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1、2024ANNUAL REPORTTable of ContentsChair of the Board of Directors Letter to Shareholders1Chief Executive Officers Letter to Shareholders3Managements Discussion and Analysis5 Overview of Cineplex6 Business Strategy12 Cineplexs Businesses14 Overview of Operations20 Results of Operations24 Balance Shee
2、ts41 Liquidity and Capital Resources43 Adjusted Free Cash Flow and Dividends51 Share Activity52 Seasonality and Quarterly Results 55 Related Party Transactions58 Material Accounting Judgments and Estimation Uncertainties58 Accounting Policies59 Risks and Uncertainties60 Controls and Procedures69 Out
3、look70 Non-GAAP and Other Financial Measures72Financial Statements and Notes79 Managements Report to Shareholders79 Independent Auditors Report80 Consolidated Balance Sheets 85 Consolidated Statements of Operations87 Consolidated Statements of Comprehensive Income(Loss)88 Consolidated Statements of
4、Changes in Equity89 Consolidated Statements of Cash Flows90 Notes to Consolidated Financial Statements92Investor Information154 Letter from the Chair of the BoardDear fellow shareholders,It is my pleasure to write to you as Chair of the Board of Directors of Cineplex Inc.I am honoured to lead this d
5、edicated group of Directors and be part of an organization that I strongly support.Despite the ongoing impact of the now-resolved writers and actors strikes,which especially limited content supply in the first half of 2024,Cineplex achieved promising financial results in the latter half of the year.
6、We took decisive financial,strategic and corporate actions to improve Cineplexs financial flexibility and ensure its continued success.The team successfully closed the sale of P1AG,completed our comprehensive refinancing plan,and implemented a Normal Course Issuer Bid(“NCIB”),all of which demonstrat
7、e our continued commitment to our shareholders and our focus on ensuring the long-term growth and success of Cineplex.Positioning Ourselves for GrowthDuring the past year,we completed several meaningful endeavours that will position us for further growth.We opened a new theatre and three new LBE loc
8、ations in key markets across Canada,while continuing to expand our media businesses to strengthen our position as a leading advertising solution in the industry.Our teams continued to maintain focus on improving operational efficiencies across the businesses and ensuring a disciplined capital alloca
9、tion strategy during the short-term content supply disruption.Looking ahead to the latter part of 2025,we anticipate a year of growth,driven by the return of a diverse slate of films that resonate with a wide range of audiences.Strength of the BoardThe strength of our Board is essential to deliverin
10、g excellent corporate governance.Throughout the year,the Board worked closely with senior management to focus on shareholder value and ensure that Cineplexs strategy continues to foster growth and innovation.In addition,our ongoing executive succession planning initiatives ensure a robust management
11、 pipeline for navigating future challenges and opportunities.A diverse Board with a broad range of skills and experiences is crucial to supporting Cineplexs strategic objectives.Our commitment to inclusion and diversity within Cineplex is well reflected in our Board.Currently,four female members con
12、stitute 44%of the Directors or 50%of the independent Directors,while four members of underrepresented communities make up 44%of the Directors.Path Forward:A Promising Future We remain confident in the long-term success of the theatrical exhibition industry.With the impact of the Hollywood writers an
13、d actors strikes diminishing,we anticipate an improved volume of film product and the continued resilience of the exhibition business.Our robust outlook for the remainder of 2025 reflects our focus on operational efficiency,disciplined capital allocation and continued growth of our businesses.Your B
14、oard remains focused on addressing our stock performance and charting a course toward shareholder returns,profitability,and sustainable growth.On behalf of the entire Board,I would like to extend a heartfelt thank you to Joan Dea,who,after years of dedicated service,has decided not to seek re-electi
15、on.Throughout her tenure,Joan has been a steadfast leader,providing invaluable strategic insight,guidance,and unwavering commitment to the companys success.As we move forward,we are pleased to nominate Rania Llewellyn,a seasoned financial executive with nearly three decades of banking experience,inc
16、luding as President&CEO of Laurentian Bank.Her proven leadership in driving growth,enhancing customer experience,and fostering diversity will be invaluable as we continue to advance our strategic priorities.Cineplex Inc.Letter to ShareholdersCINEPLEX INC.2024 ANNUAL REPORTLETTER TO SHAREHOLDERS1I wo
17、uld like to thank our management team and all our employees for their passion,hard work and dedication to delivering the best experience for our customers.Thank you to our shareholders for their continued support and confidence in the Cineplex team as we solidify our position of being Canadas number
18、 one entertainment destination.Your confidence in our vision and leadership is deeply appreciated,and we are fully committed to delivering results that reflect the trust you have placed in us.Sincerely yours,Phyllis YaffeChair of the Board,Cineplex ICineplex Inc.Letter to ShareholdersCINEPLEX INC.20
19、24 ANNUAL REPORTLETTER TO SHAREHOLDERS2Letter from the CEODear fellow shareholders,I am proud of what Cineplex has accomplished over the past year,showing great resilience through the challenges that affected the exhibition industry.We remain steadfast in our commitment to delivering exceptional exp
20、eriences to our guests across Canada.Our ability to strategically adapt and innovate has reinforced our position as one of North Americas premier entertainment and media companies.Box Office&Film Slate StrengthThe 2024 box office continued to highlight what a diversified film slate can offer with nu
21、merous record-breaking films throughout the year.Moviegoers were drawn to animated family favourites,blockbuster action films,and musicals.The year featured Inside Out 2,the highest-grossing animated film of all time;Deadpool&Wolverine,the highest-grossing R-rated film of all time;and Wicked,the hig
