CINEMARK USA INC /TX - 10-Q Quarterly Report

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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2003

Commission File Number: 033-47040

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

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

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

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

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

Yes X No ____

Indicate by check mark whether the registrant is an accelerated filer (as
defined in Rule 12b-2 of the Exchange Act).

Yes ____ No X

As of August 11, 2003, 1,500 shares of Class A common stock and 182,648 shares
of Class B common stock were outstanding.

CINEMARK USA, INC. AND SUBSIDIARIES

Index Page
----

PART I FINANCIAL INFORMATION

Item 1. Financial Statements

Condensed Consolidated Balance Sheets as of June 30, 2003
(unaudited) and December 31, 2002 3

Condensed Consolidated Statements of Operations (unaudited)
for the three and six month periods ended June 30, 2003
and 2002 4

Condensed Consolidated Statements of Cash Flows (unaudited)
for the six month periods ended June 30, 2003 and 2002 5

Notes to Condensed Consolidated Financial Statements (unaudited) 6

Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 21

Item 3. Quantitative and Qualitative Disclosures About Market Risk 30

Item 4. Controls and Procedures 31

PART II OTHER INFORMATION

Item 1. Legal Proceedings 32

Item 2. Changes in Securities and Use of Proceeds 32

Item 3. Defaults Upon Senior Securities 32

Item 4. Submission of Matters to a Vote of Security Holders 32

Item 5. Other Information 32

Item 6. Exhibits and Reports on Form 8-K 36

SIGNATURES 38

2

PART I - FINANCIAL INFORMATION
Item 1. Financial Statements

CINEMARK USA, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS

June 30, December 31,
2003 2002
(Unaudited)
-------------------------------

ASSETS

CURRENT ASSETS
Cash and cash equivalents $ 50,646,698 $ 63,718,515
Inventories 4,398,202 3,688,915
Accounts receivable 15,302,136 12,441,849
Income tax receivable - 715,931
Prepaid expenses and other 5,790,363 4,094,135
-------------------------------
Total current assets 76,137,399 84,659,345

THEATRE PROPERTIES AND EQUIPMENT 1,210,413,633 1,177,508,981
Less accumulated depreciation and amortization (425,805,783) (385,778,478)
-------------------------------
Theatre properties and equipment - net 784,607,850 791,730,503

OTHER ASSETS
Goodwill 10,885,354 10,751,844
Investments in and advances to affiliates 2,662,812 3,040,940
Deferred charges and other - net 38,574,528 26,631,296
-------------------------------
Total other assets 52,122,694 40,424,080
-------------------------------

TOTAL ASSETS $ 912,867,943 $ 916,813,928
===============================

LIABILITIES AND SHAREHOLDER'S EQUITY

CURRENT LIABILITIES
Current portion of long-term debt $ 5,975,666 $ 30,190,449
Current income taxes payable 7,102,705 -
Accounts payable and accrued expenses 115,002,413 124,237,312
-------------------------------
Total current liabilities 128,080,784 154,427,761

LONG-TERM LIABILITIES
Senior credit agreements 136,204,835 282,237,221
Senior subordinated notes 521,602,807 380,159,167
Deferred lease expenses 25,596,461 24,837,457
Deferred gain on sale leasebacks 4,189,660 4,372,620
Deferred income taxes 11,718,179 11,170,128
Deferred revenues and other long-term liabilities 2,999,488 5,129,370
-------------------------------
Total long-term liabilities 702,311,430 707,905,963

MINORITY INTERESTS IN SUBSIDIARIES 32,612,970 26,714,929

SHAREHOLDER'S EQUITY
Class A common stock, $.01 par value: 10,000,000 shares
authorized, 1,500 shares issued and outstanding 15 15
Class B common stock, no par value: 1,000,000 shares
authorized, 239,893 shares issued and outstanding 49,543,427 49,543,427
Additional paid-in-capital 12,523,455 11,974,860
Retained earnings 94,108,343 80,273,323
Treasury stock, 57,245 Class B shares at cost (24,232,890) (24,232,890)
Accumulated other comprehensive loss (82,079,591) (89,793,460)
-------------------------------
Total shareholder's equity 49,862,759 27,765,275
-------------------------------

TOTAL LIABILITIES AND SHAREHOLDER'S EQUITY $ 912,867,943 $ 916,813,928
===============================

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

3

CINEMARK USA, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)

Three Months Ended June 30, Six Months Ended June 30,
2003 2002 2003 2002
------------------------------ ------------------------------

REVENUES
Admissions $157,295,430 $161,395,144 $285,976,567 $307,806,708
Concession 79,338,705 80,084,602 143,711,945 149,370,820
Other 12,343,436 11,969,591 23,290,818 22,973,915
------------------------------ ------------------------------
Total revenues 248,977,571 253,449,337 452,979,330 480,151,443

COSTS AND EXPENSES
Cost of operations:
Film rentals and advertising 88,748,650 89,733,324 155,997,857 166,618,351
Concession supplies 12,796,853 13,775,334 22,710,427 25,757,154
Salaries and wages 24,691,432 25,977,570 47,301,181 48,528,004
Facility lease expense 29,638,793 29,125,793 58,452,923 58,275,403
Utilities and other 28,242,555 26,444,411 53,721,682 53,129,752
------------------------------ ------------------------------
Total cost of operations 184,118,283 185,056,432 338,184,070 352,308,664

General and administrative expenses 10,611,409 11,815,562 20,201,223 22,458,579
Depreciation and amortization 16,698,568 16,845,737 32,835,482 34,012,518
Asset impairment loss 2,060,845 223,378 2,060,845 781,776
(Gain) loss on sale of assets and other (374,590) 273,732 (991,019) 812,924
------------------------------ ------------------------------
Total costs and expenses 213,114,515 214,214,841 392,290,601 410,374,461

OPERATING INCOME 35,863,056 39,234,496 60,688,729 69,776,982

OTHER INCOME (EXPENSE)
Interest expense (14,218,719) (14,110,113) (27,514,327) (28,894,050)
Amortization of debt issue cost (587,330) (591,170) (1,170,950) (1,182,340)
Interest income 424,735 514,716 1,083,364 998,055
Foreign currency exchange gain (loss) 135,068 (2,100,767) 151,199 (2,321,764)
Loss on early retirement of debt (5,612,377) - (7,258,136) -
Equity in income (loss) of affiliates (46,832) 96,267 149,524 213,008
Minority interests in (income) loss of subsidiaries (1,506,280) 140,745 (2,276,485) (735,726)
------------------------------ ------------------------------
Total other expenses (21,411,735) (16,050,322) (36,835,811) (31,922,817)
------------------------------ ------------------------------
INCOME BEFORE INCOME TAXES AND
CUMULATIVE EFFECT OF AN ACCOUNTING CHANGE 14,451,321 23,184,174 23,852,918 37,854,165

Income taxes 6,069,227 9,124,792 10,017,898 13,564,061
------------------------------ ------------------------------

INCOME BEFORE CUMULATIVE EFFECT
OF AN ACCOUNTING CHANGE 8,382,094 14,059,382 13,835,020 24,290,104

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

NET INCOME $ 8,382,094 $ 14,059,382 $ 13,835,020 $ 20,900,325
============================== ==============================

EARNINGS PER SHARE-Basic/Diluted
Income before accounting change $ 45.52 $ 76.35 $ 75.13 $ 131.91
Cumulative effect of an accounting change - - - (18.41)
------------------------------ ------------------------------
Net income $ 45.52 $ 76.35 $ 75.13 $ 113.50
============================== ==============================

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

4

CINEMARK USA, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)

Six Months Ended June 30,
2003 2002
------------------------------

OPERATING ACTIVITIES
Net income $ 13,835,020 $ 20,900,325

Noncash items in net income:
Depreciation 32,510,137 33,623,952
Amortization of other assets 325,345 388,566
Amortization of foreign advanced rents 865,123 942,739
Amortized compensation - stock options 548,595 554,559
Amortization of debt issue costs 1,170,950 1,182,340
Amortization of gain on sale leasebacks (182,960) (182,960)
Amortization of debt discount and premium (235,522) (14,253)
Amortization of deferred revenues (2,013,119) (2,403,953)
Loss on impairment of assets 2,060,845 781,776
(Gain) loss on sale of assets and other (991,019) 812,924
Loss on early retirement of debt 7,258,136 -
Deferred lease expenses 759,004 908,404
Deferred income tax expenses 548,051 8,734,689
Equity in income of affiliates (149,524) (213,008)
Minority interests in income of subsidiaries 2,276,485 735,726
Cumulative effect of an accounting change - 3,389,779

Cash provided by (used for) operating working capital:

Inventories (709,287) (338,425)
Accounts receivable (2,860,287) 546,752
Prepaid expenses and other (1,696,228) (685,693)
Other assets (7,308,911) 5,889,103
Advances with affiliates 302,966 1,302,669
Accounts payable and accrued expenses (13,742,782) (615,285)
Other long-term liabilities (116,763) (192,327)
Income tax receivable/payable 7,818,636 (915,444)
------------------------------

Net cash provided by operating activities 40,272,891 75,132,955

INVESTING ACTIVITIES
Additions to theatre properties and equipment (17,976,259) (12,191,593)
Sale of theatre properties and equipment 2,075,395 1,514,477
Investment in affiliates (3,314) -
Dividends/capital returned from affiliates 228,000 594,340
------------------------------

Net cash used for investing activities (15,676,178) (10,082,776)

FINANCING ACTIVITIES
Issuance of senior subordinated notes 375,225,000 -
Retirement of senior subordinated notes (232,989,000) -
Increase in long-term debt 238,508,545 19,115,888
Decrease in long-term debt (408,827,678) (57,257,124)
Increase in debt issue cost (14,944,223) -
Increase in minority investment in subsidiaries 3,896,860 421,855
Decrease in minority investment in subsidiaries (275,304) (5,413,657)
------------------------------

Net cash used for financing activities (39,405,800) (43,133,038)

EFFECT OF EXCHANGE RATE CHANGES ON CASH AND
CASH EQUIVALENTS 1,737,270 (3,619,868)
------------------------------

INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (13,071,817) 18,297,273

CASH AND CASH EQUIVALENTS:
Beginning of period 63,718,515 50,199,223
------------------------------

End of period $ 50,646,698 $ 68,496,496
==============================

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

5

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

1. The Company and Basis of Presentation

Cinemark USA, Inc. and its subsidiaries (the "Company") is one of the
leaders in the motion picture exhibition industry in terms of both revenues and
the number of screens in operation, with theatres in the United States ("U.S."),
Canada, Mexico, Argentina, Brazil, Chile, Ecuador, Peru, Honduras, El Salvador,
Nicaragua, Costa Rica, Panama, Colombia and the United Kingdom. The Company also
manages additional theatres in the U.S. and provides management services for one
theatre in Taiwan at June 30, 2003.

The condensed consolidated financial statements have been prepared by
the Company, without audit, according to the rules and regulations of the
Securities and Exchange Commission. In the opinion of management, these interim
financial statements reflect all adjustments (which, except for the cumulative
effect of an accounting change, include only normal recurring adjustments)
necessary to state fairly the financial position and results of operations as
of, and for, the periods indicated. The condensed consolidated financial
statements include the accounts of Cinemark USA, Inc. and its subsidiaries.
Majority-owned subsidiaries that the Company controls are consolidated while
those subsidiaries of which the Company owns between 20% and 50% and does not
control are accounted for as affiliates under the equity method. Those
subsidiaries of which the Company owns less than 20% are accounted for as
affiliates under the cost method. The results of these subsidiaries and
affiliates are included in the condensed consolidated financial statements
effective with their formation or from their dates of acquisition. Significant
intercompany balances and transactions are eliminated in consolidation. Certain
reclassifications have been made to the 2002 financial statements to conform to
the 2003 presentation.

These condensed consolidated financial statements should be read in
conjunction with the audited annual financial statements and the notes thereto
for the year ended December 31, 2002, included in the Annual Report filed March
19, 2003 on Form 10-K by the Company under the Securities Exchange Act of 1934.
Operating results for the three and six month periods ended June 30, 2003 are
not necessarily indicative of the results to be achieved for the full year.

2. Earnings Per Share

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

Three Months Ended Six Months Ended
June 30, June 30,
-------- --------
2003 2002 2003 2002
---- ---- ---- ----

Income before accounting change $8,382,094 $14,059,382 $13,835,020 $24,290,104
========== =========== =========== ===========

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

Income before accounting change per common share $45.52 $76.35 $75.13 $131.91
====== ====== ====== =======

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

Income before accounting change per common
and common equivalent share $45.52 $76.35 $75.13 $131.91
====== ====== ====== =======

6

Basic income per share is computed by dividing income by the weighted
average number of shares of common stock of all classes outstanding during the
period. Diluted income per share is computed by dividing income by the weighted
average number of shares of common stock and potentially dilutive common stock
outstanding using the treasury stock method.

On May 16, 2002, Cinemark, Inc. was formed as the Delaware holding
company of Cinemark USA, Inc. Under a share exchange agreement, dated May 17,
2002, and after giving effect to a reverse stock split, each outstanding share
and each outstanding option to purchase shares of Cinemark USA, Inc. was
exchanged for shares and options to purchase shares, respectively, of common
stock of Cinemark, Inc. (the "Share Exchange"). As a result of the Share
Exchange, the Company no longer has any options outstanding under existing stock
option plans and its weighted average common and common equivalent shares
outstanding for the three and six month periods ended June 30, 2003 and 2002 do
not include options to purchase shares of Cinemark, Inc.'s common stock.

3. Stock Option Accounting

As a result of the Share Exchange, the Company no longer has any options
outstanding under existing stock option plans. However, compensation expense
resulting from amortization of unearned compensation related to outstanding
stock options of Cinemark, Inc. is still being recorded in the Company's
condensed consolidated statements of operations.

