Company Obtains Extended Covenant Relief Under
Credit Facilities
TORONTO, Nov. 13, 2020
/CNW/ - (TSX: CGX) - Cineplex Inc. ("Cineplex" or the
"Company") today released its financial results for the three and
nine months ended September 30, 2020.
The Company's third quarter financial results were impacted by the
COVID-19 pandemic, as the Company temporarily closed all of its
theatres and location-based entertainment ("LBE") venues effective
March 16, 2020, only beginning to
reopen in select markets during the last few weeks of June. Unless
otherwise specified, all amounts are in Canadian dollars.
"Cineplex is a resilient organization and we remain confident in
our financial position and business recovery plans, despite the
tough industry and economic conditions," said Ellis Jacob, President and CEO,
Cineplex.
"Building on our response to the pandemic, we continued to focus
on adapting our operations, significantly reducing expenses, and
strengthening Cineplex's financial position. In addition to this
focus, since Q2, we have raised $303
million (net of fees) in additional financing, obtained
extended relief under our credit facilities, reduced net cash
outflows with respect to leases by approximately $58 million, received approximately $22.5 million in wage subsidies, and are
generating a substantial tax asset which we will realize upon in
2021."
"In the third quarter, we reopened all of our theatres and with
the first major film in five months, Tenet, we welcomed over 1.6
million guests to our theatres. This signals to us, as well as our
studio partners, that Canadians have missed the magic of the big
screen and are confident in the rigorous health and safety
protocols we have put in place in our venues. Keeping our guests
and staff safe is our top priority and we are proud that no major
outbreaks or transmission of COVID-19 can be attributed to movie
theatres."
"We are always reviewing and refining our operating plans across
the entire business and will take the necessary steps that ensure
Cineplex remains on solid financial ground and is well positioned
for a strong and healthy future," Mr. Jacob concluded.
Impact of the COVID-19 Pandemic
On March 16, 2020, Cineplex
announced the temporary closure of all of its theatres and LBE
venues across Canada, as well as
substantially all route locations operated by P1AG. On April 1, 2020, in response to applicable
government directives and guidance from Canadian public health
authorities, Cineplex announced the continued closure of its
theatres and LBE venues across Canada.
Cineplex was able to reopen a limited number of venues in late
June, and as government restrictions across the country were eased,
additional locations were opened. On August
21, 2020, Cineplex became one of the first of all the major
film exhibitors in the world to reopen its entire circuit of
theatres with all 164 Cineplex theatres and 1,687 screens across
Canada reopened, including 22 VIP
Cinemas locations, as well as 10 location based entertainment
venues.
The COVID-19 pandemic has had a material negative effect on all
aspects of Cineplex's businesses resulting in material decreases in
revenues, results of operations and cash flows. Since March 15, 2020, Cineplex has experienced a net
cash burn of approximately $15
million to $20 million per
month as a result of having to close its theatres and LBE venues
(for Q3 2020 net cash burn was $49.7
million for the three months or approximately $16.6 million monthly) (see Non-GAAP measures
section of this news release). When used in this news release, net
cash burn is calculated as adjusted EBITDAaL less cash interest
(excluding amounts with respect to lease obligations), provision
for income taxes and net capital expenditures. Net cash burn
assumes that all of Cineplex's theatres and LBE venues remain
closed or have limitations on capacity, current government wage
subsidies continue in place, with respect to the Canada Emergency Wage Subsidy ('CEWS') and
certain lease-related abatements and other lease-related savings
currently being negotiated are implemented as expected by
management.
As some of Cineplex's largest expenses, such as film cost and
cost of food services, are fully variable, during the closure of
its theatres and LBE venues Cineplex focused on reducing its
largest fixed and semi-fixed expenses, including those attributed
to theatre payroll and theatre occupancy. Cineplex was able to
materially reduce theatre payroll expenses from $40.9 million reported in the third quarter of
2019 to approximately $3.9 million in
the third quarter of 2020 as a result of assistance received under
CEWS. With respect to theatre occupancy expenses, Cineplex worked
with its landlord partners to identify relief measures, which
resulted in significantly reduced cash rent being paid in the third
quarter of 2020. The focus was on identifying opportunities for
lease-related abatements during the closure period, converting
fixed components of rent to variable rent during the reopening
period and looking for other opportunities to extract value under
its existing lease agreements.
Reopening Plans
Although restrictions on social gatherings are being lifted in
many of the markets in which Cineplex operates, there has been a
reinstatement of restrictions in certain markets and there is the
possibility that further restrictions may be reinstituted in the
future if there are additional outbreaks of COVID-19 in
Canada. Reinstitution of
restrictions on social gatherings that would result in the closure
of Cineplex's theatres and LBE venues would have a significant
negative impact on the ability and timing of Cineplex's return to
profitability.
Subsequent to September 30, 2020,
social gathering restrictions were reinstituted in several key
markets that Cineplex operates including select regions in
Ontario, Quebec and Manitoba. The restrictions resulted in the
mandated temporary closure of certain theatres and LBE locations.
In addition, with the global delay of exhibitors reopening,
specifically those in California
and New York, distributors have
shifted the release dates of major movie titles out of 2020 into
2021 and beyond, in an effort to maximize box office revenues on
their eventual release. This included No Time To Die, and
Dune. In addition, some previously expected theatrical
releases have instead been redirected to streaming services. The
impact of the reduction of new releases in the fourth quarter as a
result of these postponements in combination with the ongoing and
potentially expanded restrictions on the reopening of Cineplex's
businesses, has also negatively impacted the timing of Cineplex's
return to profitability.
Cineplex has also undertaken the sale of assets and lease rights
unlocking value where available. During the third quarter, Cineplex
sold certain restrictive lease rights to landlords resulting in the
receipt of $21 million during the
quarter. Cineplex also announced during the quarter that it
was pursuing the sale of its head office location, with the
potential for a leaseback transaction, expected to close in early
2021.
Credit Facility Waiver
On November 12, 2020, Cineplex and
Cineplex Entertainment Limited Partnership entered into the Second
Credit Agreement Amendment with its lenders. The amendment provides
Cineplex with immediate financial covenant suspension in light of
the COVID-19 pandemic and its effects on Cineplex's businesses,
which will be extended to the second quarter of 2021. As at
September 30, 2020, an aggregate of
$460 million was outstanding under
the Credit Facilities.
Other Matters
Repudiation of the Arrangement Agreement with
Cineworld:
On June 12, 2020, Cineworld
delivered a notice to Cineplex purporting to terminate the
Arrangement Agreement dated December 15,
2019 between Cineplex and Cineworld (the "Arrangement
Agreement"). On July 3, 2020,
Cineplex announced that it had commenced an action in the Ontario
Superior Court of Justice against Cineworld and 1232743 B.C. Ltd. seeking damages arising from
what Cineplex claims was a wrongful repudiation of the Arrangement
Agreement. The claim seeks damages, including the approximately
$2.18 billion that Cineworld would
have paid upon the closing of the Cineworld Transaction for
Cineplex's securities, reduced by the value of the Cineplex
securities retained by its security holders, as well as
compensation for other losses including the failure of Cineworld to
repay or refinance Cineplex's approximately $664 million in debt and transaction
expenses.
On September 2, 2020, Cineworld
filed its Statement of Defence and Counterclaim in which it denied
Cineplex's claims and advanced a counterclaim seeking reimbursement
of an unspecified amount for costs incurred with respect to the
transaction and an unspecified amount for punitive damages.
Cineplex responded to Cineworld's defence and counterclaim on
September 15, 2020, denying all
claims levied by Cineworld.
While a trial date has been set for September 2021, due to uncertainties inherent in
litigation, it is not possible for Cineplex to predict the timing
or final outcome of the legal proceedings against Cineworld or to
determine the amount of damages, if any, that may be awarded.
Third Quarter Financial Results
|
|
|
|
|
2020
|
2019
|
Period over
Period
Change (i)
|
Total revenues
(ii)
|
$
|
61.0
million
|
$
|
418.4
million
|
-85.4 %
|
Theatre
attendance
|
1.6
million
|
17.5
million
|
-91.1 %
|
Net (loss) income
from continuing operations (iii)
|
$
|
(121.2)
million
|
$
|
15.1
million
|
NM
|
Net loss from
discontinued operations
|
$
|
— million
|
$
|
(1.7)
million
|
NM
|
Net (loss) income
(iii)
|
$
|
(121.2)
million
|
$
|
13.4
million
|
NM
|
Box office revenues
per patron ("BPP") (iv)
|
$
|
9.30
|
$
|
10.16
|
-8.5 %
|
Concession revenues
per patron ("CPP") (iv)
|
$
|
7.37
|
$
|
6.68
|
10.3 %
|
Adjusted EBITDA
(iv)
|
$
|
(28.9)
million
|
$
|
106.1
million
|
NM
|
Adjusted EBITDAaL
(iii) (iv)
|
$
|
(46.7)
million
|
$
|
62.3
million
|
NM
|
Adjusted EBITDAaL
margin (iii) (iv)
|
(76.6) %
|
14.9 %
|
-91.5 %
|
Adjusted free cash
flow (iv)
|
$
|
(77.3)
million
|
$
|
48.2
million
|
NM
|
Adjusted free cash
flow per common share of Cineplex ("Share") (iv)
|
$
|
(1.221)
|
$
|
0.762
|
NM
|
Earnings per Share
("EPS") from continuing operations - basic and diluted
(iii)
|
$
|
(1.91)
|
$
|
0.24
|
NM
|
EPS from discontinued
operations - basic and diluted
|
$
|
—
|
$
|
(0.03)
|
NM
|
EPS - basic and
diluted (iii)
|
$
|
(1.91)
|
$
|
0.21
|
NM
|
Year to Date Financial Results
|
|
|
|
|
2020
|
2019
|
Period over
Period
Change (i)
|
Total revenues
(ii)
|
$
|
365.8
million
|
$
|
1,221.9
million
|
-70.1 %
|
Theatre
attendance
|
12.3
million
|
49.5
million
|
-75.2 %
|
Net (loss) income
from continuing operations (iii)
|
$
|
(393.6)
million
|
$
|
31.8
million
|
NM
|
Net loss from
discontinued operations
|
$
|
(5.0)
million
|
$
|
(6.4)
million
|
NM
|
Net (loss) income
(iii)
|
$
|
(398.6)
million
|
$
|
25.4
million
|
NM
|
Box office revenues
per patron ("BPP") (iv)
|
$
|
10.23
|
$
|
10.58
|
-3.3 %
|
Concession revenues
per patron ("CPP") (iv)
|
$
|
6.86
|
$
|
6.70
|
2.4 %
|
Adjusted EBITDA
(iv)
|
$
|
(23.8)
million
|
$
|
299.3
million
|
NM
|
Adjusted EBITDAaL
(iii) (iv)
|
$
|
(116.9)
million
|
$
|
168.2
million
|
NM
|
Adjusted EBITDAaL
margin (iii) (iv)
|
(31.9) %
|
13.8 %
|
-45.7 %
|
Adjusted free cash
flow (iv)
|
$
|
(131.3)
million
|
$
|
129.3
million
|
NM
|
Adjusted free cash
flow per common share of Cineplex ("Share") (iv)
|
$
|
(2.074)
|
$
|
2.042
|
NM
|
Earnings per Share
("EPS") from continuing operations - basic and diluted
(iii)
|
$
|
(6.21)
|
$
|
0.50
|
NM
|
EPS from discontinued
operations - basic and diluted
|
$
|
(0.08)
|
$
|
(0.10)
|
NM
|
EPS - basic and
diluted (iii)
|
$
|
(6.29)
|
$
|
0.40
|
NM
|
|
|
i.
|
Period over period
change calculated based on thousands of dollars except percentage
and per share values. Changes in percentage amounts are calculated
as 2020 value less 2019 value.
|
ii.
|
All amounts are from
continuing operations.
|
iii.
|
2020 includes
expenses related to the Cineworld Transaction/Litigatiopn in the
amount of $0.5 million for the third quarter and $2.8 million for
year to date.
|
iv.
|
Adjusted EBITDA,
adjusted EBITDAaL, adjusted EBITDAaL margin, adjusted free cash
flow per common share of Cineplex, BPP and CPP are measures that do
not have a standardized meaning under generally accepted accounting
principles ("GAAP"). These measures as well as other Non-GAAP
financial measures reported by Cineplex are defined in the
'Non-GAAP Financial Measures' section at the end of this news
release.
|
KEY DEVELOPMENTS IN THE THIRD QUARTER OF 2020
The following describes certain key business initiatives
undertaken and results achieved during the third quarter of 2020 in
each of Cineplex's core business areas:
FILM ENTERTAINMENT AND CONTENT
Theatre Exhibition
- Reported third quarter box office revenues of $14.5 million, a decrease of $163.3 million (91.8%) from $177.9 million reported in the prior year period
due to the 91.1% decrease in theatre attendance from 17.5 million
in 2019 to 1.6 million in the third quarter of 2020 due to the slow
rollout of the opening of theatres in the third quarter after the
closures in the second quarter, strict capacity restrictions and
limited number of first-run movies.