22、hest-grossing Broadway adaptation film of all time,in addition to many other successes.Our commitment to international cinema has proven to be a significant strength,allowing us to counteract film slate disruptions while catering to Canadas diverse audiences.By offering a rich selection of global co
23、ntent,we continue to attract a broader moviegoing audience and drive sustained engagement.We have maintained our leadership position in international cinema with international titles accounting for 10.2%of our 2024 box office revenue-significantly outperforming the North American market average of 3
24、.7%.Financial PerformanceWhile the Hollywood writers and actors strikes affected film supply,pushing several major titles beyond 2024 and contributing to annual declines in revenue and adjusted EBITDAaL,we saw significant momentum in the latter half of the year.This is demonstrated by 94%of 2024s ad
25、justed EBITDAaL being generated in the second half of the year.Our guests continue to demonstrate the enduring appeal and impact of the theatrical experience.We established an all-time box office per patron(“BPP”)record of$13.09 and an all-time concession per patron(“CPP”)record of$9.47 in 2024,and
26、generated 42%of our box office revenues from premium formats.These results clearly demonstrate that we are well-positioned for financial success with a steady supply of content.Strategic GrowthWe made significant strides in expanding our entertainment and digital out of home footprints.We opened thr
27、ee new Location-Based Entertainment(“LBE”)venues in Q4 2024,increasing our location count to 16 and strengthening our leadership position as an entertainment destination for Canadians.The newly opened LBE locations on Granville Street in downtown Vancouver,at Fairview Mall in Toronto,and at the Roya
28、lmount district of Montreal alongside a new 5 screen premium theatre,are strategically positioned in high-traffic areas.We also expanded our digital media signage network through new partnerships with Cadillac Fairview and Cominar.Cineplexs coverage now includes 95 malls,including 9 of the top 10 bu
29、siest,in Canada.The addition of these two networks contributed to a remarkable 44.3%growth in digital placed-based media revenue.Our recent Lumen study proved that cinema advertising is unmatched in capturing audience attention.Our impressive cinema media revenue per patron(“CMPP”)of$1.84,and 10.2%g
30、rowth over the prior year,underscores the confidence advertisers have in the value we deliver.With a diverse portfolio of assets and accreditation with the Canadian Out-of-Home Marketing and Measurement Bureau and its inaugural mall measurement methodology,Cineplex has secured its position as a lead
31、ing media provider in Canada.Cineplex Inc.Letter to ShareholdersCINEPLEX INC.2024 ANNUAL REPORTLETTER TO SHAREHOLDERS3Through our robust data models,CineClub loyalty program,15 million Scene+members,and our digital channels,we can drive increased attendance and guest engagement.Our approach to perso
32、nalization and targeted marketing continues to attract new visitors,re-engage past customers,and strengthen consumer loyalty.Optimizing Our Balance SheetIn 2024,Cineplex completed several initiatives targeted at returning value to shareholders.The sale of Player One Amusement Group Inc.for gross pro
33、ceeds of$155M provided us with the financial flexibility to execute our comprehensive refinancing plan,which included extending debt maturities,removing covenant restrictions,and reducing potential dilution from convertible debentures.Furthermore,our enthusiasm for the future of this business was hi
34、ghlighted as we commenced a Normal Course Issuer Bid(“NCIB”),reinforcing our focus to deliver shareholder returns.The Path ForwardAs we enter 2025,we remain encouraged by the momentum in our business.While the first quarter reflects some lingering effects of the Hollywood strikes,we anticipate a sig
35、nificant ramp-up in box office performance beginning in Q2,driven by a strong film slate and an increasing number of wide releases.2025 projects to have approximately 110 to 115 wide releases,up from 95 in 2024.We remain confident that our data-driven strategies will continue to maximize shareholder
36、 value,and that 2025 will be another transformative year as we reinforce our position as one of North Americas leading entertainment and media companies.I am deeply grateful to the incredible Cineplex team for their unwavering dedication to creating outstanding experiences for our guests and clients
37、.I also extend my sincere appreciation to our Board of Directors,valued customers,partners,guests,and investors for their continued support.Together we have navigated various challenges and positioned Cineplex for an exciting and promising future.Sincerely,Ellis JacobPresident and CEO,Cineplex Inc.C
38、ineplex Inc.Letter to ShareholdersCINEPLEX INC.2024 ANNUAL REPORTLETTER TO SHAREHOLDERS4MANAGEMENTS DISCUSSION AND ANALYSISFebruary 10,2025 The following managements discussion and analysis(“MD&A”)of Cineplex Inc.s(“Cineplex”)financial condition and results of operations should be read together with
39、 the consolidated financial statements and related notes(see Section 1,Overview of Cineplex).These financial statements,presented in Canadian dollars,were prepared in accordance with Canadian generally accepted accounting principles(“GAAP”),defined as International Financial Reporting Standards(“IFR
40、S”)as set out in the Handbook of the Canadian Institute of Chartered Professional Accountants.Unless otherwise specified,all information in this MD&A is as of December 31,2024 and all amounts are in Canadian dollars.Non-GAAP and Other Financial MeasuresCineplex reports on certain non-GAAP measures,n
41、on-GAAP ratios,supplementary financial measures and total segments measures that are used by management to evaluate Cineplexs performance.In addition,non-GAAP measures are used in measuring compliance with debt covenants.Non-GAAP measures do not have standardized meaning under GAAP and may not be co
42、mparable to similar measures provided by other issuers.Cineplex includes these measures because management believes that they assist investors in assessing financial performance.The definition,calculation and reconciliation of non-GAAP measures are provided in Section 17,Non-GAAP and other financial
