advertising Revenue (as defined in the modified ESA), or it will be adjusted upward to reach this minimum payment. Additionally, with respect to any on-screen advertising time provided to the Company’s beverage concessionaire, the Company is required to purchase such time from NCM at a negotiated rate. The modified ESA has, except with respect to certain limited services, a remaining term of approximately 2625 years.
During March 2008,

As a result of the application of a portion of the proceeds it received from the NCMI initial public offering, the Company had a negative basis in its original membership units in NCM, performedwhich is referred to herein as the Company’s Tranche 1 Investment. Following the NCM, Inc. IPO, the Company does not recognize undistributed equity in the earnings on its initial annual common unit adjustment calculationTranche 1 Investment until NCM’s future net earnings, less distributions received, surpass the amount of the excess distribution. The Company recognizes equity in accordance withearnings on its Tranche 1 Investment only to the extent it receives cash distributions from NCM. The Company recognizes cash distributions it receives from NCM on its Tranche 1 Investment as a component of earnings as Distributions from NCM. The Company believes that the accounting model provided by ASC 323-10-35-22 for recognition of equity investee losses in excess of an investor’s basis is analogous to the accounting for equity income subsequent to recognizing an excess distribution.

Common Unit Adjustments

Pursuant to a Common Unit Adjustment Agreement dated as of February 13, 2007 between NCM, Inc.NCMI and the Company, AMC Entertainment, Inc. (“AMC”) and Regal and AMC. TheEntertainment Group (“Regal”), which we refer to collectively as the Founding Members, annual adjustments to the common unit adjustment ismembership units are made primarily based on the changeincreases or decreases in the number of theatre screens operated and theatre attendance generated by and attendanceeach Founding Member. To account for the receipt of the Company, AMC and Regal. As a result of the calculation, the Company received an additional 846,303 common units under the Common Unit Adjustment Agreement, we follow the guidance in FASB ASC 323-10-35-29 (formerly EITF 02-18, “Accounting for Subsequent Investments in an Investee after Suspension of NCM, eachEquity Loss Recognition”) by analogy, which also refers to AICPA Technical Practice Aid 2220.14, which indicates that if a subsequent investment is made in an equity method investee that has experienced significant losses, the investor must determine if the subsequent investment constitutes funding of which is convertible into one shareprior losses. We concluded that the construction or acquisition of NCM, Inc.new theatres that has led to the common stock. The Company recordedunit adjustments equates to making additional investments in NCM. We evaluated the receipt of the additional common units in NCM and the assets exchanged for these additional units and have determined that the right to use our incremental new screens would not be considered funding of prior losses. We account for these additional common units, which we refer to herein as our Tranche 2 Investment, as a separate investment than our Tranche 1 Investment. The common units received are recorded at fair value as an increase in our investment in NCM with a corresponding adjustmentan offset to deferred revenue. The deferred revenue is amortized over the remaining term of $19,020. Subsequentthe ESA. Our Tranche 2 Investment is accounted for following the equity

CINEMARK HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

In thousands, except share and per share data

method, with undistributed equity earnings related to our Tranche 2 Investment included as a component of earnings in equity in income (loss) of affiliates and distributions received related to our Tranche 2 Investment are recorded as a reduction of our investment basis. In the annualevent that a common unit adjustment discussed above, in May 2008, oneis determined to be a negative number, the Founding Member can elect to either transfer and surrender to NCM the number of NCM’s other founding members completed an acquisitioncommon units equal to all or part of another theatre circuit that required an extraordinarysuch Founding Member’s common unit adjustment calculation byor to pay to NCM an amount equal to such Founding Member’s common unit adjustment calculated in accordance with the Common Unit Adjustment Agreement. AsIf the Company then elects to surrender common units as part of a result of this extraordinarynegative common unit adjustment, the founding member was granted additionalCompany would record a reduction to deferred revenue at the then fair value of the common units of NCM, which resulted in dilutionsurrendered and a reduction of the Company’s ownership interest in NCM. The Company recognized a change of interest loss of approximately $75 duringTranche 2 Investment at an amount equal to the year ended December 31, 2008weighted average cost for Tranche 2 common units, with the difference between the two values recorded as a result of this extraordinary common unit adjustment, which is reflected in (gain)gain or loss on sale of assets and other on the consolidated statement of operations.

other.

During March 2009, NCM performed its annual common unit adjustment calculation under the Common Unit Adjustment Agreement. As a result of the calculation, the Company received an additional 1,197,303 common units of NCM, each of which is convertible into one share of NCM, Inc. common stock. The Company recorded the additional common units received at fair value as an investmentpart of its Tranche 2 Investment with a corresponding adjustment to deferred revenue of $15,536.

During March 2010, NCM performed its annual common unit adjustment calculation under the Common Unit Adjustment Agreement. As a result of the calculation, the Company received an additional 1,757,548 common units of NCM, each of which is convertible into one share of NCM, Inc. common stock. The Company recorded the additional common units received at fair value as an investmentpart of its Tranche 2 Investment with a corresponding adjustment to deferred revenue of $30,683. Subsequent to the annual common unit adjustment discussed above, in May 2010, one of NCM’s other founding members completed an acquisition of another theatre circuit that required an extraordinary common unit adjustment calculation by NCM in accordance with the Common Unit Adjustment Agreement. As a result of this extraordinary common unit adjustment, the founding member was granted additional common units of NCM, which resulted in dilution of the Company’s ownership interest in NCM. The Company recognized a change of interest gain of approximately $271 during the year ended December 31, 2010 as a result of this extraordinary


F-15


CINEMARK HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
common unit adjustment, which is reflected in (gain) loss on sale of assets and other on the consolidated statement of operations.
income.

During March 2011, NCM performed its annual common unit adjustment calculation under the Common Unit Adjustment Agreement. As a result of the calculation, the Company received an additional 549,417 common units of NCM, each of which is convertible into one share of NCM, Inc. common stock. The Company recorded the additional common units received at fair value as part of its Tranche 2 Investment with a corresponding adjustment to deferred revenue of approximately $9,302.

As of December 31, 2010,2011, the Company owned a total of 16,946,50317,495,920 common units of NCM, which represented an approximate 15%16% interest. The Company accounts for its investment in

CINEMARK HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

In thousands, except share and per share data

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

Below is a summary of activity with NCM included in the Company’s consolidated financial statements:

                         
  Investment
  Deferred
  Distributions
  Equity in
  Other
  Cash
 
  in NCM  Revenue  from NCM  Earnings  Revenue  Received 
 
Balance as of January 1, 2008 $  $(172,696)                
Receipt of common units due to 2008 common unit adjustment $19,020  $(19,020) $  $  $  $ 
Change of interest loss due to extraordinary common unit adjustment(2)  (75)               
Revenues earned under ESA(1)              (1,764)  1,764 
Receipt of excess cash distributions  (644)     (16,005)        16,649 
Receipt under tax receivable agreement        (2,833)        2,833 
Equity in earnings  840         (840)      
Amortization of deferred revenue     1,869         (1,869)   
                         
Balance as of and for the period ended December 31, 2008 $19,141  $(189,847) $(18,838) $(840) $(3,633) $21,246 
                         
Receipt of common units due to 2009 common unit adjustment $15,536  $(15,536) $  $  $  $ 
Revenues earned under ESA(1)              (5,711)  5,711 
Receipt of excess cash distributions  (2,358)     (17,738)        20,096 
Receipt under tax receivable agreement        (3,084)        3,084 
Equity in earnings  1,913         (1,913)      
Amortization of deferred revenue     2,377         (2,377)   
                         
Balance as of and for the period ended December 31, 2009 $34,232  $(203,006) $(20,822) $(1,913) $(8,088) $28,891 
                         


F-16


   Investment
in NCM
  Deferred
Revenue
  Distributions
from NCM
  Equity in
Earnings
  Other
Revenue
  Cash
Received
 

Balance as of January 1, 2009

  $19,141   $(189,847    

Receipt of common units due to annual common unit adjustment

  $15,536   $(15,536 $—     $—     $—     $—    

Revenues earned under ESA(1)

   —      —      —      —      (5,711  5,711  

Receipt of excess cash distributions

   (2,358  —      (17,738  —      —      20,096  

Receipt under tax receivable agreement

   —      —      (3,084  —      —      3,084  

Equity in earnings

   1,913    —      —      (1,913  —      —    

Amortization of deferred revenue

   —      2,377    —      —      (2,377  —    
  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

 

Balance as of and for the period ended December 31, 2009

  $34,232   $(203,006 $(20,822 $(1,913 $(8,088 $28,891  
    

 

 

  

 

 

  

 

 

  

 

 

 

Receipt of common units due to annual common unit adjustment

  $30,683   $(30,683 $—     $—     $—     $—    

Change of interest gain due to extraordinary common unit adjustment(2)

   271    —      —      —      —      —    

Revenues earned under ESA(1)

   —      —      —      —      (5,033  5,033  

Receipt of excess cash distributions

   (4,753  —      (19,616  —      —      24,369  

Receipt under tax receivable agreement

   (520  —      (3,742  —      —      4,262  

Equity in earnings

   4,463    —      —      (4,463  —      —    

Amortization of deferred revenue

   —      3,116    —      —      (3,116  —    
  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

 

Balance as of and for the period ended December 31, 2010

  $64,376   $(230,573 $(23,358 $(4,463 $(8,149 $33,664  
    

 

 

  

 

 

  

 

 

  

 

 

 

Receipt of common units due to annual common unit adjustment

  $9,302   $(9,302 $—     $—     $—     $—    

Revenues earned under ESA(1)

    —      —      —      (5,890  5,890  

Receipt of excess cash distributions

   (6,322  —      (20,023  —      —      26,345  

Receipt under tax receivable agreement

   (729  —      (4,138  —      —      4,867  

Equity in earnings

   5,413    —      —      (5,413  —      —    

Amortization of deferred revenue

   —      3,565    —      —      (3,565  —    
  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

 

Balance as of and for the period ended December 31, 2011

  $72,040   $(236,310 $(24,161 $(5,413 $(9,455 $37,102  
  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

 

CINEMARK HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
                         
  Investment
  Deferred
  Distributions
  Equity in
  Other
  Cash
 
  in NCM  Revenue  from NCM  Earnings  Revenue  Received 
 
Receipt of common units due to 2010 common unit adjustment $30,683  $(30,683) $  $  $  $ 
Change of interest gain due to extraordinary common unit adjustment(2)  271                
Revenues earned under ESA(1)              (5,033)  5,033 
Receipt of excess cash distributions  (4,753)     (19,616)        24,369 
Receipt under tax receivable agreement  (520)     (3,742)        4,262 
Equity in earnings  4,463         (4,463)      
Amortization of deferred revenue     3,116         (3,116)   
                         
Balance as of and for the period ended December 31, 2010 $64,376  $(230,573) $(23,358) $(4,463) $(8,149) $33,664 
                         
(1)
(1)

Amounts include the per patron and per digital screen theatre access fees due to the Company, net of amounts due to NCM for on-screen advertising time provided to the Company’s beverage concessionaire. The amounts due to NCM for on-screen advertising time provided to the Company’s beverage concessionaire were approximately $12,784, $9,719, $10,156 and $10,156$10,733 for the years ended December 31, 2008, 2009, 2010 and 2010,2011, respectively.

(2)

Change in interest gain or loss is included in (gain) loss on sale of assets and other on the consolidated statement of operations.income.

CINEMARK HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

In thousands, except share and per share data

The tables below present summary financial information for NCM for the periods indicated:

             
  Year Ended
  January 1,
 December 31,
 December 31,
  2009 2009 2010
 
Gross revenues $369,524  $380,667  $427,475 
Operating income $173,927  $168,876  $190,559 
Net income $95,328  $128,531  $139,541 
indicated (information for the year ended December 29, 2011 was not yet available):

   Year Ended 
   January 1, 2009   December 31, 2009   December 31, 2010 

Gross revenues

  $369,524    $380,667    $427,475  

Operating income

  $173,179    $168,146    $190,559  

Net income

  $95,328    $128,531    $139,541  

   As of December 31, 
   2009   2010 

Total assets

  $304,406    $425,972  

Total liabilities

  $944,008    $932,549  
7.  INVESTMENT IN DIGITAL CINEMA IMPLEMENTATION PARTNERS

7.    INVESTMENT IN DIGITAL CINEMA IMPLEMENTATION PARTNERS

On February 12, 2007, the Company, AMC Entertainment Inc. and Regal Entertainment Group entered into a joint venture known as Digital Cinema Implementation Partners LLC (“DCIP”) to facilitate the implementation of digital cinema in the Company’s theatres and to establish agreements with major motion picture studios for the financing of digital cinema.

On March 10, 2010, the Company signed a master equipment lease agreement and other related agreements (collectively the “Agreements”) with Kasima LLC (“Kasima”), which is an indirect subsidiary of DCIP and a related party to the Company. Upon signing the Agreements, the Company contributed the majority of its U.S. digital projection systems at a fair value of $16,380 to DCIP, which DCIP then contributed to Kasima. The net book value of the contributed equipment was approximately $18,090, and as a result, the Company recorded a loss of approximately $1,710,

F-17


CINEMARK HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
which is reflected in (gain) loss on sale of assets and other on the consolidated statement of operationsincome for the year ended December 31, 2010. OnDuring April 24, 2010, the Company sold additional U.S. digital projection systems with a net book value of approximately $1,520 to Kasima for approximately $1,197, resulting in an additional loss of approximately $323, which is reflected in (gain) loss on sale of assets and other on the consolidated statement of operationsincome for the year ended December 31, 2010. During 2011, the Company sold additional U.S. digital projection systems with a net book value of approximately $3,777 to DCIP for approximately $2,739, resulting in a loss of approximately $1,038, which is reflected in (gain) loss on sale of assets and other on the consolidated statement of income for the year ended December 31, 2011.

The Company has a variable interest in Kasima through the terms of its master equipment lease agreement; however, the Company has determined that it is not the primary beneficiary of Kasima, as the Company does not have the ability to direct the activities of Kasima that most significantly impact Kasima’s economic performance.

CINEMARK HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

In thousands, except share and per share data

As of December 31, 2010,2011, the Company had a 33% voting interest in DCIP and a 24.3% economic interest in DCIP.

The Company accounts for its investment in DCIP and its subsidiaries under the equity method of accounting. Below is a summaryrollforward of activity with DCIP:
     
  Investment in
 
  DCIP 
 
Balance as of January 1, 2008 $260 
Cash contributions to DCIP  4,000 
Equity in losses  (3,243)
     
Balance as of December 31, 2008 $1,017 
Cash contributions to DCIP  2,500 
Equity in losses  (2,877)
     
Balance as of December 31, 2009 $640 
Cash contributions to DCIP  2,813 
Equipment contributions to DCIP, at fair value  16,380 
Distributions received from DCIP  (1,068)
Equity in losses  (7,927)
     
Balance as of December 31, 2010 $10,838 
     
our investment in DCIP from January 1, 2009 through December 31, 2011:

Balance as of January 1, 2009

  $1,017  

Cash contributions to DCIP

   2,500  

Equity in losses

   (2,877
  

 

 

 

Balance as of December 31, 2009

  $640  

Cash contributions to DCIP

   2,813  

Equipment contributions to DCIP, at fair value

   16,380  

Distributions received from DCIP

   (1,068

Equity in losses

   (7,927
  

 

 

 

Balance as of December 31, 2010

  $10,838  

Cash contributions to DCIP

   1,471  

Equity in income

   489  
  

 

 

 

Balance as of December 31, 2011

  $12,798  
  

 

 

 

As a result of the Agreements, the Company continues to roll outhas installed digital projection systems to a majority of its first run U.S. theatres. The digital projection systems are being leased from Kasima under an operating lease with an initial term of twelve years that contains ten one-year fair value renewal options. The equipment lease agreement also contains a fair value purchase option. Under the equipment lease agreement, the Company pays minimum annual rent of one thousand dollars per digital projection system for the first six and a half years from the effective date of the agreement and minimum annual rent of three thousand dollars per digital projection system beginning at six and a half years from the effective date through the end of the lease term. The Company may also be subject to various types of other rent if such digital projection systems do not meet minimum performance requirements as outlined in the agreements. Certain of the other rent payments are subject to either a monthly or an annual maximum. As of December 31, 2010,2011, the Company had 1,3363,460 digital projection systems being leased under the master equipment lease agreement with Kasima. The Company recorded equipment lease expense of approximately $1,354 and $5,332 during the yearyears ended December 31, 2010 and 2011, respectively, which is included in utilities and other costs on the consolidated statementstatements of operations.

The Company has a variable interest in Kasima through the terms of its master equipment lease agreement; however, the Company has determined that it is not the primary beneficiary of Kasima, as the Company does not have the ability to direct the activities of Kasima that most significantly impact Kasima’s economic performance.
income.

The digital projection systems leased from Kasima will replacereplaced a majority of the Company’s existing 35 millimeter projection systems in its U.S. theatres. Therefore, upon signing the agreements, the Company began accelerating the depreciation of these existing 35 millimeter projection systems, based on the estimated two year replacement timeframe.systems. The Company recorded depreciation expense of approximately $9,423 and $10,604 on its domestic 35 millimeter projectorsprojection systems during the yearyears ended December 31, 2010.2010 and 2011, respectively. The net book value of the existingCompany’s domestic 35 millimeter projection systems to be replaced was approximately $10,606have been fully depreciated as of December 31, 2010.


F-18

2011.


8.    INVESTMENT IN REALD

CINEMARK HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
8.  INVESTMENT IN REAL D
The Company licenses3-D systems from Real D.RealD. Under its license agreement with RealD, the Company earnsearned options to purchase shares of Real DRealD common stock at an exercise price of $0.00667 onceas it has installed a certain number of3-D systems as outlined in the license agreement. During the second quarter of 2010, the Company reached the first target level and vested in 407,593earned a total of 1,085,828 options to purchase shares of common stock in Real D.RealD. Upon vesting in these options, the Company recorded ana total investment in Real DRealD of approximately $6,521,$18,909, which representsrepresented the estimated aggregate fair value of the options, with an offset to deferred lease incentive liability. The fair value of the options was determined using Real D’s initial public offering price.
During the third quarter of 2010, the Company vested in an additional 499,708 Real D options by reaching the second target level and a pro-rata portion of the third target level, as outlined in the license agreement. Upon vesting in these additional 499,708 options, the Company increased its investment in Real D and its deferred lease incentive by approximately $8,117, which represented the estimated fair value of the Real D options. The fair value measurements were based upon Real D’s closing stock prices on the dates of vesting, discounted to reflect the impact of thelock-up period to which the Company is subject until January 2011.
During the fourth quarter of 2010, the Company vested in an additional 178,527 Real D options by installing additional Real D 3D systems. Upon vesting in these additional 178,527 options, the Company increased its investment in Real D and its deferred lease incentive by approximately $4,271, which represented the estimated fair value of the Real D options, discounted to reflect the impact of thelock-up period to which the Company is subject until January 2011.
The fair value measurements used to estimate the fair value of Real D RealD

CINEMARK HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

In thousands, except share and per share data

options in which the company vested during the year ended December 31, 2010, as discussed above, fallfell under Level 2 of the U.S. GAAP fair value hierarchy as defined by ASC Topic820-10-35. The aggregatefair value measurement for the Company’s investment in RealD transferred from Level 2 to Level 1 during the year ended December 31, 2011. Previous fair value estimates for the investment were based on RealD’s quoted stock price, discounted to reflect the impact of a lock-up period to which the Company was subject. The lock-up period expired during January 2011; therefore, the fair value estimates for the investment subsequent to January 2011 were based on RealD’s stock price with no adjustments.

During the year ended December 31, 2011, the Company vested in an additional 136,952 RealD options by reaching the final target level, as outlined in the license agreement. Upon vesting in these additional options, the Company recorded an increase in its investment in RealD and its deferred lease incentive liability of approximately $18,909 recorded as a result$3,402, which represented the estimated fair value of the vesting events discussed aboveRealD options. The fair value measurements were based upon RealD’s quoted stock prices on the dates of vesting. These fair value measurements fall under Level 1 of the U.S. GAAP fair value hierarchy as defined by ASC Topic 820-10-35. The deferred lease incentive liability, which is reflected in other long-term liabilities on the consolidated balance sheet as of December 31, 2010 andsheets, is being amortized over the remaining term of the license agreement, which is approximately seven and one-half years.

Prior to the completion of Real D’s initial public offering,

During March 2011, the Company accountedexercised all of its options to purchase shares of common stock in RealD for $0.00667 per share. The Company accounts for its investment in Real D as a cost method investment. Subsequent to the completion of Real D’s initial public offering, which occurred during July 2010, the Company is accounting for its investment in Real DRealD as a marketable security. The Company has determined that its Real D optionsRealD shares are available for saleavailable-for-sale securities in accordance with ASC Topic320-10-35-1, therefore unrealized holding gains and losses are reported as a component of accumulated other comprehensive income (loss) until realized.

As of December 31, 2010,2011, the Company had vestedowned 1,222,780 shares in a total of 1,085,828 Real D Options,RealD, with an estimated fair value of $27,993.$9,709. The fair value of the Real D optionsRealD shares as of December 31, 20102011 was determined based upon the closingquoted price of Real D’sRealD’s common stock on that date, discounted to reflect thelock-up period to which the Company is subject until JanuaryDecember 30, 2011, which falls under Level 21 of the U.S. GAAP fair value hierarchy as defined by ASC Topic820-10-35. During the year ended December 31, 2010,2011, the Company recorded an unrealized holding gainloss of approximately $9,084$21,694, before taxes, as a component of accumulated other comprehensive income (loss).

Under

During the license agreement,year ended December 31, 2011, the Company can earn uprecognized an other-than-temporary impairment on its investment in RealD due to an additional 136,951 Real D options as it meets additional3-D system installation targets as outlinedthe length of time and extent to which RealD’s quoted stock price has been below the Company’s basis in the license agreement.

9.  SHARE EXCHANGES WITH AND PURCHASES OF NONCONTROLLING INTERESTS
During May 2008,stock. As a result of the other-than-temporary impairment, the Company reclassified approximately $12,610, which represented cumulative net unrealized holding losses, from accumulated other comprehensive income (loss) to earnings.

Below is a rollforward of the Company’s partnersinvestment in Central America (the “Central American Partners”) exercised an option available to them under an Exchange Option Agreement dated February 7, 2007 between the Company and the Central American Partners. Under this option, which was contingent upon completion of an initial public offering of common stock by the Company, the Central American Partners were entitled to exchange their shares in


F-19

RealD from January 2010 through December 31, 2011:


Balance as of January 1, 2010

  $—    

Fair value of options earned

   18,909  

Unrealized holding gain

   9,084  
  

 

 

 

Balance as of December 31, 2010

  $27,993  

Fair value of options earned

   3,402  

Exercise of options at $0.00667 per share

   8  

Unrealized holding loss

   (21,694
  

 

 

 

Balance as of December 31, 2011

  $9,709  
  

 

 

 

CINEMARK HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Cinemark Equity Holdings Corporation, which is the Company’s Central American holding company, for shares of the Company’s common stock. The number of shares to be exchanged was determined based on the Company’s equity value

In thousands, except share and the equity value of the Central American Partner’s interest in Cinemark Equity Holdings Corporation, both of which are defined in the Exchange Option Agreement. As a result of this exchange on October 1, 2008, the Company issued 902,981 shares of its common stock to its Central American Partners (the “Central America Share Exchange”). As a result of this transaction, the Company owns 100% of the shares in Cinemark Equity Holdings Corporation. The Company accounted for the transaction as a step acquisition. The purchase price of the shares in Cinemark Equity Holdings Corporation was recorded based on the fair value of the shares issued by the Company of $12,949 plus related transaction costs of $2, which totaled approximately $12,951. The following table represents the allocation of purchase price to the assets acquired and liabilities assumed:

     
Net unfavorable leases $(443)
Vendor contract  1,034 
Tradename  892 
Goodwill  8,222 
Reduction of noncontrolling interest  3,246 
     
  $12,951 
     
The net book values of fixed assets approximated fair value. The net unfavorable leases, vendor contracts and tradename are presented as intangible assets on the Company’s consolidated balance sheets. The goodwill recorded as a result of the acquisition is not deductible for tax purposes and is included in the international segment.
During July 2008, the Company’s partners in Ecuador (the “Ecuador Partners”) exercised an option available to them under an Exchange Option Agreement dated April 24, 2007 between the Company and the Ecuador Partners. Under this option, which was contingent upon completion of an initial public offering of common stock by the Company, the Ecuador Partners were entitled to exchange their shares in Cinemark del Ecuador S.A. for shares of the Company’s common stock. The number of shares to be exchanged was determined based on the Company’s equity value and the equity value of the Ecuador Partner’s interest in Cinemark del Ecuador S.A., both of which are defined in the Exchange Option Agreement. As a result of this exchange on November 6, 2008, the Company issued 393,615 shares of its common stock to its Ecuador partners (the “Ecuador Share Exchange”). As a result of this transaction, the Company owns 100% of the shares of Cinemark del Ecuador S.A. The Company accounted for the transaction as a step acquisition. The purchase price of the shares in Cinemark del Ecuador S.A. was recorded based on the fair value of the shares issued by the Company, which was approximately $3,200.
The following table represents the allocation of purchase price to the assets acquired and liabilities assumed:
     
Net unfavorable leases $(161)
Tradename  313 
Goodwill  1,473 
Reduction of noncontrolling interest  1,575 
     
  $3,200 
     
The net book value of fixed assets approximated fair value. The net unfavorable leases and tradename are presented as intangible assets on the Company’s consolidated balance sheets. The goodwill recorded as a result of the acquisition is not deductible for tax purposes and is included in the international segment.
per share data

9.    SHARE EXCHANGES WITH AND PURCHASES OF NONCONTROLLING INTERESTS

During April 2010, the Company’s partners in Colombia (the “Colombian Partners”) exercised an option available to them under an Exchange Option Agreement dated April 9, 2007 between the Company and the Colombian Partners. Under this option, which was contingent upon completion of an initial public offering of common stock by the Company, the Colombian Partners were entitled to exchange their shares in Cinemark Colombia S.A. for shares of the Company’s common stock (the “Colombia Share Exchange”). The number of shares to be exchanged was determined based on the


F-20


CINEMARK HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
Company’s equity value and the equity value of the Colombian Partners’ interest in Cinemark Colombia S.A., both of which are defined in the Exchange Option Agreement. As a result of the Colombia Share Exchange, on June 14, 2010, the Company issued 1,112,723 shares of its common stock to the Colombian Partners. The increase in the Company’s ownership interest in its Colombian subsidiary was accounted for as an equity transaction. The Company recorded an increase in common stock and additional-paid-in-capital of approximately $6,951, which represented the book value of the Colombian partners’ noncontrolling interest account of approximately $5,865 plus the Colombian partners’ share of accumulated other comprehensive loss of approximately $1,086. As a result of this transaction, the Company owns 100% of the shares in Cinemark Colombia S.A.

During November 2010, the Company purchased its noncontrolling interests’ 20% share of Cinemark Panama S.A. (“Cinemark Panama”) for approximately $888 in cash. The transaction was accounted for as an equity transaction in accordance with ASC Topic810-45-23. 810-10-45-23. The book value of Cinemark Panama’s noncontrolling interest was approximately $498, therefore the Company recorded an adjustment to additionalpaid-in-capital of approximately $390. As a result of the transaction, the Company owns 100% of the shares in Cinemark Panama.

10.  GOODWILL AND OTHER INTANGIBLE ASSETS — NET

During May 2011, the Company purchased its Chilean partners’ 2.6% share of Cinemark Chile S.A. (“Cinemark Chile”) for approximately $1,443 in cash. The increase in the Company’s ownership interest in its Chilean subsidiary was accounted for as an equity transaction in accordance with ASC Topic 810-10-45-23. The Company recorded a decrease in additional paid-in-capital of approximately $1,402, which represented the difference between the cash paid and the book value of the Chilean partners’ noncontrolling interest account of approximately $917, plus the Chilean partners’ share of accumulated other comprehensive loss of approximately $485. As a result of this transaction, the Company owns 100% of the shares in Cinemark Chile.

10.    GOODWILL AND OTHER INTANGIBLE ASSETS — NET

The Company’s goodwill was as follows:

             
  U.S.
  International
    
  Operating
  Operating
    
  Segment  Segment  Total 
 
Balance at January 1, 2009(1) $903,461  $136,357  $1,039,818 
Acquisition of four U.S. theatres(2)  44,565      44,565 
Acquisition of one Brazil theatre(3)     6,270   6,270 
Foreign currency translation adjustments and other     25,649   25,649 
             
Balance at December 31, 2009(1) $948,026  $168,276  $1,116,302 
Foreign currency translation adjustments     6,669   6,669 
             
Balance at December 31, 2010(1) $948,026  $174,945  $1,122,971 
             

   U.S.
Operating
Segment
   International
Operating
Segment
  Total 

Balance January 1, 2010(1)

  $948,026    $168,276   $1,116,302  

Foreign currency translation adjustments

   —       6,669    6,669  
  

 

 

   

 

 

  

 

 

 

Balance at December 31, 2010(1)

  $948,026    $174,945   $1,122,971  

Acquisition of ten theatres in Argentina (see Note 5)

   —       43,018    43,018  

Foreign currency translation adjustments

   —       (15,352  (15,352
  

 

 

   

 

 

  

 

 

 

Balance at December 31, 2011(1)

  $948,026    $202,611   $1,150,637  
  

 

 

   

 

 

  

 

 

 

(1)
(1)

Balances are presented net of accumulated impairment losses of $214,031 for the U.S. operating segment and $27,622 for the international operating segment.

(2)See Note 5.
(3)The Company acquired one theatre in Brazil during 2009 for approximately $9,061 which resulted in an allocation of $6,270 to goodwill, $2,130 to theatre properties and equipment and $661 to other current assets and liabilities.

