Good morning. My name is Deketria and I will be your conference operator today. At this time, I would like to welcome everyone to the Cinemark Fourth Quarter and Year End Earnings Conference Call. [Operator Instructions] Mr. Rinderman, you may begin your conference.

Thank you, Deketria. Welcome, everyone to Cinemark's 2011 Fourth Quarter and Full Year Results Conference Call and Webcast. In accordance with the Safe Harbor provision of the Private Securities Litigation Reform Act of 1995, certain matters that are discussed by members of management during this call may constitute forward-looking statements. Such statements are subject to risks, uncertainties and other factors that may cause Cinemark's actual performance to be materially different from the performance indicated or implied by such statements. Such risk factors are set forth in the company's SEC filings. I would now like to turn the call over to Alan Stock. Alan is joined this morning by Tim Warner and Robert Copple. Alan?

Thanks, Rob. We appreciate everyone us joining today. It is my pleasure to introduce my longtime colleague and Cinemark's new Chief Executive Officer, Tim Warner. Some of you may have met Tim at Cinemark's Investor Day a few years ago. But if you haven't had the opportunity to meet him in person yet, there will be many occasions to get to know him much better, starting with today's call. As is announced last week, after over 26 years of helping this great company grow into the #1 global theatrical exhibitor, I decided to retire as CEO. I will continue to serve in a transitional role through May 1, and in an advisory consulting role for 2 years thereafter, to help ensure a seamless transition. Tim has been with Cinemark for 16 years. He spent his first 11 years developing our Latin America business as President of Cinemark International. For the last 5 years, he has run our Domestic business as President and Chief Operating Officer. Clearly, Tim's experience and strong relationships with our worldwide management team and business partners will make this an easy transition. Tim can tell you more about himself later but I will mention that having had the opportunity to work closely with him for all these years, I have great confidence that he is the right person to lead our company and continue to build on our success and strategic initiatives. His experience, combined with our seasoned management team, is one of the primary reasons I felt comfortable retiring at this time. Tim, congratulations.

Well, Alan, thank you. And on behalf of the entire team at Cinemark, I want to thank Alan, not only for his service as a CEO, but also for his 26 years in building Cinemark into the company it is today. We look forward to your continued involvement with the company in the years to come. Although the CEO title is new, I'm certainly not new to Cinemark or our industry. As Alan mentioned, after serving in various industry leadership positions, I joined Cinemark 16 years ago to head up our international development initiative. After successfully establishing our international operations and putting in place our talented and experienced international management team, I moved over to the domestic operations. In 2007, with the acquisition of Century Theaters and our IPO, I became President and CEO of our domestic company. By combining the talents of both companies, we put together one of the best management teams in our industry. I'm excited about my new role at Cinemark and look forward to meeting investors and analysts. Robert and I will be attending several investor conferences in late March -- in late February and early March. So I'll soon have the opportunity to meet many of you in person. I will now briefly summarize Cinemark's fourth quarter and 2011 full year results, review industry box office performance for the same period, and provide an update on Q1 2012 to date, and a preview of the remaining 2012 slate. Robert will then cover our financials and capital structure, as well as the latest on our domestic and Latin America expansion plans. As we -- after his prepared remarks, we will conclude with our customary Q&A session. Cinemark's worldwide admission revenues in Q4, again, outperformed the North American industry box office. We also outperformed the industry…

Thank you, Tim. Good morning. In the fourth quarter, Cinemark's worldwide total revenues increased 2.1% to $535.9 million. Adjusted revenues were $336.9 million, a slight decrease of 1.4% compared to the estimated 5% to 5.5% North American industry decrease. The company's adjusted EBITDA was $112.7 million resulting in a 21% margin. Cinemark's U.S. segment total revenues were $374.5 million in Q4. Our domestic attendance decrease of only 2.6% compared favorably to the estimated 3.5% to 4% attendance decline in the overall industry. Cinemark's average Q4 U.S. ticket price was $6.57 down from $6.71 in the prior year, primarily reflecting the lower mix of 3D product and a higher weighting of family films, which sell proportionally more child and discounted matinee tickets. We continue to maintain a policy of modest base price increases, reflecting our strategy of maintaining value for Cinemark's customers as we focus on driving theater attendance. In the U.S., concession revenues grew 4.3% in Q4 to $119.7 million and concessions per patron rose 7.2% to $3.26, reflecting increases in sales volume and the positive effect of more family and concession friendly titles during the quarter. This is the highest quarterly per patron concession revenue in our history. Our U.S. segment adjusted EBITDA was $82.1 million and adjusted EBITDA margin was 21.9%. Cinemark, again, achieved very strong Q4 operating results in Latin America, despite a FX headwind in Brazil's difficult comp from Q4 of 2010. Admission revenues increased 8.4% and attendance rose 12.1%. Our average ticket prices decreased 3.2%, due primarily to FX. Q4 international concession revenues grew 18.7% versus the year-ago period, reflecting higher attendance and a 5.9% rise in average concession revenues per patron resulting from price increases net of FX impact. Total international revenues rose to $161.4 million and adjusted EBITDA increased 25.7% to approximately $30.6…

[Operator Instructions] And your first question comes from the line of Barton Crockett with Lazard Capital Management.