43、 measures.Forward-Looking StatementsCertain information included in this MD&A contains forward-looking statements within the meaning of applicable securities laws.These forward-looking statements include,among others,statements with respect to Cineplexs objectives and goals,and the strategies to ach
44、ieve such objectives and goals,as well as statements with respect to Cineplexs beliefs,plans,objectives,expectations,anticipations,estimates and intentions.The words“may”,“will”,“could”,“should”,“would”,“suspect”,“outlook”,“believe”,“plan”,“anticipate”,“estimate”,“expect”,“intend”,“forecast”,“object
45、ive”and“continue”(or the negatives thereof),and words and expressions of similar import,are intended to identify forward-looking statements.By their very nature,forward-looking statements involve inherent risks and uncertainties,including those described in Cineplexs Annual Information Form(“AIF”),a
46、nd in this MD&A.These 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 re
47、sults 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 Cineplexs control,could cause actual results to differ materially from the beliefs,plans,
48、objectives,expectations,anticipations,estimates and intentions expressed in such forward-looking statements,including:Cineplexs expectations with respect to liquidity and capital expenditures;its ability to meet its ongoing capital,operating and other obligations,and anticipated needs for,and source
49、s of,funds;Cineplexs ability to execute cost-cutting and revenue enhancement initiatives;the ongoing recovery of Cineplexs business and the movie exhibition industry from the effects of the COVID-19 pandemic and the writers and actors guilds strike;competition from alternative forms of entertainment
50、 and content delivery via streaming and other formats;information concerning future purchases of Common Shares under Cineplexs normal course issuer bid(NCIB);and risks generally encountered in the relevant industry,competition,customer,legal,taxation and accounting matters.The foregoing list of fact
51、ors that may affect future results is not exhaustive.When reviewing Cineplexs 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 e
52、xpectations and about material factors or assumptions applied in making forward-looking statements may be found in the“Risks and Uncertainties”section of this MD&A.Cineplex Inc.Managements Discussion and AnalysisCINEPLEX INC.2024 ANNUAL REPORTMANAGEMENTS DISCUSSION&ANALYSIS5Cineplex does not underta
53、ke 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,Cineplex undertakes no obligation to comment on analyses,expectations or statements made by third parties in r
54、espect of Cineplex,its financial or operating results or its securities.All forward-looking statements in this MD&A are made as of the date hereof and are qualified by these cautionary statements.Additional information,including Cineplexs AIF,can be found on SEDAR+at www.sedarplus.ca.1.OVERVIEW OF C
55、INEPLEXCineplex(TSX:CGX)is a top-tier Canadian brand that operates in the Film Entertainment and Content,Amusement and Leisure,and Media sectors.Cineplex offers a unique escape from the everyday to millions of guests through its circuit of 172 movie theatres and location-based entertainment venues.I
56、n addition to being Canadas largest and most innovative film exhibitor,the company operates Canadas favourite destination for Eats&Entertainment(The Rec Room),complexes specially designed for teens and families(Playdium),and an entertainment concept that brings movies,amusement gaming,dining,and liv
57、e performances together under one roof(Cineplex Junxion).It also operates successful businesses in cinema media(Cineplex Media),digital place-based media(Cineplex Digital Media or CDM),alternative programming(Cineplex Events)and motion picture distribution(Cineplex Pictures).Providing even more valu
58、e for its guests,Cineplex is a partner in Scene+,Canadas largest entertainment and lifestyle loyalty program.Proudly recognized as having one of the countrys Most Admired Corporate Cultures,Cineplex employs over 10,000 people in its offices and venues across Canada.As of December 31,2024,Cineplex ow
59、ned,leased or had a joint venture interest in 1,617 screens in 156 theatres from coast to coast as well as 16 location-based entertainment venues in seven provinces.CineplexTheatre locations and screens at December 31,2024ProvinceLocations(i)ScreensUltraAVXIMAX Screens(ii)VIP AuditoriumsD-BOX Audito
60、riumsRecliner AuditoriumsOther Screens(iii)Ontario 66 710 42 14 48 48 115 14 Quebec 18 225 10 3 9 8 22 4 British Columbia 25 236 15 5 20 15 43 4 Alberta 18 195 19 3 16 17 93 7 Nova Scotia 9 80 1 1 2 1 Saskatchewan 6 54 4 3 3 16 1 Manitoba 5 49 3 1 3 4 16 1 New Brunswick 5 41 2 1 2 10 Newfoundland&La
61、brador 2 14 1 1 Prince Edward Island 2 13 1 TOTALS 156 1,617 96 29 99 101 315 32 Percentage of screens 6%2%6%6%19%2%(i)Includes Junxion theatres in Manitoba and Ontario.(ii)All IMAX screens are 3D enabled.Total 3D screens including IMAX screens are 827 screens or 51%of the circuit.(iii)Other screens
62、 includes 7 4DX screens,5 Cineplex Clubhouse screens and 20 ScreenX screens.Cineplex Inc.Managements Discussion and AnalysisCINEPLEX INC.2024 ANNUAL REPORTMANAGEMENTS DISCUSSION&ANALYSIS6Cineplex-Theatres,screens and premium offerings in the last eight quarters20242023Q4Q3Q2Q1Q4Q3Q2Q1Theatres1561551
63、56158158158158157Screens1,6171,6121,6181,6311,6311,6311,6311,625UltraAVX Screens9697979897979695IMAX Screens2927272626252525VIP Auditoriums9999999999999999D-BOX Auditoriums101102102102102102101100Recliner Auditoriums315309306302299295292283Other Screens3230292929272727Cineplex-LBE-at December 31,202
64、4 and 202320242023ProvinceThe Rec RoomPlaydiumThe Rec RoomPlaydiumOntario 4 3 4 2 Quebec 1 Alberta 3 3 Manitoba 1 1 Newfoundland&Labrador 1 1 British Columbia 2 1 Nova Scotia 1 1 TOTALS 12 4 10 3 Cineplex Inc.Managements Discussion and AnalysisCINEPLEX INC.2024 ANNUAL REPORTMANAGEMENTS DISCUSSION&AN
65、ALYSIS7Sale of Player One Amusement GroupOn November 22,2023,Cineplex Entertainment Limited Partnership(“CELP”)announced that it had entered into a definitive share purchase agreement to sell 100%of the issued and outstanding shares of Player One Amusement Group Inc.(“P1AG”)for cash proceeds of$155.