As of December 31, intangibleassets-net, consisted of the following:
                     
  December 31,
           December 31,
 
  2008  Additions(1)  Amortization  Other(2)  2009 
 
Intangible assets with finite lives:                    
Gross carrying amount $78,696  $4,755  $  $(467) $82,984 
Accumulated amortization  (46,030)     (5,640)  1,204   (50,466)
                     
Total net intangible assets with finite lives  32,666   4,755   (5,640)  737   32,518 
Intangible assets with indefinite lives:                    
Tradename  309,102         1,378   310,480 
                     
Total intangible assets — net $341,768  $4,755  $(5,640) $2,115  $342,998 
                     


F-21


CINEMARK HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

                     
  December 31,
           December 31,
 
  2009  Additions  Amortization  Other(2)  2010 
 
Intangible assets with finite lives:                    
Gross carrying amount $82,984  $  $  $(18,665) $64,319 
Accumulated amortization  (50,466)     (5,126)  9,407   (46,185)
                     
Total net intangible assets with finite lives  32,518      (5,126)  (9,258)  18,134 
Intangible assets with indefinite lives:                    
Tradename  310,480         590   311,070 
                     
Total intangible assets — net $342,998  $  $(5,126) $(8,668) $329,204 
                     

In thousands, except share and per share data

As of December 31, intangible assets-net, consisted of the following:

   January 1,
2010
  Amortization  Other(1)  December 31,
2010
 

Intangible assets with finite lives:

     

Gross carrying amount

  $82,984   $—     $(18,665 $64,319  

Accumulated amortization

   (50,466  (5,126  9,407    (46,185
  

 

 

  

 

 

  

 

 

  

 

 

 

Total net intangible assets with finite lives

   32,518    (5,126  (9,258  18,134  

Intangible assets with indefinite lives:

     

Tradename

   310,480    —      590    311,070  
  

 

 

  

 

 

  

 

 

  

 

 

 

Total intangible assets — net

  $342,998   $(5,126 $(8,668 $329,204  
  

 

 

  

 

 

  

 

 

  

 

 

 

   December 31,
2010
  Additions (2)   Amortization  Other(1)  December 31,
2011
 

Intangible assets with finite lives:

       

Gross carrying amount

  $64,319   $14,835    $—     $(4,773 $74,381  

Accumulated amortization

   (46,185  —       (4,579  3,451    (47,313
  

 

 

  

 

 

   

 

 

  

 

 

  

 

 

 

Total net intangible assets with finite lives

   18,134    14,835     (4,579  (1,322  27,068  

Intangible assets with indefinite lives:

       

Tradename

   311,070    —       —      (1,231  309,839  
  

 

 

  

 

 

   

 

 

  

 

 

  

 

 

 

Total intangible assets — net

  $329,204   $14,835    $(4,579 $(2,553 $336,907  
  

 

 

  

 

 

   

 

 

  

 

 

  

 

 

 

(1)
(1)The additions to other intangible assets are a result of the acquisition of theatres in the U.S. as discussed in Note 5, partially offset by a decrease due to the final purchase price allocation related to the acquisition of theatres in Brazil during 2008.
(2)Activity for 2009 and 2010 includes foreign currency translation adjustments and impairments. See Note 11 for summary of impairment charges.

Activity for 2010 also includes a write-off of approximately $5,814 for a vendor contract in Mexico that was terminated, and approximately $2,294 related to the Company’s original IMAX license agreement that was terminated.terminated, impairment charges of approximately $1,527 and foreign currency translation adjustments. Activity for 2011 includes the write-off of approximately $549 for a vendor contract in Brazil that was terminated and foreign currency translation adjustments.

(2)

See Note 5.

Estimated aggregate future amortization expense for intangible assets is as follows:

     
For the year ended December 31, 2011 $3,981 
For the year ended December 31, 2012  2,997 
For the year ended December 31, 2013  2,437 
For the year ended December 31, 2014  1,902 
For the year ended December 31, 2015  1,799 
Thereafter  5,018 
     
Total $18,134 
     
11.  IMPAIRMENT OF LONG-LIVED ASSETS

For the year ended December 31, 2012

  $4,716  

For the year ended December 31, 2013

   4,536  

For the year ended December 31, 2014

   3,978  

For the year ended December 31, 2015

   3,660  

For the year ended December 31, 2016

   3,429  

Thereafter

   6,749  
  

 

 

 

Total

  $27,068  
  

 

 

 

11.    IMPAIRMENT 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. See Note 1 for discussion of the Company’s impairment evaluation.

CINEMARK HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

In thousands, except share and per share data

The Company’s long-lived asset impairment losses are summarized in the following table:

             
  Year Ended December 31, 
  2008  2009  2010 
 
United States theatre properties $27,761  $10,013  $5,166 
International theatre properties  6,869   1,340   5,668 
             
Subtotal $34,630  $11,353  $10,834 
Intangible assets (see Note 10)  323   358   1,527 
Goodwill (see Note 10)  78,579       
Equity investment     147   177 
             
Impairment of long-lived assets $113,532  $11,858  $12,538 
             

F-22


   Year Ended December 31, 
   2009   2010   2011 

United States theatre properties

  $10,013    $5,166    $3,635  

International theatre properties

   1,340     5,668     3,398  
  

 

 

   

 

 

   

 

 

 

Subtotal

  $11,353    $10,834    $7,033  

Intangible assets (see Note 10)

   358     1,527     —    

Equity investment

   147     177     —    
  

 

 

   

 

 

   

 

 

 

Impairment of long-lived assets

  $11,858    $12,538    $7,033  
  

 

 

   

 

 

   

 

 

 

CINEMARK HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
The long-lived asset impairment charges recorded during each of the years presented are specific to theatres that were directly and individually impacted by increased competition, adverse changes in market demographics, or adverse changes in the development or the conditions of the areas surrounding the theatre. As of December 31, 2010,2011, the estimated aggregate fair value of the long-lived assets impaired during the year ended December 31, 20102011 was approximately $5,680.
12.  DEFERRED CHARGES AND OTHER ASSETS — NET
$3,596.

12.    DEFERRED CHARGES AND OTHER ASSETS — NET

As of December 31, deferred charges and other assets — net consisted of the following:

         
  December 31, 
  2009  2010 
 
Debt issue costs $37,334  $45,510 
Less: Accumulated amortization  (12,210)  (16,235)
         
Subtotal  25,124   29,275 
Long-term prepaid rents  15,426   17,773 
Interest rate swap assets (see Note 14)     8,955 
Construction advances and other deposits  3,171   5,426 
Equipment to be placed in service  6,454   7,753 
Other  2,327   1,796 
         
Total $52,502  $70,978 
         

   December 31, 
   2010  2011 

Debt issue costs

  $45,510    45,826  

Less: Accumulated amortization

   (16,235  (18,956
  

 

 

  

 

 

 

Subtotal

   29,275    26,870  

Long-term prepaid rents

   17,773    15,778  

Interest rate swap assets (see Note 14)

   8,955    —    

Construction related deposits

   5,426    6,463  

Lease deposits

   —      2,208  

Equipment to be placed in service

   7,753    10,495  

Other

   1,796    2,166  
  

 

 

  

 

 

 

Total

  $70,978   $63,980  
  

 

 

  

 

 

 

During the year ended December 31, 2010,2011, the Company paid debt issue costs of approximately $8,858$4,427 related to the amendmentissuance of its 7.375% senior subordinated notes and extension ofthe Company wrote off approximately $2,183 in unamortized debt issue costs for its senior secured credit facility related to the prepayment of approximately $157,235 of its outstanding term loan debt under the facility. See Note 13 for discussion of long term debt activity.

CINEMARK HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

In thousands, except share and per share data

13.    In addition, the Company wrote off fully amortized debt issue costs for certain debt that was retired during the year ended December 31, 2010.

13.  LONG-TERM DEBT
LONG-TERM DEBT

As of December 31, long-term debt consisted of the following:

         
  December 31, 
  2009  2010 
 
Cinemark USA, Inc. term loan $1,083,600  $1,072,764 
Cinemark USA, Inc. 85/8% senior notes due 2019(1)
  458,897   459,677 
Cinemark USA, Inc. 9% senior subordinated notes due 2013  181    
Other long-term debt  1,027    
         
Total long-term debt  1,543,705   1,532,441 
Less current portion  12,227   10,836 
         
Long-term debt, less current portion $1,531,478  $1,521,605 
         

   December 31, 
   2010   2011 

Cinemark USA, Inc. term loan

  $1,072,764    $905,887  

Cinemark USA, Inc. 8.625% senior notes due 2019(1)

   459,677     460,530  

Cinemark USA, Inc. 7.375% senior subordinated notes due 2021

   —       200,000  

Hoyts General Cinema (Argentina) bank loan due 2013

   —       5,804  
  

 

 

   

 

 

 

Total long-term debt

   1,532,441     1,572,221  

Less current portion

   10,836     12,145  
  

 

 

   

 

 

 

Long-term debt, less current portion

  $1,521,605    $1,560,076  
  

 

 

   

 

 

 

(1)
(1)

Includes the $470,000 aggregate principal amount of the 85/8%8.625% senior notes net of the unamortized discount of $11,103$10,323 and $10,323$9,470 at December 31, 20092010 and 2010,2011, respectively.

Senior Secured Credit Facility

On October 5, 2006, in connection with the Century Acquisition, Cinemark USA, Inc. entered into a senior secured credit facility that provided for a $1,120,000 term loan and a $150,000 revolving credit line. On March 2, 2010, the Company completed an amendment and extension to its existing senior secured credit facility to primarily


F-23


CINEMARK HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
extend the maturities of the facility and make certain other modifications. Approximately $924,375 of the Company’s then remaining outstanding $1,083,600 term loan debt was extended from an original maturity date of October 2013 to a maturity date of April 2016. The then remaining term loan debt of $159,225 that was not extended matures on the originalcontinued to have a maturity date of October 2013. PaymentsOn June 3, 2011, the Company prepaid the remaining $157,235 of its unextended term loan debt utilizing a portion of the proceeds from the issuance of the Cinemark USA, Inc. 7.375% senior subordinated notes discussed below. There were no prepayment penalties incurred upon the prepayment of the term loan debt. Subsequent to the prepayment, the quarterly payments due on the extended amountterm loan are due in equal quarterly installments ofapproximately $2,311 per quarter through March 31, 2016 with the remaining principal amount of approximately $866,602 due April 30, 2016. Payments onThe prepayment did not impact the original amount that was not extended are due in equal quarterly installments of approximately $398 beginning March 31, 2010 through September 30, 2012 and increase to approximately $37,418 each calendar quarter from December 31, 2012 to June 30, 2013 with one final payment of approximately $42,593 at maturity on October 5, 2013. The amendment also imposed a 1.0% prepayment premium for one year on certain prepayments of the extended portion of the term loan debt.
The interest rate on the original term loan debt that was not extended accrues interest, at Cinemark USA, Inc.’s option, at: (A) the base rate equalapplicable to the higher of (1) the prime lending rate as set forth on the British Banking Association Telerate page 5, or (2) the federal funds effective rate from time to time plus 0.50% (the “base rate”), plus a margin that ranges from 0.50% to 0.75% per annum, or (B) a “eurodollar rate” plus a margin that ranges from 1.50% to 1.75%, per annum. The margin of the original term loan debt that was not extended is determined by the applicable corporate credit rating. The interest rate on the extendedremaining portion of the term loan debt, which accrues interest at Cinemark USA, Inc.’s option at: (A) the base rate equal to the higher of (1) the prime lending rate as set forth on the British Banking Association Telerate page 5, or (2) the federal funds effective rate from time to time plus 0.50%, plus a 2.25% margin per annum, or (B) a “eurodollar rate” plus a 3.25% margin per annum.

The prepayment did not impact the interest rate applicable to or the maturity of the Company’s revolving credit line. The maturity date of $73,500 of Cinemark USA, Inc.’s $150,000 revolving credit line has been extended from October 2012 to March 2015. The maturity date of the remaining $76,500 of Cinemark USA, Inc.’s revolving credit line did not change and remains October 2012. As of September 30, 2010, the Company had no borrowings outstanding under the revolving credit line. The interest rate on the original revolving credit line accrues interest, at Cinemark USA, Inc.’s option, at: (A) a base rate equal to the higher of (1) the prime lending rate as set forth on the British Banking Association Telerate page 5 and (2) the federal funds effective rate from time to time plus 0.50%, plus a margin that ranges from 0.50% to 1.00% per annum, or (B) a “eurodollar rate” plus a margin that ranges from 1.50% to 2.00% per annum. The interest rate on the extended revolving credit line accrues interest, at Cinemark USA, Inc.’s option at: (A) the base rate equal to the higher of (1) the prime lending rate as set forth on the British Banking Association Telerate page 5, or (2) the federal funds effective rate from time to time plus 0.50%, plus a margin that ranges from 1.75% to 2.0% per annum, or (B) a “eurodollar rate” plus a margin that ranges from 2.75% to 3.0% per annum. The margin of the revolving credit line is determined by the consolidated net senior secured leverage ratio as defined in the credit agreement.

CINEMARK HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

In thousands, except share and per share data

The Company incurred debt issue costs of approximately $8,858 during the year ended December 31, 2010 related to the amendment and extension of its senior secured credit facility. These costs are being amortized over the remaining term of the facility.

At

As a result of the prepayment, the Company wrote-off approximately $2,183 in unamortized debt issue costs related to the unextended portion of term loan debt that was prepaid. In addition, the Company determined that a portion of the quarterly interest payments hedged by two of its current interest rate swap agreements under cash flow hedges and the quarterly interest payments related to its previously terminated interest rate swap agreement were probable not to occur and therefore reclassified approximately $2,760 of its accumulated other comprehensive loss related to these cash flow hedges to earnings, as a component of loss on early retirement of debt. The Company also paid fees of $2, which are reflected in loss on early retirement of debt for the year ended December 31, 2010,2011.

As of December 31, 2011, there was $1,072,764approximately $905,887 outstanding under the term loan and no borrowings outstanding under the $150,000 revolving credit line. The weighted average interest rate on outstanding term loan borrowings under the senior secured credit facility at December 31, 20102011 was approximately 4.8%5.0% per annum.

Cinemark USA, Inc.’s obligations under the senior secured credit facility are guaranteed by Cinemark Holdings, Inc. and certain of Cinemark USA, Inc.’s domestic subsidiaries and are secured by mortgages on certain fee and leasehold properties and security interests in substantially all of Cinemark USA, Inc.’s and the guarantors’ personal property, including, without limitation, pledges of all of Cinemark USA, Inc.’s capital stock, all of the capital stock of certain of Cinemark USA, Inc.’s domestic subsidiaries and 65% of the voting stock of certain of its foreign subsidiaries.

The senior secured credit facility contains usual and customary negative covenants for agreements of this type, including, but not limited to, restrictions on Cinemark USA, Inc.’s ability, and in certain instances, its subsidiaries’


F-24


CINEMARK HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
and Cinemark Holdings, Inc.’s ability, to consolidate or merge or liquidate, wind up or dissolve; substantially change the nature of its business; sell, transfer or dispose of assets; create or incur indebtedness; create liens; pay dividends, and repurchase stock; and make capital expenditures and investments. The senior secured credit facility also requiresIf Cinemark USA, Inc. has borrowings outstanding on the revolving credit line, it is required to satisfy a consolidated net senior secured leverage ratio covenant as determined in accordance with the senior secured credit facility.

The dividend restriction contained in the senior secured credit facility prevents the Company and any of its subsidiaries from paying a dividend or otherwise distributing cash to its stockholders unless (1) the Company is not in default, and the distribution would not cause the Company to be in default, under the senior secured credit facility; and (2) the aggregate amount of certain dividends, distributions, investments, redemptions and capital expenditures made since October 5, 2006, including dividends declared by the board of directors, is less than the sum of (a) the aggregate amount of cash and cash equivalents received by Cinemark Holdings, Inc. or Cinemark USA, Inc. as common equity since October 5, 2006, (b) Cinemark USA, Inc.’s consolidated EBITDA minus 1.75 times its consolidated interest expense, each as defined in the senior secured credit facility, since October 1, 2006, (c) $150 million and (d) certain other amounts specified in the senior secured credit facility, subject to certain adjustments specified in the senior secured credit facility. The dividend restriction is subject to certain exceptions specified in the senior secured credit facility.

The senior secured credit facility also includes customary events of default, including, among other things, payment default, covenant default, breach of representation or warranty, bankruptcy, cross-default, material ERISA events, certain types of change of control, material money judgments and failure to maintain subsidiary

CINEMARK HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

In thousands, except share and per share data

guarantees. If an event of default occurs, all commitments under the senior secured credit facility may be terminated and all obligations under the senior secured credit facility could be accelerated by the lenders, causing all loans outstanding (including accrued interest and fees payable thereunder) to be declared immediately due and payable.

See Note 14 for a discussion of the Company’s interest rate swap agreements.

Senior Notes

On June 29, 2009, Cinemark USA, Inc. issued $470,000 aggregate principal amount of 8.625% senior notes due 2019 with an original issue discount of $11,468, resulting in proceeds of approximately $458,532. The proceeds were primarily used to fund the repurchase of the remaining $419,403 aggregate principal amount at maturity of Cinemark, Inc.’s 93/4%9.75% senior discount notes discussed below. Interest is payable on June 15 and December 15 of each year. The senior notes mature on June 15, 2019. The original issue discount is being amortized on the effective interest method over the term of the senior notes. The Company incurred debt issue costs of $12,722 in connection with the issuance during the year ended December 31, 2009. As of December 31, 2010,2011, the carrying value of the senior notes was $459,677.

$460,530.

Cinemark USA, Inc. filed a registration statement with the Securities and Exchange Commission on September 24, 2009 pursuant to which Cinemark USA, Inc. offered to exchange the senior notes for substantially similar registered senior notes. The registration statement became effective and the notes were exchanged on December 17, 2009. The exchanged registered senior notes do not have transfer restrictions.

The senior notes are fully and unconditionally guaranteed on a joint and several senior unsecured basis by certain of Cinemark USA, Inc.’s subsidiaries that guarantee, assume or become liable with respect to any of Cinemark USA, Inc.’s or a guarantor’s debt. The senior notes and the guarantees are senior unsecured obligations and rank equally in right of payment with all of Cinemark USA, Inc.’s and its guarantor’s existing and future senior unsecured debt and senior in right of payment to all of Cinemark USA, Inc.’s and its guarantor’s existing and future subordinated debt. The senior notes and the guarantees are effectively subordinated to all of Cinemark USA, Inc.’s and its guarantor’s existing and future secured debt to the extent of the value of the assets securing such debt, including all borrowings under Cinemark USA, Inc.’s senior secured credit facility. The senior notes and the


F-25


CINEMARK HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
guarantees are structurally subordinated to all existing and future debt and other liabilities of Cinemark USA, Inc.’s subsidiaries that do not guarantee the senior notes.

The indenture to the senior notes contains covenants that limit, among other things, the ability of Cinemark USA, Inc. and certain of its subsidiaries to (1) consummate specified asset sales, (2) make investments or other restricted payments, including paying dividends, making other distributions or repurchasing subordinated debt or equity, (3) incur additional indebtedness and issue preferred stock, (4) enter into transactions with affiliates, (5) enter new lines of business, (6) merge or consolidate with, or sell all or substantially all of its assets to, another person and (7) create liens. Upon a change of control of Cinemark Holdings, Inc. or Cinemark USA, Inc., Cinemark USA, Inc. would be required to make an offer to repurchase the senior notes at a price equal to 101% of the aggregate principal amount outstanding plus accrued and unpaid interest, if any, through the date of repurchase. Certain asset dispositions are considered triggering events that may require Cinemark USA, Inc. to use the proceeds from those asset dispositions to make an offer to purchase the notes at 100% of their principal amount, plus accrued and unpaid interest, if any, to the date of repurchase if such proceeds are not otherwise used within 365 days as described in the indenture. The indenture governing the senior notes allows Cinemark USA, Inc. to incur additional indebtedness if it satisfies the coverage ratio specified in the indenture, after giving effect to the incurrence of the additional indebtedness, and in certain other circumstances. The required minimum coverage ratio is 2 to 1 and our actual ratio as of December 31, 20102011 was 5.045.1 to 1.

CINEMARK HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

In thousands, except share and per share data

Prior to June 15, 2014, Cinemark USA, Inc. may redeem all or any part of the senior notes at its option at 100% of the principal amount plus a make-whole premium. After June 15, 2014, Cinemark USA, Inc. may redeem the senior notes in whole or in part at redemption prices described in the senior notes. In addition, Cinemark USA, Inc. may redeem up to 35% of the aggregate principal amount of the senior notes from the net proceeds of certain equity offerings at the redemption price set forth in the senior notes.

Senior Subordinated Notes

On June 3, 2011, Cinemark USA, Inc. issued $200,000 aggregate principal amount of 7.375% senior subordinated notes due 2021, at par value. The proceeds, after payment of fees, were primarily used to fund the prepayment of the remaining $157,235 of the Company’s unextended portion of term loan debt under its senior secured credit facility. Interest on the senior subordinated notes is payable on June 15 and December 15 of each year beginning on December 15, 2011. The senior subordinated notes mature on June 15, 2021. The Company incurred debt issue costs of approximately $4,427 in connection with the issuance.

The senior subordinated notes are fully and unconditionally guaranteed on a joint and several senior subordinated unsecured basis by certain of the Company’s subsidiaries that guarantee, assume or become liable with respect to any of the Company’s or a guarantor’s other debt. The senior subordinated notes and the guarantees are senior subordinated unsecured obligations and rank equally in right of payment with all of the Company’s and a guarantor’s future senior subordinated indebtedness; are subordinate in right of payment to all of the Company’s and a guarantor’s existing and future senior indebtedness, whether secured or unsecured, including the Company’s obligations under its senior secured credit facility and its 8.625% senior notes; and structurally subordinate to all existing and future indebtedness and other liabilities of the Company’s non-guarantor subsidiaries.

The indenture to the senior subordinated notes contains covenants that limit, among other things, the ability of Cinemark USA, Inc. and certain of its subsidiaries to (1) make investments or other restricted payments, including paying dividends, making other distributions or repurchasing subordinated debt or equity, (2) incur additional indebtedness and issue preferred stock, (3) enter into transactions with affiliates, (4) enter new lines of business, (5) merge or consolidate with, or sell all or substantially all of its assets to, another person and (6) create liens. Upon a change of control, as defined in the Indenture, the Company would be required to make an offer to repurchase the senior subordinated notes at a price equal to 101% of the aggregate principal amount outstanding plus accrued and unpaid interest, if any, through the date of repurchase. The indenture governing the senior subordinated notes allows Cinemark USA, Inc. to incur additional indebtedness if we satisfy the coverage ratio specified in the indenture, after giving effect to the incurrence of the additional indebtedness, and in certain other circumstances. The required minimum coverage ratio is 2 to 1, and our actual ratio as of December 31, 2011 was 5.1 to 1.

Prior to June 15, 2016, Cinemark USA, Inc. may redeem all or any part of the senior subordinated notes at its option at 100% of the principal amount plus a make-whole premium plus accrued and unpaid interest on the senior subordinated notes to the date of redemption. After June 15, 2016, Cinemark USA, Inc. may redeem the senior subordinated notes in whole or in part at redemption prices specified in the indenture. In addition, prior to June 15, 2014, Cinemark USA, Inc. may redeem up to 35% of the aggregate principal amount of the senior subordinated notes from the net proceeds of certain equity offerings at the redemption price set forth in the indenture.

Cinemark USA, Inc. and its guarantor subsidiaries filed a registration statement with the Securities and Exchange Commission (the “Commission”) on July 27, 2011 pursuant to which Cinemark USA, Inc. offered to exchange the senior subordinated notes for substantially similar registered senior subordinated notes. The

CINEMARK HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

In thousands, except share and per share data

registration statement became effective August 4, 2011, and approximately $199,500 of the notes were exchanged on September 7, 2011. The registered senior subordinated notes, issued in the exchange, do not have transfer restrictions. Approximately $500 of the notes were not exchanged as of December 31, 2011.

Senior Discount Notes

On March 31, 2004, Cinemark, Inc. issued approximately $577,173 aggregate principal amount at maturity of 93/4%9.75% senior discount notes due 2014. Interest on the notes accreted until March 15, 2009 up to their aggregate principal amount. Subsequently, cash interest accrued and was payable semi-annually in arrears on March 15 and September 15, commencing on September 15, 2009.

Prior to 2008,2009, Cinemark, Inc. repurchased on the open market $110,770$157,770 aggregate principal amount at maturity of its 93/4%9.75% senior discount notes for approximately $96,741$138,949 including accreted interest of $22,147$37,333 and net cash premiums of $5,380.$2,843. Cinemark, Inc. funded these repurchases with available cash from its operations and with proceeds from the Company’s initial public offering.

During 2008, in ten open market purchases, Cinemark, Inc. repurchased $47,000 aggregate principal amount at maturity of its 93/4% senior discount notes for approximately $42,208, including accreted interest of $15,186offering and a discount of $2,537. Cinemark, Inc. funded the transactions with proceedsavailable cash from the Company’s initial public offering. The Company recorded a gain on early retirement of debt of approximately $1,698 during the year ended December 31, 2008 related to these repurchases, which included gains on the repurchases offset by the write-off of unamortized debt issue costs.
operations.

On June 15, 2009, Cinemark, Inc. commenced a cash tender offer for any and all of its 93/4%9.75% senior discount notes due 2014, of which $419,403 aggregate principal amount at maturity remained outstanding. In connection with the tender offer, Cinemark, Inc. solicited consents to adopt proposed amendments to the indenture to eliminate substantially all restrictive covenants and certain events of default provisions. On June 29, 2009, approximately $402,459 aggregate principal amount at maturity of the 93/4%9.75% senior discount notes were tendered and repurchased by the Company for approximately $433,415, including accrued interest of $11,336 and tender premiums paid of $19,620. The Company funded the repurchase with the proceeds from the issuance of the Cinemark USA, Inc. senior notes discussed above. On August 3, 2009, the CompanyCinemark, Inc. delivered to the Bank of New York Trust Company


F-26


CINEMARK HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
N.A., as trustee, a notice to redeem the $16,944 aggregate principal amount at maturity of the Company’s 93/4%9.75% senior discount notes remaining outstanding. The notice specified September 8, 2009 as the redemption date, at which time the Company paid approximately $18,564, consisting of a redemption price of 104.875% of the face amount of the discount notes remaining outstanding plus accrued and unpaid interest to, but not including, the redemption date. The Company funded the redemption with proceeds from the issuance of the Cinemark USA, Inc. senior notes discussed above. The Company recorded a loss on early retirement of debt of approximately $27,878 during the year ended December 31, 2009, which included tender and call premiums paid, other fees and the write-off of unamortized debt issue costs.

Former Senior Subordinated Notes

On February 11, 2003, Cinemark USA, Inc. issued $150,000 aggregate principal amount of 9% senior subordinated notes due 2013 and on May 7, 2003, Cinemark USA, Inc. issued an additional $210,000 aggregate principal amount of 9% senior subordinated notes due 2013, collectively referred to as the 9% senior subordinated notes. Interest was payable on February 1 and August 1 of each year.

Prior to 2008,2009, Cinemark USA, Inc. repurchased a total of $359,816$359,819 aggregate principal amount of its 9% senior subordinated notes. The transactions were funded by Cinemark USA, Inc. with the proceeds from its sale of a portion of its investment in NCM during 2007 and available cash from its operations.

During 2008, in one open market purchase, Cinemark USA, Inc. repurchased $3 aggregate principal amountalso executed a supplemental indenture removing substantially all of its 9% senior subordinated notes.
the restrictive covenants and certain events of default.

On October 14, 2010, Cinemark USA, Inc. redeemed all of itsthe $181 remaining outstanding 9% senior subordinated notes for approximately $181.notes. The Company recorded a loss on early retirement of debt of approximately $3 during the year ended December 31, 2010, consisting of premiums paid.

CINEMARK HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

In thousands, except share and per share data

Fair Value of Long Term Debt

The Company estimates the fair value of its long-term debt primarily using quoted market prices, which fall under Level 2 of the U.S. GAAP fair value hierarchy as defined by FASB ASC Topic820-10-35. The carrying value of the Company’s long term debt was $1,532,441$1,572,221 and $1,543,705$1,532,441 as of December 31, 20102011 and 2009,2010, respectively. The fair value of the Company’s long term debt was $1,581,963$1,622,286 and $1,513,838$1,581,963 as of December 31, 2011 and 2010, and 2009, respectively.

Covenant Compliance and Debt Maturity

As of December 31, 2010,2011, the Company believes it was in full compliance with all agreements, including related covenants, governing its outstanding debt. The Company’s long-term debt at December 31, 20102011 matures as follows:

     
2011 $10,836 
2012  47,856 
2013  126,672 
2014  9,244 
2015  9,244 
Thereafter  1,338,912(1)
     
Total $1,542,764 
     

2012

  $12,145  

2013

   12,145  

2014

   9,244  

2015

   9,244  

2016

   868,913  

Thereafter

   660,530(1) 
  

 

 

 

Total

  $1,572,221  
  

 

 

 

(1)
(1)

Reflects the aggregate principal amount at maturity of the 85/8%8.625% senior notes before the original issue discount of $10,323.$9,470.


F-27

14.    INTEREST RATE SWAP AGREEMENTS


CINEMARK HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
14.  INTEREST RATE SWAP AGREEMENTS
The Company is currently a party to fourfive interest rate swap agreements that qualify for cash flow hedge accounting. No premium or discount was incurred upon the Company entering into any of its interest rate swap agreements because the pay rates and receive rates on the interest rate swap agreements represented prevailing rates for each counterparty at the time each of the interest rate swap agreements was consummated. The fair values of the interest rate swaps are recorded on the Company’s consolidated balance sheet as an asset or liability with the effective portion of the interest rate swaps’ gains or losses reported as a component of accumulated other comprehensive income (loss) and the ineffective portion reported in earnings. The Company’s current interest rate swap agreements exhibited no ineffectiveness duringchanges in fair values are reclassified from accumulated other comprehensive income (loss) into earnings in the same period that the hedged items affect earnings. For the years ended December 2008,31, 2009, 2010 and 2010.
2011, the Company reclassified $10,395, $11,771 and $15,929, respectively, from accumulated other comprehensive income (loss) into earnings.

The valuation technique used to determine fair value is the income approach and under this approach, the Company uses projected future interest rates as provided by counterparties to the interest rate swap agreements and the fixed rates that the Company is obligated to pay under these agreements. Therefore, the Company’s measurements use significant unobservable inputs, which fall in Level 3 of the U.S. GAAP hierarchy as defined by FASB ASC Topic 820-10-35.

820-10-35.CINEMARK HOLDINGS, INC. AND SUBSIDIARIES There were no changes in valuation techniques during the period, no transfers in or out of Level 3

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

In thousands, except share and no gains or losses included in earnings that were attributable to the change in unrealized gains or losses related to the interest rate swap agreements.

per share data

Below is a summary of the Company’s current interest rate swap agreements:

                     
               Estimated
 
  Amount
  Effective
 Pay
  Receive
  Expiration
 Fair Value at
 
Category
 
Hedged
  
Date
 
Rate
  
Rate
  
Date
 
December 31, 2010
 
 
Interest Rate Swap Assets
              
  $175,000  December 2010  1.400%  1-Month LIBOR  September 2015 $4,421 
  $175,000  December 2010  1.398%  1-Month LIBOR  September 2015  4,534 
                     
                  $8,955 
                     
Interest Rate Swap Liabilities
              
  $125,000  August 2007  4.922%  3-Month LIBOR  November 2012 $(8,801)
  $175,000  November 2008  3.630%  1-Month LIBOR  (1)  (7,169)(2)
                     
                  $(15,970)
                     
Total $650,000                 
                     
agreements designated as hedge agreements as of December 31, 2011:

Amount

Designated

as a Hedge

  Nominal
Amount
  

Effective

Date

 Pay
Rate
  Receive Rate  

Expiration

Date

 Current
Liability (1)
  Long-
Term
Liability (2)
  Estimated
Total Fair
Value at
December 31,
2011
 
$106,632(3)  $125,000   August 2007  4.9220%    3-Month LIBOR   August 2012 $3,375   $—     $3,375  
$63,983(4)  $75,000   November 2008  3.6300%    1-Month LIBOR   November 2012  2,124    —      2,124  
$175,000   $175,000   December 2010  1.3975%    1-Month LIBOR   September 2015  1,605    2,228    3,833  
$175,000   $175,000   December 2010  1.4000%    1-Month LIBOR   September 2015  1,632    2,271    3,903  
$100,000   $100,000   November 2011  1.7150%    1-Month LIBOR   April 2016  1,243    2,098    3,341  

 

 

  

 

 

      

 

 

  

 

 

  

 

 

 
$620,615   $650,000       $9,979   $6,597   $16,576  

 

 

  

 

 

      

 

 

  

 

 

  

 

 

 

(1)
(1)$100,000 of this swap expires November 2011 and $75,000 expires November 2012.
(2)Approximately $2,928 is reflected

Included in accrued other current liabilities on the consolidated balance sheet as of December 31, 2010.2011.