I wanted to ask about your CapEx outlook. So you see the increase to $250 million or so in 2012 from $185 million or so in 2011. I know that part of that is new builds, part of that is the digital projector installations in Latin America. How should we think about that going forward after 2012? Is this kind of an unusual step-up or is this going to be the new normal for a couple of years as you continue to kind of pursue the Latin American opportunity and finish the international CapEx rollout?

Good question, Barton. I think as you look at 2013, it will be fairly similar maybe slightly less. To your point, we foresee a great runway in Latin America, so building that, we feel like there is the potential to go to that 150-plus screen count a year. Clearly, that's going to vary. Over the last few years, we've given numbers and maybe been a little more excited about the potential ability to build both domestically and internationally than happens. We know that, that screens potential is there but clearly always depends on when a mall opens. Having said that, we feel it's safer to go ahead and ramp up the numbers some because we definitely are seeing more opportunities in Latin America than what we've seen over the last few years. And we think, again, we can see that 150 to 175 screen count. And that represents about half of the additional CapEx we're talking about. On top of that, the other part is rolling out digital, primarily in Latin America, so that's increasing the difference. We think that will also roll out into 2013. So I think, ballpark, we'll be similar next year. We will slow down our XD rollout in 2013, as I think most of the conversions will be done by that point. That will save money, as well as some of the other maintenance, major maintenance projects, that we actually started a few years ago where we're really having -- doing some major changes to a few theaters, I think that will slow down next year. So I would tend to say, in 2013, they'll be slightly less. I don't have a great number but if I was guessing, maybe its $20 million to $30 million less, but I think it'll still be high. When you get to 2014, then I think we'll drop off substantially because the digital and all that will be done.

Okay, great. And then if I could switch gears just a little bit. On the Latin American business, I know that there's has been talk or reports of changes in some legislation in Brazil concerning expatriation of dividends and ownership of property. Does anything in the regulatory environment there affect your ability to use your cash flows or -- I think it's less in Brazil and more to Argentina. Is there any change that affects your ability to monetize your recent investment there or to reap the cash flows from Latin America? Any regulatory change there that affects you?

Yes, we don't see that. Fortunately, at least currently, we're reinvesting most of money in Latin America that we generate. With the acquisition last year, we set up some structures to be able to move money around both throughout our international circuit, as well as moving it back to the U.S. So really, with the changes you mentioned, Argentina, we don't foresee that causing problems. Most countries kind of hesitate to put those in place because they want foreign investment coming in. And again, having said that, all of our countries we try to finance in a way and structure in a way that we haven't run into any problems in pulling money out. Again most of it is being reinvested anyway currently. But longer-term, as we start pulling money back to the U.S., we don't -- other than just normal things running to, we don't see a problem.

Okay. And final thing, can you give as the FX impact in the quarter?

Yes. If we were to take our ticket prices, it's probably the quickest way but it's pretty much reflective of what it -- top to bottom. Our ticket price for international, if you looked at it for the quarter, was down 3.2%. If it were not for FX, it would've been up about 2.2%. So you're looking at about a 5.5% swing. Concession prices were up 5.9%. They would have been up 11.7% without FX so that's about 6%. So I think -- and generally, looking at our numbers, that 5.5% to 6% negative impact is pretty much what happened.

And your next question comes from the line of Eric Handler with MKM Partners.

A couple of things. First, you threw a bunch of numbers out there for your expected openings for the theater screens for the year. Can you just give us an expectation where you think you might end 2012 with your screen count for both the U.S. and international screens? Secondly, your concession spending per cap growth was very strong again, particularly in the U.S. I'm just curious if there was anything in the product mix that helped that out. And then last, Alan to put you on the spot, even though you've been with the company for 25 years, it's not too often you see a 50-year old decide retire, just wondering if you could give a little more insight into your decision.