66、0 million,subject to customary post-closing adjustments(the“Sale Transaction”).The Sale Transaction closed on February 1,2024.On closing of the Sale Transaction,P1AG and CELP entered into a long-term agreement under which P1AG will continue to supply and service amusement games in Cineplexs theatres
67、 and location-based entertainment venues.The proceeds from the Sale Transaction were used to repay bank debt.In connection with the sale of P1AG,Cineplex recognized total net income,net of taxes,from discontinued operations of$68.0 million.That income included a material gain of$67.2 million,net of
68、income taxes.In accordance with IFRS 5,Non-current assets held for sale and discontinued operations,the balance sheet discloses separately the assets and liabilities of P1AG at December 31,2023,and discontinued operations are excluded from the results of continuing operations and are presented as a
69、single amount as after tax profit or loss from discontinued operations in the consolidated statement of operations.The results of discontinued operations(P1AG)have been excluded from prior period figures as applicable per IFRS 5 to conform to current period presentation(see Section 13,Accounting pol
70、icies).Other than where disclosed,discussions of results and Non-GAAP financial measures,including EBITDA,adjusted EBITDA and adjusted EBITDAaL,in this MD&A are of continuing operations.P1AG continues to be a key supplier to Cineplexs exhibition and LBE businesses and Cineplex does not anticipate ch
71、anges to its amusement revenue generating activities and margins,or operating costs,or general and administrative costs as a result of the sale of P1AG.Competition Tribunal Administrative Monetary PenaltyOn September 23,2024,the Competition Tribunal ordered Cineplex to pay an administrative monetary
72、 penalty and costs of$39.2 million.The amount is presented separately on the statement of operations and balance sheet.On October 23,2024,Cineplex filed its Notice of Appeal with the Federal Court of Appeal and,with the Competition Bureaus consent,was granted a stay regarding payment of the administ
73、rative monetary penalty,pending the Federal Court of Appeals decision.The order and Cineplexs response are discussed in more detail in Section 14,Risks and uncertainties.Cineplex Inc.Managements Discussion and AnalysisCINEPLEX INC.2024 ANNUAL REPORTMANAGEMENTS DISCUSSION&ANALYSIS81.2 FINANCIAL HIGHL
74、IGHTSFinancial highlightsFourth QuarterFull Year(in thousands of dollars,except theatre attendance in thousands of patrons and per share and per patron amounts)20242023 Change(ii)20242023 Change(ii)Total revenues$362,743$315,078 15.1%$1,330,438$1,388,894 -4.2%Theatre attendance 11,141 9,599 16.1%42,
75、946 47,862 -10.3%Net income(loss)from continuing operations$3,332$(12,102)NM$(105,684)$138,051 NMNet income from discontinued operations,including gain on disposition$3,148 -100.0%$68,003$29,113 133.6%Net income(loss)(iii)$3,332$(8,954)NM$(37,681)$167,164 NMNet income(loss)as a percentage of sales f
76、rom continuing operations(iii)0.9%-3.8%4.7%-7.9%9.9%-17.8%Cash provided by continuing operating activities$105,754$83,385 26.8%$159,079$196,094 -18.9%Box office revenues per patron(“BPP”)(iv)$13.26$12.90 2.8%$13.09$12.53 4.5%Concession revenues per patron(“CPP”)(iv)$9.41$9.28 1.4%$9.47$8.90 6.4%Adju
77、sted EBITDA(v)$84,749$65,902 28.6%$263,925$322,962 -18.3%Adjusted EBITDAaL(v)$40,275$24,178 66.6%$93,267$157,363 -40.7%Adjusted EBITDAaL from discontinued operations(v)$5,352 -100.0%$508$35,732 -98.6%Adjusted EBITDAaL including discontinued operations(v)$40,275$29,530 36.4%$93,775$193,095 -51.4%Adju
78、sted EBITDAaL margin from continuing operations(vi)11.1%7.7%3.4%7.0%11.3%-4.3%Adjusted free cash flow(v)$20,267$(1,047)NM$(7,150)$83,691 NMAdjusted free cash flow per share(vi)$0.320$(0.016)NM$(0.112)$1.320 NMEarnings(loss)per share from continuing operations-basic(iii)$0.05$(0.19)NM$(1.66)$2.18 NME
79、arnings per share from discontinued operations-basic$0.05 -100.0%$1.07$0.46 132.6%Earnings(loss)per share-basic(iii)$0.05$(0.14)NM$(0.59)$2.64 NMEarnings(loss)per share from continuing operations-diluted(iii)$0.05$(0.19)NM$(1.66)$1.80 NMEarnings per share from discontinued operations-diluted$0.05 -1
80、00.0%$1.07$0.32 234.4%Earnings(loss)per share-diluted(iii)$0.05$(0.14)NM$(0.59)$2.12 NM(i)The results of discontinued operations from P1AG have been excluded from prior period figures as applicable per IFRS 5 to conform to the current period presentation.All amounts are from continuing operations un
81、less otherwise noted.See Section 13,Accounting policies.(ii)Throughout this MD&A,changes in percentage amounts are calculated as 2024 value less 2023 value.(iii)2024 includes the loss on the 2024 Refinancing(described in Section 7.4,Long-term debt)of$nil during the fourth quarter and$56.0 million fo
82、r full year,and expenses related to other transactions or litigation outside the normal course of business in the amount of$nil during the fourth quarter(2023-$0.6 million)and$2.5 million(2023-$3.4 million)for full year.The full year also includes the$39.2 million provision for the Competition Tribu
83、nals administrative monetary penalty.(iv)Represents a supplementary financial measure.See Section 17,Non-GAAP and other financial measures.(v)Represents a non-GAAP financial measure.See Section 17,Non-GAAP and other financial measures.(vi)Represents a non-GAAP ratio.See Section 17,Non-GAAP and other
84、 financial measures.Total revenues for the fourth quarter of 2024 increased by 15.1%,or$47.7 million to$362.7 million as compared to Cineplexs fourth quarter revenues in 2023.Adjusted EBITDAaL for the fourth quarter of 2024 was$40.3 million,an increase of 66.6%as compared to the prior year,primarily
85、 due to higher theatre attendance.Cineplex Inc.Managements Discussion and AnalysisCINEPLEX INC.2024 ANNUAL REPORTMANAGEMENTS DISCUSSION&ANALYSIS91.3 KEY DEVELOPMENTS IN 2024 The following describes certain key business initiatives undertaken and results achieved during 2024 in each of Cineplexs core
86、 business areas:FILM ENTERTAINMENT AND CONTENTTheatre ExhibitionReported annual box office revenues of$562.2 million,a decrease of$37.8 million or 6.3%from$599.9 million,due to a 10.3%decrease in theatre attendance as a result of the disruption of the 2024 release schedule from the writers and actor