(2)

Included in other long-term liabilities on the consolidated balance sheet as of December 31, 2011.

(3)

An additional $18,368 of this original $125,000 swap is no longer designated as a hedge as a result of the prepayment of the unextended portion of the Company’s term loan debt.

(4)

An additional $11,017 of this original $75,000 swap is no longer designated as a hedge as a result of the prepayment of the unextended portion of the Company’s term loan debt.

During June 2011, the Company prepaid the remaining unextended portion of its term loan debt under its senior secured credit facility (see Note 13). As a result, the Company determined that a portion of the quarterly interest payments hedged by two of its current interest rate swap agreements and the quarterly interest payments related to its previously terminated interest rate swap agreement were probable not to occur and therefore reclassified approximately $2,760 of its accumulated other comprehensive loss related to these cash flow hedges to earnings, as a component of loss on early retirement of debt, during the year ended December 31, 2011.

The Company was previously a party to an interest rate swap agreement that was effective during 2007 with a counterparty that filed for bankruptcy during September 2008 and whose credit rating was downgraded as a result. Prior to the counterparty’s credit rating downgrade, the change in fair value of the interest rate swap was recorded as a component of accumulated other comprehensive income (loss). Subsequent to the counterparty’s credit rating downgrade, the change in fair value of the interest rate swap was recorded in earnings as a component of interest expense. The Company terminated the interest rate swap agreement during October 2008. The Company determined that the forecasted transactions hedged by this interest rate swap are still probable to occur, thus the total amount previously reported in accumulated other comprehensive income (loss) related to this interest rate swap agreement of $18,147 is being amortized on a straight-line basis to interest expense over the period during which the forecasted transactions are expected to occur, which is September 15, 2008 through August 13, 2012. The Company amortized approximately $1,351$4,633, $4,633 and $4,236 to interest expense during the year ended December 31, 2008 and


F-28


CINEMARK HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
$4,633 to interest expense during each of the years ended December 31, 2009, 2010 and 2010.2011, respectively. The Company will amortize approximately $4,633$3,953 to interest expense over the next twelve months.

See Note 15 for additional information about the Company’s fair value measurements related to its interest rate swap agreements.

15.  FAIR VALUE MEASUREMENTS

CINEMARK HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

In thousands, except share and per share data

15.    FAIR VALUE MEASUREMENTS

The Company determines fair value measurements in accordance with FASB ASC Topic 820, which establishes a fair value hierarchy under which an asset or liability is categorized based on the lowest level of input significant to its fair value measurement. The levels of input defined by FASB ASC Topic 820 are as follows:

Level 1 — quoted market prices in active markets for identical assets or liabilities that are accessible at the measurement date;
Level 2 — other than quoted market prices included in Level 1 that are observable for the asset or liability, either directly or indirectly; and
Level 3

Level 1

 — quoted market prices in active markets for identical assets or liabilities that are accessible at the measurement date;

Level 2

 — other than quoted market prices included in Level 1 that are observable for the asset or liability, either directly or indirectly; and

Level 3

 — unobservable and should be used to measure fair value to the extent that observable inputs are not available.

Below is a summary of assets and liabilities measured at fair value toon a recurring basis by the extent that observable inputs are not available.

Company under FASB ASC Topic 820 as of December 31, 2011:

   Carrying
Value
  Fair Value 

Description

   Level 1   Level 2   Level 3 

Interest rate swap liabilities — current (see Note 14)

  $(9,979 $—      $—      $(9,979

Interest rate swap liabilities — long term (see Note 14)

  $(6,597 $—      $—      $(6,597

Investment in RealD (see Note 8)

  $9,709   $9,709    $—      $—    

Below is a summary of assets and liabilities measured at fair value on a recurring basis by the Company under FASB ASC Topic 820 as of December 31, 2010:

                 
  Carrying
 Fair Value
Description
 Value Level 1 Level 2 Level 3
 
Interest rate swap liabilities — current (see Note 14) $(2,928) $  $  $(2,928)
Interest rate swap liabilities — long term (see Note 14) $(13,042) $  $  $(13,042)
Interest rate swap assets — long term (see Note 14) $8,955  $  $  $8,955 
Investment in Real D (see Note 8) $27,993  $  $27,993  $ 
Below is a summary of assets and liabilities measured at fair value on a recurring basis by the Company under FASB ASC Topic 820 as of December 31, 2009:
                 
  Carrying
 Fair Value
Description
 Value Level 1 Level 2 Level 3
 
Interest rate swap liabilities — long term (see Note 14) $(18,524) $  $  $(18,524)

   Carrying
Value
  Fair Value 

Description

   Level 1   Level 2   Level 3 

Interest rate swap liabilities — current (see Note 14)

  $(2,928 $—      $—      $(2,928

Interest rate swap liabilities — long term (see Note 14)

  $(13,042 $—      $—      $(13,042

Interest rate swap assets — long term (see Note 14)

  $8,955   $—      $—      $8,955  

Investment in RealD (see Note 8)

  $27,993   $—      $27,993    $—    

Below is a reconciliation of the beginning and ending balance for assets and liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3):

                 
  Liabilities  Assets 
  2009  2010  2009  2010 
 
Beginning balance — January 1 $(24,781) $(18,524) $     —  $     — 
Total gain included in accumulated other comprehensive income (loss)  6,257   2,554      8,955 
                 
Ending balance — December 31 $(18,524) $(15,970) $  $8,955 
                 

   Liabilities  Assets 
   2011  2010  2011  2010 

Beginning balances — January 1

  $15,970   $18,524   $8,955   $—    

Total gain (loss) included in accumulated other comprehensive income (loss)

   1,736    (2,554  (8,955  8,955  

Total gain included in earnings

   (1,130  —      —      —    
  

 

 

  

 

 

  

 

 

  

 

 

 

Ending balances — December 31

  $16,576   $15,970   $—     $8,955  
  

 

 

  

 

 

  

 

 

  

 

 

 

There were no changes in valuation techniques during the period. The fair value measurement for the Company’s investment in RealD transferred from Level 2 to Level 1 during the year ended December 31, 2011. Previous fair value estimates for the investment were based on RealD’s quoted stock price, discounted to reflect

CINEMARK HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

In thousands, except share and per share data

the impact of a lock-up period to which the Company was subject. The lock-up period expired during January 2011; therefore, the fair value estimates for the investment subsequent to January 2011 were based on RealD’s stock price with no adjustments. See Note 8 for more information on the Company’s investment in RealD. There were no transfers in or out of Level 3 and no gains or losses included induring the earnings that were attributable to the change in unrealized gains or losses related to the interest rate swap agreements.


F-29

year ended December 31, 2011.


16.    FOREIGN CURRENCY TRANSLATION

CINEMARK HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
16.  FOREIGN CURRENCY TRANSLATION
The accumulated other comprehensive income (loss) account in stockholders’ equity of $(7,459)$28,181 and $28,181$(23,682) at December 31, 20092010 and December 31, 2010,2011, respectively, includes the cumulative foreign currency adjustmentsgains (losses) of $16,070$34,248 and $34,248,$(11,325), respectively, from translating the financial statements of the Company’s international subsidiaries, and also includes the change in fair values of the Company’s interest rate swap agreements.
agreements that are designated as hedges and the change in fair value of the Company’s available-for-sale securities.

In 20092010 and 2010,2011, all foreign countries where the Company has operations were deemed non-highly inflationary and the local currency is the same as the functional currency in all of the locations. Thus, any fluctuation in the currency results in a cumulative foreign currency translation adjustment recorded to accumulated other comprehensive income (loss).

On December 31, 2010,2011, the exchange rate for the Brazilian real was 1.671.87 reais to the U.S. dollar (the exchange rate was 1.751.67 reais to the U.S. dollar at December 31, 2009)2010). As a result, the effect of translating the December 31, 20102011 Brazilian financial statements into U.S. dollars is reflected as a foreign currency translation adjustment to the accumulated other comprehensive income (loss) account as an increasea decrease in stockholders’ equity of $10,377.$28,000. At December 31, 2010,2011, the total assets of the Company’s Brazilian subsidiaries were U.S. $333,562.

$327,679.

On December 31, 2010,2011, the exchange rate for the Mexican peso was 12.3914.00 pesos to the U.S. dollar (the exchange rate was 13.0412.39 pesos to the U.S. dollar at December 31, 2009)2010). As a result, the effect of translating the December 31, 20102011 Mexican financial statements into U.S. dollars is reflected as a foreign currency translation adjustment to the accumulated other comprehensive income (loss) account as an increasea decrease in stockholders’ equity of $5,338.$11,818. At December 31, 2010,2011, the total assets of the Company’s Mexican subsidiaries were U.S. $143,898.

$121,935.

On December 31, 2010,2011, the exchange rate for the ChileanArgentinean peso was 473.204.31 pesos to the U.S. dollar (the exchange rate was 519.303.98 pesos to the U.S. dollar at December 31, 2009)2010). As a result, the effect of translating the December 31, 20102011 Argentinean financial statements into U.S. dollars is reflected as a foreign currency translation adjustment to the accumulated other comprehensive income (loss) account as a decrease in stockholders’ equity of $4,196. At December 31, 2011, the total assets of the Company’s Argentinean subsidiaries were U.S. $128,524.

On December 31, 2011, the exchange rate for the Chilean peso was 520.70 pesos to the U.S. dollar (the exchange rate was 473.20 pesos to the U.S. dollar at December 31, 2010). As a result, the effect of translating the December 31, 2011 Chilean financial statements into U.S. dollars is reflected as a foreign currency translation adjustment to the accumulated other comprehensive income (loss) account as an increasea decrease in stockholders’ equity of $2,270.$3,324. At December 31, 2010,2011, the total assets of the Company’s Chilean subsidiaries were U.S. $35,593.

$40,084.

The effect of translating the December 31, 20102011 financial statements of the Company’s other international subsidiaries, with local currencies other than the U.S. dollar, is reflected as a foreign currency translation adjustment to the accumulated other comprehensive income (loss) account as an increase in stockholders’ equity of $1,279.

$1,280.

CINEMARK HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

In thousands, except share and per share data

During June 2010,May 2011, the Company’s ownership in its ColombianChilean subsidiary increased from 50.1%97.4% to 100%, as a result of the Colombia Share Exchange.Company’s purchase of the noncontrolling interests’ shares of Cinemark Chile. As part of this transaction, the Company recorded the amount of accumulated other comprehensive loss previously allocated to the noncontrolling interest of $1,086$485, related to the translation of the Chilean financial statements into U.S. dollars, as an increase to accumulated other comprehensive income (loss) with an offsetting creditdecrease to additionalpaid-in-capital. See Note 9.

17.  INVESTMENTS IN AND ADVANCES TO AFFILIATES

17.    INVESTMENTS IN AND ADVANCES TO AFFILIATES

The Company had the following investments in and advances to affiliates at December 31:

         
  December 31, 
  2009  2010 
 
Cinemark — Core Pacific, Ltd. (Taiwan) — investment, at cost — 14% interest $1,383  $1,383 
Other  1,506   1,236 
         
Total $2,889  $2,619 
         


F-30


   December 31, 
   2010   2011 

Cinemark — Core Pacific, Ltd. (Taiwan) — investment, at cost — 14% interest

  $1,383    $1,383  

Other

   1,236     160  
  

 

 

   

 

 

 

Total

  $2,619    $1,543  
  

 

 

   

 

 

 

18.    NONCONTROLLING INTERESTS IN SUBSIDIARIES

CINEMARK HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
18.  NONCONTROLLING INTERESTS IN SUBSIDIARIES
Noncontrolling interests in subsidiaries of the Company were as follows at December 31:
         
  December 31, 
  2009  2010 
 
Cinemark Partners II — 49.2% interest $7,961  $8,655 
Cinemark Colombia, S.A. — 49.0% interest until April 2010  4,465    
Greeley Ltd. — 49.0% interest  982   857 
Cinemark Panama S.A. — 20% interest until November 2010  369    
Others  1,019   2,093 
         
Total $14,796  $11,605 
         
During April 2010, the Company’s partners in Colombia (the “Colombian Partners”) exercised an option available to them under an Exchange Option Agreement dated April 9, 2007 between the Company and the Colombian Partners. Under this option, which was contingent upon completion of an initial public offering of common stock by the Company, the Colombian Partners were entitled to exchange their shares in Cinemark Colombia S.A. for shares of the Company’s common stock (the “Colombia Share Exchange”). The number of shares to be exchanged was determined based on the Company’s equity value and the equity value of the Colombian Partners’ interest in Cinemark Colombia S.A., both of which are defined in the Exchange Option Agreement. As a result of the Colombia Share Exchange, on June 14, 2010, the Company issued 1,112,723 shares of its common stock to the Colombian Partners. The increase in the Company’s ownership interest in its Colombian subsidiary was accounted for as an equity transaction. The Company recorded an increase in additional-paid-in-capital of approximately $6,951, which represented the book value of the Colombian partners’ noncontrolling interest account of approximately $5,865 plus the Colombian partners’ share of accumulated other comprehensive loss of approximately $1,086. As a result of this transaction, the Company owns 100% of the shares in Cinemark Colombia S.A.
During November 2010, the Company purchased its noncontrolling interests’ 20% share of Cinemark Panama S.A. (“Cinemark Panama”) for approximately $888 in cash. The transaction was accounted for as an equity transaction in accordance with ASC Topic810-45-23. The book value of Cinemark Panama’s noncontrolling interest was approximately $498, therefore the Company recorded an adjustment to additionalpaid-in-capital of approximately $390. As a result of the transaction, the Company owns 100% of Cinemark Panama.


F-31


   December 31, 
   2010   2011 

Cinemark Partners II — 49.2% interest (in one theatre)

  $8,655    $7,864  

Greeley Ltd. — 49.0% interest (in one theatre)

   857     695  

Others

   2,093     2,203  
  

 

 

   

 

 

 

Total

  $11,605    $10,762  
  

 

 

   

 

 

 

CINEMARK HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
Below is a summary of the impact of changes in the Company’s ownership interest in its subsidiaries on its equity:
             
  Years Ended December 31, 
  2008  2009  2010 
 
Net income (loss) attributable to Cinemark Holdings, Inc.  $(48,325) $97,108  $146,120 
             
Transfers from noncontrolling interests            
Increase in Cinemark Holdings, Inc. common stock and additionalpaid-in-capital for the Colombia Share Exchange
 $  $  $6,951 
Decrease in Cinemark Holdings, Inc. additionalpaid-in-capital for the buyout of Panama noncontrolling interests
        (390)
Increase in Cinemark Holdings, Inc. common stock and additionalpaid-in-capital for the Central America Share Exchange
  12,949       
Increase in Cinemark Holdings, Inc. common stock and additionalpaid-in-capital for the Ecuador Share Exchange
  3,200       
Increase in Cinemark Holdings, Inc. additionalpaid-in-capital for the buyout of Argentina noncontrolling interests
     23    
             
Net transfers from non-controlling interests  16,149   23   6,561 
             
Change from net income (loss) attributable to Cinemark Holdings, Inc. and transfers from noncontrolling interests $(32,176) $97,131  $152,681 
             

   Years ended December 31, 
   2009   2010  2011 

Net income attributable to Cinemark Holdings, Inc.

  $97,108    $146,120   $130,557  
  

 

 

   

 

 

  

 

 

 

Transfers from noncontrolling interests

     

Increase in Cinemark Holdings, Inc. common stock and additional paid-in-capital for the Colombia Share Exchange (see Note 9)

  $—      $6,951   $—    

Decrease in Cinemark Holdings, Inc. additional paid-in-capital for the buyout of Panama noncontrolling interests (see Note 9)

   —       (390  —    

Increase in Cinemark Holdings, Inc. additional paid-in-capital for the buyout of Argentina noncontrolling interests

   23     —      —    

Decrease in Cinemark Holdings, Inc. additional paid-in-capital for the buyout of Chile noncontrolling interests (see Note 9)

   —       —      (1,402
  

 

 

   

 

 

  

 

 

 

Net transfers from non-controlling interests

   23     6,561    (1,402
  

 

 

   

 

 

  

 

 

 

Change from net income attributable to Cinemark

     

Holdings, Inc. and transfers from noncontrolling interests

  $97,131    $152,681   $129,155  
  

 

 

   

 

 

  

 

 

 

CINEMARK HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

In thousands, except share and per share data

19.    CAPITAL STOCK

19.  

CAPITAL STOCK
Common Stock —Common stockholders are entitled to vote on all matters submitted to a vote of the Company’s stockholders. Subject to the rights of holders of any then outstanding shares of the Company’s preferred stock, the Company’s common stockholders are entitled to any dividends that may be declared by the board of directors. The shares of the Company’s common stock are not subject to any redemption provisions. The Company has no issued and outstanding shares of preferred stock.

The Company’s ability to pay dividends is effectively limited by its status as a holding company and the terms of its indentureindentures and its subsidiary’s senior secured credit facility, which also significantly restrict the ability of certain of the Company’s subsidiaries to pay dividends directly or indirectly to the Company. Furthermore, certain of the Company’s foreign subsidiaries currently have a deficit in retained earnings which prevents the Company from declaring and paying dividends from those subsidiaries.

During May 2008, the Company’s partners in Central America (the “Central American Partners”) exercised an option available to them under an Exchange Option Agreement dated February 7, 2007 between the Company and the Central American Partners. Under this option, which was triggered by completion of an initial public offering of common stock by the Company, the Central American Partners were entitled to exchange their shares in Cinemark Equity Holdings Corporation, which is the Company’s Central American holding company, for shares of the Company’s common stock. As a result of this exchange on October 1, 2008, the Company issued 902,981 shares of its common stock to its Central American Partners during October 2008. See Note 9.
During July 2008, the Company’s partners in Ecuador (the “Ecuador Partners”) exercised an option available to them under an Exchange Option Agreement dated April 24, 2007 between the Company and the Ecuador Partners. Under this option, which was triggered by completion of an initial public offering of common stock by the Company, the Ecuador Partners were entitled to exchange their shares in Cinemark del Ecuador S.A. for shares of


F-32


CINEMARK HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
the Company’s common stock. As a result of this exchange, the Company issued 393,615 shares of its common stock to its Ecuador partners during November 2008. See Note 9.
During April 2010, the Company’s partners in Colombia (the “Colombian Partners”) exercised an option available to them under an Exchange Option Agreement dated April 9, 2007 between the Company and the Colombian Partners. Under this option, which was contingent upon completion of an initial public offering of common stock by the Company, the Colombian Partners were entitled to exchange their shares in Cinemark Colombia S.A. for shares of the Company’s common stock. The number of shares to be exchanged was determined based on the Company’s equity value and the equity value of the Colombian Partners’ interest in Cinemark Colombia S.A., both of which are defined in the Exchange Option Agreement. As a result of this exchange, on June 14, 2010, the Company issued 1,112,723 shares of its common stock to the Colombian Partners. See Note 9.

Treasury Stock —Treasury stock represents shares of common stock repurchased by the Company and not yet retired. The Company has applied the cost method in recording its treasury shares.

Below is a summary of the Company’s treasury stock activity for the years ended December 31, 20092010 and 2010:

         
  Number of
    
  Treasury
    
  Shares  Cost 
 
Balance at January 1, 2009    $ 
Restricted stock forfeitures(1)  30,475    
Noncash stock option exercises(2)  3,274,943   43,895 
         
Balance at December 31, 2009  3,305,418  $43,895 
Restricted stock forfeitures(1)  2,719    
Noncash stock option exercises(3)  35,298   531 
Restricted stock withholdings(4)  16,424   299 
         
Balance at December 31, 2010  3,359,859  $44,725 
         
2011:

   Number of
Treasury
Shares
   Cost 
    

Balance at January 1, 2010

   3,305,418    $43,895  

Restricted stock forfeitures(1)

   2,719     —    

Noncash stock option exercises(2)

   35,298     531  

Restricted stock withholdings(3)

   16,424     299  
  

 

 

   

 

 

 

Balance at December 31, 2010

   3,359,859    $44,725  

Restricted stock forfeitures(1)

   1,920     —    

Restricted stock withholdings(4)

   25,200     494  

Restricted stock awards canceled(1)

   4,613     —    
  

 

 

   

 

 

 

Balance at December 31, 2011

   3,391,592    $45,219  
  

 

 

   

 

 

 

(1)
(1)

The Company repurchased forfeited and canceled restricted shares at a cost of $0.001 per share in accordance with the Company’s Amended and Restated 2006 Long Term Incentive Plan.

(2)In a noncash stock option exercise, the exercise price for the shares to be held by employees and the related tax withholdings are satisfied with stock withholdings. The Company repurchased the shares at current market value based on the days on which the stock options were exercised, which ranged from $13.40 to $13.46.
(3)

In a noncash stock option exercise, the exercise price for the shares to be held by employees and the related tax withholdings are satisfied with stock withholdings. The Company repurchased the shares at current market value based on the days on which the stock options were exercised, which ranged from $14.85 to $15.17.

CINEMARK HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

In thousands, except share and per share data

(4)(3)

The Company repurchased restricted shares as a result of the election by employees to have the Company withhold shares of restricted stock to satisfy their tax liabilities upon vesting in restricted stock. The Company repurchased the shares at market value on the dates of repurchase.

All of these repurchases were done in accordance with the Amended and Restated 2006 Long Term Incentive Plan (“Restated Incentive Plan”).
(4)

The Company withheld restricted shares as a result of the election by certain employees to satisfy their tax liabilities upon vesting in restricted stock. The Company determined the number of shares to be withheld based upon a market value of $19.60 per share.

As of December 31, 2010,2011, the Company had no plans to retire any shares of treasury stock.

Share Based Awards — During March 2008, the Company’s board of directors approved the Amended and Restated 2006 Long Term Incentive Plan (the “Restated Incentive Plan”). The Restated Incentive Plan amended and restated the prior plan, to (i) increase the number of shares reserved for issuance from 9,097,360 shares of common stock to 19,100,000 shares of common stock and (ii) permit the Compensation Committee of the Company’s board


F-33


CINEMARK HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
of directors (the “Compensation Committee”) to award participants restricted stock units and performance awards. The right of a participant to exercise or receive a grant of a restricted stock unit or performance award may be subject to the satisfaction of such performance or objective business criteria as determined by the Compensation Committee. With the exception of the changes identified in (i) and (ii) above, the Restated Incentive Plan does not materially differ from the prior plan. The Restated Incentive Plan was approved by the Company’s stockholders at its annual meeting held on May 15, 2008.
During August 2008, the Company filed a registration statement with the Securities and Exchange Commission onForm S-8 for the purpose of registering the additional shares available for issuance under the Restated Incentive Plan.
Stock Options — A summary of stock option activity and related information for the years ended December 31, 2008, 2009, 2010 and 20102011 is as follows:
                             
  Year Ended
  Year Ended
  Year Ended
    
  December 31, 2008  December 31, 2009  December 31, 2010    
     Weighted
     Weighted
     Weighted
    
     Average
     Average
     Average
  Aggregate
 
     Exercise
     Exercise
     Exercise
  Intrinsic
 
  Shares  Price  Shares  Price  Shares  Price  Value 
 
Outstanding at January 1  6,323,429  $7.63   6,139,670  $7.63   1,231,892  $7.63     
Granted                      
Forfeited  (14,492) $7.63                 
Exercised  (169,267) $7.63   (4,907,778) $7.63   (1,091,536) $7.63     
                             
Outstanding at December 31  6,139,670  $7.63   1,231,892  $7.63   140,356  $7.63  $1,349 
                             
Vested options at December 31  5,809,343  $7.63   1,231,892  $7.63   140,356  $7.63  $1,349 
                             

   Year Ended
December 31, 2009
   Year Ended
December 31, 2010
   Year Ended
December 31, 2011
     
   Shares  Weighted
Average
Exercise
Price
   Shares  Weighted
Average
Exercise
Price
   Shares  Weighted
Average
Exercise
Price
   Aggregate
Intrinsic
Value
 

Outstanding at January 1

   6,139,670   $7.63     1,231,892   $7.63     140,356   $7.63    

Exercised

   (4,907,778 $7.63     (1,091,536 $7.63     (58,190 $7.63    
  

 

 

  

 

 

   

 

 

  

 

 

   

 

 

  

 

 

   

Outstanding at December 31

   1,231,892   $7.63     140,356   $7.63     82,166   $7.63    $892  
  

 

 

  

 

 

   

 

 

  

 

 

   

 

 

  

 

 

   

 

 

 

Vested options at December 31

   1,231,892   $7.63     140,356   $7.63     82,166   $7.63    $892  
  

 

 

  

 

 

   

 

 

  

 

 

   

 

 

  

 

 

   

 

 

 

There were no options granted or forfeited during any of the periods presented. The total intrinsic value of options exercised during the years ended December 31, 2008, 2009, 2010 and 2010,2011, was $1,191, $28,083, $9,836 and $9,836,$699, respectively. The Company recognized tax benefits of approximately $474, $7,545, $2,680 and $2,680$238 related to the options exercised during the year ended December 31, 2008, 2009, 2010 and 2010,2011, respectively.

The Company recorded compensation expense of $3,393 and $1,152 during the yearsyear ended December 31, 2008 and 2009 respectively, related to these stock options. As of December 31, 2010, there was no remaining unrecognized compensation expense related to outstanding stock options, and all outstanding optionswhich became fully vested on April 2, 2009. Options outstanding at December 31, 20102011 have an average remaining contractual life of approximately fourthree years.


F-34


CINEMARK HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
Restricted Stock— Below is a summary of restricted stock activity for the years ended December 31, 2008, 2009, 2010 and 2010:
                         
  Year Ended
  Year Ended
  Year Ended
 
  December 31, 2008  December 31, 2009  December 31, 2010 
     Weighted
     Weighted
     Weighted
 
     Average
     Average
     Average
 
     Exercise
     Exercise
     Exercise
 
  Shares  Price  Shares  Price  Shares  Price 
 
Outstanding at January 1  21,880  $18.28   385,666  $13.32   764,078  $11.10 
Granted  392,317  $13.32   472,881  $9.69   683,921  $17.94 
Vested  (22,032) $18.24   (70,493) $13.77   (190,589) $12.63 
Forfeited  (6,499) $13.14   (23,976) $11.15   (2,719) $11.03 
                         
Outstanding at December 31  385,666  $13.32   764,078  $11.10   1,254,691  $14.60 
                         
2011:

   Year Ended
December 31, 2009
   Year Ended
December 31, 2010
   Year Ended
December 31, 2011
 
   Shares  Weighted
Average
Exercise
Price
   Shares  Weighted
Average
Exercise
Price
   Shares  Weighted
Average
Exercise
Price
 

Outstanding at January 1

   385,666   $13.32     764,078   $11.10     1,254,691   $14.60  

Granted

   472,881   $9.69     683,921   $17.94     424,436   $19.45  

Vested

   (70,493 $13.77     (190,589 $12.63     (288,204 $10.84  

Canceled

   —      —       —      —       (4,613 $18.35  

Forfeited

   (23,976 $11.15     (2,719 $11.03     (1,920 $14.34  
  

 

 

  

 

 

   

 

 

  

 

 

   

 

 

  

 

 

 

Outstanding at December 31

   764,078   $11.10     1,254,691   $14.60     1,384,390   $16.85  
  

 

 

  

 

 

   

 

 

  

 

 

   

 

 

  

 

 

 

CINEMARK HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

In thousands, except share and per share data

During the year ended December 31, 2010,2011, the Company granted 683,921424,436 shares of restricted stock to directors and employees of the Company. The fair valuevalues of the shares of restricted stock granted waswere determined based on the market valuevalues of the Company’s common stock on the dates of grant, which ranged from $13.15$19.35 to $18.47$20.71 per share. The Company assumed forfeiture rates ranging from zero0% to 5% for the restricted stock awards. The restricted stock granted to directors vests over periods ranging from six months to one year and thebased on continued service. The restricted stock granted to employees vests over four years based on continued service.

The recipients of restricted stock are entitled to receive dividends and to vote their respective shares, however the sale and transfer of the restricted shares is prohibited during the restriction period.

The Company recorded total compensation expense of $1,394, $2,393, $4,928 and $4,928$6,591 related to restricted stock awards during the years ended December 31, 2008, 2009, 2010 and 2010,2011, respectively. As of December 31, 2010,2011, the remaining unrecognized compensation expense related to these restricted stock awards was approximately $12,486$13,688 and the weighted average period over which this remaining compensation expense will be recognized is approximately threetwo years. Upon vesting, the Company receives an income tax deduction. The total fair value of shares vested during the years ended December 31, 2008, 2009, 2010 and 20102011 was $286, $762, $3,272 and $3,272,$5,658, respectively. The Company recognized tax benefits of approximately $109, $287, $1,087 and $1,087$2,188 related to shares that vested during the years ended December 2008, 2009, 2010 and 2010,2011, respectively. The recipients of restricted stock are entitled to receive dividends and to vote their respective shares, however the sale and transfer of the restricted shares is prohibited during the restriction period.

Restricted Stock Units— During the years ended December 31, 2008, 2009, 2010 and 2010,2011, the Company granted restricted stock units representing 204,361, 303,168, 396,429 and 396,429153,727 hypothetical shares of common stock, respectively, under the Restated Incentive Plan. The restricted stock units vest based on a combination of financial performance factors and continued service. The financial performance factors are based on an implied equity value concept that determines an internal rate of return (“IRR”) during a three fiscal year period based on a formula utilizing a multiple of Adjusted EBITDA subject to certain specified adjustments (as defined in the restricted stock unit award agreement). The financial performance factors for the restricted stock units have a threshold, target and maximum level of payment opportunity. If the IRR for the three year period is at least 8.5%, which is the threshold, one-third of the restricted stock units vest. If the IRR for the three year period is at least 10.5%, which is the target, two-thirds of the restricted stock units vest. If the IRR for the three year period is at least 12.5%, which is the maximum, 100% of the restricted stock units vest. All payouts of restricted stock units that vest will be subject to an additional one year service requirement and will be paid in the form of common stock if the participant continues to provide services through the fourth anniversary of the grant date. At the time of each of the 2009, 2010 and 2011 restricted stock unit grants, the Company was not able to determine which IRR level would be reached for the respective three year performance period, therefore the Company assumed the mid-point IRR level for these grants in determining the amount of compensation expense to record for such grants. The fair values of the restricted stock unit awards granted were determined based on the market values of the Company’s common stock on the dates of grant, which ranged from $19.35 to $20.71 per share. The Company assumed forfeiture rates ranging from 0% to 5% for the restricted stock unit awards. Restricted stock unit award participants are eligible to receive dividend equivalent payments if and at the time the restricted stock unit awards vest.