The Company applies Accounting Principles Board Opinion No. 25 and
related interpretations in accounting for stock option plans. Had compensation
costs been determined based on the fair value at the date of grant for awards
under the plans, consistent with the method of Statement of Financial Accounting
Standards ("SFAS") No. 123, "Accounting for Stock-Based Compensation" and SFAS
No. 148, "Accounting for Stock-Based Compensation Transition and Disclosure",
the Company's net income and earnings per share would have been reduced to the
pro-forma amounts indicated below:

Three Months Ended Six Months Ended
June 30, June 30,
-------- --------
2003 2002 2003 2002
---- ---- ---- ----

Net income as reported $8,382,094 $14,059,382 $13,835,020 $20,900,325
Compensation expense included in reported net
income, net of tax 274,298 277,280 548,595 554,559
Compensation expense under fair value method,
net of tax (339,417) (342,399) (678,831) (684,796)
--------- --------- --------- ---------
Pro-forma net income $8,316,975 $13,994,263 $13,704,784 $20,770,088
========== =========== =========== ===========

Earnings per share:
Basic earnings per share $45.52 $76.35 $75.13 $113.50
Pro-forma basic earnings per share $45.16 $75.99 $74.42 $112.79
Diluted earnings per share $45.52 $76.35 $75.13 $113.50
Pro-forma diluted earnings per share $45.16 $75.99 $74.42 $112.79

No stock options were granted during 2002 or during the six month period
ended June 30, 2003. The fair value of each option grant is estimated on the
date of grant using the multiple option approach of the Black-Scholes option
pricing model with the following assumptions: dividend yield of 0 percent; an
expected life of 6.5 years; expected volatility of approximately 38 percent; and
risk-free interest rates of approximately 5% at the time of the last option
grant date in 2001.

7

4. Comprehensive Income (Loss)

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

Three Months Ended Six Months Ended
June 30, June 30,
-------- --------
2003 2002 2003 2002
---- ---- ---- ----

Net income $8,382,094 $14,059,382 $13,835,020 $20,900,325
Foreign currency translation adjustment 6,868,190 (16,666,510) 7,713,869 (26,597,024)
--------- ------------ --------- ------------
Comprehensive income (loss) $15,250,284 $(2,607,128) $21,548,889 $(5,696,699)
=========== ============ =========== ============

5. Foreign Currency Translation

The accumulated other comprehensive loss account included in
shareholder's equity of $82,079,591 and $89,793,460 at June 30, 2003 and
December 31, 2002, respectively, primarily relates to the cumulative foreign
currency adjustments from translating the financial statements of Cinemark
Argentina, S.A., Cinemark Brasil S.A. and Cinemark de Mexico, S.A. de C.V. into
U.S. dollars.

On June 30, 2003, the exchange rate for the Argentine peso was 2.8 pesos
to the U.S. dollar (the exchange rate was 3.4 pesos to the U.S. dollar at
December 31, 2002). As a result, the effect of translating the June 30, 2003
Argentine financial statements into U.S. dollars resulted in a foreign currency
translation adjustment to the accumulated other comprehensive loss account as an
increase to shareholder's equity of approximately $3 million at June 30, 2003.
At June 30, 2003, total assets of Cinemark Argentina, S.A. were approximately
U.S. $16 million.

On June 30, 2003, the exchange rate for the Brazilian real was 2.9 reais
to the U.S. dollar (the exchange rate was 3.5 reais to the U.S. dollar at
December 31, 2002). As a result, the effect of translating the June 30, 2003
Brazilian financial statements into U.S. dollars resulted in a foreign currency
translation adjustment to the accumulated other comprehensive loss account as an
increase to shareholder's equity of approximately $4 million at June 30, 2003.
At June 30, 2003, total assets of Cinemark Brasil S.A. were approximately U.S.
$59 million.

On June 30, 2003, the exchange rate for the Mexican peso was 10.4 pesos
to the U.S. dollar (the exchange rate was 10.4 pesos to the U.S. dollar at
December 31, 2002). As a result, the effect of translating the June 30, 2003
Mexican financial statements into U.S. dollars did not result in a material
foreign currency translation adjustment to the accumulated other comprehensive
loss account in shareholder's equity at June 30, 2003. At June 30, 2003, total
assets of Cinemark de Mexico, S.A. de C.V. were approximately U.S. $86 million.

In 2002 and 2003, all foreign countries in which the Company has
operations, including Argentina, Brazil and Mexico were deemed non-highly
inflationary. Thus, the Company records a foreign currency translation
adjustment to the accumulated other comprehensive loss account as an increase or
reduction to shareholder's equity for any fluctuation in foreign currencies.

6. Supplemental Cash Flow Information

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

Six Months Ended
June 30,
--------
2003 2002
---- ----
Cash paid for interest $28,944,777 $27,793,836
Cash paid for income taxes (net of refunds) 1,067,061 5,782,379

8

7. Financial Information About Geographic Areas

The Company operates in a single business segment as a motion picture
exhibitor. The Company is a multinational corporation with consolidated
operations in the U.S., Canada, Mexico, Argentina, Brazil, Chile, Ecuador, Peru,
Honduras, El Salvador, Nicaragua, Costa Rica, Panama, Colombia and the United
Kingdom.

Revenues in the United States and Canada, Mexico, Brazil and other
foreign countries for the six month periods ended June 30, 2003 and 2002 are as
follows:

Six Months Ended
June 30,
--------
Revenues 2003 2002
-------- ---- ----
U.S. and Canada $350,520,276 $369,019,438
Mexico 33,695,235 43,590,520
Brazil 35,563,541 36,471,520
Other foreign countries 33,702,764 31,537,451
Eliminations (502,486) (467,486)
---------- ----------
Total $452,979,330 $480,151,443
============ ============

Long-lived assets in the U.S. and Canada, Mexico, Brazil and other
foreign countries as of June 30, 2003 and December 31, 2002 are as follows:

June 30, December 31,
Long-Lived Assets 2003 2002
----------------- ---- ----
U.S. and Canada $619,905,671 $633,896,654
Mexico 68,197,117 67,990,885
Brazil 43,435,684 37,892,202
Other foreign countries 53,069,378 51,950,762
---------- ----------
Total $784,607,850 $791,730,503
============ ============

8. Goodwill and Other Intangible Assets

The Company adopted Statement of Financial Accounting Standards ("SFAS")
No. 142, "Goodwill and Other Intangible Assets," effective January 1, 2002. In
accordance with SFAS No. 142, beginning on January 1, 2002, the Company's
goodwill and its other intangible assets, which have been deemed to have
indefinite lives, are no longer being amortized and are subject to annual
impairment tests. As of January 1, 2002, the Company performed the required
transitional impairment tests of goodwill and other intangible assets with
indefinite useful lives, and as a result, recorded impairment charges of
$3,325,611 and $64,168, respectively. These charges are reflected as a
cumulative effect of a change in accounting principle in the condensed
consolidated statement of operations for the six month period ended June 30,
2002.

The Company recorded an additional impairment of goodwill in the amount
of $558,398 in the six month period ended June 30, 2002 (recorded as a component
of asset impairment loss in the condensed consolidated statement of operations).
The additional impairment of goodwill related to a write-down of goodwill to
fair value associated with the Company's Argentine operations. As of December
31, 2002, the Company performed the required annual impairment tests of goodwill
and other intangible assets with indefinite useful lives and no additional
impairment was present. Goodwill and other intangible assets can be affected by
foreign currency adjustments from translating foreign subsidiary financial
statements into U.S. dollars.

Goodwill and other intangible assets at June 30, 2003 and December 31,
2002 are as follows:

June 30, December 31,
2003 2002
---- ----
Amortized Other Intangible Assets:
Capitalized licensing fees $9,000,000 $9,000,000
Other intangible assets 536,518 72,403
Less - accumulated amortization (1,403,205) (1,139,070)
----------- -----------
Net other intangible assets $8,133,313 $7,933,333
========== ==========

Unamortized Goodwill and Other Intangible Assets:
Goodwill $10,885,354 $10,751,844
Other intangible assets 65,088 16,163
------ ------
$10,950,442 $10,768,007
=========== ===========

9

Aggregate Amortization Expense:
For the six month period ended June 30, 2003 $325,345
========
For the six month period ended June 30, 2002 $388,566
========

Aggregate amortization expense for the six month period ended June 30,
2003 consists of $264,136 of amortization of other intangible assets and $61,209
of amortization of other assets (both of which are included in deferred charges
and other on the condensed consolidated balance sheet).

Estimated Amortization Expense of Other Intangible Assets:
For the twelve month period ended June 30, 2004 $528,273
For the twelve month period ended June 30, 2005 528,273
For the twelve month period ended June 30, 2006 528,273
For the twelve month period ended June 30, 2007 528,273
For the twelve month period ended June 30, 2008 528,273
Thereafter 5,491,948
---------
Total $8,133,313
==========

9. New Accounting Pronouncements

In April 2002, the Financial Accounting Standards Board issued Statement
of Financial Accounting Standards ("SFAS") No. 145, "Rescission of FASB
Statements No. 4, 44, and 64, Amendment of FASB Statement No. 13, and Technical
Corrections". SFAS No. 145 requires, among other things, that gains and losses
on the early extinguishment of debt be classified as extraordinary only if they
meet the criteria for extraordinary treatment set forth in Accounting Principles
Board Opinion No. 30. The provisions of this statement related to classification
of gains and losses on the early extinguishment of debt are effective for fiscal
years beginning after May 15, 2002. This statement became effective for the
Company on January 1, 2003. See note 12 for discussion of the loss on early
retirement of debt recorded in the three and six month periods ended June 30,
2003 in conjunction with the Company's long-term debt refinancing.

In November 2002, the Financial Accounting Standards Board issued
Interpretation No. 45, "Guarantor's Accounting and Disclosure Requirements for
Guarantees, Including Indirect Guarantees of Indebtedness of Others" ("FIN 45").
This interpretation elaborates on the disclosures to be made by a guarantor in
its interim and annual financial statements about its obligations under certain
guarantees that it has issued. It also clarifies that a guarantor is required to
recognize, at the inception of a guarantee, a liability for the fair value of
the obligation undertaken in issuing the guarantee. The disclosure requirements
of FIN 45 are effective for interim and annual periods after December 15, 2002.
The initial recognition and initial measurement requirements of FIN 45 are
effective prospectively for guarantees issued or modified after December 31,
2002. The adoption of this statement had no impact on the condensed consolidated
financial statements.

In April 2003, the Financial Accounting Standards Board issued SFAS No.
149, "Amendment of SFAS No. 133 on Derivative Instruments and Hedging
Activities." SFAS No. 149 amends and clarifies accounting for derivative
instruments, including certain derivative instruments embedded in other
contracts, and for hedging activities under SFAS No. 133. The Company, which
uses derivatives on a limited basis, will apply this statement on a prospective
basis.

10

In May 2003, the Financial Accounting Standards Board issued SFAS No.
150, "Accounting for Certain Financial Instruments with Characteristics of both
Liabilities and Equity." SFAS No. 150 establishes standards for how an issuer
classifies and measures certain financial instruments with characteristics of
both liabilities and equity. It requires that an issuer classify a financial
instrument that is within its scope as a liability (or an asset in some
circumstances). Many of these instruments were previously classified as
temporary equity. This statement will be effective for financial instruments
entered into or modified after May 31, 2003, and otherwise shall be effective at
the beginning of the first interim period beginning after June 15, 2003.
Adoption of SFAS No. 150 will not have a material impact on the Company's
condensed consolidated financial statements.

10. Related Party Transactions

The Company manages one theatre with twelve screens for Laredo Theatre,
Ltd ("Laredo"). Lone Star Theatres, Inc. owns 25% of the limited partnership
interests in Laredo. The Company is the sole general partner and owns the
remaining limited partnership interests in Laredo. Lone Star Theatres, Inc. is
100% owned by Mr. David Roberts, who is Lee Roy Mitchell's son-in-law. Under the
agreement, management fees are paid by Laredo to the Company at a rate of 5% of
theatre revenues up to $50,000,000 each year and 3% of theater revenues in
excess of $50,000,000 each year. The Company recorded $112,653 of management fee
revenues and received $375,000 of dividends from Laredo during the six month
period ended June 30, 2003. All such amounts are included in the Company's
condensed consolidated financial statements with the intercompany amounts
eliminated in consolidation.

The Company manages one theatre with eight screens for Mitchell
Theatres. Mitchell Theatres is 100% owned by members of Lee Roy Mitchell's
family. Under the agreement, management fees are paid by Mitchell Theatres to
the Company at a rate of 5% of theatre revenues. The term ends in November 2003.
However, the Company has the option to renew for one or more five-year periods.
The Company recorded $15,054 of management fee revenues from Mitchell Theatres
during the six month period ended June 30, 2003.

The Company leases one theatre with seven screens from Plitt Plaza Joint
Venture ("Plitt Plaza"). Plitt Plaza is indirectly owned by Lee Roy Mitchell.
The annual rent is approximately $264,000 plus certain taxes, maintenance
expenses, insurance, and a percentage of gross admissions and concession
receipts in excess of certain amounts. The Company recorded $139,412 of facility
lease expense payable to Plitt Plaza during the six month period ended June 30,
2003.The lease expired in July 2003. The Company and Plitt Plaza signed a letter
agreement under which the Company will enter into a new lease with similar terms
as the expired lease. The Company has plans to open a new theatre in the same
city (scheduled to open in December 2003), at which time the new lease under the
letter agreement would become month-to-month.

The Company entered into a profit participation agreement dated May 17,
2002 with its President, Alan Stock, pursuant to which Mr. Stock receives a
profit interest in two recently built theatres once the Company has recovered
its capital investment in these theatres plus its borrowing costs. Under this
agreement, operating losses and disposition losses for any year are allocated
100% to the Company. Operating profits and disposition profits for these
theatres for any fiscal year are allocated first to the Company to the extent of
total operating losses and losses from any disposition of these theatres.
Thereafter, net cash from operations from these theatres or from any disposition
of these theatres is paid first to the Company until such payments equal the
Company's investment in these theatres, plus interest, and then 51% to the
Company and 49% to Mr. Stock. In the event that Mr. Stock's employment is
terminated without cause, profits will be distributed according to this formula
without first allowing the Company to recoup its investment plus interest
thereon. No amounts have been paid to Mr. Stock to date pursuant to the profit
participation agreement. Upon completion of an initial public offering of
Cinemark, Inc.'s common stock, the Company will have the option to purchase Mr.
Stock's interest in the theatres for a price equal to the fair market value of
the profit interest, as determined by an independent appraiser. The Company does
not intend to enter into similar arrangements with its executive officers in the
future.

11. Litigation and Litigation Settlements

In March 1999, the Department of Justice filed suit in the U.S. District
Court, Northern District of Ohio, Eastern Division, against the Company alleging
certain violations of the Americans with Disabilities Act of 1990 (the "ADA")
relating to the Company's wheelchair seating arrangements and seeking remedial
action. An Order granting Summary Judgment to the Company was issued in November
2001. The Department of Justice has appealed the district court's ruling with
the Sixth Circuit Court of Appeals. If the Company loses this litigation, the

11

Company's financial position, results of operations and cash flows may be
materially and adversely affected. The Company is unable to predict the outcome
of this litigation or the range of potential loss, however, management believes
that based upon current precedent the Company's potential liability with respect
to such proceeding is not material in the aggregate to the Company's financial
position, results of operations and cash flows. Accordingly, the Company has not
established a reserve for loss in connection with this proceeding.

