Delaware | 7832 | 20-5490327 | ||
(State or Other Jurisdiction
of
Incorporation or Organization) |
(Primary Standard Industrial
Classification Code Number) |
(I.R.S. Employer
Identification Number) |
Terry M. Schpok, P.C.
Akin Gump Strauss Hauer & Feld LLP 1700 Pacific Avenue, Suite 4100 Dallas, Texas 75201 Telephone: (214) 969-2800 |
D. Rhett Brandon, Esq.
Simpson Thacher & Bartlett LLP 425 Lexington Avenue New York, New York 10017 Telephone: (212) 455-3615 |
Proposed Maximum Aggregate
|
||||||
Title of Shares to be Registered | Offering Price (1) (2) | Amount of Registration Fee (3) | ||||
Common Stock, par value
$0.001 per share
|
$400,000,000 | $42,800 | ||||
(1) | Includes shares that may be issued and sold if the underwriter exercises its option to purchase additional shares. | |
(2) | Estimated solely for purposes of calculating the amount of the registration fee in accordance with Rule 457(o) under the Securities Act. | |
(3) | Calculated based upon the estimate of the proposed maximum aggregate offering price. |
The
information in this preliminary prospectus is not complete and
may be changed. Neither we nor the selling stockholders may sell
these securities until the registration statement filed with the
Securities and Exchange Commission is effective. This
preliminary prospectus is not an offer to sell and is
not soliciting an offer to buy these securities in any
jurisdiction where the offer or sale is not permitted.
|
Per Share | Total | |||||||
Public offering price
|
$ | $ | ||||||
Underwriting discount
|
$ | $ | ||||||
Proceeds to Cinemark Holdings,
Inc. (before expenses)
|
$ | $ | ||||||
Proceeds to the Selling
Stockholders (before expenses)
|
$ | $ |
Page | ||||||||
1 | ||||||||
12 | ||||||||
20 | ||||||||
21 | ||||||||
21 | ||||||||
22 | ||||||||
24 | ||||||||
25 | ||||||||
28 | ||||||||
35 | ||||||||
54 | ||||||||
67 | ||||||||
81 | ||||||||
83 | ||||||||
87 | ||||||||
90 | ||||||||
92 | ||||||||
94 | ||||||||
99 | ||||||||
99 | ||||||||
99 | ||||||||
F-1 | ||||||||
Stockholders' Agreement | ||||||||
Registration Agreement | ||||||||
First Amendment to Employment Agreement - Robert Copple | ||||||||
2006 Long Term Incentive Plan | ||||||||
Form of Stock Option Agreement | ||||||||
Susidiaries | ||||||||
Consent of Deloitte & Touche LLP | ||||||||
Consent of Grant Thornton LLP |
i
ii
iii
8
9
26
48
F-18
II-4
II-5
1
Table of Contents
Advertising:
NCM develops, produces,
sells and distributes a branded, pre-feature entertainment and
advertising program called
FirstLook
, along
with an advertising program for its lobby entertainment network,
or LEN, and various marketing and promotional products in
theatre lobbies;
CineMeetings:
NCM provides live and
pre-recorded networked and single-site meetings and events in
the theatres throughout its network; and
Digital Programming Events:
NCM
distributes live and pre-recorded concerts, sporting events and
other entertainment programming to theatres across its digital
network.
2
Table of Contents
3
Table of Contents
4
Table of Contents
our dependency on motion picture production and performance
could have a material adverse effect on our business;
a deterioration in relationships with film distributors could
adversely affect our ability to license commercially successful
films at reasonable rental rates;
we may not be able to successfully execute our business strategy
because of the competitive nature of our industry as well as
competition from alternative forms of entertainment;
our substantial lease and debt obligations could impair our
liquidity and financial condition; and
we may not be able to identify suitable locations for expansion
or generate additional revenue opportunities.
5
Table of Contents
Common stock offered by us
shares
Common stock offered by the selling stockholders
shares
Common stock to be outstanding after the offering
shares
Underwriters option
The selling stockholders have granted the underwriter a
30-day
option to purchase up to an aggregate
of additional
shares of our common stock if the underwriter sells more
than shares
in this offering.
Dividend policy
Following this offering, we intend to pay a quarterly cash
dividend at an annual rate initially equal to
$ per share (or a quarterly rate
initially equal to $ per
share) of common stock, commencing in
the
quarter of 2007, which will be a partial dividend paid on a pro
rata basis depending on the closing date for this offering. The
declaration of future dividends on our common stock will be at
the discretion of our Board of Directors and will depend upon
many factors, including our results of operations, financial
condition, earnings, capital requirements, limitations in our
debt agreements and legal requirements. See Dividend
Policy.
Use of proceeds
We expect to use the net proceeds that we receive from this
offering to repay outstanding debt and for working capital and
other general corporate purposes. See Use of
Proceeds. We will not receive any proceeds from the sale
of shares by the selling stockholders.
Proposed New York Stock Exchange symbol
CNK
shares
of our common stock issuable upon the exercise of outstanding
stock options, which have a weighted average exercise price of
$ per share; and
an aggregate
of shares
of our common stock reserved for future issuance under our 2006
Long Term Incentive Plan.
assumes no exercise of the underwriters option to purchase
up to an aggregate
of
additional shares of our common stock; and
assumes an initial public offering price of
$ per share, the midpoint of
the price range set forth on the cover page of this prospectus.
6
Table of Contents
Cinemark, Inc.
Cinemark Holdings, Inc.
Predecessor
Successor
January 1,
April 2,
Pro Forma
2004
2004
Nine Months
Year Ended
to
to
Year Ended
Nine Months
Year Ended
Ended
December 31,
April 1,
December 31,
December 31,
Ended September 30,
December 31,
September 30,
2003
2004
2004
2005
2005
2006
2005
2006
(Dollars
in thousand, except per share data)
Statement of Operations
Data
(1)
:
$
597,548
$
149,134
$
497,865
$
641,240
$
470,535
$
514,183
$
982,699
$
779,085
300,568
72,480
249,141
320,072
234,564
260,223
457,190
369,864
52,756
12,011
43,611
59,285
41,909
54,683
74,559
64,844
$
950,872
$
233,625
$
790,617
$
1,020,597
$
747,008
$
829,089
$
1,514,448
$
1,213,793
135,563
556
73,620
63,501
78,838
98,187
118,440
145,745
47,389
(9,068
)
(7,842
)
(25,408
)
12,578
21,170
(39,762
)
16,759
$
44,649
$
(10,633
)
$
(3,687
)
$
(25,408
)
$
12,578
$
21,170
$
(39,762
)
$
16,759
$
1.10
$
(0.26
)
$
(0.13
)
$
(0.91
)
$
0.45
$
0.76
$
(1.28
)
$
0.54
$
1.09
$
(0.26
)
$
(0.13
)
$
(0.91
)
$
0.45
$
0.74
$
(1.28
)
$
0.53
40,516
40,614
27,675
27,784
27,746
27,896
31,172
31,285
40,795
40,614
27,675
27,784
27,746
28,453
31,172
31,841
7
Table of Contents
Cinemark, Inc.
Cinemark Holdings, Inc.
Predecessor
Successor
January 1,
April 2,
Pro Forma
2004
2004
Nine Months
Year Ended
to
to
Year Ended
Nine Months
Year Ended
Ended
December 31,
April 1,
December 31,
December 31,
Ended September 30,
December 31,
September 30,
2003
2004
2004
2005
2005
2006
2005
2006
(Dollars
in thousands)
$
135,522
$
10,100
$
112,986
$
165,270
$
84,070
$
80,425
(47,151
)
(16,210
)
(100,737
)
(81,617
)
(53,455
)
(76,395
)
(45,738
)
346,983
(361,426
)
(3,750
)
(1,477
)
(44,293
)
51,002
17,850
63,158
75,605
47,676
77,902
$
210,122
$
50,608
$
178,632
$
210,135
$
152,127
$
180,285
$
323,750
$
267,535
22.1%
21.7%
22.6%
20.6%
20.4%
21.7%
21.4%
22.0%
Cinemark, Inc.
Cinemark Holdings, Inc.
Predecessor
Successor
Pro Forma
As of
As of
As of
December 31,
December 31,
As of September 30,
September 30,
2003
2004
2005
2006
2006
(In thousands)
$
107,322
$
100,248
$
182,199
$
142,204
$
78,594
775,880
794,723
803,269
806,393
1,411,347
960,736
1,831,855
1,864,852
1,830,803
3,152,165
658,431
1,026,055
1,055,095
1,038,926
2,022,092
76,946
533,200
519,349
546,680
690,535
Table of Contents
Cinemark Inc.
Cinemark Holdings, Inc.
Predecessor
Successor
As of and
January 1,
April 2,
As of and
Cinemark and Century Combined
for the
2004
2004
for the
Nine Months
Year Ended
to
to
Year Ended
Year Ended
Ended
December 31,
April 1,
December 31,
December 31,
As of and for Nine Months Ended September 30,
December 31,
September 30,
2003
2004
2004
2005
2005
2006
2005
2006
(Attendance in thousands)
189
191
191
200
197
202
276
279
2,244
2,262
2,303
2,417
2,369
2,468
3,412
3,485
112,581
25,790
87,856
105,573
78,257
81,558
152,093
117,506
97
95
101
108
106
113
108
113
852
835
869
912
898
945
912
945
60,553
15,791
49,904
60,104
45,270
46,930
60,104
46,930
286
286
292
308
303
315
384
392
3,096
3,097
3,172
3,329
3,267
3,413
4,324
4,430
173,134
41,581
137,760
165,677
123,527
128,488
212,197
164,436
(1)
Statement of Operations Data (other than net income (loss)),
non-GAAP Data and attendance data exclude the results of the two
United Kingdom theatres and the eleven Interstate theatres for
all periods presented as these theatres were sold during the
period from April 2, 2004 through December 31, 2004.
The results of operations for these theatres in the 2003 and
2004 periods are presented as discontinued operations. See
note 6 to our annual consolidated financial statements.
(2)
We set forth our definitions of Adjusted EBITDA and Adjusted
EBITDA margin and a reconciliation of net income (loss) to
Adjusted EBITDA at Non-GAAP Financial Measures
and Reconciliations.
(3)
The data excludes certain theatres operated by us in the
U.S. pursuant to management agreements that are not part of
our consolidated operations.
(4)
The data for 2003 excludes theatres, screens and attendance for
eight theatres and 46 screens acquired on December 31,
2003, as the results of operations for these theatres are not
included in our 2003 consolidated results of operations.
(5)
The data excludes certain theatres operated internationally
through our affiliates that are not part of our consolidated
operations.
Table of Contents
Cinemark Inc.
Cinemark Holdings, Inc.
Predecessor
Successor
Pro Forma
Nine Months
Nine Months
Nine Months
Year Ended
January 1, 2004
April 2, 2004
Year Ended
Ended
Ended
Year Ended
Ended
December 31,
to April 1,
to December 31,
December 31,
September 30,
September 30,
December 31,
September 30,
2003
2004
2004
2005
2005
2006
2005
2006
(Dollars in thousands)
$
44,649
$
(10,633
)
$
(3,687
)
$
(25,408
)
$
12,578
$
21,170
$
(39,762
)
$
16,759
25,041
(3,703
)
18,293
9,408
7,026
9,576
2,176
3,411
54,163
12,562
58,149
84,082
61,996
67,108
162,131
125,200
8,970
765
5,020
(4,581
)
(2,762
)
333
(6,105
)
375
2,740
1,565
(4,155
)
65,085
16,865
58,266
81,952
61,005
61,541
136,791
102,670
3,087
4,174
3,131
2,982
4,203
3,004
(1,738
)
(1,303
)
5,049
1,000
36,721
51,677
2,917
5,199
51,677
5,605
(1,202
)
(513
)
3,602
4,436
2,879
5,300
9,393
5,361
4,547
560
3,336
4,395
3,357
4,928
4,984
4,305
31,995
1,080
145
2,148
2,148
$
210,122
$
50,608
$
178,632
$
210,135
$
152,127
$
180,285
$
323,750
$
267,535
22.1
%
21.7
%
22.6
%
20.6
%
20.4
%
21.7
%
21.4
%
22.0
%
(1)
Includes amortization of debt issue costs.
10
Table of Contents
Century Theatres, Inc.
Year Ended
Year Ended
Year Ended
September 30,
September 29,
September 28,
2004
2005
2006
(Dollars in thousands)
$
33,242
$
27,256
$
18,124
21,216
17,310
12,674
11,713
13,081
29,367
(1,045
)
(1,403
)
(282
)
45,635
49,500
47,116
(1,734
)
(1,738
)
(1,738
)
295
406
110
4,967
61
1,803
744
(565
)
15,672
$
111,235
$
109,717
$
120,835
22.3
%
22.5
%
23.4
%
(1)
Reflects change of control payments of $15.7 million as a
result of the Century acquisition.
(2)
Century had no stock option plan during the periods presented.
11
Table of Contents
12
Table of Contents
making it more difficult for us to satisfy our obligations;
requiring us to dedicate a substantial portion of our cash flow
to payments on our lease and debt obligations, thereby reducing
the availability of our cash flow to fund working capital,
capital expenditures, acquisitions and other corporate
requirements and to pay dividends;
impeding our ability to obtain additional financing in the
future for working capital, capital expenditures, acquisitions
and general corporate purposes;
subjecting us to the risk of increased sensitivity to interest
rate increases on our variable rate debt, including our
borrowings under our new senior secured credit facility; and
making us more vulnerable to a downturn in our business and
competitive pressures and limiting our flexibility to plan for,
or react to, changes in our business.
13
Table of Contents
14
Table of Contents
15
Table of Contents
16
Table of Contents
authorization of our Board of Directors to issue shares of
preferred stock without stockholder approval;
a board of directors classified into three classes of directors
with the directors of each class having staggered, three-year
terms;
provisions regulating the ability of our stockholders to
nominate directors for election or to bring matters for action
at annual meetings of our stockholders; and
provisions of Delaware law that restrict many business
combinations and provide that directors serving on classified
boards of directors, such as ours, may be removed only for cause.
17
Table of Contents
18
Table of Contents
19
Table of Contents
future revenues, expenses and profitability;
the future development and expected growth of our business;
projected capital expenditures;
attendance at movies generally or in any of the markets in which
we operate;
the number or diversity of popular movies released and our
ability to successfully license and exhibit popular films;
national and international growth in our industry;
competition from other exhibitors and alternative forms of
entertainment; and
determinations in lawsuits in which we are defendants.
20
Table of Contents
21
Table of Contents
on an actual basis;
on a pro forma basis to reflect the following transactions in
connection with the Century acquisition: (a) borrowings of
$1,120 million under our new senior secured credit
facility, (b) application of the net proceeds from those
borrowings to pay off $360 million under Centurys
then existing credit facility and $253.5 million under our
former senior secured credit facility and to fund a portion of
the purchase price for the Century acquisition, (c) the
issuance
of shares
of our common stock to pay approximately $150 million of
the purchase price for the Century acquisition, (d) the use
of $53 million of cash to pay the remaining portion of the
purchase price for the Century acquisition and related
transaction expenses and (e) the advance of $17 million of
cash to Century to satisfy working capital obligations;
on a pro forma basis as adjusted to reflect our receipt of the
estimated net proceeds from this offering at an assumed initial
public offering price of $ per
share, and the application of those proceeds.