F-35


CINEMARK HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

In thousands, except share and per share data

Below is a table summarizing the potential number of shares that could vest under restricted stock unit awards granted during the years ended December 31, 2008, 2009, 2010 and 20102011 at each of the three levels of financial performance (excluding forfeitures):

                         
  Granted During the Year Ended December 31,
  2008 2009 2010
  Number of
   Number of
   Number of
  
  Shares
 Value at
 Shares
 Value at
 Shares
 Value at
  Vesting Grant Vesting Grant Vesting Grant
 
at IRR of at least 8.5%  68,116  $885   101,051  $963   132,144  $2,423 
at IRR of at least 10.5%  136,239  $1,771   202,117  $1,927   264,288  $4,847 
at IRR of at least 12.5%  204,361  $2,656   303,168  $2,891   396,429  $7,271 

   Granted During the Year Ended December 31, 
   2009   2010   2011 
   

Number of

Shares

   Value at   

Number of

Shares

   Value at   

Number of

Shares

   Value at 
   Vesting   Grant   Vesting   Grant   Vesting   Grant 

at IRR of at least 8.5%

   101,051    $963     132,144    $2,423     51,239    $991  

at IRR of at least 10.5%

   202,117    $1,927     264,288    $4,847     102,488    $1,983  

at IRR of at least 12.5%

   303,168    $2,891     396,429    $7,271     153,727    $2,975  

During the year ended December 31, 2010, the Compensation Committee of the Company’s board of directors approved a modification of restricted stock unit awards granted to employees during 2008. The Compensation Committee also approved the cancellation and replacement of restricted stock unit awards granted to the Company’s top five executive officers during 2008. Both the modification and the cancellation and replacement were accounted for as modifications of share based awards. As a result of these modifications, the Company recorded incremental compensation expense of approximately $435 during the year ended December 31, 2010, which representsrepresented the difference between the grant date fair value and the modification date fair value of these awards for the portion of the service period that hashad been satisfied.satisfied at the time of the modification. The service period for the modified awards did not change. The Company will record additional incremental compensation expense of $261 over the remaining service period.

At the time of each of the 2008 and 2009 restricted stock unit grants, the Company was not able to determine which IRR level would be reached for the respective three year performance period, therefore the Company assumed the mid-point IRR level for both grants in determining the amount of compensation expense to record for such grants.

During the year ended December 31, 2010, based upon additional information, the Company determined that the 12.5% IRR level willwould be reached for the 2008 grant and recorded incremental compensation expense of approximately $823 during the year ended December 31, 2010. During the year ended December 31, 2010, the Company also determined that the 12.5% IRR level iswas expected to be reached for the 2009 grant. The Companygrant and recorded additionalincremental compensation expense of approximately $823 for the 2008 restricted stock unit grant and $377 for the 2009 restricted stock unit grant during the year ended December 31, 2010.

Due to the fact that the IRR for the three year performance period could not be determined at the time of the 2010 grant, the Company estimated that the most likely outcome is the achievement of the mid-point IRR level. The Company assumed a forfeiture rate of 5% for the restricted stock unit awards. If during the service period, additional information becomes available to lead the Company to believe a different IRR level will be achieved for the three year performance periods, the Company will reassess the number of units that will vest for the respective grant and adjust its compensation expense accordingly on a prospective basis over the remaining service period.

As of December 31, 2010,2011, no restricted stock unit awards had vested. There were no forfeitures of restricted stock unit awards during the year ended December 31, 2010.2011. The Company recorded total compensation expense of $326, $759, $3,424, including the incremental compensation expense discussed above, and $3,424$3,101 related to these restricted stock unit awards during the years ended December 31, 2008, 2009, 2010 and 2010,2011, respectively. As of December 31, 2010,2011, the Company had restricted stock units outstanding that represented a total of 884,0401,037,770 hypothetical shares of common stock, net of actual cumulative forfeitures of 19,918 units, assuming the maximum IRR of at least 12.5% is achieved for all of the grants. As of December 31, 2010,2011, the remaining unrecognized compensation expense related to the outstanding restricted stock unit awards was $6,389,$5,213, which assumes the high-point IRR level has been achieved for the 2008 grant, the high-point IRR level will be achieved for theand 2009 grantgrants and the mid-point IRR level will be achieved for the 2010 grant.and 2011 grants. The weighted average period over which this remaining compensation expense will be recognized is approximately two years.


F-36


CINEMARK HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

20.  SUPPLEMENTAL CASH FLOW INFORMATION

In thousands, except share and per share data

20.    SUPPLEMENTAL CASH FLOW INFORMATION

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

             
  Year Ended December 31,
  2008 2009 2010
 
Cash paid for interest(1) $94,533  $239,376  $103,047 
Cash paid for income taxes, net of refunds received $36,203  $46,213  $93,435 
Noncash investing and financing activities:            
Change in accounts payable and accrued expenses for the acquisition of theatre properties and equipment(2) $3,723  $(6,166) $3,339 
Theatre properties and equipment acquired under capital lease(3) $7,911  $20,400  $6,934 
Change in fair market values of interest rate swap agreements, net of taxes $(22,063) $3,898  $7,170 
Investment in NCM — receipt of common units (See Note 6) $19,020  $15,536  $30,683 
Investment in NCM — change of interest gain (loss) (See Note 6) $(75) $  $271 
Net book value of equipment contributed to DCIP (See Note 7) $  $  $18,090 
Dividends accrued on unvested restricted stock unit awards $(74) $(201) $(635)
Shares issued upon non-cash stock option exercises, at exercise price of $7.63 per share $  $34,923  $413 
Investment in Real D (See Note 8) $  $  $18,909 
Change in fair market value ofavailable-for-sale securities, net of taxes (See Note 8)
 $  $  $5,659 
Issuance of common stock as a result of the Central America Share Exchange (See Note 9) $12,949  $  $ 
Issuance of common stock as a result of the Ecuador Share Exchange (See Note 9) $3,200  $  $ 
Issuance of common stock as a result of the Colombia Share Exchange (See Note 9) $  $  $6,951 

  Year Ended December 31, 
  2009  2010  2011 

Cash paid for interest(1)

 $239,376   $103,047   $113,084  

Cash paid for income taxes, net of refunds received

 $46,213   $93,435   $29,106  

Noncash investing and financing activities:

   

Change in accounts payable and accrued expenses for the acquisition of theatre properties and equipment(2)

 $(6,166 $3,339   $7,349  

Theatre properties and equipment acquired under capital lease(3)

 $20,400   $6,934   $6,696  

Change in fair market values of interest rate swap agreements, net of taxes

 $3,898   $7,170   $4,867  

Investment in NCM — receipt of common units (See Note 6)

 $15,536   $30,683   $9,302  

Investment in NCM — change of interest gain (See Note 6)

 $—     $271   $—    

Net book value of equipment contributed to DCIP (See Note 7)

 $—     $18,090   $—    

Dividends accrued on unvested restricted stock unit awards

 $(201 $(635 $(684

Shares issued upon non-cash stock option exercises, at exercise price of $7.63 per share

 $34,923   $413   $—    

Investment in RealD (See Note 8)

 $—     $18,909   $3,402  

Change in fair market value of available-for-sale securities, net of taxes (See Note 8)

 $—     $5,659   $(13,566

Issuance of common stock as a result of the Colombia Share Exchange
(See Note 9)

 $—     $6,951   $—    

(1)
(1)Includes

Activity for 2009 includes $158,349 of interest paid as a result of the repurchase of approximately $419,403 aggregate principal amount of the Company’s 93/4%9.75% senior discount notes in 2009.notes. The interest portion of the repurchase had accreted on the senior discount notes since issuance during 2004.

(2)

Additions to theatre properties and equipment included in accounts payable as of December 31, 20092010 and 20102011 were $7,823$11,162 and $11,162,$18,512, respectively.

(3)Amount recorded during the twelve months ended December 31, 2009 was a result of the acquisition of theatres in the U.S. as discussed in

See Note 5.

During 2008, the Company elected to use the proceeds of approximately $2,089 from the sale of real properties to pursue the purchase of like-kind properties in accordance with the Internal Revenue Code and as a result, the proceeds were deposited to an escrow account. The Company did not purchase like-kind properties and the deposits of approximately $24,828 were returned to the Company during the year ended December 31, 2008.


F-37


CINEMARK HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

21.  INCOME TAXES

In thousands, except share and per share data

21.    INCOME TAXES

Income (loss) before income taxes consisted of the following:

             
  Year Ended December 31, 
  2008  2009  2010 
 
Income (loss) before income taxes:            
U.S.  $(53,452) $98,908  $124,335 
Foreign  30,077   46,693   83,166 
             
Total $(23,375) $145,601  $207,501 
             
Current:            
Federal $37,681  $35,303  $35,172 
Foreign  4,620   13,706   21,933 
State  4,729   8,450   9,336 
             
Total current expense  47,030   57,459   66,441 
             
Deferred:            
Federal  (28,138)  (9,527)  (143)
Foreign  7,330   (2,405)  (7,188)
State  (5,167)  (682)  (1,272)
             
Total deferred taxes  (25,975)  (12,614)  (8,603)
             
Income taxes $21,055  $44,845  $57,838 
             

   Year Ended December 31, 
   2009  2010  2011 

Income before income taxes:

    

U.S.

  $98,908   $124,335   $114,692  

Foreign

   46,693    83,166    90,940  
  

 

 

  

 

 

  

 

 

 

Total

  $145,601   $207,501   $205,632  
  

 

 

  

 

 

  

 

 

 

Current:

    

Federal

  $35,303   $35,172   $17,070  

Foreign

   13,706    21,933    26,830  

State

   8,450    9,336    7,099  
  

 

 

  

 

 

  

 

 

 

Total current expense

   57,459    66,441    50,999  
  

 

 

  

 

 

  

 

 

 

Deferred:

    

Federal

   (9,527  (143  22,100  

Foreign

   (2,405  (7,188  (2,332

State

   (682  (1,272  2,283  
  

 

 

  

 

 

  

 

 

 

Total deferred taxes

   (12,614  (8,603  22,051  
  

 

 

  

 

 

  

 

 

 

Income taxes

  $44,845   $57,838   $73,050  
  

 

 

  

 

 

  

 

 

 

A reconciliation between income tax expense and taxes computed by applying the applicable statutory federal income tax rate to income (loss) before income taxes follows:

             
  Year Ended December 31, 
  2008  2009  2010 
 
Computed normal tax expense (benefit) $(9,544) $50,960  $72,625 
Goodwill  27,503       
Foreign inflation adjustments  464   1,614   47 
State and local income taxes, net of federal income tax impact  (2,506)  5,215   5,195 
Foreign losses not benefited and other changes in valuation allowance  1,459   (552)  (5,685)
Foreign tax rate differential  1,537   (1,464)  (4,798)
Foreign dividends  2,084   2,141   3,952 
Capital loss benefit     (12,913)   
Changes in uncertain tax positions     6,957   (8,080)
True up to deferred tax items     (6,453)   
Other — net  58   (660)  (5,418)
             
Income taxes $21,055  $44,845  $57,838 
             

   Year Ended December 31, 
   2009  2010  2011 

Computed normal tax expense

  $50,960   $72,625   $71,972  

Foreign inflation adjustments

   1,614    47    (1,587

State and local income taxes, net of federal income tax impact

   5,215    5,195    7,310  

Foreign losses not benefited and other changes in valuation allowance

   (552  (5,685  (676

Foreign tax rate differential

   (1,464  (4,798  (3,321

Foreign dividends

   2,141    3,952    4,173  

Capital loss benefit

   (12,913  —      —    

Changes in uncertain tax positions

   6,957    (8,080  396  

True up to deferred tax items

   (6,453  —      —    

Other — net

   (660  (5,418  (5,217
  

 

 

  

 

 

  

 

 

 

Income taxes

  $44,845   $57,838   $73,050  
  

 

 

  

 

 

  

 

 

 

The Company reinvests the undistributed earnings of its foreign subsidiaries, with the exception of its subsidiary in Ecuador. Accordingly, deferred U.S. federal and state income taxes are provided only on the undistributed earnings of the Company’s Ecuador subsidiary. As of December 31, 2010,2011, the cumulative amount of


F-38


CINEMARK HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
undistributed earnings of the foreign subsidiaries on which the Company has not recognized income taxes was approximately $254,000.
$293,000. Determination of the amount of any unrecognized deferred income tax liability on this temporary difference is not practicable because of the complexities of the hypothetical calculation.

CINEMARK HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

In thousands, except share and per share data

Deferred Income Taxes

The tax effects of significant temporary differences and tax loss and tax credit carryforwards comprising the net long-term deferred income tax liabilities as of December 31, 20092010 and 20102011 consisted of the following:

         
  December 31, 
  2009  2010 
 
Deferred liabilities:        
Theatre properties and equipment $102,464  $101,162 
Deferred intercompany sales  8,650   12,905 
Intangible asset — other  7,277   23,872 
Intangible asset — tradenames  116,054   112,720 
Investment in partnerships  38,405   56,732 
         
Total deferred liabilities  272,850   307,391 
         
Deferred assets:        
Deferred lease expenses  13,493   21,333 
Theatre properties and equipment  11,672   14,152 
Deferred revenue — NCM and Fandango  64,313   84,206 
Capital lease obligations  52,645   51,294 
Interest rate swaps agreements  7,157   (606)
Tax loss carryforwards  12,747   8,847 
Alternative minimum tax and other credit carryforwards  5,634   9,076 
Other expenses, not currently deductible for tax purposes  1,915   13,320 
         
Total deferred assets  169,576   201,622 
         
Net deferred income tax liability before valuation allowance  103,274   105,769 
Valuation allowance against deferred assets  18,228   15,425 
         
Net deferred income tax liability $121,502  $121,194 
         
Net deferred tax liability — Foreign $13,381  $6,807 
Net deferred tax liability — U.S.   108,121   114,387 
         
Total $121,502  $121,194 
         
The Company’s valuation allowance against deferred tax assets decreased from $18,228 at December 31, 2009 to $15,425 at December 31, 2010. The change in the valuation allowance was primarily due to realization of deferred tax assets for the Company’s Chilean subsidiaries.

   December 31, 
   2010  2011 

Deferred liabilities:

   

Theatre properties and equipment

  $101,162   $92,466  

Deferred intercompany sales

   12,905    12,051  

Intangible asset — other

   23,872    24,749  

Intangible asset — tradenames

   112,720    116,333  

Investment in partnerships

   56,732    98,742  
  

 

 

  

 

 

 

Total deferred liabilities

   307,391    344,341  
  

 

 

  

 

 

 

Deferred assets:

   

Deferred lease expenses

   21,333    23,225  

Theatre properties and equipment

   14,152    5,910  

Deferred revenue — NCM and Fandango

   84,206    88,616  

Capital lease obligations

   51,294    51,211  

Interest rate swap agreements

   (606  5,882  

Tax loss carryforwards

   8,847    10,602  

Alternative minimum tax and other credit carryforwards

   9,076    7,548  

Other expenses, not currently deductible for tax purposes

   13,320    23,750  
  

 

 

  

 

 

 

Total deferred assets

   201,622    216,744  
  

 

 

  

 

 

 

Net deferred income tax liability before valuation allowance

   105,769    127,597  

Valuation allowance against deferred assets

   15,425    15,443  
  

 

 

  

 

 

 

Net deferred income tax liability

  $121,194   $143,040  
  

 

 

  

 

 

 

Net deferred tax liability — Foreign

  $6,807   $10,757  

Net deferred tax liability — U.S.

   114,387    132,283  
  

 

 

  

 

 

 

Total

  $121,194   $143,040  
  

 

 

  

 

 

 

The Company’s foreign tax credit carryforwards begin expiring in 2015. Some foreign net operating losses will expire in the next reporting period; however, some losses may be carried forward indefinitely. State net operating losses may be carried forward for periods of between five and twenty years with the last expiring year being 2029.


F-39


CINEMARK HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

In thousands, except share and per share data

Uncertain Tax Positions

The following is a reconciliation of the total amounts of unrecognized tax benefits excluding interest and penalties, for the years ended December 31, 2008, 2009, 2010 and 2010:

             
  Year Ended December 31, 
  2008  2009  2010 
 
Balance at January 1, $12,493  $13,976  $23,857 
Gross increases-tax positions in prior periods  37   2,274    
Gross decreases-tax positions in prior periods  (199)     (1,392)
Gross increases — current period tax positions  2,397   7,845   3,551 
Gross decreases — current period tax positions  (752)  (622)  (613)
Settlements        (10,383)
Foreign currency translation adjustments     384   177 
             
Balance at December 31, $13,976  $23,857  $15,197 
             
2011:

   Year Ended December 31, 
   2009  2010  2011 

Balance at January 1,

  $13,976   $23,857   $15,197  

Gross increases-tax positions in prior periods

   2,274    —      3,153  

Gross decreases-tax positions in prior periods

   —      (1,392  —    

Gross increases — current period tax positions

   7,845    3,551    3,729  

Gross decreases — current period tax positions

   (622  (613  (633

Settlements

   —      (10,383  (2,467

Foreign currency translation adjustments

   384    177    (319
  

 

 

  

 

 

  

 

 

 

Balance at December 31,

  $23,857   $15,197   $18,660  
  

 

 

  

 

 

  

 

 

 

The Company had $31,661$19,788 and $19,788$22,411 of gross unrecognized tax benefits, including interest and penalties, as of December 31, 20092010 and December 31, 2010,2011, respectively. Of these amounts, $23,212$14,339 and $14,339$16,274 represent the amount of unrecognized tax benefits that if recognized would impact the effective income tax rate for the years ended December 31, 20092010 and 2010,2011, respectively. The Company had $7,804$4,591 and $4,592$3,751 accrued for interest and penalties as of December 31, 20092010 and 2010,2011, respectively.

The Company and its subsidiaries file income tax returns in the U.S. federal jurisdiction, and multiple state and foreign jurisdictions, and the Company is routinely under audit by many different tax authorities. The Company believes that its accrual for tax liabilities is adequate for all open audit years based on its assessment of many factors including past experience and interpretations of tax law. This assessment relies on estimates and assumptions and may involve a series of complex judgments about future events. The Company is no longer subject to income tax audits from the Internal Revenue Service for years before 2006.2007. The Company is no longer subject to state income tax examinations by tax authorities in its major state jurisdictions for years before 2006.2007. Certain state returns were amended as a result of the Internal Revenue Service examination closures for 2002 through 2005,2006, and the statutes remain open for those amendments. The Company is no longer subject tonon-U.S. income tax examinations by tax authorities in its majornon-U.S. tax jurisdictions for years before 2004.

The Company is currently under examination by the Internal Revenue Service for the 20062007, 2008 and 20072009 tax years. It is reasonably possibleWe do not believe that these audits couldwill be completed within the next twelve months. These events could result in a decrease in the Company’s total unrecognized tax benefits of approximately $1,948, which includes approximately $259 of accrued interest.

CINEMARK HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

In thousands, except share and per share data

22.    COMMITMENTS AND CONTINGENCIES

22.  

COMMITMENTS AND CONTINGENCIES
Leases— The Company conducts a significant part of its theatre operations in leased properties under noncancelable operating and capital leases with terms generally ranging from 10 to 25 years. In addition to the minimum annual lease payments, some of the leases provide for contingent rentals based on operating results of the theatre and most require the payment of taxes, insurance and other costs applicable to the property. The Company can renew, at its option, a substantial portion of the leases at defined or then market rental rates for various periods. Some leases also provide for escalating rent payments throughout the lease term. A liability for deferred lease expenses of $27,698$30,454 and $30,454$34,466 at December 31, 20092010 and 2010,2011, respectively, has been provided to account for


F-40


CINEMARK HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
lease expenses on a straight-line basis, where lease payments are not made on such a basis. Rent expense was as follows:
             
  Year Ended December 31, 
  2008  2009  2010 
 
Fixed rent expense $175,368  $181,075  $186,893 
Contingent rent expense  50,227   57,704   68,824 
             
Total facility lease expense $225,595  $238,779  $255,717 
             

   Year Ended December 31, 
   2009   2010   2011 

Fixed rent expense

  $181,075    $186,893    $200,006  

Contingent rent expense

   57,704     68,824     76,272  
  

 

 

   

 

 

   

 

 

 

Total facility lease expense

  $238,779    $255,717    $276,278  
  

 

 

   

 

 

   

 

 

 

Future minimum lease payments under noncancelable operating and capital leases that have initial or remaining terms in excess of one year at December 31, 20102011 are due as follows:

         
  Operating
  Capital
 
  Leases  Leases 
 
2011 $200,144  $21,237 
2012  200,444   21,376 
2013  196,047   21,514 
2014  188,802   21,790 
2015  182,114   22,007 
Thereafter  827,684   132,675 
         
Total $1,795,235  $240,599 
         
Amounts representing interest payments      100,439 
         
Present value of future minimum payments     $140,160 
Current portion of capital lease obligations      7,348 
         
Capital lease obligations, less current portion     $132,812 
         

   Operating
Leases
   Capital
Leases
 

2012

  $219,650    $23,264  

2013

   220,027     23,119  

2014

   214,152     22,868  

2015

   206,969     23,030  

2016

   196,054     22,807  

Thereafter

   847,075     115,293  
  

 

 

   

 

 

 

Total

  $1,903,927    $230,381  
  

 

 

   

Amounts representing interest payments

     (89,209
    

 

 

 

Present value of future minimum payments

    $141,172  

Current portion of capital lease obligations

     9,639  
    

 

 

 

Capital lease obligations, less current portion

    $131,533  
    

 

 

 

Employment AgreementsEffective June 16, 2008, theThe Company entered into newhas employment agreements with Lee Roy Mitchell, Alan W. Stock, Timothy Warner, Robert Copple, and Michael Cavalier and effective December 15, 2008, the Company entered into newRob Carmony. These employment agreements with Lee Roy Mitchell, Rob Carmony, and John Lundin. Collectively these new employment agreements are herein referred to as the “Employment Agreements”. The Employment Agreements have an initial term of three years subject to an automatic extension for a one-year period, unless the employment agreements are terminated. Effective June 3, 2009, the Company terminated its employment agreement with John Lundin. Effective May 25, 2009, the Company entered into an employment agreement with Steve Bunnell that has an initial term of two years subject to an extension for a one year period, unless the agreement is terminated. Effective February 15, 2010, the Company entered into an employment agreement with Valmir Fernandes, that has an initial term of three years. The base salaries stipulated in the employment agreements are subject to review during the term of the agreements for increase (but not decrease) each year by the Company’s Compensation Committee. Management personnel subject to these employment agreements are eligible to receive annual cash incentive bonuses upon the Company meeting certain performance targets established by its Compensation Committee.

On February 15, 2012, Mr. Stock retired from the Company and as a result, his employment agreement was terminated. See Note 28.

CINEMARK HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

In thousands, except share and per share data

Retirement Savings Plan — The Company has a 401(k) retirement savings plan for the benefit of all employees and makes contributions as determined annually by the board of directors. Contribution payments of $1,834$2,081 and $2,081$2,311 were made in 2009 (for plan year 2008) and 2010 (for plan year 2009) and 2011 (for plan year 2010), respectively. A liability of approximately $2,313$2,443 has been recorded at December 31, 20102011 for contribution payments to be made in 20112012 (for plan year 2010)2011).


F-41


CINEMARK HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
Litigation and Litigation SettlementsOn December 10, 2010, the Company was made a party to a putative class action claim in the United States District Court for the Northern District of California. The claim has been filed by a disability rights group and two individuals for injunctive relief, damages and attorney’s fees concerning captioning the movie exhibitions at the Company’s theatres in California. Monetary damages are also sought on behalf of all hearing-disabled patrons of our theatres in California. This case is in an early pretrial phase. The Company intends to vigorously defend this suit. The Company is currently unable to estimate a possible loss or range of loss related to this matter.
From time to time, the Company is involved in other various legal proceedings arising from the ordinary course of its business operations, such as personal injury claims, employment matters, landlord-tenant disputes, patent claims and contractual disputes, some of which are covered by insurance or by indemnification from vendors. The Company believes its potential liability with respect to these types of proceedings currently pending is not material, individually or in the aggregate, to the Company’s financial position, results of operations and cash flows.
23.  SEGMENTS

23.    SEGMENTS

The Company manages its international market and its U.S. market as separate reportable operating segments. The international segment consists of operations in Brazil, Mexico, Argentina, Chile, Colombia, Argentina, Peru, Ecuador, Honduras, El Salvador, Nicaragua, Costa Rica, Panama and Guatemala. The U.S. segment includes U.S. and Canada operations. (Note that the Company’s only Canadian theatre was sold during November 2010). Each segment’s revenue is derived from admissions and concession sales and other ancillary revenues, primarily screen advertising. The measure of segment profit and loss the Company uses to evaluate performance and allocate its resources is Adjusted EBITDA, as defined in the reconciliation table below. The Company does not report asset information by segment because that information is not used to evaluate the performance or allocate resources between segments.

Below is a breakdown of select financial information by reportable operating segment:

             
  Year Ended December 31, 
  2008  2009  2010 
 
Revenues:            
U.S.  $1,360,176  $1,558,736  $1,584,281 
International  385,817   421,765   564,240 
Eliminations  (3,706)  (4,001)  (7,377)
             
Total revenues $1,742,287  $1,976,500  $2,141,144 
             
             
  Year Ended December 31, 
Adjusted EBITDA: 2008  2009  2010 
 
U.S.  $291,487  $361,685  $363,345 
International  78,805   83,839   122,575 
             
Total Adjusted EBITDA $370,292  $445,524  $485,920 
             
         
  Year Ended December 31, 
Capital Expenditures: 2009  2010 
 
U.S.  $81,695  $70,474 
International  43,102   85,628 
         
Total capital expenditures $124,797  $156,102 
         


F-42


   Year Ended December 31, 
   2009  2010  2011 

Revenues:

    

U.S.

  $1,558,736   $1,584,281   $1,593,667  

International

   421,765    564,240    696,119  

Eliminations

   (4,001  (7,377  (10,173
  

 

 

  

 

 

  

 

 

 

Total revenues

  $1,976,500   $2,141,144   $2,279,613  
  

 

 

  

 

 

  

 

 

 

   Year Ended December 31, 
   2009   2010   2011 

Adjusted EBITDA:

      

U.S.

  $361,685    $363,345    $371,212  

International

   83,839     122,575     148,261  
  

 

 

   

 

 

   

 

 

 

Total Adjusted EBITDA

  $445,524    $485,920    $519,473  
  

 

 

   

 

 

   

 

 

 

      Year Ended December 31, 
       2010   2011 

Capital Expenditures:

      

U.S.

    $70,474    $79,510  

International

     85,628     105,309  
    

 

 

   

 

 

 

Total capital expenditures

    $156,102    $184,819  
    

 

 

   

 

 

 

CINEMARK HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

In thousands, except share and per share data

The following table sets forth a reconciliation of net income (loss) to Adjusted EBITDA:

             
  Year Ended December 31, 
  2008  2009  2010 
 
Net income (loss) $(44,430) $100,756  $149,663 
Add (deduct):            
Income taxes  21,055   44,845   57,838 
Interest expense(1)  116,058   102,505   112,444 
(Gain) loss on early retirement of debt  (1,698)  27,878   3 
Other income(2)  (11,927)  (4,688)  (3,721)
Depreciation and amortization  155,326   148,264   142,731 
Amortization of favorable/unfavorable leases  2,708   1,251   777 
Impairment of long-lived assets  113,532   11,858   12,538 
(Gain) loss on sale of assets and other  8,488   3,202   (431)
Deferred lease expenses  4,350   3,960   3,940 
Amortization of long-term prepaid rents  1,717   1,389   1,786 
Share based awards compensation expense  5,113   4,304   8,352 
             
Adjusted EBITDA $370,292  $445,524  $485,920 
             

   Year Ended December 31, 
   2009  2010  2011 

Net income

  $100,756   $149,663   $132,582  

Add (deduct):

    

Income taxes

   44,845    57,838    73,050  

Interest expense(1)

   102,505    112,444    123,102  

Loss on early retirement of debt

   27,878    3    4,945  

Loss on marketable securities — RealD

   —      —      12,610  

Other income(2)

   (4,688  (3,721  (13,594

Depreciation and amortization(3)

   149,515    143,508    154,449  

Impairment of long-lived assets

   11,858    12,538    7,033  

(Gain) loss on sale of assets and other

   3,202    (431  8,792  

Deferred lease expenses

   3,960    3,940    4,155  

Amortization of long-term prepaid rents

   1,389    1,786    2,657  

Share based awards compensation expense

   4,304    8,352    9,692  
  

 

 

  

 

 

  

 

 

 

Adjusted EBITDA

  $445,524   $485,920   $519,473  
  

 

 

  

 

 

  

 

 

 

(1)
(1)

Includes amortization of debt issue costs.

(2)

Includes interest income, foreign currency exchange gain (loss), and equity in lossincome (loss) of affiliates and excludes distributions from NCM. Distributions from NCM are reported entirely within the U.S. operating segment.

(3)

Includes amortization of favorable/unfavorable leases.

Financial Information About Geographic Areas

We have operations in the U.S., Brazil, Mexico, Chile, Colombia, Argentina, Peru, Ecuador, Honduras, El Salvador, Nicaragua, Costa Rica, Panama and Guatemala, which are reflected in the consolidated financial statements.

Below is a breakdown of select financial information by geographic area:

             
  Year Ended December 31, 
  2008  2009  2010 
 
Revenues
            
U.S.  $1,360,176  $1,558,736  $1,584,281 
Brazil  186,159   218,236   315,884 
Mexico  78,292   65,206   70,859 
Other foreign countries  121,366   138,323   177,497 
Eliminations  (3,706)  (4,001)  (7,377)
             
Total $1,742,287  $1,976,500  $2,141,144 
             
         
  December 31, 
  2009  2010 
 
Theatres properties and equipment, net
        
U.S.  $1,040,395  $972,358 
Brazil  91,996   129,361 
Mexico  39,371   43,127 
Other foreign countries  47,826   70,600 
         
Total $1,219,588  $1,215,446 
         


F-43


   Year Ended December 31, 
   2009  2010  2011 

Revenues

    

U.S.

  $1,558,736   $1,584,281   $1,593,667  

Brazil

   218,236    315,884    358,820  

Other foreign countries

   203,529    248,356    337,299  

Eliminations

   (4,001  (7,377  (10,173
  

 

 

  

 

 

  

 

 

 

Total

  $1,976,500   $2,141,144   $2,279,613  
  

 

 

  

 

 

  

 

 

 

   December 31, 
    2010   2011 

Theatres properties and equipment, net

    

U.S.