So I'll go ahead and start, save Alan for last so he can think about it. He can kind of gloat over it as we sit here. But with respect to the screen count, we foresee like I said, probably 150, 175 screens. I would say about 1/3 of those will be in the U.S., new build. In the U.S., we would foresee closing price somewhere in the 30 to 40 screens. So net in the U.S., actually, I would guess is somewhere in the 15 to 25 screen count range. Internationally, we would foresee opening, I guess, 100 to 125 screens. Don't know really any closures there so that ought to be pretty pure. So I think if you kind of net of all those to where we are, we'll be close to 3,900 U.S. screens and we'd be around 1,375, 1,380 international screens at the end of next year if it goes the way that we planned. With respect to concessions. I don't know if there was anything unusual that we did. A lot of it was concession -- was just the nature of the film product that was being showed, it was very concession friendly. We have a fairly extensive program of product mix that's out there, where we also provide special deals by mixing kid's specials and putting drinks and combo specials together. We've been focused on that for, really, the last few years. Our head of concession has done a great job of finding the combos that fit well. We have special promotion programs. And I think those programs, combined with really the type of films that we had, have driven the number. Again, to be fair to it, if you look at last year, Q1 was lower concession per cap. I think Q2 was a little higher. Q3 was a little lower, and Q4 was higher. It's going to vary clearly with the type of film that's out there. I think the overall number probably goes up from where we were last year. We tend to suggest to people that both our concession and our box office increases would be in that ballpark 2% range domestically. And then clearly, the film will drive it up or down from that. But again, I think some of the combos, everything we're doing also push the numbers well.

So Eric, I guess I get to answer your question. And I will tell you for me personally this is -- obviously, was not an easy decision. It's never easy when you've been with a company as long as I have been. But at the end of the day after 26 years, it was really, I guess in my mind for me to achieve some of my personal goals and some directions I wanted to head in, it was just time for me to make this change. And having said that, it was incredibly important for me to make sure that, number one, that the company was doing a very, very well. I would never want to leave when the company was down or having any kind of issues. And as you certainly heard from our numbers, we continue to perform incredibly well, be the leading exhibitor in the whole space. So for me, it was a good time to do that. And then especially on top of it, we have just a fantastic management team. They all understand our goals, our objectives. They've been with the company a long time. We work very well as a team. And on top of that, I mean as you've heard, I mean Tim is very well qualified to step into my shoes to make sure he continues to lead the company. And all those pieces of the puzzle were a good timing for me, I think it’s good timing for the company. And especially, I'll be around for a couple of years to make sure I'm available for any questions or help or anything I can really do to ensure that the company continues to be successful. So I think the bottom line for me is that it was just a great time for me.

Your next question comes from line of Bo Tang.

You talked about the FX impact in the quarter, which was helpful. But I guess, just given the recent moves in rates, could you help us think through the FX impact for the coming quarter and also for the full year?

Yes. If I look at where we were last year at this time, and again Brazil's a big piece of it, Q1 it looks like FX was averaging somewhere around 1.67. Fortunately, after year end, FX has come back down some or strengthened. If you want Brazil, I think we're running around 1.71, 1.72 right now, if I recall. So if it can hold in that area, again, you're looking at maybe a 4% to 5% impact, so it's not that bad. We were, obviously, much more concerned -- at the end of last year we saw it really rise to the high 1.7s and actually into the 1.8s, because that would have been a pretty significant change from where we were last year. But it can hold somewhere in this range, that would be my ballpark guess. If I look at the other countries, Mexico and Argentina and some of those, it probably it isn't that different, maybe a little bigger move in some of those countries. But my gut is -- let's say that, I don't know maybe 5 -- ballpark 5, it could be up to 8. I think that's not that different for the year because, as you look at a lot of the countries, you had a strengthening in Q2 and Q3, of currencies. So if I assume that does not happen and we just kind of hold somewhere close to where we are, I think that we'll be ballpark for the year as well.

Okay, great. And then on pricing, would you be able to give us a breakdown of your 2D, 3D and IMAX ticket price growth for the quarter?

Yes. I don't know we've really detailed that. I would say -- to be honest with you, for the most part, for the quarter most of our ticket prices remain relatively flat. Didn't necessarily have much growth year-over-year and while we had raised prices, some of that just had to do with the way ticket sales went. XD, in particular, is a bit unusual in that, when we look at the ticket price there, we do show 2D and 3D, so really our average XD price can vary significantly depending on the mix of films going to it. So for instance, this quarter on XD, we are actually down versus last year. But it was just because we showed many more 2D films than we showed 3D. However, if you look at the throughput on XD, it's been climbing. So that flexibility we have is very beneficial. Maybe if I looked at it kind of a different way and looked, overall, at our upcharges, our average upcharge for premium, which includes 3D and XD and IMAX was a little over $3. So it stayed relatively the same amount domestically. Internationally, it historically have been closer to $3, it's kind of moved down a little bit. That's both a combination of the FX impact, as well as we roll XD and 3D out to broader markets throughout international. We do expect we won't hold $3, it'd probably be more than $2.25 to $2.50 range. And that's primarily just because you get into smaller markets that you can't really charge the same average upcharge. Overall, it doesn't mean that our upcharge went down in our regional markets, those are still holding in the $3 range, it's just that average comes down a little bit. But all in all, it was flat, maybe slightly down on prices, but that has a lot more to do with mix. And again, our estimation for 2011 would be domestic prices would be up 1% to 2% again, outside of mix of film. And then internationally, I'd probably say more in the 5% to 7% range is where we'd probably shoot for an increase.