In August 2001, David Wittie, Rona Schnall, Ron Cranston, Jennifer
McPhail, Peggy Garaffa and ADAPT of Texas filed suit in the 201st Judicial
District Court of Travis County, Texas alleging certain violations of the Human
Resources Code, the Texas Architectural Barriers Act, the Texas Accessibility
Standards and the Deceptive Trade Practices Act relating to accessibility of
movie theatres for patrons using wheelchairs at two theatres located in the
Austin, Texas market. The plaintiffs were seeking remedial action and
unspecified damages. On February 20, 2003, a jury determined that the Company's
theatres located in the Austin, Texas market complied with the Human Resources
Code, the Texas Architectural Barriers Act and the Texas Accessibility
Standards. The judge granted summary judgment to the Company with respect to the
Deceptive Trade Practices Act. The plaintiffs failed to timely appeal the
verdict. Accordingly, the Company has not established a reserve for loss in
connection with this proceeding.

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

The plaintiffs in the Department of Justice litigation, Austin, Texas
litigation and Mission, Texas litigation have argued that the theatres must
provide wheelchair seating locations with viewing angles to the screen that are
at the median or better than all seats in the auditorium. To date three courts
and one jury in a fourth court have rejected that position. In three of the four
courts, the Company was the defendant, and the courts or a jury have found the
Company's theatres to comply with the ADA; Lara v. Cinemark USA, Inc., United
States Court of Appeals for the Fifth Circuit; United States of America v.
Cinemark USA, Inc., United States District Court for the Northern District of
Ohio, Eastern Division; and Wittie v. Cinemark USA, Inc., 201st Judicial
District Court of Travis County, Texas. Oregon Paralyzed Veterans of America v.
Regal Cinemas, Inc., United States District Court for the District of Oregon,
adopted the reasoning established in Lara and granted summary judgment in favor
of Regal Cinemas, Inc.

In May 2002, Robert Todd on behalf of Robert Preston Todd, his minor
child and "all individuals who are deaf or are severely hearing impaired"
brought this case in the United States District Court for the Southern District
of Texas, Houston Division against several movie theatre operators, including
AMC Entertainment, Inc., Regal Entertainment, Inc., the Company and Century
Theaters as well as eight movie production companies. The lawsuit alleges
violation of Title III of the ADA and the First Amendment to the Constitution of
the United States. Plaintiffs seek unspecified injunctive relief, unspecified
declaratory relief, unspecified monetary damages (both actual and punitive) and
unspecified attorney's fees. The Company has denied any violation of law and has
vigorously defended against all claims. On March 7, 2003, the federal district
judge presiding over the case granted summary judgment to the defendants on the
alleged First Amendment violations. On August 5, 2003, the federal district
judge presiding over the case granted summary judgment to the defendants on the
alleged ADA violations. The Company is unable to predict the outcome of this
litigation or the range of potential loss, however, management believes that
based upon current precedent the Company's potential liability with respect to
such proceeding is not material in the aggregate to the Company's financial
position, results of operations and cash flows. Accordingly, the Company has not
established a reserve for loss in connection with this proceeding.

12

In April 2002, the Malthouse Development Company Limited, as landlord,
filed a lawsuit in the High Court of Justice, Chancery Division, in England,
against Cinemark Theatres UK Limited and Cinemark International L.L.C., as
tenant and guarantor of tenant's obligations, respectively, under a lease for
the construction and operation of a movie theatre in Banbury, England. The lease
was previously terminated for cause by Cinemark Theatres UK Limited. The
Malthouse Development Company Limited is seeking damages for the U.S. dollar
equivalent of approximately $1.5 million based on an alleged improper
termination. Cinemark Theatres UK Limited and Cinemark International, L.L.C.
have filed an answer to the complaint, denying the allegations. The Company
intends to vigorously defend this suit. The Company is unable to predict the
outcome of this litigation or the range of potential loss, however, based on the
opinion of its barristers and Queen's counsel, the Company believes its
potential liability with respect to such proceeding is not material in the
aggregate to its financial position, results of operations and cash flows.
Accordingly, the Company has not established a reserve for loss in connection
with this proceeding.

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

12. Long-Term Debt Refinancing

On February 11, 2003, the Company issued $150 million principal amount
of 9% Senior Subordinated Notes to qualified institutional buyers in reliance on
Rule 144A which were subsequently registered under the Securities Act of 1933.
Interest is payable on February 1 and August 1 of each year, beginning on August
1, 2003. The notes mature on February 1, 2013. The net proceeds of approximately
$145.9 million from the issuance of the 9% Senior Subordinated Notes were used
to repay a portion of the Company's existing Credit Facility.

On February 14, 2003, the Company entered into a new senior secured
credit facility consisting of a $75 million revolving credit line and a $125
million term loan with Lehman Commercial Paper, Inc. for itself and as
administrative agent for a syndicate of lenders. The new credit facility also
provides for incremental loans of up to $100 million. The new credit facility is
guaranteed by the guarantors of the senior subordinated notes and is secured by
mortgages on certain fee and leasehold properties and security interests on
certain personal and intangible property, including without limitation, pledges
of all of the capital stock of certain domestic subsidiaries and 65% of the
voting stock of certain of the Company's foreign subsidiaries. The net proceeds
from the new credit facility were used to repay, in full, the then existing
Credit Facility and the Cinema Properties Facility.

The term of the revolving credit line is five years. Borrowings under
the revolving credit line bear interest, at the Company's option, at: (A) a
margin of 2.00% per annum plus a "base rate" equal to the higher of (i) the
prime lending rate as set forth on the British Banking Association Telerate page
5 or (ii) the federal funds effective rate from time to time plus 0.50%, or (B)
a "eurodollar rate" equal to the rate at which eurodollar deposits are offered
in the interbank eurodollar market for terms of one, two, three or six, or (if
available to all lenders in their sole discretion) nine or twelve months, as
selected by the Company, plus a margin of 3.00% per annum. After September 30,
2003 the margin applicable to base rate loans will range from 1.25% per annum to
2.00% per annum and the margin applicable to eurodollar rate loans will range
from 2.25% per annum to 3.00% per annum based upon the Company achieving certain
ratios of debt to consolidated EBITDA (as defined in the new Credit Facility).

The term loan matures on March 31, 2008, but will be extended to March
31, 2009 if, on or prior to May 31, 2007 the maturity of the Company's existing
senior subordinated debt is extended beyond September 30, 2009. The term loan
reduces automatically each calendar quarter by $312,500 from June 30, 2003 to
March 31, 2007 and then reduces by $30,000,000 each calendar quarter from June
30, 2007 to maturity at March 31, 2008. The term loan bears interest, at the
Company's option, at: (A) the base rate plus a margin of 1.75% or (B) the
eurodollar rate plus a margin of 2.75%.

On April 18, 2003, the Company announced a tender offer to repurchase
up to $240 million aggregate principal amount of its outstanding $200 million
9 5/8% Series B Senior Subordinated Notes due 2008 and its $75 million 9 5/8%
Series D Senior Subordinated Notes due 2008.

13

On May 7, 2003, the Company issued an additional $210 million of 9%
Senior Subordinated Notes due 2013 at a premium of 107.25% of the face amount to
qualified institutional buyers in reliance on Rule 144A which were subsequently
registered under the Securities Act of 1933. The new notes were offered as
additional debt securities under an indenture pursuant to which, on February 11,
2003, the Company issued $150 million of 9% Senior Subordinated Notes due 2013.
Interest is payable on February 1 and August 1 of each year, beginning on August
1, 2003. The notes mature on February 1, 2013. The net proceeds of this add-on
issuance of $226.7 million and additional borrowings under the Company's senior
secured credit facility were utilized on May 16, 2003 to fund the purchase of
approximately $233.0 million of outstanding 9 5/8% senior subordinated notes
tendered as of midnight on May 15, 2003 pursuant to the April 18, 2003 tender
offer.

The loss on early retirement of debt of $7,258,136 recorded in the
condensed consolidated statement of operations for the six month period ended
June 30, 2003 related to the $1,645,759 write-off of unamortized debt issue
costs associated with the retirement of the Company's existing Credit Facility
and the Cinema Properties Facility in the first quarter of 2003 and the
$5,612,377 write-off of unamortized debt issue costs, unamortized bond
premiums/discounts and tender offer repurchase costs associated with the tender
offer to repurchase and subsequent retirement of senior subordinated notes in
the second quarter of 2003.

13. Condensed Consolidated Financial Statements of Subsidiary Guarantors

The Company has outstanding approximately $42 million principal amount
of 9 5/8% Senior Subordinated Notes due 2008, $105 million principal amount of 8
1/2% Senior Subordinated Notes due 2008 and $360 million principal amount of 9%
Senior Subordinated Notes due 2013. All of the Company's Senior Subordinated
Notes are fully and unconditionally guaranteed, jointly and severally, on a
senior subordinated unsecured basis by the following wholly-owned subsidiaries
of Cinemark USA, Inc.

Cinemark, L.L.C., Sunnymead Cinema Corp., Cinema Properties, Inc.,
Greeley Holdings, Inc. (formerly known as Cinemark Paradiso, Inc.), Trans Texas
Cinema, Inc., Missouri City Central 6, Inc., Cinemark Mexico (USA), Inc.,
Cinemark Leasing Company, Cinemark Partners I, Inc., Multiplex Properties, Inc.,
Multiplex Services, Inc., CNMK Investments, Inc., CNMK Delaware Investments I,
L.L.C., CNMK Delaware Investments II, L.L.C., CNMK Delaware Investments
Properties, L.P., CNMK Texas Properties, Ltd, Laredo Theatre, Ltd. and Cinemark
Investments Corporation.

The following supplemental condensed consolidating financial statements
present:

1. Condensed consolidating balance sheets as of June 30, 2003 and
December 31, 2002 and condensed consolidating statements of
operations and cash flows for each of the six month periods
ended June 30, 2003 and 2002.

2. Cinemark USA, Inc. (the "Parent" and "Issuer"), combined Guarantor
Subsidiaries and combined Non-Guarantor Subsidiaries with their
investments in subsidiaries accounted for using the equity
method of accounting and therefore, the Parent column reflects
the equity income (loss) of its Guarantor Subsidiaries and
Non-Guarantor Subsidiaries, which are also separately reflected
in the stand-alone Guarantor Subsidiaries and Non-Guarantor
Subsidiaries column. Additionally, the Guarantor subsidiaries
column reflects the equity income (loss) of its Non-Guarantor
Subsidiaries, which are also separately reflected in the
stand-alone Non-Guarantor Subsidiaries column.

3. Elimination entries necessary to consolidate the Parent and all of
its Subsidiaries.

14

SUBSIDIARY GUARANTORS
CONDENSED CONSOLIDATING BALANCE SHEET INFORMATION
June 30, 2003

Parent Subsidiary Subsidiary
ASSETS Company Guarantors Non-Guarantors Eliminations Consolidated

CURRENT ASSETS
Cash and cash equivalents $ 6,705,032 $ 3,448,731 $ 40,492,935 $ - $ 50,646,698
Inventories 1,885,924 1,249,193 1,263,085 - 4,398,202
Accounts receivable 26,686,104 8,628,265 9,180,988 (29,193,221) 15,302,136
Income tax receivable 604,672 28,900 1,017,723 (1,651,295) -
Prepaid expenses and other 6,545,432 503,390 2,741,541 (4,000,000) 5,790,363
-----------------------------------------------------------------------

Total current assets 42,427,164 13,858,479 54,696,272 (34,844,516) 76,137,399

THEATRE PROPERTIES AND EQUIPMENT - net 311,714,970 289,520,706 183,372,174 - 784,607,850

OTHER ASSETS
Goodwill 7,897,512 412,327 2,758,616 (183,101) 10,885,354
Investments in and advances to affiliates 483,201,679 350,305,714 28,851,932 (859,696,513) 2,662,812
Deferred charges and other - net 22,946,412 1,357,509 75,724,766 (61,454,159) 38,574,528
-----------------------------------------------------------------------

Total other assets 514,045,603 352,075,550 107,335,314 (921,333,773) 52,122,694
-----------------------------------------------------------------------

TOTAL ASSETS $868,187,737 $655,454,735 $345,403,760 $(956,178,289) $912,867,943
=======================================================================

LIABILITIES AND SHAREHOLDER'S EQUITY

CURRENT LIABILITIES
Current portion of long-term debt $ 1,305,629 $ - $ 4,670,037 $ - $ 5,975,666
Current income taxes payable 8,754,000 - - (1,651,295) 7,102,705
Accounts payable and accrued expenses 65,458,567 42,061,744 36,637,036 (29,154,934) 115,002,413
-----------------------------------------------------------------------

Total current liabilities 75,518,196 42,061,744 41,307,073 (30,806,229) 128,080,784

LONG-TERM LIABILITIES
Long-term debt, less current portion 661,445,427 45,237,910 86,821,620 (135,697,315) 657,807,642
Deferred income taxes 10,163,691 8,210,473 (6,655,985) - 11,718,179
Other long-term liabilities and deferrals 28,350,787 74,185,977 4,238,845 (73,990,000) 32,785,609
----------------------------------------------------------------------

Total long-term liabilities 699,959,905 127,634,360 84,404,480 (209,687,315) 702,311,430

MINORITY INTERESTS IN SUBSIDIARIES - 1,229,981 31,382,989 - 32,612,970

SHAREHOLDER'S EQUITY
Common stock 49,546,772 25,789 111,543,706 (111,572,825) 49,543,442
Other shareholder's equity 43,162,864 484,502,861 76,765,512 (604,111,920) 319,317
-----------------------------------------------------------------------

Total shareholder's equity 92,709,636 484,528,650 188,309,218 (715,684,745) 49,862,759
-----------------------------------------------------------------------

TOTAL LIABILITIES AND SHAREHOLDER'S EQUITY $868,187,737 $655,454,735 $345,403,760 $(956,178,289) $912,867,943
=======================================================================

15

SUBSIDIARY GUARANTORS
CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS INFORMATION
SIX MONTHS ENDED JUNE 30, 2003

Parent Subsidiary Subsidiary
Company Guarantors Non-Guarantors Eliminations Consolidated