  $972,358    $934,279  

Brazil

   129,361     149,294  

Other foreign countries

   113,727     155,277  
  

 

 

   

 

 

 

Total

  $1,215,446    $1,238,850  
  

 

 

   

 

 

 

CINEMARK HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

24.  RELATED PARTY TRANSACTIONS
The

In thousands, except share and per share data

24.    RELATED PARTY TRANSACTIONS

Prior to March 2010, the Company leased one theatre from Plitt Plaza Joint Venture (“Plitt Plaza”) on amonth-to-month basis. Plitt Plaza is indirectly owned by Lee Roy Mitchell, the Company’s Chairman of the Board, who directly and indirectly owns approximately 12%9% of the Company’s issued and outstanding shares of common stock. The Company closed this theatre during March 2010. The Company recorded $127, $118 and $30 of facility lease and other operating expenses payable to Plitt Plaza joint venture during the years ended December 31, 2008, 2009 and 2010, respectively. During the year ended December 31, 2010, the Company recorded approximately $111 related to the termination of the lease, which is reflected in (gain) loss on sale of assets and other on the consolidated statementsstatement of operations.

income.

The Company manages one theatretheatres for Laredo Theatre, Ltd. (“Laredo”). The Company is the sole general partner and owns 75% of the limited partnership interests of Laredo. Lone Star Theatres, Inc. owns the remaining 25% of the limited partnership interests in Laredo and is 100% owned by Mr. David Roberts, Lee Roy Mitchell’sson-in-law. Under the agreement, management fees are paid by Laredo to the Company at a rate of 5% of annual theatre revenues up to $50,000 and 3% of annual theatre revenues in excess of $50,000. The Company recorded $92, $102, $105 and $105$476 of management fee revenues during the years ended December 31, 2008, 2009, 2010 and 2010,2011, respectively. All such amounts are included in the Company’s consolidated financial statements with the intercompany amounts eliminated in consolidation.

The Company has an Aircraft Time Sharing Agreement with Copper Beech Capital, LLC to use, on occasion, a private aircraft owned by Copper Beech Capital, LLC. Copper Beech Capital, LLC is owned by Mr. Mitchell and his wife, Tandy Mitchell. The private aircraft is used by Mr. Mitchell and other executives who accompany Mr. Mitchell to business meetings for the Company. The Company reimburses Copper Beech Capital, LLC the actual costs of fuel usage and the expenses of the pilots, landing fees, storage fees and similar expenses incurred during the trip. For the years ended December 31, 2008, 2009, 2010 and 2010,2011, the aggregate amounts paid to Copper Beech Capital, LLC for the use of the aircraft was approximately $136, $64, $73 and $73,$86, respectively.

The Company leases 20 theatres and one parking facility from Syufy Enterprises, LP (“Syufy”) or affiliates of Syufy. Raymond Syufy is one of the Company’s directors and is an officer of the general partner of Syufy. OfCertain of these 21 leases 17 have fixed minimum annual rent in an aggregate amount of approximately $21,044. The four leases without minimum annualand others have just percentage rent have rent based upon a specified percentage of gross sales as defined in the lease with no minimum annual rent. For the years ended December 31, 2008, 2009, 2010 and 2010,2011, the Company paid total rent of approximately $1,304, $1,296$18,614, $18,058 and $1,224,$18,881, respectively, in percentage rent for these four leases.

25.  VALUATION AND QUALIFYING ACCOUNTS
to Syufy.

CINEMARK HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

In thousands, except share and per share data

25.    VALUATION AND QUALIFYING ACCOUNTS

The Company’s valuation allowance for deferred tax assets for the years ended December 31, 2008, 2009, 2010 and 20102011 were as follows:

     
  Valuation Allowance for
 
  Deferred Tax Assets 
 
Balance at January 1, 2008 $9,872 
Additions  4,200 
Deductions  (609)
     
Balance at December 31, 2008 $13,463 
Additions  5,163 
Deductions  (398)
     
Balance at December 31, 2009 $18,228 
Additions  3,398 
Deductions  (6,201)
     
Balance at December 31, 2010 $15,425 
     


F-44


   Valuation Allowance
for Deferred
Tax Assets
 

Balance at January 1, 2009

  $13,463  

Additions

   5,163  

Deductions

   (398
  

 

 

 

Balance at December 31, 2009

  $18,228  

Additions

   3,398  

Deductions

   (6,201
  

 

 

 

Balance at December 31, 2010

  $15,425  

Additions

   2,338  

Deductions

   (2,320
  

 

 

 

Balance at December 31, 2011

  $15,443  
  

 

 

 

26.    QUARTERLY FINANCIAL INFORMATION (UNAUDITED)

   2010 
   First
Quarter
   Second
Quarter
   Third
Quarter
   Fourth
Quarter
   Full Year 

Revenues

  $516,631    $539,369    $560,235    $524,909    $2,141,144  

Operating income

  $71,793    $79,697    $73,788    $67,591    $292,869  

Net income attributable to Cinemark Holdings, Inc.

  $35,093    $39,682    $33,332    $38,013    $146,120  

Net income per share attributable to Cinemark

          

Holdings, Inc.’s common stockholders:

          

Basic

  $0.32    $0.35    $0.29    $0.33    $1.30  

Diluted

  $0.31    $0.35    $0.29    $0.33    $1.29  

   2011 
   First
Quarter
   Second
Quarter
   Third
Quarter
   Fourth
Quarter
   Full Year 

Revenues

  $483,136    $620,593    $640,013    $535,871    $2,279,613  

Operating income

  $48,756    $97,001    $101,310    $61,467    $308,534  

Net income attributable to Cinemark Holdings, Inc.

  $24,963    $40,411    $46,920    $18,263    $130,557  

Net income per share attributable to Cinemark

          

Holdings, Inc.’s common stockholders:

          

Basic

  $0.22    $0.35    $0.41    $0.16    $1.15  

Diluted

  $0.22    $0.35    $0.41    $0.16    $1.14  

27.    SUBSEQUENT EVENT — DIVIDEND DECLARATION

CINEMARK HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
26.  QUARTERLY FINANCIAL INFORMATION (UNAUDITED)
                     
  2009
  First
 Second
 Third
 Fourth
  
  Quarter Quarter Quarter Quarter Full Year
 
Revenues $425,800  $517,508  $496,825  $536,367  $1,976,500 
Operating income $50,586  $70,550  $55,671  $73,667  $250,474 
Net income attributable to Cinemark Holdings, Inc.  $17,565  $18,670  $21,011  $39,862  $97,108 
Net income per share attributable to Cinemark Holdings, Inc.’s common stockholders:                    
Basic $0.16  $0.17  $0.19  $0.36  $0.89 
Diluted $0.16  $0.17  $0.19  $0.36  $0.87 
                     
  2010
  First
 Second
 Third
 Fourth
  
  Quarter Quarter Quarter Quarter Full Year
 
Revenues $516,631  $539,369  $560,235  $524,909  $2,141,144 
Operating income $71,793  $79,697  $73,788  $67,591  $292,869 
Net income attributable to Cinemark Holdings, Inc.  $35,093  $39,682  $33,332  $38,013  $146,120 
Net income per share attributable to Cinemark Holdings, Inc.’s common stockholders:                    
Basic $0.32  $0.35  $0.29  $0.33  $1.30 
Diluted $0.31  $0.35  $0.29  $0.33  $1.29 
27.  SUBSEQUENT EVENT — DIVIDEND DECLARATION
On February 24, 2011,3, 2012, the Company’s board of directors declared a cash dividend for the fourth quarter of 20102011 of $0.21 per share of common stock payable to stockholders of record on March 4, 2011.2, 2012. The dividend will be paid on March 16, 2011.


F-45

2012.


CINEMARK HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

In thousands, except share and per share data

28.    SUBSEQUENT EVENT — RETIREMENT OF CHIEF EXECUTIVE OFFICER

On February 15, 2012, the Company’s Chief Executive Officer, Alan Stock, announced his retirement. As a result of the retirement, the Company’s employment agreement with Mr. Stock was effectively terminated. The Company does not owe Mr. Stock any additional compensation under the terminated employment agreement. Mr. Stock will continue on in a transitional role until May 1, 2012 and will then become a consultant for the Company for a two-year period through April 30, 2014 in accordance with his consulting agreement. Mr. Stock will retain his share based awards under their original vesting terms.

SCHEDULE 1 SCHEDULE 1 CONDENSED FINANCIAL INFORMATION OF REGISTRANT

SCHEDULE 1 — CONDENSED FINANCIAL INFORMATION OF REGISTRANT

CINEMARK HOLDINGS, INC.

PARENT COMPANY BALANCE SHEETS

         
  December 31,
  December 31,
 
  2009  2010 
  (In thousands, except share data) 
 
ASSETS
Cash and cash equivalents $199  $232 
Accounts receivable  317    
Investment in subsidiaries  907,344   1,029,101 
         
Total assets $907,860  $1,029,333 
         
LIABILITIES AND EQUITY
Liabilities        
Accounts payable to subsidiaries $7,656  $6,728 
Accrued other current liabilities  98   149 
Other long-term liabilities  274   909 
         
Total liabilities  8,028   7,786 
Equity        
Common stock, $0.001 par value: 300,000,000 shares authorized, 114,222,523 shares issued and 110,917,105 shares outstanding at December 31, 2009; and 117,110,703 shares issued and 113,750,844 shares outstanding at December 31, 2010  114   117 
Additionalpaid-in-capital
  1,011,667   1,037,586 
Treasury stock, 3,305,418 and 3,359,859 common shares at cost at December 31, 2009 and 2010, respecitvely  (43,895)  (44,725)
Retained earnings (deficit)  (60,595)  388 
Accumulated other comprehensive income (loss)  (7,459)  28,181 
         
Total equity  899,832   1,021,547 
         
Total liabilities and equity
 $907,860  $1,029,333 
         

(In thousands, except share data)

   December 31,
2010
  December 31,
2011
 

Assets

   

Cash and cash equivalents

  $232   $156  

Investment in subsidiaries

   1,029,101    1,014,532  
  

 

 

  

 

 

 

Total assets

  $1,029,333   $1,014,688  
  

 

 

  

 

 

 

Liabilities and equity

   

Liabilities

   

Accounts payable to subsidiaries

  $6,728   $—    

Accrued other current liabilities

   149    780  

Other long-term liabilities

   909    1,031  
  

 

 

  

 

 

 

Total liabilities

   7,786    1,811  

Commitments and contingencies

   

Equity

   

Common stock, $0.001 par value: 300,000,000 shares authorized; 117,110,703 shares issued and 113,750,844 shares outstanding at December 31, 2010 and 117,593,329 shares issued and 114,201,737 shares outstanding at December 31, 2011

   117    118  

Additional paid-in-capital

   1,037,586    1,047,237  

Treasury stock, 3,359,859 and 3,391,592 common shares at cost at December 31, 2010 and 2011, respectively

   (44,725  (45,219

Retained earnings

   388    34,423  

Accumulated other comprehensive income (loss)

   28,181    (23,682
  

 

 

  

 

 

 

Total equity

   1,021,547    1,012,877  
  

 

 

  

 

 

 

Total liabilities and equity

  $1,029,333   $1,014,688  
  

 

 

  

 

 

 

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


F-46


CINEMARK HOLDINGS, INC.

PARENT COMPANY STATEMENTS OF OPERATIONS
INCOME

YEARS ENDED DECEMBER 31, 2008, 2009, 2010 AND 20102011

             
  Year Ended December 31, 
  2008  2009  2010 
  (In thousands) 
 
Revenues $  $  $ 
Cost of operations  988   1,536   2,030 
             
Operating loss  (988)  (1,536)  (2,030)
Other income  1,940   94   1 
             
Income (loss) before income taxes and equity in income (loss) of subsidiaries  952   (1,442)  (2,029)
Income taxes  (365)  519   762 
Equity in income (loss) of subsidiaries, net of taxes  (48,912)  98,031   147,387 
             
Net income (loss)
 $(48,325) $97,108  $146,120 
             

(in thousands)

   Year Ended December 31, 
   2009  2010  2011 

Revenues

  $—     $—     $—    

Cost of operations

   1,536    2,030    2,193  
  

 

 

  

 

 

  

 

 

 

Operating loss

   (1,536  (2,030  (2,193

Other income

   94    1    —    
  

 

 

  

 

 

  

 

 

 

Loss before income taxes and equity in income of subsidiaries

   (1,442  (2,029  (2,193

Income taxes

   519    762    823  

Equity in income of subsidiaries, net of taxes

   98,031    147,387    131,927  
  

 

 

  

 

 

  

 

 

 

Net income

  $97,108   $146,120   $130,557  
  

 

 

  

 

 

  

 

 

 

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


F-47


CINEMARK HOLDINGS, INC.

PARENT COMPANY STATEMENTS OF EQUITY AND COMPREHENSIVE INCOME (LOSS)
CASH FLOWS

YEARS ENDED DECEMBER 31, 2008, 2009, 2010 AND 20102011

                                     
                    Accumulated
  Total
    
                    Other
  Cinemark
    
  Common Stock  Treasury Stock  Additional
  Retained
  Comprehensive
  Holdings, Inc.
  Comprehensive
 
  Shares
     Shares
     Paid-in-
  Earnings
  Income
  Stockholders’
  Income
 
  Issued  Amount  Issued  Amount  Capital  (Deficit)  (Loss)  Equity  (Loss) 
              (In thousands)          
 
Balance at January 1, 2008
  106,984  $107     $  $939,327  $47,074  $32,695  $1,019,203     
Issuance of restricted stock, net of restricted stock forfeitures  385                               
Exercise of stock options  169              1,292           1,292     
Share based awards compensation expense                  474           474     
Subsidiaries’ share based awards activity                  5,113           5,113     
Issuance of shares as a result of Central America share exchange  903   1           12,948           12,949     
Issuance of shares as a result of Ecuador share exchange  394   1           3,199           3,200     
Dividends paid to stockholders                      (77,534)      (77,534)    
Dividends accrued on unvested restricted stock awards                      (74)      (74)    
Contribution by noncontrolling interest                                   
Dividends paid to noncontrolling interests                                   
Comprehensive income (loss):                                    
Net loss                      (48,325)      (48,325)  (48,325)
Fair value adjustments on interest rate swap agreements, net of taxes of $2,442                          (22,063)  (22,063)  (22,063)
Amortization 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)
                                     
Balance at December 31, 2008
  108,835  $109     $  $962,353  $(78,859) $(72,347) $811,256  $(153,367)
                                     
Issuance of restricted stock, net of restricted stock forfeitures  479      (30)                   
Exercise of stock options, net of stock withholdings  4,908   5   (3,275)  (43,895)  37,442         (6,448)    
Share based awards compensation expense              500         500     
Subsidiaries’ share based awards activity              11,349         11,349     
Dividends paid to stockholders                 (78,643)     (78,643)    
Dividends accrued on unvested restricted stock awards                 (201)     (201)    
Purchase of noncontrolling interest share of an Argentina subsidiary              23         23     
Dividends paid to noncontrolling interests                            
Comprehensive income:                                   
Net income                 97,108       97,108   97,108 
Fair value adjustments on interest rate swap agreements, net of taxes of $2,359                    3,898   3,898   3,898 
Amortization of accumulated other comprehensive loss on terminated swap agreement                    4,633   4,633   4,633 
Foreign currency translation adjustment                    56,357   56,357   56,357 
                                     
Balance at December 31, 2009
  114,222  $114   (3,305) $(43,895) $1,011,667  $(60,595) $(7,459) $899,832  $161,996 
                                     
Colombia share exchange  1,113   1         6,950      (1,086)  5,865     
Share based awards compensation expense              765         765     
Subsidiaries’ share based awards activity              7,587         7,587     
Issuance of restricted stock, net of restricted stock forfeitures  684   1                  1     
Stock repurchases related to restricted stock that vested during the year ended December 31, 2010        (20)  (299)           (299)    
Exercise of stock options, net of stock withholdings  1,092   1   (35)  (531)  8,327         7,797     
Tax benefit related to stock option exercises              2,680         2,680     
Dividends paid to stockholders                 (84,502)     (84,502)    
Dividends accrued on unvested restricted stock unit awards                 (635)     (635)    
Purchase of noncontrolling interest share of Panama subsidiary              (390)        (390)    
Dividends paid to noncontrolling interests                            
Comprehensive income:                                    
Net income                 146,120      146,120   146,120 
Fair value adjustments on interest rate swap agreements, net of taxes of $4,339                    7,170   7,170   7,170 
Amortization of accumulated other comprehensive loss on terminated swap agreement                    4,633   4,633   4,633 
Fair value adjustments on available-for-sale securities, net of taxes of $3,424                    5,659   5,659   5,659 
Foreign currency translation adjustment                    19,264   19,264   19,264 
                                     
Balance at December 31, 2010
  117,111  $117   (3,360) $(44,725) $1,037,586  $388  $28,181  $1,021,547  $182,846 
                                     

(in thousands)

   Year Ended December 31, 
   2009  2010  2011 

Operating Activities

    

Net income

  $97,108   $146,120   $130,557  

Adjustments to reconcile net income to cash provided by (used for) operating activities:

    

Share based awards compensation expense

   500    765    666  

Equity in income of subsidiaries

   (98,031  (147,387  (131,927

Changes in other assets and liabilities

   9,171    (561  1,516  
  

 

 

  

 

 

  

 

 

 

Net cash provided by (used for) operating activities

   8,748    (1,063  812  

Investing Activities

    

Investments in subsidiaries; Cinemark, Inc. and Cinemark USA, Inc.

   (18,000  —      —    

Dividends received from subsidiaries; Cinemark, Inc. and Cinemark USA, Inc.

   58,625    78,100    95,000  
  

 

 

  

 

 

  

 

 

 

Net cash provided by investing activities

   40,625    78,100    95,000  

Financing Activities

    

Proceeds from stock option exercises

   2,524    7,914    444  

Payroll taxes paid as a result of immaculate option exercises

   (8,972  (416  (494

Dividends paid to stockholders

   (78,643  (84,502  (95,838
  

 

 

  

 

 

  

 

 

 

Net cash used for financing activities

   (85,091  (77,004  (95,888
  

 

 

  

 

 

  

 

 

 

Increase (decrease) in cash and cash equivalents

   (35,718  33    (76

Cash and cash equivalents:

    

Beginning of period

   35,917    199    232  
  

 

 

  

 

 

  

 

 

 

End of period

  $199   $232   $156  
  

 

 

  

 

 

  

 

 

 

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


F-48


CINEMARK HOLDINGS, INC.
PARENT COMPANY STATEMENTS OF CASH FLOWS
YEARS ENDED DECEMBER 31, 2008, 2009 AND 2010
             
  Year Ended December 31, 
  2008  2009  2010 
  (In thousands) 
 
Operating Activities
            
Net income (loss) $(48,325) $97,108  $146,120 
Adjustments to reconcile net income (loss) to cash provided by (used for) operating activities:            
Share based awards compensation expense  474   500   765 
Equity in (income) loss of subsidiaries  48,912   (98,031)  (147,387)
Changes in other assets and liabilities  (2,837)  9,171   (561)
             
Net cash provided by (used for) operating activities  (1,776)  8,748   (1,063)
Investing Activities
            
Investments in subsidiaries; Cinemark, Inc. and Cinemark USA, Inc.   (42,207)  (18,000)   
Dividends received from subsidiaries; Cinemark, Inc. and Cinemark USA, Inc.   51,500   58,625   78,100 
             
Net cash provided by investing activities  9,293   40,625   78,100 
Financing Activities
            
Proceeds from stock option exercises  1,292   2,524   7,914 
Payroll taxes paid as a result of immaculate option exercises     (8,972)  (416)
Dividends paid to stockholders  (77,534)  (78,643)  (84,502)
             
Net cash used for financing activities  (76,242)  (85,091)  (77,004)
             
Increase (decrease) in cash and cash equivalents
  (68,725)  (35,718)  33 
Cash and cash equivalents:
            
Beginning of period  104,642   35,917   199 
             
End of period $35,917  $199  $232 
             
The accompanying notes are an integral part of the consolidated financial statements.


F-49


CINEMARK HOLDINGS, INC.
NOTES TO PARENT COMPANY FINANCIAL STATEMENTS

In thousands, except share and per share data

1.  BASIS OF PRESENTATION

1.    BASIS OF PRESENTATION

On August 2, 2006, Cinemark Holdings, Inc. was formed as the Delaware holding company of Cinemark, Inc. On April 24, 2007, Cinemark Holdings, Inc. completed an initial public offering of its common stock. Effective December 11, 2009, Cinemark, Inc. was merged into Cinemark Holdings, Inc. and Cinemark Holdings, Inc. became the holding company of Cinemark USA, Inc.

Cinemark Holdings, Inc. conducts substantially all of its operations through its subsidiaries. There are significant restrictions over Cinemark Holdings, Inc.’s ability to obtain funds from its subsidiaries through dividends, loans or advances. Accordingly, these financial statements have been presented on a “parent-only” basis.

2.  DIVIDEND PAYMENTS

2.    DIVIDEND PAYMENTS

In August 2007, Cinemark Holdings, Inc. initiated a quarterly dividend policy, which was amended in November 2010. Below is a summary of dividends paiddeclared for the fiscal periods indicated.

                 
        Amount per
    
  Date of
  Date
  Common
  Total
 
Date Declared
 Record  Paid  Share  Dividends(1) 
 
02/26/08  03/06/08   03/14/08  $0.18  $19,270 
05/09/08  05/30/08   06/12/08  $0.18   19,353 
08/07/08  08/25/08   09/12/08  $0.18   19,370 
11/06/08  11/26/08   12/11/08  $0.18   19,615 
                 
Total — Year ended December 31, 2008             $77,608 
                 
02/13/09  03/05/09   03/20/09  $0.18  $19,619 
05/13/09  06/02/09   06/18/09  $0.18   19,734 
07/29/09  08/17/09   09/01/09  $0.18   19,739 
11/04/09  11/25/09   12/10/09  $0.18   19,752 
                 
Total — Year ended December 31, 2009             $78,844 
                 
02/25/10  03/05/10   03/19/10  $0.18  $20,104 
05/13/10  06/04/10   06/18/10  $0.18   20,313 
07/29/10  08/17/10   09/01/10  $0.18   20,519 
11/02/10  11/22/10   12/07/10  $0.21   24,201 
                 
Total — Year ended December 31, 2010             $85,137 
                 

          Date

          Declared

 

Date of
Record

  

Date

Paid

  

Amount per
Common
Share(2)

  

Total
Dividends (1)

 
        02/13/09  03/05/09    03/20/09   $0.18   $19,619  
        05/13/09  06/02/09    06/18/09   $0.18   $19,734  
        07/29/09  08/17/09    09/01/09   $0.18   $19,739  
        11/04/09  11/25/09    12/10/09   $0.18   $19,752  
    

 

 

 

Total — Year ended December 31, 2009

  

  $78,844  
    

 

 

 
        02/25/10  03/05/10    03/19/10   $0.18   $20,104  
        05/13/10  06/04/10    06/18/10   $0.18   $20,313  
        07/29/10  08/17/10    09/01/10   $0.18   $20,519  
        11/02/10  11/22/10    12/07/10   $0.21   $24,201  
    

 

 

 

Total — Year ended December 31, 2010

  

  $85,137  
    

 

 

 
        02/24/11  03/04/11    03/16/11   $0.21   $24,056  
        05/12/11  06/06/11    06/17/11   $0.21   $24,152  
        08/04/11  08/17/11    09/01/11   $0.21   $24,157  
        11/03/11  11/18/11    12/07/11   $0.21   $24,157  
    

 

 

 

Total — Year ended December 31, 2011

  

  $96,522  
    

 

 

 

(1)
(1)

Of the dividends recorded during 2008, 2009, 2010 and 2010, $74,2011, $201, $635 and $635,$684, respectively, were related to outstanding restricted stock units and will not be paid until such units vest. See NoteNotes 19 and 20 to the Company’s consolidated financial statements included elsewhere in this annual report onForm 10-K.

(2)
(2)

Beginning with the dividend declared on November 2, 2010, the Company’s board of directors raised the quarterly dividend to $0.21 per common share.

3.  DIVIDENDS RECEIVED FROM SUBSIDIARIES

3.    DIVIDENDS RECEIVED FROM SUBSIDIARIES

During the yearsyear ended December 31, 2008 and 2009, Cinemark Holdings, Inc. received cash dividends of $51,500, and $39,050 respectively, from its former subsidiary, Cinemark, Inc. During the years ended December 31, 2009, 2010 and 2010,2011, Cinemark Holdings, Inc. received cash dividends of $19,575, $78,100 and $78,100,$95,000, respectively, from its subsidiary, Cinemark USA, Inc.


F-50


CINEMARK HOLDINGS, INC.

NOTES TO PARENT COMPANY FINANCIAL STATEMENTS — (Continued)

4.  LONG-TERM DEBT

In thousands, except share and per share data

4.    LONG-TERM DEBT

Cinemark Holdings, Inc. has no direct outstanding debt obligations, but its subsidiaries do. For a discussion of the debt obligations of Cinemark Holdings, Inc.’s subsidiaries, see Note 13 to the Company’s consolidated financial statements included elsewhere in this annual report onForm 10-K.

5.    CAPITAL STOCK

5.  CAPITAL STOCK

Cinemark Holdings, Inc.’s capital stock along with its 2006 long-term incentive plan and related activity are discussed in Note 19 of the Company’s consolidated financial statements included elsewhere in this annual report onForm 10-K.

6.    COMMITMENTS AND CONTINGENCIES

6.  COMMITMENTS AND CONTINGENCIES

Cinemark Holdings, Inc. has no direct commitments and contingencies, but its subsidiaries do. See Note 22 of the Company’s consolidated financial statements included elsewhere in this annual report onForm 10-K.


F-51


EXHIBITS

TO

EXHIBITS
TO
FORM 10-K

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

FOR

CINEMARK HOLDINGS, INC.

FOR FISCAL YEAR ENDED

DECEMBER 31, 20102011


E-1


EXHIBIT INDEX
     
Number
 
Exhibit Title
 
 2.1(a) Stock Contribution and Exchange Agreement, dated as of August 7, 2006, by and between Cinemark Holdings, Inc., Cinemark, Inc., Syufy Enterprises, LP and Century Theatres Holdings, LLC (incorporated by reference to Exhibit 10.2 to Current Report on Form 8-K, File No. 000-47040, filed by Cinemark USA, Inc. on August 11, 2006).
 2.1(b) Stock Purchase Agreement, dated as of August 7, 2006, by and among Cinemark USA, Inc., Cinemark Holdings, Inc., Syufy Enterprises LP, Century Theatres, Inc. and Century Theatres Holdings, LLC (incorporated by reference to Exhibit 10.1 to current Report on Form 8-K, File No, 000-47040, filed by Cinemark USA, Inc. on August 11, 2006).
 2.2 Contribution and Exchange Agreement, dated as of August 7, 2006, by and among Cinemark Holdings, Inc. and Lee Roy Mitchell, The Mitchell Special Trust, Alan W. Stock, Timothy Warner, Robert Copple, Michael Cavalier, Northwestern University, John Madigan, Quadrangle Select Partners LP, Quadrangle Capital Partners A LP, Madison Dearborn Capital Partners IV, L.P., K&E Investment Partners, LLC — 2004-B-DIF, Piola Investments Ltd., Quadrangle (Cinemark) Capital Partners LP and Quadrangle Capital Partners LP (incorporated by reference to Exhibit 10.3 to Current Report on Form 8-K, File No. 000-47040, filed by Cinemark USA, Inc. on August 11, 2006).
 3.1 Second Amended and Restated Certificate of Incorporation of Cinemark Holdings, Inc. filed with the Delaware Secretary of State on April 9, 2007 (incorporated by reference to Exhibit 3.1 to Amendment No. 2 to our Registration Statement on Form S-1, File No. 333-140390, filed April 9, 2007).
 3.2(a) Amended and Restated Bylaws of Cinemark Holdings, Inc. dated April 9, 2007 (incorporated by reference to Exhibit 3.2 to Amendment No. 2 to our Registration Statement on Form S-1, File No. 333-140390, filed April 9, 2007).
 3.2(b) First Amendment to the Amended and Restated Bylaws of Cinemark Holdings, Inc. dated April 16, 2007 (incorporated by reference to Exhibit 3.2(b) to Amendment No. 4 to our Registration Statement on Form S-1, File No. 333-140390, filed April 19, 2007).
 4.1 Specimen stock certificate of Cinemark Holdings, Inc. (incorporated by reference to Exhibit 4.1 to Amendment No. 2 to our Registration Statement on Form S-1, File No. 333-140390, filed April 9, 2007).
 4.2(a) Indenture, dated as of March 31, 2004, between Cinemark, Inc. and The Bank of New York Trust Company, N.A. governing the 93/4% senior discount notes issued thereunder (incorporated by reference to Exhibit 4.2(a) to Cinemark, Inc.’s Registration Statement on Form S-4, File No. 333-116292, filed June 8, 2004).
 4.2(b) Form of 93/4% senior discount notes (contained in the indenture listed as Exhibit 4.2(a) above) (incorporated by reference to Exhibit 4.2(b) to Cinemark, Inc.’s Registration Statement on Form S-4, File No. 333-116292, filed June 8, 2004).
 4.3(a) Indenture, dated as of February 11, 2003, between Cinemark USA, Inc. and The Bank of New York Trust Company of Florida, N.A. governing the 9% senior subordinated notes issued thereunder (incorporated by reference to Exhibit 10.2(b) to Cinemark USA, Inc.’s Annual Report on Form 10-K, File 033-47040, filed March 19, 2003).
 4.3(b) First Supplemental Indenture, dated as of May 7, 2003, between Cinemark USA, Inc., the subsidiary guarantors party thereto and The Bank of New York Trust Company of Florida, N.A. (incorporated by reference from Exhibit 4.2(i) to Cinemark USA, Inc.’s Registration Statement on Form S-4/A, File No. 333-104940, filed May 28, 2003).
 4.3(c) Second Supplemental Indenture dated as of November 11, 2004, between Cinemark USA, Inc., the subsidiary guarantors party thereto and The Bank of New York Trust Company of Florida, N.A. (incorporated by reference to Exhibit 4.2(c) to Cinemark USA, Inc.’s Annual Report on Form 10-K, File No. 033-047040, filed March 28, 2005).
 4.3(d) Third Supplemental Indenture, dated as of October 5, 2006, among Cinemark USA, Inc., the subsidiaries of Cinemark USA, Inc. named therein, and The Bank of New York Trust Company, N.A., as trustee (incorporated by reference to Exhibit 10.7 to Current Report on Form 8-K, File No. 000-47040, filed by Cinemark USA, Inc. on October 12, 2006).


