| Cinemark USA, Inc. | |||||||||
| Reconciliation of Adjusted EBITDA to Net Income | |||||||||
| For the Three and Nine Months Ended September 30, 2005 and 2006 | |||||||||
| (in thousands, unaudited) | |||||||||
| Three Months Ended | Nine Months Ended | ||||||||
| September 30, | September 30, | ||||||||
| 2006 | 2005 | 2006 | 2005 | ||||||
| Net income | $ 14,262 | $ 10,643 | $ 50,554 | $ 37,163 | |||||
| Income taxes | 7,844 | 7,538 | 20,875 | 20,016 | |||||
| Interest expense (1) | 12,935 | 11,711 | 37,993 | 34,610 | |||||
| Other income | (364) | (2,062) | (1,227) | (2,808) | |||||
| Operating income | 34,677 | 27,830 | 108,195 | 88,981 | |||||
| Add: Depreciation, amortization and impairment of long-lived assets | 24,681 | 21,283 | 65,784 | 59,430 | |||||
| Add: Loss on sale of assets and other | 1,395 | 1,070 | 2,938 | 1,908 | |||||
| Add: Stock option compensation expense (2) | 716 | - | 2,148 | - | |||||
| Add: Deferred lease expenses (3) | 394 | 790 | 1,541 | 2,171 | |||||
| Adjusted EBITDA (4) | $ 61,863 | $ 50,973 | $ 180,606 | $ 152,490 | |||||
| (1) Includes amortization of debt issue costs and excludes capitalized interest. | |||||||||
| (2) Non-cash expense included in general and administrative expenses. | |||||||||
| (3) Non-cash expense included in facility lease expense. | |||||||||
| (4) Adjusted EBITDA as calculated in the chart above represents net income before income taxes, interest expense, other | |||||||||
| income, depreciation, amortization and impairment of long-lived assets, loss on sale of assets and other, stock option compensation expense | |||||||||
| and changes in deferred lease expense. Adjusted EBITDA is a non-GAAP financial measure commonly used in our industry | |||||||||
| and should not be construed as an alternative to net income or operating income as an indicator of operating performance or | |||||||||
| as an alternative to cash flow provided by operating activities as a measure of liquidity (as determined in accordance with GAAP). | |||||||||
| Adjusted EBITDA may not be comparable to similarly titled measures reported by other companies. The calculation of Adjusted | |||||||||
| EBITDA is consistent with the definition of EBITDA in our senior subordinated notes indentures. We have | |||||||||
| included Adjusted EBITDA because we believe it provides management and investors with additional information to measure our | |||||||||
| performance and liquidity, estimate our value and evaluate our ability to service debt. In addition, we use Adjusted EBITDA for | |||||||||
| incentive compensation purposes. | |||||||||