Your next question comes from line of Townsend Buckles with JPMorgan.

Just a few questions. First, on film rent in the U.S. actually coming up a bit despite the down the box office quarter. Robert, I think you touched upon it, but is there anything structural there that should result in higher rent going forward, all else equal?

No. I don't see that. Rent really ends up varying a lot by quarter and by the movies played. And it's hard to even look at it compared to -- amongst theater companies because we all have a number of different items that go into that film rental line. But there's nothing structurally that will change it. We think the averages still remains pretty consistent. And that quarter is not indicative of any long-term changes or anything.

Going to Latin America, could you touch on box office trends you're seeing this quarter? The public data we've seen has been a bit spotty lately. Just how it's comparing to what you're seeing in the U.S.

Yes, one of the big things, clearly, to keep in mind is that when you look at last year in Q1, domestic I think box office was, if I recall, was down in the 20% range while our international box office was actually up about 17%. So you had just a huge variance between domestic and international last year. And again, that had to do with how product played out, timing of films that when through and as well as -- Q1 tends to be -- is really more of their holiday period compared to what the U.S. is. That being said, just that huge variance would suggest that I've got a pretty high hurdle to match last year is much less to outperform the U.S. is outperforming because the U.S. was starting down 20% anyway. If you look at box office mojo, I think right now -- and again I'm not suggesting that it's indicative of the numbers, it's more, I think, reflective I think, directionally, of numbers. I think people can look at that. I just won't use it for exacts. But if you look at Brazil and Argentina and Mexico, I think all of those are reflective of being down 5%, 10% versus last year. It's too early for us to know where it ends up. But I do think it is a bit of a higher hurdle than, clearly, what the U.S. had, and so if projections are the U.S. is up 18%, I would not say that you'd see international doing the same thing.

Okay. And then just lastly, an update on the use of cash. It looks like you got about 5 years of dividends on the balance sheet now, and your clearly stepping up CapEx quite a bit. I mean, does that prevent you from wanting to do something with the dividend and how do M&A plans factor into that?

Yes. No, it doesn't. I mean, if you look at our cash flow, we absorbed the increase in CapEx, new build CapEx, as well as the roll of digital. We're fairly comfortable with that. I think acquisitions easily have room to handle pretty much any size acquisition, both with our cash balance as well as our borrowing capacity. So we said we're at a 2x net EBITDA to debt. And so our debt to EBITDA. So I think we have plenty of capacity should we really want to do something extraordinary. Not that we're heading there. So the 500 we have ought to cover all the little things we've been doing over the last few years. Also, again, putting it all in perspective, I don't think it prevents any changes in our outlook on dividends. Again, we've said that our focus will remain on acquisitions, enhancing the circuit-creating value through increasing our EBITDA while maintaining a strong dividend. I think, over time, I wouldn't to see our cash balance going down, again, outside of a major acquisition or something. So I think, over time, then we can adjust the dividend. But again, that'll be a little further down the road.

Your next question comes from the line of Ben Mogil with Stifel, Nicolaus.

Wanted to ask you guys really 2 quick questions. So first question would be sort of following on Townsend's question about leverage ratios or sort of about optimal capital structure, given that you've got sort of $500 million of CapEx sitting ahead of you and you're sort of currently levered at 2x. Give a sense of what your current optimal leverage structure is over the next couple of years just given the OpEx build.

Again, I would say that, really coming from our cash flow, I mean we might eat a little bit into our cash, but again, if we -- assuming these are good years, and we think they will be, I think we can absorb most of this through just our operating cash flow. So we don't foresee leveraging unless there was a great reason to do it with some acquisition that made sense to put some leverage on. If we do eat into our cash balances, I just don't feel it's going to be that significant. So my gut is we'll maintain our leverage ratios pretty close to where we are. Even if we did an acquisition, again, I mean that obviously increases our EBITDA. So I don't know, the leverage changes much.

Are you seeing in the domestic market some of the sort of potential sellers now coming to the market more thoughtfully in terms of pricing and are you seeing the new build activity sort of just continue to remain, domestically, relatively benign?

I can see that some of the smaller exhibitors are going to have a financial barrier as they try to transition to digital, and then there's also some operating barriers as to how you service digital for the smaller exhibitors. Now, from Cinemark's perspective, our focus has always been on the quality of the screens and are they going to enhance our overall company. We've done a major acquisition when we acquired Century and then, here a couple of years ago, we acquired the 4 Muvico theaters, that both those acquisitions enhanced our place in the marketplace and they're really high quality screens. We have the same policy in Latin America. When you look at what would done in Latin America, the Hoyts screens in Argentina were really high quality screens. Has enhanced our place in the marketplace and then we did a couple of minor transactions in Brazil the last couple of years. But our standards are that they have to be really high quality screens and are going to enhance our position in the marketplace.