- BPP was $9.30, a decrease of
$0.86 (8.5%) versus the prior year
period BPP of $10.16.
Theatre Food Service
- Reported third quarter theatre food service revenues of
$13.9 million, a decrease of
$103.1 million (88.1%) from the prior
year period as a result of the decrease in theatre attendance and
restricted food offerings.
- CPP was $7.37, an increase of
$0.69 (10.3%) versus the prior period
CPP of $6.68.
Alternative Programming
- Alternative Programming (Cineplex Events) featured the release
of the Break the Silence: The Movie starring BTS, Bill & Ted
Face The Music, André Rieu's Magical Maastricht: Together In Music
and A Night At The Louvre: Leonardo Da
Vinci.
Digital Commerce
- Total registered users for Cineplex Store increased by 41% in
the third quarter of 2020 as compared to the prior year
period.
MEDIA
- Reported third quarter media revenues of $12.8 million, a decrease of $30.5 million or 70.4% compared to the prior year
period.
Cinema Media
- Reported third quarter revenues of $3.3
million, compared to $22.6
million in the prior year period, a decrease of 85.2%,
primarily due to the decreases in show-time and pre-show
advertising as a result of the limited screens and new releases
available.
Digital Place-Based Media
- Reported third quarter revenues of $9.5
million, compared to $20.7
million in the prior year period, a decrease of 54.2%,
primarily due to the lower project installation revenues as a
result of COVID-19 and reductions in customers' businesses.
AMUSEMENT AND LEISURE
Amusement Solutions
- Reported third quarter revenues of $13.2
million, a decrease of $36.7
million (77.2%) versus the prior year period as a result of
the temporary closures of P1AG route locations and capacity
restrictions due to COVID-19.
Location-based Entertainment
- As of August 4, 2020, all of
Cineplex's LBE venues were reopened with province specific
restrictions on capacity in both the gaming and restaurant
areas.
- Reported third quarter revenues of $5.1 million, a decrease of $14.3 million (73.8%) as compared to the prior
year period due to locations beings partially closed for the third
quarter and capacity restrictions at the reopened locations.
LOYALTY
- Membership in the SCENE loyalty program remained flat at 10.5
million members as at September 30,
2020.
CORPORATE
- On July 15, 2020, Cineplex
completed the offering of $275.0
million aggregate principal amount of convertible unsecured
subordinated debentures. On July 17,
2020, the underwriters purchased an over-allotment option
for an additional $41.3 million
aggregate principal amount of the Debentures.
- During the quarter, Cineplex initiated a sales process for its
head office building located at 1303 Yonge Street, Toronto, Ontario.
- Cineplex announced the appointment and return of Phyllis Yaffe to the Board of Directors. Ms.
Yaffe returned to the role of Board Chair, replacing Ian Greenberg who did not stand for re-election
at the Annual Special Meeting of shareholders in October 2020.
- In July, Cineplex announced a cost restructuring program
incurring $5.4 million in associated
costs during the quarter.
OPERATING RESULTS FOR THE THREE AND NINE MONTHS ENDED
SEPTEMBER 30, 2020
Total revenues
Total revenues for the three months ended September 30, 2020 decreased $357.4 million (85.4%) to $61.0 million as compared to the prior year
period. Total revenues for the nine months ended September 30, 2020 decreased $856.1 million (70.1%) to $365.8 million as compared to the prior year
period. A discussion of the factors affecting the changes in box
office, food service, media, amusement and other revenues for the
two periods is provided below.
Non-GAAP measures discussed throughout this news release,
including adjusted EBITDA, adjusted EBITDAaL, adjusted store level
EBITDAaL, adjusted EBITDAaL margin, adjusted store level EBITDAaL
margin, adjusted free cash flow, theatre attendance, BPP, premium
priced product, same theatre metrics, CPP, film cost percentage,
food service cost percentage and concession margin per patron are
defined and discussed in Non-GAAP measures section of this news
release.
Box office revenues
The following table highlights the movement in box office
revenues, theatre attendance and BPP for the quarter and the year
to date (in thousands of dollars, except theatre attendance
reported in thousands of patrons and per patron amounts, unless
otherwise noted):
|
|
|
Box office
revenues
|
Third
Quarter
|
Year to
Date
|
|
2020
|
|
2019
|
|
Change
|
2020
|
|
2019
|
|
Change
|
Box office
revenues
|
$
|
14,531
|
|
$
|
177,865
|
|
-91.8
|
%
|
$
|
125,560
|
|
$
|
523,732
|
|
-76.0
|
%
|
Theatre attendance
(i)
|
1,563
|
|
17,512
|
|
-91.1
|
%
|
12,279
|
|
49,511
|
|
-75.2
|
%
|
Box office revenue
per patron (i)
|
$
|
9.30
|
|
$
|
10.16
|
|
-8.5
|
%
|
$
|
10.23
|
|
$
|
10.58
|
|
-3.3
|
%
|
BPP excluding premium
priced product (i)
|
$
|
8.47
|
|
$
|
8.95
|
|
-5.4
|
%
|
$
|
9.22
|
|
$
|
9.08
|
|
1.5
|
%
|
Same theatre box
office revenues (i)
|
$
|
14,453
|
|
177,278
|
|
-91.8
|
%
|
$
|
123,467
|
|
$
|
517,727
|
|
-76.2
|
%
|
Same theatre
attendance (i)
|
1,553
|
|
17,440
|
|
-91.1
|
%
|
12,106
|
|
48,980
|
|
-75.3
|
%
|
% Total box from
premium priced product (i)
|
28.3
|
%
|
35.8
|
%
|
-7.5
|
%
|
28.6
|
%
|
42.8
|
%
|
-14.2
|
%
|
(i) See Non-GAAP
measures section of this news release.
|
|
|
|
|
Box office
continuity
|
Third
Quarter
|
|
Year to
Date
|
|
Box
Office
|
|
Theatre
Attendance
|
|
Box
Office
|
|
Theatre
Attendance
|
2019 as
reported
|
$
|
177,865
|
|
17,512
|
|
$
|
523,732
|
|
49,511
|
Same theatre
attendance change
|
(161,493)
|
|
(15,887)
|
|
(389,763)
|
|
(36,874)
|
Impact of same
theatre BPP change
|
(1,332)
|
|
—
|
|
(4,497)
|
|
—
|
New and acquired
theatres (i)
|
78
|
|
10
|
|
(1,856)
|
|
(122)
|
Disposed and closed
theatres (i)
|
(587)
|
|
(72)
|
|
(2,056)
|
|
(236)
|
2020 as
reported
|
$
|
14,531
|
|
1,563
|
|
$
|
125,560
|
|
12,279
|
(i) See Non-GAAP
measures section of this news release. Represents theatres
opened, acquired, disposed or closed subsequentto the start of the
prior year comparative period.
|
|
|
|
|
|
|
Third Quarter 2020
Top Cineplex Films
|
3D
|
%
Box
|
Third Quarter 2019
Top Cineplex Films
|
3D
|
%
Box
|
1
|
Tenet
|
|
37.2
|
%
|
1
|
The Lion
King
|
√
|
18.2
|
%
|
2
|
The Spongebob Movie:
Sponge On The Run
|
|
14.3
|
%
|
2
|
Spider-Man: Far From
Home
|
√
|
13.8
|
%
|
3
|
Unhinged
|
|
9.6
|
%
|
3
|
Fast &
Furious
|
|
6.7
|
%
|
4
|
The New
Mutants
|
|
8.4
|
%
|
4
|
It Chapter
Two
|
|
6.6
|
%
|
5
|
After We
Collided
|
|
4.8
|
%
|
5
|
Once Upon A Time In
Hollywood
|
|
5.8
|
%
|
|
|
|
|
|
|
|
|
Year to Date 2020
Top Cineplex Films
|
3D
|
%
Box
|
Year to Date 2019
Top Cineplex Films
|
3D
|
%
Box
|
1
|
1917
|
|
8.6
|
%
|
1
|
Avengers:
Endgame
|
√
|
11.6
|
%
|
2
|
Star Wars: The Rise
of Skywalker
|
√
|
6.4
|
%
|
2
|
The Lion
King
|
√
|
6.3
|
%
|
3
|
Jumanji: The Next
Level
|
√
|
6.8
|
%
|
3
|
Captain
Marvel
|
√
|
5.9
|
%
|
4
|
Bad Boys For
Life
|
|
7.7
|
%
|
4
|
Spider-Man: Far From
Home
|
√
|
4.7
|
%
|
5
|
Sonic The
Hedgehog
|
|
5.7
|
%
|
5
|
Aladdin
|
√
|
4.0
|
%
|
Third Quarter and Year to Date
As of August 21, 2020, Cineplex
had reopened its entire circuit of theatres with limited show times
and reduced seating capacity to ensure physical distancing,
enhanced cleaning protocols and staff equipped with personal
protective equipment. As a result of these restrictions, the
gradual reopening of the theatres throughout the summer, and
limited film product, box office revenues decreased $163.3 million, or 91.8%, to $14.5 million during the period, compared to
$177.9 million reported in the
third quarter of 2019.
Cineplex's BPP for the period decreased $0.86, or 8.5%, from $10.23 in the prior year to $9.30 in the current period. The decrease
was due to lower ticket pricing on previously released content,
SCENE promotions and reduced premium offerings. The quarter
included the release of the much anticipated Christopher Nolan's film "Tenet" on
August 26, one week before it was
released in the US. Distributors have continued to push their film
slates further out in the calendar and into 2021 and beyond in
response to the impact of COVID-19 on exhibitors.
Box office revenues for the nine months ended September 30, 2020 were $125.6 million, a decrease of $398.2 million or 76.0% compared to the
prior year. The decrease in box office revenues was primarily due
to the decrease in attendance as a result of the government
mandated restrictions that have kept theatres closed or operating
below full capacity for the majority of the year.
Food service revenues
The following table highlights the movement in food service
revenues, theatre attendance and CPP for the quarter and the year
to date (in thousands of dollars, except theatre attendance and
same theatre attendance reported in thousands of patrons and per
patron amounts):
|
|
|
Food service
revenues
|
Third
Quarter
|
Year to
Date
|
|
2020
|
|
2019
|
|
Change
|
2020
|
|
2019
|
|
Change
|
Food service -
theatres
|
$
|
11,519
|
|
$
|
117,048
|
|
-90.2
|
%
|
$
|
84,262
|
|
$
|
331,961
|
|
-74.6
|
%
|
Food service -
LBE
|
1,479
|
|
8,502
|
|
-82.6
|
%
|
8,250
|
|
26,210
|
|
-68.5
|
%
|
Food service -
delivery
|
2,470
|
|
—
|
|
NM
|
5,577
|
|
—
|
|
NM
|
Total food service
revenues
|
$
|
15,468
|
|
$
|
125,550
|
|
-87.7
|
%
|
$
|
98,089
|
|
$
|
358,171
|
|
-72.6
|
%
|
|
|
|
|
|
|
|
Theatre attendance
(i)
|
1,563
|
|
17,512
|
|
-91.1
|
%
|
12,279
|
|
49,511
|
|
-75.2
|
%
|
CPP (i)
(ii)
|
$
|
7.37
|
|
$
|
6.68
|
|
10.3
|
%
|
$
|
6.86
|
|
$
|
6.70
|
|
2.4
|
%
|
Same theatre food
service revenues (i)
|
$
|
11,264
|
|
$
|
116,622
|
|
-90.3
|
%
|
$
|
82,573
|
|
$
|
327,958
|
|
-74.8
|
%
|
Same theatre
attendance (i)
|
1,553
|
|
17,440
|
|
-91.1
|
%
|
12,106
|
|
48,980
|
|
-75.3
|
%
|
(i) See Non-GAAP
measures section of this news release.
|
(ii) Food service
revenue from LBE and delivery is not included in the CPP
calculation.
|
|
|
|
|
Theatre food
service revenue continuity
|
Third
Quarter
|
|
Year to
Date
|
|
Theatre Food
Service
|
|
Theatre
Attendance
|
|
Theatre Food
Service
|
|
Theatre
Attendance
|
2019 as
reported
|
$
|
117,048
|
|
17,512
|
|
$
|
331,961
|
|
49,511
|
Same theatre
attendance change
|
(108,732)
|
|
(15,887)
|
|
(252,409)
|
|
(36,874)
|
Impact of same
theatre CPP change
|
3,411
|
|
—
|
|
7,024
|
|
—
|
New and acquired
theatres (i)
|
135
|
|
10
|
|
(980)
|
|
(122)
|
Disposed and closed
theatres (i)
|
(425)
|
|
(72)
|
|
(1,416)
|
|
(236)
|
2020 as
reported
|
$
|
11,437
|
|
1,563
|
|
$
|
84,180
|
|
12,279
|
(i) See Non-GAAP
measures section of this news release. Represents theatres
opened, acquired, disposed or closed subsequent to the start of the
prior
year comparative period.
|
Third Quarter and Year to Date
Food service revenues are comprised primarily of concession
revenues, which includes food service sales at theatre locations
and through delivery services including Uber Eats and Skip the
Dishes. Food service revenues also include food and beverage sales
at The Rec Room.