E-2


     
Number
 
Exhibit Title
 
 4.3(e) Fourth Supplemental Indenture, dated as of March 20, 2007, among Cinemark USA, Inc., the subsidiaries of Cinemark USA, Inc. named therein, and The Bank of New York Trust Company, N.A., as trustee (incorporated by reference to Exhibit 4.1to the Current Report on Form 8-K, File No. 033-47040, filed by Cinemark USA, Inc. on March 26, 2007).
 4.3(f) Form of 9% Senior Subordinated Note, Due 2013 (contained in the Indenture listed as Exhibit 4.3(a) above) (incorporated by reference to Exhibit 10.2(b) to Cinemark USA, Inc.’s Annual Report on Form 10-K , File 033-47040, filed March 19, 2003).
 4.5 Registration Agreement, dated as of August 7, 2006, effective October 5, 2006, by and among Cinemark Holdings, Inc. and the stockholders party thereto (incorporated by reference to Exhibit 4.5 to Cinemark Holdings Inc.’s Registration Statement on Form S-1, File No. 333-140390, filed February 1, 2007).
 4.6 Director Nomination Agreement by and among Cinemark Holdings, Inc. and certain stockholders (incorporated by reference to Exhibit 10.1 to Cinemark Holdings, Inc.’s Current Report on Form 8K, File No. 001-33401, filed May 3, 2007).
 4.8(a) Indenture dated as of June 29, 2009, among Cinemark USA, Inc., the Guarantors named therein and Wells Fargo Bank, N.A., as trustee governing the 8.625% Senior Notes due 2019 of Cinemark USA, Inc. issued thereunder (incorporated by reference to Exhibit 4.2 to the Company’s Current Report on Form 8-K, File No. 001-33401, filed July 6, 2009).
 4.8(b) Form of 8.625% Senior Notes due 2019 of Cinemark USA, Inc. (contained in the Indenture listed as Exhibit 4.2(a) above) (incorporated by reference to Exhibit 4.3 to the Company’s Current Report on Form 8-K, File No. 001-33401, filed July 6, 2009).
 4.9(a) Indenture dated as of March 31, 2004 between Cinemark, Inc. and The Bank of New York Mellon Trust Company, N.A. (formerly known as The Bank of New York Trust Company, N.A.) governing the 9.75% Senior Discount Notes issued thereunder (incorporated by reference to Exhibit 4.2(a) to Cinemark, Inc.’s Registration Statement on Form S-4 (File No. 333-116292) filed June 8, 2004).
 4.9(b) First Supplemental Indenture dated as of June 29, 2009 between Cinemark, Inc., the subsidiary guarantors party thereto and The Bank of New York Mellon Trust Company, N.A. (formerly known as The Bank of New York Trust Company, N.A.) (incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K, File No. 001-33401, filed June 30, 2009).
 10.1(a) Management Agreement, dated December 10, 1993, between Laredo Theatre, Ltd. and Cinemark USA, Inc. (incorporated by reference to Exhibit 10.14(b) to Cinemark USA, Inc.’s Annual Report on Form 10-K, File No. 033-47040, filed March 31, 1994).
 10.1(b) First Amendment to Management Agreement of Laredo Theatre, Ltd., effective as of December 10, 2003, between CNMK Texas Properties, Ltd. (successor in interest to Cinemark USA, Inc.) and Laredo Theatre Ltd. (incorporated by reference to Exhibit 10.1(d) to Cinemark, Inc.’s Registration Statement on Form S-4, File No. 333-116292, filed June 8, 2004).
 10.1(c) Second Amendment to Management of Laredo Theatres, Ltd., effective as of December 10, 2008, between CNMK Texas Properties, L.L.C. (Successor in interest to Cinemark USA, Inc.) and Laredo Theatre Ltd (incorporated by reference to Exhibit 10.1(c) to the Company’s Annual Report on Form 10-K, File No. 001-33401, filed March 13, 2009).
 +10.2(a) Amended and Restated Agreement to Participate in Profits and Losses, dated as of March 12, 2004, between Cinemark USA, Inc. and Alan W. Stock (incorporated by reference to Exhibit 10.2 to Cinemark USA, Inc.’s Quarterly Report on Form 10-Q, File No. 033-47040, filed May 14, 2004).
 +10.2(b) Termination Agreement to Amended and Restated Agreement to Participate in Profits and Losses, dated as of May 3, 2007, by and between Cinemark USA, Inc. and Alan W. Stock (incorporated by reference to Exhibit 10.2 to Cinemark Holdings, Inc.’s Current Report on Form 8K, File No. 001-33401, filed May 3, 2007).
 10.3 License Agreement, dated December 10, 1993, between Laredo Joint Venture and Cinemark USA, Inc. (incorporated by reference to Exhibit 10.14(c) to Cinemark USA, Inc.’s Annual Report on Form 10-K, File No. 033-47040, filed March 31, 1994).
 10.4(a) Tax Sharing Agreement, between Cinemark USA, Inc. and Cinemark International, L.L.C. (f/k/a Cinemark II, Inc. ), dated as of June 10, 1992 (incorporated by reference to Exhibit 10.22 to Cinemark USA, Inc.’s Annual Report on Form 10-K, File No. 033-47040, filed March 31, 1993).

E-3


Number

 

Exhibit Title

    2.1(a) Stock Contribution and Exchange Agreement, dated as of August 7, 2006, by and between Cinemark Holdings, Inc., Cinemark, Inc., Syufy Enterprises, LP and Century Theatres Holdings, LLC (incorporated by reference to Exhibit 10.2 to Current Report on Form 8-K, File No. 000-47040, filed by Cinemark USA, Inc. on August 11, 2006).
Number
    2.1(b) 
Stock Purchase Agreement, dated as of August 7, 2006, by and among Cinemark USA, Inc., Cinemark Holdings, Inc., Syufy Enterprises LP, Century Theatres, Inc. and Century Theatres Holdings, LLC (incorporated by reference to Exhibit Title
10.1 to current Report on Form 8-K, File No. 000-47040, filed by Cinemark USA, Inc. on August 11, 2006).
    2.2Contribution and Exchange Agreement, dated as of August 7, 2006, by and among Cinemark Holdings, Inc. and Lee Roy Mitchell, The Mitchell Special Trust, Alan W. Stock, Timothy Warner, Robert Copple, Michael Cavalier, Northwestern University, John Madigan, Quadrangle Select Partners LP, Quadrangle Capital Partners A LP, Madison Dearborn Capital Partners IV, L.P., K&E Investment Partners, LLC — 2004-B-DIF, Piola Investments Ltd., Quadrangle (Cinemark) Capital Partners LP and Quadrangle Capital Partners LP (incorporated by reference to Exhibit 10.3 to Current Report on Form 8-K, File No. 000-47040, filed by Cinemark USA, Inc. on August 11, 2006).
    3.110.4(b)Second Amended and Restated Certificate of Incorporation of Cinemark Holdings, Inc. filed with the Delaware Secretary of State on April 9, 2007 (incorporated by reference to Exhibit 3.1 to Amendment No. 2 to our Registration Statement on Form S-1, File No. 333-140390, filed April 9, 2007).
    3.2(a)Amended and Restated Bylaws of Cinemark Holdings, Inc. dated April 9, 2007 (incorporated by reference to Exhibit 3.2 to Amendment No. 2 to our Registration Statement on Form S-1, File No. 333-140390, filed April 9, 2007).
    3.2(b)First Amendment to the Amended and Restated Bylaws of Cinemark Holdings, Inc. dated April 16, 2007 (incorporated by reference to Exhibit 3.2(b) to Amendment No. 4 to our Registration Statement on Form S-1, File No. 333-140390, filed April 19, 2007).
    4.1Specimen stock certificate of Cinemark Holdings, Inc. (incorporated by reference to Exhibit 4.1 to Amendment No. 2 to our Registration Statement on Form S-1, File No. 333-140390, filed April 9, 2007).
    4.2(a)Indenture, dated as of March 31, 2004, between Cinemark, Inc. and The Bank of New York Trust Company, N.A. governing the 9 3/4% senior discount notes issued thereunder (incorporated by reference to Exhibit 4.2(a) to Cinemark, Inc.’s Registration Statement on Form S-4, File No. 333-116292, filed on June 8, 2004).
    4.2(b)First Supplemental Indenture, dated as of June 29, 2009, between Cinemark, Inc. and The Bank of New York Trust Company, N.A. governing the 9 3/4% senior discount notes issued thereunder (incorporated by reference to Exhibit 4.1 to Cinemark Holdings, Inc.’s Current Report on Form 8K, File No. 001-33401, filed on June 30, 2009).
    4.2(c)Form of 9 3/4% senior discount notes (contained in the indenture listed as Exhibit 4.2(a) above) (incorporated by reference to Exhibit 4.2(b) to Cinemark, Inc.’s Registration Statement on Form S-4, File No. 333-116292, filed June 8, 2004).
    4.3(a)Indenture, dated as of February 11, 2003, between Cinemark USA, Inc. and The Bank of New York Trust Company of Florida, N.A. governing the 9% senior subordinated notes issued thereunder (incorporated by reference to Exhibit 10.2(b) to Cinemark USA, Inc.’s Annual Report on Form 10-K, File 033-47040, filed March 19, 2003).

    4.3(b)First Supplemental Indenture, dated as of May 7, 2003, between Cinemark USA, Inc., the subsidiary guarantors party thereto and The Bank of New York Trust Company of Florida, N.A. (incorporated by reference from Exhibit 4.2(i) to Cinemark USA, Inc.’s Registration Statement on Form S-4/A, File No. 333-104940, filed May 28, 2003).
    4.3(c)Second Supplemental Indenture dated as of November 11, 2004, between Cinemark USA, Inc., the subsidiary guarantors party thereto and The Bank of New York Trust Company of Florida, N.A. (incorporated by reference to Exhibit 4.2(c) to Cinemark USA, Inc.’s Annual Report on Form 10-K, File No. 033-047040, filed March 28, 2005).
    4.3(d)Third Supplemental Indenture, dated as of October 5, 2006, among Cinemark USA, Inc., the subsidiaries of Cinemark USA, Inc. named therein, and The Bank of New York Trust Company, N.A., as trustee (incorporated by reference to Exhibit 10.7 to Cinemark USA, Inc.’s Current Report on Form 8-K, File No. 000-47040, filed on October 12, 2006).
    4.3(e)Fourth Supplemental Indenture, dated as of March 20, 2007, among Cinemark USA, Inc., the subsidiaries of Cinemark USA, Inc. named therein, and The Bank of New York Trust Company, N.A., as trustee (incorporated by reference to Exhibit 4.1to Cinemark USA, Inc.’s Current Report on Form 8-K, File No. 033-47040, filed on March 26, 2007).
    4.3(f)Form of 9% Senior Subordinated Note, Due 2013 (contained in the Indenture listed as Exhibit 4.3(a) above) (incorporated by reference to Exhibit 10.2(b) to Cinemark USA, Inc.’s Annual Report on Form 10-K, File 033-47040, filed March 19, 2003).
    4.4(a)Indenture dated as of June 29, 2009, between Cinemark USA, Inc. and Wells Fargo Bank, N.A., as trustee governing the 8 5/8% senior notes of Cinemark USA, Inc. issued thereunder (incorporated by reference to Exhibit 4.2 to the Cinemark Holdings, Inc.’s Current Report on Form 8-K, File No. 001-33401, filed July 6, 2009).
    4.4(b)Form of 8 5/8% senior notes of Cinemark USA, Inc. (contained in the Indenture listed as Exhibit 4.4(a) above) (incorporated by reference to Exhibit 4.3 to the Cinemark Holdings, Inc.’s Current Report on Form 8-K, File No. 001-33401, filed July 6, 2009).
    4.5(a)Indenture, dated as of June 3, 2011, between Cinemark USA, Inc. and Wells Fargo Bank, N.A. governing the 7 3/8% senior subordinated notes issued thereunder (incorporated by reference to Exhibit 4.1 to Cinemark Holdings, Inc.’s Current Report on Form 8K, File No. 001-33401, filed on July 6, 2011).
    4.5(b)Form of 7 3/8% senior subordinated notes of Cinemark USA, Inc. (contained in the Indenture listed as Exhibit 4.6(a) above) (incorporated by reference to Exhibit 4.3 to the Cinemark Holdings, Inc.’s Current Report on Form 8-K, File No. 001-33401, filed on July 6, 2011).
  10.1(a)Management Agreement, dated December 10, 1993, between Laredo Theatre, Ltd. and Cinemark USA, Inc. (incorporated by reference to Exhibit 10.14(b) to Cinemark USA, Inc.’s Annual Report on Form 10-K, File No. 033-47040, filed March 31, 1994).
  10.1(b)First Amendment to Management Agreement of Laredo Theatre, Ltd., effective as of December 10, 2003, between CNMK Texas Properties, Ltd. (successor in interest to Cinemark USA, Inc.) and Laredo Theatre Ltd. (incorporated by reference to Exhibit 10.1(d) to Cinemark, Inc.’s Registration Statement on Form S-4, File No. 333-116292, filed June 8, 2004).
  10.1(c)Second Amendment to Management of Laredo Theatres, Ltd., effective as of December 10, 2008, between CNMK Texas Properties, L.L.C. (Successor in interest to Cinemark USA, Inc.) and Laredo Theatre Ltd. (incorporated by reference to Exhibit 10.1(c) to the Cinemark Holdings, Inc.’s Annual Report on Form 10-K, File No. 001-33401, filed March 13, 2009).

+10.2(a)Amended and Restated Agreement to Participate in Profits and Losses, dated as of March 12, 2004, between Cinemark USA, Inc. and Alan W. Stock (incorporated by reference to Exhibit 10.2 to Cinemark USA, Inc.’s Quarterly Report on Form 10-Q, File No. 033-47040, filed May 14, 2004).
+10.2(b)Termination Agreement to Amended and Restated Agreement to Participate in Profits and Losses, dated as of May 3, 2007, by and between Cinemark USA, Inc. and Alan W. Stock (incorporated by reference to Exhibit 10.2 to Cinemark Holdings, Inc.’s Current Report on Form 8K, File No. 001-33401, filed May 3, 2007).
  10.3License Agreement, dated December 10, 1993, between Laredo Joint Venture and Cinemark USA, Inc. (incorporated by reference to Exhibit 10.14(c) to Cinemark USA, Inc.’s Annual Report on Form 10-K, File No. 033-47040, filed March 31, 1994).
  10.4(a)Tax Sharing Agreement, between Cinemark USA, Inc. and Cinemark International, L.L.C. (f/k/a Cinemark II, Inc. ), dated as of June 10, 1992 (incorporated by reference to Exhibit 10.22 to Cinemark USA, Inc.’s Annual Report on Form 10-K, File No. 033-47040, filed March 31, 1993).
  10.4(b) Tax Sharing Agreement, dated as of July 28, 1993, between Cinemark USA, Inc. and Cinemark Mexico (USA) (incorporated by reference to Exhibit 10.10 to Cinemark Mexico (USA)’s Registration Statement on Form S-4, File No. 033-72114, filed November 24, 1993).
+10.5(a)10.5(a) Employment Agreement, dated as of March 12, 2004, between Cinemark, Inc. and Lee Roy Mitchell (incorporated by reference to Exhibit 10.14(a) to Cinemark USA, Inc.’s Quarterly Report on Form 10-Q, File No. 033-47040, filed May 14, 2004).
+10.5(b)10.5(b) First Amendment to Employment Agreement, effective as of December 12, 2006, by and between Cinemark, Inc. and Lee Roy Mitchell (incorporated by reference to Exhibit 10.1 to Cinemark, Inc.’s Current Report on Form 8-K, File No. 001-31372, filed December 18, 2006).
+10.5(c)10.5(c) Employment Agreement, dated as of March 12, 2004, between Cinemark, Inc. and Alan Stock (incorporated by reference to Exhibit 10.14(b) to Cinemark USA, Inc.’s Quarterly Report on Form 10-Q, File No. 033-47040, filed May 14, 2004).
+10.5(d)10.5(d) First Amendment to Employment Agreement, effective as of December 12, 2006, by and between Cinemark, Inc. and Alan W. Stock (incorporated by reference to Exhibit 10.2 to Cinemark, Inc.’s Current Report on Form 8-K, File No. 001-31372, filed December 18, 2006).
+10.5(e)10.5(e) Employment Agreement, dated as of March 12, 2004, between Cinemark, Inc. and Timothy Warner (incorporated by reference to Exhibit 10.14(c) to Cinemark USA, Inc.’s Quarterly Report on Form 10-Q, File No. 033-47040, filed May 14, 2004).
+10.5(f)10.5(f) First Amendment to Employment Agreement, effective as of December 12, 2006, by and between Cinemark, Inc. and Timothy Warner (incorporated by reference to Exhibit 10.3 to Cinemark, Inc.’s Current Report on Form 8-K, File No. 001-31372, filed December 18, 2006).
+10.5(g)10.5(g) Employment Agreement, dated as of March 12, 2004, between Cinemark, Inc. and Robert Copple (incorporated by reference to Exhibit 10.14(d) to Cinemark USA, Inc.’s Quarterly Report on Form 10-Q, File No. 033-47040, filed May 14, 2004).
+10.5(h)10.5(h) First Amendment to Employment Agreement, effective as of January 25, 2007, between Cinemark, Inc. and Robert Copple (incorporated by reference to Exhibit 10.5(j) to Cinemark Holdings, Inc.’s Registration Statement on Form S-1, File No. 333-140390, filed February 1, 2007).
+10.5(i)10.5(i) Employment Agreement, dated as of March 12, 2004, between Cinemark, Inc. and Rob Carmony (incorporated by reference to Exhibit 10.14(e) to Cinemark USA, Inc.’s Quarterly Report on Form 10-Q, File No. 033-47040, filed May 14, 2004).

+10.5(j)
+10.5(j) First Amendment to Employment Agreement, effective as of January 14, 2008, between Cinemark, Inc. and Rob Carmony (incorporated by reference to Exhibit 10.1 to Cinemark Holdings, Inc.’s Current Report on Form 8K, File No. 001-33401, filed January 16, 2008).
+10.5(k)10.5(k) Employment Agreement, dated as of March 12, 2004, between Cinemark, Inc. and Tandy Mitchell (incorporated by reference to Exhibit 10.14(f) to Cinemark USA, Inc.’s Quarterly Report on Form 10-Q, File No. 033-47040, filed May 14, 2004).
+10.5(l)10.5(l) Termination Agreement, dated as of June 16, 2008, between Cinemark Holdings, Inc. and Tandy Mitchell (incorporated by reference to Exhibit 10.5 to Cinemark Holdings, Inc.’s Quarterly Report on Form 10-Q, File No. 001-33401, filed August 8, 2008).
+10.5(m)10.5(m) Employment Agreement, dated as of June 16, 2008, between Cinemark Holdings, Inc. and Alan Stock (incorporated by reference to Exhibit 10.1 to Cinemark Holdings, Inc.’s Quarterly Report on Form 10-Q, File No. 333-140390, filed August 8, 2008).
+10.5(n)10.5(n) Employment Agreement, dated as of June 16, 2008, between Cinemark Holdings, Inc. and Timothy Warner (incorporated by reference to Exhibit 10.2 to Cinemark Holdings, Inc.’s Quarterly Report on Form 10-Q, File No. 333-140390, filed August 8, 2008).
+10.5(o)10.5(o) Employment Agreement, dated as of June 16, 2008, between Cinemark Holdings, Inc. and Robert Copple (incorporated by reference to Exhibit 10.3 to Cinemark Holdings, Inc.’s Quarterly Report on Form 10-Q, File No. 333-140390, filed August 8, 2008).
+10.5(p)10.5(p) Employment Agreement, dated as of June 16, 2008, between Cinemark Holdings, Inc. and Michael Cavalier (incorporated by reference to Exhibit 10.4 to Cinemark Holdings, Inc.’s Quarterly Report on Form 10-Q, File No. 333-140390, filed August 8, 2008).

E-4


Number
Exhibit Title
+10.5(q)10.5(q) Employment Agreement, dated as of December 15, 2008, between Cinemark Holdings, Inc. and Lee Roy Mitchell (incorporated by reference to Exhibit 10.5 (q) to Cinemark Holdings, Inc.’s Annual Report on Form 10-K, File No. 001-33401, filed March 13, 2009).
+10.5(r)10.5(r) Employment Agreement, dated as of December 15, 2008, between Cinemark Holdings, Inc. and Rob Carmony (incorporated by reference to Exhibit 10.5 (r) to Cinemark Holdings, Inc.’s Annual Report on Form 10-K, File No. 001-33401, filed March 13, 2009).
+10.5(s)10.5(s) Employment Agreement, dated as of December 15, 2008, between Cinemark Holdings, Inc. and John Lundin (incorporated by reference to Exhibit 10.5 (s) to Cinemark Holdings, Inc.’s Annual Report on Form 10-K, File No. 001-33401, filed March 13, 2009).
+10.5(t)10.5(t) Employment agreement, dated as of April 7, 2009, between Cinemark Holdings, Inc. and Steven Bunnell (incorporated by reference to Exhibit 10.1 to Cinemark Holdings, Inc.’s Quarterly Report on Form 10-Q, File No. 001-33401, filed August 7, 2009).
+10.5(u)10.5(u) Employment Agreement, dated as of February 15, 2010, between Cinemark Holdings, Inc. and Valmir Fernandes (incorporated by reference to Exhibit 10.5(v) to Cinemark Holdings, Inc.’s Annual Report on Form 10-K, File No. 001-33401, filed March 10, 2010).
10
.6(a)  10.6(a) Credit Agreement, dated as of October 5, 2006, among Cinemark Holdings, Inc., Cinemark, Inc., CNMK Holding, Inc., Cinemark USA, Inc., the several banks and other financial institutions or entities from time to time parties to the Agreement, Lehman Brothers Inc. and Morgan Stanley Senior Funding, Inc., as joint lead arrangers and joint bookrunners, Morgan Stanley Senior Funding, Inc., as syndication agent, BNP Paribas and General Electric Capital Corporation as co-documentation agents, and Lehman Commercial Paper Inc., as administrative agent (incorporated by reference to Exhibit 10.5 to Current Report on Form 8-K, File No. 000-47040, filed by Cinemark USA, Inc. on October 12, 2006).

  10.6(b)10.6(b) First Amendment to Credit Agreement dated as of March 14, 2007 among Cinemark Holdings, Inc., Cinemark, Inc., CNMK Holding, Inc., Cinemark USA, Inc., the several banks and other financial institutions or entities from time to time parties thereto, Lehman Brothers Inc. and Morgan Stanley Senior Funding, Inc., as joint lead arrangers and joint bookrunners, Morgan Stanley Senior Funding, Inc., as syndication agent, BNP Paribas and General Electric Capital Corporation, as co-documentation agents, and Lehman Commercial Paper Inc., as administrative agent (incorporated by reference to Exhibit 10.6(b) to Amendment No. 1 to Cinemark Holdings, Inc.’s Registration Statement on Form S-1, File No. 333-140390, filed March 16, 2007).
10
.6(c)  10.6(c) Second Amendment to Credit Agreement dated as of January 29, 2010 by and among Lehman Commercial Paper Inc. (“Lehman”), a debtor and debtor in possession under chapter 11 of the Bankruptcy Code as Administrative Agent, the Required Lenders, Barclay’s Bank PLC, as successor Administrative Agent, Cinemark USA, Inc. and each Loan Party. (incorporated by reference to the Company’sCinemark Holdings, Inc.’s Annual Report on Form 10-K, File No. 001-33401, filed March 10, 2010).
10
.6(d)  10.6(d) Third Amendment to Credit Agreement dated as of March 2, 2010 by and among Cinemark Holdings, Inc., Cinemark USA, Inc., Barclays Bank PLC and the Required Lenders (incorporated by reference to Exhibit 10.1 to Cinemark Holdings, Inc.’s Current Report on Form 8-K , File No. 001-33401, filed on March 8, 2010).
10
.6(e)  10.6(e) Guarantee and Collateral Agreement, dated as of October 5, 2006, among Cinemark Holdings, Inc., Cinemark, Inc., CNMK Holding, Inc., Cinemark USA, Inc. and each subsidiary guarantor party thereto (incorporated by reference to Exhibit 10.6 to Current Report on Form 8-K, File No. 000-47040, filed by Cinemark USA, Inc. on October 12, 2006).
+10.7(a)10.7(a) Cinemark Holdings, Inc. 2006 Long Term Incentive Plan, dated December 22, 2006 (incorporated by reference to Exhibit 10.7(a) to Cinemark Holdings, Inc.’s Registration Statement on Form S-1, File No. 333-140390, filed February 1, 2007).
+10.7(b)10.7(b) First Amendment to Cinemark Holdings, Inc. 2006 Long Term Incentive Plan, dated December 22, 2006 (incorporated by reference to Exhibit 10.1 to Cinemark Holdings, Inc.’s Current Report on Form 8K, File No. 001-33401, filed November 15, 2007).
+10.7(c)10.7(c) Amended and Restated Cinemark Holdings, Inc. 2006 Long Term Incentive Plan (incorporated by reference to Exhibit 4.1 to Cinemark Holdings, Inc.’s Quarterly Report on form 10-Q, File No. 001-33401, filed May 9, 2008).

E-5


     
Number
 
Exhibit Title
 
 +10.7(d) Form of Stock Option Agreement (incorporated by reference to Exhibit 10.7(b) to Cinemark Holdings, Inc.’s Registration Statement on Form S-1, File No. 333-140390, filed February 1, 2007).
 +10.7(e) Form of Restricted Share Award Agreement pursuant to the Amended and Restated Cinemark Holdings, Inc. 2006 Long Term Incentive Plan (incorporated by reference to Exhibit 4.6 to Cinemark Holdings, Inc.’s Registration Statement on Form S-8, File No. 333-146349, filed August 29, 2008).
 +10.7(f) Form of Restricted Stock Unit Award Agreement pursuant to the Amended and Restated Cinemark Holdings, Inc. 2006 Long Term Incentive Plan (incorporated by reference to Exhibit 4.2 to Cinemark Holdings, Inc.’s Quarterly Report on Form 10-Q, File No. 001-33401, filed May 9, 2008).
 10.8 Exhibitor Services Agreement, dated as of February 13, 2007, by and between National CineMedia, LLC and Cinemark USA, Inc. (incorporated by reference to Exhibit 10.8 to Amendment No. 1 to Cinemark Holdings, Inc.’s Registration Statement on Form S-1, File No. 333-140390, filed March 16, 2007).
 10.9 Third Amended and Restated Limited Liability Company Operating Agreement, dated as of February 12, 2007, by and between Cinemark Media, Inc., American Multi-Cinema, Inc., Regal CineMedia, LLC and National CineMedia, Inc. (incorporated by reference to Exhibit 10.9 to Amendment No. 1 to Cinemark Holdings, Inc.’s Registration Statement on Form S-1, File No. 333-140390, filed March 16, 2007).
 10.10(a) Indenture of Lease, dated as of September 30, 1995, by and between Syufy Enterprises, L.P., as landlord and Century Theatres of California, Inc., as tenant, for Century Stadium 14, Sacramento, CA (incorporated by reference to Exhibit 10.10(a) to Amendment No. 5 to Cinemark Holdings, Inc.’s Registration Statement on Form S-1, File No. 333-140390, filed April 20, 2007).
 10.10(b) First Amendment, dated as of September 1, 2000, to Indenture of Lease, dated as of September 30, 1995, by and between Syufy Enterprises, L.P., as landlord and Century Theatres of California, Inc., as tenant, for Century Stadium 14, Sacramento, CA (incorporated by reference to Exhibit 10.10(b) to Amendment No. 5 to Cinemark Holdings, Inc.’s Registration Statement on Form S-1, File No. 333-140390, filed April 20, 2007).
 10.10(c) Second Amendment, dated as of April 15, 2005, to Indenture of Lease, dated as of September 30, 1995, by and between Syufy Enterprises, L.P., as landlord and Century Theatres of California, Inc., as tenant, for Century Stadium 14, Sacramento, CA(incorporated by reference to Exhibit 10.10(c) to Amendment No. 5 to Cinemark Holdings, Inc.’s Registration Statement on Form S-1, File No. 333-140390, filed April 20, 2007).
 10.10(d) Third Amendment, dated as of September 29, 2005, to Indenture of Lease, dated as of September 30, 1995, by and between Syufy Enterprises, L.P., as landlord and Century Theatres of California, Inc., as tenant, for Century Stadium 14, Sacramento, CA (incorporated by reference to Exhibit 10.10(d) to Amendment No. 3 to Cinemark Holdings, Inc.’s Registration Statement on Form S-1, File No. 333-140390, filed April 18, 2007).
 10.10(e) Fourth Amendment, dated as of August 7, 2006, to Indenture of Lease, dated as of September 30, 1995, by and between Syufy Enterprises, L.P., as landlord and Century Theatres of California, Inc., as tenant, for Century Stadium 14, Sacramento, CA (incorporated by reference to Exhibit 10.10(e) to Amendment No. 5 to Cinemark Holdings, Inc.’s Registration Statement on Form S-1, File No. 333-140390, filed April 20, 2007).
 10.11(a) Indenture of Lease, dated as of December 1, 1995, by and between Syufy Enterprises, L.P., as landlord and Century Theatres of California, Inc., as tenant, for Century Laguna 16, Elk Grove, CA (incorporated by reference to Exhibit 10.11(a) to Amendment No. 5 to Cinemark Holdings, Inc.’s Registration Statement on Form S-1, File No. 333-140390, filed April 20, 2007).
 10.11(b) First Amendment, dated as of September 1, 2000, to Indenture of Lease, dated as of December 1, 1995, by and between Syufy Enterprises, L.P., as landlord and Century Theatres of California, Inc., as tenant, for Century Laguna 16, Elk Grove, CA (incorporated by reference to Exhibit 10.11(b) to Amendment No. 5 to Cinemark Holdings, Inc.’s Registration Statement on Form S-1, File No. 333-140390, filed April 20, 2007).

E-6


+10.7(d) Form of Stock Option Agreement (incorporated by reference to Exhibit 10.7(b) to Cinemark Holdings, Inc.’s Registration Statement on Form S-1, File No. 333-140390, filed February 1, 2007).
+10.7(e) Form of Restricted Share Award Agreement pursuant to the Amended and Restated Cinemark Holdings, Inc. 2006 Long Term Incentive Plan (incorporated by reference to Exhibit 4.6 to Cinemark Holdings, Inc.’s Registration Statement on Form S-8, File No. 333-146349, filed August 29, 2008).
Number
*+10.7(f) 
Exhibit Title
Form of Restricted Stock Unit Award Agreement pursuant to the Amended and Restated Cinemark Holdings, Inc. 2006 Long Term Incentive Plan.
    10.8Exhibitor Services Agreement, dated as of February 13, 2007, by and between National CineMedia, LLC and Cinemark USA, Inc. (incorporated by reference to Exhibit 10.8 to Amendment No. 1 to Cinemark Holdings, Inc.’s Registration Statement on Form S-1, File No. 333-140390, filed March 16, 2007).