Okay. And then sort of last question. So given the recent liberalizations in China that clearly favor both 3D, and IMAX in particular. On the margins, you think that spurs to do more products in both of these formats and given that you're underway at IMAX, sort of some thoughts around sort of what the change or do you see any change in terms of what the film makers are going to be doing, given that China's obviously a large and materially growing market?

Yes. Well, first off on China, we're -- obviously, we have looked at China in my past. I spent, probably 3 or 4, 5 years going to China, 3x or 4x a year and then we set up our operations in Taiwan, so we would a small participation there, so we would understand the Chinese market for when it opened. But there are substantial barriers to go in into China and the big barrier is that a company like our ours can't own 51% of the company and so you can't control the company. And I think without that factor changing, we'll always have a limited opportunity in China to expand into China. Then on the 3D and IMAX, I mean, I think the big development in 3D, and they demonstrated it last year at the CinemaCon, is the going to the 48 frames per second. I think that that's going to really enhance the technology and I'm going to presume that the upcoming films from James Cameron, the new Avatars and that will probably also go into 48 frames per second. And so I think that will be the new emphasis as the expansion of 3D. And I think the other thing that's happening as you're starting to get some of your top filmmakers to start to make movies in 3D. This past year, you've seen both Spielberg and Scorsese do films in 3D and I think the creative community, in general, was getting a lot more comfortable with the 3D format. As it relates to our footprint of XD and IMAX, we see XD having tremendous flexibility in the marketplace, that we can play all films. We don't need any special adaptation. We can just take whatever they give us and play it on our XD screen. We also got 8 successful IMAX screens, that we think our strategy of going forward on the XD is the right strategy. And I think you're starting to see some of the rest of the people in the industry really develop the large XD format, as we call XD, but you also see some of our competitors trying to adapt that technology and that format.

Your next question comes from the line of Eric Wold with B. Riley.

I guess 2 questions. I guess, one, with the current situation down in Latin America with, hopefully, moving towards the BPF structure. Are you seeing more opportunity down there to build screens, open screens on your own, versus M&A or would you still characterize the M&A opportunities here and abroad as fairly robust?

No, I mean, I think our -- the vast growth -- I mean, our vast growth in Latin America has been organic growth not M&A activity. Recently we had a major M&A activity in Argentina and then some minor M&A activities. But I mean, the vast majority of our screens are organic grown. And for the foreseeable future, I mean, I see that as how we're going to grow our company.

Okay. And a quick follow-up question on XD, kind of going with some of the other questions that have been asked. I guess, one, you focused a lot of the flexibility of the slate and how that benefits you on those screens. Give us a sense of maybe what that delta was in the quarter in terms of how the slate benefit your XD screens versus your IMAX screens as more of kind of constrained slate? And then, two, anything you learned in 2011 with your slate of XD screens that would kind of change your internal model in terms of the CapEx build or the P&L from the screens is where you'd want to place it or you may or may not want to think about it a year before?

Eric, I think we haven't really run down or provided data comparing IMAX and XD. IMAX continues to be a very premium format that does very, very well. When we look at our XD screens and we're playing the same product, we think they perform extremely well and it's a theater-by-theater, really, comparison. We have some theaters that will outperform some of our IMAXs, some IMAXs outperform some of our XDs depending on the film. But again, I mean that is to say, IMAX just has a great product, they have great background in marketing. And so we very much like our IMAX screens. The reason we're emphasizing the flexibility is it really is something we can control. If we look at what happens, especially say this quarter and I can take the cumulative results of an XD versus IMAX screen, we think it reflects a benefit of the concept that we put together because we are able to just push -- select the films that we push through there. We are able to rotate them fairly quickly and so that really maximizes utilization at that higher end screen. As far as what we have learned? We are still, interesting enough, experimenting on them. We have some theaters that we've actually put 2 XDs into and we're seeing how that works. We're looking at different markets that we're putting them as we're finishing out our largest market and trying to determine as we go to smaller markets how well they performed in those markets. So there's still some things that we have to learn as far as what we can do. But I think that the key to it is we found that just the upcharge itself that we do on those and the attendance, using just straight attendance, gets the returns that we've been after and we also feel that, realistically, it enhances the theater experience at that theater and is actually drawing more people, overall, into the theater. So we know it's a been a great return. But we also want to keep a certain, if I'm going to call it, quality standard in terms of size and presentation, and that itself we think, ultimately, limit -- put some of it out of how many of these in theaters. And again, we think by the end of this year, we'll usually be over 100. We'll continue to put them in all of our new builds and then probably slow down a little bit of our conversions. But considering our new build slate, that number will continue to grow. We also think it's great advantage in Latin America because we are the most prominent, I think, brand down there and by having this particular concept, this bigger concept, it really makes us that much stronger.

Your next question comes from line of David Miller with Caris & Company.