REVENUES $215,226,617 $159,125,440 $110,046,237 $ (31,418,964) $452,979,330

COSTS AND EXPENSES
Cost of operations 186,959,288 100,941,196 81,964,346 (31,680,760) 338,184,070
General and administrative expenses 1,752,786 11,967,292 6,219,349 261,796 20,201,223
Depreciation and amortization 10,725,108 10,952,463 11,157,911 - 32,835,482
Asset impairment loss - 820,493 1,240,352 - 2,060,845
(Gain) loss on sale of assets and other 48,362 (1,040,239) 858 - (991,019)
-----------------------------------------------------------------------
Total costs and expenses 199,485,544 123,641,205 100,582,816 (31,418,964) 392,290,601
-----------------------------------------------------------------------

OPERATING INCOME 15,741,073 35,484,235 9,463,421 - 60,688,729

OTHER INCOME (EXPENSE)
Interest expense (26,587,025) (2,902,912) (3,765,749) 5,741,359 (27,514,327)
Amortization of debt issue cost (1,010,561) (130,329) (30,060) - (1,170,950)
Interest income 2,713,017 3,181,200 930,506 (5,741,359) 1,083,364
Foreign currency exchange gain - - 151,199 - 151,199
Loss on early retirement of debt (6,374,514) (883,622) - - (7,258,136)
Equity in income (loss) of affiliates 31,973,164 2,740,921 170,915 (34,735,476) 149,524
Minority interests in income of subsidiaries - (118,678) (2,157,807) - (2,276,485)
-----------------------------------------------------------------------
Total other income (expense) 714,081 1,886,580 (4,700,996) (34,735,476) (36,835,811)
-----------------------------------------------------------------------

INCOME (LOSS) BEFORE INCOME TAXES 16,455,154 37,370,815 4,762,425 (34,735,476) 23,852,918

Income taxes 2,245,134 5,751,236 2,021,528 - 10,017,898
-----------------------------------------------------------------------

NET INCOME (LOSS) $ 14,210,020 $ 31,619,579 $ 2,740,897 $ (34,735,476) $ 13,835,020
=======================================================================

16

SUBSIDIARY GUARANTORS
CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS INFORMATION
SIX MONTHS ENDED JUNE 30, 2003

Parent Subsidiary Subsidiary
Company Guarantors Non-Guarantors Eliminations Consolidated

OPERATING ACTIVITIES
Net income (loss) $ 14,210,020 $ 31,619,579 $ 2,740,897 $ (34,735,476) $ 13,835,020

Noncash items in net income (loss):
Depreciation and amortization 9,852,662 11,082,793 12,053,094 - 32,988,549
Loss on impairment of assets - 820,493 1,240,352 - 2,060,845
(Gain) loss on sale of assets and other 48,362 (1,040,239) 858 - (991,019)
Loss on early retirement of debt 6,374,514 883,622 - - 7,258,136
Deferred lease expenses 8,375,193 (7,536,514) (79,675) - 759,004
Deferred income tax expenses (211,732) 184,883 574,900 - 548,051
Equity in (income) loss of affiliates (31,973,164) (2,740,921) (170,915) 34,735,476 (149,524)
Minority interests in income of subsidiaries - 118,678 2,157,807 - 2,276,485
Cash provided by (used for) operating working capital (12,160,442) 1,241,817 (1,989,457) (5,404,574) (18,312,656)
-----------------------------------------------------------------------

Net cash provided by (used for) operating activities (5,484,587) 34,634,191 16,527,861 (5,404,574) 40,272,891

INVESTING ACTIVITIES
Additions to theatre properties and equipment (5,752,807) (3,771,948) (8,451,504) - (17,976,259)
Sale of theatre properties and equipment 1,200 2,063,364 10,831 - 2,075,395
Net transactions with affiliates (45,089,611) (1,901,467) (2,826,886) 50,042,650 224,686
-----------------------------------------------------------------------

Net cash provided by (used for) investing activities (50,841,218) (3,610,051) (11,267,559) 50,042,650 (15,676,178)

FINANCING ACTIVITIES
Issuance of senior subordinated notes 375,225,000 - - - 375,225,000
Retirement of senior subordinated notes (232,989,000) - - - (232,989,000)
Increase in long-term debt 238,508,545 - - - 238,508,545
Decrease in long-term debt (328,532,229) (74,335,900) (5,959,549) - (408,827,678)
Increase in debt issue cost (14,944,223) - - - (14,944,223)
Change in intercompany notes 16,275,000 23,050,000 5,313,076 (44,638,076) -
Increase in minority investment in subsidiaries - - 3,896,860 - 3,896,860
Decrease in minority investment in subsidiaries - (125,000) (150,304) - (275,304)
-----------------------------------------------------------------------

Net cash provided by (used for) financing activities 53,543,093 (51,410,900) 3,100,083 (44,638,076) (39,405,800)

EFFECT OF EXCHANGE RATE CHANGES
ON CASH AND CASH EQUIVALENTS - - 1,737,270 - 1,737,270
-----------------------------------------------------------------------

INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (2,782,712) (20,386,760) 10,097,655 - (13,071,817)

CASH AND CASH EQUIVALENTS:
Beginning of period 9,487,744 23,835,491 30,395,280 - 63,718,515
-----------------------------------------------------------------------

End of period $ 6,705,032 $ 3,448,731 $ 40,492,935 $ - $ 50,646,698
=======================================================================

17

SUBSIDIARY GUARANTORS
CONDENSED CONSOLIDATING BALANCE SHEET INFORMATION
DECEMBER 31, 2002

Parent Subsidiary Subsidiary
ASSETS Company Guarantors Non-Guarantors Eliminations Consolidated

CURRENT ASSETS
Cash and cash equivalents $ 9,487,744 $ 23,835,491 $ 30,395,280 $ - $ 63,718,515
Inventories 1,618,111 924,709 1,146,095 - 3,688,915
Accounts receivable 20,715,100 7,577,935 8,127,358 (23,978,544) 12,441,849
Income tax receivable (76,969) 745,133 47,767 - 715,931
Prepaid expenses and other 4,948,540 2,459,454 1,281,141 (4,595,000) 4,094,135
-----------------------------------------------------------------------

Total current assets 36,692,526 35,542,722 40,997,641 (28,573,544) 84,659,345

THEATRE PROPERTIES AND EQUIPMENT - net 297,727,453 317,354,222 176,648,828 - 791,730,503

OTHER ASSETS
Goodwill 5,275,538 3,034,301 2,442,005 - 10,751,844
Investments in and advances to affiliates 419,075,595 277,255,664 28,970,718 (722,261,037) 3,040,940
Deferred charges and other - net 9,002,357 5,347,599 74,064,083 (61,782,743) 26,631,296
-----------------------------------------------------------------------

Total other assets 433,353,490 285,637,564 105,476,806 (784,043,780) 40,424,080
-----------------------------------------------------------------------

TOTAL ASSETS $767,773,469 $638,534,508 $323,123,275 $(812,617,324) $916,813,928
=======================================================================

LIABILITIES AND SHAREHOLDER'S EQUITY

CURRENT LIABILITIES
Current portion of long-term debt $ 55,629 $ 23,000,000 $ 7,134,820 $ - $ 30,190,449
Accounts payable and accrued expenses 72,131,876 43,636,926 32,228,042 (23,759,532) 124,237,312
-----------------------------------------------------------------------

Total current liabilities 72,187,505 66,636,926 39,362,862 (23,759,532) 154,427,761

LONG-TERM LIABILITIES
Long-term debt, less current portion 594,977,372 74,956,909 83,521,345 (91,059,238) 662,396,388
Deferred income taxes 10,375,423 8,025,590 (7,230,885) - 11,170,128
Other long-term liabilities and deferrals 19,858,840 84,630,823 4,434,784 (74,585,000) 34,339,447
-----------------------------------------------------------------------

Total long-term liabilities 625,211,635 167,613,322 80,725,244 (165,644,238) 707,905,963

MINORITY INTERESTS IN SUBSIDIARIES - 1,236,303 25,478,626 - 26,714,929

SHAREHOLDER'S EQUITY
Common stock 49,546,772 25,789 111,543,706 (111,572,825) 49,543,442
Other shareholder's equity 20,827,557 403,022,168 66,012,837 (511,640,729) (21,778,167)
-----------------------------------------------------------------------

Total shareholder's equity 70,374,329 403,047,957 177,556,543 (623,213,554) 27,765,275
-----------------------------------------------------------------------

TOTAL LIABILITIES AND SHAREHOLDER'S EQUITY $767,773,469 $638,534,508 $323,123,275 $(812,617,324) $916,813,928
=======================================================================

18

SUBSIDIARY GUARANTORS
CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS INFORMATION
SIX MONTHS ENDED JUNE 30, 2002

Parent Subsidiary Subsidiary
Company Guarantors Non-Guarantors Eliminations Consolidated

REVENUES $230,320,608 $158,817,761 $119,550,156 $ (28,537,082) $480,151,443

COSTS AND EXPENSES
Cost of operations 181,627,630 113,063,765 86,154,351 (28,537,082) 352,308,664
General and administrative expenses 15,867,030 - 6,591,549 - 22,458,579
Depreciation and amortization 10,843,878 10,642,936 12,525,704 - 34,012,518
Asset impairment loss - 558,398 223,378 - 781,776
Loss on sale of assets and other 360,256 179,049 273,619 - 812,924
-----------------------------------------------------------------------
Total costs and expenses 208,698,794 124,444,148 105,768,601 (28,537,082) 410,374,461
-----------------------------------------------------------------------

OPERATING INCOME 21,621,814 34,373,613 13,781,555 - 69,776,982

OTHER INCOME (EXPENSE)
Interest expense (27,351,144) (2,057,673) (4,968,842) 5,483,609 (28,894,050)
Amortization of debt issue cost (1,126,034) (49,167) (7,139) - (1,182,340)
Interest income 1,052,029 4,618,692 810,943 (5,483,609) 998,055
Foreign currency exchange loss - - (2,321,764) - (2,321,764)
Equity in income (loss) of affiliates 30,617,282 4,478,751 205,733 (35,088,758) 213,008
Minority interests in income of subsidiaries - (130,216) (605,510) - (735,726)
-----------------------------------------------------------------------
Total other income (expense) 3,192,133 6,860,387 (6,886,579) (35,088,758) (31,922,817)
-----------------------------------------------------------------------

INCOME (LOSS) BEFORE INCOME TAXES AND
CUMULATIVE EFFECT OF AN ACCOUNTING CHANGE 24,813,947 41,234,000 6,894,976 (35,088,758) 37,854,165

Income taxes 3,558,802 8,090,662 1,914,597 - 13,564,061
-----------------------------------------------------------------------

INCOME (LOSS) BEFORE CUMULATIVE EFFECT OF AN
ACCOUNTING CHANGE 21,255,145 33,143,338 4,980,379 (35,088,758) 24,290,104

Cumulative effect of a change in accounting principle,
net of tax benefit of $0. (91,394) (3,298,385) - - (3,389,779)
-----------------------------------------------------------------------

NET INCOME (LOSS) $ 21,163,751 $ 29,844,953 $ 4,980,379 $ (35,088,758) $ 20,900,325
=======================================================================

19

SUBSIDIARY GUARANTORS
CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS INFORMATION
SIX MONTHS ENDED JUNE 30, 2002

Parent Subsidiary Subsidiary
Company Guarantors Non-Guarantors Eliminations Consolidated

OPERATING ACTIVITIES
Net income (loss) $ 21,163,751 $ 29,844,953 $ 4,980,379 $ (35,088,758) $ 20,900,325

Noncash items in net income (loss):
Depreciation and amortization 9,923,305 10,692,104 13,475,581 - 34,090,990
Loss on impairment of assets - 558,398 223,378 - 781,776
Loss on sale of assets and other 360,256 179,049 273,619 - 812,924
Deferred lease expenses 802,183 62,063 44,158 - 908,404
Deferred income tax expenses 1,549,461 7,187,492 (2,264) - 8,734,689
Equity in (income) loss of affiliates (30,617,282) (4,478,751) (205,733) 35,088,758 (213,008)
Minority interests in income of subsidiaries - 130,216 605,510 - 735,726
Cumulative effect of an accounting change 91,394 3,298,385 - - 3,389,779
Cash provided by (used for) operating working capital 1,938,036 66,910,931 (64,528,295) 670,678 4,991,350
-----------------------------------------------------------------------

Net cash provided by (used for) operating activities 5,211,104 114,384,840 (45,133,667) 670,678 75,132,955

INVESTING ACTIVITIES
Additions to theatre properties and equipment (2,379,620) (2,784,486) (7,027,487) - (12,191,593)
Sale of theatre properties and equipment 1,514,477 - - - 1,514,477
Net transactions with affiliates 18,407,751 (104,367,997) 4,891,316 81,663,270 594,340
-----------------------------------------------------------------------

Net cash provided by (used for) investing activities 17,542,608 (107,152,483) (2,136,171) 81,663,270 (10,082,776)

FINANCING ACTIVITIES
Increase in long-term debt 17,510,038 - 1,605,850 - 19,115,888
Decrease in long-term debt (50,555,629) (1,500,000) (5,201,495) - (57,257,124)
Change in intercompany notes 13,958,000 - 68,375,948 (82,333,948) -
Increase in minority investment in subsidiaries - - 421,855 - 421,855
Decrease in minority investment in subsidiaries - (112,500) (5,301,157) - (5,413,657)
-----------------------------------------------------------------------

Net cash provided by (used for) financing activities (19,087,591) (1,612,500) 59,901,001 (82,333,948) (43,133,038)

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

INCREASE IN CASH AND CASH EQUIVALENTS 3,666,121 5,619,857 9,011,295 - 18,297,273

CASH AND CASH EQUIVALENTS:
Beginning of period 8,590,808 12,560,326 29,048,089 - 50,199,223
-----------------------------------------------------------------------

End of period $ 12,256,929 $ 18,180,183 $ 38,059,384 $ - $ 68,496,496
=======================================================================

20

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

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

Overview

We generate revenues primarily from box office receipts, concession
sales and screen advertising sales. Revenues are recognized when admissions and
concession sales are received and earned at the theatres and screen advertising
is shown at the theatres. Our revenues are affected by changes in attendance and
average admissions and concession revenues per patron. Attendance is primarily
affected by the commercial appeal of the films released during the period
reported. We generate additional revenues related to theatre operations from
vendor marketing programs, pay phones, ATM machines and electronic video games
installed in video arcades located in some of our theatres.

Film rentals and advertising, concession supplies and salaries and wages
vary directly with changes in revenues. Film rental costs are accrued based on
the applicable box office receipts and either the mutually agreed upon firm
terms or estimates of the final settlement depending on the film licensing
arrangement. Advertising costs borne by us, 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 ads is based on, among other things, the size of the directory and
the frequency and size of the newspaper's circulation. We purchase concession
supplies to replace units sold. Although salaries and wages include a fixed
component of cost (i.e. the minimum staffing cost to operate a theatre facility
during non-peak periods), salaries and wages move in relation to revenues as
theatre staffing is adjusted to handle changes in attendance volume.