87、s strikes in 2023.Reported an annual record BPP of$13.09,an increase of$0.56 or 4.5%compared to the prior year of$12.53.Opened Cinma Cineplex Royalmount,in Ville Mont-Royal,Quebec on November 25,2024,a five screen theatre featuring recliner seating and laser projection.Closed three locations at the
88、end of their lease terms as part of Cineplexs portfolio optimization and rationalization strategy.Enhanced the theatre circuit with the addition of four IMAX screens,one UltraAVX screen,three ScreenX auditoriums,and installed laser projectors at 31 auditoriums across Canada.The CineClub subscription
89、 program reached over 180,000 members,providing members with benefits accessible across Cineplexs businesses nationwide including Cineplex theatres and LBE venues.Theatre Food ServiceReported annual theatre food service revenues of$406.8 million,a decrease of$19.1 million or 4.5%compared to the prio
90、r year,primarily due to a 10.3%decrease in theatre attendance.Reported annual record CPP of$9.47,an increase of$0.6 or 6.4%compared to the prior year,primarily due to an increase in average spend.Completed the national rollout of mobile food and beverage ordering across the entire theatre circuit,al
91、lowing guests to pre-order prior to the beginning of the movie.Signed an agreement with DoorDash and launched nationally to provide additional home delivery services.Introduced the nationwide refill program in the fourth quarter of 2024,allowing customers to upgrade to a large popcorn or fountain dr
92、ink and receive one eligible same day refill during the same visit.Alternative Programming and Distribution As part of the theatrical distribution partnership with Lionsgate,Cineplex Pictures(Cineplexs distribution business)distributed The Strangers:Chapter 1,Imaginary,and Borderlands,as well as The
93、 Boy and the Heron from GKIDS and My Hero Academia:Youre Next from Emic Media in 2024.Continued a leadership position in alternative programming,with 10.2%of 2024 box office revenues coming from international films,compared to those films having a 3.7%North-American share.Strong performing titles,Ja
94、tt&Juliet 3(Punjabi),Mittran Da Chaleya Truck Ni(Punjabi),and Ardaas Sarbat De Bhalle Di(Punjabi)of which Cineplex represented over 75%of total North American box office.Event Cinema programming consisted of a variety of successful initiatives through 2024 including Terrifier 3,Coraline,Queen Rock M
95、ontreal,and ICC Mens T20 Cricket World Cup 2024.Digital Commerce Closed an agreement for the sale of Cineplex Store for nominal proceeds on January 1,2025.The Cineplex Store will maintain its existing name and branding in market for a transition period of up to one year.Curated Cineplex Store collec
96、tions for Black History Month,Asian History Month,National Indigenous Peoples Day,Pride Month,and National Day for Truth and Reconciliation to highlight diverse experiences,cultures and artistic expressions.Cineplex Inc.Managements Discussion and AnalysisCINEPLEX INC.2024 ANNUAL REPORTMANAGEMENTS DI
97、SCUSSION&ANALYSIS10MEDIAReported annual media revenues of$134.8 million,an increase of$16.2 million or 13.6%compared to the prior year.Cinema Media Reported annual cinema media revenues of$79.1 million,a decrease of$0.9 million or 1.1%over the prior year.Reported an annual cinema media per patron(CM
98、PP)of$1.84,an increase of$0.17 or 10.2%over the prior year(see Section 17,Non-GAAP and other financial measures).Continued to leverage expertise in data and analytics to drive revenues.In March of 2024,Cineplex Media released the results of its proprietary Canadian Cinema Attention Results from Lume
99、n,a well-known and respected global research company.These results far outperform any other video media option in the marketplace,and highlight the strength of the Cinema advertising channel.Cineplex Medias mall network,featuring over 750 screens across 95 shopping destinations,has been officially a
100、ccredited by the Canadian Out-of-Home Marketing and Measurement Bureau(“COMMB”),establishing Cineplexs advanced mall audience measurement methodology as the new COMMB standard creating a new standard within the digital out of home(“DOOH”)space.Digital Place-Based Media Reported annual revenues of$55
101、.7 million,an increase of$17.1 million or 44.3%over the prior year,primarily due to an agreement with Cadillac Fairview that began in the first quarter.Annual non-project revenues accounted for$37.4 million,an increase of$10.5 million or 39.3%,compared to the prior year of$26.8 million,which primari
102、ly consists of media advertising,sales of software and IT support.In 2024,developed,installed,and maintained state-of-the-art digital signage network in five Cominar managed shopping centres across Quebec,and managed directory and media assets at 14 Cadillac Fairview properties across Canada.LOCATIO
103、N-BASED ENTERTAINMENTReported annual revenues of$128.6 million,a decrease of$3.8 million or 2.8%compared to the prior year.Reported annual adjusted store level EBITDAaL of$30.0 million,a decrease of$8.0 million or 21.0%compared to the prior year due to higher operating costs including payroll,and oc
104、cupancy costs.Opened the first Rec Room in Quebec,The Rec Room Royalmount,on November 25,2024,The Rec Room Granville,in Vancouver,British Columbia on December 12,2024 and Playdium Fairview,in Toronto,Ontario on December 19,2024.Enhanced the location-based entertainment circuit at The Rec Room South
105、Edmonton,in Edmonton,Alberta,with attraction upgrades of spark bowling,and augmented reality axe throwing and darts.LOYALTYMembership in the Scene+loyalty program was over 15 million members as at December 31,2024.CORPORATE On February 1,2024,Cineplex completed the sale of 100%of the issued and outs
106、tanding shares of P1AG for a purchase price of$155.0 million in cash,subject to customary post-closing adjustments.In connection with the sale of P1AG,Cineplex recognized a material gain of$67.3 million during the first quarter.On March 4,2024,Cineplex completed a comprehensive refinancing plan(the“
107、2024 Refinancing”),see Section 7.4,Long-term debt.Recognized a$39.2 million provision related to the Competition Tribunals administrative monetary penalty.Cineplex denies the allegations,and is appealing both the finding and penalty.Cineplex Inc.Managements Discussion and AnalysisCINEPLEX INC.2024 A
