Good afternoon. My name is Jeremy and I will be yourconference operator today. At this time, I would like to welcome everyone tothe Cinemark fiscal third quarter 2007 earnings conference call. (OperatorInstructions) Ms. Sacks, you may begin the conference.

Thank you and welcome to Cinemark's fiscal third quarter2007 earnings call. Before we begin, let me remind you that in accordance withthe Safe Harbor provision of the Private Securities Litigation Reform Act of1995, the company knows that certain matters to be discussed by members ofmanagement during this call may constitute forward-looking statements. Suchstatements are subject to risk, uncertainties, and other factors that may causethe actual performance of Cinemark to be materially different from theperformance indicated or implied by such statements. Such risk factors are setforth in the company’s SEC filings. Today, Cinemark's CEO, AlanW. Stock, and CFO, Robert Copple, will be discussing the third quarterresults. I will now turn the call over to Alan.

Thank you, Nikki. On today’s call, I will comment on theindustry and Cinemark's third quarter results, the outlook for the upcomingfilm slate, and provide an overview of Cinemark's strategy. During the third quarter, Cinemark's revenues increased63.7% quarter over quarter and adjusted EBITDA grew 87.8%. Our solidperformance was driven by a strong slate of films, the performance of ourinternational theaters and the integration of the century circuit. The revenue increase was primarily related to a 33.5%increase in attendance, a 29.7% increase in average ticket prices, and a 20%increase in concession revenues per patron, all of which were favorablyimpacted by the acquisition of Century Theaters that occurred on October 5,2006. According to industry sources, domestic box office revenueswere up approximately 15% from the quarter over last year, due to a strong anddiverse slate of films with solid box office results from films such asTransformers, Harry Potter and the Order of the Phoenix, Ratatouille, TheBourne Ultimatum, The Simpsons Movie and Superbad. The third quarter results differed from the second quarterin that the second quarter was dominated by a few blockbusters, whereas in thethird quarter, there were strong contributions from a variety of mid-tierfilms. For the fourth quarter, the industry box office has startedslower compared to last year. The industry box office was down approximately13% for October but is up almost 3% for November through November 11th. Films and attendance for the fourth quarter are typicallyweighted towards the second half of the quarter. Some of the anticipated filmproduct for the fall and holiday season include Beowulf, our next 3D film, NewLine’s Golden Compass, I Am Legend with Will Smith, and another installment ofNational Treasure, the Book of Secrets. We have started to hear the lineup for 2008 and the earlyread is optimistic with films such as Disney’s Pixar film WALL•E, a Batmaninstallment called The…

Thanks, Alan. I will review our third quarter financialperformance in more detail and discuss our balance sheet. Before I address thedetails of our third quarter results, as a reminder, we acquired CenturyTheaters in October of 2006. Century added 1,017 screens in 77 theaters to ourexisting domestic theater base. Century had a higher average ticket price andhigher average concession per cap than Cinemark as a result of a mix of marketsin which the Century theaters are located. During the third quarter, we increased our admissionsrevenues to 73.3% to $308 million and our concession revenues 59.8% to $144.3million. As a result, our total revenues increased $183.5 million to $471.5million, a 63.7% increase. This increase was driven by attendance growth of33.5% in 2007 over 2006, an increase in average ticket price to $5.11 in 2007,from $3.94 in 2006, and an increase in concession revenues per patron to $2.40in 2007 from $2.00 in 2006. On a segment basis for the quarter, our U.S. operationsgenerated revenues of $377.6 million, a 79.6% increase over 2006. This increaseis after the impact of the changes in our other income attributable toadvertising revenues received from NCM as a result of the modification of ourexhibitor service agreement. Our international operations increased revenues 20.7% to$93.9 million. Film rentals and advertising cost were $166.8 million forthe third quarter of 2007. While our domestic film rental and advertising costas a percentage of box office revenues decreased 40 basis points, our worldwidefilm rental and advertising costs increased 30 basis points to 54.2%, due tothe increased relative weight of our domestic business to our overallbusinesses compared to the prior year. Concession supplies costs were $22.5 million for the thirdquarter of 2007, compared to $15 million for the third quarter of 2006. Ourconcession supply costs as a percentage of concession revenues decreased 100basis points to 15.6%,…

(Operator Instructions) Your first question comes from theline of Eric Handler.