Facility lease expense is primarily a fixed cost at the theatre level as
our facility leases generally require a fixed monthly minimum rent payment, with
certain leases also subject to additional percentage rent if a target annual
revenue level is achieved. Facility lease expense as a percentage of revenues is
also affected by the number of leased versus fee owned facilities.

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

Critical Accounting Policies

We prepare our condensed consolidated financial statements in conformity
with accounting principles generally accepted in the United States of America.
As such, we are required to make certain estimates, judgments and assumptions
that we believe are reasonable based upon the information available. These
estimates, judgments and assumptions affect the reported amounts of assets and
liabilities at the date of the financial statements and the reported amounts of
revenues and expenses during the periods presented. The significant accounting
policies which we believe are the most critical to aid in fully understanding
and evaluating our reported financial results are included in our Annual Report
filed March 19, 2003 on Form 10-K. No significant changes have been made to our
critical accounting policies during the period covered by this filing.

Results of Operations

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

21

% of Revenues % of Revenues
Three Months Ended Six Months Ended
June 30, June 30,
-------- --------
2003 2002 2003 2002
---- ---- ---- ----

Revenues
Admissions 63.2% 63.7% 63.1% 64.1%
Concession 31.8 31.6 31.8 31.1
Other 5.0 4.7 5.1 4.8
--- --- --- ---
Total revenues 100.0 100.0 100.0 100.0

Cost of operations 73.9 73.0 74.7 73.4
General and administrative expenses 4.3 4.7 4.5 4.7
Depreciation and amortization 6.7 6.6 7.1 7.0
Asset impairment loss 0.8 0.1 0.5 0.2
(Gain) loss on sale of assets and other (0.1) 0.1 (0.2) 0.2
----- --- ----- ---
Total cost of operations 85.6 84.5 86.6 85.5
---- ---- ---- ----

Operating income 14.4 15.5 13.4 14.5

Interest expense (1) (5.9) (5.8) (6.3) (6.3)
Loss on early retirement of debt (2.3) - (1.6) -
Income taxes 2.4 3.6 2.2 2.8
Income before accounting change 3.4 5.5 3.1 5.1
Net income 3.4 5.5 3.1 4.4

(1) includes amortization of debt issue costs.

Second quarter ended June 30, 2003 and 2002

Revenues

Revenues for the second quarter ended June 30, 2003 decreased to $249.0
million from $253.4 million for the second quarter ended June 30, 2002, a 1.7%
decrease. The decrease in revenues for the second quarter is primarily
attributable to a 0.7% decrease in attendance and a 1.8% decrease in the average
ticket price related to the unfavorable change in foreign currency exchange
rates. Revenues per screen decreased 2.3% to $82,035 in the second quarter of
2003 from $83,924 in the second quarter of 2002.

Cost of Operations

Cost of operations, as a percentage of revenues, increased to 73.9% in
the second quarter of 2003 from 73.0% in the second quarter of 2002. The
percentage increase is primarily due to the decrease in revenues while many of
our theatre operating costs are fixed in nature. Film rentals and advertising as
a percentage of admissions revenues increased to 56.4% in the second quarter of
2003 from 55.6% in the second quarter of 2002, utilities and other costs as a
percentage of revenues increased to 11.3% in the second quarter of 2003 from
10.4% in the second quarter of 2002 and facility lease expense as a percentage
of revenues increased to 11.9% in the second quarter of 2003 from 11.5% in the
second quarter of 2002. These increased operating costs were partially offset by
a decrease in concession supplies as a percentage of concession revenues in the
second quarter of 2003 to 16.1% from 17.2% in the second quarter of 2002 and a
decrease in salaries and wages as a percentage of revenues in the second quarter
of 2003 to 9.9% from 10.2% in the second quarter of 2002. The decrease in
concession supplies as a percentage of concession revenues is primarily related
to the successful implementation of a domestic concession price increase in the
fourth quarter of 2002.

22

General and Administrative Expenses

General and administrative expenses, as a percentage of revenues,
decreased to 4.3% for the second quarter of 2003 from 4.7% for the second
quarter of 2002. General and administrative expenses decreased to $10.6 million
in the second quarter of 2003 from $11.8 million in the second quarter of 2002.
The decrease in general and administrative expenses is primarily related to
decreased professional fees and accrued bonus expense.

Depreciation and Amortization

Depreciation and amortization of $16.7 million in the second quarter of
2003 is consistent with the $16.8 million recorded in the second quarter of
2002.

Asset Impairment Loss

We wrote down the assets of certain properties to their fair value which
resulted in asset impairment charges of $2.1 million and $0.2 million in the
second quarter of 2003 and 2002, respectively, related to assets to be held and
used. The asset impairment charges of $2.1 million recorded in the second
quarter of 2003 related to a $1.3 million write-down to fair value of one
theatre in Mexico and a $0.8 million write-down to fair value of one theatre in
the U.S. The asset impairment charges of $0.2 million recorded in the second
quarter of 2002 related to the write-down to fair value of one theatre in El
Salvador.

Interest Expense

Interest costs incurred, including amortization of debt issue cost, of
$14.8 million in the second quarter of 2003 were consistent with the $14.7
million recorded in the second quarter of 2002.

Loss on Early Retirement of Debt

The loss on early retirement of debt of $5.6 million recorded in the
second quarter of 2003 related to the write-off of unamortized debt issue costs,
unamortized bond premiums/discounts and tender offer repurchase costs associated
with the tender offer to repurchase and the subsequent retirement of senior
subordinated notes in the second quarter of 2003.

Income Taxes

Income tax expense of $6.1 million was recorded in the second quarter of
2003 in comparison with income tax expense of $9.1 million recorded in the
second quarter of 2002. Our effective tax rate for the second quarter of 2003
was 42.0% as compared to 39.4% for the second quarter of 2002.

Net Income

We realized net income of $8.4 million for the second quarter of 2003 in
comparison with income of $14.1 million for the second quarter of 2002. The
decrease is primarily related to the $5.6 million (pre-tax) loss on early
retirement of debt recorded in the second quarter of 2003.

Six month periods ended June 30, 2003 and 2002

Revenues

Revenues for the six month period ended June 30, 2003 ("the 2003
period") decreased to $453.0 million from $480.2 million for the six month
period ended June 30, 2002 ("the 2002 period"), a 5.7% decrease. The decrease in
revenues for the 2003 period is primarily attributable to a 3.8% decrease in
attendance and a 3.4% decrease in the average ticket price related to the
unfavorable change in foreign currency exchange rates. Revenues per screen
decreased 6.3% to $149,435 in the 2003 period from $159,458 in the 2002 period.

23

Cost of Operations

Cost of operations, as a percentage of revenues, increased to 74.7% in
the 2003 period from 73.4% in the 2002 period. The percentage increase is
primarily due to the decrease in revenues while many of our theatre operating
costs are fixed in nature. Facility lease expense as a percentage of revenues
increased to 12.9% in the 2003 period from 12.1% in the 2002 period, utilities
and other costs as a percentage of revenues increased to 11.9% in the 2003
period from 11.1% in the 2002 period, salaries and wages as a percentage of
revenues increased to 10.4% in the 2003 period from 10.1% in the 2002 period and
film rentals and advertising as a percentage of admissions revenues increased to
54.5% in the 2003 period from 54.1% in the 2002 period. These increased
operating costs were partially offset by a decrease in concession supplies as a
percentage of concession revenues to 15.8% in the 2003 period from 17.2% in the
2002 period. The decrease in concession supplies as a percentage of concession
revenues is primarily related to the successful implementation of a domestic
concession price increase in the fourth quarter of 2002.

General and Administrative Expenses

General and administrative expenses, as a percentage of revenues,
decreased to 4.5% for the 2003 period from 4.7% for the 2002 period. General and
administrative expenses decreased to $20.2 million in the 2003 period from $22.5
million in the 2002 period. The decrease in general and administrative expenses
is primarily related to decreased professional fees and accrued bonus expense.

Depreciation and Amortization

Depreciation and amortization decreased to $32.8 million in the 2003
period from $34.0 million in the 2002 period.

Asset Impairment Loss

We wrote down the assets of certain properties to their fair value which
resulted in asset impairment charges of $2.1 million and $0.8 million in the
2003 and 2002 periods, respectively, related to assets to be held and used. The
asset impairment charges of $2.1 million recorded in the 2003 period related to
a $1.3 million write-down to fair value of one theatre in Mexico and a $0.8
million write-down to fair value of one theatre in the U.S. The asset impairment
charges of $0.8 million recorded in the 2002 period related to a $0.6 million
write-down to fair value of goodwill associated with our Argentine operations
and a $0.2 million write-down to fair value of one theatre in El Salvador.

Interest Expense

Interest costs incurred, including amortization of debt issue cost,
decreased 4.6% in the 2003 period to $28.7 million from $30.1 million in the
2002 period. The decrease in interest costs incurred for the 2003 period is due
principally to a decrease in our average debt outstanding.

Loss on Early Retirement of Debt

The loss on early retirement of debt of $7.3 million recorded in the
2003 period related to the $1.7 million write-off of unamortized debt issue
costs associated with the refinancing of the Company's existing Credit Facility
and the Cinema Properties Facility in the first quarter of 2003 and the $5.6
million write-off of debt issue costs, unamortized bond premiums/discounts and
tender offer repurchase costs associated with the tender offer to repurchase and
the subsequent retirement of senior subordinated notes in the second quarter of
2003.

Income Taxes

Income tax expense of $10.0 million was recorded in the 2003 period in
comparison with income tax expense of $13.6 million recorded in the 2002 period.
Our effective tax rate for the 2003 period was 42.0% as compared to 35.8% for
the 2002 period. The change in the effective tax rate is primarily due to an
increase in foreign permanent differences and the impact on the 2002 rate
resulting from the cumulative effect of an accounting change.

24

Net Income

We realized net income of $13.8 million for the 2003 period in
comparison with net income of $20.9 million for the 2002 period. The decrease is
primarily related to the $7.3 million (pre-tax) loss on early retirement of debt
recorded in the 2003 period.

Liquidity and Capital Resources

Operating Activities

We primarily collect our revenues in cash, mainly through box office
receipts and the sale of concession supplies. However, we continue to expand the
number of theatres that provide the patron a choice of using a credit card, in
place of cash, which we convert to cash in approximately three to four days.
Because our revenues are received in cash prior to the payment of related
expenses, we have an operating "float" and historically have not required
traditional working capital financing. We typically operate with a negative
working capital position for our ongoing theatre operations throughout the year,
primarily because of the lack of significant inventory and accounts receivable.

Investing Activities

Our investing activities have been principally related to the
development and acquisition of additional theatres. New theatre openings and
acquisitions historically have been financed with internally generated cash and
by debt financing, including borrowings under our credit facility.

We are continuing to expand our U.S. theatre circuit. We have opened one
new theatre (12 screens) in the six month period ended June 30, 2003 bringing
our total domestic screen count to 2,218 screens (12 of which are in Canada). As
of June 30, 2003, we have signed commitments to build three new theatres with 31
screens scheduled to open in the U.S. by the end of 2003 and six new theatres
with 82 screens and a five screen expansion to an existing theatre scheduled to
open in the U.S. subsequent to 2003. We estimate the remaining capital
expenditures for the development of these 118 screens in the U.S. will be
approximately $30 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 from cash flow from operations, borrowings under our credit
facility, subordinated note borrowings, proceeds from sale leaseback
transactions and/or sales of excess real estate. Additionally, we may from time
to time, subject to compliance with our debt instruments, purchase on the open
market or call our debt securities depending upon the availability and prices of
such securities.

We are also continuing to expand our international theatre circuit. We
have opened one new theatre (8 screens) and added two screens to an existing
theatre in the six month period ended June 30, 2003 bringing our total
international screen count to 826 screens. As of June 30, 2003, we have signed
commitments to build four new theatres with 26 screens and a five screen
expansion to an existing theatre scheduled to open in international markets by
the end of 2003 and four new theatres with 27 screens scheduled to open in
international markets subsequent to 2003. We estimate the remaining capital
expenditures for the development of these 58 screens in international markets
will be approximately $20 million. Actual expenditures for continued theatre
development and acquisitions are subject to change based upon the availability
of attractive opportunities. We anticipate that investments in excess of
available cash will be funded by us or by debt or equity financing to be
provided by third parties directly to our subsidiaries.

25

Financing Activities

As of June 30, 2003, our long-term debt obligations, capital lease
obligations, future minimum lease obligations under non-cancelable operating
leases, outstanding letters of credit and purchase commitments (excluding
capital expenditures) for each period indicated are summarized as follows:

Payments Due by Period
(In millions)

Less Than After 5
Contractual Obligations Total 1 Year 1-3 Years 4-5 years Years
--------------------------------- ------- --------- --------- --------- -------

Long-term debt................... $663.8 $6.0 $12.0 $124.2 $521.6
Capital lease obligations........ 0.1 0.1 - - -
Operating lease obligations...... 1,411.2 101.5 207.2 206.7 895.8
Letters of credit................ 0.1 0.1 - - -
Purchase commitments............. 3.8 1.9 1.1 0.8 -

As of June 30, 2003, we were in full compliance with all agreements
governing our outstanding debt.

New Senior Subordinated Notes Issuance

On February 11, 2003, we issued $150 million of 9% Senior Subordinated
Notes due 2013 to qualified buyers in reliance on Rule 144A which were
subsequently registered under the Securities Act of 1933. Interest is payable on
February 1 and August 1 of each year, beginning on August 1, 2003. The notes
will mature on February 1, 2013. The net proceeds of approximately $145.9
million from the issuance of the 9% Senior Subordinated Notes were used to repay
a portion of our then existing credit facility.

On May 7, 2003, we issued an additional $210 million of 9% Senior
Subordinated Notes due 2013 at a premium of 107.25% of the face amount to
qualified institutional buyers in reliance on Rule 144A which were subsequently
registered under the Securities Act of 1933. The new notes were offered as
additional debt securities under an indenture pursuant to which, on February 11,
2003, the Company issued $150 million of 9% Senior Subordinated Notes due 2013.
Interest is payable on February 1 and August 1 of each year, beginning on August
1, 2003. The notes will mature on February 1, 2013. The net proceeds of this
add-on issuance of $226.7 million and additional borrowings under our senior
secured credit facility were utilized to fund the purchase on May 16, 2003 of
approximately $233.0 million of outstanding 9 5/8% senior subordinated notes
tendered as of midnight on May 15, 2003 pursuant to a tender offer announced on
April 18, 2003.