108、NNUAL REPORTMANAGEMENTS DISCUSSION&ANALYSIS11Cineplex repurchased for cancellation 620,275 common shares of Cineplex(“Common Shares”)at an average price of$10.70 per Common Share under its previously announced normal course issuer bid(the“NCIB”).Celebrated Community Day on September 14,2024 with a m
109、orning of free,family-friendly movies,free gaming at XSCAPE Play card locations,and free non-redemption gaming at LBE venues,with select discounted concessions,where one dollar from every concession order of select items,and food and beverage orders were donated to BGC Canada.Commemorated National D
110、ay for Truth and Reconciliation on September 30,2024 by raising awareness,honouring Indigenous communities through pre-show content,and donating to Tipi of Hope Foundation.2.CINEPLEXS BUSINESS AND STRATEGYCineplexs mission statement is“Passionately delivering exceptional experiences.”All of its effo
111、rts are focused on this mission and it is Cineplexs goal to consistently provide guests and customers with exceptional experiences.Cineplexs current operations are primarily conducted in three main areas:film entertainment and content,media,and amusement and leisure including location-based entertai
112、nment,all supported by the Scene+loyalty program.Cineplexs key strategic areas of focus include:Continuing to enhance and expand Cineplexs presence as an entertainment destination for Canadians;Capitalizing on core media strengths and infrastructure to provide continued growth for Cineplexs media bu
113、sinesses both inside and outside theatres;Developing and scaling amusement and leisure concepts by extending existing capabilities andinfrastructure;Driving value within businesses by leveraging opportunities to optimize value,realize synergies,implement customer-centric technology and leverage big
114、data across Cineplex ecosystems;andPursuing opportunities that capitalize on Cineplexs core strengths.Cineplex uses the Scene+loyalty program and database as a strategic asset to link these areas of focus and drive customer acquisition and spending across all lines of business.Cineplex Inc.Managemen
115、ts Discussion and AnalysisCINEPLEX INC.2024 ANNUAL REPORTMANAGEMENTS DISCUSSION&ANALYSIS12Diversified Entertainment and Media CompanyKey elements of this strategy include going beyond movies to reach customers in new ways and maximizing revenue per patron.Cineplex has implemented in-theatre initiati
116、ves to improve the overall entertainment experience,including increased premium offerings,enhanced in-theatre services,alternative pricing strategies,continued development of the Scene+loyalty and CineClub subscription programs,and initiatives in theatre food service such as optimizing and adding pr
117、oduct offerings and improving service execution.The ultimate goal of these in-theatre customer service initiatives is to maximize revenue per patron and increase the frequency of movie-going at Cineplexs theatres.While box office revenues(which include alternative programming)typically account for t
118、he largest portion of Cineplexs revenues,Cineplex has diversified its revenue streams through cinema media,digital place-based media,location-based entertainment,promotions and other revenue streams.Net income(loss)(millions)(i)$(588.0)$(237.4)$(9.7)$138.1$(105.7)20202021202220232024Cineplex Inc.Man
119、agements Discussion and AnalysisCINEPLEX INC.2024 ANNUAL REPORTMANAGEMENTS DISCUSSION&ANALYSIS13 Net income(loss)as a%of sales(i)(164.1)%(42.7)%(0.9)%9.9%(7.9)%20202021202220232024Adjusted EBITDAaL(millions)(i)(ii)$(171.2)$(93.0)$54.2$157.4$93.320202021202220232024Adjusted EBITDAaL Margin(i)(ii)(47.
120、8)%(16.7)%4.9%11.3%7.0%20202021202220232024(i)The results of discontinued operations have been excluded from prior period figures as applicable per IFRS 5 to conform to current period presentation.(ii)2024 includes expenses related to the Cineworld transaction and other transactions or litigation ou
121、tside the normal course of business in the amount of$2.5 million(2023-$3.4 million).3.CINEPLEXS BUSINESSESCineplexs operations are primarily conducted in three main areas:film entertainment and content,media,and location-based entertainment,all supported by the Scene+loyalty program.FILM ENTERTAINME
122、NT AND CONTENTTheatre ExhibitionTheatrical exhibition is Cineplexs core business.Box office revenues are highly dependent on the marketability,quality and appeal of the film product released by the major motion picture studios.The motion picture industry consists of three principal activities:produc
123、tion,distribution and exhibition.Production involves the development,financing and creation of feature-length motion pictures.Distribution involves the promotion and exploitation of motion pictures in a variety of different channels.Theatrical exhibition continues to be a key channel for new motion
124、picture releases and is Cineplexs core business function.Cineplex Inc.Managements Discussion and AnalysisCINEPLEX INC.2024 ANNUAL REPORTMANAGEMENTS DISCUSSION&ANALYSIS14 Source:Movie Theatre Association of Canada(MTAC)Canadian Industry Box Office(in millions)$235.0$345.0$674.0$898.0$847.020202021202
125、220232024Cineplex believes that the following are important factors in the film exhibition industry in Canada:Importance of theatrical success in establishing movie brands and subsequent movies.Theatrical exhibition is the initial and most important channel for new motion picture releases.Cineplexs
126、ability to operate successfully depends upon the availability,diversity and appeal of filmed content,the ability of Cineplex to license films and the performance of these films in Cineplexs markets.Cineplex primarily licenses first-run films,the success of which is dependent upon their quality,as we
127、ll as on the marketing efforts of film studios and distributors.While studios have experimented with different release strategies through secondary channels such as streaming,initial theatrical releases continue to be the most important channel for film success as evidenced by the successful box off
128、ice releases of Wicked,Moana 2,Deadpool&Wolverine,Inside Out 2,and Dune:Part Two.Cineplex is able to diversify its content offering through the evolving theatrical exhibition landscape with the entrance of streamers like Apple and Amazon opting for initial theatrical releases for films such as Argyl