As of September 30, 2006
Pro Forma
Actual
Pro Forma
As Adjusted
(In thousands)
(Unaudited)
$
142,204
$
78,594
$
253,500
1,120,000
423,869
423,869
351,216
351,216
116,666
10,341
10,341
1,038,926
2,022,092
17,145
17,145
28
31
534,747
684,744
(732
)
(732
)
12,637
6,492
546,680
690,535
$
1,602,751
$
2,729,772
$
22
Table of Contents
(1)
Actual, pro forma and pro forma as adjusted amounts shown are
net of unamortized debt premiums of approximately
$19.0 million associated with the issuance of the
9% senior subordinated notes.
23
Table of Contents
$
$
$
$
$
Average
Shares Purchased
Total Consideration
Price Per
Number
Percent
Amount
Percent
Share
%
$
%
$
%
$
%
%
$
%
24
Table of Contents
Cinemark, Inc.
Cinemark Holdings, Inc.
Predecessor
Successor
January 1, 2004
April 2, 2004
Year Ended
Nine Months Ended
Year Ended December 31,
to
to
December 31,
September 30,
2001
2002
2003
April 1, 2004
December 31, 2004
2005
2005
2006
(Dollars in thousands, except per share data)
$
548,786
$
595,287
$
597,548
$
149,134
$
497,865
$
641,240
$
470,535
$
514,183
257,442
291,807
300,568
72,480
249,141
320,072
234,564
260,223
47,113
48,760
52,756
12,011
43,611
59,285
41,909
54,683
$
853,341
$
935,854
$
950,872
$
233,625
$
790,617
$
1,020,597
$
747,008
$
829,089
58,160
130,443
135,563
556
73,620
63,501
78,838
98,187
(3,456
)
40,509
47,389
(9,068
)
(7,842
)
(25,408
)
12,578
21,170
$
(4,021
)
$
35,476
$
44,649
$
(10,633
)
$
(3,687
)
$
(25,408
)
$
12,578
$
21,170
$
(0.10
)
$
0.88
$
1.10
$
(0.26
)
$
(0.13
)
$
(0.91
)
$
0.45
$
0.76
$
(0.10
)
$
0.87
$
1.09
$
(0.26
)
$
(0.13
)
$
(0.91
)
$
0.45
$
0.74
39,497
40,513
40,516
40,614
27,675
27,784
27,746
27,896
39,497
40,625
40,795
40,614
27,675
27,784
27,746
28,453
$
87,117
$
150,119
$
135,522
$
10,100
$
112,986
$
165,270
$
84,070
$
80,425
(33,799
)
(34,750
)
(47,151
)
(16,210
)
(100,737
)
(81,617
)
(53,455
)
(76,395
)
(21,508
)
(96,140
)
(45,738
)
346,983
(361,426
)
(3,750
)
(1,477
)
(44,293
)
40,352
38,032
51,002
17,850
63,158
75,605
47,676
77,902
$
170,085
$
206,270
$
210,122
$
50,608
$
178,632
$
210,135
$
152,127
$
180,285
19.9
%
22.0
%
22.1
%
21.7
%
22.6
%
20.6
%
20.4
%
21.7
%
25
Table of Contents
Cinemark, Inc.
Cinemark Holdings, Inc.
Predecessor
Successor
As of
As of December 31,
September 30,
2001
2002
2003
2004
2005
2006
(In thousands)
$
50,199
$
63,719
$
107,322
$
100,248
$
182,199
$
142,204
866,406
791,731
775,880
794,723
803,269
806,393
996,544
916,814
960,736
1,831,855
1,864,852
1,830,803
780,956
692,587
658,431
1,026,055
1,055,095
1,038,926
25,337
27,664
76,946
533,200
519,349
546,680
Cinemark, Inc.
Cinemark Holdings, Inc.
Predecessor
Successor
As of
and for
As of and for the
As of and for the
Year Ended
As of and for Nine Months Ended
As of and for Year Ended December 31,
Period From
Period From
December 31,
September 30,
January 1, 2004
April 2, 2004
to
to
2001
2002
2003
April 1, 2004
December 31, 2004
2005
2005
2006
(Attendance in thousands)
188
188
189
191
191
200
197
202
2,217
2,215
2,244
2,262
2,303
2,417
2,369
2,468
100,022
111,959
112,581
25,790
87,856
105,573
78,257
81,558
88
92
97
95
101
108
106
113
783
816
852
835
869
912
898
945
53,853
60,109
60,553
15,791
49,904
60,104
45,270
46,930
276
280
286
286
292
308
303
315
3,000
3,031
3,096
3,097
3,172
3,329
3,267
3,413
153,875
172,068
173,134
41,581
137,760
165,677
123,527
128,488
(1)
Statement of Operations Data (other than net income (loss)),
non-GAAP
Data and attendance data exclude the results of the two United
Kingdom theatres and the eleven Interstate theatres for all
periods presented as these theatres were sold during the period
from April 2, 2004 to December 31, 2004. The results
of operations for these theatres in the 2003 and 2004 periods
are presented as discontinued operations. See note 6 to our
annual consolidated financial statements.
(2)
We set forth our definitions of Adjusted EBITDA and Adjusted
EBITDA margin and a reconciliation of net income (loss) to
Adjusted EBITDA at Non-GAAP Financial
Measures and Reconciliation.
(3)
The data excludes certain theatres operated by us in the
U.S. pursuant to management agreements that are not part of
our consolidated operations.
(4)
The data excludes certain theatres operated internationally
through our affiliates that are not part of our consolidated
operations.
(5)
The data for 2003 excludes theatres, screens and attendance for
eight theatres and 46 screens acquired on December 31,
2003, as the results of operations for these theatres are not
included in our 2003 consolidated results of operations.
Table of Contents
Cinemark, Inc.
Cinemark Holdings, Inc.
Predecessor
Successor
April 2,
Nine Months
January 1,
2004 to
Year Ended
Ended
Year Ended December 31,
2004 to
December 31,
December 31,
September 30,
2001
2002
2003
April 1, 2004
2004
2005
2005
2006
(In thousands)
$
(4,021
)
$
35,476
$
44,649
$
(10,633
)
$
(3,687
)
$
(25,408
)
$
12,578
$
21,170
(14,115
)
29,092
25,041
(3,703
)
18,293
9,408
7,026
9,576
70,931
57,793
54,163
12,562
58,149
84,082
61,996
67,108
4,800
3,150
8,970
765
5,020
(4,581
)
(2,762
)
333
3,390
565
1,542
2,740
1,565
(4,155
)
73,078
66,583
65,085
16,865
58,266
81,952
61,005
61,541
3,087
4,174
3,131
2,982
20,723
3,869
5,049
1,000
36,721
51,677
2,917
5,199
12,408
470
(1,202
)
(513
)
3,602
4,436
2,879
5,300
4,702
3,802
4,547
560
3,336
4,395
3,357
4,928
31,995
1,014
1,103
1,080
145
2,148
$
170,085
$
206,270
$
210,122
$
50,608
$
178,632
$
210,135
$
152,127
$
180,285
19.9
%
22.0
%
22.1
%
21.7
%
22.6
%
20.6
%
20.4
%
21.7
%
(1)
Includes amortization of debt issue costs.
27
Table of Contents
28
Table of Contents
29
Table of Contents
30
Table of Contents
Adjustments
Cinemark
Century
to Reflect Century
Historical
Historical
Acquisition
Pro Forma
(In thousands)
$
514,183
$
264,902
$
$
779,085
260,223
109,641
369,864
54,683
10,161
64,844
829,089
384,704
1,213,793
275,005
137,711
412,716
41,863
16,043
57,906
79,002
41,216
120,218
113,128
44,733
157,861
100,924
39,226
140,150
609,922
278,929
888,851
45,958
32,271
(15,672
)(7)
62,557
61,541
36,200
4,929
(5)
102,670
2,982
22
(6)
3,004
5,199
406
5,605
5,300
61
5,361
730,902
347,867
(10,721
)
1,068,048
98,187
36,837
10,721
145,745
(64,949
)
(26,033
)
(29,392
)(8)
(120,374
)
(2,159
)
(454
)
(2,213
)(8)
(4,826
)
5,563
567
6,130
(5,896
)
(609
)
(6,505
)
(67,441
)
(26,529
)
(31,605
)
(125,575
)
30,746
10,308
(20,884
)
20,170
9,576
4,376
(10,541
)(9)
3,411
$
21,170
$
5,932
$
(10,343
)
$
16,759
$
0.76
$
0.54
$
0.74
$
0.53
31
Table of Contents
Adjustments
Cinemark
Century
to Reflect Century
Historical
Historical
Acquisition
Pro Forma
(In thousands)
$
641,240
$
341,459
$
$
982,699
320,072
137,118
457,190
59,285
15,274
74,559
1,020,597
493,851
1,514,448
347,727
178,275
526,002
52,507
20,124
72,631
101,431
52,641
154,072
138,477
55,917
194,394
123,831
45,676
169,507
763,973
352,633
1,116,606
50,884
26,454
77,338
81,952
48,559
6,280
(5)
136,791
4,174
29
(6)
4,203
51,677
51,677
4,436
4,957
9,393
957,096
432,603
6,309
1,396,008
63,501
61,248
(6,309
)
118,440
(81,342
)
(12,736
)
(61,757
)(8)
(155,835
)
(2,740
)
(3,556
)(8)
(6,296
)
6,600
1,045
7,645
(2,019
)
479
(1,540
)
(79,501
)
(11,212
)
(65,313
)
(156,026
)
(16,000
)
50,036
(71,622
)
(37,586
)
9,408
19,600
(26,832
)(9)
2,176
$
(25,408
)
$
30,436
$
(44,790
)
$
(39,762
)
$
(0.91
)
$
(1.28
)
$
(0.91
)
$
(1.28
)
32
Table of Contents
(1)
Reflects the estimated allocation of the purchase price paid to
acquire Century. Under the purchase method of accounting, the
total consideration paid is allocated to Centurys tangible
and intangible assets and liabilities based on their estimated
fair values as of the date of the Century acquisition. The
purchase price has been allocated based on preliminary estimates
of fair values of the acquired assets and assumed liabilities
with the assistance of independent third party valuation
advisors and based on our experience with acquired businesses
and their related valuations and purchase price allocations. The
allocation is subject to revisions as requested information
becomes available and such revisions could be material.
$
531,226
150,000
6,899
$
688,125
$
(126,535
)
178,536
(947
)
136,000
(5,600
)
(5,057
)
(4,577
)
(135,519
)
28,604
20,677
(152
)
$
85,430
$
602,695
(2)
Reflects the pro forma adjustments to stockholders equity
to effect the Century acquisition. The issuance of capital stock
is reflected in common stock at par value of $3 and additional
paid-in-capital of $149,997.
(3)
Reflects the reduction in available cash to fund a portion of
the cash requirements to effect the Century acquisition, which
includes approximately $53,000 for a portion of the purchase
price and approximately $17,000 to satisfy working capital
obligations.
(4)
In connection with the closing of the Century acquisition,
Cinemark USA, Inc. entered into a new senior secured credit
facility, and used the proceeds of $1,120,000 ($11,200 of which
is classified as a current liability) under the new term loan to
fund the majority of cash portion of the purchase price, to pay
off approximately $360,000 ($3,600 of which was classified as a
current liability) under Centurys then existing senior
credit facility and $2,037 of accrued interest payable and to
repay in full all outstanding amounts under Cinemark USA,
Inc.s former senior secured credit facility of
approximately $253,500 ($2,600 of which was classified as a
current liability). Debt issue costs related to the new senior
secured credit facility were $22,767. Historical debt issue
costs related to Cinemark USA, Inc.s former senior secured
credit facility of $6,145 were written off.
(5)
Reflects the depreciation related to the increase in theatre
property and equipment to fair value pursuant to purchase
accounting for the Century acquisition.
33
Table of Contents
(6)
Reflects the amortization associated with intangible assets
recorded pursuant to the purchase method of accounting for the
Century acquisition as follows:
Amount
$
602,695
Indefinite life
136,000
Indefinite life
(5,600
)
Remaining term of the lease
commitments ranging from one to thirty years
(7)
To give effect to the elimination of change of control payments
to Centurys management for the nine months ended
September 30, 2006.
(8)
Reflects interest expense and amortization of debt issuance
costs resulting from the changes to Cinemark USA, Inc.s
debt structure:
Nine Months
Ended
Year Ended
September 30,
December 31,
2006
2005
$
(13,879
)
$
(16,604
)
(18,217
)
(3,623
)
61,488
81,984
$
29,392
$
61,757
Nine Months
Ended
Year Ended
September 30,
December 31,
2006
2005
$
(179
)
$
(239
)
(454
)
2,846
3,795
$
2,213
$
3,556
(9)
To reflect the tax effect of the pro forma adjustments at our
statutory income tax rate of 39%.
(10)
To reflect operations between September 28, 2006 and
October 5, 2006, the period prior to the Century
acquisition.
(11)
To reflect accrual of transaction fees not settled in cash at
closing.
34
Table of Contents
AND RESULTS OF OPERATIONS
35
Table of Contents
36
Table of Contents
actual theatre level cash flows;
future years budgeted theatre level cash flows;
theatre property and equipment carrying values;
theatre goodwill carrying values;
amortizing intangible assets carrying values;
the age of a recently built theatre;
competitive theatres in the marketplace;
the sharing of a marketplace with our other theatres;
changes in foreign currency exchange rates;
the impact of recent ticket price changes;
available lease renewal options; and
other factors considered relevant in our assessment of
impairment of individual theatre assets.
37
Table of Contents
38
Table of Contents
Nine Months Ended
Year Ended December 31,
September 30,
2003
2004
2005
2005
2006
(Dollars in millions, except screen related data)
$
597.5
$
647.0
$
641.2
$
470.5
$
514.2
300.6
321.6
320.1
234.6
260.2
52.8
55.6
59.3
41.9
54.7
$
950.9
$
1,024.2
$
1,020.6
$
747.0
$
829.1
$
324.9
$
348.8
$
347.7
$
253.5
$
275.0
49.7
53.8
52.5
38.2
41.9
97.2
103.1
101.5
75.2
79.0
119.5
128.7
138.5
102.4
113.1
110.8
113.0
123.8
90.9
100.9
$
702.1
$
747.4
$
764.0
$
560.2
$
609.9
62.8
%
63.2
%
62.8
%
63.0
%
62.0
%
31.6
31.4
31.4
31.4
31.4
5.6
5.4
5.8
5.6
6.6
100.0
%
100.0
%
100.0
%
100.0
%
100.0
%
54.4
%
53.9
%
54.2
%
53.9
%
53.5
%
16.5
16.7
16.4
16.3
16.1
10.2
10.1
9.9
10.1
9.5
12.6
12.6
13.6
13.7
13.6
11.7
11.0
12.1
12.2
12.2
73.8
%
73.0
%
74.9
%
75.0
%
73.6
%
3,027
3,135
3,239
3,217
3,375
$
314,178
$
326,664
$
315,104
$
232,185
$
245,649
(1)
Results exclude the results of our two United Kingdom theatres
and our eleven Interstate theatres sold during 2004. The results
of operations for these theatres are included as discontinued
operations for 2003 and 2004.
(2)
All costs are expressed as a percentage of total revenues,
except film rentals and advertising, which are expressed as a
percentage of admissions revenues, and concession supplies,
which are expressed as a percentage of concession revenues.
(3)
Excludes depreciation and amortization.
