Cinemark USA, Inc.
Reconciliation of Adjusted EBITDA
(unaudited, in thousands)
		Year ended
		December 31,
		2006	2005
		(Combined) (1)	(Predecessor)
Net income		$                36,824	$              48,365
	Income taxes	27,951	28,182
	Interest expense (2)	69,673	47,108
	Other (income) expense	2,954	(4,627)
Operating income		137,402	119,028
	Add:  Depreciation, amortization and impairment of long-lived assets	124,069	86,133
	Add:  Loss on sale of assets and other	5,284	2,625
	Add:  Stock option compensation expense (5)	2,864	-
	Add:  Deferred lease expenses (6)	2,114	2,511
	Adjusted EBITDA (3)	$              271,733	$            210,297
(1)     During the year ended December 31, 2006, the Company’s parent, Cinemark, Inc., completed a share exchange with its newly-formed parent, Cinemark Holdings, Inc.  As a result of the share exchange, which occurred on October 5, 2006, the Company was required to push down the accounting basis of its shareholders as of the date of the share exchange.  The Company’s financial statements are reflective of its historical basis for periods prior to the share exchange, referred to as predecessor, and reflective of the new basis for periods subsequent to the share exchange, referred to as successor.  The predecessor and successor results of operations for 2006 have been combined.  Although this combined presentation does not comply with generally accepted accounting principles, we believe this presentation provides a meaningful method of comparison against our 2005 results.
(2)     Includes amortization of debt issue costs and excludes capitalized interest.
(3)     Adjusted EBITDA as calculated in the chart above represents net income before income taxes, interest expense, other (income) expense, depreciation, amortization and impairment of long-lived assets, loss on sale of assets and other, changes in deferred lease expense, and stock option compensation.  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 substantially consistent with the definition of EBITDA in our senior subordinated notes indenture. 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.
(4)     Adjusted EBITDA margin is calculated using Adjusted EBITDA divided by revenues.
(5)     Non-cash expense included in general and administrative expenses.
(6)     Non-cash expense included in facility lease expense.