129、e,The Instigators,Fancy Dance,I am Celine,Challengers,and Red One.In spite of changing release models,Cineplex remains confident that traditional studios will continue to commit a significant number of films to an exclusive theatrical window,in addition to an increase in theatrical film product rele
130、ased by streaming companies.Continued supply of successful films.Studios are increasingly producing film franchises,such as the Marvel&DC universes,Fast&Furious and Avatar among others.Additionally,new franchises continue to be developed.When the first film in a franchise is successful,subsequent fi
131、lms in the franchise benefit from existing public awareness and anticipation.The result is that such features typically attract large audiences and generate strong box office revenues.The success of a broader range of film genres also benefits film exhibitors.In 2025,the studios are currently planni
132、ng to release a strong slate of films,including Dogman,Captain America:Brave New World,Snow White,A Working Man,A Minecraft Movie,Thunderbolts*,Mission:Impossible The Final Reckoning,Lilo&Stitch,Karate Kid:Legends,Ballerina,Elio,How to Train Your Dragon,28 Years Later,F1,M3GAN 2.0,Jurassic World Reb
133、irth,Superman:Legacy,The Fantastic Four:First Steps,The Bad Guys 2,Saw XI,Michael,Tron:Ares,The Black Phone 2,The Running Man,Wicked:For Good,Zootopia 2,Five Nights at Freddys 2,and Avatar:Fire and Ash.Convenient and affordable form of out-of-home entertainment.Cineplexs BPP was$13.09 and$12.53 in 2
134、024 and 2023,respectively.Excluding the impact of Cineplexs premium-priced product,BPP was$11.28 and$10.91 in 2024 and 2023,respectively.The movie-going experience continues to provide value and compares favourably to alternative forms of out-of-home entertainment in Canada such as professional spor
135、ting events or live theatre,and with Cineplex,Scene+members enjoy the ability to earn points towards Cineplex products as well as discounts and special offers.CineClub members also have benefits accessible across Cineplexs businesses nationwide including Cineplex theatres and LBE venues.Cineplex Inc
136、.Managements Discussion and AnalysisCINEPLEX INC.2024 ANNUAL REPORTMANAGEMENTS DISCUSSION&ANALYSIS15Providing a variety of premium and enhanced guest theatre experiences.Premium priced theatre offerings include 3D,4DX,UltraAVX,VIP,IMAX,D-BOX,ScreenX and Cineplex Clubhouse.BPP for premium-priced prod
137、uct was$17.36 in 2024,and accounted for 41.6%of total box office revenues in 2024.Recent enhancements to,and offerings at,the current circuit include the addition of five all-recliner seating auditoriums,including one auditorium with D-BOX seating at the new theatre Cinma Cineplex Royalmount,which o
138、pened on November 25,2024.The theatre circuit was also enhanced with four IMAX screens at Cineplex Cinemas Yonge-Eglinton and VIP,Cineplex Odeon South Edmonton Cinemas,Scotiabank Theatre Vancouver and Cineplex Cinemas Dieppe,three ScreenX auditoriums at Cineplex Cinemas Scarborough,Scotiabank Theatr
139、e Chinook and Cineplex Cinemas Coquitlam and VIP,one UltraAVX screen at Scotiabank Theatre Saskatoon and VIP,and lastly,a retrofit of all-recliner seating at ten auditoriums,at Cineplex Cinemas Fredericton.Box Office Revenues(millions)$132.8$236.3$461.3$599.9$562.220202021202220232024Box Office Reve
140、nue per Patron$10.17$11.77$12.12$12.53$13.0920202021202220232024Cineplexs leading market position enables it to effectively manage film,food service and other theatre-level costs,thereby maximizing operating efficiencies.Cineplex seeks to achieve incremental operating savings through best practices,
141、operational efficiencies and negotiating improved supplier contracts.In addition,Cineplex continues to evaluate its existing theatre portfolio on an ongoing basis.Theatre Attendance(millions)13.120.138.047.942.920202021202220232024Cineplexs theatres are also ideal locations for meetings and corporat
142、e events.Organizations,particularly corporations with offices across the country,can use Cineplexs theatres and digital technology for annual meetings,product launches and employee or customer events,producing revenue streams independent of film exhibition.Cineplex opened a premium theatre,Cinma Cin
143、eplex Royalmount,in Ville Mont-Royal,Quebec on November 25,2024.The premium theatre with recliner seating is adjacent to The Rec Room Royalmount to create the ultimate one-stop entertainment destination with over 50,000 square feet of excitement all under one roof.Theatre Food ServiceCineplexs theat
144、re food service business offers guests a range of food choices to enhance their theatre experience while generating strong profit margins for the company.Cineplexs theatres feature its internally developed brands:Outtakes and Melt.In certain Cineplex theatres,food offerings are also enhanced with th
145、ird party brands such as Starbucks.Cineplex Inc.Managements Discussion and AnalysisCINEPLEX INC.2024 ANNUAL REPORTMANAGEMENTS DISCUSSION&ANALYSIS16Cineplex continually focuses on process improvements designed to increase the speed of service at the concession counter in addition to optimizing the re
146、tail branded outlets available at Cineplexs theatres.Each of the wide range of menu items available at Outtakes locations,expanded liquor service available in theatres,partnerships with Uber Eats,Skip The Dishes,and DoorDash as well as the expanded menu and the licensed lounge service available at V
147、IP Cinemas are designed to reach a wider market and to increase both purchase incidence and transaction value.Digital menu boards installed across the circuit offer flexibility in menu offerings to guests which contribute to an improved guest experience while also creating additional revenue opportu
148、nities.During 2024,Cineplex completed the national rollout of mobile food and beverage ordering,across the entire theatre circuit,allowing guests to pre-order prior to the beginning of the movie providing greater purchase flexibility.Theatre Food Service Revenues(millions)$99.6$172.3$341.7$434.4$414
149、.620202021202220232024 Concession Revenue per Patron$6.99$7.93$8.72$8.90$9.4720202021202220232024 Alternative ProgrammingAlternative programming includes Cineplexs international film programming as well as content offered under its Event Cinema brand offerings,including The Metropolitan Opera,sporti