We may redeem all or part of the new notes on or after February 1, 2008.
Prior to February 1, 2006, we may redeem up to 35% of the aggregate principal
amount of the notes from the proceeds of certain equity offerings. The notes are
general, unsecured obligations, are subordinated in right of payment to our
senior secured credit facility or other senior indebtedness, and rank pari passu
with our existing senior subordinated debt. The notes are guaranteed by certain
of our domestic subsidiaries. The guarantees are subordinated to the senior debt
of the subsidiary guarantors and rank pari passu with the senior subordinated
debt of our guarantor subsidiaries. The notes are effectively subordinated to
the indebtedness and other liabilities of the Company's non-guarantor
subsidiaries.

Senior Subordinated Notes

As of June 30, 2003, we have outstanding four issues of senior
subordinated notes: (1) $29.9 million in 9 5/8% Series B Senior Subordinated
Notes due 2008; (2) $12.1 million in 9 5/8% Series D Senior Subordinated Notes
due 2008; (3) $105 million in 8 1/2% Series B Senior Subordinated Notes due
2008; and (4) $360 million in 9% Senior Subordinated Notes due 2013. Interest in
each issue is payable on February 1 and August 1 of each year.

The indentures governing the senior subordinated notes contain covenants
that limit, among other things, dividends, transactions with affiliates,
investments, sale of assets, mergers, repurchases of our capital stock, liens

26

and additional indebtedness. Upon a change of control, we would be required to
make an offer to repurchase the senior subordinated notes at a price equal to
101% of the principal amount outstanding plus accrued and unpaid interest
through the date of repurchase. The indentures governing the senior subordinated
notes allow us to incur additional indebtedness if we satisfy the coverage ratio
specified in each indenture, after giving effect to the incurrence of the
additional indebtedness, and in certain other circumstances.

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

Generally, if we are in default under the senior secured credit facility
and other senior indebtedness, we would not be allowed to make payments on the
senior subordinated notes until the defaults have been cured or waived. If we
fail to make any payments when due or within the applicable grace period, we
would be in default under the indentures governing the senior subordinated
notes.

New Senior Secured Credit Facility

On February 14, 2003, we entered into a new senior secured credit
facility consisting of a $75 million revolving credit line and a $125 million
term loan with Lehman Commercial Paper, Inc. for itself and as administrative
agent for a syndicate of lenders. The new credit facility also provides for
incremental term loans of up to $100 million. The new credit facility is
guaranteed by the guarantors of the new senior subordinated notes and is secured
by mortgages on certain fee and leasehold properties and security interests on
certain personal and intangible property, including without limitation, pledges
of all of the capital stock of certain domestic subsidiaries and 65% of the
voting stock of certain of our foreign subsidiaries. The net proceeds from the
new credit facility were used to repay, in full, the then existing Credit
Facility and the Cinema Properties Facility.

The term of the revolving credit line is five years. Borrowings under
the revolving credit line bear interest, at our option, at: (A) a margin of
2.00% per annum plus a "base rate" equal to the higher of (i) the prime lending
rate as set forth on the British Banking Association Telerate page 5 or (ii) the
federal funds effective rate from time to time plus 0.50%, or (B) a "eurodollar
rate" equal to the rate at which eurodollar deposits are offered in the
interbank eurodollar market for terms of one, two, three or six, or (if
available to all lenders in their sole discretion) nine or twelve months, as
selected by us, plus a margin of 3.00% per annum. The margin applicable to base
rate loans ranges from 1.25% per annum to 2.00% per annum and the margin
applicable to eurodollar rate loans ranges from 2.25% per annum to 3.00% per
annum based upon our achieving certain ratios of debt to consolidated EBITDA (as
defined in the new credit facility).

The term loan matures on March 31, 2008, but will be extended to March
31, 2009, if on or prior to May 31, 2007 the maturity of our existing senior
subordinated debt is extended beyond September 30, 2009. The term loan reduces
automatically each calendar quarter by $312,500 from June 30, 2003 to March 31,
2007 and then reduces by $30,000,000 each calendar quarter from June 30, 2007 to
maturity at March 31, 2008. The term loan bears interest, at our option, at (A)
the base rate plus a margin of 1.75% or (B) the eurodollar rate plus a margin of
2.75%.

Under the new credit facility, we are required to maintain specified
levels of fixed charge coverage and set limitations on our leverage ratios. We
are limited in our ability to pay dividends and in our ability to incur
additional indebtedness and liens and, following the issuance of certain types
of indebtedness or the disposition of assets, subject to certain exceptions, we
would be required to apply certain of the proceeds to repay amounts outstanding
under the credit facility. The new credit facility also contains certain other
covenants and restrictions customary in credit agreements of this kind.

As of June 30, 2003, there was no outstanding balance on the revolving
credit line. As of June 30, 2003, $74.9 million is available to us to borrow
under the revolving credit line taking into consideration the $0.1 million
letter of credit outstanding. As of June 30, 2003, we had $124.7 million
outstanding under the term loan and the effective interest rate on such
borrowings was 4.1% per annum.

27

Cinemark USA Revolving Credit Facility

In February 1998, we entered into a reducing revolving credit facility
with a group of banks for which Bank of America, N.A. acted as administrative
agent. The credit facility provided for an initial commitment of $350 million
which was automatically reduced each quarter by 2.5%, 3.75%, 5.0%, 6.25% and
6.25% of the aggregate $350 million in 2001, 2002, 2003, 2004 and 2005,
respectively, until maturity in 2006. As of December 31, 2002, the aggregate
commitment available to us was $262.5 million. We prepaid a portion of the
indebtedness outstanding under the credit facility on February 11, 2003 with the
net proceeds of our new $150 million 9% senior subordinated notes issuance. The
credit facility was repaid in full on February 14, 2003 from the net proceeds of
our new senior secured credit facility entered into with Lehman Commercial
Paper, Inc. for itself and as administrative agent for a syndicate of lenders.

Cinemark Mexico Revolving Credit Facility

In November 1998, Cinemark Mexico (USA), Inc. executed a credit
agreement with Bank of America National Trust and Savings Association (the
"Cinemark Mexico Credit Agreement"). The Cinemark Mexico Credit Agreement was a
revolving credit facility and provided for a loan to Cinemark Mexico of up to
$30 million in the aggregate. Cinemark Mexico was required to make principal
payments of $0.5 million in each of the third and fourth quarters of 2001, $1.5
million per quarter in 2002 with the remaining principal outstanding of $23
million due in January 2003. On January 15, 2003, the Cinemark Mexico Credit
Agreement was paid in full.

Cinema Properties Term Loan

In December 2000, Cinema Properties, Inc., a wholly owned subsidiary
that was not subject to restrictions imposed by the credit facility or the
indentures governing the senior subordinated notes, borrowed a $77 million
3-year term loan from Lehman Brothers Bank, FSB (the "Cinema Properties
Facility"), which was originally scheduled to mature on December 31, 2003. In
2002, the Cinema Properties Facility was amended, which among other things,
extended the maturity date one year to December 31, 2004 and eliminated the
lender's discretionary right to require Cinema Properties, Inc. to make $1.5
million principal payments in the third and fourth quarters of 2002. The $77
million Cinema Properties Facility was repaid in full on February 14, 2003 from
the net proceeds of our new senior secured credit facility entered into with
Lehman Commercial Paper, Inc. for itself and as administrative agent for a
syndicate of lenders. Simultaneously, with such repayment, Cinema Properties,
Inc. and its shareholders were merged with and into us.

Cinemark Brasil Notes Payable

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

(1) BNDES (Banco Nacional de Desenvolvimento Economico e Social (the
Brazilian National Development Bank)) credit line in the U.S. dollar equivalent
in Brazilian reais of US$3.8 million executed in October 1999 with a term of 5
years (with a nine month grace period) and accruing interest at a BNDES basket
rate, which is a multiple currency rate based on the rate at which the bank
borrows, plus a spread amounting to 14.5%;

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

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

These sources are secured by a variety of instruments, including comfort
letters from Cinemark International, promissory notes for up to 130% of the
value, a revenue reserve account and equipment collateral. A fourth funding
source (import financing executed with Banco ABC Brasil) was paid in full during
the second quarter of 2003. As of June 30, 2003, an aggregate of $4.5 million
was outstanding and the average effective interest rate on such borrowings was
14.3% per annum.

28

Cinemark Chile Notes Payable

On March 26, 2002, Cinemark Chile S.A. entered into a Debt
Acknowledgment, Rescheduling and Joint Guarantee and Co-Debt Agreement with
Scotiabank Sud Americano and three local banks. Under this agreement, Cinemark
Chile S.A. borrowed the U.S. dollar equivalent of approximately $10.6 million in
Chilean pesos (adjusted for inflation pursuant to the Unidades de Fomento).
Cinemark Chile S.A. is required to make 24 equal quarterly installments of
principal plus accrued and unpaid interest, commencing March 27, 2002. The
indebtedness is secured by a first priority commercial pledge of the shares of
Cinemark Chile S.A., a chattel mortgage over Cinemark Chile's personal property
and by guarantees issued by Cinemark International, L.L.C. and Chile Films S.A.,
whose owners are shareholders of Cinemark Chile S.A. The agreement requires
Cinemark Chile S.A. to maintain certain financial ratios and contains other
restrictive covenants typical for agreements of this type such as a limitation
on dividends. Funds borrowed under this agreement bear interest at the 90 day
TAB Banking rate (360 day TAB Banking rate with respect to one of the four
banks) as published by the Association of Banks and Financial Institutions Act
plus 2%. As of June 30, 2003, $7.8 million was outstanding under this agreement
and the effective interest rate on such borrowing was 4.3% per annum.

Credit Ratings

On January 31, 2003, Standard & Poor's revised its outlook on us from
stable to positive and assigned a BB- rating to our new senior secured credit
facility and a B- rating to the $150 million 9% senior subordinated notes issued
on February 11, 2003. On the same day, Moody's Investor Services upgraded its
rating on our three existing series of senior subordinated notes due 2008 from
Caa2 to B3 and assigned a Ba3 rating to our new senior secured credit facility
and a B3 rating to the $150 million 9% senior subordinated notes issued on
February 11, 2003. On April 25, 2003, Standard & Poor's assigned a B- rating to
the $210 million 9% senior subordinated notes issued on May 7, 2003.

Recent Developments

On August 1, 2003, the Company announced that it is seeking certain
amendments to its senior secured credit facility from its lenders to provide a
$165 million term loan with a term expiring on March 31, 2008 subject to
extensions permitted in the senior credit facility. The net proceeds of the term
loan and additional borrowings under the revolving facility will be used to (i)
repay the $124.7 million of term loans currently outstanding under the Company's
senior secured credit facility and (ii) redeem the approximately $42 million of
the Company's 9 5/8% Senior Subordinated Notes due 2008 which remain
outstanding.

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
Memorial Day to Labor Day and during the holiday season extending from
Thanksgiving through year-end. The unexpected emergence of a hit film during
other periods can alter this seasonality trend. The timing of such film releases
can 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.

Cautionary Statement Regarding Forward-Looking Statements

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

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

You can identify forward-looking statements by the use of words such as
"may," "should," "will," "could," "estimates," "predicts," "potential,"
"continue," "anticipates," "believes," "plans," "expects," "future" and
"intends" and similar expressions which are intended to identify forward-looking
statements. These statements are not guarantees of future performance and are
subject to risks, uncertainties and other factors, some of which are beyond our
control and difficult to predict and could cause actual results to differ
materially from those expressed or forecasted in the forward-looking statements.
In evaluating these forward-looking statements, you should carefully

29

consider the risks and uncertainties described in this report. These
forward-looking statements reflect our view only as of the date of this report.
Actual results could differ materially from those indicated by such
forward-looking statements due to a number of factors. All forward-looking
statements attributable to us or persons acting on our behalf are expressly
qualified in their entirety by this cautionary statement. We undertake no
current obligation to publicly update such forward-looking statements to reflect
subsequent events or circumstances.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

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

Interest Rate Risk

An increase or decrease in interest rates would affect interest costs
relating to our variable rate debt facilities. We and our subsidiaries are
currently parties to variable rate debt facilities. At June 30, 2003, we had an
aggregate of $142.0 million of variable rate debt outstanding under these
facilities. These facilities represent approximately 21% of our outstanding
long-term debt. Based on the interest rate levels in effect on the variable rate
debt outstanding at June 30, 2003, a 100 basis point increase in market interest
rates would not increase our annual interest expense by a material amount.
Changes in interest rates do not have a direct impact on interest expense
relating to the remaining fixed rate debt facilities.

The table below provides information about our fixed rate and variable
rate long-term debt agreements:

Expected Maturity Date
As of June 30, 2003
-------------------

June 30, June 30, June 30, June 30, June 30, Fair
(in millions) 2004 2005 2006 2007 2008 Thereafter Total Value
------------- ---- ---- ---- ---- ---- ---------- ----- -----

Long-term debt:
Fixed rate $0.1 $ - $0.1 $ - $ - $521.6 $521.8 $521.8
Average interest rate 8.9%

Variable rate $5.9 $5.4 $6.5 $33.1 $91.1 $ - $142.0 $143.3
Average interest rate 4.4%

Total debt $6.0 $5.4 $6.6 $33.1 $91.1 $521.6 $663.8 $665.1

Expected Maturity Date
As of December 31, 2002
-----------------------

Dec. 31, Dec. 31, Dec. 31, Dec. 31, Dec. 31, Fair
(in millions) 2003 2004 2005 2006 2007 Thereafter Total Value
------------- ---- ---- ---- ---- ---- ---------- ----- -----

Long-term debt:
Fixed rate $0.1 $ - $0.1 $ - $ - $380.2 $380.4 $393.8
Average interest rate 9.3%

Variable rate $30.1 $165.6 $94.6 $19.9 $2.0 $ - $312.2 $324.1
Average interest rate 4.4%

Total debt $30.2 $165.6 $94.7 $19.9 $2.0 $380.2 $692.6 $717.9

In December 2000, Cinema Properties, Inc., a wholly-owned subsidiary
of ours, entered into the Cinema Properties Facility. Pursuant to the terms
of the Cinema Properties Facility, funds borrowed bear interest at a rate
per annum equal to LIBOR (as defined in the Cinema Properties Facility)
plus 5.75%. As part of the Cinema Properties Facility, in order to hedge
against future changes in interest rates, Cinema Properties, Inc. purchased
from Lehman Brothers Derivative Products Inc. an Interest Rate Cap Agreement
with a notional amount equal to $77 million with a five year term and a
strike rate equal to the excess of three month LIBOR over the strike price of

30

6.58%. Three month LIBOR as of the date of closing was 6.58%. At December 31,
2002, the interest rate cap agreement was recorded at its fair value of $0.1
million. During the six month period ended June 30, 2003, the Interest Rate Cap
Agreement was written down to $0. We do not have any additional derivative
financial instruments in place as of June 30, 2003 that would have a material
effect on our financial position, results of operations and cash flows.