39
Table of Contents
Nine Months Ended
September 30,
2005
2006
% Change
$
470.5
$
514.2
9.3%
$
234.6
$
260.2
10.9%
$
41.9
$
54.7
30.5%
$
747.0
$
829.1
11.0%
123.5
128.5
4.0%
$
3.81
$
4.00
5.1%
$
1.90
$
2.03
6.7%
$
232,185
$
245,649
5.8%
40
Table of Contents
41
Table of Contents
Year Ended December 31,
2004
2005
% Change
$
647.0
$
641.2
(0.9
)%
$
321.6
$
320.1
(0.5
)%
$
55.6
$
59.3
6.7
%
$
1,024.2
$
1,020.6
(0.4
)%
179.3
165.7
(7.6
)%
$
3.61
$
3.87
7.2
%
$
1.79
$
1.93
7.8
%
$
326,664
$
315,104
(3.6
)%
42
Table of Contents
43
Table of Contents
Year Ended December 31,
2003
2004
% Change
$
597.5
$
647.0
8.3
%
$
300.6
$
321.6
7.0
%
$
52.8
$
55.6
5.3
%
$
950.9
$
1,024.2
7.7
%
173.1
179.3
3.6
%
$
3.45
$
3.61
4.6
%
$
1.74
$
1.79
2.9
%
$
314,178
$
326,664
4.0
%
44
Table of Contents
45
Table of Contents
New Theatres
Existing Theatres
Total
$
33.7
$
17.3
$
51.0
$
61.5
$
19.5
$
81.0
$
50.3
$
25.3
$
75.6
$
33.8
$
13.9
$
47.7
$
52.1
$
25.8
$
77.9
46
Table of Contents
Payments Due by Period
Less Than
1 - 3
4 - 5
After
Total
One Year
Years
Years
5 Years
(In millions)
$
1,150.7
$
5.5
$
11.1
$
247.2
$
886.9
561.5
49.0
111.7
182.1
218.7
1,511.6
128.3
259.5
245.9
877.9
0.1
0.1
9.3
3.1
6.2
66.8
18.5
46.6
1.1
0.6
$
3,300.0
$
204.5
$
435.1
$
676.3
$
1,984.1
47
Table of Contents
Pro Forma Payments Due by Period
Less Than
1 - 3
4 - 5
After
Total
One Year
Years
Years
5 Years
(In millions)
$
2,017.2
$
14.1
$
28.3
$
23.9
$
1,950.9
1,004.9
112.3
236.4
321.7
334.5
1,954.1
160.0
325.3
313.1
1,155.7
116.7
3.5
8.2
9.5
95.5
122.2
12.5
23.7
22.2
63.8
0.1
0.1
9.3
3.1
6.2
169.8
18.5
149.6
1.1
0.6
$
5,394.3
$
324.1
$
777.7
$
691.5
$
3,601.0
(1)
Includes the
9
3
/
4
% senior
discount notes in the aggregate principal amount at maturity of
$535.6 million.
(2)
Amounts include scheduled interest payments on fixed rate and
variable rate debt agreements. Estimates for the variable rate
interest payments were based on interest rates in effect on
September 30, 2006. The average interest rates on our fixed
rate and variable rate debt were 9.5% and 7.3%, respectively, as
of September 30, 2006.
(3)
Includes estimated capital expenditures associated with the
construction of new theatres to which we were committed as of
September 30, 2006.
Table of Contents
49
Table of Contents
50
Table of Contents
51
Table of Contents
52
Table of Contents
Average
December 31,
Fair
Interest
2006
2007
2008
2009
2010
Thereafter
Total
Value
Rate
(In millions)
$
0.1
$
$
$
$
$
939.5
$
939.6
$
792.8
9.5
%
6.8
5.5
4.3
4.1
185.1
61.1
266.9
268.4
6.6
%
$
6.9
$
5.5
$
4.3
$
4.1
$
185.1
$
1,000.6
$
1,206.5
$
1,061.2
Average
September 30,
Fair
Interest
2007
2008
2009
2010
2011
Thereafter
Total
Value
Rate
(In millions)
$
0.1
$
$
$
$
$
886.9
$
887.0
$
771.8
9.5
%
5.4
6.8
4.3
125.0
122.2
263.7
265.7
7.3
%
$
5.5
$
6.8
$
4.3
$
125.0
$
122.2
$
886.9
$
1,150.7
$
1,037.5
Average
Fair
Interest
2007
2008
2009
2010
2011
Thereafter
Total
Value
Rate
(In millions)
$
0.1
$
$
$
$
$
886.9
$
887.0
$
771.8
9.5
%
14.0
15.4
12.9
12.7
11.2
1,064.0
1,130.2
1,144.4
7.3
%
$
14.1
$
15.4
$
12.9
$
12.7
$
11.2
$
1,950.9
$
2,017.2
$
1,916.2
(1)
Includes the
9
3
/
4
%
senior discount notes in the aggregate principal amount at
maturity of $575.3 million at December 31, 2005 and
$535.6 million at September 30, 2006.
53
Table of Contents
54
Table of Contents
Advertising:
NCM develops, produces,
sells and distributes a branded, pre-feature entertainment and
advertising program called
FirstLook
, along
with an advertising program for its LEN and various marketing
and promotional products in theatre lobbies;
CineMeetings:
NCM provides live and
pre-recorded networked and single-site meetings and events in
the theatres throughout its network; and
Digital Programming Events:
NCM
distributes live and pre-recorded concerts, sporting events and
other entertainment programming to theatres across its digital
network.
55
Table of Contents
U.S. Box
Office
Revenues
($ in millions)
$
5,912
$
6,366
$
6,949
$
7,448
$
7,661
$
8,413
$
9,520
$
9,489
$
9,539
$
8,991
56
Table of Contents
57
Table of Contents
58
Table of Contents
Total
Total
Theatres
Screens
74
955
63
707
19
205
12
155
9
138
7
111
8
106
7
98
7
83
6
82
5
73
5
68
6
67
4
54
4
52
3
50
5
46
4
41
3
41
2
40
4
39
3
30
2
27
2
27
2
22
1
20
1
16
1
16
1
14
1
14
1
14
1
14
1
12
1
10
1
10
1
8
1
8
278
3,473
1
12
279
3,485
59
Table of Contents
Total
Total
Theatres
Screens
35
302
29
282
12
91
12
80
9
77
8
50
4
26
4
37
113
945
(1)
Includes Honduras, El Salvador, Nicaragua, Costa Rica and Panama.
60
Table of Contents
Optimization of product mix.
Concession
products are primarily comprised of various sizes of popcorn,
soft drinks and candy. Different varieties and flavors of candy
and soft drinks are offered at theatres based on preferences in
that particular geographic region. Specially priced combos are
launched on a regular basis to increase average concession
purchases as well as to attract new buyers. Kids meals are
also offered and packaged towards younger patrons.
Staff training.
Employees are continually
trained in suggestive-selling and
upselling techniques. This training occurs through
situational role-playing conducted at our Customer
Satisfaction University as well as continued
on-the-job
training. Theatre managers receive additional compensation based
on concession sales at their theatres and are therefore
motivated to maximize concession sales. Consumer promotions
conducted at the concession stand always include a motivational
element which rewards theatre staff for exceptional combo sales
during the period.
61
Table of Contents
Theatre design.
Our theatres are designed to
optimize efficiencies at the concession stands, which include
multiple service stations to facilitate serving more customers
quicker. We strategically place large concession stands within
theatres to heighten visibility, reduce the length of concession
lines, and improve traffic flow around the concession stands.
Centurys concession areas are designed as individual
stations which allow customers to select their choice of
refreshments and proceed to the cash register. This design
permits efficient service, enhanced choice and superior
visibility of concession items. As we continue to integrate
Century into our operations, we will evaluate this concession
design against our historical design to determine the most
optimum layout.
Cost control.
We negotiate prices for
concession supplies directly with concession vendors and
manufacturers to obtain bulk rates. Concession supplies are
distributed through a national distribution network. The
concession distributor supplies and distributes inventory to the
theatres, which place volume orders directly with the vendors to
replenish stock. The concession distributor is paid a percentage
fee for warehousing and delivery of concession goods on a weekly
basis.
Sales.
We employ sales personnel at our
corporate office who work with NCM to oversee the development
and implementation of a comprehensive domestic theatre rental
and group sales effort. NCM and our sales department are
responsible for increasing theatre rental income during periods
when the theatre is normally closed and maximizing group film
bookings to specialized groups such as schools, daycare centers
and religious organizations. We believe the large lobbies,
comfortable seating, big screens and sound capabilities make our
theatres an attractive venue for corporate events, private
parties, private screenings and team building meetings. With the
digital equipment that will be installed in the majority of our
theatres, we can also offer capacity to do PowerPoint and other
presentations for corporate meetings. We believe the trend to
use theatre auditoriums for non-film events during non-peak
times will increase, which will add revenues and attract new
audiences to our theatres while not significantly increasing
costs. In addition, targeted efforts to sell niche films to
particular groups will also increase overall revenues.
62
Table of Contents
Business Development.
Our marketing personnel
are responsible for the sale of our gift cards, gift
certificates and discount tickets, which are called SuperSavers.
We market these programs to such business representatives as
realtors, human resource managers, incentive program managers
and hospital and pharmaceutical personnel. Gift cards and gift
certificates can be purchased at our theatres. Gift cards, gift
certificates and SuperSavers are also sold online, via phone,
fax, email and regular mail and fulfilled in-house from the
local corporate office.
location, accessibility and capacity of an exhibitors
theatre;
theatre comfort;
quality of projection and sound equipment;
level of customer service; and
licensing terms.
63
Table of Contents
64
Table of Contents
65
Table of Contents
66
Table of Contents
69
Chairman of the Board; Director
46
Chief Executive Officer
61
President; Chief Operating Officer
56
Executive Vice President;
Assistant Secretary
48
Executive Vice President;
Treasurer; Chief Financial Officer; Assistant Secretary
48
Senior Vice President-Operations
40
Senior Vice President-General
Counsel; Secretary
61
Senior Vice President-Purchasing
49
Senior Vice President-Development
57
Vice President-Film Licensing
49
Vice President-Construction
56
Vice President-Marketing and
Communications
48
Director
46
Director
40
Director
33
Director
63
Director
46
Director
44
Director
41
Director
67
Table of Contents
68
Table of Contents
Expiration
Members
of Term
69
Table of Contents
assist the Board of Directors in its oversight responsibilities
regarding (1) the integrity of our financial statements,
(2) our risk management compliance with legal and
regulatory requirements, (3) our system of internal
controls regarding finance and accounting and (4) our
accounting, auditing and financial reporting processes
generally, including the qualifications, independence and
performance of the independent auditor;
prepare the report required by the SEC for inclusion in our
annual proxy or information statement;
appoint, retain, compensate, evaluate and terminate our
independent accountants;
approve audit and non-audit services to be performed by the
independent accountants;
establish procedures for the receipt, retention and treatment of
complaints received by our company regarding accounting,
internal accounting controls or auditing matters, and the
confidential, anonymous submission by employees of concerns
regarding questionable accounting or auditing matters; and
perform such other functions as the Board of Directors may from
time to time assign to the audit committee.
70
Table of Contents
71
Table of Contents
72
Table of Contents
the allocation between long-term and currently paid out
compensation;
the allocation between cash and non-cash compensation, and among
different forms of non-cash compensation;
the allocation among each different form of long-term award;
how the determination is made as to when awards are granted,
including awards of equity-based compensation such as
options; and
stock ownership guidelines and any policies regarding hedging
the economic risk of such ownership.
All Other
Salary
Bonus
Option Awards
Compensation
Total
Year
($)
($)(1)
($)(2)
($)
($)
2006
$
763,958
$
$
24,701
(4)
$
788,659
2006
452,097
415,761
634,180
(5)
1,502,038
2006
366,616
415,761
14,772
(6)
797,149
2006
330,118
415,761
16,631
(7)
762,510
2006
318,247
270,244
15,578
(8)
604,069
(1)
We have not determined the amounts of the bonuses that are
payable to the named executive officers for 2006. We expect to
determine these amounts and pay the bonuses in February 2007.
(2)
These amounts represent the dollar amount of compensation cost
we recognized during 2006 for awards granted during 2004 based
on the grant date fair value of the named executive
officers option awards in accordance with
SFAS 123(R). See note 4 to our unaudited interim
consolidated financial statements for assumptions used in
determining compensation expense on options granted in
accordance with SFAS 123R.
(3)
Effective December 12, 2006, Mr. Mitchell stepped down
as our Chief Executive Officer. Mr. Stock was elected to
replace Mr. Mitchell as our Chief Executive Officer.
Mr. Mitchell will continue to serve as our
73
Table of Contents
Chairman of the Board of Directors. Mr. Stock had
previously served as our President since March 1993 and as Chief
Operating Officer since March 1992. Effective December 12,
2006, Mr. Warner was elected to replace Mr. Stock as
our President and Chief Operating Officer. Mr. Warner had
previously served as our Senior Vice President since May 2002
and President of Cinemark International, L.L.C. since April 1996.
(4)
Represents an $11,550 annual matching contribution to
Mr. Mitchells 401(k) savings plan, $10,250
representing the value of the use of a company vehicle for one
year and $2,901 of life insurance premiums and disability
insurance paid by us for the benefit of Mr. Mitchell.
(5)
Represents an $11,550 annual matching contribution to
Mr. Stocks 401(k) savings plan, $3,793 of life
insurance premiums and disability insurance paid by us for the
benefit of Mr. Stock and payments of $618,837 under
Mr. Stocks profit participation agreement for certain
of our theatres.
(6)
Represents an $11,550 annual matching contribution to
Mr. Warners 401(k) savings plan and $3,222 of life
insurance premiums and disability insurance paid by us for the
benefit of Mr. Warner.
(7)
Represents an $11,550 annual matching contribution to
Mr. Copples 401(k) savings plan and $5,081 of life
insurance premiums and disability insurance paid by us for the
benefit of Mr. Copple.
(8)
Represents an $11,550 annual matching contribution to
Mr. Carmonys 401(k) savings plan and $4,028 of life
insurance premiums and disability insurance paid by us for the
benefit of Mr. Carmony.
74
Table of Contents
75
Table of Contents
76
Table of Contents
77
Table of Contents
Option Awards
Number of
Number of
Securities
Securities
Underlying
Underlying
Unexercised Options
Unexercised Options
Option
(#)
(#)
Exercise Price
Option Expiration
Exercisable
Unexercisable
($)
Date
September 29, 2014
September 29, 2014
September 29, 2014
September 29, 2014
78
Table of Contents
Most Recent
Medical /
Other
Group
Salary
Bonus(1)
Dental
Life
Life
Disability(2)
Total
$
763,958
$
$
4,864
$
648
$
2,253
$
771,723
452,097
11,549
1,080
2,713
467,439
366,616
9,753
1,092
2,130
379,591
330,118
11,549
890
1,071
3,120
346,748
318,247
4,864
1,080
2,948
327,139
(1)
In 2005, the minimum Adjusted EBITDA target was not met and no
plan participant received a bonus under our incentive bonus
program.
(2)
Amounts for disability include long-term disability, individual
disability income protection insurance and short-term disability.
Fees
Earned or
Paid in Cash
Total
($)
($)
219,746
219,746
(1)
On January 19, 2007, we made a cash payment of $219,746 to
Mr. Senior for his services on our Board of Directors
through December 31, 2006. In addition,
on ,
2007 we granted Mr. Senior options to
purchase shares of common
stock at $ per share. Of
the options,
were vested on the date of grant
and will vest quarterly until
April 2009.