Thanks. A couple of quick questions for you guys; first, ifyou take away Century, what would your core attendance growth have been for thequarter? Secondly, when you look at the current state of the currency markets,is that changing your thinking at all regarding Latin America in terms of beingmore opportunistic? And then last, with the writers’ strike going on and all thelate night television shows going dark, do you think that’s having an impact alittle bit on attendance as they don’t have that venue now to use forpromotions? And if so, are you seeing studios trying to do anything else to tryto drive some incremental attendance?

Let me take a shot at the first couple and Alan can catchthe strike. I’m not sure if I can properly answer your question. If Iunderstand right on the first one, you were trying to get some comparability onattendance on our core group and maybe focusing on Cinemark. Because we don’tseparate Cinemark now from the Century assets, and then obviously in prior quarterslast year, we did not have the Century assets, it’s not easy to do. What I can tell you overall is that we did performattendance domestically in line with what we’ve seen industry statistics to be.We feel like our first run theaters did increase attendance year over year,looking at overall circuit that made sense with respect to what we’ve seen inthe industry. Starting next quarter, obviously I won’t have to phrasethings that way anymore. We’ll have pure comparability from now on. I apologizeif we’ve gone through that -- you know, left it until this quarter, but that’sabout as detailed as I can get there. On Latin America, we are clearly benefiting from theweakness of the dollar in terms of exchange rates. We still see greatopportunities in Latin America. We don’t see economies going down at all. Ifanything, we see them continue to strengthen, especially in the Braziliancorridor. We think trade is going very well. We think that currencywill hold if not continue to strengthen, so we think our international assetsare one, performing extremely well on their own and will continue to do so andwill continue to have good expansion opportunities, and we’ll pursue thoseopportunities just like we have in the past. We’ve always looked at them in terms of when opportunitiespresent themselves, mostly in malls and if those developers develop the mall,and we’ll pursue those and then, to the extent that currency can continue tohelp us, that’s one benefit in our circuit with having the internationalpresence.

I think your last question, Eric, on the writers’ strike, Imean, you pose an interesting thought here, as it is the quality of what’shappening in the TV and the television market, does that drive customers to thetheater. Although it’s a little early to tell whether that really is the case,that certainly could be a positive benefit that is gained, although wecertainly don’t advocate a strike or -- you know, hopefully it will getresolved in a short manner, as it typically has in the past. Really the key for us, and always will be, is the quality offilm that we’ve got in our theaters. We know that as a result of theanticipation of the strike, a lot of the studios have already stockpiled a lotof film, so we know there is for us a lot of product that is slated to come outthrough this next year, year-and-a-half. So we feel like we are in pretty goodshape and hopefully I think can get resolved in a timely manner.

Just as a quick refresher, when did the Century acquisitionclose?

Early October.

October 5th.

October, so you arepretty much right on. The impact is de minimus on a year-over-year basis?

That's correct.

Your next questioncomes from the line of Barton Crockett – JP Morgan.

I wanted to just follow up a little bit on the pro formaquestion that Eric had. I understand that you are not really going to give us awhole lot more than the attendance pro forma domestically. I was wonderinginternationally, excluding currency impacts, can you give us some sense of whatthe change was in box office and concession revenue overall? Then also on a perscreen and per attendee basis, if you can give us that. Additionally, just in terms of trying to parse this out alittle bit tonight so that we can deal with people tomorrow, if you can give usa little bit of the breakdown, domestic and international on concession andadmissions?