A few questions. Rob, what was the free cash flow number in the quarter? I just don't see that in the press release. And then, just as a follow-up, your average screens per theater is around 11.4. Regal is just more like 12. Regal actually used to be more like 12.4, but now it's 12.6, 12.7. Just in terms of capacity utilization, I mean, are you comfortable with that kind of 11.4 ratio? Do see that going to the 12's or does Latin America just prohibit that? And then I have a follow-up.

On that one, we try to build the right theater for the marketplace and both Regal and ourselves have a different profile. And so our focus is always on, as we evaluate marketplaces, what size of theater that we should build there. And we focus on getting the right size in the marketplace rather than focus on just building the standard format theater like an old -- AMC, several years, ago was going out with 24-, 30-plexes as their model. We've always modeled our theaters based on the marketplace.

And then with respect to our free cash flow. If you look at our net cash flow provided by operations everything kind of bottom-lined from a GAAP, and then took out our CapEx, I think you'd get around the $40 million range of net free cash flow.

Okay. And then just a follow. I've noticed that the Warner Bros. release of The Hobbit is -- I think it's December 15, I could have the date wrong. I think that's the second Friday there in December. December 14, 15, something like that. Would that make The Hobbit a Q1 of '13 release in Latin America or is it -- do you guys know? Is it a day and date release globally?

I don't know if they set their release patterns on a global basis yet, if that has been determined. But in the U.S., you're correct. It's in that time period.

Your next question comes from the line of Tony Wible with Janney.

I was hoping we could start off by digging in to Brazil. Could you give us what, on a local-currency basis, you guys are up year-over-year in Brazil versus the industry? And I guess where I'm kind of going with this is, I'm trying to track how much market share are you gaining and is that just a function of building out niche screens in the market or is there a bigger secular shift of you just organically gaining share?

Tony, and I apologize, but we don't generally give out specifics on countries from a segment point of view. I will say though, if you want to look overall at Brazil, the total revenues will be broken out when we send out the K. I think that's in our segment part of it. It will show what the change is year-over-year. The total, when you see that, the total revenues for Brazil aren't going to change that much, because again, it had that pretty big wall to climb, with Tropa De Elite from last year. I mean, that was such a big film in Q4 of the prior year. It is going to -- revenues are going to be up though some and so -- well, they'll be up for the year. For the quarter, if I recall, they were slightly down. And again, that doesn't have to do with performance in Brazil. Our new screens -- it just literally has to do with overcoming that hurdle. As far as compared to the industry, I don't know have that in front of me, but I think you'd find that, that was pretty similar. When we've looked at the industry in the past, how it’s done compared to us, we've generally outperformed it. Some of that is -- we're building more than other people. In general, we're staying kind of ahead of that curve on our market share and the quality of the asset we have, as well as the recognition of the assets that we have down there.

I guess, when I look at Brazil being a negative number and your total international up 12%, is the delta there a function of you guys just doing much better outside of Brazil, so in Argentina and Mexico?

Sure, absolutely. If you looked at what happened out in the growth in Q4, that was in Brazil. I mean, again, we had to overcome, actually, a slight negative in Brazil and the rest of our international did extremely well. Now, also, keep in mind -- and it didn't carry the load by any chance, but it helped. I mean, we do have the Hoyts acquisition. That was the first full quarter of recognizing some benefits from Hoyts. But I mean, all of our international, without Hoyts, did extremely well and really made up that difference for Brazil this quarter.

Is there any kind of generic commentary you could give about share gain? I know, in the U.S., you kind of talked about exceeding the benchmark by 1% to 2%. In Latin America, do you have a sense -- since you can't breakout each individual country, can you just generically say what you think you're gaining share as either a percentage versus the industry box office?

I wish I had a number. I'll tell you what, we'll look at that for the next call and try to have some stats on that. The difficulty, obviously, it varies so much by country, pulling the data itself. When we did have our international call, a few weeks -- or I guess about a month ago, we did talk a little bit about some of that. And I think that it'll vary a lot by country. But I don't know if it would be that different. And that again we're probably up, I don't know, 1% to 5% versus what the country generally does, would be my gut. And again, some of that is not only do we maintain share in building but we're probably a little more robust builder, so we're going to just gain market share as expansion occurs.

Your next question comes from the line of Joe Hovorka with Raymond James.

I'm sorry if I missed this but did you give what percent your screens international are digital?

Yes, 35%.

It's 35%?

Yes.

And what of that is 3D?

3D, pretty much all of it.

Yes, about 35%.

Okay. And then the CapEx plans over the next couple of years anticipates taking that 35% to 100%?

Yes it does.

Okay. And then what is the cost differential of a new build in digital versus if you would've done it in the 35-millimeter?

It's not substantially different. It's one, that over the years, we've been able to -- the cost of digital has changed some and so there is some incremental cost, but when I look at it compared to the total new build cost, it’s not material.

Okay. And you said what part of the increase in CapEx was going towards converting, I guess, the 65%?

Yes, actually for our CapEx, that's probably in the $60 million to $70 million range.