79
Table of Contents
(2)
Effective upon completion of the Century acquisition on
October 5, 2006, we appointed Raymond W. Syufy and Joseph
E. Syufy to our Board of Directors.
for any breach of the directors duty of loyalty to the
company or its stockholders;
for acts or omissions not in good faith or that involve
intentional misconduct or a knowing violation of law;
in respect of certain unlawful dividend payments or stock
redemptions or repurchases; and
for any transaction from which the director derives an improper
personal benefit.
for a right of indemnitee to bring a suit in the event a claim
for indemnification or advancement of expenses is not paid in
full by us within a specified period of time; and
permit us to purchase and maintain insurance, at our expense, to
protect us and any of our directors, officers and employees
against any loss, whether or not we would have the power to
indemnify that person against that loss under Delaware law.
80
Table of Contents
each person known by us to beneficially hold five percent or
more of our outstanding common stock;
each of our directors;
each of our named executive officers;
all of our executive officers and directors as a group; and
the selling stockholders.
Shares to
Beneficial Ownership Prior to the Offering
be Sold in
Beneficial Ownership Immediately After the Offering
Names of Beneficial Owner
Number
Percent
the Offering
Number
Percent
66.3
%
%
7.1
%
%
10.8
%
%
14.2
%
%
*
%
*
%
*
%
*
%
66.3
%
%
66.3
%
%
66.3
%
%
66.3
%
%
%
7.1
%
%
10.8
%
%
10.8
%
%
99.3
%
%
*
Represents less than 1%
(1)
Includes shares owned by
Northwestern
University, shares
owned by John Madigan
and shares owned by K&E
Investment Partners, L.P. 2004-B DIF. MDP has an
irrevocable proxy to vote these shares in all matters subject to
stockholder approval. The address of Madison Dearborn Capital
Partners IV, L.P. is Three First National Plaza,
Suite 3800, 70 West Madison Street, Chicago, Illinois
60602.
81
Table of Contents
(2)
Includes shares
owned by Quadrangle Select Partners
LP, shares owned by
Quadrangle Capital Partners A LP
and shares owned by
Quadrangle (Cinemark) Capital Partners LP. Quadrangle GP
Investors LLC is the general partner of Quadrangle GP Investors
LP. Quadrangle GP Investors LP is the general partner of
Quadrangle Capital Partners LP, Quadrangle Select Partners LP,
Quadrangle Capital Partners A LP and Quadrangle (Cinemark)
Capital Partners LP. Quadrangle Capital Partners LP disclaims
beneficial ownership of all shares held by Quadrangle Select
Partners LP and Quadrangle Capital Partners A LP. The address of
Quadrangle Capital Partners LP is c/o Quadrangle Group LLC,
375 Park Avenue, New York, New York 10152.
(3)
The address of Syufy Enterprises LP is 150 Pelican Way,
San Rafael, California 94901.
(4)
Includes shares of common
stock owned by the Mitchell Special Trust. Mr. Mitchell is
the co-trustee of the Mitchell Special Trust. Mr. Mitchell
expressly disclaims beneficial ownership of all shares held by
the Mitchell Special Trust. Mr. Mitchells address is
c/o Cinemark, Inc., 3900 Dallas Parkway, Suite 500,
Plano, Texas 75093.
(5)
Includes shares
of common stock issuable upon the exercise of options that may
be exercised within 60 days of the date hereof.
(6)
Includes shares
of common stock issuable upon the exercise of options that may
be exercised within 60 days of the date hereof.
(7)
Includes shares
of common stock issuable upon the exercise of options that may
be exercised within 60 days of the date hereof.
(8)
Includes shares
of common stock issuable upon the exercise of options that may
be exercised within 60 days of the date hereof.
(9)
The shares beneficially owned by MDCP IV may be deemed to be
beneficially owned by Madison Dearborn Partners IV, L.P. (or MDP
IV), the sole general partner of MDCP IV. John A. Canning, Jr.,
Paul J. Finnegan and Samuel M. Mencoff are the sole members of a
limited partner committee of MDP IV that has the power, acting
by majority vote, to vote or dispose of the shares beneficially
held by MDCP IV. Messrs. Chereskin, Perry and Selati are
each limited partners of MDP IV and Managing Directors and
Members of Madison Dearborn Partners, LLC (the general partner
of MDP IV), and therefore may be deemed to share beneficial
ownership of the shares beneficially owned by MDCP IV.
Mr. Dombalagian is a limited partner of MDP IV and a
Director of Madison Dearborn Partners, LLC, and therefore may be
deemed to share beneficial ownership of the shares beneficially
owned by MDCP IV. Messrs. Canning, Finnegan, Mencoff,
Chereskin, Perry, Selati and Dombalagian and MDP IV each hereby
disclaims any beneficial ownership of any shares beneficially
owned by MDCP IV. The address for each person named in this
footnote is Three First National Plaza, Suite 3800, 70 West
Madison Street, Chicago, Illinois 60602.
(10)
Mr. Ezersky is a Managing Member of Quadrangle GP Investors
LLC, which is the general partner of Quadrangle GP Investors LP.
Quadrangle GP Investors LP is the general partner of Quadrangle
Capital Partners LP, Quadrangle Select Partners LP, Quadrangle
Capital Partners A LP and Quadrangle (Cinemark) Capital Partners
LP, and he may therefore be deemed to share beneficial ownership
of the shares owned by
Quadrangle Capital Partners LP,
the shares owned by
Quadrangle Select Partners LP,
the shares owned by
Quadrangle Capital Partners A LP and
the shares owned by
Quadrangle (Cinemark) Capital Partners LP. Mr. Ezersky
expressly disclaims beneficial ownership of the shares owned by
Quadrangle Capital Partners LP, Quadrangle Select Partners LP,
Quadrangle Capital Partners A LP and Quadrangle (Cinemark)
Capital Partners LP.
(11)
Raymond Syufy and Joseph Syufy are executive officers of the
general partner of Syufy Enterprises LP and they may therefore
be deemed to share beneficial ownership of
the shares owned by Syufy
Enterprises LP. Raymond Syufy and Joseph Syufy expressly
disclaim beneficial ownership of the shares owned by Syufy
Enterprises LP.
(12)
Includes shares
of common stock issuable upon the exercise of options that may
be exercised within 60 days of the date hereof.
82
Table of Contents
83
Table of Contents
84
Table of Contents
85
Table of Contents
86
Table of Contents
restricting dividends on the common stock;
diluting the voting power of the common stock;
impairing the liquidation rights of the common stock;
delaying or preventing a change in control without further
action by the stockholders; or
decreasing the market price of common stock.
87
Table of Contents
88
Table of Contents
a stockholder who owns 15% or more of our outstanding voting
stock (otherwise known as an interested stockholder),
an affiliate of an interested stockholder, or
an associate of an interested stockholder,
our Board of Directors approves the transaction that made the
stockholder an interested stockholder, prior to the
date of that transaction;
after the completion of the transaction that resulted in the
stockholder becoming an interested stockholder, that
stockholder owned at least 85% of our voting stock outstanding
at the time the transaction commenced, excluding shares owned by
our officers and directors; or
on or subsequent to the date of the transaction, the business
combination is approved by our Board of Directors and authorized
at a meeting of our stockholders by an affirmative vote of at
least two-thirds of the outstanding voting stock not owned by
the interested stockholder.
89
Table of Contents
1% of the number of shares of our common stock then
outstanding; or
the average weekly trading volume of our common stock during the
four calendar weeks preceding the filing of a Form 144 with
respect to such sale.
90
Table of Contents
91
Table of Contents
92
Table of Contents
93
Table of Contents
the obligation to purchase all of the shares of our common stock
offered hereby (other than those shares of our common stock
covered by their option to purchase additional shares as
described below), if any of the shares are purchased;
the representations and warranties made by us and the selling
stockholders to the underwriters are true;
there is no material change in our business or the financial
markets; and
we deliver customary closing documents to the underwriter.
Per Share
Total
94
Table of Contents
during the last 17 days of
the -day
restricted period we issue an earnings release or material news
or a material event relating to us occurs; or
prior to the expiration of
the -day
restricted period, we announce that we will release earnings
results during the
16-day
period beginning on the last day of
the -day
period,
the history and prospects for the industry in which we compete;
our financial information;
the ability of our management and our business potential and
earning prospects;
the prevailing securities markets at the time of this
offering; and
the recent market prices of, and the demand for, publicly traded
shares of generally comparable companies.
95
Table of Contents
Stabilizing transactions permit bids to purchase the underlying
security so long as the stabilizing bids do not exceed a
specified maximum.
A short position involves a sale by the underwriter of shares of
our common stock in excess of the number of shares the
underwriters are obligated to purchase in the offering, which
creates the syndicate short position. This short position may be
either a covered short position or a naked short position. In a
covered short position, the number of shares of our common stock
involved in the sales made by the underwriter in excess of the
number of shares they are obligated to purchase is not greater
than the number of shares that they may purchase by exercising
their option to purchase additional shares. In a naked short
position, the number of shares of our common stock involved is
greater than the number of shares in their option to purchase
additional shares. The underwriter may close out any short
position by either exercising their option to purchase
additional shares
and/or
purchasing shares of our common stock in the open market. In
determining the source of shares to close out the short
position, the underwriter will consider, among other things, the
price of shares of our common stock available for purchase in
the open market as compared to the price at which they may
purchase shares through their option to purchase additional
shares. A naked short position is more likely to be created if
the underwriter is concerned that there could be downward
pressure on the price of the shares of our common stock in the
open market after pricing that could adversely affect investors
who purchase in the offering.
96
Table of Contents
(a)
to legal entities which are authorized or regulated to operate
in the financial markets or, if not so authorized or regulated,
whose corporate purpose is solely to invest in securities;
(b)
to any legal entity which has two or more of (1) an average
of at least 250 employees during the last financial year;
(2) a total balance sheet of more than 43,000,000;
and (3) an annual net turnover of more than
50,000,000, as shown in its last annual or consolidated
accounts;
(c)
to fewer than 100 natural or legal persons (other than qualified
investors as defined in the Prospectus Directive); or
(d)
in any other circumstances falling within Article 3(2) of
the Prospectus Directive,
97
Table of Contents
(a)
it has only communicated or caused to be communicated and will
only communicate or cause to be communicated an invitation or
inducement to engage in investment activity (within the meaning
of Section 21 of the Financial Services and Markets Act
2000 or FSMA) received by it in connection with the issue or
sale of shares of our common stock in circumstances in which
Section 21(1) of the FSMA does not apply to us, and
(b)
it has complied with, and will comply with all applicable
provisions of the FSMA with respect to anything done by it in
relating to shares of our common stock in, from or otherwise
involving the United Kingdom.
98
Table of Contents
99
Table of Contents
Page
CINEMARK HOLDINGS, INC. AND
SUBSIDIARIES
CONSOLIDATED FINANCIAL STATEMENTS:
F-2
F-3
F-4
F-5
F-6
F-7
CINEMARK HOLDINGS, INC. AND
SUBSIDIARIES
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS:
F-40
F-41
F-42
F-43
CENTURY THEATRES, INC. AND
SUBSIDIARIES
CONSOLIDATED FINANCIAL STATEMENTS:
F-55
F-56
F-57
F-58
F-59
F-60
F-1
Table of Contents
F-2
Table of Contents
F-3
Table of Contents
Year Ended
January 1, 2004
April 2, 2004 to
Year Ended
December 31, 2003
to April 1, 2004
December 31, 2004
December 31, 2005
(Predecessor)
(Predecessor)
(Successor)
(Successor)
(In thousands, except per share data)
$
597,548
$
149,134
$
497,865
$
641,240
300,568
72,480
249,141
320,072
52,756
12,011
43,611
59,285
950,872
233,625
790,617
1,020,597
324,902
78,678
270,138
347,727
49,640
11,989
41,772
52,507
97,240
23,989
79,095
101,431
119,517
30,915
97,829
138,477
110,792
26,282
86,684
123,831
702,091
171,853
575,518
763,973
44,286
11,869
39,803
50,884
31,995
65,085
16,865
58,266
81,952
3,087
4,174
5,049
1,000
36,721
51,677
(1,202
)
(513
)
3,602
4,436
815,309
233,069
716,997
957,096
135,563
556
73,620
63,501
(51,853
)
(11,972
)
(56,231
)
(81,342
)
(2,310
)
(590
)
(1,918
)
(2,740
)
2,035
494
1,476
6,600
(196
)
170
(436
)
(1,276
)
(7,540
)
(3,309
)
(46
)
141
37
136
227
(3,410
)
(1,466
)
(2,887
)
(924
)
(63,133
)
(13,327
)
(63,169
)
(79,501
)
72,430
(12,771
)
10,451
(16,000
)
25,041
(3,703
)
18,293
9,408
47,389
(9,068
)
(7,842
)
(25,408
)
(2,740
)
(1,565
)
4,155
$
44,649
$
(10,633
)
$
(3,687
)
$
(25,408
)
$
1.17
(0.22
)
$
(0.28
)
$
(0.91
)
(0.07
)
(0.04
)
0.15
$
1.10
$
(0.26
)
$
(0.13
)
$
(0.91
)
$
1.16
$
(0.22
)
$
(0.28
)
$
(0.91
)
(0.07
)
(0.04
)
0.15
$
1.09
$
(0.26
)
$
(0.13
)
$
(0.91
)
F-4
Table of Contents
CONSOLIDATED STATEMENTS OF STOCKHOLDERS
EQUITY AND COMPREHENSIVE INCOME (LOSS)
YEAR ENDED DECEMBER 31, 2003, PERIOD FROM
JANUARY 1, 2004 TO APRIL 1, 2004, PERIOD FROM
APRIL 2, 2004 TO DECEMBER 31, 2004 AND YEAR
ENDED DECEMBER 31, 2005
Class A
Class B
Accumulated
Common Stock
Common Stock
Additional
Unearned
Retained
Other
Shares
Shares
Paid-in
Compensation
Earnings
Comprehensive
Comprehensive
Issued
Amount
Issued
Amount
Capital
Stock Options
(Deficit)
Loss
Total
Income (Loss)
(In thousands)
19,563
$
20
20,949
$
21
$
40,350
$
(3,105
)
$
80,172
$
(89,794
)
$
27,664
44,649
44,649
$
44,649
(285
)
285
1,080
1,080
101
304
304
3,249
3,249
3,249
19,664
$
20
20,949
$
21
$
40,369
$
(1,740
)
$
124,821
$
(86,545
)
$
76,946
$
47,898
(10,633
)
(10,633
)
(10,633
)
145
145
6
6
6
1,595
1,595
19,664
$
20
20,949
$
21
$
40,369
$
$
114,188
$
(86,539
)
$
68,059
$
(10,627
)
4,727
$
5
$
$
9,459
$
$
20,562
$
(14,712
)
$
15,314
22,948
23
518,222
518,245
(3,687
)
(3,687
)
(3,687
)
3,328
3,328
3,328
27,675
$
28
$
$
527,681
$
$
16,875
$
(11,384
)
$
533,200
$
(359
)
(25,408
)
(25,408
)
(25,408
)
221
5,000
5,000
(82
)
(82
)
6,639
6,639
6,639
27,896
$
28
$
$
532,599
$
$
(8,533
)
$
(4,745
)
$
519,349
$
(18,769
)
F-5
Table of Contents
Year Ended
January 1, 2004 to
April 2, 2004 to
Year Ended
December 31, 2003
April 1, 2004
December 31, 2004
December 31, 2005
(Predecessor)
(Predecessor)
(Successor)
(Successor)
(In thousands)
$
44,649
$
(10,633
)
$
(3,687
)
$
(25,408
)
64,429
16,705
52,035
71,870
656
160
9,318
14,256
1,806
497
1,216
1,258
1,080
145
2,310
590
1,918
2,740
(366
)
(91
)
(48
)
(63
)
(972
)
(366
)
(2,437
)
(3,105
)
(2,623
)
(55
)
(698
)
(597
)
5,049
1,000
36,721
51,677
(1,202
)
(513
)
3,602
4,436
3,601
(1,727
)
46
1,595
96
26,635
38,549
2,741
63
2,120
3,137
1,863
(9,531
)
16,924
(12,332
)
(141
)
(37
)
(136
)
(227
)
3,410
1,466
2,887
924
204
1,869
(1,869
)
3,374
(922
)
202
(635
)
219
(133
)
(309
)
(2,998
)
1,769
1,931
(4,102
)
(1,382
)
(780
)
2,367
(649
)
(5,909
)
(3,255
)
(4,193
)
(12,373
)
405
(454
)
508
(121
)
6,906
11,254
(19,254
)
14,082
3,234
100
549
1,198
6,033
(118
)
(12,236
)
20,181
135,522
10,100
112,986
165,270
(51,002
)
(17,850
)
(63,158
)
(75,605
)
3,084
262
12,683
1,317
(7,329
)
1,250
(44,958
)
(5,379
)
767
128
75
(47,151
)
(16,210
)
(100,737
)
(81,617
)
101
5,000
360,000
518,245
(835,704
)
(1,302
)
375,225
(275,000
)
(122,750
)
403,516
692
290,754
660
(537,765
)
(2,267
)
(197,803
)
(6,671
)
(15,622
)
(10,491
)
(13,863
)
(239
)
4,573
171
798
155
(766
)
(1,122
)
(1,103
)
(1,353
)
(45,738
)
346,983
(361,426
)
(3,750
)
970
(45
)
1,275
2,048
43,603
340,828
(347,902
)
81,951
63,719
107,322
448,150
100,248
$
107,322
$
448,150
$
100,248
$
182,199
F-6
Table of Contents
1.
