CINEPLEX GALAXY Income Fundirfiles.cineplex.com/investors/presentations/2010/... · 2009...

CINEPLEX GALAXYIncome Fund

Q32010

Cineplex Entertainment

Largest

Company in

Most

Successful

and

Motion Picture

Theatre Exhibition

Canada

129

Theatres

with

1,342

Screens

The

Box Office Market Share - 2009

Empire12.9%

Other6.9%

AMC6.7%

Landmark2.4%

Guzzo3.3%

CineplexEntertainment

67.8%

Market Share

of Canadian Box Office Revenues

Exhibition

OverviewBusiness

2008

Cineplex

Entertainment

Q3/10YTD

2009

Industry Box Office

* Source: Motion Picture Theatre Associations of Canada

Canadian

Industry*+4.2%

+13.7%

+12.8%

+5.8% +4.5%

+3.3%

Films for 2010

October 8th

Secretariat

A

December 22ndNovember 19th

True Grit

Due Date

November 5thOctober 22nd

Paranormal Activity

Harry Potter and the Deathly Hallows: Part

1Morning Glory

November 12th

December 17th

Jackass 3D

October 15th

December 10th

Chronicles of Narnia:The Voyage of the

Dawn Treader

October 22nd

Saw VII - 3D

November 5th

Megamind

December 17th

Yogi Bear TRON Legacy

Tangled

November 26th

3D Films for Q4

December 22nd

Gulliver’s Travels

Evolving the Entertainment Experience

MediaMerchandising

Exhibition

Media

MerchandisingLoyalty

Interactive

Evolving the Entertainment Experience

AlternativeProgramming

Exhibition

2009 Accomplishments

Exhibition

- Record 70 million visitors, (+ 10.2%)

- Record Box Office Revenue, (+ 13.7%)

- Record Box Office per Patron, (+ 3.2%) to $8.30

- Opened Cineplex Odeon Westmount and VIP Cinemas in London, ON

- Retrofitted four theatres

- Installed 106 digital projectors and 100 RealD 3D systems

SCENE

- Increased membership by 735,000 members

- Reached 2 million member milestone – October

2009 Accomplishments

Media

- Record revenues of $66.8 million, (+ 9.5%)

- Completed acquisition of Onsite Media Network Inc. and renamed to Cineplex Digital Media

- Recognized by Marketing Magazine as one of Canada’s Top 10 Media Players of the Year

Merchandising

- Record concession revenues, (+14.5%)

- Record annual CPP of $4.12, (+ 3.9%)

- Opened XSCAPE Entertainment Centre at SilverCity Newmarket Cinemas

- Launched speed of service initiatives (Zoning)

- Rationalization of Branded Food Offerings

2009 Accomplishments

1. Cineplex.com- #1 destination of choice for movie-goers in Canada

- Redesigned website to add enhanced search capability/widgets/improved navigation

2. e-commerce- The Cineplex Store

- Gift cards online

- Earn and redeem SCENE points online

- Signed a license agreement with Roxio CinemaNow - to power a new digital moviedownload service at cineplex.com

- Online ticketing- Significant increase in online ticket sales (54.2%)

- PRINT SKIP SCAN service expanded to 92 locations

3. Mobile- Mobile site developed and launched

- m.cineplex.com

Interactive

2009 Accomplishments

- The Met Opera’s Live in High Definition series expanded to 90+ theatres

- Launched The Met Summer Series

- Expanded alternative content offerings

- Concerts, sporting events, speaker series

- Launched new partnership with the UK’s National Theatre (5 performances)

Alternative Programming

Loyalty

Media

Interactive

Merchandising

Exhibition

Evolving the Entertainment Experience

AlternativeProgramming

Exhibition

2010:

Digital rollout will expand to replace 35mm projectors

Expand VIP Cinemas

UltraAVX - Audio Visual Experience

New builds (CrossIron Mills -Calgary, AB, Chilliwack, BC)

Theatre Upgrades and Retrofits

70 million people visited our theatres in 2009

Exhibition fuels ALL core businesses

Digital Projection and 3D

Additional 3D screens to be added

(overall target 30-35% of circuit)

Canadian digital financing structure

- Anticipate Q1 2011 launch

- Anticipate taking 18 months to complete rollout

Digital

New Builds

As of Dec. 31, 2008 As of Dec. 31, 2009 As of Sept. 30, 2010

Digital Screens 84 190 342

REALD Systems 49 149 300

Locations 46 89 116

100%

3D Impact

Game changer – guests love 3D

Drives increased attendance

Drives increased box office revenues (premium price)

Provides incremental growth potential moving forward

- Media – advertising revenues

- Alternative Programming – 3D sports, concerts, live theatre, opera and more!