Food services revenues were materially impacted by the
government mandated closures of theatres and LBE venues as a result
of COVID-19. By the latter part of the third quarter, Cineplex
reopened its entire circuit of theatres with limited seating
capacity to ensure appropriate physical distancing measures were in
place. Food services revenues decreased $110.1 million, or 87.7%, to $15.5 million which included home delivery
revenues of $2.5 million during the
quarter, compared to $125.6 million reported in the third quarter
of 2019. The decrease in food service revenue was primarily due to
the decrease in theatre attendance, limited concession menu
options, and government mandated capacity restrictions at theatres
and LBE venues.
Despite the limited menu offering, CPP increased $0.69, or 10.3%, to $7.37 in the current period from $6.68 in the prior year period .
Food service revenues for the nine months ended September 30, 2020 were $98.1 million, a decrease of $260.1 million or 72.6% compared to the
prior year. Cineplex continued to support its home delivery
services while focusing on the safe reopening of theatres and LBE
venues in the third quarter. The year to date decrease in food
service revenue primarily due to the decrease in theatre
attendance, limited concession menu options, and government
mandated capacity restrictions at theatres and LBE venues.
Media revenues
The following table highlights the movement in media revenues
for the quarter and the year to date (in thousands of dollars):
|
|
|
Media
revenues
|
Third
Quarter
|
Year to
Date
|
|
2020
|
|
2019
|
|
Change
|
2020
|
|
2019
|
|
Change
|
Cinema
media
|
$
|
3,334
|
|
$
|
22,572
|
|
-85.2
|
%
|
$
|
22,200
|
|
$
|
73,244
|
|
-69.7
|
%
|
Digital place-based
media
|
9,491
|
|
20,736
|
|
-54.2
|
%
|
30,662
|
|
53,966
|
|
-43.2
|
%
|
Total media revenues
from continuing operations
|
$
|
12,825
|
|
$
|
43,308
|
|
-70.4
|
%
|
$
|
52,862
|
|
$
|
127,210
|
|
-58.4
|
%
|
Media revenues from
discontinued operations
|
—
|
|
138
|
|
NM
|
602
|
|
827
|
|
-27.2
|
%
|
Total media
revenues
|
$
|
12,825
|
|
$
|
43,446
|
|
-70.5
|
%
|
$
|
53,464
|
|
$
|
128,037
|
|
-58.2
|
%
|
Third Quarter and Year to Date
Total media revenues from continuing operations decreased
$30.5 million (70.4%) to
$12.8 million in the third
quarter compared to the prior year period. During the third quarter
media revenues were primarily driven by digital placed-based media
revenues specifically from creative services, network management,
support services and digital advertising with the gradual/limited
reopening of malls. Cinema media revenues were materially
negatively impacted by the closure of theatres and limited first
run film product in the third quarter leading to a sharp decline in
show-time and pre-show advertising revenue. Total media revenues
from continuing operations for the nine months ended September 30, 2020 were $52.9 million, a decrease of $74.3 million or 58.4% compared to the prior
year. The decrease resulted from a $23.3
million decrease in digital place-based media revenues due
to lower hardware and digital media revenue and a $51.0 million decrease in Cinema media due to
theatre closures effective March 16,
2020 with limited reopening and a minimal number of new
releases beginning in the third quarter.
Amusement Revenues
The following table highlights the movement in amusement
revenues for the quarter and the year to date (in thousands of
dollars):
|
|
|
Amusement
revenues
|
Third
Quarter
|
Year to
Date
|
|
2020
|
|
2019
|
|
Change
|
2020
|
|
2019
|
|
Change
|
Amusement - P1AG
excluding Cineplex exhibition and LBE (i)
|
$
|
9,564
|
|
$
|
44,788
|
|
-78.6
|
%
|
$
|
48,212
|
|
$
|
138,278
|
|
-65.1
|
%
|
Amusement - Cineplex
exhibition (i)
|
119
|
|
2,847
|
|
-95.8
|
%
|
2,327
|
|
8,239
|
|
-71.8
|
%
|
Amusement -
LBE
|
3,553
|
|
10,508
|
|
-66.2
|
%
|
13,765
|
|
28,243
|
|
-51.3
|
%
|
Total amusement
revenues
|
$
|
13,236
|
|
$
|
58,143
|
|
-77.2
|
%
|
$
|
64,304
|
|
$
|
174,760
|
|
-63.2
|
%
|
(i) Cineplex receives
a venue revenue share on games revenues earned at in-theatre game
rooms and XSCAPE Entertainment Centres. Amusement - Cineplex
exhibition reports the total of this venue revenue share which is
consistent with the historical presentation of Cineplex's amusement
revenues. Amusement - P1AG excluding Cineplex exhibition and
LBE reflects P1AG's gross amusement revenues, net of the venue
revenue share paid to Cineplex reflected in Amusement - Cineplex
exhibition above.
|
Third Quarter and Year to Date
Amusement revenues decreased 77.2%, or $44.9 million, to $13.2 million during the third quarter of
2020 compared to the prior year period. Amusement revenues for the
nine months ended September 30, 2020
were $64.3 million, a decrease
of $110.5 million or 63.2%
compared to the prior year. The quarterly and year to date decrease
in revenue was primarily due to the government mandated closures of
P1AG route locations, Cineplex theatres and LBE venues due to
COVID-19 mandated capacity restrictions and resulting decreased
attendance. P1AG's revenues were primarily earned through the
reopening of select FEC locations in both Canada and the
United States as well as equipment sales during the
quarter.
Other revenues
The following table highlights the other revenues which includes
revenues from the Cineplex Store, promotional activities,
screenings, private parties, corporate events, breakage on gift
card sales and revenues from management fees for the quarter and
the year to date (in thousands of dollars):
|
|
|
Other
revenues
|
Third
Quarter
|
Year to
Date
|
|
2020
|
|
2019
|
|
Change
|
2020
|
|
2019
|
|
Change
|
Other revenues from
continuing operations
|
$
|
4,962
|
|
$
|
13,582
|
|
-63.5
|
%
|
$
|
24,996
|
|
$
|
38,053
|
|
-34.3
|
%
|
Other revenues from
discontinued operations
|
—
|
|
—
|
|
NM
|
|
199
|
|
16
|
|
NM
|
|
Total other
revenues
|
$
|
4,962
|
|
$
|
13,582
|
|
-63.5
|
%
|
$
|
25,195
|
|
$
|
38,069
|
|
-33.8
|
%
|
Third Quarter and Year to Date
The quarterly and year to date decreases in other revenues from
continuing operations were primarily due to the suspension of the
recognition of deferred revenues on gift card and other related
products during the shut-down of theater and LBE venues. In
addition, the shut downs reduced other ancillary revenues generated
from theatres, such as venue rentals.
Film cost
The following table highlights the movement in film cost and the
film cost percentage for the quarter and the year to date (in
thousands of dollars, except film cost percentage):
|
|
|
Film
cost
|
Third
Quarter
|
Year to
Date
|
|
2020
|
|
2019
|
|
Change
|
2020
|
|
2019
|
|
Change
|
Film cost
|
$
|
7,261
|
|
$
|
93,735
|
|
-92.3
|
%
|
$
|
63,771
|
|
$
|
275,461
|
|
-76.8
|
%
|
Film cost percentage
(i)
|
50.0
|
%
|
52.7
|
%
|
-2.7
|
%
|
50.8
|
%
|
52.6
|
%
|
-1.8
|
%
|
(i) See Non-GAAP
measures section of this news release.
|
|
|
|
Third Quarter and Year to Date
Film cost varies primarily with box office revenues and can vary
from quarter to quarter usually based on the relative strength of
the titles exhibited during the period, impacted by film cost terms
varying by title and distributor.
Film costs in the third quarter related primarily to the
exhibition of the film Tenet. However, lower settlement
rates on older and classic film products resulted in a lower film
cost as compared to the prior year period.
Cost of food service
The following table highlights the movement in cost of food
service and food service cost as a percentage of food service
revenues ("concession cost percentage") for both theatres and
LBE for the quarter and the year to date (in thousands of
dollars, except percentages and margins per patron):
|
|
|
Cost of food
service
|
Third
Quarter
|
Year to
Date
|
|
2020
|
|
2019
|
|
Change
|
2020
|
|
2019
|
|
Change
|
|
|
|
|
|
|
|
Cost of food service
- theatre
|
$
|
3,210
|
|
$
|
25,222
|
|
-87.3
|
%
|
$
|
24,141
|
|
$
|
72,083
|
|
-66.5
|
%
|
Cost of food service
- LBE
|
470
|
|
2,217
|
|
-78.8
|
%
|
2,537
|
|
7,039
|
|
-64.0
|
%
|
Total cost of food
service
|
$
|
3,680
|
|
$
|
27,439
|
|
-86.6
|
%
|
$
|
26,678
|
|
$
|
79,122
|
|
-66.3
|
%
|
|
|
|
|
|
|
|
Theatre concession
cost percentage (i)
|
23.0
|
%
|
21.5
|
%
|
1.5
|
%
|
26.9
|
%
|
21.7
|
%
|
5.2
|
%
|
LBE food cost
percentage (i)
|
30.5
|
%
|
26.1
|
%
|
4.4
|
%
|
30.2
|
%
|
26.9
|
%
|
3.3
|
%
|
Theatre concession
margin per patron (i)
|
$
|
5.67
|
|
$
|
5.24
|
|
1.5
|
%
|
$
|
5.01
|
|
$
|
5.25
|
|
-6.7
|
%
|
(i) See Non-GAAP
measures section of this news release.
|
|
|
|
Third Quarter and Year to Date
Cost of food service at the theatres varies primarily with
theatre attendance as well as the quantity and mix of offerings
sold. Cost of food service at LBE venues varies primarily with the
volume of guests who visit the location as well as the quantity and
mix between food and beverage items sold.
The quarterly and year to date decreases were due to the lower
food service revenues for both segments as a result of the
temporary closure of Cineplex's theatre and LBE locations in
response to COVID-19.
Depreciation and amortization
The following table highlights the movement in depreciation and
amortization expenses during the quarter and the year to date (in
thousands of dollars):
|
|
|
Depreciation and
amortization expenses
|
Third
Quarter
|
Year to
Date
|
|
2020
|
|
2019
|
|
Change
|
2020
|
|
2019
|
|
Change
|
Depreciation of
property, equipment and leaseholds
|
$
|
27,241
|
|
$
|
28,714
|
|
-5.1
|
%
|
$
|
86,303
|
|
$
|
86,944
|
|
-0.7
|
%
|
|
Amortization of
intangible assets and other
|
3,134
|
|
2,998
|
|
4.5
|
%
|
9,793
|
|
8,804
|
|
11.2
|
%
|
Sub-total -
depreciation and amortization - other assets
|
$
|
30,375
|
|
$
|
31,712
|
|
-4.2
|
%
|
$
|
96,096
|
|
$
|
95,748
|
|
0.4
|
%
|
|
|
|
|
|
|
|
|
Depreciation -
right-of-use assets
|
30,539
|
|
36,456
|
|
-16.2
|
%
|
100,257
|
|
109,475
|
|
-8.4
|
%
|
Total depreciation
and amortization from continuing operations
|
$
|
60,914
|
|
$
|
68,168
|
|
-10.6
|
%
|
$
|
196,353
|
|
$
|
205,223
|
|
-4.3
|
%
|
|
Depreciation and
amortization from discontinued operations
|
—
|
|
1,215
|
|
-100.0
|
%
|
—
|
|
3,623
|
|
-100.0
|
%
|
Total depreciation
and amortization
|
$
|
60,914
|
|
$
|
69,383
|
|
-12.2
|
%
|
$
|
196,353
|
|
$
|
208,846
|
|
-6.0
|
%
|
|
Third Quarter and Year to Date
Depreciation of property, equipment and leaseholds from
continuing operations decreased $1.5
million, or 5.1%, to $27.2 million during the third quarter of
2020 compared to the prior year period, and a year to date decrease
of $0.6 million, or 0.7%, to
$86.3 million compared to the
prior year. The decrease was due to the impact of the impairment
recorded in the first quarter of 2020 on the carrying value of
long-lived assets.