SUMMARY
OF SIGNIFICANT ACCOUNTING POLICIES
F-7
Table of Contents
40 years
5 to 15 years
Lesser of lease term or useful
life
F-8
Table of Contents
Indefinite-lived
Indefinite-lived
Straight-line method over 15 years
Straight-line method over the
terms of the underlying contracts. The terms of the underlying
contracts range from 1 to 17 years.
Based on the pattern in which the
economic benefits are realized over the terms of the lease
agreements. The terms of the lease agreements range from 1 to 31
years.
Straight-line method over the
terms of the underlying agreements
F-9
Table of Contents
Year Ended
January 1, 2004
April 2, 2004 to
Year Ended
December 31,
to
December 31,
December 31,
2003
April 1, 2004
2004
2005
(Predecessor)
(Predecessor)
(Successor)
(Successor)
$
44,649
$
(10,633
)
$
(3,687
)
$
(25,408
)
707
88
(1,054
)
(162
)
(2,057
)
(2,964
)
$
44,302
$
(10,707
)
$
(5,744
)
$
(28,372
)
$
1.10
$
(0.26
)
$
(0.13
)
$
(0.91
)
$
1.09
$
(0.26
)
$
(0.21
)
$
(1.02
)
$
1.09
$
(0.26
)
$
(0.13
)
$
(0.91
)
$
1.09
$
(0.26
)
$
(0.21
)
$
(1.02
)
F-10
Table of Contents
(1)
Amount for the period from January 1, 2004 to April 1,
2004 excludes compensation expense of $16,245 related to the MDP
Merger included in net income (loss).
F-11
Table of Contents
2.
NEW
ACCOUNTING PRONOUNCEMENTS
3.
MERGER
WITH MADISON DEARBORN PARTNERS AND RELATED REFINANCING OF
CERTAIN LONG-TERM DEBT
F-12
Table of Contents
$
79,967
650,653
620,540
258,567
42,384
(90,940
)
(120,232
)
(922,694
)
$
518,245
(a)
The goodwill recorded as a result of the MDP Merger is not
deductible for tax purposes.
F-13
Table of Contents
F-14
Table of Contents
4.
ACQUISITIONS
$
730
2,231
23,962
18,806
$
45,729
F-15
Table of Contents
$
439
480
1,179
1,715
1,566
$
5,379
5.
INVESTMENT
IN NATIONAL CINEMEDIA LLC
F-16
Table of Contents
6.
DISCONTINUED
OPERATIONS
Year Ended
December
January 1, 2004 to
April 2, 2004 to
31, 2003
April 1, 2004
December 31, 2004
(Predecessor)
(Predecessor)
(Successor)
$
4,328
$
1,730
$
3,163
1,878
1,285
4,056
513
326
811
6,719
$
3,341
$
8,030
1,863
757
1,434
365
262
643
1,043
628
1,638
1,395
608
1,076
799
634
1,581
5,465
2,889
6,372
496
277
220
656
83
212
2,500
540
1,800
(3,057
)
9,657
5,049
3,747
F-17
Table of Contents
Year Ended
December
January 1, 2004 to
April 2, 2004 to
31, 2003
April 1, 2004
December 31, 2004
(Predecessor)
(Predecessor)
(Successor)
(2,938
)
(1,708
)
4,283
323
14
(55
)
(2,615
)
(1,694
)
4,228
125
(129
)
73
$
(2,740
)
$
(1,565
)
$
4,155
Table of Contents
Year Ended
Year Ended
December 31,
January 1, 2004 to
April 2, 2004 to
December 31,
2003
April 1, 2004
December 31, 2004
2005
(Predecessor)
(Predecessor)
(Successor)
(Successor)
$
47,389
$
(9,068
)
$
(7,842
)
$
(25,408
)
40,516
40,614
27,675
27,784
$
1.17
$
(0.22
)
$
(0.28
)
$
(0.91
)
40,516
40,614
27,675
27,784
279
40,795
40,614
27,675
27,784
$
1.16
$
(0.22
)
$
(0.28
)
$
(0.91
)
F-19
Table of Contents
8.
GOODWILL
AND OTHER INTANGIBLE ASSETS NET
Other
International
U.S.
Brazil
Mexico
Argentina
Chile
Locations
Total
$
6,312
$
$
$
239
$
2,994
$
2,538
$
12,083
6
(114
)
1
(107
)
$
6,312
$
$
$
245
$
2,880
$
2,539
$
11,976
(5,239
)
(203
)
(2,390
)
(2,108
)
(9,940
)
475,284
49,657
55,754
6,357
10,897
22,591
620,540
26,923
3,813
30,736
(700
)
(700
)
(31,775
)
(1,103
)
(1,156
)
(993
)
(721
)
(35,748
)
(2,650
)
(2,650
)
(1,317
)
259
253
(989
)
(1,464
)
(3,258
)
$
441,232
$
74,160
$
58,670
$
6,652
$
9,405
$
20,837
$
610,956
(1,432
)
(1,432
)
(38,403
)
(684
)
(3,203
)
(724
)
(434
)
(1,853
)
(45,301
)
(2,961
)
(2,098
)
(5,059
)
(4,132
)
(3,158
)
109
(820
)
374
(7,627
)
$
401,397
$
66,383
$
50,211
$
6,037
$
8,151
$
19,358
$
551,537
F-20
Table of Contents
Foreign
Balance at
Currency
Balance at
December 31,
Translation
December 31,
2004
Additions
Adjustment
2005
$
4,638
$
500
$
$
5,138
(493
)
(298
)
(791
)
$
4,145
$
202
$
$
4,347
52,262
2,670
1,627
56,559
(5,682
)
(9,280
)
(14,962
)
$
46,580
$
(6,610
)
$
1,627
$
41,597
30,575
1,210
892
32,677
(3,087
)
(4,175
)
(7,262
)
$
27,488
$
(2,965
)
$
892
$
25,415
1,668
(5
)
1,663
(232
)
(325
)
(557
)
$
1,436
$
(325
)
$
(5
)
$
1,106
$
79,649
$
(9,698
)
$
2,514
$
72,465
173,490
1,179
(956
)
173,713
3
3
$
253,142
$
(8,519
)
$
1,558
$
246,181
F-21
Table of Contents
$
9,344
7,577
7,183
6,511
5,940
35,910
$
72,465
Year Ended
January 1,
April 2, 2004
Year Ended
December 31,
2004 to
to December 31,
December 31,
2003
April 1, 2004
2004
2005
(Predecessor)
(Predecessor)
(Successor)
(Successor)
$
820
$
1,000
$
973
$
5,626
2,200
529
750
1,241
$
4,790
$
1,000
$
973
$
6,376
259
35,748
45,301
$
5,049
$
1,000
$
36,721
$
51,677
F-22
Table of Contents
2004
2005
$
27,128
$
27,330
(2,478
)
(5,218
)
24,650
22,112
6,626
11,782
1,728
2,026
3,599
3,744
3,178
3,602
2,721
2,718
$
42,502
$
45,984
2004
2005
$
386,731
$
423,978
367,275
364,170
258,050
255,450
7,324
6,587
6,675
4,910
1,026,055
1,055,095
6,539
6,871
$
1,019,516
$
1,048,224
F-23
Table of Contents
F-24
Table of Contents
F-25
Table of Contents
F-26
Table of Contents
$
6,871
5,557
4,277
4,108
185,034
849,248
$
1,055,095
F-27
Table of Contents
2004
2005
$
$
7,329
602
612
171
171
1,383
1,383
1,662
1,698
$
3,818
$
11,193
F-28
Table of Contents
2004
2005
$
8,494
$
8,554
3,227
2,577
2,056
2,333
1,586
1,491
827
932
204
272
303
263
$
16,697
$
16,422
F-29
Table of Contents
September 30,
January 28,
2004
2005
Grant
Grant
6.5 years
6.5 years
39%
44%
3.79%
3.93%
0%
0%
(1)
Expected volatility is based on historical volatility of the
common stock price of comparable public companies.
2004
2005
Weighted
Weighted
Average
Average
Exercise
Exercise
Shares
Price
Shares
Price
$
2,361,590
$
22.58
2,361,590
$
22.58
4,075
$
22.58
$
$
$
$
2,361,590
$
22.58
2,365,665
$
22.58
353,211
$
22.58
827,603
$
22.58
F-30
Table of Contents
Year Ended
January 1,
April 2, 2004 to
Year Ended
December 31,
2004 to
December 31,
December 31,
2003
April 1, 2004
2004
2005
(Predecessor)
(Predecessor)
(Successor)
(Successor)
$
50,992
$
23,307
$
23,379
$
45,166
$
17,330
$
5,070
$
11,612
$
2,911
$
$
$
6,463
$
(4,312
)
$
3,218
$
1,609
$
(2,758
)
$
8,945
Year Ended
January 1,
April 2, 2004 to
Year Ended
December 31,
2004 to
December 31,
December 31,
2003
April 1, 2004
2004
2005
(Predecessor)
(Predecessor)
(Successor)
(Successor)
$
65,348
$
(26,030
)
$
3,312
$
(21,925
)
7,082
13,259
7,139
5,925
$
72,430
$
(12,771
)
$
10,451
$
16,000
$
16,280
$
(5,668
)
$
8,397
$
17,653
5,885
443
3,565
2,115
1,013
(537
)
997
1,972
23,178
(5,762
)
12,959
21,740
2,898
1,791
1,142
(9,778
)
(1,053
)
4,830
24
18
268
(638
)
(2,578
)
1,863
2,059
5,334
(12,332
)
$
25,041
$
(3,703
)
$
18,293
$
9,408
F-31
Table of Contents
Year Ended
January 1,
April 2, 2004 to
Year Ended
December 31,
2004 to
December 31,
December 31,
2003
April 1, 2004
2004
2005
(Predecessor)
(Predecessor)
(Successor)
(Successor)
$
25,351
$
(4,470
)
$
3,658
$
(5,600
)
(20
)
(11
)
11,587
14,310
11
(25
)
(75
)
(3,405
)
666
(175
)
348
1,030
221
(800
)
(1,450
)
(1,518
)
883
(29
)
(88
)
(33
)
1,537
(2,071
)
1,807
4,313
3,087
$
25,041
$
(3,703
)
$
18,293
$
9,408
2004
2005
$
42,758
$
36,432
2,985
2,961
16,115
13,084
65,169
63,627
9,957
7,988
136,984
124,092
2,198
3,014
4,012
6,772
830
208
4,583
3,435
4,033
2,439
14,501
13,549
1,147
2,159
(1,421
)
(2,701
)
29,883
28,875
107,101
95,217
7,383
6,935
$
114,484
$
102,152
$
8,011
$
8,035
106,473
94,117
$
114,484
$
102,152
F-32
Table of Contents
18.
COMMITMENTS
AND CONTINGENCIES
Year Ended
January 1,
April 2, 2004 to
Year Ended
December 31,
2004 to
December 31,
December 31,
2003
April 1, 2004
2004
2005
(Predecessor)
(Predecessor)
(Successor)
(Successor)
$
100,562
$
26,230
$
78,724
$
110,995
18,955
4,685
19,105
27,482
119,517
30,915
97,829
138,477
1,401
350
1,056
1,432
$
120,918
$
31,265
$
98,885
$
139,909
F-33
Table of Contents
Operating
Leases
$
121,353
127,263
125,287
122,030
115,937
925,537
$
1,537,407
F-34
Table of Contents
F-35
Table of Contents
F-36
Table of Contents
19.
FINANCIAL
INFORMATION ABOUT GEOGRAPHIC AREAS
Year Ended
January 1, 2004
April 2, 2004 to
Year Ended
December 31,
to
December 31,
December 31,
2003
April 1, 2004
2004
2005
(Predecessor)
(Predecessor)
(Successor)
(Successor)
$
743,843
$
175,563
$
607,831
$
757,902
70,246
17,801
58,347
74,919
74,853
21,775
69,097
112,182
63,475
18,889
56,311
77,213
(1,545
)
(403
)
(969
)
(1,619
)
$
950,872
$
233,625
$
790,617
$
1,020,597
December 31,
December 31,
2004
2005
$
631,706
$
646,841
61,043
55,366
51,982
52,371
49,992
48,691
$
794,723
$
803,269
(1)
Revenues for all periods do not include results of the two
United Kingdom theatres or the eleven Interstate theatres, which
were sold during 2004, as the results of operations for these
theatres are included as discontinued operations
F-37
Table of Contents
20.
OTHER
RELATED PARTY TRANSACTIONS
January 1,
April 2,
Year Ended
2004 to
2004 to
Year Ended
December 31,
April 1,
December 31,
December 31,
2003
2004
2004
2005
(Predecessor)
(Predecessor)
(Successor)
(Successor)
$
288
$
30
$
108
$
152
$
395
$
40
$
129
$
146
$
32
$
$
$
66
F-38
Table of Contents
21.
VALUATION
AND QUALIFYING ACCOUNTS
Valuation Allowance
for Deferred
Tax Assets
$
11,767
2,876
(1,626
)
$
13,017
(187
)
$
12,830
(1,282
)
(4,165
)
$
7,383
2,232
(2,680
)
$
6,935
22.
