May 10, 2005
Zip+4 Code: 20549-0305
Via Fax & U.S. Mail
Robert Copple
Senior Vice President and Treasurer
Cinemark USA, Inc.
3900 Dallas Parkway, Suite 500
Plano, Texas 75093
RE: Cinemark USA, Inc. (the "Company")
Form 10-K for the year ended December 31, 2004
File No. 033-47040
Dear Mr. Copple:
Based upon an examination restricted solely to considerations of
the
Financial Statements, Management`s Discussion and Analysis, and
Selected Financial Data, the staff has the following comments on
the
above-referenced documents. Where indicated, we think you should
revise your future filings in response to these comments. If you
disagree, we will consider your explanation as to why our comment
is
inapplicable or a revision is unnecessary. Please be as detailed
as
necessary in your explanation. In some of our comments, we may
ask
you to provide us with supplemental information so we may better
understand your disclosure. After reviewing this information, we
may
or may not raise additional comments.
Please understand that the purpose of our review process is to
assist
you in your compliance with the applicable disclosure requirements
and
to enhance the overall disclosure in your filing. We look forward
to
working with you in these respects. We welcome any questions you
may
have about our comments or on any other aspect of our review.
Feel
free to call us at the telephone numbers listed at the end of this
letter.
Please respond to confirm that such comments will be complied
with,
or, if certain of the comments are deemed inappropriate by the
Company, advise the staff of the reason thereof.
Pursuant to Rule 101(a)(3) of Regulation S-T, your response should
be
submitted in electronic form, under the label "corresp" with a
copy to
the staff. After our review of your supplemental replies, we may
have
further comments. Please respond within fifteen (15) business
days.
Form 10-K For the Fiscal Year Ended October 29, 2004
Item 7- Management discussion and analysis of financial condition
and
results of operation
Critical accounting policies, page 18
1. Please expand your critical accounting policies disclosures to
address each accounting policy that requires management`s most
difficult, subjective or complex judgments. For example, you
should
provide disclosure addressing any uncertainties or significant
judgments surrounding your accounting for gift cards, contingent
facility rentals, depreciable lives of theater equipment, and
advances
collected on concession contracts. These disclosures should
discuss
how management assesses the likelihood of gift card redemptions as
well as how management assesses the accounting for contingent
rentals
based on operating results of underlying theaters and how
management
assess the appropriateness of useful lives in determining
depreciation
expense. Additionally, your disclosures should clarify when
management considers advances collected on concession contracts to
be
earned. Please ensure that you do not simply duplicate the
accounting
policy disclosures in the notes to the financial statements. For
guidance refer to FRR 72.
Liquidity and Capital Resources Financing Activities, page 26
2. Please consider revising your discussion of investing
activities to
quantify capital expenditures related to both construction of new
theatres and refurbishment of existing theatres.
3. You state that you typically operate with a negative working
capital position primarily because of the lack of significant
inventory and accounts receivable. It does not appear that your
explanation for the cause of your working capital deficit is
correct,
as you also state that your revenues are received in cash prior to
the
payment of related expenses. Please revise this disclosure as
appropriate.
4. As the table of contractual obligations is intended to increase
the
transparency of cash flow, we believe that registrants should
generally include scheduled interest payments in the table. Where
interest rates are variable and unknown, you may use your judgment
to
determine whether or not to include such estimates. If you elect
to
include them, you may determine the appropriate methodology to
estimate the interest payments. Regardless of whether you include
interest payments or not, a footnote to the table should clarify
whether or not you have done so and, if applicable, the
methodology
you have used in your estimate. If interest payments are excluded
from the table, please disclose the significant contractual terms
of
the debt and any other additional information that is material to
an
understanding of these future cash flows. Please revise to
reflect
the effect of interest payments.
Note 1- Summary of Significant Accounting Policies, page F-7
5. Please revise to clarify why you recognize foreign advanced
rents
over a period of 10 to 20 years.
6. Please revise your lease accounting policy to describe the
nature
of your involvement during the construction period for assets
which
you will lease when construction is complete. Refer to EITF 97-
10.
7. Please revise your accounting policy for goodwill to disclose
reporting units used in your impairment tests and the multiple of
cash
flows used in estimating fair values of reporting units.
We urge all persons who are responsible for the accuracy and
adequacy
of the disclosure in the filing reviewed by the staff to be
certain
that they have provided all information investors require for an
informed decision. Since the company and its management are in
possession of all facts relating to a company`s disclosure, they
are
responsible for the accuracy and adequacy of the disclosures they
have
made.
In connection with responding to our comments, please provide, in
writing, a statement from the company acknowledging that:
* the company is responsible for the adequacy and accuracy of the
disclosure in the filing;
* staff comments or changes to disclosure in response to staff
comments do not foreclose the Commission from taking any action
with
respect to the filing; and
* the company may not assert staff comments as a defense in any
proceeding initiated by the Commission or any person under the
federal
securities laws of the United States.
In addition, please be advised that the Division of Enforcement
has
access to all information you provide to the staff of the Division
of
Corporation Finance in our review of your filing or in response to
our
comments on your filing.
**********
You may contact Juan Migone at (202) 551-3312 or Lyn Shenk, at
(202)
551-3380 if you have questions regarding comments on the financial
statements and related matters. Please contact the undersigned at
(202) 551-3211 with any other questions.
Sincerely,
David R. Humphrey
Branch Chief- Accountant
Via facsimile: Robert Copple
(972) 665-1003
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Robert Copple
Cinemark USA, Inc.
May 10, 2005
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