The quarterly and year to date movements in amortization of
intangible assets and other from continuing operations as compared
to the prior year periods were due to internally developed software
for digital products including the Cineplex mobile app and website
platforms, net of the reallocation to amortization of intangible
assets from discontinued operations in the prior year.
The quarterly and year to date decrease of $5.9 million and $9.2 million in amortization of right-of-use
assets from continuing operations were due to reduced carrying
values, resulting from the impairment recorded in the first quarter
of 2020 in addition to modifications to lease agreements related to
COVID-19.
Impairment of long-lived assets and goodwill
The following table highlights the movement in impairment of
long-lived assets and goodwill during the quarter and the year to
date (in thousands of dollars):
|
|
|
|
Impairment of
long-lived assets and goodwill
|
Third
Quarter
|
|
Year to
Date
|
|
2020
|
|
2019
|
|
Change
|
|
2020
|
|
2019
|
|
Change
|
Impairment of
property, equipment and leaseholds
|
$
|
—
|
|
$
|
—
|
|
NM
|
|
$
|
(33,949)
|
|
$
|
—
|
|
NM
|
Impairment of
right-of-use assets
|
—
|
|
—
|
|
NM
|
|
(50,610)
|
|
—
|
|
NM
|
Impairment of
goodwill
|
(65,634)
|
|
—
|
|
NM
|
|
(154,129)
|
|
—
|
|
NM
|
Impairment of
long-lived assets and goodwill
|
$
|
(65,634)
|
|
$
|
—
|
|
NM
|
|
$
|
(238,688)
|
|
$
|
—
|
|
NM
|
Third Quarter and Year to Date
The closure of its operations on March
16, 2020 as a result of the declaration of a global
pandemic, was identified as a triggering event for purposes of
testing long-lived assets and goodwill for
impairment. Carrying values of assets were tested for
recoverability measured as the fair value based on internal budgets
which reflect the negative impact of COVID-19 pandemic on
Cineplex's current and future results. Where the carrying value of
assets at March 31, 2020 was assessed
as exceeding the recoverable value of those assets at that point in
time, an impairment has been recognized. Because impairments are
measured at a point in time, the impact of COVID-19 pandemic on the
2020 results, which will be reflected in the results of operations
in 2020, has also impacted the measurement of recoverable value,
and is therefore included in the impairment calculation. Where an
impairment has been recorded with respect to a long-lived asset, it
will be reversed when and if the recoverable value of the related
asset increases. Management will monitor and re-assess the
recoverable value of the impaired assets, reversing the impairments
where it increases. Impairments recorded with respect to goodwill
cannot be reversed.
A triggering event occurred on September
30, 2020 as a result of the material decrease in Cineplex's
market value due to a sharp decline in its share price at that date
from June 30, 2020. Cineplex
reassessed the underlying key assumptions and inputs used during
the impairment testing completed as at March
31, 2020 and June 30, 2020.
The recoverable amount was determined using fair value less costs
to sell which considered future after-tax cash flows. Based on the
results of the impairment tests completed, Cineplex recognized
impairment charges of $65.6 million
for the three months ended September 30,
2020.
If business conditions deteriorate further, or should they
remain depressed for a prolonged period of time, management's
estimates of operating results and future cash flows for the
forecasted period may be insufficient to support the goodwill
assigned to them, thus requiring impairment charges. Cineplex will
continue to evaluate the recoverability of goodwill at the cash
generating unit level on an annual basis during its fourth quarter
and whenever events or changes in circumstances indicate there may
be a potential impairment.
Impairment of intangible assets - discontinued
operations
The following table highlights the movement in impairment of
intangible assets - discontinued operations during the quarter and
the year to date (in thousands of dollars):
|
|
|
Impairment of
intangible assets - discontinued operations
|
Third
Quarter
|
Year to
Date
|
|
2020
|
|
2019
|
|
Change
|
2020
|
|
2019
|
|
Change
|
Impairment of
intangible assets - discontinued operations
|
$
|
—
|
|
$
|
—
|
|
NM
|
$
|
5,156
|
|
$
|
—
|
|
NM
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Intangible assets included in assets held for sale were written
down prior to disposition to reflect their expected net realizable
value.
(Gain) loss on disposal of assets
The following table shows the movement in the loss on disposal
of assets during the quarter and the year to date (in thousands of
dollars):
|
|
|
(Gain) loss on
disposal of assets
|
Third
Quarter
|
Year to
Date
|
|
2020
|
|
2019
|
|
Change
|
2020
|
|
2019
|
|
Change
|
(Gain) loss on
disposal from continuing operations
|
$
|
(14,113)
|
|
$
|
303
|
|
NM
|
$
|
(12,818)
|
|
$
|
896
|
|
NM
|
Loss on disposal from
discontinued operations
|
—
|
|
—
|
|
NM
|
129
|
|
—
|
|
NM
|
(Gain) loss on
disposal of assets
|
$
|
(14,113)
|
|
$
|
303
|
|
NM
|
$
|
(12,689)
|
|
$
|
896
|
|
NM
|
The quarterly and year to date movements in (gain) loss on
disposal of assets from continuing operations as compared to the
prior year periods were due mainly to the negotiated sale of
certain restrictive lease rights completed during the quarter.
Other costs
Other costs include three main sub-categories of expenses:
theatre occupancy expenses, which capture the rent and associated
occupancy costs for Cineplex's theatre operations; other operating
expenses, which include the costs related to running Cineplex's
film entertainment and content, media, as well as amusement and
leisure; and general and administrative expenses, which includes
costs related to managing Cineplex's operations, including head
office expenses. Please see the discussions below for more details
on these categories.
The following table highlights the movement in other costs for
the quarter and the year to date (in thousands of dollars):
|
|
|
Other
costs
|
Third
Quarter
|
Year to
Date
|
|
2020
|
|
2019
|
|
Change
|
2020
|
|
2019
|
|
Change
|
Theatre occupancy
expenses
|
$
|
14,917
|
|
$
|
18,219
|
|
-18.1
|
%
|
$
|
50,623
|
|
$
|
53,374
|
|
-5.2
|
%
|
Other operating
expenses
|
50,939
|
|
156,732
|
|
-67.5
|
%
|
220,525
|
|
462,434
|
|
-52.3
|
%
|
General and
administrative expenses
|
12,898
|
|
16,004
|
|
-19.4
|
%
|
27,329
|
|
51,963
|
|
-47.4
|
%
|
Total other costs
from continuing operations
|
$
|
78,754
|
|
$
|
190,955
|
|
-58.8
|
%
|
$
|
298,477
|
|
$
|
567,771
|
|
-47.4
|
%
|
Other costs from
discontinued operations
|
—
|
|
1,391
|
|
NM
|
2,212
|
|
5,530
|
|
-60.0
|
%
|
Total other
costs
|
$
|
78,754
|
|
$
|
192,346
|
|
-59.1
|
%
|
$
|
300,689
|
|
$
|
573,301
|
|
-47.6
|
%
|
Theatre occupancy expenses
The following table highlights the movement in theatre occupancy
expenses for the quarter and the year to date (in thousands of
dollars):
|
|
|
Theatre occupancy
expenses
|
Third
Quarter
|
Year to
Date
|
|
2020
|
|
2019
|
|
Change
|
2020
|
|
2019
|
|
Change
|
Cash rent
paid/payable (i) (iv) (v)
|
$
|
7,419
|
|
$
|
39,111
|
|
-81.0
|
%
|
$
|
85,434
|
|
$
|
117,879
|
|
-27.5
|
%
|
Other
occupancy
|
15,921
|
|
18,230
|
|
-12.7
|
%
|
52,725
|
|
55,191
|
|
-4.5
|
%
|
One-time items
(ii)
|
(799)
|
|
(323)
|
|
NM
|
|
(1,939)
|
|
(2,213)
|
|
-12.4
|
%
|
Total theatre
occupancy including cash lease payments paid/payable
|
$
|
22,541
|
|
$
|
57,018
|
|
-60.5
|
%
|
$
|
136,220
|
|
$
|
170,857
|
|
-20.3
|
%
|
Cash rent
paid/payable related to lease obligations (iii) (v)
|
(7,624)
|
|
(38,799)
|
|
-80.4
|
%
|
(85,597)
|
|
(117,483)
|
|
-27.1
|
%
|
Theatre occupancy as
reported
|
$
|
14,917
|
|
$
|
18,219
|
|
-18.1
|
%
|
$
|
50,623
|
|
$
|
53,374
|
|
-5.2
|
%
|
(i) Represents the
cash payments for theatre rent paid or payable during the
quarter.
|
(ii) One-time items
include amounts related to both theatre rent and other theatre
occupancy costs. They are isolated here to illustrate Cineplex's
theatre rent and other theatre occupancy costs excluding these
one-time, non-recurring items.
|
(iii) Cash rent
paid/payable that has been reallocated to offset the lease
obligations.
|
(iv) The 2020 and
2019 year to date balance each includes $0.4 million of cash rent
paid not pertaining to the current period. See Non-GAAP measures
section of this new release.
|
(v) Does not reflect
the impact of $2.6 million of quantified negotiated lease-related
abatements that are included in the total amount in the 2020
quarter and year to date figures.
|
|
|
|
|
Theatre occupancy
continuity
|
Third
Quarter
|
|
Year to
Date
|
|
Occupancy
|
|
Occupancy
|
2019 as
reported
|
$
|
18,219
|
|
$
|
53,374
|
Impact of new and
acquired theatres
|
26
|
|
920
|
Impact of disposed
theatres
|
(468)
|
|
(874)
|
Same theatre rent
change (i)
|
(31,381)
|
|
(32,611)
|
One-time
items
|
(477)
|
|
274
|
Other
|
(2,177)
|
|
(2,346)
|
Impact of IFRS 16
adoption:
|
|
|
|
Cash rent
paid/payable related to lease obligations
|
31,175
|
|
31,886
|
2020 as
reported
|
$
|
14,917
|
|
$
|
50,623
|
(i) See Non-GAAP
measures section of this news release.
|
|
|
Third Quarter
Total theatre occupancy decreased $3.3
million (18.1%) during the third quarter of 2020 compared to
the prior year period. This decrease was primarily due to the rent
relief measures Cineplex has undertaken with landlord partners
resulting in lower theatre rent related expense including common
area maintenance and taxes as compared to the prior year
period.
Following the closure of all theatre and LBE locations in
March 2020, Cineplex has worked with
landlord partners to identify relief measures. While Cineplex is
still in the process of finalizing the measures, cash rent payments
in the third quarter were materially reduced.
Year to Date
For the year to date period, theatre occupancy expenses
decreased $2.8 million (5.2%)
compared to the prior year. This decrease was primarily due to
lower theatre rent related expense including common area
maintenance and taxes as compared to the prior year period.