QUARTERLY
FINANCIAL INFORMATION (UNAUDITED)
2004
First
Second
Third
Fourth
April 2, 2004
Quarter
Quarter
Quarter
Quarter(2)
to December 31, 2004
(Predecessor)
(Successor)
(Successor)
(Successor)
(Successor)
$
233,625
$
274,616
$
260,048
$
255,953
$
790,617
$
556
$
45,120
$
33,162
$
(4,662
)
$
73,620
$
(10,633
)
$
14,455
$
10,277
$
(28,419
)
$
(3,687
)
$
(0.26
)
$
0.52
$
0.37
$
(1.03
)
$
(0.13
)
$
(0.26
)
$
0.52
$
0.37
$
(1.03
)
$
(0.13
)
2005 (Successor)
First
Second
Third
Fourth
Full
Quarter
Quarter
Quarter
Quarter(2)
Year
$
237,681
$
253,027
$
256,300
$
273,589
$
1,020,597
$
26,277
$
28,043
$
24,519
$
(15,338
)
$
63,501
$
4,453
$
5,865
2,260
$
(37,986
)
$
(25,408
)
$
0.16
$
0.21
$
0.08
$
(1.37
)
$
(0.91
)
$
0.16
$
0.21
$
0.08
$
(1.37
)
$
(0.91
)
(1)
During the period from January 1, 2004 to April 1,
2004, the Company recorded $32.0 million of change of
control and stock compensation expenses related to the MDP
Merger.
(2)
During the fourth quarter of 2004 and 2005, the Company recorded
goodwill impairment charges of $35.7 million and
$45.3 million, respectively.
F-39
Table of Contents
(in thousands, except share data)
(Unaudited)
F-40
Table of Contents
Nine months ended September 30,
2006
2005
$
514,183
$
470,535
260,223
234,564
54,683
41,909
829,089
747,008
275,005
253,511
41,863
38,151
79,002
75,245
113,128
102,439
100,924
90,884
609,922
560,230
45,958
38,008
61,541
61,005
2,982
3,131
5,199
2,917
5,300
2,879
730,902
668,170
98,187
78,838
(64,949
)
(59,962
)
(2,159
)
(2,034
)
5,563
4,206
94
(698
)
(2,501
)
(46
)
(1,699
)
182
(1,790
)
(882
)
(67,441
)
(59,234
)
30,746
19,604
9,576
7,026
$
21,170
$
12,578
$
0.76
$
0.45
$
0.74
$
0.45
F-41
Table of Contents
Nine Months Ended September 30,
2006
2005
$
21,170
$
12,578
56,841
53,357
7,682
10,779
816
999
2,159
2,034
(48
)
(46
)
(2,333
)
(2,329
)
(307
)
(358
)
5,199
2,917
2,148
5,300
2,879
369
46
30,222
28,583
4,112
2,358
(7,488
)
(1,727
)
1,800
(182
)
1,790
882
274
128
(9,174
)
(3,420
)
(1,443
)
(1,127
)
(8,394
)
(15,056
)
(189
)
(122
)
(20,993
)
(19,588
)
484
529
(9,572
)
9,956
80,425
84,070
(77,902
)
(47,676
)
1,236
1,266
(7,329
)
271
284
(76,395
)
(53,455
)
5,000
(30,331
)
(1,302
)
(10,000
)
2,273
307
(5,009
)
(4,831
)
(1,226
)
(651
)
(44,293
)
(1,477
)
268
4,361
(39,995
)
33,499
182,199
100,248
$
142,204
$
133,747
F-42
Table of Contents
F-43
Table of Contents
F-44
Table of Contents
September 30,
January 28,
2004
2005
Grant
Grant
6.5 years
6.5 years
39%
44%
3.79%
3.93%
0%
0%
(1)
Expected volatility is based on historical volatility of the
common stock price of comparable public companies.
Number of
Weighted Average
Options
Exercise Price
2,365,665
$
22.58
$
$
(3,075
)
$
22.58
2,362,590
$
22.58
F-45
Table of Contents
Nine months Ended
September 30, 2005
$
12,578
(2,223
)
$
10,355
$
0.45
$
0.37
F-46
Table of Contents
Nine months ended
September 30,
2006
2005
$
21,170
$
12,578
27,896
27,746
$
0.76
$
0.45
27,896
27,746
743
28,639
27,746
$
0.74
$
0.45
F-47
Table of Contents
Write-offs
Foreign Currency
Balance at
due to theatre
Translation
Balance at
December 31, 2005
closures and other
Adjustment
September 30, 2006
$
401,397
$
(1,497
)
$
$
399,900
66,383
(63
)
344
66,664
50,211
1,750
51,961
6,037
185
6,222
8,151
350
8,501
19,358
327
19,685
$
551,537
$
(1,560
)
$
2,956
$
552,933
F-48
Table of Contents
Foreign Currency
Balance at
Translation
Balance at
December 31, 2005
Additions
Adjustment
September 30, 2006
Intangible assets with
finite lives:
Capitalized licensing fees:
$
5,138
$
$
$
5,138
(791
)
(242
)
(1,033
)
$
4,347
$
(242
)
$
$
4,105
Vendor contracts:
56,559
(290
)
56,269
(14,962
)
(4,110
)
(19,072
)
$
41,597
$
(4,110
)
$
(290
)
$
37,197
Net favorable leases:
32,677
(908
)
(381
)
31,388
(7,262
)
(2,982
)
(10,244
)
$
25,415
$
(3,890
)
$
(381
)
$
21,144
Other intangible assets:
1,663
(26
)
1,637
(557
)
(228
)
(785
)
$
1,106
$
(228
)
$
(26
)
$
852
Total net intangible assets with
finite lives
$
72,465
$
(8,470
)
$
(697
)
$
63,298
Intangible assets with
indefinite lives:
173,713
98
173,811
3
3
Total intangible assets with
indefinite lives
$
173,716
$
$
98
$
173,814
Total intangible
assets net
$
246,181
$
(8,470
)
$
(599
)
$
237,112
F-49
Table of Contents
$
2,238
7,610
7,199
6,518
5,869
33,864
$
63,298
F-50
Table of Contents
Nine Months Ended
September 30,
2006
2005
$
21,170
$
12,578
4,013
(2,369
)
$
25,183
$
10,209
F-51
Table of Contents
Nine months ended
September 30,
2006
2005
$
43,132
$
41,172
$
26,616
$
(1,228
)
$
(2,151
)
$
(5,783
)
$
(7,832
)
$
1,607
Nine months ended
September 30,
Revenues
2006
2005
$
607,729
$
553,631
98,950
81,614
55,704
54,939
68,126
58,028
(1,420
)
(1,204
)
$
829,089
$
747,008
September 30,
December 31,
Theatre Properties and Equipment-net
2006
2005
$
651,829
$
646,841
53,528
52,371
52,448
55,366
48,588
48,691
$
806,393
$
803,269
F-52
Table of Contents
F-53
Table of Contents
F-54
Table of Contents
F-55
Table of Contents
F-56
Table of Contents
2006
2005
2004
(as restated, see Note 13)
(as restated, see Note 13)
(In thousands of dollars)
$
354,961
$
338,760
$
351,353
146,172
135,625
136,957
60
60
60
14,801
14,202
10,447
515,994
488,647
498,817
184,837
177,491
181,896
21,357
19,750
19,744
164,485
153,930
153,727
37,849
26,765
32,284
47,522
49,500
45,930
456,050
427,436
433,581
59,944
61,211
65,236
29,367
13,081
11,713
(221
)
3,564
(935
)
30,798
44,566
54,458
12,674
17,310
21,216
$
18,124
$
27,256
$
33,242
F-57
Table of Contents
Accumulated
Retained
Other
Common Stock
Earnings
Comprehensive
Shares
Amount
(Deficit)
Income
Total
(In thousands of dollars, except share amounts)
10,000,000
$
5,252
$
143,227
$
$
148,479
33,242
33,242
10,000,000
5,252
176,469
181,721
27,256
27,256
10,000,000
5,252
203,725
208,977
(2,170,937
)
(1,140
)
(106,539
)
(107,679
)
(12,500
)
(12,500
)
(234,177
)
(234,177
)
1,490
1,490
18,124
18,124
19,614
7,829,063
$
4,112
$
(131,367
)
$
1,490
$
(125,765
)
F-58
Table of Contents
2006
2005
2004
(as restated,
(as restated,
see Note 13)
see Note 13)
(In thousands of dollars)
$
18,124
$
27,256
$
33,242
46,557
49,338
45,712
61
4,967
110
852
(12,084
)
(2,359
)
1,040
(1,738
)
(1,738
)
(1,734
)
1,419
162
218
(227
)
674
(4,294
)
(343
)
115
(217
)
(4,881
)
(143
)
41
8,538
(19,664
)
9,951
(6,657
)
2,380
(108
)
12,940
(1,129
)
(8,505
)
(1,849
)
(397
)
1,674
(565
)
744
1,803
38
34
343
60,185
60,240
79,276
(46,190
)
(23,427
)
(55,853
)
305
178
65
(45,885
)
(23,249
)
(55,788
)
15,000
23,850
(15,000
)
(23,850
)
(5,532
)
(107,679
)
(12,500
)
(234,177
)
(2,408
)
(1,838
)
(1,387
)
360,000
(48,232
)
(13,737
)
(6,237
)
(50,528
)
(15,575
)
(7,624
)
(36,228
)
21,416
15,864
43,518
22,102
6,238
$
7,290
$
43,518
$
22,102
$
30,200
$
19,314
$
25,864
$
28,651
$
12,616
$
11,583
$
39,383
$
5,659
$
25,705
$
$
313
$
F-59
Table of Contents
F-60
Table of Contents
F-61
Table of Contents
20-30 years
Lesser of term of lease or asset life
15 years
3-7 years
F-62
Table of Contents
F-63
Table of Contents
F-64
Table of Contents
2006
2005
$
24,446
$
24,473
317,682
301,548
124,249
84,866
238,193
211,957
17,597
13,886
722,167
636,730
(295,749
)
(249,953
)
$
426,418
$
386,777
F-65
Table of Contents
2006
2005
2004
$
24,758
$
19,823
$
20,059
(12,084
)
(2,513
)
1,157
$
12,674
$
17,310
$
21,216
2006
2005
2004
35.0
%
35.0
%
35.0
%
4.7
4.8
4.3
0.2
0.2
0.1
0.9
0.3
(1.2
)
(0.4
)
41.1
%
38.8
%
39.0
%
F-66
Table of Contents
2006
2005
$
7,908
$
1,214
1,668
2,066
17,055
15,911
1,311
1,215
42
116
64
28,048
20,522
(19,530
)
(23,903
)
(987
)
(185
)
(20,517
)
(24,088
)
$
7,531
$
(3,566
)
F-67
Table of Contents
$
360,000
(3,600
)
$
356,400
$
3,600
3,600
3,600
3,600
3,600
342,000
$
360,000
F-68
Table of Contents
Operating Leases
To Parent
Capital Leases
and Affiliates
Total
Total
$
31,236
$
41,516
$
16,561
30,896
44,663
16,609
30,120
43,901
16,631
30,216
43,513
16,794
31,606
44,640
15,777
154,398
297,435
158,524
$
308,472
$
515,668
240,896
(124,382
)
$
116,514
F-69
Table of Contents
F-70
Table of Contents
F-71
Table of Contents
2006
2005
As previously
As previously
reported
As restated
reported
As restated
$
9,486
$
7,886
243,512
241,912
202,125
203,725
207,377
208,977
$
11,074
$
12,674
18,910
17,310
19,724
18,124
25,656
27,256
19,724
18,124
25,656
27,256
21,214
19,614
25,656
27,256
19,724
18,124
25,656
27,256
(13,684
)
(12,084
)
(759
)
(2,359
)
F-72
Table of Contents
Table of Contents
Item 13.
Other
Expenses of Issuance and Distribution.
*
To be completed by amendment.
Item 14.
Indemnification
of Directors and Officers
II-1
Table of Contents
we are required to indemnify our directors and officers, subject
to very limited exceptions;
we may indemnify other employees and agents, subject to very
limited exceptions;
we are required to advance expenses, as incurred, to our
directors and officers in connection with a legal proceeding,
subject to very limited exceptions; and
we may advance expenses, as incurred, to our employees and
agents in connection with a legal proceeding.
Item 15.
Recent
Sales of Unregistered Securities
Pursuant to a stock purchase agreement, dated August 7,
2006, and amendment thereto, dated October 4, 2006, among
Cinemark USA, Inc., Century and Syufy Enterprise, LP, Cinemark
USA, Inc. acquired approximately 77% of the issued and
outstanding capital stock of Century.
Pursuant to a contribution and exchange agreement, dated
August 7, 2006, by and between Syufy, Cinemark, Inc.,
Century Theatres Holdings, LLC and Cinemark Holdings, Inc.,
Syufy contributed the remaining shares of capital stock of
Century to Cinemark Holdings in exchange
for shares
of Cinemark Holdings.
Pursuant to a share exchange agreement, dated August 7,
2006, by and among Cinemark Holdings, Inc. and then current
stockholders of Cinemark, Inc., the stockholders, immediately
prior to the consummation of the transactions contemplated by
the purchase agreement and the contribution and exchange
agreement referenced above, exchanged
their shares
of common stock of Cinemark, Inc. for an equal number of shares
of Cinemark Holdings common stock.
II-2
Table of Contents
Item 16.
Exhibits
and Financial Statement Schedules.
**1
Form of Underwriting Agreement.
2
.1
Stock Contribution and Exchange
Agreement, dated as of August 7, 2006, by and between
Cinemark Holdings, Inc., Cinemark, Inc., Syufy Enterprises, LP
and Century Theatres Holdings, LLC (incorporated by reference to
Exhibit 10.2 to Current Report on
Form 8-K,
File No. 000-47040, filed by Cinemark USA, Inc. with the SEC on
August 11, 2006).
2
.2
Contribution and Exchange
Agreement, dated as of August 7, 2006, by and among
Cinemark Holdings, Inc. and Lee Roy Mitchell, The Mitchell
Special Trust, Alan W. Stock, Timothy Warner, Robert Copple,
Michael Cavalier, Northwestern University, John Madigan,
Quadrangle Select Partners LP, Quadrangle Capital Partners A LP,
Madison Dearborn Capital Partners IV, L.P., K&E Investment
Partners, LLC 2004-B-DIF, Piola Investments Ltd.,
Quadrangle (Cinemark) Capital Partners LP and Quadrangle Capital
Partners LP (incorporated by reference to Exhibit 10.3 to
Current Report on
Form 8-K,
File No. 000-47040, filed by Cinemark USA, Inc. with the SEC on
August 11, 2006).
**3
.1
Amended and Restated Certificate
of Incorporation of Cinemark Holdings, Inc. filed with the
Delaware Secretary of State
on ,
2007.
**3
.2
Amended and Restated Bylaws of
Cinemark Holdings, Inc.
dated ,
2007.
**4
.1
Form of common stock certificate.
4
.2(a)
Indenture, dated as of
March 31, 2004, between Cinemark, Inc. and The Bank of New
York Trust Company, N.A. governing the
9
3
/
4
% senior
discount notes issued thereunder (incorporated by reference to
Exhibit 4.2(a) to Cinemark, Inc.s Registration
Statement on
Form S-4,
File
No. 333-116292,
filed June 8, 2004).
4
.2(b)
Form of
9
3
/
4
% senior
discount notes (contained in the indenture listed as
Exhibit 4.2(a) above) (incorporated by reference to
Exhibit 4.2(b) to Cinemark, Inc.s Registration
Statement on
Form S-4,
File
No. 333-116292,
filed June 8, 2004).