- Other core businesses benefit e.g. Merchandising, SCENE

2008 2009 Q3 YTD 2009 Q3 YTD 2010

% of Total Box Office

Revenues from IMAX and 3D3.4% 14.4% 16.4% 25.1%

New Theatres and Retrofits - 2009

Retrofits

New Theatres Screens Open

London, ON 8 + 3 VIP May 8, 2009Cineplex Odeon

Calgary, AB 10 2009(Cineplex Odeon Westhills)

Belleville, ON 8 2009(Galaxy Cinemas)

Vernon, BC 7 2009(Galaxy Cinemas)

Lethbridge, AB 6 2009(Galaxy Cinemas)

Cineplex Odeon Westmount & VIP Cinemas

SilverCity CrossIron Mills Cinemas &

XSCAPE Entertainment Centre

Calgary, AB 7 + XSCAPE June 2010(SilverCity CrossIron Mills)

Chilliwack, BC 8 November 2010(Galaxy)

Victoria, BC 7 Spring 2011(Cineplex Odeon WestshoreCinemas)

Edmonton, AB 8 + 3 VIP 2012(Cineplex Odeon Windermere)

New Theatres and Retrofits - 2010+

New Theatres Screens Opening

Exhibition Summary

SCENE

Discount Tuesdays

New Builds and Retrofits

Evolving the Entertainment Experience

- Digital and 3D

- UltraAVX - Audio Visual Experience

- XSCAPE Entertainment Centres

- VIP Cinemas

Exhibition

Evolving the Entertainment Experience

AlternativeProgramming

Loyalty

Media

Interactive

Merchandising

The Metropolitan Opera

World Wrestling Entertainment

Bollywood and Ethnic Movies

Concerts and Live Events

UFC

2010 Olympic Games at 64

Cineplex theatres across Canada

Future

- 3D sports, 3D concerts,

live theatre productions,

speaker series

Alternative Programming

Loyalty

Media

Interactive

Merchandising

Exhibition

Evolving the Entertainment Experience

AlternativeProgramming

Merchandising CPP Revenue Growth

Pro Forma2005

Merchandising

Expand speed of service initiatives (Zoning)

Rationalization of Branded Food Offerings

Expand in-house brand – Outtakes

Strategically add XSCAPE Entertainment Centres

2010:

XSCAPE Entertainment Centre

Loyalty

Media

Interactive

Merchandising

Exhibition

Evolving the Entertainment Experience

AlternativeProgramming

Cineplex Media

94%

Market Share

On screen advertising -Full Motion and Digital Pre-show

Famous and Famous Quebec Magazines

Cineplex.com advertising

Specialty Media -backlits, banners, popcorn bags, in-theatre sampling, kiosks, etc.

Cineplex Digital Media -Theatre and External Networks

Sponsorship and Naming Rights

Other exhibitor representation commissions

Cineplex Media Revenue Summary

$47.1

$56.2$61.0

$66.8

2006 2007 2008 20092005

$34.2

($millions)

Cineplex Media Revenue by Component

2009

Digital Pre-Show34%

Magazine6%

Lobby/Monitors2%

Commissions2%Website

5%

Full Motion47%

Barter & Other4%

Cineplex Digital Media - Theatre Lobby Network

Upgrading digital signage in

100 theatres

- Lobby Network and Service Level

2010 completion

Cineplex Digital Media - External Network

Acquired Onsite Media in 2009

Stadium Network: Ottawa, Calgary, Vancouver, Edmonton

Office Network: 26 Brookfield properties -Toronto, Ottawa, Calgary, Edmonton, Vancouver

Plans to expand External Network

Potential acquisition opportunities

Digital Display & Communications Inc.Acquired in July 2010

Award-winning digital signage company

DDC designs, installs, maintains and operates networks for retail, financial, hospitality and entertainment industries

DDC’s ‘service model’ networks combined with Cineplex Digital Media’s ‘advertising model’ networks, sales force and entertainment content provide significant opportunities for growth

Loyalty

Media

Interactive

Merchandising

Exhibition

Evolving the Entertainment Experience

AlternativeProgramming

SCENE Loyalty Program

Program launched (January 24, 2007)

Reached 1 million members (July 22, 2008)

Reached 2 million members (October 24, 2009)

At September 30, 2010 - 2.6 million members

Number of members (millions)

Gain a more thorough understanding of guests

Mine membership data to generate insights

Communicate directly and regularly

Drive Increased frequency of visitation

Drive increased purchase incidence

Generate additional revenue

Continued member acquisition

Add program partners

Use database to target members

- Studios – film sequels or series

- Advertisers – targeted database

Cineplex targeted offers

- Drive frequency and purchase incidenceMonetize program

SCENE Loyalty Program

Scene Objectives: Future Initiatives:

