The U.S. motion picture exhibition industry has a demonstrated track record of consistent, long-term growth, with box office revenues growing at a CAGR of 5.4% over the last 35 years. Despite historical economic cycles, attendance has grown at a 1.2% CAGR over the same period. The industry has maintained momentum with strong performance in 2006. For the nine months ended September 30, 2006, U.S. box office revenues were up 6.3% and attendance was up 4.3% over the same period in 2005.

International growth has also been strong. According to PwC, global box office revenues grew steadily at a CAGR of 2.5% from 2001 to 2005 as a result of the increasing acceptance of moviegoing as a popular form of entertainment throughout the world, ticket price increases and new theatre construction. Latin America has been one of the fastest growing regions in the world, with box office revenues growing at a CAGR of 12.6% from 2001 to 2005.

Growth in Latin America is expected to be fueled by a combination of continued development of modern theatres, attractive demographics (i.e., a significant teenage population), strong product from Hollywood and the emergence of a local film industry. In many Latin American countries the local film industry had been dormant because of the lack of sufficient theatres to screen the film product. The development of new modern multiplex theatres has revitalized the local film industry and, in Mexico, Brazil and Argentina, successful local film product often provides incremental growth opportunities.

The Company operated 353 first run theatres with 4,066 screens and 39 discount theatres with 364 screens.

The Company’s theatres in the U.S. are primarily located in mid-sized U.S. markets, including suburbs of major metropolitan areas.

The Company’s theatres in Latin America are primarily located in major metropolitan markets. The Company first entered Latin America with the opening of theatres in Chile in 1993 and Mexico in 1994.

The Company presently has theatres in twelve of the fifteen largest metropolitan areas in Latin America.

Cost of operations was $609.9 million, or 73.6% of revenues, for the nine months ended September 30, 2006 compared to $560.2 million, or 75.0% of revenues, for the nine months ended September 30, 2005.

Depreciation and amortization expense, including amortization of net favorable leases, was $64.5 million for the nine months ended September 30, 2006 compared to $64.1 million for the nine months ended September 30, 2005.

Interest costs incurred, including amortization of debt issue costs, was $67.1 million for the nine months ended September 30, 2006 compared to $62.0 million for the nine months ended September 30, 2005.