Barton, I appreciate your call, and I'll address it the bestI can. As we've said, we do have some limited information we can give on proforma, so I will give what I do have. I'm not sure I'm answering it quite inthe order you asked; I think one of your questions was generally on FX. FX did benefit us; we still did very well on theinternational side. We break out attendance separately. Attendance was up,without rounding if you do the real math it was up about 5% and when you roundit, it's 4.2% or so. But if you take the exact numbers that are printed in ourQ which will be available first thing in the morning, it's actually in the Q togo out right now, but since the SEC is closed, it will happen in the morning. You will find that is up 4.2%, maybe a little less than whatsome people have reported domestically. That has more to do with the timing offilm releases in international markets. If you look at our overallinternational to-date, it's up attendance-wise about 3% for the trailing ninemonths or for the last nine months, which we think you will find is ahead ofwhat most people have reported their attendance numbers being for the last ninemonths. So that's a little bit of a timing issue. On a pure operating basis, taking out FX, I think box wasgenerally up domestically about 15%. We are just about on top of that;internationally maybe just slightly less, only because of the timing of the waythe attendance hit, but within a few percent. With respect to growth, we do in our Q reflect revenue perscreen; not necessarily box per screen, but revenue per screen. For thequarter, international was up 15.1%, domestic was up 23%. Hopefully that givesyou some idea there. When you get the international detail it will all be in the Qbecause we do segment. When you look at domestic, just trying to givecomparability, I can give you the growth with respect to the ticket price andconcession price on a relative pro forma basis. Ticket price was up 9.2%domestically, and concession price was up 7.4%.

With the Q out tomorrow morning, I'm sorry that I had to --

With the close of day, we would have had that out with itbut we were trying to get this call done so that will give you more information.

But then switching gears a little bit on the screen buildsgoing into next year, you gave us some of the contracted totals. I waswondering, can you give us a sense of how many screen closures you might havenext year? Just overall, should the net screen growth next year be lessthan this year, which seemed like that was my impression coming into thisreport, I was wondering if that's still a valid assumption.

Generally we've told people that we would increase screencount 200 to 250 screens a year and then we close probably 30 to 50 screens ayear, so you are somewhere in that 200 to 220 range. That would still be whatwe’d perceive. When we started out the year maybe early on, we tried to lookforward into 2008. We felt like it might be a little slower in termsopportunities. We definitely are seeing enough to fill the slate that should bein line with the numbers I just gave you.

Switching gears here a little bit on the comments about thedebt and the buy back or the focus on the capital structure, if the creditmarkets are weak, that would seem to make it maybe a little bit cheaper to buyback your debt. Is there a new issuance that's maybe a complicating factorthere? I was wondering if you could elaborate on what is the constraint on thatat this point?

What we are trying todo is take advantage just of what you said, opportunistically going into themarket when we see weakness and buy our bonds. If you look at how our bondshave traded since our last quarterly call, they actually popped up and stayedup and in the last probably two weeks they have come back down; two to threeweeks, as the market weakened a little bit. We looked out there, we looked at opportunities to buy, weactually pursued some bonds and yet if we can just get the price right and whenthe bonds did come back we bought them. So to your point, there is a marketthat gives us opportunity, but we are trying to make sure we are making it aseconomical on us as possible. The other side of it though is clearly the debt markets aremore difficult to enter into. If we were to use all of our current cash to paydown our debt and then went and borrowed the money, that could increase ourcost of capital. We are trying to balance our availability of cash withopportunities we think might be out there in the acquisition market over thenext year, as well as opportunistically buying down our debt.

One final thing and I will step aside. In terms of the 3D,you guys said you are looking at the different technologies in Chicago,I guess. There's been some discussion about the rate that Real D might becharging for their system which seems to be the most widely adopted at thisearly point. Do you have any thoughts about the appeal of let's say a Real Dsystem over the others, and the ability to get that at a price that makes sensefor the theater companies? Any early thoughts on that at this point?