4
.3(a)
Indenture, dated as of
February 11, 2003, between Cinemark USA, Inc. and The Bank
of New York Trust Company of Florida, N.A. governing the
9% senior subordinated notes issued thereunder
(incorporated by reference to Exhibit 10.2(b) to Cinemark
USA, Inc.s Annual Report on
Form 10-K
(File
033-47040)
filed March 19, 2003).
4
.3(b)
First Supplemental Indenture,
dated as of May 7, 2003, between Cinemark USA, Inc., the
subsidiary guarantors party thereto and The Bank of New York
Trust Company of Florida, N.A. (incorporated by reference from
Exhibit 4.2(i) to Cinemark USA, Inc.s Registration
Statement on
Form S-4/A
(File
No. 333-104940)
filed May 28, 2003).
4
.3(c)
Second Supplemental Indenture
dated as of November 11, 2004, between Cinemark USA, Inc.,
the subsidiary guarantors party thereto and The Bank of New York
Trust Company of Florida, N.A. (incorporated by reference to
Exhibit 4.2(c) to Cinemark USA, Inc.s Annual Report
on
Form 10-K,
File No.
033-047040,
filed March 28, 2005).
4
.3(d)
Third Supplemental Indenture,
dated as of October 5, 2006, among Cinemark USA, Inc., the
subsidiaries of Cinemark USA, Inc. named therein, and The Bank
of New York Trust Company, N.A., as trustee (incorporated by
reference to Exhibit 10.7 to Current Report on
Form 8-K,
File No. 000-47040, filed by Cinemark USA, Inc. with the SEC on
October 12, 2006).
4
.3(e)
Form of 9% Senior
Subordinated Note, Due 2013 (contained in the Indenture
listed as Exhibit 4.3(a) above) (incorporated by reference
to Exhibit 10.2(b) to Cinemark USA, Inc.s Annual
Report on
Form 10-K
(File
033-47040)
filed March 19, 2003).
*4
.4
Stockholders Agreement, dated as
of August 7, 2006, effective October 5, 2006, by and
among Cinemark Holdings, Inc. and the stockholders party thereto.
*4
.5
Registration Agreement, dated as
of August 7, 2006, effective October 5, 2006, by and
among Cinemark Holdings, Inc. and the stockholders thereto.
**5
Opinion of Akin Gump Strauss
Hauer & Feld LLP.
II-3
Table of Contents
10
.1(a)
Management Agreement, dated
December 10, 1993, between Laredo Theatre, Ltd. and
Cinemark USA, Inc. (incorporated by reference to
Exhibit 10.14(b) to Cinemark USA, Inc.s Annual Report
on
Form 10-K,
File No.
033-47040,
filed March 31, 1994).
10
.1(b)
First Amendment to Management
Agreement of Laredo Theatre, Ltd., effective as of
December 10, 2003, between CNMK Texas Properties, Ltd.
(successor in interest to Cinemark USA, Inc.) and Laredo Theatre
Ltd. (incorporated by reference to Exhibit 10.1(d) to Cinemark,
Inc.s Registration Statement on
Form S-4,
File No.
333-116292,
filed June 8, 2004).
10
.2
Amended and Restated Agreement to
Participate in Profits and Losses, dated as of March 12,
2004, between Cinemark USA, Inc. and Alan W. Stock (incorporated
by reference to Exhibit 10.2 to Cinemark USA, Inc.s
Quarterly Report on
Form 10-Q,
File No.
033-47040,
filed May 14, 2004).
10
.3
License Agreement, dated
December 10, 1993, between Laredo Joint Venture and
Cinemark USA, Inc. (incorporated by reference to
Exhibit 10.14(c) to Cinemark USA, Inc.s Annual Report
on
Form 10-K,
File No.
033-47040,
filed March 31, 1994).
10
.4(a)
Tax Sharing Agreement, between
Cinemark USA, Inc. and Cinemark International, L.L.C. (f/k/a
Cinemark II, Inc. ), dated as of June 10, 1992
(incorporated by reference to Exhibit 10.22 to Cinemark
USA, Inc.s Annual Report on
Form 10-K,
File No.
033-47040,
filed March 31, 1993).
10
.4(b)
Tax Sharing Agreement, dated as of
July 28, 1993, between Cinemark USA, Inc. and Cinemark
Mexico (USA) (incorporated by reference to Exhibit 10.10 to
Cinemark Mexico (USA)s Registration Statement on
Form S-4,
File No.
033-72114,
filed on November 24, 1993).
+10
.5(a)
Employment Agreement, dated as of
March 12, 2004, between Cinemark, Inc. and Lee Roy Mitchell
(incorporated by reference to Exhibit 10.14(a) to Cinemark
USA, Inc.s Quarterly Report on
Form 10-Q,
File No.
033-47040,
filed May 14, 2004).
+10
.5(b)
First Amendment to Employment
Agreement, effective as of December 12, 2006, by and
between Cinemark, Inc. and Lee Roy Mitchell (incorporated by
reference to Exhibit 10.1 to Cinemark, Inc.s Current
Report on
Form 8-K,
File No. 001-31372, filed December 18, 2006).
+10
.5(c)
Employment Agreement, dated as of
March 12, 2004, between Cinemark, Inc. and Alan Stock
(incorporated by reference to Exhibit 10.14(b) to Cinemark
USA, Inc.s Quarterly Report on
Form 10-Q,
File No.
033-47040,
filed May 14, 2004).
+10
.5(d)
First Amendment to Employment
Agreement, effective as of December 12, 2006, by and
between Cinemark, Inc. and Alan W. Stock (incorporated by
reference to Exhibit 10.2 to Cinemark, Inc.s Current
Report on
Form 8-K,
File No. 001-31372, filed December 18, 2006).
+10
.5(e)
Employment Agreement, dated as of
March 12, 2004, between Cinemark, Inc. and Tim Warner
(incorporated by reference to Exhibit 10.14(c) to Cinemark
USA, Inc.s Quarterly Report on
Form 10-Q,
File No.
033-47040,
filed May 14, 2004).
+10
.5(f)
First Amendment to Employment
Agreement, effective as of December 12, 2006, by and
between Cinemark, Inc. and Timothy Warner (incorporated by
reference to Exhibit 10.3 to Cinemark, Inc.s Current
Report on
Form 8-K,
File No. 001-31372, filed December 18, 2006).
+10
.5(g)
Employment Agreement, dated as of
March 12, 2004, between Cinemark, Inc. and Robert Copple
(incorporated by reference to Exhibit 10.14(d) to Cinemark
USA, Inc.s Quarterly Report on
Form 10-Q,
File No.
033-47040,
filed May 14, 2004).
+10
.5(h)
Employment Agreement, dated as of
March 12, 2004, between Cinemark, Inc. and Rob Carmony
(incorporated by reference to Exhibit 10.14(e) to Cinemark
USA, Inc.s Quarterly Report on
Form 10-Q,
File No.
033-47040,
filed May 14, 2004).
+10
.5(i)
Employment Agreement, dated as of
March 12, 2004, between Cinemark, Inc. and Tandy Mitchell
(incorporated by reference to Exhibit 10.14(f) to Cinemark
USA, Inc.s Quarterly Report on
Form 10-Q,
File No.
033-47040,
filed May 14, 2004).
*+10
.5(j)
First Amendment to Employment
Agreement, dated January 25, 2007, between Cinemark, Inc.
and Robert Copple.
Table of Contents
10
.6(a)
Credit Agreement, dated as of
October 5, 2006, among Cinemark Holdings, Inc., Cinemark,
Inc., CNMK Holding, Inc., Cinemark USA, Inc., the several banks
and other financial institutions or entities from time to time
parties to the Agreement, Lehman Brothers Inc. and Morgan
Stanley Senior Funding, Inc., as joint lead arrangers and joint
bookrunners, Morgan Stanley Senior Funding, Inc., as syndication
agent, BNP Paribas and General Electric Capital Corporation as
co-documentation agents, and Lehman Commercial Paper Inc., as
administrative agent (incorporated by reference to
Exhibit 10.5 to Current Report on
Form 8-K,
File No. 000-47040, filed by Cinemark USA, Inc. with the SEC on
October 12, 2006).
10
.6(b)
Guarantee and Collateral
Agreement, dated as of October 5, 2006, among Cinemark
Holdings, Inc., Cinemark, Inc., CNMK Holding, Inc., Cinemark
USA, Inc. and each subsidiary guarantor party thereto
(incorporated by reference to Exhibit 10.6 to Current
Report on
Form 8-K,
File No. 000-47040, filed by Cinemark USA, Inc. with the SEC on
October 12, 2006).
*+10
.7(a)
Cinemark Holdings, Inc. 2006 Long
Term Incentive Plan, dated December 22, 2006.
*+10
.7(b)
Form of Stock Option Agreement.
*21
Subsidiaries of the registrant.
*23
.1
Consent of Deloitte &
Touche LLP.
*23
.2
Consent of Grant Thornton LLP.
**23
.3
Consent of Akin Gump Strauss
Hauer & Feld LLP (included in the opinion filed as
Exhibit 5 to this Registration Statement).
*24
Power of Attorney (included on the
signature page of this Registration Statement).
*
Filed herewith.
**
To be filed by amendment.
+
Management contract, compensatory plan or arrangement.
Table of Contents
II-6
Table of Contents
By:
Chairman of the Board of Directors
and Director
February 1, 2007
Chief Executive Officer
(principal executive officer)
February 1, 2007
Executive Vice President;
Treasurer and Chief Financial Officer
(principal financial and
accounting officer)
February 1, 2007
Director
February 1, 2007
Director
February 1, 2007
Director
February 1, 2007
II-7
Table of Contents
Director
February 1, 2007
Director
February 1, 2007
Director
February 1, 2007
Director
February 1, 2007
Director
February 1, 2007
II-8
Table of Contents
**1
Form of Underwriting Agreement.
2
.1
Stock Contribution and Exchange
Agreement, dated as of August 7, 2006, by and between
Cinemark Holdings, Inc., Cinemark, Inc., Syufy Enterprises, LP
and Century Theatres Holdings, LLC (incorporated by reference to
Exhibit 10.2 to Current Report on
Form 8-K,
File No. 000-47040, filed by Cinemark USA, Inc. with the SEC on
August 11, 2006).
2
.2
Contribution and Exchange
Agreement, dated as of August 7, 2006, by and among
Cinemark Holdings, Inc. and Lee Roy Mitchell, The Mitchell
Special Trust, Alan W. Stock, Timothy Warner, Robert Copple,
Michael Cavalier, Northwestern University, John Madigan,
Quadrangle Select Partners LP, Quadrangle Capital Partners A LP,
Madison Dearborn Capital Partners IV, L.P., K&E Investment
Partners, LLC 2004-B-DIF, Piola Investments Ltd.,
Quadrangle (Cinemark) Capital Partners LP and Quadrangle Capital
Partners LP (incorporated by reference to Exhibit 10.3 to
Current Report on
Form 8-K,
File No. 000-47040, filed by Cinemark USA, Inc. with the SEC on
August 11, 2006).
**3
.1
Amended and Restated Certificate
of Incorporation of Cinemark Holdings, Inc. filed with the
Delaware Secretary of State
on ,
2007.
**3
.2
Amended and Restated Bylaws of
Cinemark Holdings, Inc.
dated ,
2007.
**4
.1
Form of common stock certificate.
4
.2(a)
Indenture, dated as of
March 31, 2004, between Cinemark, Inc. and The Bank of New
York Trust Company, N.A. governing the
9
3
/
4
% senior
discount notes issued thereunder (incorporated by reference to
Exhibit 4.2(a) to Cinemark, Inc.s Registration
Statement on
Form S-4,
File
No. 333-116292,
filed June 8, 2004).
4
.2(b)
Form of
9
3
/
4
% senior
discount notes (contained in the indenture listed as
Exhibit 4.2(a) above) (incorporated by reference to
Exhibit 4.2(b) to Cinemark, Inc.s Registration
Statement on
Form S-4,
File
No. 333-116292,
filed June 8, 2004).
4
.3(a)
Indenture, dated as of
February 11, 2003, between Cinemark USA, Inc. and The Bank
of New York Trust Company of Florida, N.A. governing the
9% senior subordinated notes issued thereunder
(incorporated by reference to Exhibit 10.2(b) to Cinemark
USA, Inc.s Annual Report on
Form 10-K
(File
033-47040)
filed March 19, 2003).
4
.3(b)
First Supplemental Indenture,
dated as of May 7, 2003, between Cinemark USA, Inc., the
subsidiary guarantors party thereto and The Bank of New York
Trust Company of Florida, N.A. (incorporated by reference from
Exhibit 4.2(i) to Cinemark USA, Inc.s Registration
Statement on
Form S-4/A
(File
No. 333-104940)
filed May 28, 2003).
4
.3(c)
Second Supplemental Indenture
dated as of November 11, 2004, between Cinemark USA, Inc.,
the subsidiary guarantors party thereto and The Bank of New York
Trust Company of Florida, N.A. (incorporated by reference to
Exhibit 4.2(c) to Cinemark USA, Inc.s Annual Report
on
Form 10-K,
File No.
033-047040,
filed March 28, 2005).
4
.3(d)
Third Supplemental Indenture,
dated as of October 5, 2006, among Cinemark USA, Inc., the
subsidiaries of Cinemark USA, Inc. named therein, and The Bank
of New York Trust Company, N.A., as trustee (incorporated by
reference to Exhibit 10.7 to Current Report on
Form 8-K,
File No. 000-47040, filed by Cinemark USA, Inc. with the SEC on
October 12, 2006).
4
.3(e)
Form of 9% Senior
Subordinated Note, Due 2013 (contained in the Indenture
listed as Exhibit 4.3(a) above) (incorporated by reference
to Exhibit 10.2(b) to Cinemark USA, Inc.s Annual
Report on
Form 10-K
(File
033-47040)
filed March 19, 2003).
*4
.4
Stockholders Agreement, dated as
of August 7, 2006, effective October 5, 2006, by and
among Cinemark Holdings, Inc. and the stockholders party thereto.
*4
.5
Registration Agreement, dated as
of August 7, 2006, effective October 5, 2006, by and
among Cinemark Holdings, Inc. and the stockholders thereto.
**5
Opinion of Akin Gump Strauss
Hauer & Feld LLP.
10
.1(a)
Management Agreement, dated
December 10, 1993, between Laredo Theatre, Ltd. and
Cinemark USA, Inc. (incorporated by reference to
Exhibit 10.14(b) to Cinemark USA, Inc.s Annual Report
on
Form 10-K,
File No.
033-47040,
filed March 31, 1994).
Table of Contents
10
.1(b)
First Amendment to Management
Agreement of Laredo Theatre, Ltd., effective as of
December 10, 2003, between CNMK Texas Properties, Ltd.
(successor in interest to Cinemark USA, Inc.) and Laredo Theatre
Ltd. (incorporated by reference to Exhibit 10.1(d) to Cinemark,
Inc.s Registration Statement on
Form S-4,
File No.
333-116292,
filed June 8, 2004).
10
.2
Amended and Restated Agreement to
Participate in Profits and Losses, dated as of March 12,
2004, between Cinemark USA, Inc. and Alan W. Stock (incorporated
by reference to Exhibit 10.2 to Cinemark USA, Inc.s
Quarterly Report on
Form 10-Q,
File No.
033-47040,
filed May 14, 2004).
10
.3
License Agreement, dated
December 10, 1993, between Laredo Joint Venture and
Cinemark USA, Inc. (incorporated by reference to
Exhibit 10.14(c) to Cinemark USA, Inc.s Annual Report
on
Form 10-K,
File No.