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
accepted accounting principles in the U.S. require that our subsidiaries use the
currency of the primary economic environment in which they operate as their
functional currency. If our subsidiaries operate in a highly inflationary
economy, generally accepted accounting principles in the U.S. require that the
U.S. dollar be used as the functional currency for the subsidiary. Currency
fluctuations result in us reporting exchange gains (losses) or foreign currency
translation adjustments relating to our international subsidiaries depending on
the inflationary environment of the country in which we operate. Based upon our
equity ownership in our international subsidiaries as of June 30, 2003, holding
everything else constant, a 10% immediate unfavorable change in each of the
foreign currency exchange rates to which we are exposed would decrease the net
fair value of our investments in our international subsidiaries by approximately
$5.5 million.

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

We have established a system of controls and other procedures designed
to ensure that information required to be disclosed in our periodic reports
filed under the Securities Exchange Act of 1934 (the "Exchange Act"), as
amended, is recorded, processed, summarized and reported within the time periods
specified in the Securities and Exchange Commission's rules and forms. These
disclosure controls and procedures have been evaluated under the direction of
our Chief Executive Officer and Chief Financial Officer within the last 90 days.
Based on such evaluations, the Chief Executive Officer and Chief Financial
Officer have concluded that the disclosure controls and procedures are effective
in alerting them in a timely basis to material information relating to the
Company and its consolidated subsidiaries required to be included in our reports
filed or submitted under the Exchange Act.

Changes in Internal Controls

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

31

PART II - OTHER INFORMATION

Item 1. Legal Proceedings

Reference is made to Item 3 of the Company's Annual Report on Form 10-K
for the fiscal year ended December 31, 2002. See updated discussion of Legal
Proceedings in the notes to condensed consolidated financial statements.

Item 2. Changes in Securities and Use of Proceeds

Not Applicable

Item 3. Defaults Upon Senior Securities

Not Applicable

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

There have not been any matters submitted to a vote of security holders
during the first six months of 2003 through the solicitation of proxies or
otherwise.

Item 5. Other Information

a) Recent Developments

On August 1, 2003, the Company announced that it is seeking
certain amendments to its senior secured credit facility from its
lenders to provide a $165 million term loan with a term expiring on
March 31, 2008 subject to extensions permitted in the senior credit
facility. The net proceeds of the term loan and additional borrowings
under the revolving facility will be used to (i) repay the $124.7
million of term loans currently outstanding under the Company's senior
secured credit facility and (ii) redeem the approximately $42 million of
the Company's 9 5/8% Senior Subordinated Notes due 2008 which remain
outstanding.

b) Supplemental Schedules specified by the Senior Subordinated Notes
Indenture:
Page
----
Condensed Consolidating Balance Sheet
(unaudited) as of June 30, 2003 33

Condensed Consolidating Statements
of Operations (unaudited) for the
six month period ended June 30, 2003 34

Condensed Consolidating Statements of
Cash Flows (unaudited) for the six month
period ended June 30, 2003 35

32

CINEMARK USA, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATING BALANCE SHEETS
AS OF JUNE 30, 2003
(Unaudited)

Restricted Unrestricted
Group Group Eliminations TOTAL
------------- ------------- -------------- -------------

ASSETS

CURRENT ASSETS
Cash and cash equivalents $ 22,519,899 $ 28,126,799 $ - $ 50,646,698
Inventories 3,826,440 571,762 - 4,398,202
Accounts receivable (18,239,069) 33,801,270 (260,065) 15,302,136
Income tax receivable (985,973) 985,973 - -
Prepaid expenses and other 4,944,496 845,867 - 5,790,363
-----------------------------------------------------------------
Total current assets 12,065,793 64,331,671 (260,065) 76,137,399

THEATRE PROPERTIES AND EQUIPMENT - net 713,733,480 70,874,370 - 784,607,850

OTHER ASSETS
Goodwill 8,126,738 2,758,616 - 10,885,354
Investments in and advances to affiliates 167,959,009 1,167,194 (166,463,391) 2,662,812
Deferred charges and other - net 34,033,329 4,541,199 - 38,574,528
-----------------------------------------------------------------
Total other assets 210,119,076 8,467,009 (166,463,391) 52,122,694
-----------------------------------------------------------------

TOTAL ASSETS $935,918,349 $143,673,050 $(166,723,456) $912,867,943
=================================================================

LIABILITIES AND SHAREHOLDER'S EQUITY

CURRENT LIABILITIES
Current portion of long-term debt $ 1,490,871 $ 4,484,795 $ - $ 5,975,666
Current income taxes payable 6,187,859 914,846 - 7,102,705
Accounts payable and accrued expenses 99,895,767 15,421,957 (315,311) 115,002,413
-----------------------------------------------------------------
Total current liabilities 107,574,497 20,821,598 (315,311) 128,080,784

LONG-TERM LIABILITIES
Senior credit agreements 126,339,672 9,865,163 - 136,204,835
Senior subordinated notes 521,602,807 - - 521,602,807
Deferred lease expenses 25,196,757 399,704 - 25,596,461
Deferred gain on sale leasebacks 4,189,660 - - 4,189,660
Deferred income taxes 11,950,866 (232,687) - 11,718,179
Deferred revenues and other long-term liabilities 968,136 2,031,352 - 2,999,488
-----------------------------------------------------------------
Total long-term liabilities 690,247,898 12,063,532 - 702,311,430

MINORITY INTERESTS IN SUBSIDIARIES 8,656,018 23,956,952 - 32,612,970

SHAREHOLDER'S EQUITY
Class A common stock, $.01 par value: 10,000,000 shares
authorized, 1,500 shares issued and outstanding 15 - - 15
Class B common stock, no par value: 1,000,000 shares
authorized, 239,893 shares issued and outstanding 49,543,427 14,958,000 (14,958,000) 49,543,427
Additional paid-in-capital 12,523,455 151,450,145 (151,450,145) 12,523,455
Retained earnings 138,448,439 (44,340,096) - 94,108,343
Treasury stock, 57,245 Class B shares at cost (24,232,890) - - (24,232,890)
Accumulated other comprehensive loss (46,842,510) (35,237,081) - (82,079,591)
-----------------------------------------------------------------
Total shareholder's equity 129,439,936 86,830,968 (166,408,145) 49,862,759
-----------------------------------------------------------------

TOTAL LIABILITIES AND SHAREHOLDER'S EQUITY $935,918,349 $143,673,050 $(166,723,456) $912,867,943
=================================================================

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

33

CINEMARK USA, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 2003
(Unaudited)

Restricted Unrestricted
Group Group Eliminations TOTAL
------------- ------------- -------------- -------------

REVENUES $390,302,685 $ 64,438,384 $ (1,761,739) $452,979,330

COSTS AND EXPENSES
Cost of operations 290,944,077 49,001,732 (1,761,739) 338,184,070
General and administrative expenses 16,395,275 3,805,948 - 20,201,223
Depreciation and amortization 27,089,923 5,745,559 - 32,835,482
Asset impairment loss 2,060,845 - - 2,060,845
(Gain) loss on sale of assets and other (991,959) 940 - (991,019)
-----------------------------------------------------------------
Total costs and expenses 335,498,161 58,554,179 (1,761,739) 392,290,601
-----------------------------------------------------------------

OPERATING INCOME 54,804,524 5,884,205 - 60,688,729

OTHER INCOME (EXPENSE)
Interest expense (26,115,482) (1,398,845) - (27,514,327)
Amortization of debt issue cost (958,690) (212,260) - (1,170,950)
Interest income 438,471 644,893 - 1,083,364
Foreign currency exchange gain (loss) (310,823) 462,022 - 151,199
Loss on early retirement of debt (5,932,769) (1,325,367) - (7,258,136)
Equity in income (loss) of affiliates (21,391) 170,915 - 149,524
Minority interests in income of subsidiaries (583,423) (1,693,062) - (2,276,485)
-----------------------------------------------------------------
Total other expenses (33,484,107) (3,351,704) - (36,835,811)
-----------------------------------------------------------------

INCOME BEFORE INCOME TAXES 21,320,417 2,532,501 - 23,852,918

Income taxes 9,275,030 742,868 - 10,017,898
-----------------------------------------------------------------

NET INCOME $ 12,045,387 $ 1,789,633 $ - $ 13,835,020
=================================================================

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

34

CINEMARK USA, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED JUNE 30, 2003
(Unaudited)

Restricted Unrestricted
Group Group Eliminations TOTAL
------------- ------------- -------------- -------------

OPERATING ACTIVITIES
Net income $ 12,045,387 $ 1,789,633 $ - $ 13,835,020

Noncash items in net income:
Depreciation 26,811,760 5,698,377 - 32,510,137
Amortization of other assets 278,163 47,182 - 325,345
Amortization of foreign advanced rents 523,706 341,417 - 865,123
Amortized compensation - stock options 548,595 - - 548,595
Amortization of debt issue costs 958,690 212,260 - 1,170,950
Amortization of gain on sale leasebacks (182,960) - - (182,960)
Amortization of debt discount and premium (235,522) - - (235,522)
Amortization of deferred revenues (2,013,119) - - (2,013,119)
Loss on impairment of assets 2,060,845 - - 2,060,845
(Gain) loss on sale of assets and other (991,959) 940 - (991,019)
Loss on early retirement of debt 5,932,769 1,325,367 - 7,258,136
Deferred lease expenses 774,423 (15,419) - 759,004
Deferred income tax expenses 1,457,562 (909,511) - 548,051
Equity in (income) loss of affiliates 21,391 (170,915) - (149,524)
Minority interests in income of subsidiaries 583,423 1,693,062 - 2,276,485
Cash provided by (used for) operating working capital 14,005,289 (32,317,945) - (18,312,656)
-----------------------------------------------------------------

Net cash provided by (used for) operating activities 62,578,443 (22,305,552) - 40,272,891

INVESTING ACTIVITIES
Additions to theatre properties and equipment (16,084,459) (1,891,800) - (17,976,259)
Sale of theatre properties and equipment 2,068,527 6,868 - 2,075,395
Transfer of theatre properties and equipment (93,106,945) 93,106,945 - -
Investment in affiliates (3,314) - - (3,314)
Dividends/capital returned from affiliates 153,000 75,000 - 228,000
-----------------------------------------------------------------

Net cash provided by (used for) investing activities (106,973,191) 91,297,013 - (15,676,178)

FINANCING ACTIVITIES
Issuance of senior subordinated notes 375,225,000 - - 375,225,000
Retirement of senior subordinated notes (232,989,000) - - (232,989,000)
Increase in long-term debt 238,508,545 - - 238,508,545
Decrease in long-term debt (327,394,170) (81,433,508) - (408,827,678)
Increase in debt issue cost (14,944,223) - - (14,944,223)
Increase in minority investment in subsidiaries 15,583 3,881,277 - 3,896,860
Decrease in minority investment in subsidiaries (149,111) (126,193) - (275,304)
-----------------------------------------------------------------

Net cash provided by (used for) financing activities 38,272,624 (77,678,424) - (39,405,800)

EFFECT OF EXCHANGE RATE CHANGES ON CASH AND
CASH EQUIVALENTS 156,514 1,580,756 - 1,737,270
-----------------------------------------------------------------

DECREASE IN CASH AND CASH EQUIVALENTS (5,965,610) (7,106,207) - (13,071,817)

CASH AND CASH EQUIVALENTS:
Beginning of period 28,485,509 35,233,006 - 63,718,515
-----------------------------------------------------------------

End of period $ 22,519,899 $ 28,126,799 $ - $ 50,646,698
=================================================================

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

35

Item 6. Exhibits and Reports on Form 8-K

a) Exhibits

3.1 Amended and Restated Articles of Incorporation of the
Company filed with the Texas Secretary of State on June
3,1992 (incorporated by reference to Exhibit 3.1(a) to
the Company's Annual Report on Form 10-K (File No.
033-47040) filed March 31, 1993).
3.2(a) Bylaws of the Company, as amended (incorporated by
reference to Exhibit 3.2 to the Company's Registration
Statement on Form S-1 (File No. 033-47040) filed April
9, 1992).
3.2(b) Amendment to Bylaws of the Company dated March 12, 1996
(incorporated by reference to Exhibit 3.2(b) to the
Company's Annual Report on Form 10-K (File No.
033-47040) filed March 6, 1997).
4.1(a) Exchange and Registration Rights Agreement dated
February 11, 2003, among Cinemark USA, Inc., certain
subsidiary guarantor parties thereto and the initial
purchasers named therein (incorporated by reference to
Exhibit 10.2(c) to the Company's Annual Report on Form
10-K (File No. 033-47040) filed March 19, 2003).
4.1(b) Exchange and Registration Rights Agreement dated May 7,
2003 among Cinemark USA, Inc., certain subsidiary
guarantors party thereto and the initial purchasers
named therein (incorporated by reference to Exhibit
4.1(b) to the Company's Registration Statement on Form
S-4 (File No. 333-104940) filed May 28, 2003.
4.2(a) Indenture dated August 15, 1996 between the Company and
U.S. Trust Company of Texas, N.A., governing the 9 5/8%
senior subordinated notes issued thereunder
(incorporated by reference to Exhibit 4.1 to the
Company's Registration Statement on Form S-4 (File No.
333-11895) filed September 13, 1996).
4.2(b) First Supplemental Indenture dated June 26, 1997 between
the Company and U.S. Trust Company of Texas, N.A.
(incorporated by reference to Exhibit 4.4 to Cinemark,
Inc.'s Registration statement on Form S-1 (File No.
333-88618) filed on May 17, 2002).
4.2(c) Second Supplemental Indenture dated as of February 11,
2003 between the Company, the Subsidiary guarantor
parties thereto and The Bank of New York Trust Company
of Florida, N.A., as successor trustee to U.S. Trust
Company of Texas, N.A.
4.2(d) Indenture dated June 26, 1997 between the Company and
U.S. Trust Company of Texas, N.A. governing the 9 5/8%
senior subordinated notes issued thereunder
(incorporated by reference to Exhibit 4.1 to the
Company's Registration Statement on Form S-4 (File No.
333-32959) filed August 6, 1997).
4.2(e) First Supplemental Indenture dated as of February 11,
2003 between the Company, the subsidiary guarantors
party thereto and The Bank of New York Trust Company of
Florida, N.A., as successor trustee to U.S. Trust
Company of Texas, N.A.
4.2(f) Indenture dated January 14, 1998 between the Company and
U.S. Trust Company of Texas, N.A. governing the 8 1/2%
senior subordinated notes issued thereunder
(incorporated by reference to Exhibit 4.1 to the
Company's Registration Statement on Form S-4 (File No.
333-45417) filed February 2, 1998).
4.2(g) First Supplemental Indenture dated as of February 11,
2003 between the Company, the subsidiary guarantors
party thereto and The Bank of New York Trust Company of
Florida, N.A., as successor trustee to U.S. Trust
Company of Texas, N.A.