39

40

Loyalty

Media

Interactive

Merchandising

Exhibition

Evolving the Entertainment Experience

AlternativeProgramming

2010:

Adding more robust rich content

New blogging/search enhancements

New search engine optimization (SEO) initiatives

Increased page views and unique visitors

Increased online advertising revenue

Interactive - Cineplex.com

Further enhancements / in-house systemSignificant increases in online ticket sales

Interactive - e-commerce

Cineplex Store:

2010:

Online Ticketing:

2010:

Fastest, easiest and most convenient way to purchase tickets -- PRINT SKIP SCAN

Online sales of gift cards, DVDs, Blu-ray, new release and catalogue movies

Earn and redeem SCENE points

Launched digital movie download service on

November 17, 2010

m.cineplex.com

SMS Mobile Platform

Cineplex Apps - Blackberry, iPhone, Android

Mobile Payment and Ticketing

SMS – contests, games, promotions, segmented alerts

Mobile Advertising Delivery

Interactive - Mobile

Mobile:

2010:

Financial

Highlights

Record Annual Results

*Indicates Annual Record

2009 2008 %

Box Office $581.1* $510.9 13.7%

Concession 288.3* 251.6 14.5

Other 95.0* 87.1 9.0

Total Revenue 964.3* 849.7 13.5

Adjusted EBITDA 159.9* 140.5 13.8

EBITDA Margin 16.6% 16.5% 0.1

Attendance 70.0* 63.5 10.2

BPP $8.30* $8.05 3.2

CPP $4.12* $3.96 3.9

Cineplex Regal Cinemark Carmike AMC

BPP 3.2% 6.0% 2.4% 4.7% 4.5%

Box Office revenue growth

13.7% 5.8% 14.8% 10.6% 3.6%

CPP growth 3.9% 2.6% 0.6% -0.2% 0.5%

Concession revenue growth

14.5% 2.3% 12.7% 5.5% -0.4%

Total Revenue

growth13.5% 4.4% 13.4% 8.9% 2.4%

EBITDA growth 13.8% 2.1% 20.3% 10.0% 2.7%

Attendance

growth10.2% -0.3% 12.0% 5.7% -0.9%

Cineplex vs. US Exhibitors - 2009 vs. 2008

Attendance(millions)

Box Office Revenue

Box Office Revenue Box Office per Patron

($millions)

Concession Revenue

Concession Revenue CPP

($millions)

Other Revenue

$67.9

$81.0$87.1

$95.0

($millions)

$44.3

Adjusted EBITDA*

Adjusted EBITDA Adjusted EBITDA Margin

($millions)

*Cineplex Entertainment Limited Partnership

Q3 2010 Results(millions)

Cineplex Galaxy Income Fund

Q3 2010 Q3 2009 %Q3 2010

YTD

Q3 2009

YTD%

Box Office $157.9 $155.9 1.3% $462.7 $437.5 5.8%

Concession 80.1 78.0 2.7% 227.6 215.3 5.7%

Other 31.1 23.7 31.3% 79.7 64.3 23.9%

Total Revenue 269.0 257.5 4.5% 770.0 717.2 7.4%

Adjusted EBITDA 55.2 47.2 16.8% 132.1 121.8 8.5%

EBITDA Margin 20.5% 18.3% 2.2% 17.2% 17.0% 0.2%

Attendance 18.9 18.8 0.7% 53.6 52.9 1.4%

BPP $8.35 $8.30 0.6% $8.63 $8.27 4.4%

CPP $4.24 $4.15 2.2% $4.24 $4.07 4.2%

Credit Facilities

Covenant Leverage Ratio

Maturity Capacity Drawn

Term Facility July 2012 $235.0 $235.0

Revolving Facility July 2012 130.0 0

Total $365.0 $235.0

($millions)

2.89 2.39 1.94 1.88 1.64 1.57

2005 2006 2007 2008 2009 Sept. 30, 2010

Distributions

Payout Ratio

Distributions

112%

80%69% 67% 59% 57%

2005 2006 2007 2008 2009

LTM Sept. 302010

2020 - 505 Burrard St

LTM Sept. 302010

Corporate Conversion Plan

Conversion Date - January 1, 2011

Plan of Arrangement - Business Corporations Act (Ontario)

Management Information Circular – Nov 1, 2010

Special Meeting – Dec 2, 2010

Tax-Deferred Rollover Basis for Canadian Resident

Unitholders

Eligibility for dividend tax credits

Initial Dividends

- $1.26 annually payable monthly

Questions

Answersand