Each year?

It will probably have that -- again, some of it depends on when BPF agreements are signed. So that definitely can vary this year. We're assuming those get done fairly soon, which will allow us to really start ramping up quickly. If we're able to do that, again, it has to happen pretty quickly because we're getting close to the end of the first quarter. But assuming that occurs, we probably would be in that $60 million, $70 million range this year. Probably, next year is probably more in the $40 million to $50 million range and then that ought to get close to doing it.

Your next question comes from the line of Martin Pyykkonen with Wedge Partners.

A couple of things. I was trying to get a sense for -- in terms of the all digital conversion, where you're at in terms of pulling labor costs out and really applied more domestically where it's kind of a change from film to all digital. Obviously, Latin America it's more new footprint, so presumably all digital. I'm just trying to get a sense for -- going forward, I know you won't give a guidance comment financially, but where the EBITDA margin could go from here as a result of that. I mean, much more runway is there on that? And then secondly, it kind of came up in another question. But on M&A, do you see meaningful consolidation here, domestically, in terms of operators and any kind of number or framework you'd put around that if that is the case. In other words those that are wanting to bail out and you could go in with an all digital footprint in a attractive location for you. I'm just trying to get a sense of scale for how much of that will be out there in your mind.

Well, on the first part of your question, I think that George Lucas sort of stated it best at last year's CinemaCon panel where he says, "Getting to digital was just the first step to open up all the advances in technology that we can take advantage of." And I think that the 48 frames per second is a huge advancement, as to how films are going to presented. Also, you're seeing the studios bring back the classics in 3D and you know that's been a big benefit to the industry. Also we've been doing some minor expectation because the studios are converting all their libraries to digital. And so we've been experimenting with just bringing back some classic 2D things and the early experiments of that, like on Ben Hur and that have been very, very promising. So I think it might open up those libraries. The other thing with digital is that we're working on setting up a satellite footprint to where -- one of the barriers to exhibition has always been access to our screens. And this new system will create one porthole where there'll be tremendous access to all content providers that can reach thousands and thousands of screens via that 1 portal. So I think we're in the initial stage of this here digital transformation and what it's going to do to our industry. We have seen some cost savings from an operational standpoint. But I think there's still some upside to digital, as to how it's going to transform our overall industry. Now, regarding the M&A activity, I don't know if we see significant M&A activity from any of the circuits. I think there might be some minor M&A activity like there usually is. But when you look at the big picture, I don't see significant M&A activity.

And then, I guess, on the first part, I was really meaning more in terms of your operations and the projector built in, particularly. That it sounds like probably do, maybe not want to quantify it, but did you get more margin leverage in the sense that a year or 2 out from now, there'll be less labor up in that booth than there is today, just kind of across your whole network. Is that a fair assumption?

Yes. There is an opportunity there. We've already said, realizing some of that's because we have fully digitized in the U.S. and you start seeing that the theater is completely digitized. And throughout 2011, we were -- in all of our theaters there had been -- clearly, each quarter, we're ramping that up. So I think we've started realizing some of that. I don't know you're going to see a material change from it and when you get down to the EBITDA margin, I think it helps. It's not one that will move that greatly. I think, as Tim said, what we see, really, the greater opportunity that really might move that margin, I think, is from the incremental revenues that might be realized as digital really takes hold among all the circuits. So that a producer or alternative entertainment, whatever might be out there, can really utilize the whole platform and that just hasn't been available yet.

That was actually my other question. Last one is just on alternative content, when you look at sort of a few years out, as opposed to real near term. It seems like opera's done pretty well, there's sports issues about rights cost and a lot of the different things. But obviously, being all-digital enabled, that better -- as you see it as alternative content of meaningful a number, could it be a high single-digit, 10% of revenue several years out or is it always going to be very small relative to the traditional box?

It's hard to forecast where it ultimately ends up. But we have been doing some experimentation with doing 3D sports in an alternative content, but it's just been on an experimental basis, as they tried to film it like we ran Wimbledon. And the actual results on Wimbledon, from an experience standpoint, was very, very good. And for course we tried some football, basketball, different things in 3D. And I think that's still an emerging -- as to how you film it in 3D and then also how you disperse it. But I think there is upside to alternative content but I don't know if we could quantify it at this time.

Your next question comes on line of Marla Backer with Hudson Square.

I have 2 questions. One is you talked a little bit about the flexibility that you have programming your XD screens. So I'm wondering if you could provide a little bit more color. Is your general strategy to switch out the film every 1 to 2 weeks when a new big film comes in or do you let it play if it appears the film has legs? And to what extent, if any, are you contractually obligated to studios to maintain a film on that screen?