Other operating expenses
The following table highlights the movement in other operating
expenses during the quarter and the year to date (in thousands of
dollars):
|
|
|
Other operating
expenses
|
Third
Quarter
|
Year to
Date
|
|
2020
|
|
2019
|
|
Change
|
2020
|
|
2019
|
|
Change
|
Theatre
payroll
|
$
|
3,868
|
|
$
|
40,886
|
|
-90.5
|
%
|
$
|
35,532
|
|
$
|
118,668
|
|
-70.1
|
%
|
Theatre operating
expenses
|
13,341
|
|
30,060
|
|
-55.6
|
%
|
48,642
|
|
88,847
|
|
-45.3
|
%
|
Media
|
8,673
|
|
22,932
|
|
-62.2
|
%
|
34,400
|
|
60,859
|
|
-43.5
|
%
|
P1AG
|
12,118
|
|
38,375
|
|
-68.4
|
%
|
56,144
|
|
119,869
|
|
-53.2
|
%
|
LBE (i)
|
3,808
|
|
13,313
|
|
-71.4
|
%
|
21,694
|
|
38,418
|
|
-43.5
|
%
|
LBE pre-opening
(ii)
|
198
|
|
480
|
|
-58.8
|
%
|
1,122
|
|
1,844
|
|
-39.2
|
%
|
SCENE
|
4,325
|
|
3,981
|
|
8.6
|
%
|
8,533
|
|
13,079
|
|
-34.8
|
%
|
Marketing
|
1,107
|
|
4,083
|
|
-72.9
|
%
|
5,087
|
|
11,126
|
|
-54.3
|
%
|
Other
(iii)
|
3,891
|
|
7,128
|
|
-45.4
|
%
|
19,296
|
|
23,193
|
|
-16.8
|
%
|
Other operating
expenses including cash lease payments paid/payable
|
$
|
51,329
|
|
$
|
161,238
|
|
-68.2
|
%
|
$
|
230,450
|
|
$
|
475,904
|
|
-51.6
|
%
|
Cash rent
paid/payable related to lease obligations (iv) (v)
|
(390)
|
|
(4,506)
|
|
-91.3
|
%
|
(9,925)
|
|
(13,470)
|
|
-26.3
|
%
|
Other operating
expenses from continuing operations
|
$
|
50,939
|
|
$
|
156,732
|
|
-67.5
|
%
|
$
|
220,525
|
|
$
|
462,434
|
|
-52.3
|
%
|
Other operating
expenses from discontinued operations
|
—
|
|
1,391
|
|
NM
|
2,212
|
|
5,530
|
|
-60.0
|
%
|
Total other operating
expenses
|
$
|
50,939
|
|
$
|
158,123
|
|
-67.8
|
%
|
$
|
222,737
|
|
$
|
467,964
|
|
-52.4
|
%
|
(i) Includes
operating costs of LBE locations. Overhead relating to
management of LBE portfolio are included in the 'Other'
line.
|
(ii) Includes
pre-opening costs of LBE.
|
(iii) Other category
includes overhead costs related to LBE and other Cineplex internal
departments.
|
(iv) Cash rent
paid/payable that has been reallocated to offset the lease
obligations.
|
(v) Does not reflect
the impact of $2.6 million of quantified negotiated lease-related
abatements that are included in the total amount in the 2020
quarter and year to date figures.
|
|
|
|
|
Other operating
continuity from continuing operations
|
Third
Quarter
|
|
Year to
Date
|
|
Other
Operating
|
|
Other
Operating
|
2019 as
restated
|
$
|
156,732
|
|
$
|
462,434
|
Impact of new and
acquired theatres
|
206
|
|
(154)
|
Impact of disposed
theatres
|
(311)
|
|
(908)
|
Same theatre payroll
change (i)
|
(36,946)
|
|
(82,387)
|
Same theatre
operating expenses change (i)
|
(16,686)
|
|
(39,895)
|
Media operating
expenses change
|
(14,259)
|
|
(26,459)
|
P1AG operating
expenses change
|
(26,257)
|
|
(63,725)
|
LBE operating
expenses change
|
(9,505)
|
|
(16,724)
|
LBE pre-opening
change
|
(282)
|
|
(722)
|
SCENE
change
|
344
|
|
(4,546)
|
Marketing
change
|
(2,976)
|
|
(6,039)
|
Other
|
(3,237)
|
|
(3,895)
|
|
|
|
Impact of IFRS 16
adoption:
|
|
|
|
|
|
Cash rent
paid/payable related to lease obligations (ii)
|
4,116
|
|
3,545
|
2020 as
reported
|
$
|
50,939
|
|
$
|
220,525
|
(i) See Non-GAAP
measures section of this news release.
|
(ii) Does not reflect
the impact of $2.6 million of quantified negotiated lease-related
abatements that are included in the total amount in the 2020
quarter and year to date figures.
|
Third Quarter
The overall decrease in other operating expenses was a result of
the temporary closure of theatres, LBE locations and P1AG route
locations and the resulting impact on all other parts of the
business partially offset by costs incurred with the gradual
reopening of theatre and LBE locations, including rehiring
previously laid off. In order to manage costs Cineplex took
advantage of government subsidy programs in Canada and the
United States, offsetting Other operating costs with
$19.0 million in the third quarter,
including $11.0 million against
theatre payroll, and focused on reducing overall spending. In
addition to wage subsidies received, theatre and LBE payroll costs
were reduced as a result of limited hours due to slower rollouts of
openings which were limited.
Year to Date
The overall decrease in other operating expenses was as a result
of the temporary closure of theatres, LBE locations and P1AG route
locations leading to a decrease in business volumes.
General and administrative expenses
The following table highlights the movement in general and
administrative ("G&A") expenses during the quarter and the year
to date, including Share-based compensation costs, and G&A
expenses net of these costs (in thousands of dollars):
|
|
|
G&A
expenses
|
Third
Quarter
|
Year to
Date
|
|
2020
|
|
2019
|
|
Change
|
2020
|
|
2019
|
|
Change
|
G&A excluding the
following items
|
$
|
9,253
|
|
$
|
13,985
|
|
-33.8
|
%
|
$
|
36,456
|
|
$
|
47,705
|
|
-23.6
|
%
|
Restructuring
|
5,427
|
|
176
|
|
NM
|
|
5,862
|
|
889
|
|
NM
|
|
Transaction /
Litigation costs
|
453
|
|
—
|
|
NM
|
|
2,822
|
|
—
|
|
NM
|
|
LTIP (i)
|
(2,343)
|
|
1,598
|
|
NM
|
|
(15,352)
|
|
2,607
|
|
NM
|
|
Option
plan
|
273
|
|
408
|
|
-33.1
|
%
|
(1,921)
|
|
1,201
|
|
NM
|
|
G&A expenses
including cash lease payments paid/payable
|
$
|
13,063
|
|
$
|
16,167
|
|
-19.2
|
%
|
$
|
27,867
|
|
$
|
52,402
|
|
-46.8
|
%
|
Cash rent
paid/payable included as part of lease obligations (ii)
(iii)
|
(165)
|
|
(163)
|
|
1.2
|
%
|
(538)
|
|
(439)
|
|
22.6
|
%
|
G&A expenses as
reported
|
$
|
12,898
|
|
$
|
16,004
|
|
-19.4
|
%
|
$
|
27,329
|
|
$
|
51,963
|
|
-47.4
|
%
|
(i) LTIP includes the
expense for the LTIP program as well as the expense for the
executive and Board deferred share unit plans.
|
(ii) Cash rent
paid/payable that has been reallocated to offset the lease
obligations.
|
(iii) Does not
reflect the impact of $2.6 million of quantified negotiated
lease-related abatements that are included in the total amount in
the 2020 quarter and year to date figures.
|
Third Quarter and Year to Date
G&A expenses decreased $3.1 million during the third
quarter of 2020 as compared to the prior year period. This was
primarily a result of the $3.3
million received under the COVID-19 CEWS wage subsidy
program. These savings were partially offset by costs of
$5.4 million arising from a cost
restructuring program implemented in the third quarter net of a
decrease of $3.9 million in LTIP
expense due to the decrease in the Share price from $8.04 at June 30,
2020 to $7.21 at September 30, 2020. Transaction costs of
$0.5 million related to the Cineworld
Transaction and ensuing litigation resulting from the repudiation
of the Cineworld Transaction were incurred during the quarter.
G&A expenses for the year to date period decreased
$24.6 million compared to the prior
year period due to a $18.0 million
decrease in LTIP expense, a $3.1
million decrease in option plan expense and the COVID-19
CEWS wages subsidy program from which $7.1
million was received and was recorded against payroll. The
impact of the COVID-19 pandemic on Cineplex's business led to a
sharp decline in the Share price which fell to $7.21 per Share at September 30, 2020 from $33.85 at December 31,
2019. With the termination of the Arrangement Agreement,
Share options have been reclassified to being accounted for as
equity-settled and both LTIP and option expenses have been
accounted for over their original vesting periods (prior to the
Arrangement Agreement).
EARNINGS BEFORE INTEREST, INCOME TAXES, DEPRECIATION AND
AMORTIZATION ("EBITDA") (see Non-GAAP measures section of this news
release)
The following table presents EBITDA, adjusted EBITDA and
adjusted EBITDAaL for the three and nine months ended September 30, 2020 as compared to the prior year
periods (expressed in thousands of dollars, except adjusted
EBITDAaL margin):
|
|
|
EBITDA
|
Third
Quarter
|
Year to
Date
|
|
2020
|
|
2019
|
|
Change
|
2020
|
|
2019
|
|
Change
|
EBITDA
|
$
|
(82,497)
|
|
$
|
107,025
|
|
NM
|
|
$
|
(254,347)
|
|
$
|
300,679
|
|
NM
|
|
Adjusted
EBITDA
|
$
|
(28,928)
|
|
$
|
106,132
|
|
NM
|
|
$
|
(23,769)
|
|
$
|
299,257
|
|
NM
|
|
Adjusted
EBITDAaL
|
$
|
(46,725)
|
|
$
|
62,312
|
|
NM
|
|
$
|
(116,867)
|
|
$
|
168,219
|
|
NM
|
|
Adjusted EBITDAaL
margin
|
-76.6
|
%
|
14.9
|
%
|
-91.5
|
%
|
-31.9
|
%
|
13.8
|
%
|
-45.7
|
%
|
Adjusted EBITDAaL for the third quarter of 2020 decreased
$109.0 million from the prior year
period. For the nine months ended September
30, 2020, adjusted EBITDAaL decreased $285.1 million, as compared to the same period in
2019. The quarterly and year to date decreases were primarily due
the impact of the COVID-19 government imposed restrictions and
resulting closure of substantially all of Cineplex businesses in
March 2020. In computing adjusted
EBITDAaL, cash rents paid or payable have been partially offset by
the quantified lease-related savings negotiated with landlords as a
result of the COVID-19 disclosures. This includes agreements with
landlords that are evidenced by way of written confirmation of the
terms agreed upon up to the date of this MD&A, and are in the
process of being formally documented. Adjusted EBITDAaL margin is
calculated as adjusted EBITDAaL divided by total revenues.
ADJUSTED FREE CASH FLOW (see Non-GAAP measures section of
this news release)
For the third quarter of 2020, adjusted free cash flow per
common share of Cineplex was $(1.22)
as compared to $0.76 in the prior
year period. The declared dividends per common share of Cineplex
were nil in the third quarter of 2020 and $0.45 in the prior year period. During the 12
months ended September 30, 2020,
Cineplex generated adjusted free cash flow per Share of
$(1.45), compared to $3.00 in the prior 12 month period. Cineplex
declared dividends per Share of $0.60
and $1.75, respectively, in each 12
month period. The payout ratios for these periods were (41.2)% and
58.3%, respectively.
NON-GAAP FINANCIAL MEASURES
EBITDA and Adjusted Free Cash Flow
EBITDA and adjusted free cash flow are not measures recognized
by GAAP and do not have standardized meanings in accordance with
such principles. Therefore, EBITDA and adjusted free cash flow may
not be comparable to similar measures presented by other
issuers.
EBITDA is calculated by adding back to net income or net loss,
income tax expense, depreciation and amortization expense, and
interest income from continuing operations. Adjusted EBITDA
excludes the change in fair value of financial instrument, (gain)
loss on disposal of assets, foreign exchange, impairment of
long-lived assets and goodwill, the equity loss (income) of CDCP,
the non-controlling interests' share of adjusted EBITDA of TG-CPX
Limited Partnership, and depreciation, amortization, interest and
taxes of Cineplex's other joint ventures and associates. Adjusted
EBITDAaL modifies adjusted EBITDA to deduct current period cash
rent paid or payable related to lease obligations net of quantified
savings negotiated with landlords as a result of the COVID-19
closures. This includes agreements with landlords that are
evidenced by way of written confirmation of the terms agreed upon
to the date of approval of the financial statements and MD&A,
and are in the process of being formally documented.
Cineplex's management believes that adjusted EBITDAaL is an
important supplemental measure of Cineplex's profitability at an
operational level and provides analysts and investors with
comparability in evaluating and valuing Cineplex's performance
period over period. EBITDA, adjusted for various unusual
items, is also used to define certain financial covenants in
Cineplex's Credit Facilities. Management calculates adjusted
EBITDAaL margin by dividing adjusted EBITDAaL by total
revenues.
Adjusted free cash flow is a non-GAAP measure generally used by
Canadian corporations, as an indicator of financial performance and
it should not be seen as a measure of liquidity or a substitute for
comparable metrics prepared in accordance with GAAP. For a
detailed reconciliation of net income or net loss to EBITDA,
adjusted EBITDA and adjusted EBITDAaL and from cash provided by
operating activities to adjusted free cash flow, please refer to
Cineplex's management's discussion and analysis filed on
www.sedar.com.