    10 .910.11(c)Third Amended and Restated Limited Liability Company Operating Agreement, dated as of February 12, 2007, by and between Cinemark Media, Inc., American Multi-Cinema, Inc., Regal CineMedia, LLC and National CineMedia, Inc. (incorporated by reference to Exhibit 10.9 to Amendment No. 1 to Cinemark Holdings, Inc.’s Registration Statement on Form S-1, File No. 333-140390, filed March 16, 2007).
    10.10(a)Indenture of Lease, dated as of September 30, 1995, by and between Syufy Enterprises, L.P., as landlord and Century Theatres of California, Inc., as tenant, for Century Stadium 14, Sacramento, CA (incorporated by reference to Exhibit 10.10(a) to Amendment No. 5 to Cinemark Holdings, Inc.’s Registration Statement on Form S-1, File No. 333-140390, filed April 20, 2007).
    10.10(b)First Amendment, dated as of September 1, 2000, to Indenture of Lease, dated as of September 30, 1995, by and between Syufy Enterprises, L.P., as landlord and Century Theatres of California, Inc., as tenant, for Century Stadium 14, Sacramento, CA (incorporated by reference to Exhibit 10.10(b) to Amendment No. 5 to Cinemark Holdings, Inc.’s Registration Statement on Form S-1, File No. 333-140390, filed April 20, 2007).
    10.10(c)Second Amendment, dated as of April 15, 2005, to Indenture of Lease, dated as of September 30, 1995, by and between Syufy Enterprises, L.P., as landlord and Century Theatres of California, Inc., as tenant, for Century Stadium 14, Sacramento, CA(incorporated by reference to Exhibit 10.10(c) to Amendment No. 5 to Cinemark Holdings, Inc.’s Registration Statement on Form S-1, File No. 333-140390, filed April 20, 2007).
    10.10(d)Third Amendment, dated as of September 29, 2005, to Indenture of Lease, dated as of September 30, 1995, by and between Syufy Enterprises, L.P., as landlord and Century Theatres of California, Inc., as tenant, for Century Stadium 14, Sacramento, CA (incorporated by reference to Exhibit 10.10(d) to Amendment No. 3 to Cinemark Holdings, Inc.’s Registration Statement on Form S-1, File No. 333-140390, filed April 18, 2007).
    10.10(e)Fourth Amendment, dated as of August 7, 2006, to Indenture of Lease, dated as of September 30, 1995, by and between Syufy Enterprises, L.P., as landlord and Century Theatres of California, Inc., as tenant, for Century Stadium 14, Sacramento, CA (incorporated by reference to Exhibit 10.10(e) to Amendment No. 5 to Cinemark Holdings, Inc.’s Registration Statement on Form S-1, File No. 333-140390, filed April 20, 2007).
    10.11(a)Indenture of Lease, dated as of December 1, 1995, by and between Syufy Enterprises, L.P., as landlord and Century Theatres of California, Inc., as tenant, for Century Laguna 16, Elk Grove, CA (incorporated by reference to Exhibit 10.11(a) to Amendment No. 5 to Cinemark Holdings, Inc.’s Registration Statement on Form S-1, File No. 333-140390, filed April 20, 2007).
    10.11(b)First Amendment, dated as of September 1, 2000, to Indenture of Lease, dated as of December 1, 1995, by and between Syufy Enterprises, L.P., as landlord and Century Theatres of California, Inc., as tenant, for Century Laguna 16, Elk Grove, CA (incorporated by reference to Exhibit 10.11(b) to Amendment No. 5 to Cinemark Holdings, Inc.’s Registration Statement on Form S-1, File No. 333-140390, filed April 20, 2007).
    10.11(c) Second Amendment, dated as of April 15, 2005, to Indenture of Lease, dated as of December 1, 1995, by and between Syufy Enterprises, L.P., as landlord and Century Theatres of California, Inc., as tenant, for Century Laguna 16, Elk Grove, CA (incorporated by reference to Exhibit 10.11(c) to Amendment No. 3 to Cinemark Holdings, Inc.’s Registration Statement on Form S-1, File No. 333-140390, filed April 18, 2007).

    10.11(d)10.11(d) Third Amendment, dated as of September 29, 2005, to Indenture of Lease, dated as of December 1, 1995, by and between Syufy Enterprises, L.P., as landlord and Century Theatres of California, Inc., as tenant, for Century Laguna 16, Elk Grove, CA (incorporated by reference to Exhibit 10.11(d) to Amendment No. 3 to Cinemark Holdings, Inc.’s Registration Statement on Form S-1, File No. 333-140390, filed April 18, 2007).
10
.11(e)    10.11(e) Fourth Amendment, dated as of August 7, 2006, to Indenture of Lease, dated as of December 1, 1995, by and between Syufy Enterprises, L.P., as landlord and Century Theatres of California, Inc., as tenant, for Century Laguna 16, Elk Grove, CA (incorporated by reference to Exhibit 10.11(e) to Amendment No. 5 to Cinemark Holdings, Inc.’s Registration Statement on Form S-1, File No. 333-140390, filed April 20, 2007).
10
.12(a)    10.12(a) Indenture of Lease, dated as of September 30, 1995, by and between Syufy Enterprises, L.P., as landlord and Century Theatres of California, Inc., as tenant, for Century Capitol 16, San Jose, CA (incorporated by reference to Exhibit 10.12(a) to Amendment No. 5 to Cinemark Holdings, Inc.’s Registration Statement on Form S-1, File No. 333-140390, filed April 20, 2007).
10
.12(b)    10.12(b) First Amendment, dated as of September 1, 2000, to Indenture of Lease, dated as of September 30, 1995, by and between Syufy Enterprises, L.P., as landlord and Century Theatres of California, Inc., as tenant, for Century Capitol 16, San Jose, CA (incorporated by reference to Exhibit 10.12(b) to Amendment No. 5 to Cinemark Holdings, Inc.’s Registration Statement on Form S-1, File No. 333-140390, filed April 20, 2007).
10
.12(c)    10.12(c) Second Amendment, dated as of April 15, 2005, to Indenture of Lease, dated as of September 30, 1995, by and between Syufy Enterprises, L.P., as landlord and Century Theatres of California, Inc., as tenant, for Century Capitol 16, San Jose, CA (incorporated by reference to Exhibit 10.12(c) to Amendment No. 5 to Cinemark Holdings, Inc.’s Registration Statement on Form S-1, File No. 333-140390, filed April 20, 2007).
10
.12(d)10.12(d) Third Amendment, dated as of September 29, 2005, to Indenture of Lease, dated as of September 30, 1995, by and between Syufy Enterprises, L.P., as landlord and Century Theatres of California, Inc., as tenant, for Century Capitol 16, San Jose, CA (incorporated by reference to Exhibit 10.12(d) to Amendment No. 3 to Cinemark Holdings, Inc.’s Registration Statement on Form S-1, File No. 333-140390, filed April 18, 2007).
10
.12(e)10.12(e) Fourth Amendment, dated as of August 7, 2006, to Indenture of Lease, dated as of September 30, 1995, by and between Syufy Enterprises, L.P., as landlord and Century Theatres of California, Inc., as tenant, for Century Capitol 16, San Jose, CA (incorporated by reference to Exhibit 10.12(e) to Amendment No. 5 to Cinemark Holdings, Inc.’s Registration Statement on Form S-1, File No. 333-140390, filed April 20, 2007).
10
.13(a)10.13(a) Indenture of Lease, dated as of September 30, 1995, by and between Syufy Enterprises, L.P., as landlord and Century Theatres of California, Inc., as tenant, for Century 10 Berryessa, San Jose, CA (incorporated by reference to Exhibit 10.13(a) to Amendment No. 5 to Cinemark Holdings, Inc.’s Registration Statement on Form S-1, File No. 333-140390, filed April 20, 2007).
10
.13(b)10.13(b) First Amendment, dated as of September 1, 2000, to Indenture of Lease, dated as of September 30, 1995, by and between Syufy Enterprises, L.P., as landlord and Century Theatres of California, Inc., as tenant, for Century 10 Berryessa, San Jose, CA (incorporated by reference to Exhibit 10.13(b) to Amendment No. 5 to Cinemark Holdings, Inc.’s Registration Statement on Form S-1, File No. 333-140390, filed April 20, 2007).

10.13(c)
10.13(c) Second Amendment, dated as of April 15, 2005, to Indenture of Lease, dated as of September 30, 1995, by and between Syufy Enterprises, L.P., as landlord and Century Theatres of California, Inc., as tenant, for Century 10 Berryessa, San Jose, CA (incorporated by reference to Exhibit 10.13(c) to Amendment No. 3 to Cinemark Holdings, Inc.’s Registration Statement on Form S-1, File No. 333-140390, filed April 18, 2007).

E-7


Number
Exhibit Title
10.13(d)10.13(d) Third Amendment, dated as of September 29, 2005, to Indenture of Lease, dated as of September 30, 1995, by and between Syufy Enterprises, L.P., as landlord and Century Theatres of California, Inc., as tenant, for Century 10 Berryessa, San Jose, CA (incorporated by reference to Exhibit 10.13(d) to Amendment No. 5 to Cinemark Holdings, Inc.’s Registration Statement on Form S-1, File No. 333-140390, filed April 20, 2007)...
10
.13(e)10.13(e) Fourth Amendment, dated as of August 7, 2006, to Indenture of Lease, dated as of September 30, 1995, by and between Syufy Enterprises, L.P., as landlord and Century Theatres of California, Inc., as tenant, for Century 10 Berryessa, San Jose, CA (incorporated by reference to Exhibit 10.13(e) to Amendment No. 3 to Cinemark Holdings, Inc.’s Registration Statement on Form S-1, File No. 333-140390, filed April 18, 2007).
10
.14(a)10.14(a) Indenture of Lease, dated as of December 1, 1995, by and between Syufy Enterprises, L.P., as landlord and Century Theatres of California, Inc., as tenant, for Century 14, Folsom, CA (incorporated by reference to Exhibit 10.14(a) to Amendment No. 5 to Cinemark Holdings, Inc.’s Registration Statement on Form S-1, File No. 333-140390, filed April 20, 2007).
10
.14(b)10.14(b) First Amendment, dated as of September 1, 2000, to Indenture of Lease, dated as of December 1, 1995, by and between Syufy Enterprises, L.P., as landlord and Century Theatres of California, Inc., as tenant, for Century 14, Folsom, CA (incorporated by reference to Exhibit 10.14(b) to Amendment No. 5 to Cinemark Holdings, Inc.’s Registration Statement on Form S-1, File No. 333-140390, filed April 20, 2007).
10
.14(c)10.14(c) Second Amendment, dated as of April 15, 2005, to Indenture of Lease, dated as of December 1, 1995, by and between Syufy Enterprises, L.P., as landlord and Century Theatres of California, Inc., as tenant, for Century 14, Folsom, CA (incorporated by reference to Exhibit 10.14(c) to Amendment No. 3 to Cinemark Holdings, Inc.’s Registration Statement on Form S-1, File No. 333-140390, filed April 18, 2007).
10
.14(d)10.14(d) Third Amendment, dated as of September 29, 2005, to Indenture of Lease, dated as of December 1, 1995, by and between Syufy Enterprises, L.P., as landlord and Century Theatres of California, Inc., as tenant, for Century 14, Folsom, CA (incorporated by reference to Exhibit 10.14(d) to Amendment No. 3 to Cinemark Holdings, Inc.’s Registration Statement on Form S-1, File No. 333-140390, filed April 18, 2007).
10
.14(e)10.14(e) Fourth Amendment, dated as of August 7, 2006, to Indenture of Lease, dated as of December 1, 1995, by and between Syufy Enterprises, L.P., as landlord and Century Theatres of California, Inc., as tenant, for Century 14, Folsom, CA (incorporated by reference to Exhibit 10.14(e) to Amendment No. 5 to Cinemark Holdings, Inc.’s Registration Statement on Form S-1, File No. 333-140390, filed April 20, 2007).
10
.15(a)10.15(a) Indenture of Lease, dated as of September 30, 1995, by and between Syufy Enterprises, L.P., as landlord and Century Theatres of Nevada, Inc., as tenant, for Cinedome 12, Henderson, NV (incorporated by reference to Exhibit 10.15(a) to Amendment No. 5 to Cinemark Holdings, Inc.’s Registration Statement on Form S-1, File No. 333-140390, filed April 20, 2007).

10.15(b)
10.15(b) First Amendment, dated as of September 1, 2000, to Indenture of Lease, dated as of September 30, 1995, by and between Syufy Enterprises, L.P., as landlord and Century Theatres of Nevada, Inc., as tenant, for Cinedome 12, Henderson, NV (incorporated by reference to Exhibit 10.15(b) to Amendment No. 5 to Cinemark Holdings, Inc.’s Registration Statement on Form S-1, File No. 333-140390, filed April 20, 2007).
10
.15(c)10.15(c) Second Amendment, dated as of April 15, 2005, to Indenture of Lease, dated as of September 30, 1995, by and between Syufy Enterprises, L.P., as landlord and Century Theatres of Nevada, Inc., as tenant, for Cinedome 12, Henderson, NV (incorporated by reference to Exhibit 10.15(c) to Amendment No. 3 to Cinemark Holdings, Inc.’s Registration Statement on Form S-1, File No. 333-140390, filed April 18, 2007).
10
.15(d)10.15(d) Third Amendment, dated as of September 29, 2005, to Indenture of Lease, dated as of September 30, 1995, by and between Syufy Enterprises, L.P., as landlord and Century Theatres of Nevada, Inc., as tenant, for Cinedome 12, Henderson, NV (incorporated by reference to Exhibit 10.15(d) to Amendment No. 3 to Cinemark Holdings, Inc.’s Registration Statement on Form S-1, File No. 333-140390, filed April 18, 2007).

E-8


Number
Exhibit Title
10.15(e)10.15(e) Fourth Amendment, dated as of August 7, 2006, to Indenture of Lease, dated as of September 30, 1995, by and between Syufy Enterprises, L.P., as landlord and Century Theatres of Nevada, Inc., as tenant, for Cinedome 12, Henderson, NV (incorporated by reference to Exhibit 10.15(e) to Amendment No. 5 to Cinemark Holdings, Inc.’s Registration Statement on Form S-1, File No. 333-140390, filed April 20, 2007)...
10
.16(a)10.16(a) Indenture of Lease, dated as of September 30, 1995, by and between Syufy Enterprises, L.P., as landlord and Century Theatres of California, Inc., as tenant, for Century Park 12, Redwood City, CA (incorporated by reference to Exhibit 10.16(a) to Amendment No. 5 to Cinemark Holdings, Inc.’s Registration Statement on Form S-1, File No. 333-140390, filed April 20, 2007).
10
.16(b)10.16(b) First Amendment, dated as of September 1, 2000, to Indenture of Lease, dated as of September 30, 1995, by and between Syufy Enterprises, L.P., as landlord and Century Theatres of California, Inc., as tenant, for Century Park 12, Redwood City, CA (incorporated by reference to Exhibit 10.16(b) to Amendment No. 5 to Cinemark Holdings, Inc.’s Registration Statement on Form S-1, File No. 333-140390, filed April 20, 2007).
10
.16(c)10.16(c) Second Amendment, dated as of April 15, 2005, to Indenture of Lease, dated as of September 30, 1995, by and between Syufy Enterprises, L.P., as landlord and Century Theatres of California, Inc., as tenant, for Century Park 12, Redwood City, CA (incorporated by reference to Exhibit 10.16(c) to Amendment No. 5 to Cinemark Holdings, Inc.’s Registration Statement on Form S-1, File No. 333-140390, filed April 20, 2007).
10
.16(d)10.16(d) Third Amendment, dated as of September 29, 2005, to Indenture of Lease, dated as of September 30, 1995, by and between Syufy Enterprises, L.P., as landlord and Century Theatres of California, Inc., as tenant, for Century Park 12, Redwood City, CA (incorporated by reference to Exhibit 10.16(d) to Amendment No. 3 to Cinemark Holdings, Inc.’s Registration Statement on Form S-1, File No. 333-140390, filed April 18, 2007).
10
.16(e)10.16(e) Fourth Amendment, dated as of August 7, 2006, to Indenture of Lease, dated as of September 30, 1995, by and between Syufy Enterprises, L.P., as landlord and Century Theatres of California, Inc., as tenant, for Century Park 12, Redwood City, CA (incorporated by reference to Exhibit 10.16(e) to Amendment No. 5 to Cinemark Holdings, Inc.’s Registration Statement on Form S-1, File No. 333-140390, filed April 20, 2007).
10
.17(a)10.17(a) Indenture of Lease, dated as of September 30, 1995, by and between Syufy Enterprises, L.P., as landlord and Century Theatres of California, Inc., as tenant, for Century 8, North Hollywood, CA (incorporated by reference to Exhibit 10.17(a) to Amendment No. 5 to Cinemark Holdings, Inc.’s Registration Statement on Form S-1, File No. 333-140390, filed April 20, 2007).

10.17(b)
10.17(b) First Amendment, dated as of September 1, 2000, to Indenture of Lease, dated as of September 30, 1995, by and between Syufy Enterprises, L.P., as landlord and Century Theatres of California, Inc., as tenant, for Century 8, North Hollywood, CA (incorporated by reference to Exhibit 10.17(b) to Amendment No. 5 to Cinemark Holdings, Inc.’s Registration Statement on Form S-1, File No. 333-140390, filed April 20, 2007).
10
.17(c)10.17(c) Second Amendment, dated as of April 15, 2005, to Indenture of Lease, dated as of September 30, 1995, by and between Syufy Enterprises, L.P., as landlord and Century Theatres of California, Inc., as tenant, for Century 8, North Hollywood, CA (incorporated by reference to Exhibit 10.17(c) to Amendment No. 3 to Cinemark Holdings, Inc.’s Registration Statement on Form S-1, File No. 333-140390, filed April 18, 2007).
10
.17(d)10.17(d) Third Amendment, dated as of September 29, 2005, to Indenture of Lease, dated as of September 30, 1995, by and between Syufy Enterprises, L.P., as landlord and Century Theatres of California, Inc., as tenant, for Century 8, North Hollywood, CA (incorporated by reference to Exhibit 10.17(d) to Amendment No. 3 to Cinemark Holdings, Inc.’s Registration Statement on Form S-1, File No. 333-140390, filed April 18, 2007).
10
.17(e)10.17(e) Third Amendment, dated as of August 7, 2006, to Indenture of Lease, dated as of September 30, 1995, by and between Syufy Enterprises, L.P., as landlord and Century Theatres of California, Inc., as tenant, for Century 8, North Hollywood, CA (incorporated by reference to Exhibit 10.17(e) to Amendment No. 5 to Cinemark Holdings, Inc.’s Registration Statement on Form S-1, File No. 333-140390, filed April 20, 2007).

E-9


Number
Exhibit Title
10.18(a)10.18(a) Indenture of Lease, dated as of September 30, 1995, by and between Syufy Enterprises, L.P., as landlord and Century Theatres of California, Inc., as tenant, for Century Plaza 10, S. San Francisco, CA (incorporated by reference to Exhibit 10.18(a) to Amendment No. 5 to Cinemark Holdings, Inc.’s Registration Statement on Form S-1, File No. 333-140390, filed April 20, 2007).
10
.18(b)10.18(b) First Amendment, dated as of October 31, 1996, to Indenture of Lease, dated as of September 30, 1995, by and between Syufy Enterprises, L.P., as landlord and Century Theatres of California, Inc., as tenant, for Century Plaza 10, S. San Francisco, CA (incorporated by reference to Exhibit 10.18(b) to Amendment No. 3 to Cinemark Holdings, Inc.’s Registration Statement on Form S-1, File No. 333-140390, filed April 18, 2007).
10
.18(c)10.18(c) Second Amendment, dated as of September 1, 2000, to Indenture of Lease, dated as of September 30, 1995, by and between Syufy Enterprises, L.P., as landlord and Century Theatres of California, Inc., as tenant, for Century Plaza 10, S. San Francisco, CA (incorporated by reference to Exhibit 10.18(c) to Amendment No. 5 to Cinemark Holdings, Inc.’s Registration Statement on Form S-1, File No. 333-140390, filed April 20, 2007).
10
.18(d)10.18(d) Third Amendment, dated as of April 15, 2005, to Indenture of Lease, dated as of September 30, 1995, by and between Syufy Enterprises, L.P., as landlord and Century Theatres of California, Inc., as tenant, for Century Plaza 10, S. San Francisco, CA (incorporated by reference to Exhibit 10.18(d) to Amendment No. 5 to Cinemark Holdings, Inc.’s Registration Statement on Form S-1, File No. 333-140390, filed April 20, 2007).
10
.18(e)10.18(e) Fourth Amendment, dated as of September 29, 2005, to Indenture of Lease, dated as of September 30, 1995, by and between Syufy Enterprises, L.P., as landlord and Century Theatres of California, Inc., as tenant, for Century Plaza 10, S. San Francisco, CA (incorporated by reference to Exhibit 10.18(e) to Amendment No. 3 to Cinemark Holdings, Inc.’s Registration Statement on Form S-1, File No. 333-140390, filed April 18, 2007).
10
.18(f)10.18(f) Fifth Amendment, dated as of August 7, 2006, to Indenture of Lease, dated as of September 30, 1995, by and between Syufy Enterprises, L.P., as landlord and Century Theatres of California, Inc., as tenant, for Century Plaza 10, S. San Francisco, CA (incorporated by reference to Exhibit 10.18(f) to Amendment No. 5 to Cinemark Holdings, Inc.’s Registration Statement on Form S-1, File No. 333-140390, filed April 20, 2007).

10.19(a)
10.19(a) Indenture of Lease, dated as of September 30, 1995, by and between Syufy Enterprises, L.P., as landlord and Century Theatres of California, Inc., as tenant, for Cinedome 8, Freemont, CA (incorporated by reference to Exhibit 10.19(a) to Amendment No. 5 to Cinemark Holdings, Inc.’s Registration Statement on Form S-1, File No. 333-140390, filed April 20, 2007).
10
.19(b)10.19(b) First Amendment, dated as of September 1, 2000, to Indenture of Lease, dated as of September 30, 1995, by and between Syufy Enterprises, L.P., as landlord and Century Theatres of California, Inc., as tenant, for Cinedome 8, Freemont, CA (incorporated by reference to Exhibit 10.19(b) to Amendment No. 5 to Cinemark Holdings, Inc.’s Registration Statement on Form S-1, File No. 333-140390, filed April 20, 2007).
10
.19(c)10.19(c) Second Amendment, dated as of April 15, 2005, to Indenture of Lease, dated as of September 30, 1995, by and between Syufy Enterprises, L.P., as landlord and Century Theatres of California, Inc., as tenant, for Cinedome 8, Freemont, CA (incorporated by reference to Exhibit 10.19(c) to Amendment No. 5 to Cinemark Holdings, Inc.’s Registration Statement on Form S-1, File No. 333-140390, filed April 20, 2007).
10
.19(d)10.19(d) Third Amendment, dated as of September 29, 2005, to Indenture of Lease, dated as of September 30, 1995, by and between Syufy Enterprises, L.P., as landlord and Century Theatres of California, Inc., as tenant, for Cinedome 8, Freemont, CA (incorporated by reference to Exhibit 10.19(d) to Amendment No. 5 to Cinemark Holdings, Inc.’s Registration Statement on Form S-1, File No. 333-140390, filed April 20, 2007).
10
.19(e)10.19(e) Fourth Amendment, dated as of August 7, 2006, to Indenture of Lease, dated as of September 30, 1995, by and between Syufy Enterprises, L.P., as landlord and Century Theatres of California, Inc., as tenant, for Cinedome 8, Freemont, CA (incorporated by reference to Exhibit 10.19(e) to Amendment No. 5 to Cinemark Holdings, Inc.’s Registration Statement on Form S-1, File No. 333-140390, filed April 20, 2007).

E-10


Number
Exhibit Title
10.20(a)10.20(a) Indenture of Lease, dated as of September 30, 1995, by and between Syufy Enterprises, L.P., as landlord and Century Theatres of California, Inc., as tenant, for Cinedome 7, Newark, CA (incorporated by reference to Exhibit 10.20(a) to Amendment No. 5 to Cinemark Holdings, Inc.’s Registration Statement on Form S-1, File No. 333-140390, filed April 20, 2007).
10
.20(b)10.20(b) First Amendment, dated as of September 1, 2000, to Indenture of Lease, dated as of September 30, 1995, by and between Syufy Enterprises, L.P., as landlord and Century Theatres of California, Inc., as tenant, for Cinedome 7, Newark, CA (incorporated by reference to Exhibit 10.20(b) to Amendment No. 5 to Cinemark Holdings, Inc.’s Registration Statement on Form S-1, File No. 333-140390, filed April 20, 2007).
10
.20(c)10.20(c) Second Amendment, dated as of April 15, 2005, to Indenture of Lease, dated as of September 30, 1995, by and between Syufy Enterprises, L.P., as landlord and Century Theatres of California, Inc., as tenant, for Cinedome 7, Newark, CA (incorporated by reference to Exhibit 10.20(c) to Amendment No. 3 to Cinemark Holdings, Inc.’s Registration Statement on Form S-1, File No. 333-140390, filed April 18, 2007).
10
.20(d)10.20(d) Third Amendment, dated as of September 29, 2005, to Indenture of Lease, dated as of September 30, 1995, by and between Syufy Enterprises, L.P., as landlord and Century Theatres of California, Inc., as tenant, for Cinedome 7, Newark, CA(incorporated by reference to Exhibit 10.20(d) to Amendment No. 5 to Cinemark Holdings, Inc.’s Registration Statement on Form S-1, File No. 333-140390, filed April 20, 2007).
10
.20(e)10.20(e) Fourth Amendment, dated as of August 7, 2006, to Indenture of Lease, dated as of September 30, 1995, by and between Syufy Enterprises, L.P., as landlord and Century Theatres of California, Inc., as tenant, for Cinedome 7, Newark, CA (incorporated by reference to Exhibit 10.20(e) to Amendment No. 5 to Cinemark Holdings, Inc.’s Registration Statement on Form S-1, File No. 333-140390, filed April 20, 2007).

10.21(a)
10.21(a) Indenture of Lease, dated as of September 30, 1995, by and between Syufy Enterprises, L.P., as landlord and Century Theatres of California, Inc., as tenant, for Century Cinema 16, Mountain View, CA (incorporated by reference to Exhibit 10.21(a) to Amendment No. 5 to Cinemark Holdings, Inc.’s Registration Statement on Form S-1, File No. 333-140390, filed April 20, 2007).
10
.21(b)10.21(b) First Amendment, dated as of September 1, 2000, to Indenture of Lease, dated as of September 30, 1995, by and between Syufy Enterprises, L.P., as landlord and Century Theatres of California, Inc., as tenant, for Century Cinema 16, Mountain View, CA (incorporated by reference to Exhibit 10.21(b) to Amendment No. 5 to Cinemark Holdings, Inc.’s Registration Statement on Form S-1, File No. 333-140390, filed April 20, 2007).
10
.21(c)10.21(c) Second Amendment, dated as of April 15, 2005, to Indenture of Lease, dated as of September 30, 1995, by and between Syufy Enterprises, L.P., as landlord and Century Theatres of California, Inc., as tenant, for Century Cinema 16, Mountain View, CA (incorporated by reference to Exhibit 10.21(c) to Amendment No. 5 to Cinemark Holdings, Inc.’s Registration Statement on Form S-1, File No. 333-140390, filed April 20, 2007).
10
.21(d)10.21(d) Third Amendment, dated as of September 29, 2005, to Indenture of Lease, dated as of September 30, 1995, by and between Syufy Enterprises, L.P., as landlord and Century Theatres of California, Inc., as tenant, for Century Cinema 16, Mountain View, CA (incorporated by reference to Exhibit 10.21(d) to Amendment No. 3 to Cinemark Holdings, Inc.’s Registration Statement on Form S-1, File No. 333-140390, filed April 18, 2007).
10
.21(e)10.21(e) Fourth Amendment, dated as of August 7, 2006, to Indenture of Lease, dated as of September 30, 1995, by and between Syufy Enterprises, L.P., as landlord and Century Theatres of California, Inc., as tenant, for Century Cinema 16, Mountain View, CA (incorporated by reference to Exhibit 10.21(e) to Amendment No. 5 to Cinemark Holdings, Inc.’s Registration Statement on Form S-1, File No. 333-140390, filed April 20, 2007).
10
.22(a)10.22(a) Indenture of Lease, dated as of September 30, 1995, by and between SycalSyufy Properties, Inc. (succeeded by Syufy Properties, Inc.), as landlord and Century Theatres of California, Inc., as tenant, for Cinearts 5, Pleasant Hill, CA (incorporated by reference to Exhibit 10.22(a) to Amendment No. 5 to Cinemark Holdings, Inc.’s Registration Statement on Form S-1, File No. 333-140390, filed April 20, 2007).

E-11


Number
Exhibit Title
10.22(b)10.22(b) First Amendment, dated as of September 1, 2000, to Indenture of Lease, dated as of September 30, 1995, by and between Syufy Enterprises, L.P., as landlord and Century Theatres of California, Inc., as tenant, for Cinearts 5, Pleasant Hill, CA (incorporated by reference to Exhibit 10.22(b) to Amendment No. 5 to Cinemark Holdings, Inc.’s Registration Statement on Form S-1, File No. 333-140390, filed April 20, 2007).
10
.22(c)10.22(c) Second Amendment, dated as of April 15, 2005, to Indenture of Lease, dated as of September 30, 1995, by and between Syufy Enterprises, L.P., as landlord and Century Theatres of California, Inc., as tenant, for Cinearts 5, Pleasant Hill, CA (incorporated by reference to Exhibit 10.22(c) to Amendment No. 3 to Cinemark Holdings, Inc.’s Registration Statement on Form S-1, File No. 333-140390, filed April 18, 2007). ..
10
.22(d)10.22(d) Third Amendment, dated as of September 29, 2005, to Indenture of Lease, dated as of September 30, 1995, by and between Syufy Enterprises, L.P., as landlord and Century Theatres of California, Inc., as tenant, for Cinearts 5, Pleasant Hill, CA (incorporated by reference to Exhibit 10.22(d) to Amendment No. 5 to Cinemark Holdings, Inc.’s Registration Statement on Form S-1, File No. 333-140390, filed April 20, 2007).
10
.22(e)10.22(e) Fourth Amendment, dated as of August 7, 2006, to Indenture of Lease, dated as of September 30, 1995, by and between Syufy Enterprises, L.P., as landlord and Century Theatres of California, Inc., as tenant, for Cinearts 5, Pleasant Hill, CA (incorporated by reference to Exhibit 10.22(e) to Amendment No. 5 to Cinemark Holdings, Inc.’s Registration Statement on Form S-1, File No. 333-140390, filed April 20, 2007).