Well, on the XD screen, the model that we've established is that we decide which we think is the biggest film for our XD film that week, and can only make a 1-week commitment. Based on performance then we make a decision whether we want to hold it or we want to go with the next big film. And that's the beauty of our XD screen and the studios are -- they might want to stay on the screen but they also realize it's a great model for them and it's a great model for us to always be presenting what we think is the #1 film in the market for XD on XD. And that is the flexibility that really drives capacity issues and a lot of other drivers on our XD screens. And the studios have pretty much accepted that format. Now, each week, there is a lot of request in trying to get onto that XD screen because it drives a lot of box office. But the model has been fairly well accepted in the marketplace.

And then I have a have a housekeeping question on the faster speed rates, frame rates. You talked about the 48 frames per second. Well, it was my understanding that Barco, the Barco technology, is compliant with the 48 frames per second and shouldn't have any problems with it. But that some of the other technologies out there might not be able to accommodate those higher frames, frames per second. Is that your understanding as well?

Well, I mean, I will only speak on behalf of Barco and that is the technology that we're using and it is compliant and we will have the ability to show it on the 48 frames per second. I haven't, obviously, since our focus is on Barco, I haven't focused as much on the other technologies.

Your next question comes from the line of Bishop Cheen with Wells Fargo.

A couple of housekeeping questions. Capital leases tend to run about $140 million, $141 million. Do you have the number there for 2011?

Yes. I think at the end of 2011 it was about -- as you just said, is about $141 million.

Okay. And also, can you restate the census? U.S. theaters and screens year end for 2011?

The screen count we had at year end? Sure, let me just grab that. We had, on a U.S. basis 3,878 U.S. screens. We had...

How many theaters?

That was 297 theaters. And then...

That's helpful. And last question, are you making any progress in the age old challenge of trying to increase the yields from your off-peak use of your facilities, your theaters? Is there anything new and exciting that you've discovered in that?

Well, I mean, I think that -- one thing we highlighted in our report, that with the studios starting to do some re-releases of more classic films like Lion King and Beauty and the Beast and now you're going to have Titanic, what they realized on those re-releases they need to bring them into the slower periods of the marketplace. So I think that could improve and spread out of the releases throughout the year and those re-releases are getting great results. The other thing that I think is encouraging, from a film standpoint as I referred to earlier, is that we are experimenting with bringing back classic 2D films and the initial results that we've gotten, have received on, have been very encouraging. And we're working with all the studios to try to expand that program. And so I think having the digital format, of having the studios have the films on digital and us having the digital footprint, is going to allow us to do a lot of experimentation and expansion to give better screen utilization.

That was right in the core skill set. What about those nontraditional uses with the junior colleges or political rallies or what have you, civic events. Is there anything different that you've seen, Latin American or domestic, in the nontraditional use of your facility?

I mean, it's always been a very minor part of our business. And I think that the future utilization of the screens will be more around the film and alternative content. But as you know, meeting spaces and this, I think, it'll always be a segment of our business but not a meaningful segment for growth.

Right. Last question, the second run chain Cinemark at one-time had been the, by a magnitude, a leader in the discount theater, second run however people like to call it...

Yes, discount theaters.

Discount theaters. As you look ahead, is that still -- it used to be like 20% of your business, probably significantly less now, is that still something that is viable going forward?

We still have some change that, if you want to call them discount, that definitely service a part of the market. It's not a significant part of our chain. We don't break it out as a segment. As a viable, sure it still works. It's not a focus of the company. We maintain some of the theaters that we've had in the past. We're not opening any under that brand or anything like that or as a discount. But it is -- it maintains itself. It's a nice piece of our business, but again, not a significant piece.

Your next question comes on line of Jeff Logsdon with Bank of Montreal.

Really for anyone, I guess Tim's the best to look at this, but how's the situation with Open Road films? Are you indexing similar to other films? Is there some film zone limitations or issues? Are the play dates kind of a similar to your screen count nationally? If you could kind of give us some background or dynamics around that would help.

Well, one, we think is great for the industry because, and it's also great for Cinemark, because the more companies out there that are bringing product to the marketplace, it's a great answer for us. And to your specific questions, both on the cable release and then also on The Grey. We performed pretty much on average to our national share of box office in Killer Elite. The Grey, because of the type of picture it was, I think we might have over-performed slightly. We know the management team at Open Road. They're great film people and we wish them all the success in the world and look forward to playing their product.

So should we take it from that, that simply because Open Road is a partnership owned by competitors, for the most part, that, that hasn't been a variable and you're getting access to the films?

Yes. No, it's not an issue and they see -- I'm sure they segmented that company as a film company. And I have every belief that they're just going to move forward as a film company. And access to their product or cooperation with us is very similar to any other studio.

Which is always fun, right?

Yes I know. Absolutely, yes. Maybe they might be an adviser to us. So yes it's fun, yes.

And there are no further questions at this time.

Well, we appreciate everybody's participation today and look forward to -- as we said, we'll be at conferences in the next few weeks and look forward to seeing people. Have a good day.

This concludes today's conference call. You may now disconnect.