Earnings per Share Metrics
Cineplex has presented
basic and diluted earnings per share net of this item to provide a
more comparable earnings per share metric between the current
periods and prior year periods. In the non-GAAP measure, earnings
is defined as net income or net loss excluding the change in fair
value of financial instrument.
Per Patron Revenue Metrics
Cineplex reviews per patron
metrics as they relate to box office revenue and theatre food
service revenue such as BPP, CPP, BPP excluding premium priced
product, and concession margin per patron, as these are key
measures used by investors to value and assess Cineplex's
performance, and are widely used in the theatre exhibition
industry. Management of Cineplex defines these metrics as
follows:
Theatre Attendance: Theatre attendance is calculated as
the total number of paying patrons that frequent Cineplex's
theatres during the period.
BPP: Calculated as total box office revenues divided
by total paid theatre attendance for the period.
BPP excluding premium priced product: Calculated as total
box office revenues for the period, less box office revenues from
3D, 4DX, UltraAVX, VIP and IMAX product; divided by total paid
theatre attendance for the period, less paid theatre attendance for
3D, 4DX, UltraAVX, VIP, ScreenX and IMAX product.
CPP: Calculated as total theatre food service
revenues divided by total paid total theatre attendance for the
period.
Premium priced product: Defined as 3D, 4DX,
UltraAVX, IMAX, ScreenX and VIP film product.
Theatre concession margin per patron: Calculated as total
theatre food service revenues less total theatre food service cost,
divided by theatre attendance for the period.
Same Theatre Analysis
Cineplex reviews and reports
same theatre metrics relating to box office revenues, theatre food
service revenues, theatre rent expense and theatre payroll expense,
as these measures are widely used in the theatre exhibition
industry as well as other retail industries.
Same theatre metrics are calculated by removing the results for
all theatres that have been opened, acquired, closed or otherwise
disposed of subsequent to the start of the prior year comparative
period. For the three months ended September
30, 2020 the impact of one locations that has been opened or
acquired and two locations that have been closed or otherwise
disposed of have been excluded, resulting in 163 theatres being
included in the same theatre metrics. For the nine months ended
September 30, 2020 the impact of the
two locations that have been opened or acquired and three locations
that have been closed or otherwise disposed of have been excluded,
resulting in 162 theatres being included in the same theatre
metrics.
Cost of sales percentages
Cineplex reviews and reports
cost of sales percentages for its two largest revenue sources, box
office revenues and food service revenues as these measures are
widely used in the theatre exhibition industry. These measures are
reported as film cost percentage and concession cost percentage,
respectively, and are calculated as follows:
Film cost percentage: Calculated as total film cost
expense divided by total box office revenues for the period.
Theatre concession cost percentage: Calculated as total
theatre food service costs divided by total theatre food service
revenues for the period.
LBE food cost percentage: Calculated as total LBE food
costs divided by total LBE food service revenues for the
period.
Lease-related Cash Saving
Quantified savings negotiated with landlords as a result of the
COVID-19 disclosures. This includes agreements that are evidenced
by way of written confirmation of the terms agreed upon to the date
of the MD&A, and are in the process of formally documented.
Net Cash Burn
Calculated as adjusted EBITDAaL less
cash interest expense (excluding amounts with respect to lease
obligations), provision for income taxes and net capital
expenditures.
|
|
Net cash
burn
|
2020
|
|
Q3
|
|
Q2
|
Adjusted
EBITDAaL
|
$
|
(46,725)
|
|
$
|
(72,532)
|
Cash interest expense
excluding lease obligations
|
(11,317)
|
|
(7,782)
|
Provision for income
taxes
|
16,497
|
|
34,440
|
Net capital
expenditures
|
(8,198)
|
|
(8,019)
|
Total net cash
burn
|
$
|
(49,743)
|
|
$
|
(53,893)
|
Average monthly net
cash burn
|
$
|
(16,581)
|
|
$
|
(17,964)
|
Certain information included in this news release contains
forward-looking statements within the meaning of applicable
securities laws. These forward-looking statements include, among
others, statements with respect to Cineplex's objectives, goals and
strategies to achieve those objectives and goals, as well as
statements with respect to Cineplex's beliefs, plans, objectives,
expectations, anticipations, estimates and intentions. The words
"may", "will", "could", "should", "would", "suspect", "outlook",
"believe", "plan", "anticipate", "estimate", "expect", "intend",
"forecast", "objective" and "continue" (or the negative thereof),
and words and expressions of similar import, are intended to
identify forward-looking statements. Forward-looking statements
also include, statements pertaining to:
- Cineplex's outlook, goals, expectations and projected
results of operations, including factors and assumptions underlying
Cineplex's projections regarding the duration and impact of a novel
strain of coronavirus ("COVID-19") pandemic on Cineplex, the movie
exhibition industry and the economy in general, as well as
Cineplex's response to the pandemic related to the closure of its
theatres and location-based entertainment ("LBE") venues, employee
reductions and other cost-cutting initiatives and increased
expenses relating to safety measures taken at its facilities to
protect the health and well-being of guests and employees;
- Cineplex's expectations with respect to net cash burn,
liquidity and capital expenditures, including its ability to meet
its ongoing capital, operating and other obligations, and
anticipated needs for, and sources of, funds; and
- Cineplex's ability to execute cost-cutting and revenue
enhancement initiatives in response to the COVID-19
pandemic.
The COVID-19 pandemic has had an unprecedented impact on
Cineplex, along with the rest of the movie exhibition industry and
other industries in which Cineplex operates, including material
decreases in revenues, results of operations and cash flows. The
situation continues to evolve and the social and economic effects
are widespread. As an entertainment and media company that operates
spaces where guests gather in close proximity, Cineplex's business
has been significantly impacted by the actions taken to control the
spread of COVID-19. These actions include, among other things, the
introduction of social distancing measures and restrictions
including those on capacity. There is limited visibility on when
these restrictions will be lifted in many of the markets in which
Cineplex operates and how quickly guests will return to Cineplex's
locations once its operations resume due to prolonged safety
concerns and adverse economic conditions. Cineplex is actively
monitoring the situation and is adapting its business strategies as
the impact of the COVID-19 pandemic evolves.
By their very nature, forward-looking statements involve
inherent risks and uncertainties, including those described in
Cineplex's Annual Information Form ("AIF"), its MD&A for the
year ended December 31, 2019 ("Annual
MD&A") and in this news release. Those risks and uncertainties,
both general and specific, give rise to the possibility that
predictions, forecasts, projections and other forward-looking
statements will not be achieved. Certain material factors or
assumptions are applied in making forward-looking statements and
actual results may differ materially from those expressed or
implied in such statements. Cineplex cautions readers not to place
undue reliance on these statements, as a number of important
factors, many of which are beyond Cineplex's control, could cause
actual results to differ materially from the beliefs, plans,
objectives, expectations, anticipations, estimates and intentions
expressed in such forward-looking statements. These factors
include, but are not limited to, the duration and impact of the
COVID-19 pandemic on Cineplex, the movie exhibition industry and
the economy in general, as well as Cineplex's response to the
COVID-19 pandemic as it relates to the closure of its theatres and
location-based entertainment venues, employee reductions and other
cost-cutting initiatives, and increased expenses relating to safety
measures taken at its facilities to protect the health and
well-being of customers and employees; Cineplex's
expectations with respect to liquidity and capital expenditures,
including its ability to meet its ongoing capital, operating and
other obligations, and anticipated needs for, and sources of,
funds; Cineplex's ability to execute cost-cutting and
revenue enhancement initiatives in response to the COVID-19
pandemic; risks generally encountered in the relevant industry,
competition, customer, legal, taxation and accounting matters; the
outcome of any litigation surrounding the termination of the
Cineworld transaction; and diversion of management time on
litigation related to the Cineworld transaction.
The foregoing list of factors that may affect future results
is not exhaustive. When reviewing Cineplex's forward-looking
statements, readers should carefully consider the foregoing factors
and other uncertainties and potential events. Additional
information about factors that may cause actual results to differ
materially from expectations and about material factors or
assumptions applied in making forward-looking statements may be
found in the "Risks and Uncertainties" section of Annual
MD&A.
Cineplex does not undertake to update or revise any
forward-looking statements, whether as a result of new information,
future events or otherwise, except as required by applicable
Canadian securities law. Additionally, we undertake no obligation
to comment on analyses, expectations or statements made by third
parties in respect of Cineplex, its financial or operating results
or its securities. All forward-looking statements in this news
release are made as of the date hereof and are qualified by these
cautionary statements. Additional information, including Cineplex's
AIF and MD&A, can be found on SEDAR at www.sedar.com.
THIRD QUARTER 2020 ANALYST CONFERENCE CALL
You are cordially invited to participate in a conference call
with the management of Cineplex (TSX: CGX) to review our third
quarter. Ellis Jacob, President
and Chief Executive Officer and Gord Nelson, Chief Financial
Officer, will host the call scheduled for:
Friday, November 13,
2020
10:00 am Eastern
Time
In order to participate in the conference call, please dial
647-792-1240, or from outside Toronto and from the U.S.,
dial 1-800-437-2398 at least five to 10 minutes prior to 10:00
a.m. ET. Please quote the conference confirmation code 9829938 to
access the call.
If you cannot participate in a live mode, a replay will be
available. Please dial 647-436-0148, or from
outside Toronto and from the U.S., dial 1-888-203-1112.
The replay passcode is 9829938.
The replay will begin at 1:00 p.m. ET on Friday, November 13, 2020 and end at 1:00
p.m. ET on Friday, November 20,
2020.
Note that media are welcome to join the call in listen-only
mode.
About Cineplex
Cineplex (TSX: CGX) is a top-tier Canadian brand that operates
in the film entertainment and content, amusement and leisure, and
media sectors. As a leading entertainment and media company,
Cineplex welcomes millions of guests annually through its circuit
of theatres and location-based entertainment ("LBE") venues across
the country. In addition to being Canada's largest and most innovative film
exhibitor, Cineplex also operates successful businesses in digital
commerce (CineplexStore.com), food service, alternative programming
(Cineplex Events), cinema media (Cineplex Media), digital
place-based media (Cineplex Digital Media "CDM") and amusement
solutions (Player One Amusement Group "P1AG"). Additionally,
Cineplex operates an LBE business through Canada's newest destinations for 'Eats &
Entertainment' (The Rec Room), and entertainment complexes
specifically designed for teens and families (Playdium).
Cineplex is a joint venture partner in SCENE, Canada's largest entertainment loyalty
program.
Proudly recognized as having one of the country's Most Admired
Corporate Cultures, Cineplex employs approximately 13,000 people in
its offices across Canada and the
United States. To learn more visit Cineplex.com or download
the Cineplex App.