I'm not sure, Barton.There's a whole lot of change from what we earlier talked about. Certainly whatwe are doing today and as I described is we're evaluating those systems andtrying to determine, are there indeed any differences or advantages or cost? Itis still too early at this point in time because some of them are still underproduction phases. We actually haven't even really seen a whole lot of materialyet on the Dolby system. We need to let those folks get their technology alittle further down the path and understand where they are going and wherethose prices are going. So it's a little early to tell yet where that is going. Obviously, the reason Real D is talked about is they havethe head start. They have the most systems that are out there today, but wefeel ourselves that we certainly have to do justice to all of them and evaluatethem. I think that's what will happen, again, as we are doing that today and aswe continue over the next several months to continue that evaluation process.

Your next questioncomes from the line of Michael Savner – Banc of America Securities.

I will just follow up with the same as Eric and Barton onthat first question. I understand youdon't want to get into pro forma numbers, but maybe qualitatively. My questionspecifically is, if we just do the very quick and basic math off of yourattendance and screen numbers it looks like, call it 2.8% growth of attendanceper screen, maybe a little bit higher when you factor in the closings, but inthat range. So qualitatively, can you tell us what the offsetting factorswere that would bring your attendance per screen number down because it wouldseem like Century, if anything, would give you an artificial boost since you'vealready told us that those were better performing screens relative to the core.That should have been additive to that number. You mentioned something, I think it was Alan or maybe it wasRobert, about the first run screens. Is there something going on at the secondrun screens that's depressing your attendance per screen during the quarter, orwas there extremely robust, well above industry average ticket pricingincreases that might have factored in? Again, just qualitatively how we thinkabout that.

When you're looking at it, I don't know if you are lookingat domestic versus international.

Just domestic.

When you look at our domestic, again a bigger picture and reiteratingwhat you just mentioned, on a first run basis we feel like our attendance is upwhere it should be, in line with what we've seen our peer group and what theindustry has published. As you know, we do have some second run theaters, and whileit's not a very big piece of our portfolio in terms of bottom line, those doput a lot of attendance through and I think as some of the other theaterscompanies have said, with the product from Q2 hitting Q3 and just overall theeconomy the way it had been working, the second run theaters are down some. Clearly, it didn't hit us on bottom line. We leveraged ourfirst run theaters very well. We operated them extremely well, and that's whyyou saw our EBITDA go up as well as it did. You saw the margins move up. By farthe vast majority of our income comes from first run. The second run theaters areprobably something less than 3% of really the bottom line, so it's not ameaningful number. But on attendance, it is a bigger number so it distorts whatit looks like our attendance change is when you get down as you're comparing iton a theatre-by-theatre basis, because they are a bigger piece of our overalltheaters and it's a bigger piece of our attendance. Does that help?

Yes, that does help. Clearly you were referencing Carmikelast week, it appeared their second run theaters brought down theirapples-to-apples numbers as well. So I guess two questions: is that a businessyou are rethinking about in the current environment? Is it less attractive toyou today than it was a few years ago? If it is and if the answer is no, it's still attractive andstill additive to what you are doing from a larger perspective, do you thinkit's something that you might want to consider breaking out separately as youreport quarters just so you don't get penalized for the wrong reason, or so wecan get some more granularity? I guess that's more of a comment than a question, but thefirst one was a question.

Michael, because it's not a significant – significant iseven too strong of a word – as I said, it's less than 3% of our bottom line,TLCF, so it's not meaningful to break out separately. It does, as you said,might distort the top of minor numbers. Obviously, this quarter is throwing offa little bit, we think that is a bit of an abnormality. We don't think you'regoing to continuously see that on a long-term basis. If discounts settle at some level, they will settle; they reallywon't throw the numbers off that much any more. If anything, the opportunitycould be if we do see a recession in the U.S.historically when things slow down in the U.S.that's when the discounts really take a life of their own and that's a greatniche to be in. Our discounts are profitable. We like that business. It'snot one that we've really grown, but it is an alternative use to some of ourtheaters and again, it's been profitable for many years. We've been good at itand if it continues to bring in good revenue we'll do it. I mean, it is generally theaters that will go offline overtime. They tend to be the older theaters that lease life will be coming up andso as we look at those if we can renew them profitably we'll do it, and if notthey will slowly move off of our portfolio.