10.23(a)
10.23(a) Indenture of Lease, dated as of September 30, 1995, by and between Syufy Enterprises, L.P., as landlord and Century Theatres of California, Inc., as tenant, for Century 24, San Jose, CA (incorporated by reference to Exhibit 10.23(a) to Amendment No. 5 to Cinemark Holdings, Inc.’s Registration Statement on Form S-1, File No. 333-140390, filed April 20, 2007).
10
.23(b)10.23(b) First Amendment, dated as of September 1, 2000, to Indenture of Lease, dated as of September 30, 1995, by and between Syufy Enterprises, L.P., as landlord and Century Theatres of California, Inc., as tenant, for Century 24, San Jose, CA (incorporated by reference to Exhibit 10.23(b) to Amendment No. 5 to Cinemark Holdings, Inc.’s Registration Statement on Form S-1, File No. 333-140390, filed April 20, 2007).
10
.23(c)10.23(c) Second Amendment, dated as of April 15, 2005, to Indenture of Lease, dated as of September 30, 1995, by and between Syufy Enterprises, L.P., as landlord and Century Theatres of California, Inc., as tenant, for Century 24, San Jose, CA (incorporated by reference to Exhibit 10.23(c) to Amendment No. 3 to Cinemark Holdings, Inc.’s Registration Statement on Form S-1, File No. 333-140390, filed April 18, 2007).
10
.23(d)10.23(d) Third Amendment, dated as of September 29, 2005, to Indenture of Lease, dated as of September 30, 1995, by and between Syufy Enterprises, L.P., as landlord and Century Theatres of California, Inc., as tenant, for Century 24, San Jose, CA (incorporated by reference to Exhibit 10.23(d) to Amendment No. 3 to Cinemark Holdings, Inc.’s Registration Statement on Form S-1, File No. 333-140390, filed April 18, 2007).
10
.23(e)10.23(e) Fourth Amendment, dated as of August 7, 2006, to Indenture of Lease, dated as of September 30, 1995, by and between Syufy Enterprises, L.P., as landlord and Century Theatres of California, Inc., as tenant, for Century 24, San Jose, CA (incorporated by reference to Exhibit 10.23(e) to Amendment No. 5 to Cinemark Holdings, Inc.’s Registration Statement on Form S-1, File No. 333-140390, filed April 20, 2007).
10
.24(a)10.24(a) Indenture of Lease, dated as of September 30, 1995, by and between Syufy Enterprises, L.P., as landlord and Century Theatres of California, Inc., as tenant, for Cinedome 8, Napa, CA (incorporated by reference to Exhibit 10.24(a) to Amendment No. 5 to Cinemark Holdings, Inc.’s Registration Statement on Form S-1, File No. 333-140390, filed April 20, 2007).
10
.24(b)10.24(b) First Amendment, dated as of September 1, 2000, to Indenture of Lease, dated as of September 30, 1995, by and between Syufy Enterprises, L.P., as landlord and Century Theatres of California, Inc., as tenant, for Cinedome 8, Napa, CA (incorporated by reference to Exhibit 10.24(b) to Amendment No. 5 to Cinemark Holdings, Inc.’s Registration Statement on Form S-1, File No. 333-140390, filed April 20, 2007).

E-12


Number
Exhibit Title
10.24(c)10.24(c) Second Amendment, dated as of April 15, 2005, to Indenture of Lease, dated as of September 30, 1995, by and between Syufy Enterprises, L.P., as landlord and Century Theatres of California, Inc., as tenant, for Cinedome 8, Napa, CA (incorporated by reference to Exhibit 10.24(c) to Amendment No. 5 to Cinemark Holdings, Inc.’s Registration Statement on Form S-1, File No. 333-140390, filed April 20, 2007).
10
.24(d)10.24(d) Third Amendment, dated as of September 29, 2005, to Indenture of Lease, dated as of September 30, 1995, by and between Syufy Enterprises, L.P., as landlord and Century Theatres of California, Inc., as tenant, for Cinedome 8, Napa, CA (incorporated by reference to Exhibit 10.24(d) to Amendment No. 3 to Cinemark Holdings, Inc.’s Registration Statement on Form S-1, File No. 333-140390, filed April 18, 2007).
10
.24(e)10.24(e) Fourth Amendment, dated as of August 7, 2006, to Indenture of Lease, dated as of September 30, 1995, by and between Syufy Enterprises, L.P., as landlord and Century Theatres of California, Inc., as tenant, for Cinedome 8, Napa, CA (incorporated by reference to Exhibit 10.24(e) to Amendment No. 5 to Cinemark Holdings, Inc.’s Registration Statement on Form S-1, File No. 333-140390, filed April 20, 2007).

10.25(a)
10.25(a) Lease Agreement, dated as of April 10, 1998, by and between Dyer Triangle LLC, as landlord and Century Theatres, Inc., as tenant, for Century 25 Union Landing, Union City, CA (incorporated by reference to Exhibit 10.25(a) to Amendment No. 5 to Cinemark Holdings, Inc.’s Registration Statement on Form S-1, File No. 333-140390, filed April 20, 2007).
10
.25(b)10.25(b) First Amendment, dated as of April 15, 2005, to Lease Agreement, dated as of April 10, 1998, by and between Dyer Triangle LLC, as landlord and Century Theatres, Inc., as tenant, for Century 25 Union Landing, Union City, CA (incorporated by reference to Exhibit 10.25(b) to Amendment No. 3 to Cinemark Holdings, Inc.’s Registration Statement on Form S-1, File No. 333-140390, filed April 18, 2007).
10
.25(c)10.25(c) Second Amendment, dated as of September 29, 2005, to Lease Agreement, dated as of April 10, 1998, by and between Dyer Triangle LLC, as landlord and Century Theatres, Inc., as tenant, for Century 25 Union Landing, Union City, CA (incorporated by reference to Exhibit 10.25(c) to Amendment No. 3 to Cinemark Holdings, Inc.’s Registration Statement on Form S-1, File No. 333-140390, filed April 18, 2007).
10
.25(d)10.25(d) Third Amendment, dated as of August 5, 2006, to Lease Agreement, dated as of April 10, 1998, by and between Dyer Triangle LLC, as landlord and Century Theatres, Inc., as tenant, for Century 25 Union Landing, Union City, CA (incorporated by reference to Exhibit 10.25(d) to Amendment No. 5 to Cinemark Holdings, Inc.’s Registration Statement on Form S-1, File No. 333-140390, filed April 20, 2007).
10
.26(a)10.26(a) Indenture of Lease, dated as of March 7, 1997, by and between Syufy Enterprises, L.P., as landlord and Century Theatres, Inc., as tenant, for Century Sparks, Sparks, NV (incorporated by reference to Exhibit 10.26(a) to Amendment No. 5 to Cinemark Holdings, Inc.’s Registration Statement on Form S-1, File No. 333-140390, filed April 20, 2007).
10
.26(b)10.26(b) First Amendment, dated as of April 15, 2005, to Indenture of Lease, dated as of March 7, 1997, by and between Syufy Enterprises, L.P., as landlord and Century Theatres, Inc., as tenant, for Century Sparks, Sparks, NV (incorporated by reference to Exhibit 10.26(b) to Amendment No. 3 to Cinemark Holdings, Inc.’s Registration Statement on Form S-1, File No. 333-140390, filed April 18, 2007).
10
.26(c)10.26(c) Second Amendment, dated as of September 29, 2005, to Indenture of Lease, dated as of March 7, 1997, by and between Syufy Enterprises, L.P., as landlord and Century Theatres, Inc., as tenant, for Century Sparks, Sparks, NV (incorporated by reference to Exhibit 10.26(c) to Amendment No. 3 to Cinemark Holdings, Inc.’s Registration Statement on Form S-1, File No. 333-140390, filed April 18, 2007).
10
.26(d)10.26(d) Third Amendment, dated as of August 7, 2006, to Indenture of Lease, dated as of March 7, 1997, by and between Syufy Enterprises, L.P., as landlord and Century Theatres, Inc., as tenant, for Century Sparks, Sparks, NV (incorporated by reference to Exhibit 10.26(d) to Amendment No. 5 to Cinemark Holdings, Inc.’s Registration Statement on Form S-1, File No. 333-140390, filed April 20, 2007).

E-13


Number
Exhibit Title
10.27(a)10.27(a) Lease Agreement, dated as of October 1, 1996, by and between Syufy Enterprises, L.P.(succeeded by Stadium Promenade LLC), as landlord and Century Theatres, Inc., as tenant, for Century Stadium 25, Orange, CA (incorporated by reference to Exhibit 10.27(a) to Amendment No. 5 to Cinemark Holdings, Inc.’s Registration Statement on Form S-1, File No. 333-140390, filed April 20, 2007).
10
.27(b)10.27(b) First Amendment, dated as of April 15, 2005, to Lease Agreement, dated as of October 1, 1996, by and between Syufy Enterprises, L.P.(succeeded by Stadium Promenade LLC), as landlord and Century Theatres, Inc., as tenant, for Century Stadium 25, Orange, (incorporated by reference to Exhibit 10.27(b) to Amendment No. 3 to Cinemark Holdings, Inc.’s Registration Statement on Form S-1, File No. 333-140390, filed April 18, 2007).

10.27(c)
10.27(c) Second Amendment, dated as of September 29, 2005, to Lease Agreement, dated as of October 1, 1996, by and between Syufy Enterprises, L.P.(succeeded by Stadium Promenade LLC), as landlord and Century Theatres, Inc., as tenant, for Century Stadium 25, Orange, (incorporated by reference to Exhibit 10.27(c) to Amendment No. 3 to Cinemark Holdings, Inc.’s Registration Statement on Form S-1, File No. 333-140390, filed April 18, 2007).
10
.27(d)10.27(d) Third Amendment, dated as of August 5, 2006, to Lease Agreement, dated as of October 1, 1996, by and between Syufy Enterprises, L.P.(succeeded by Stadium Promenade LLC), as landlord and Century Theatres, Inc., as tenant, for Century Stadium 25, Orange, (incorporated by reference to Exhibit 10.27(d) to Amendment No. 3 to Cinemark Holdings, Inc.’s Registration Statement on Form S-1, File No. 333-140390, filed April 18, 2007).
10
.28(a)10.28(a) Indenture of Lease, dated as of July 1, 1996, by and between Synm Properties Inc.(succeeded by Syufy Properties, Inc.), as landlord and Century Theatres, Inc., as tenant, Century Rio 24, Albuquerque, NM(incorporated by reference to Exhibit 10.28(a) to Amendment No. 5 to Cinemark Holdings, Inc.’s Registration Statement on Form S-1, File No. 333-140390, filed April 20, 2007).
10
.28(b)10.28(b) First Amendment, dated as of April 15, 2005, to Indenture of Lease, dated as of July 1, 1996, by and between Synm Properties Inc.(succeeded by Syufy Properties, Inc.), as landlord and Century Theatres, Inc., as tenant, Century Rio 24, Albuquerque, NM (incorporated by reference to Exhibit 10.28(b) to Amendment No. 3 to Cinemark Holdings, Inc.’s Registration Statement on Form S-1, File No. 333-140390, filed April 18, 2007).
10
.28(c)10.28(c) Second Amendment, dated as of September 29, 2005, to Indenture of Lease, dated as of July 1, 1996, by and between Synm Properties Inc.(succeeded by Syufy Properties, Inc.), as landlord and Century Theatres, Inc., as tenant, Century Rio 24, Albuquerque, NM (incorporated by reference to Exhibit 10.28(c) to Amendment No. 3 to Cinemark Holdings, Inc.’s Registration Statement on Form S-1, File No. 333-140390, filed April 18, 2007).
10
.28(d)10.28(d) Third Amendment, dated as of August 7, 2006, to Indenture of Lease, dated as of July 1, 1996, by and between Synm Properties Inc.(succeeded by Syufy Properties, Inc.), as landlord and Century Theatres, Inc., as tenant, Century Rio 24, Albuquerque, NM (incorporated by reference to Exhibit 10.28(d) to Amendment No. 5 to Cinemark Holdings, Inc.’s Registration Statement on Form S-1, File No. 333-140390, filed April 20, 2007).
10
.29(a)10.29(a) Indenture of Lease, dated as of September 3, 1996, by and between Syufy Enterprises, L.P., as landlord and Century Theatres, Inc., as tenant, for Century 14, Roseville, CA (incorporated by reference to Exhibit 10.29(a) to Amendment No. 5 to Cinemark Holdings, Inc.’s Registration Statement on Form S-1, File No. 333-140390, filed April 20, 2007).
10
.29(b)10.29(b) First Amendment, dated as of April 15, 2005, to Indenture of Lease, dated as of September 3, 1996, by and between Syufy Enterprises, L.P., as landlord and Century Theatres, Inc., as tenant, for Century 14, Roseville, CA (incorporated by reference to Exhibit 10.29(b) to Amendment No. 3 to Cinemark Holdings, Inc.’s Registration Statement on Form S-1, File No. 333-140390, filed April 18, 2007).
10
.29(c)10.29(c) Second Amendment, dated as of September 29, 2005, to Indenture of Lease, dated as of September 3, 1996, by and between Syufy Enterprises, L.P., as landlord and Century Theatres, Inc., as tenant, for Century 14, Roseville, CA (incorporated by reference to Exhibit 10.29(c) to Amendment No. 3 to Cinemark Holdings, Inc.’s Registration Statement on Form S-1, File No. 333-140390, filed April 18, 2007).

E-14


Number
Exhibit Title
10.29(d)10.29(d) Third Amendment, dated as of August 7, 2006, to Indenture of Lease, dated as of September 3, 1996, by and between Syufy Enterprises, L.P., as landlord and Century Theatres, Inc., as tenant, for Century 14, Roseville, CA (incorporated by reference to Exhibit 10.29(d) to Amendment No. 5 to Cinemark Holdings, Inc.’s Registration Statement on Form S-1, File No. 333-140390, filed April 20, 2007).

10.30(a)
10.30(a) Indenture of Lease, dated as of September 30, 1995, by and between Syufy Enterprises, L.P., as landlord and Century Theatres of Nevada, Inc., as tenant, for Rancho Santa Fe 16, Las Vegas, NV (incorporated by reference to Exhibit 10.30(a) to Amendment No. 5 to Cinemark Holdings, Inc.’s Registration Statement on Form S-1, File No. 333-140390, filed April 20, 2007).
10
.30(b)10.30(b) First Amendment, dated as of September 1, 2000, to Indenture of Lease, dated as of September 30, 1995, by and between Syufy Enterprises, L.P., as landlord and Century Theatres of Nevada, Inc., as tenant, for Rancho Santa Fe 16, Las Vegas, NV (incorporated by reference to Exhibit 10.30(b) to Amendment No. 5 to Cinemark Holdings, Inc.’s Registration Statement on Form S-1, File No. 333-140390, filed April 20, 2007).
10
.30(c)10.30(c) Second Amendment, dated as of September 30, 2006, to Indenture of Lease, dated as of September 30, 1995, by and between Syufy Enterprises, L.P., as landlord and Century Theatres of Nevada, Inc., as tenant, for Rancho Santa Fe 16, Las Vegas, NV (incorporated by reference to Exhibit 10.30(c) to Amendment No. 5 to Cinemark Holdings, Inc.’s Registration Statement on Form S-1, File No. 333-140390, filed April 20, 2007).
10
.31(a)10.31(a) Indenture of Lease, dated as of September 30, 1995, by and between Syufy Enterprises, L.P., as landlord and Century Theatres of California, Inc., as tenant, for Century Stadium 16, Ventura, CA (incorporated by reference to Exhibit 10.31(a) to Amendment No. 5 to Cinemark Holdings, Inc.’s Registration Statement on Form S-1, File No. 333-140390, filed April 20, 2007).
10
.31(b)10.31(b) First Amendment, dated as of October 1, 1996, to Indenture of Lease, dated as of September 30, 1995, by and between Syufy Enterprises, L.P., as landlord and Century Theatres of California, Inc., as tenant, for Century Stadium 16, Ventura, CA (incorporated by reference to Exhibit 10.31(b) to Amendment No. 5 to Cinemark Holdings, Inc.’s Registration Statement on Form S-1, File No. 333-140390, filed April 20, 2007).
10
.31(c)10.31(c) Second Amendment, dated as of September 1, 2000, to Indenture of Lease, dated as of September 30, 1995, by and between Syufy Enterprises, L.P., as landlord and Century Theatres of California, Inc., as tenant, for Century Stadium 16, Ventura, CA (incorporated by reference to Exhibit 10.31(c) to Amendment No. 5 to Cinemark Holdings, Inc.’s Registration Statement on Form S-1, File No. 333-140390, filed April 20, 2007).
10
.31(d)10.31(d) Third Amendment, dated as of April 15, 2005, to Indenture of Lease, dated as of September 30, 1995, by and between Syufy Enterprises, L.P., as landlord and Century Theatres of California, Inc., as tenant, for Century Stadium 16, Ventura, CA (incorporated by reference to Exhibit 10.31(d) to Amendment No. 3 to Cinemark Holdings, Inc.’s Registration Statement on Form S-1, File No. 333-140390, filed April 18, 2007).
10
.31(e)10.31(e) Fourth Amendment, dated as of August 7, 2006, to Indenture of Lease, dated as of September 30, 1995, by and between Syufy Enterprises, L.P., as landlord and Century Theatres of California, Inc., as tenant, for Century Stadium 16, Ventura, CA (incorporated by reference to Exhibit 10.31(e) to Amendment No. 5 to Cinemark Holdings, Inc.’s Registration Statement on Form S-1, File No. 333-140390, filed April 20, 2007).
10
.32(a)10.32(a) Indenture of Lease, dated as of September 30, 1995, by and between Syufy Enterprises, L.P., as landlord and Century Theatres of California, Inc., as tenant, for Northridge 14, Salinas, CA (incorporated by reference to Exhibit 10.32(a) to Amendment No. 5 to Cinemark Holdings, Inc.’s Registration Statement on Form S-1, File No. 333-140390, filed April 20, 2007).
10
.32(b)10.32(b) First Amendment, dated as of September 1, 2000, to Indenture of Lease, dated as of September 30, 1995, by and between Syufy Enterprises, L.P., as landlord and Century Theatres of California, Inc., as tenant, for Northridge 14, Salinas, CA (incorporated by reference to Exhibit 10.32(b) to Amendment No. 5 to Cinemark Holdings, Inc.’s Registration Statement on Form S-1, File No. 333-140390, filed April 20, 2007).

E-15


Number
Exhibit Title
10.32(c)10.32(c) Second Amendment, dated as of October 1, 2001, to Indenture of Lease, dated as of September 30, 1995, by and between Syufy Enterprises, L.P., as landlord and Century Theatres of California, Inc., as tenant, for Northridge 14, Salinas, CA (incorporated by reference to Exhibit 10.32(c) to Amendment No. 3 to Cinemark Holdings, Inc.’s Registration Statement on Form S-1, File No. 333-140390, filed April 18, 2007).
10
.32(d)10.32(d) Third Amendment, dated as of August 7, 2006, to Indenture of Lease, dated as of September 30, 1995, by and between Syufy Enterprises, L.P., as landlord and Century Theatres of California, Inc., as tenant, for Northridge 14, Salinas, CA (incorporated by reference to Exhibit 10.32(d) to Amendment No. 5 to Cinemark Holdings, Inc.’s Registration Statement on Form S-1, File No. 333-140390, filed April 20, 2007).
10
.33(a)10.33(a) Indenture of Lease, dated as of September 30, 1995, by and between Syufy Properties, Inc. (succeeded by Syufy Enterprises, L.P.), as landlord and Century Theatres of Utah, Inc., as tenant, for Century 16, Salt Lake City, UT (incorporated by reference to Exhibit 10.33(a) to Amendment No. 5 to Cinemark Holdings, Inc.’s Registration Statement on Form S-1, File No. 333-140390, filed April 20, 2007).
10
.33(b)10.33(b) First Amendment, dated as of January 4, 1998, to Indenture of Lease, dated as of September 30, 1995, by and between Syufy Properties, Inc. (succeeded by Syufy Enterprises, L.P.), as landlord and Century Theatres of Utah, Inc., as tenant, for Century 16, Salt Lake City, UT (incorporated by reference to Exhibit 10.33(b) to Amendment No. 3 to Cinemark Holdings, Inc.’s Registration Statement on Form S-1, File No. 333-140390, filed April 18, 2007).
10
.33(c)10.33(c) Second Amendment, dated as of September 1, 2000, to Indenture of Lease, dated as of September 30, 1995, by and between Syufy Properties, Inc. (succeeded by Syufy Enterprises, L.P.), as landlord and Century Theatres of Utah, Inc., as tenant, for Century 16, Salt Lake City, UT (incorporated by reference to Exhibit 10.33(c) to Amendment No. 5 to Cinemark Holdings, Inc.’s Registration Statement on Form S-1, File No. 333-140390, filed April 20, 2007).
10
.33(d)10.33(d) Third Amendment, dated as of April 15, 2005, to Indenture of Lease, dated as of September 30, 1995, by and between Syufy Properties, Inc. (succeeded by Syufy Enterprises, L.P.), as landlord and Century Theatres of Utah, Inc., as tenant, for Century 16, Salt Lake City, UT (incorporated by reference to Exhibit 10.33(d) to Amendment No. 3 to Cinemark Holdings, Inc.’s Registration Statement on Form S-1, File No. 333-140390, filed April 18, 2007).
10
.33(e)10.33(e) Fourth Amendment, dated as of April 15, 2005, to Indenture of Lease, dated as of September 30, 1995, by and between Syufy Properties, Inc. (succeeded by Syufy Enterprises, L.P.), as landlord and Century Theatres of Utah, Inc., as tenant, for Century 16, Salt Lake City, UT (incorporated by reference to Exhibit 10.33(e) to Amendment No. 3 to Cinemark Holdings, Inc.’s Registration Statement on Form S-1, File No. 333-140390, filed April 18, 2007).
10
.33(f)10.33(f) Fourth Amendment, dated as of August 7, 2006, to Indenture of Lease, dated as of September 30, 1995, by and between Syufy Properties, Inc. (succeeded by Syufy Enterprises, L.P.), as landlord and Century Theatres of Utah, Inc., as tenant, for Century 16, Salt Lake City, UT (incorporated by reference to Exhibit 10.33(f) to Amendment No. 5 to Cinemark Holdings, Inc.’s Registration Statement on Form S-1, File No. 333-140390, filed April 20, 2007).
10
.34(a)10.34(a) Indenture of Lease, dated as of April 17, 1998, by and between Syufy Enterprises, L.P., as landlord and Century Theatres, Inc., as tenant, for Century Larkspur, Larkspur, CA (incorporated by reference to Exhibit 10.34(a) to Amendment No. 5 to Cinemark Holdings, Inc.’s Registration Statement on Form S-1, File No. 333-140390, filed April 20, 2007).
10
.34(b)10.34(b) First Amendment, dated as of April 30, 2003, to Indenture of Lease, dated as of April 17, 1998, by and between Syufy Enterprises, L.P., as landlord and Century Theatres, Inc., as tenant, for Century Larkspur, Larkspur, CA (incorporated by reference to Exhibit 10.34(b) to Amendment No. 5 to Cinemark Holdings, Inc.’s Registration Statement on Form S-1, File No. 333-140390, filed April 20, 2007).

10.34(c)
10.34(c) Second Amendment, dated as of April 15, 2005, to Indenture of Lease, dated as of April 17, 1998, by and between Syufy Enterprises, L.P., as landlord and Century Theatres, Inc., as tenant, for Century Larkspur, Larkspur, CA (incorporated by reference to Exhibit 10.34(c) to Amendment No. 5 to Cinemark Holdings, Inc.’s Registration Statement on Form S-1, File No. 333-140390, filed April 20, 2007).

E-16


Number
Exhibit Title
10.34(d)10.34(d) Third Amendment, dated as of September 29, 2005, to Indenture of Lease, dated as of April 17, 1998, by and between Syufy Enterprises, L.P., as landlord and Century Theatres, Inc., as tenant, for Century Larkspur, Larkspur, CA (incorporated by reference to Exhibit 10.34(d) to Amendment No. 3 to Cinemark Holdings, Inc.’s Registration Statement on Form S-1, File No. 333-140390, filed April 18, 2007).
10
.34(e)10.34(e) Fourth Amendment, dated as of August 7, 2006, to Indenture of Lease, dated as of April 17, 1998, by and between Syufy Enterprises, L.P., as landlord and Century Theatres, Inc., as tenant, for Century Larkspur, Larkspur, CA (incorporated by reference to Exhibit 10.34(e) to Amendment No. 5 to Cinemark Holdings, Inc.’s Registration Statement on Form S-1, File No. 333-140390, filed April 20, 2007).
10
.35(a)10.35(a) Indenture of Lease, dated as of August 1, 1997, by and between Syufy Enterprises, L.P., as landlord and Century Theatres, Inc., as tenant, for Century Park Lane 16, Reno, NV (incorporated by reference to Exhibit 10.35(a) to Amendment No. 5 to Cinemark Holdings, Inc.’s Registration Statement on Form S-1, File No. 333-140390, filed April 20, 2007).
10
.35(b)10.35(b) First Amendment, dated as of April 15, 2005, to Indenture of Lease, dated as of August 1, 1997, by and between Syufy Enterprises, L.P., as landlord and Century Theatres, Inc., as tenant, for Century Park Lane 16, Reno, NV (incorporated by reference to Exhibit 10.35(b) to Amendment No. 3 to Cinemark Holdings, Inc.’s Registration Statement on Form S-1, File No. 333-140390, filed April 18, 2007).
10
.35(c)10.35(c) Second Amendment, dated as of September 29, 2005, to Indenture of Lease, dated as of August 1, 1997, by and between Syufy Enterprises, L.P., as landlord and Century Theatres, Inc., as tenant, for Century Park Lane 16, Reno, NV (incorporated by reference to Exhibit 10.35(c) to Amendment No. 3 to Cinemark Holdings, Inc.’s Registration Statement on Form S-1, File No. 333-140390, filed April 18, 2007).
10
.35(d)10.35(d) Third Amendment, dated as of August 7, 2006, to Indenture of Lease, dated as of August 1, 1997, by and between Syufy Enterprises, L.P., as landlord and Century Theatres, Inc., as tenant, for Century Park Lane 16, Reno, NV (incorporated by reference to Exhibit 10.35(d) to Amendment No. 5 to Cinemark Holdings, Inc.’s Registration Statement on Form S-1, File No. 333-140390, filed April 20, 2007).
10
.36(a)10.36(a) Indenture of Lease, dated as of September 30, 1995, by and between Syufy Enterprises, L.P., as landlord and Century Theatres of California, Inc., as tenant, for Century 16, Sacramento, CA (incorporated by reference to Exhibit 10.36(a) to Amendment No. 5 to Cinemark Holdings, Inc.’s Registration Statement on Form S-1, File No. 333-140390, filed April 20, 2007).
10
.36(b)10.36(b) First Amendment, dated as of September 1, 2000, to Indenture of Lease, dated as of September 30, 1995, by and between Syufy Enterprises, L.P., as landlord and Century Theatres of California, Inc., as tenant, for Century 16, Sacramento, CA (incorporated by reference to Exhibit 10.36(b) to Amendment No. 5 to Cinemark Holdings, Inc.’s Registration Statement on Form S-1, File No. 333-140390, filed April 20, 2007).
10
.36(c)10.36(c) Second Amendment, dated as of October 1, 2001, to Indenture of Lease, dated as of September 30, 1995, by and between Syufy Enterprises, L.P., as landlord and Century Theatres of California, Inc., as tenant, for Century 16, Sacramento, CA (incorporated by reference to Exhibit 10.36(c) to Amendment No. 3 to Cinemark Holdings, Inc.’s Registration Statement on Form S-1, File No. 333-140390, filed April 18, 2007).

10.36(d)
10.36(d) Third Amendment, dated as of April 15, 2005, to Indenture of Lease, dated as of September 30, 1995, by and between Syufy Enterprises, L.P., as landlord and Century Theatres of California, Inc., as tenant, for Century 16, Sacramento, CA (incorporated by reference to Exhibit 10.36(d) to Amendment No. 3 to Cinemark Holdings, Inc.’s Registration Statement on Form S-1, File No. 333-140390, filed April 18, 2007).
10
.36(e)10.36(e) Fourth Amendment, dated as of September 29, 2005, to Indenture of Lease, dated as of September 30, 1995, by and between Syufy Enterprises, L.P., as landlord and Century Theatres of California, Inc., as tenant, for Century 16, Sacramento, CA (incorporated by reference to Exhibit 10.36(e) to Amendment No. 3 to Cinemark Holdings, Inc.’s Registration Statement on Form S-1, File No. 333-140390, filed April 18, 2007).

E-17


Number
Exhibit Title
10.36(f)10.36(f) Fifth Amendment, dated as of August 7, 2006, to Indenture of Lease, dated as of September 30, 1995, by and between Syufy Enterprises, L.P., as landlord and Century Theatres of California, Inc., as tenant, for Century 16, Sacramento, CA (incorporated by reference to Exhibit 10.36(f) to Amendment No. 5 to Cinemark Holdings, Inc.’s Registration Statement on Form S-1, File No. 333-140390, filed April 20, 2007).
10
.37(a)10.37(a) Lease Agreement, dated as of October 31, 1997, by and between SycalSyufy Properties, Inc. (succeeded by 150 Pelican LLC), as landlord and Century Theatres, Inc., as tenant, for office building situated at 150 Pelican Way, San Rafael, CA (incorporated by reference to Exhibit 10.37(a) to Amendment No. 3 to Cinemark Holdings, Inc.’s Registration Statement on Form S-1, File No. 333-140390, filed April 18, 2007).
10
.37(b)10.37(b) First Amendment, dated as of December 1, 1998, to Lease Agreement, dated as of October 31, 1997, by and between SycalSyufy Properties, Inc. (succeeded by 150 Pelican LLC), as landlord and Century Theatres, Inc., as tenant, for office building situated at 150 Pelican Way, San Rafael, CA (incorporated by reference to Exhibit 10.37(b) to Amendment No. 3 to Cinemark Holdings, Inc.’s Registration Statement on Form S-1, File No. 333-140390, filed April 18, 2007).
+10.38Consulting Agreement, dated as of February 15, 2012, between Cinemark Holdings, Inc. and Alan Stock (incorporated by reference to Exhibit 10.1 to Cinemark Holdings, Inc.’s Current Report on Form 8-K, File No. 001-33401, filed February 16, 2012).
+10.39Cinemark Holdings, Inc. Performance Bonus Plan (incorporated by reference to Appendix B to Cinemark Holdings, Inc.’s Definitive Proxy Statement filed on April 15, 2008).
*+10.40Non-Employee Director Compensation Policy.
*12 Calculation of Ratio of Earnings to Fixed Charges.
*21 Subsidiaries of Cinemark Holdings, Inc.
*23.123.1 Consent of Deloitte & Touche LLP.
*31.131.1 Certification of Alan Stock,Tim Warner, Chief Executive Officer, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
*31.231.2 Certification of Robert Copple, Chief Financial Officer, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
*32.132.1 Certification of Alan Stock, Chief Executive Officer,Tim Warner, Chief Executive Officer, pursuant to 18 U.S.C. Section 1350, as added by Section 906 of the Sarbanes-Oxley Act of 2002.
*32.232.2 Certification of Robert Copple, Chief Financial Officer, Chief Executive Officer, pursuant to 18 U.S.C. Section 1350, as added by Section 906 of the Sarbanes-Oxley Act of 2002.

*101The following financial information from Cinemark Holdings, Inc.’s Annual Report on Form 10-K for the year ended December 31, 2011 filed with the SEC on February 29, 2012, formatted in XBRL includes: (i) Consolidated Balance Sheets (ii) Consolidated Statements of Income, (iii) Consolidated Statements of Comprehensive Income, (iv) Consolidated Statements of Equity, (v) Consolidated Statements of Cash Flows and (vi) the Notes to Consolidated Financial Statements tagged as detailed text.

*Filed herewith.
+Any management contract, compensatory plan or arrangement.

E-18

E-21