Cineplex
Inc. Interim Condensed Consolidated Balance
Sheets (Unaudited) (expressed in
thousands of Canadian dollars)
|
|
|
|
|
|
|
|
|
September
30,
|
|
December
31,
|
|
2020
|
|
2019
|
|
|
|
Assets
|
|
|
|
|
|
Current
assets
|
|
|
Cash and cash
equivalents
|
$
|
13,176
|
|
$
|
26,080
|
Trade and other
receivables
|
46,397
|
|
168,065
|
Income taxes
receivable
|
2,280
|
|
9,757
|
Inventories
|
27,058
|
|
30,995
|
Prepaid expenses and
other current assets
|
13,579
|
|
14,226
|
Fair value of interest
rate swap agreements
|
—
|
|
1,022
|
Assets held for
sale
|
—
|
|
6,573
|
|
|
|
|
102,490
|
|
256,718
|
|
|
|
Non-current
assets
|
|
|
Property, equipment and
leaseholds
|
578,007
|
|
662,798
|
Right-of-use
assets
|
963,060
|
|
1,232,849
|
Deferred income
taxes
|
114,674
|
|
14,197
|
Fair value of interest
rate swap agreements
|
—
|
|
472
|
Interests in joint
ventures and associates
|
16,478
|
|
28,221
|
Intangible
assets
|
84,612
|
|
88,367
|
Goodwill
|
662,900
|
|
816,790
|
|
|
|
|
$
|
2,522,221
|
|
$
|
3,100,412
|
|
|
|
|
|
|
|
Liabilities
|
|
|
|
|
|
Current
liabilities
|
|
|
Accounts payable and
accrued liabilities
|
$
|
91,975
|
|
$
|
220,188
|
Share-based
compensation
|
536
|
|
25,681
|
Dividends
payable
|
—
|
|
9,500
|
Income taxes
payable
|
787
|
|
1,183
|
Deferred
revenue
|
219,092
|
|
222,998
|
Lease
obligations
|
109,085
|
|
106,352
|
Fair value of interest
rate swap agreements
|
6,073
|
|
1,874
|
Liabilities related to
assets held for sale
|
—
|
|
2,808
|
|
|
|
|
427,548
|
|
590,584
|
|
|
|
Non-current
liabilities
|
|
|
Share-based
compensation
|
3,158
|
|
—
|
Long-term
debt
|
460,000
|
|
625,000
|
Fair value of interest
rate swap agreements
|
17,780
|
|
10,837
|
Lease
obligations
|
1,122,971
|
|
1,261,243
|
Post-employment
benefit obligations
|
10,827
|
|
10,678
|
Other
liabilities
|
7,773
|
|
9,813
|
Deferred income
taxes
|
—
|
|
1,263
|
Convertible
debentures
|
215,842
|
|
—
|
|
|
|
|
1,838,351
|
|
1,918,834
|
|
|
|
Total
liabilities
|
2,265,899
|
|
2,509,418
|
|
|
|
|
|
|
Equity
|
|
|
|
|
|
Share
capital
|
919,179
|
|
852,379
|
Deficit
|
(672,629)
|
|
(264,310)
|
Hedging reserves and
other
|
(131)
|
|
(131)
|
Contributed
surplus
|
8,543
|
|
4,052
|
Cumulative translation
adjustment
|
1,360
|
|
(887)
|
|
|
|
Total equity
attributable to owners of Cineplex
|
256,322
|
|
591,103
|
Non-controlling
interests
|
—
|
|
(109)
|
|
|
|
Total
equity
|
256,322
|
|
590,994
|
|
|
|
|
$
|
2,522,221
|
|
$
|
3,100,412
|
Cineplex
Inc. Interim Condensed Consolidated Statements of
Operations (Unaudited) (expressed in thousands
of Canadian dollars, except per share amounts)
|
|
|
|
|
|
|
|
Three months ended
September 30,
|
|
Nine months ended
September 30,
|
|
2020
|
|
|
2019
|
|
2020
|
|
|
2019
|
|
|
|
|
|
|
|
Box office
|
$
|
14,531
|
|
|
$
|
177,865
|
|
$
|
125,560
|
|
|
$
|
523,732
|
Food
service
|
15,468
|
|
|
125,550
|
|
98,089
|
|
|
358,171
|
Media
|
12,825
|
|
|
43,308
|
|
52,862
|
|
|
127,210
|
Amusement
|
13,236
|
|
|
58,143
|
|
64,304
|
|
|
174,760
|
Other
|
4,962
|
|
|
13,582
|
|
24,996
|
|
|
38,053
|
|
61,022
|
|
|
418,448
|
|
365,811
|
|
|
1,221,926
|
|
|
|
|
|
|
|
Expenses
|
|
|
|
|
|
|
Film cost
|
7,261
|
|
|
93,735
|
|
63,771
|
|
|
275,461
|
Cost of food
service
|
3,680
|
|
|
27,439
|
|
26,678
|
|
|
79,122
|
Depreciation -
right-of-use assets
|
30,539
|
|
|
36,456
|
|
100,257
|
|
|
109,475
|
Depreciation and
amortization - other assets
|
30,375
|
|
|
31,712
|
|
96,096
|
|
|
95,748
|
(Gain) /loss on
disposal of assets
|
(14,113)
|
|
|
303
|
|
(12,818)
|
|
|
896
|
Other
costs
|
78,754
|
|
|
190,955
|
|
298,477
|
|
|
567,771
|
Share of income of
joint ventures and associates
|
2,137
|
|
|
(560)
|
|
6,064
|
|
|
(2,572)
|
Interest expense -
lease obligations
|
11,854
|
|
|
12,091
|
|
34,885
|
|
|
36,780
|
Interest expense -
other
|
15,503
|
|
|
6,244
|
|
42,108
|
|
|
17,453
|
Interest
income
|
(20)
|
|
|
(75)
|
|
(149)
|
|
|
(208)
|
Foreign
exchange
|
166
|
|
|
(449)
|
|
(702)
|
|
|
569
|
Impairment of
long-lived assets and goodwill
|
65,634
|
|
|
—
|
|
238,688
|
|
|
—
|
|
231,770
|
|
|
397,851
|
|
893,355
|
|
|
1,180,495
|
|
|
|
|
|
|
|
(Loss) income from
continuing operations before income taxes
|
(170,748)
|
|
|
20,597
|
|
(527,544)
|
|
|
41,431
|
|
|
|
|
|
|
|
Provision for
income taxes
|
|
|
|
|
|
|
Current
|
146
|
|
|
7,932
|
|
(7,719)
|
|
|
16,345
|
Deferred
|
(49,685)
|
|
|
(2,435)
|
|
(126,227)
|
|
|
(6,762)
|
|
|
|
|
|
|
|
|
(49,539)
|
|
|
5,497
|
|
(133,946)
|
|
|
9,583
|
|
|
|
|
|
|
|
Net (loss) income
from continuing operations
|
$
|
(121,209)
|
|
|
$
|
15,100
|
|
$
|
(393,598)
|
|
|
$
|
31,848
|
|
|
|
|
|
|
|
Net loss from
discontinued operations, net of taxes
|
—
|
|
|
(1,718)
|
|
(4,952)
|
|
|
(6,429)
|
|
|
|
|
|
|
|
Net (loss)
income
|
$
|
(121,209)
|
|
|
$
|
13,382
|
|
$
|
(398,550)
|
|
|
$
|
25,419
|
|
|
|
|
|
|
|
Net (loss) income
from continuing operations attributable to:
|
|
|
|
|
|
Owners of
Cineplex
|
$
|
(121,209)
|
|
|
$
|
15,102
|
|
$
|
(393,593)
|
|
|
$
|
31,868
|
Non-controlling
interests
|
—
|
|
|
(2)
|
|
(5)
|
|
|
(20)
|
|
|
|
|
|
|
|
Net (loss) income
from continuing operations
|
$
|
(121,209)
|
|
|
$
|
15,100
|
|
$
|
(393,598)
|
|
|
$
|
31,848
|
|
|
|
|
|
|
|
Net (loss) income
attributable to:
|
|
|
|
|
|
|
Owners of
Cineplex
|
$
|
(121,209)
|
|
|
$
|
13,384
|
|
$
|
(398,545)
|
|
|
$
|
25,439
|
Non-controlling
interests
|
—
|
|
|
(2)
|
|
(5)
|
|
|
(20)
|
|
|
|
|
|
|
|
Net (loss)
income
|
$
|
(121,209)
|
|
|
$
|
13,382
|
|
$
|
(398,550)
|
|
|
$
|
25,419
|
|
|
|
|
|
|
|
Net (loss) income
per share attributable to owners of Cineplex - basic and
diluted:
|
|
|
|
Continuing
operations
|
$
|
(1.91)
|
|
|
$
|
0.24
|
|
$
|
(6.21)
|
|
|
$
|
0.50
|
Discontinued
operations
|
—
|
|
|
(0.03)
|
|
(0.08)
|
|
|
(0.10)
|
|
|
|
|
|
|
|
Total
operations
|
$
|
(1.91)
|
|
|
$
|
0.21
|
|
$
|
(6.29)
|
|
|
$
|
0.40
|
Cineplex
Inc. Interim Condensed Consolidated Statements of
Comprehensive Income (Unaudited) (expressed in
thousands of Canadian dollars)
|
|
|
|
|
|
Three months ended
September 30,
|
|
Nine months ended
September 30,
|
|
2020
|
|
|
2019
|
|
2020
|
|
|
2019
|
Net (loss) income
from continuing operations
|
$
|
(121,209)
|
|
|
$
|
15,100
|
|
$
|
(393,598)
|
|
|
$
|
31,848
|
|
|
|
|
|
|
|
Other
comprehensive (loss) income from continuing
operations
|
|
|
|
|
|
|
Items that will be
reclassified subsequently to net income:
|
|
|
|
|
|
|
Loss on hedging
instruments
|
—
|
|
|
(527)
|
|
—
|
|
|
(12,148)
|
Associated deferred
income taxes recovery
|
—
|
|
|
128
|
|
—
|
|
|
3,249
|
Foreign currency
translation adjustment
|
(1,145)
|
|
|
727
|
|
2,240
|
|
|
(2,209)
|
Recognition of
currency translation adjustment on disposition of discontinued
operations
|
—
|
|
|
—
|
|
(160)
|
|
|
—
|
|
|
|
|
|
|
|
Other
comprehensive (loss) income
|
(1,145)
|
|
|
328
|
|
2,080
|
|
|
(11,108)
|
|
|
|
|
|
|
|
Comprehensive
(loss) income from continuing operations
|
(122,354)
|
|
|
15,428
|
|
(391,518)
|
|
|
20,740
|
|
|
|
|
|
|
|
Net loss from
discontinued operations, net of taxes
|
—
|
|
|
(1,718)
|
|
(4,952)
|
|
|
(6,429)
|
Foreign currency
translation adjustment from discontinued operations
|
—
|
|
|
(65)
|
|
7
|
|
|
94
|
|
|
|
|
|
|
|
Comprehensive
(loss) income
|
$
|
(122,354)
|
|
|
$
|
13,645
|
|
$
|
(396,463)
|
|
|
$
|
14,405
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Comprehensive
(loss) income from continuing operations attributable
to:
|
|
|
|
|
|
|
Owners of
Cineplex
|
$
|
(122,354)
|
|
|
$
|
15,430
|
|
$
|
(391,513)
|
|
|
$
|
20,760
|
Non-controlling
interests
|
—
|
|
|
(2)
|
|
(5)
|
|
|
(20)
|
|
|
|
|
|
|
|
Comprehensive
(loss) income
|
$
|
(122,354)
|
|
|
$
|
15,428
|
|
$
|
(391,518)
|
|
|
$
|
20,740
|
|
|
|
|
|
|
|
Comprehensive
(loss) income attributable to:
|
|
|
|
|
|
|
Owners of
Cineplex
|
$
|
(122,354)
|
|
|
$
|
13,647
|
|
$
|
(396,458)
|
|
|
$
|
14,425
|
Non-controlling
interests
|
—
|
|
|
(2)
|
|
(5)
|
|
|
(20)
|
|
|
|
|
|
|
|
Comprehensive
(loss) income
|
$
|
(122,354)
|
|
|
$
|
13,645
|
|
$
|
(396,463)
|
|
|
$
|
14,405
|
Cineplex
Inc. Interim Condensed Consolidated Statements of Changes
in Equity (Unaudited) (expressed in thousands
of Canadian dollars) For the periods ended September 30,
2020 and 2019
|
|
|
|
|
|
|
|
|
|
|
|
|
Share
capital
|
|
Contributed
surplus
|
|
Hedging reserves
and other
|
|
Cumulative
translation adjustment
|
|
Deficit
|
|
Non-controlling
interests
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
January 1,
2020
|
|
$
|
852,379
|
|
$
|
4,052
|
|
$
|
(131)
|
|
$
|
(887)
|
|
$
|
(264,310)
|
|
$
|
(109)
|
|
|
$
|
590,994
|
|
|
|
|
|
|
|
|
|
|
Net loss
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(398,545)
|
|
(5)
|
|
|
(398,550)
|
Other comprehensive
income
|
|
—
|
|
—
|
|
—
|
|
2,247
|
|
(160)
|
|
—
|
|
|
2,087
|
Total
comprehensive loss
|
|
—
|
|
—
|
|
—
|
|
2,247
|
|
(398,705)
|
|
(5)
|
|
|
(396,463)
|
Dividends
declared
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(9,500)
|
|
—
|
|
|
(9,500)
|
Share option
expense
|
|
—
|
|
160
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
160
|
Conversion to
equity-settled option plan
|
|
—
|
|
3,944
|
|
—
|
|
—
|
|
|
—
|
|
|
3,944
|
Issuance of
convertible debentures
|
|
66,800
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
66,800
|
Non-controlling
interests acquired
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(114)
|
|
114
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
September 30,
2020
|
|
$
|
919,179
|
|
$
|
8,543
|
|
$
|
(131)
|
|
$
|
1,360
|
|
$
|
(672,629)
|
|
$
|
—
|
|
|
$
|
256,322