Your next question comes from the line of Hunter DuBose –Morgan Stanley.

Given the film mix for the fourth quarter, what guidance canyou give us regarding a sequential movement in average ticket prices, concessionsper cap and film costs, both domestically and internationally?

I don't know if it has so much to do with film product inour case as just the timing of when we increased our prices. Our prices lastyear were up -- our pricing this whole year --have been up beyond what historicstandards have been. I think normally in our industry box office tends to be upin the 2% to 3% range and as we reported quarter-over-quarter, we definitelyexceeded that significantly. Our price increases generally at a box level andfor that matter the concession review happens twice a year. It generally happensin the November/December timeframe and then will also occur in the May timeframe.Our price changes are based on what we are seeing in the market both from ourcompetitors and what the market itself is doing. We have seen the gas prices goup and other pushes on people's use of the dollar we will obviously considerhow that might impact what our prices might be able to increase. So, timing wise, I'd say based on history we will have alittle bit of hit in Q4 from where our prices have been because that's whensome of our prices went up last year. We did increase them again in May of thisyear so that will carry through the fourth quarter. So you might see a slightdecrease, I would say, from what you are seeing this quarter. I don't think itwill be as substantial. We look at international really the same way. We increase itthis time of year and then we'll review it again in May.

And on film costs?

Again, I don't thinkfilm costs or any of our basic structures would significantly change. Youalways have to look at that stuff over a longer period of time. You can'tisolate any particular movie or anything because those are all up and down. Idon't know that we see any significant changes one way or the other in filmcosts going forward.

Now in your earlier remarks you mentioned that you areplanning to let your 3D roll-out follow the D Cinema roll-out. Can I infercorrectly from that that the 39 screens you currently have are likely to remainpretty much constant for the foreseeable future until the December ramp startsto happen?

That is correct. Wedo not anticipate adding any more at this time until we get that digital cinemathing rolling.

You also mentioned earlier remaining open to M&Aopportunities. Can you give us an update on what the M&A landscape lookslike? Are there attractive smaller circuits actively marketing themselves rightnow, and what would be some of the barriers to actually keeping a transactionfrom happening at this point?

Well, as we've alwaysstated, there are certainly people that are out there that are interested inselling their companies, primarily smaller, regional-type circuits. There isnothing at this point in time that we have anything far enough along ordefinitive on that we can announce at this point in time. But our criteria as ithas always been is to compare the quality of the theater circuit and reallywhat they're asking for it and what we're going to pay for it. Our job right now as we continue to evaluate those is justto determine whether we can buy them at a price that's attractive enough tomake that acquisition justifiable. So at this point in time, and as we alwayshave done, we continue to evaluate and look at and determine if there arethings that are out there. There certainly could be. I don't know again that there'sanything to the size and scale and nature of what have we've found with theCentury circuit, but there potentially could be some smaller acquisitions thatare intriguing for us; again, based on the right price.

My final question is,separate from your current opportunistic redemption of your debt, what is alonger-term target leverage ratio we should be thinking about?

Hunter, I wouldgenerally say it's probably ranging somewhere between -- comparing it to EBITDAwould be three to four times; the midpoint of three-and-a-half. It willobviously fluctuate as we build up cash; I don’t believe it will go down. If weare investing that cash well, it should stay somewhere in that range. As longas we have the opportunities to continue to expand with new builds we will usethe excess cash and build the theaters with the idea that that's kind of our sweetpoint between the three and four.

I would now like to turn the call back over to Alan Stock.

So no further questions?

No, sir.

We would like to thank everyone for your participationtoday, and we'll look forward to talking with you next quarter. Thank you verymuch.