033-47040,
filed March 31, 1994).
10
.4(a)
Tax Sharing Agreement, between
Cinemark USA, Inc. and Cinemark International, L.L.C. (f/k/a
Cinemark II, Inc. ), dated as of June 10, 1992
(incorporated by reference to Exhibit 10.22 to Cinemark
USA, Inc.s Annual Report on
Form 10-K,
File No.
033-47040,
filed March 31, 1993).
10
.4(b)
Tax Sharing Agreement, dated as of
July 28, 1993, between Cinemark USA, Inc. and Cinemark
Mexico (USA) (incorporated by reference to Exhibit 10.10 to
Cinemark Mexico (USA)s Registration Statement on
Form S-4,
File No.
033-72114,
filed on November 24, 1993).
+10
.5(a)
Employment Agreement, dated as of
March 12, 2004, between Cinemark, Inc. and Lee Roy Mitchell
(incorporated by reference to Exhibit 10.14(a) to Cinemark
USA, Inc.s Quarterly Report on
Form 10-Q,
File No.
033-47040,
filed May 14, 2004).
+10
.5(b)
First Amendment to Employment
Agreement, effective as of December 12, 2006, by and
between Cinemark, Inc. and Lee Roy Mitchell (incorporated by
reference to Exhibit 10.1 to Cinemark, Inc.s Current
Report on
Form 8-K,
File No. 001-31372, filed December 18, 2006).
+10
.5(c)
Employment Agreement, dated as of
March 12, 2004, between Cinemark, Inc. and Alan Stock
(incorporated by reference to Exhibit 10.14(b) to Cinemark
USA, Inc.s Quarterly Report on
Form 10-Q,
File No.
033-47040,
filed May 14, 2004).
+10
.5(d)
First Amendment to Employment
Agreement, effective as of December 12, 2006, by and
between Cinemark, Inc. and Alan W. Stock (incorporated by
reference to Exhibit 10.2 to Cinemark, Inc.s Current
Report on
Form 8-K,
File No. 001-31372, filed December 18, 2006).
+10
.5(e)
Employment Agreement, dated as of
March 12, 2004, between Cinemark, Inc. and Tim Warner
(incorporated by reference to Exhibit 10.14(c) to Cinemark
USA, Inc.s Quarterly Report on
Form 10-Q,
File No.
033-47040,
filed May 14, 2004).
+10
.5(f)
First Amendment to Employment
Agreement, effective as of December 12, 2006, by and
between Cinemark, Inc. and Timothy Warner (incorporated by
reference to Exhibit 10.3 to Cinemark, Inc.s Current
Report on
Form 8-K,
File No. 001-31372, filed December 18, 2006).
+10
.5(g)
Employment Agreement, dated as of
March 12, 2004, between Cinemark, Inc. and Robert Copple
(incorporated by reference to Exhibit 10.14(d) to Cinemark
USA, Inc.s Quarterly Report on
Form 10-Q,
File No.
033-47040,
filed May 14, 2004).
+10
.5(h)
Employment Agreement, dated as of
March 12, 2004, between Cinemark, Inc. and Rob Carmony
(incorporated by reference to Exhibit 10.14(e) to Cinemark
USA, Inc.s Quarterly Report on
Form 10-Q,
File No.
033-47040,
filed May 14, 2004).
+10
.5(i)
Employment Agreement, dated as of
March 12, 2004, between Cinemark, Inc. and Tandy Mitchell
(incorporated by reference to Exhibit 10.14(f) to Cinemark
USA, Inc.s Quarterly Report on
Form 10-Q,
File No.
033-47040,
filed May 14, 2004).
*+10
.5(j)
First Amendment to Employment
Agreement, dated January 25, 2007, between Cinemark, Inc.
and Robert Copple.
10
.6(a)
Credit Agreement, dated as of
October 5, 2006, among Cinemark Holdings, Inc., Cinemark,
Inc., CNMK Holding, Inc., Cinemark USA, Inc., the several banks
and other financial institutions or entities from time to time
parties to the Agreement, Lehman Brothers Inc. and Morgan
Stanley Senior Funding, Inc., as joint lead arrangers and joint
bookrunners, Morgan Stanley Senior Funding, Inc., as syndication
agent, BNP Paribas and General Electric Capital Corporation as
co-documentation agents, and Lehman Commercial Paper Inc., as
administrative agent (incorporated by reference to
Exhibit 10.5 to Current Report on
Form 8-K,
File No. 000-47040, filed by Cinemark USA, Inc. with the SEC on
October 12, 2006).
Table of Contents
*
Filed herewith.
**
To be filed by amendment.
+
Management contract, compensatory plan or arrangement.
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
Sale Bonus Shares | ||||
|
||||
Michael Cavalier
|
37,891 | |||
|
||||
Robert Copple
|
49,901 | |||
|
||||
Alan Stock
|
50,149 | |||
|
||||
Timothy Warner
|
55,826 |
26
27
28
29
30
31
32
33
34
35
36
The Companys address is:
|
Cinemark Holdings, Inc.
3900 Dallas Parkway, Suite 500 Plano, Texas 75093 Facsimile: (972) 665-1004 Attention: Michael Cavalier |
|||
|
||||
MDCPs address is:
|
Madison Dearborn Capital Partners IV, L.P. | |||
|
Three First National Plaza, Suite 3800
70 West Madison Street Chicago, IL 60602 Attention: Benjamin D. Chereskin |
37
/s/ John Madigan | ||||
John Madigan | ||||
K&E INVESTMENT PARTNERS, LLC 2004-B DIF
|
||||
By: | /s/ Jack S. Levin | |||
Jack S. Levin | ||||
Its Manager | ||||
PIOLA INVESTMENTS LTD.
|
||||
By: | /s/ Riccardo Arduini | |||
Riccardo Arduini | ||||
Its Director |
SYUFY ENTERPRISES, LP
|
||||
By: | /s/ Joseph Syufy | |||
Joseph Syufy | ||||
President of Syufy Properties, Inc.
Its General Partner |
||||
CENTURY THEATRES HOLDINGS, LLC
|
||||
By: | /s/ Joseph Syufy | |||
Joseph Syufy | ||||
Its President | ||||
2
3
4
5
6
7
8
9
10
11
12
13
14
QUADRANGLE CAPITAL PARTNERS LP | ||||||
|
||||||
|
By: | Quadrangle GP Investors LP | ||||
|
Its: | General Partner | ||||
|
||||||
|
By: | Quadrangle GP Investors, LLC | ||||
|
Its: | General Partner | ||||
|
||||||
|
By: |
/s/
Peter Ezersky
|
||||
|
Its Managing Principal | |||||
|
||||||
QUADRANGLE SELECT PARTNERS LP | ||||||
|
||||||
|
By: | Quadrangle GP Investors LP | ||||
|
Its: | General Partner | ||||
|
||||||
|
By: | Quadrangle GP Investors, LLC | ||||
|
Its: | General Partner | ||||
|
||||||
|
By: |
/s/
Peter Ezersky
|
||||
|
Its Managing Principal | |||||
|
||||||
QUADRANGLE CAPITAL PARTNERS A LP | ||||||
|
||||||
|
By: | Quadrangle GP Investors LP | ||||
|
Its: | General Partner | ||||
|
||||||
|
By: | Quadrangle GP Investors, LLC | ||||
|
Its: | General Partner | ||||
|
||||||
|
By: |
/s/
Peter Ezersky
|
||||
|
Its Managing Principal | |||||
|
||||||
QUADRANGLE (CINEMARK) CAPITAL PARTNERS LP | ||||||
|
||||||
|
By: |
/s/
Peter Ezersky
|
||||
|
Its Managing Principal |
/s/ John Madigan | ||||
John Madigan | ||||
K&E INVESTMENT PARTNERS, LLC 2004-B DIF
|
||||
By: | /s/ Jack S. Levin | |||
Jack S. Levin | ||||
Its: Manager | ||||
PIOLA INVESTMENTS LTD.
|
||||
By: | /s/ Riccardo Arduini | |||
Riccardo Arduini | ||||
Its Director |
SYUFY ENTERPRISES, LP
|
||||
By: | /s/ Joseph Syufy | |||
Joseph Syufy | ||||
President of Syufy Properties, Inc.
Its General Partner |
||||
CENTURY THEATRES HOLDINGS, LLC
|
||||
By: | /s/ Joseph Syufy | |||
Joseph Syufy | ||||
Its President | ||||
COMPANY: | ||||
|
||||
CINEMARK, INC. | ||||
|
||||
|
By: | /s/ ALAN W. STOCK | ||
|
||||
|
Alan W. Stock
Its Chief Executive Officer |
|||
|
||||
EXECUTIVE: | ||||
|
||||
/s/ ROBERT COPPLE | ||||
Robert Copple |
Signature Page to FIRST Amendment to Employment Agreement
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
CINEMARK HOLDINGS, INC.
|
||||
By: | /s/ Alan Stock | |||
Alan W. Stock | ||||
Its Chief Executive Officer | ||||
1.1 | Exercise Price Restrictions Applicable to Non-Qualified Stock Options . |
(a) | In the case of Non-Qualified Stock Options, the Exercise Price shall be determined in the sole discretion of the Administrator; provided, however, that the Exercise Price shall be no less than 100% of the Fair Market Value of the shares of Stock on the Date of Grant of the Non-Qualified Stock Option. | ||
(b) | A Ten Percent Shareholder shall not be eligible for designation as an Optionholder, unless (i) the Exercise Price of a Non-Qualified Stock Option is at least 110% of the Fair Market Value of a Share on the Date of Grant. |
1.2 | Purchase Price Restrictions Applicable to Restricted Shares . |
(a) | Each Award Agreement for Restricted Shares shall state the price at which the Stock subject to such Restricted Share Agreement may be purchased (the Purchase Price), which, with respect to Restricted Shares, shall be determined in the sole discretion of the Administrator; provided, however, that the Purchase Price shall be no less than 85% of the Fair Market Value of the shares of Common Stock on the Award date of the Restricted Stock subject to the Award Agreement. | ||
(b) | A Ten Percent Shareholder shall not be eligible for An Award Agreement for Restricted Shares unless the Purchase Price (if any) is at least 100% of the Fair Market Value of a share of Common Stock. | ||
(c) | At the discretion of the Administrator, Restricted Shares may be awarded under the Plan in consideration of services rendered to the Company, a parent or a Subsidiary prior to the Award. |
1.3 | Non-Applicability . The Exercise Price restrictions applicable to Non-Qualified Stock Options required by Section 1.1 hereof and the Purchase Price restrictions applicable to Restricted Shares required by Section 1.2 hereof shall be inoperative if (a) the shares of Stock to be issued upon payment of the Purchase Price have been registered under a then currently effective registration statement under applicable federal securities laws and the Company (i) is subject to the reporting requirements of Section 13 or 15(d) of the Exchange Act or becomes an investment company registered or required to be registered under the Investment Company Act of 1940, and (ii) the Companys Stock is listed or approved for listing upon notice of issuance on a national securities exchange or on the National Market System of the Nasdaq Stock Market (or any successor to that entity), if |
2.1 | Options . Each Stock Option Agreement shall specify the date when all or any installment of the Option becomes exercisable. Unless a determination is made by counsel for the Company that Section 25102(o) of the California Corporations Code no longer requires and another exemption from qualification under the California Corporations Code applies which does not require, an Option granted to an Optionholder who is not an officer of the Company, a Director or a Consultant shall become exercisable at least as rapidly as 20% per year over the five-year period commencing on the Date of Grant. Subject to the preceding sentence, the exercise provisions of any Stock Option Agreement shall be determined by the Administrator, in its sole discretion. |
2.2 | Restricted Shares . The Restricted Shares will be forfeited immediately upon termination of Participants employment with the Company or one of its Subsidiaries, unless otherwise expressly provided herein or in the Award Agreement pursuant to such Restricted Shares were granted. Unless a determination is made by counsel for the Company that Section 25102(o) of the California Corporations Code no longer requires and another exemption from qualification under the California Corporations Code applies which does not require, an Award of Restricted Shares granted to an employee who is not an officer of the Company, a Director, a manager or a Consultant shall provide that the risk of forfeiture and any right to repurchase unvested stock at less than Fair Market Value shall lapse at a rate of at least 20% per year over five years from the date the Award Agreement for Restricted Shares is granted. Subject to the preceding sentence, the vesting and forfeiture provisions of any Restricted Share Award Agreement shall be determined by the Administrator, in its sole discretion. |
3.1 | Term of Option . Unless Optionholders Service with the Company, a parent, or Subsidiaries is terminated for Cause, in no event may the right to exercise any Option in the event of termination of Service (to the extent that the Optionholder is entitled to exercise on the date of termination of Service) be (i) less than six months from the date of termination if termination was caused by death or Disability and (ii) less than 30 days from the date of termination if termination was caused by other than death, Disability or Cause. |
3.2 | Limits on Post Termination Exercise . The provisions of Section 3.1 may not (i) allow any Option to be exercised after the expiration of ten years after the date the Option is granted or (ii) preclude a Ten Percent Shareholder from receiving an ISO satisfying the requirements of Section 422(c)(5) of the Code, including without limitation, that such ISO by its terms not be exercisable after the expiration of five years from the Date of Grant. |
4.1 | Lapse of Repurchase Rights . For purposes of the Repurchase Right under Section 9.3 of the Plan upon termination of Service, the Repurchase Price shall be presumptively reasonable if: |
(a) | In the case of vested Common Stock, it is not less than the Fair Market Value of the Common Stock to be repurchased on the date of termination of Service, and the Repurchase Right must be exercised for cash or cancellation of purchase money indebtedness for the Common Stock within 90 days of termination of Service (or in the case of Common Stock issued upon exercise of Options after the date of termination, within 90 days after the date of exercise), and the Repurchase Right terminates when the Companys securities become publicly traded. | ||
(b) | In the case of unvested Common Stock, it is at the lesser of the original purchase price or Fair Market Value, provided the Repurchase Right at the original purchase price lapses at the rate of at least 20% per year over five years from the date the Option Agreement or Award Agreement for Restricted Shares is granted (without respect to the date the Option or Award Agreement was exercised or became exercisable) and the Repurchase Right must be exercised for cash or cancellation of purchase money indebtedness for the Common Stock within 90 days of termination of Service (or in the case of Common Stock issued upon exercise of Options after the date of termination, within 90 days after the date of exercise). |
4.2 | Additional Restrictions Permitted . In addition to the restrictions set forth in clauses (a) and (b) of Section 4.1, the Common Stock held by an officer, a Director, a manager or a Consultant of the Company or an Affiliate may be subject to additional or greater restrictions. |
5.1 | Voting Rights . Notwithstanding anything to the contrary in the Plan, Common Stock issued pursuant to the Plan shall carry equal voting rights on all matters where such vote is required by applicable law. |
5.2 | Financial Information . To the extent necessary to comply with California law, the Company each year shall furnish to Participants its balance sheet and income statement, unless such Participants are limited to key Employees whose duties with the Company assure them access to equivalent information. |
2
3
4
5
(a) | Date of Grant: [ ] | ||
(b) | Name of Optionee: | ||
(c) | Number of Shares Covered by Option: | ||
(d) | Option Exercise Price Per Share: | ||
(e) | Expiration Date: [ ] |
6
CINEMARK HOLDINGS, INC.
|
||||
By: | ||||
Name: | ||||
Title: | ||||
OPTIONEE
|
||||
Name: |
Optionees Address: | ||||
2
3
Exhibit 23.1
Dallas, Texas
January 31, 2007