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
January 1,
2019
|
|
$
|
852,379
|
|
$
|
7,815
|
|
$
|
(3,678)
|
|
$
|
2,301
|
|
$
|
(179,721)
|
|
$
|
(85)
|
|
|
$
|
679,011
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
—
|
|
—
|
|
—
|
|
—
|
|
25,439
|
|
(20)
|
|
|
25,419
|
Other comprehensive
loss
|
|
—
|
|
—
|
|
(8,899)
|
|
(2,115)
|
|
—
|
|
—
|
|
|
(11,014)
|
Total
comprehensive income
|
|
—
|
|
—
|
|
(8,899)
|
|
(2,115)
|
|
25,439
|
|
(20)
|
|
|
14,405
|
Dividends
declared
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(84,234)
|
|
—
|
|
|
(84,234)
|
Share option
expense
|
|
—
|
|
1,201
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
1,201
|
|
|
|
|
|
|
|
|
|
|
September 30,
2019
|
|
$
|
852,379
|
|
$
|
9,016
|
|
$
|
(12,577)
|
|
$
|
186
|
|
$
|
(238,516)
|
|
$
|
(105)
|
|
|
$
|
610,383
|
Cineplex
Inc. Interim Condensed Consolidated Statements of Cash
Flows (Unaudited) (expressed in thousands of
Canadian dollars)
|
|
|
|
|
Three months ended
September 30,
|
|
Nine months ended
September 30,
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
Cash provided by
(used in)
|
|
|
|
|
|
|
|
|
|
Operating
activities
|
|
|
|
|
Net (loss) income
from continuing operations
|
$
|
(121,209)
|
|
$
|
15,100
|
|
$
|
(393,598)
|
|
$
|
31,848
|
Adjustments to
reconcile net income to net cash provided by
operating activities
|
|
|
|
|
Depreciation and
amortization of property, equipment and
leaseholds, and intangible assets
|
30,375
|
|
31,712
|
|
96,096
|
|
95,748
|
Depreciation of
right-of-use assets
|
30,539
|
|
36,456
|
|
100,257
|
|
109,475
|
Unrealized foreign
exchange
|
245
|
|
(169)
|
|
(445)
|
|
389
|
Interest rate swap
agreements - non-cash interest
|
118
|
|
(287)
|
|
11,413
|
|
(1,419)
|
Accretion of
convertible debentures
|
4,043
|
|
—
|
|
4,043
|
|
—
|
Other non-cash
interest
|
351
|
|
487
|
|
1,028
|
|
1,337
|
(Gain) loss on
disposal of assets
|
(14,113)
|
|
303
|
|
(12,818)
|
|
896
|
Deferred income
taxes
|
(49,685)
|
|
(2,435)
|
|
(126,227)
|
|
(6,762)
|
Non-cash share-based
compensation
|
273
|
|
408
|
|
4,377
|
|
1,201
|
Impairment of
long-lived assets and goodwill
|
65,634
|
|
—
|
|
238,688
|
|
—
|
Net change in
interests in joint ventures and associates
|
1,765
|
|
(149)
|
|
7,834
|
|
(3,238)
|
Changes in operating
assets and liabilities
|
(34,894)
|
|
(3,666)
|
|
24,079
|
|
(31,943)
|
Net cash (used in)
provided by operating activities
|
(86,558)
|
|
77,760
|
|
(45,273)
|
|
197,532
|
|
|
|
|
|
Investing
activities
|
|
|
|
|
Proceeds from
disposal of assets, including sale of discontinued
operations
|
21,000
|
|
—
|
|
21,050
|
|
—
|
Purchases of
property, equipment and leaseholds
|
(11,498)
|
|
(34,905)
|
|
(63,442)
|
|
(94,919)
|
Intangible assets
additions
|
(1,418)
|
|
(2,600)
|
|
(6,899)
|
|
(5,156)
|
Tenant
inducements
|
3,300
|
|
7,804
|
|
21,599
|
|
9,153
|
Net cash received
from CDCP
|
—
|
|
3,910
|
|
3,910
|
|
12,512
|
Net cash used in
investing activities
|
11,384
|
|
(25,791)
|
|
(23,782)
|
|
(78,410)
|
Financing
activities
|
|
|
|
|
Dividends
paid
|
—
|
|
(28,500)
|
|
(19,000)
|
|
(83,917)
|
(Repayment)
borrowings under credit facilities, net
|
(204,000)
|
|
8,000
|
|
(165,000)
|
|
69,000
|
Repayments of lease
obligations - principal
|
(24,811)
|
|
(31,836)
|
|
(59,623)
|
|
(95,900)
|
Issuance of
convertible debentures, net
|
303,063
|
|
—
|
|
303,063
|
|
—
|
Financing
fees
|
—
|
|
—
|
|
(800)
|
|
(243)
|
Net cash used in
financing activities
|
74,252
|
|
(52,336)
|
|
58,640
|
|
(111,060)
|
Effect of exchange
rate differences on cash
|
292
|
|
(158)
|
|
(98)
|
|
138
|
Increase (decrease)
in cash and cash equivalents from continuing
operations
|
(630)
|
|
(525)
|
|
(10,513)
|
|
8,200
|
Cash flows used in
discontinued operations
|
—
|
|
(1,441)
|
|
(2,391)
|
|
(3,368)
|
Cash and cash
equivalents - Beginning of period
|
13,806
|
|
32,040
|
|
26,080
|
|
25,242
|
Cash and cash
equivalents - End of period
|
$
|
13,176
|
|
$
|
30,074
|
|
$
|
13,176
|
|
$
|
30,074
|
Supplemental
information
|
|
|
|
|
Cash paid for
interest - lease obligation
|
$
|
7,647
|
|
$
|
11,684
|
|
$
|
19,168
|
|
$
|
35,575
|
Cash paid for
interest - other
|
$
|
9,169
|
|
$
|
6,406
|
|
$
|
20,612
|
|
$
|
18,668
|
Cash (received) paid
for income taxes, net
|
$
|
(3,658)
|
|
$
|
2,999
|
|
$
|
(15,173)
|
|
$
|
29,087
|
Cineplex
Inc. Interim Condensed Consolidated Supplemental
Information (Unaudited)
(expressed in thousands of Canadian dollars)
|
|
|
|
|
Reconciliation to
Adjusted EBITDAaL
|
|
|
|
|
|
|
Three months ended
September 30,
|
|
Nine months ended
September 30,
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
|
|
|
|
|
Net (loss) income
from continuing operations
|
$
|
(121,209)
|
|
$
|
15,100
|
|
$
|
(393,598)
|
|
$
|
31,848
|
|
|
|
|
|
Depreciation and
amortization - other
|
30,375
|
|
31,712
|
|
96,096
|
|
95,748
|
Depreciation -
right-of-use assets
|
30,539
|
|
36,456
|
|
100,257
|
|
109,475
|
Interest expense -
lease obligations
|
11,854
|
|
12,091
|
|
34,885
|
|
36,780
|
Interest expense -
other
|
15,503
|
|
6,244
|
|
42,108
|
|
17,453
|
Interest
income
|
(20)
|
|
(75)
|
|
(149)
|
|
(208)
|
Current income
tax expense (recovery)
|
146
|
|
7,932
|
|
(7,719)
|
|
16,345
|
Deferred income tax
recovery
|
(49,685)
|
|
(2,435)
|
|
(126,227)
|
|
(6,762)
|
|
|
|
|
|
EBITDA from
continuing operations
|
$
|
(82,497)
|
|
$
|
107,025
|
|
$
|
(254,347)
|
|
$
|
300,679
|
|
|
|
|
|
Loss on disposal of
assets
|
(14,113)
|
|
303
|
|
(12,818)
|
|
896
|
CDCP equity loss
(income) (i)
|
1,820
|
|
(790)
|
|
5,194
|
|
(3,024)
|
Foreign exchange loss
(gain)
|
166
|
|
(449)
|
|
(702)
|
|
569
|
Impairment of
long-lived assets and goodwill
|
65,634
|
|
—
|
|
238,688
|
|
—
|
Non-controlling
interest adjusted EBITDA
|
—
|
|
2
|
|
5
|
|
20
|
Depreciation and
amortization - joint ventures and associates (ii)
|
18
|
|
23
|
|
62
|
|
76
|
Taxes and interest of
joint ventures and associates (ii)
|
44
|
|
18
|
|
149
|
|
41
|
|
|
|
|
|
Adjusted EBITDA
from continuing operations
|
$
|
(28,928)
|
|
$
|
106,132
|
|
$
|
(23,769)
|
|
$
|
299,257
|
|
|
|
|
|
Cash rent
paid/payable related to lease obligations (iii)
|
(8,180)
|
|
(43,466)
|
|
(96,060)
|
|
(131,391)
|
Negotiated
lease-related cash savings for the period (iii) (iv)
|
(9,253)
|
|
—
|
|
2,598
|
|
—
|
Cash rent paid not
pertaining to current period (v)
|
(364)
|
|
(354)
|
|
364
|
|
353
|
|
|
|
|
|
Adjusted EBITDAaL
(iv)
|
$
|
(46,725)
|
|
$
|
62,312
|
|
$
|
(116,867)
|
|
$
|
168,219
|
|
|
|
|
|
(i)
|
CDCP equity loss
(income) not included in adjusted EBITDA as CDCP is a limited-life
financing vehicle that is funded by virtual print fees collected
from distributors.
|
(ii)
|
Includes the joint
ventures with the exception of CDCP (see (i) above).
|
(iii)
|
The cash rent paid or
payable incorporates negotiated lease obligation savings from prior
arrangements of $31,365 through September 30, 2020.
|
(iv)
|
See Non-GAAP measures
section of this news release.
|
(v)
|
Includes amounts
pre-paid or deferred to future periods, to better reflect the
current period EBITDAaL.
|
Cineplex
Inc.
Interim Condensed
Consolidated Supplemental Information
(Unaudited)
(expressed in
thousands of Canadian dollars, except number of shares and per
share data)
|
|
|
|
|
|
Adjusted Free Cash
Flow
|
|
|
|
|
|
|
|
|
|
|
Three months ended
September 30,
|
|
|
Nine months ended
September 30,
|
|
2020
|
|
2019
|
|
|
2020
|
|
2019
|
|
|
|
|
|
|
Cash provided by
operating activities
|
$
|
(86,558)
|
|
$
|
77,760
|
|
|
$
|
(45,273)
|
|
$
|
197,532
|
Less: Total capital
expenditures net of proceeds on sale of assets
|
9,502
|
|
(34,905)
|
|
|
(42,392)
|
|
(94,919)
|
|
|
|
|
|
|
Standardized free
cash flow
|
(77,056)
|
|
42,855
|
|
|
(87,665)
|
|
102,613
|
|
|
|
|
|
|
Add/(Less):
|
|
|
|
|
|
Changes in operating
assets and liabilities (i)
|
34,894
|
|
3,666
|
|
|
(24,079)
|
|
31,943
|
Changes in operating
assets and liabilities of joint ventures and associates
(i)
|
372
|
|
(411)
|
|
|
(1,770)
|
|
666
|
Principal component
of lease obligations
|
(24,811)
|
|
(31,836)
|
|
|
(59,623)
|
|
(95,900)
|
Principal portion of
cash rent paid not pertaining to current period
|
(357)
|
|
(345)
|
|
|
357
|
|
346
|
Growth capital
expenditures and other (ii)
|
(10,119)
|
|
30,580
|
|
|
38,184
|
|
77,463
|
Share of income of
joint ventures and associates, net of non-cash
depreciation
|
(255)
|
|
(189)
|
|
|
(659)
|
|
(335)
|
Non-controlling
interest
|
—
|
|
2
|
|
|
5
|
|
20
|
Net cash received
from CDCP (iii)
|
—
|
|
3,910
|
|
|
3,910
|
|
12,512
|
Adjusted free cash
flow
|
$
|
(77,332)
|
|
$
|
48,232
|
|
|
$
|
(131,340)
|
|
$
|
129,328
|
Average number of
Shares outstanding
|
63,333,238
|
|
63,333,238
|
|
|
63,333,238
|
|
63,333,238
|
Adjusted free cash
flow per Share
|
$
|
(1.221)
|
|
$
|
0.762
|
|
|
$
|
(2.074)
|
|
$
|
2.042
|
Dividends
declared
|
$
|
—
|
|
$
|
0.450
|
|
|
$
|
0.150
|
|
$
|
1.330
|
(i)
|
Changes in operating
assets and liabilities are not considered a source or use of
adjusted free cash flow.
|
(ii)
|
Growth capital
expenditures and other represent expenditures on Board approved
projects, exclude maintenance capital expenditures, and are net of
proceeds on asset sales. Cineplex's revolving facility is
available to fund Board approved projects.
|
(iii)
|
Excludes the share of
income of CDCP, as CDCP is a limited-life financing vehicle funded
by virtual print fees collected from distributors.
|
|
Cash invested into
CDCP, as well as cash distributions received from CDCP, are
considered to be uses and sources of adjusted free cash
flow.
|
SOURCE Cineplex