36

4.2(h) Indenture dated February 11, 2003 between the Company
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 the Company's Annual Report on Form 10-K (File No.
033-47040) filed March 19, 2003).
4.2(i) First Supplemental Indenture dated as of May 7, 2003
between the Company, the subsidiary guarantors party
thereto and The Bank of New York Trust Company of
Florida, N.A. (incorporated by reference to Exhibit
4.2(i) to the Company's Registration Statement on Form
S-4 (File No. 333-104940) filed May 28, 2003).
4.2(j) Form of 9 5/8% Note (contained in the Indenture listed
as Exhibit 4.2(a) above) (incorporated by reference to
Exhibit 4.1 to the Company's Registration Statement on
Form S-4 File No. 333-11895) filed September 13, 1996).
4.2(k) Form of 9 5/8% Note (contained in the Indenture listed
as Exhibit 4.2(d) above) (incorporated by reference to
Exhibit 4.1 to the Company's Registration Statement on
Form S-4 File No. 333-32959) filed August 6, 1997).
4.2(l) Form of 8 1/2% Note (contained in the Indenture listed
as Exhibit 4.2(f) above) (incorporated by reference to
Exhibit 4.1 to the Company's Registration Statement on
Form S-4 (File No. 333-45417) filed February 2, 1998).
4.2(m) Form of 9% Note (contained in the Indenture listed as
Exhibit 4.2(h) above) (incorporated by reference to
Exhibit 10.2(b) to the Company's Annual Report on Form
10-K (File 033-47040) filed March 19, 2003).
*31.1 Certification of Chief Executive Officer of Cinemark
USA, Inc. Pursuant to Section 302 of the Sarbanes-Oxley
Act of 2002.
*31.2 Certification of Chief Financial Officer of Cinemark
USA, Inc. Pursuant to Section 302 of the Sarbanes-Oxley
Act of 2002.
*32.1 Certification of the Chief Executive Officer of Cinemark
USA, Inc. Pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002.
*32.2 Certification of the Chief Financial Officer of Cinemark
USA, Inc. Pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002.

*filed herewith.

b) Reports on Form 8-K

On January 30, 2003, we filed a Form 8-K, reporting under Item 9
our intention to issue $150 million of senior subordinated notes due
2013 by means of Rule 144A private placement.

On April 18, 2003, we filed a Form 8-K, reporting under Item 5
and Item 7 the commencement of a tender offer to purchase up to $240
million of outstanding 9 5/8% senior subordinated notes due 2008.

On April 24, 2003, we filed a Form 8-K, reporting under Item 9
our intention to issue an additional $210 million of senior subordinated
notes due 2013 by means of Rule 144A private placement.

On August 4, 2003, we filed a Form 8-K, reporting under Item 9 a
press release announcing our operating results for the three and six
month periods ended June 30, 2003.

37

SIGNATURES

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

CINEMARK USA, INC.
Registrant

DATE: August 12, 2003

/s/Alan W. Stock
Alan W. Stock
President

/s/Robert Copple
Robert Copple
Chief Financial Officer

38

EXHIBIT INDEX

3.1 Amended and Restated Articles of Incorporation of the
Company filed with the Texas Secretary of State on June
3,1992 (incorporated by reference to Exhibit 3.1(a) to
the Company's Annual Report on Form 10-K (File No.
033-47040) filed March 31, 1993).
3.2(a) Bylaws of the Company, as amended (incorporated by
reference to Exhibit 3.2 to the Company's Registration
Statement on Form S-1 (File No. 033-47040) filed April
9, 1992).
3.2(b) Amendment to Bylaws of the Company dated March 12, 1996
(incorporated by reference to Exhibit 3.2(b) to the
Company's Annual Report on Form 10-K (File No.
033-47040) filed March 6, 1997).
4.1(a) Exchange and Registration Rights Agreement dated
February 11, 2003, among Cinemark USA, Inc., certain
subsidiary guarantor parties thereto and the initial
purchasers named therein (incorporated by reference to
Exhibit 10.2(c) to the Company's Annual Report on Form
10-K (File No. 033-47040) filed March 19, 2003).
4.1(b) Exchange and Registration Rights Agreement dated May 7,
2003 among Cinemark USA, Inc., certain subsidiary
guarantors party thereto and the initial purchasers
named therein (incorporated by reference to Exhibit
4.1(b) to the Company's Registration Statement on Form
S-4 (File No. 333-104940) filed May 28, 2003.
4.2(a) Indenture dated August 15, 1996 between the Company and
U.S. Trust Company of Texas, N.A., governing the 9 5/8%
senior subordinated notes issued thereunder
(incorporated by reference to Exhibit 4.1 to the
Company's Registration Statement on Form S-4 (File No.
333-11895) filed September 13, 1996).
4.2(b) First Supplemental Indenture dated June 26, 1997 between
the Company and U.S. Trust Company of Texas, N.A.
(incorporated by reference to Exhibit 4.4 to Cinemark,
Inc.'s Registration statement on Form S-1 (File No.
333-88618) filed on May 17, 2002).
4.2(c) Second Supplemental Indenture dated as of February 11,
2003 between the Company, the Subsidiary guarantor
parties thereto and The Bank of New York Trust Company
of Florida, N.A., as successor trustee to U.S. Trust
Company of Texas, N.A.
4.2(d) Indenture dated June 26, 1997 between the Company and
U.S. Trust Company of Texas, N.A. governing the 9 5/8%
senior subordinated notes issued thereunder
(incorporated by reference to Exhibit 4.1 to the
Company's Registration Statement on Form S-4 (File No.
333-32959) filed August 6, 1997).
4.2(e) First Supplemental Indenture dated as of February 11,
2003 between the Company, the subsidiary guarantors
party thereto and The Bank of New York Trust Company of
Florida, N.A., as successor trustee to U.S. Trust
Company of Texas, N.A.
4.2(f) Indenture dated January 14, 1998 between the Company and
U.S. Trust Company of Texas, N.A. governing the 8 1/2%
senior subordinated notes issued thereunder
(incorporated by reference to Exhibit 4.1 to the
Company's Registration Statement on Form S-4 (File No.
333-45417) filed February 2, 1998).
4.2(g) First Supplemental Indenture dated as of February 11,
2003 between the Company, the subsidiary guarantors
party thereto and The Bank of New York Trust Company of
Florida, N.A., as successor trustee to U.S. Trust
Company of Texas, N.A.

39

4.2(h) Indenture dated February 11, 2003 between the Company
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 the Company's Annual Report on Form 10-K (File No.
033-47040) filed March 19, 2003).
4.2(i) First Supplemental Indenture dated as of May 7, 2003
between the Company, the subsidiary guarantors party
thereto and The Bank of New York Trust Company of
Florida, N.A. (incorporated by reference to Exhibit
4.2(i) to the Company's Registration Statement on Form
S-4 (File No. 333-104940) filed May 28, 2003).
4.2(j) Form of 9 5/8% Note (contained in the Indenture listed
as Exhibit 4.2(a) above) (incorporated by reference to
Exhibit 4.1 to the Company's Registration Statement on
Form S-4 File No. 333-11895) filed September 13, 1996).
4.2(k) Form of 9 5/8% Note (contained in the Indenture listed
as Exhibit 4.2(d) above) (incorporated by reference to
Exhibit 4.1 to the Company's Registration Statement on
Form S-4 File No. 333-32959) filed August 6, 1997).
4.2(l) Form of 8 1/2% Note (contained in the Indenture listed
as Exhibit 4.2(f) above) (incorporated by reference to
Exhibit 4.1 to the Company's Registration Statement on
Form S-4 (File No. 333-45417) filed February 2, 1998).
4.2(m) Form of 9% Note (contained in the Indenture listed as
Exhibit 4.2(h) above) (incorporated by reference to
Exhibit 10.2(b) to the Company's Annual Report on Form
10-K (File 033-47040) filed March 19, 2003).
*31.1 Certification of Chief Executive Officer of Cinemark
USA, Inc. Pursuant to Section 302 of the Sarbanes-Oxley
Act of 2002.
*31.2 Certification of Chief Financial Officer of Cinemark
USA, Inc. Pursuant to Section 302 of the Sarbanes-Oxley
Act of 2002.
*32.1 Certification of the Chief Executive Officer of Cinemark
USA, Inc. Pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002.
*32.2 Certification of the Chief Financial Officer of Cinemark
USA, Inc. Pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002.

*filed herewith.

40

EXHIBIT 31.1

CEO CERTIFICATION
PURSUANT TO SECTION 302 OF THE
SARBANES - OXLEY ACT OF 2002

I, Lee Roy Mitchell, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Cinemark USA,
Inc.;

2. Based on my knowledge, this quarterly report does not contain any
untrue statement of a material fact or omit to state a material fact
necessary to make the statements made, in light of the circumstances
under which such statements were made, not misleading with respect to
the period covered by this quarterly report;

3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all
material respects the financial condition, results of operations and
cash flows of the registrant as of, and for, the periods presented in
this quarterly report;

4. The registrant's other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-15 (e) and 15d-15 (e)) for the
registrant and have:

a) designed such disclosure controls and procedures, or caused
such disclosure controls and procedures to be designed
under our supervision, to ensure that material information
relating to the registrant, including its consolidated
subsidiaries, is made known to us by others within those
entities, particularly during the period in which this
quarterly report is being prepared;

b) evaluated the effectiveness of the registrant's disclosure
controls and procedures and presented in this quarterly
report our conclusions about the effectiveness of the
disclosure controls and procedures, as of the end of the
period covered by this quarterly report based on such
evaluation; and

c) disclosed in this quarterly report any change in the
registrant's internal control over financial reporting that
occurred during the registrant's most recent fiscal quarter
(the registrant's fourth fiscal quarter in the case of an
annual report) that has materially affected, or is
reasonably likely to materially affect, the registrant's
internal control over financial reporting; and

5. The registrant's other certifying officer and I have disclosed,
based on our most recent evaluation of internal control over financial
reporting, to the registrant's auditors and the audit committee of
registrant's board of directors (or persons performing the equivalent
functions):

a) all significant deficiencies and material weaknesses in the
design or operation of internal control over financial
reporting which are reasonably likely to adversely affect
the registrant's ability to record, process, summarize and
report financial information; and

b) any fraud, whether or not material, that involves
management or other employees who have a significant role
in the registrant's internal control over financial
reporting.

Date: August 11, 2003

CINEMARK USA, INC.

By:/s/Lee Roy Mitchell
Lee Roy Mitchell
Chief Executive Officer

EXHIBIT 31.2

CFO CERTIFICATION
PURSUANT TO SECTION 302 OF THE
SARBANES - OXLEY ACT OF 2002

I, Robert Copple, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Cinemark USA,
Inc.;

2. Based on my knowledge, this quarterly report does not contain any
untrue statement of a material fact or omit to state a material fact
necessary to make the statements made, in light of the circumstances
under which such statements were made, not misleading with respect to
the period covered by this quarterly report;

3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all
material respects the financial condition, results of operations and
cash flows of the registrant as of, and for, the periods presented in
this quarterly report;

4. The registrant's other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-15 (e) and 15d-15 (e)) for the
registrant and have:

a) designed such disclosure controls and procedures, or caused
such disclosure controls and procedures to be designed
under our supervision, to ensure that material information
relating to the registrant, including its consolidated
subsidiaries, is made known to us by others within those
entities, particularly during the period in which this
quarterly report is being prepared;

b) evaluated the effectiveness of the registrant's disclosure
controls and procedures and presented in this quarterly
report our conclusions about the effectiveness of the
disclosure controls and procedures, as of the end of the
period covered by this quarterly report based on such
evaluation; and

c) disclosed in this quarterly report any change in the
registrant's internal control over financial reporting that
occurred during the registrant's most recent fiscal quarter
(the registrant's fourth fiscal quarter in the case of an
annual report) that has materially affected, or is
reasonably likely to materially affect, the registrant's
internal control over financial reporting; and

5. The registrant's other certifying officer and I have disclosed,
based on our most recent evaluation of internal control over financial
reporting, to the registrant's auditors and the audit committee of
registrant's board of directors (or persons performing the equivalent
functions):

a) all significant deficiencies and material weaknesses in the
design or operation of internal control over financial
reporting which are reasonably likely to adversely affect
the registrant's ability to record, process, summarize and
report financial information; and

b) any fraud, whether or not material, that involves
management or other employees who have a significant role
in the registrant's internal control over financial
reporting.

Date: August 11, 2003

CINEMARK USA, INC.

By:/s/Robert Copple
Robert Copple
Chief Financial Officer

EXHIBIT 32.1

CEO CERTIFICATION
PURSUANT TO SECTION 906 OF THE
SARBANES - OXLEY ACT OF 2002

This certification is provided pursuant to Section 906 of the Sarbanes-Oxley Act
of 2002 and accompanies the quarterly report on Form 10-Q (the "Form 10-Q") for
the quarter ended June 30, 2003 of Cinemark USA, Inc. (the "Issuer").

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

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

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

Dated: August 11, 2003.

/s/Lee Roy Mitchell
Lee Roy Mitchell
Chief Executive Officer

Subscribed and sworn to before me
this 11th day of August 2003.

/s/Carol Waldman
Name: Carol Waldman
Title: Notary Public

My commission expires: 06/07/04

EXHIBIT 32.2

CFO CERTIFICATION
PURSUANT TO SECTION 906 OF THE
SARBANES - OXLEY ACT OF 2002

This certification is provided pursuant to Section 906 of the Sarbanes-Oxley Act
of 2002 and accompanies the quarterly report on Form 10-Q (the "Form 10-Q") for
the quarter ended June 30, 2003 of Cinemark USA, Inc. (the "Issuer").

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

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

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

Dated: August 11, 2003.

/s/Robert Copple
Robert Copple
Chief Financial Officer

Subscribed and sworn to before me
this 11th day of August 2003.

/s/Carol Waldman
Name: Carol Waldman
Title: Notary Public

My commission expires: 06/07/04