150、ng events,concerts and dedicated event screens.International film programming includes Bollywood content as well as Cantonese,Hindi,Punjabi,Mandarin,Korean and Filipino language films,amongst others,in select theatres across the country based on local demographics.Alternative programming attracts a
151、more diverse audience,expanding Cineplexs demographic reach and enhancing revenues,and delivered 11%of Cineplexs annual box office revenues during 2024,compared to 10%in the prior year.The success of Cineplexs alternative programming events has led to offerings including major concert events from K-
152、Pop sensations(I am Still and Seventeen Tour Follow Again to Cinemas),Andr Rieu(The Power of Love and Gold&Silver),the anime hit Look Back,and Queen Rock Montreal presented exclusively in IMAX.Cineplex offers the Classic Film Series and Family Favourites programming during non-peak hours to enhance
153、theatre utilization rates.As additional content becomes available,Cineplex will continue to expand its alternative programming offerings.Cineplex Pictures focuses on the acquisition of feature film rights for both theatrical release and in home viewing in Canada.In addition to Lionsgates releases,Ci
154、neplex Pictures distributed films including Academy Award winner,The Boy and the Heron and My Hero Academia:Youre Next.Upcoming films that will be distributed as part of the distribution partnership with Lionsgate include:Flight Risk and The Unbreakable Boy.Cineplex Inc.Managements Discussion and An
155、alysisCINEPLEX INC.2024 ANNUAL REPORTMANAGEMENTS DISCUSSION&ANALYSIS17Digital CommerceCineplexs digital products consist of ,and the Cineplex mobile app.Cineplex has developed into one of the leading entertainment sites in Canada,a destination of choice for Canadians seeking movie entertainment info
156、rmation on the internet.The website offers movie information,show-times and the ability to buy tickets online,entertainment news and box office reports as well as advertising and digital commerce opportunities.To complement ,the Cineplex mobile app is available as a free download for a wide variety
157、of devices,providing guests with the ability to find show-times,buy tickets as well as find information relating to the latest movie choices and movie-related entertainment content in addition to providing mobile food and beverage ordering.On January 1,2025,Cineplex closed an agreement for the sale
158、of Cineplex Store for nominal proceeds.Cineplex will provide transition services for up to one year.The Cineplex Store will maintain its existing name and branding in market for the transition period and will be rebranded to a new name in late 2025 at which time the transition services will end.MEDI
159、ACineplexs media businesses cover two major categories:cinema media,which incorporates advertising mediums related to theatre exhibition,and digital place-based media which provides digital signage solutions.Media Revenues(millions)$65.4$65.3$111.7$118.7$134.820202021202220232024Cinema MediaCinema m
160、edia incorporates advertising mediums related to theatre exhibition.Cineplexs media advertising arrangements are impacted by theatre attendance levels which drive impressions and ultimately impact media revenue generated by Cineplex.Cinema advertising stands out as the ultimate attention leader,with
161、 100%of audiences viewing ads on the big screen,an average of 80%active attention across all demographics and ad lengths,and attention scores 2-5X higher than linear and connected TV,and up to 9X higher than digital video channels based off the Lumen study released in March 2024.Cineplexs core cinem
162、a media offerings include:Show-time advertising,which runs just prior to the movie trailers in a darkened auditorium with limited distractions;Pre-show advertising,featured on the big screen as guests settle in to enjoy their movie night,in the period prior to Show-time;Digital lobby advertising and
163、 digital poster cases located in high traffic areas featuring big,bold digital signage;Online and mobile advertising sales through and the Cineplex mobile app;Leveraging expertise in data and analytics to drive revenues;andProviding sales for CDM DOOH networks.Cineplexs theatres also provide opportu
164、nities for advertisers special media placements(including floor and door coverings,window clings,standees,banners,samplings,activations and lobby domination setups).Cineplex Inc.Managements Discussion and AnalysisCINEPLEX INC.2024 ANNUAL REPORTMANAGEMENTS DISCUSSION&ANALYSIS18In addition to these in
165、dividual offerings,Cineplex offers integrated solutions that can cross over some or all of the above-mentioned platforms.Advertisers can utilize these forms of media individually or take advantage of an integrated advertising program spanning multiple platforms.In partnership with its digital commer
166、ce platforms,Cineplex offers online media packages that include page dominations,page skins,pre-roll and post-roll advertising;all with geo-targeting capabilities.Cineplex also generates revenues from the sale of sponsorships and advertising at LBE venues.Digital Place-Based MediaCineplex Digital Me
167、dia(“CDM”)is an end-to-end digital experience business that offers digital signage solutions and in-store retail media networks for leading brands in shopping centres,restaurants,retailers,and entertainment destinations.CDM embraces its unique connection with Cineplex Media to focus on media-led net
168、works,such as its mall networks,and retail media networks,to further monetize these networks and offer new value and business models to clients.Cineplexs advanced mall audience measurement methodology has been accredited by the Canadian Out-of-Home Marketing and Measurement Bureau(“COMMB”),establish
169、ing a new industry standard within the digital out of home(“DOOH”)space.CDM continues to focus on providing its clients with end-to-end solutions for leading brands in shopping centres,retailers,financial institutions and restaurants,utilizing a host of technical solutions and services that optimize
170、 digital signage to deliver the right content,to the right audience at the right time.CDM operates Canadas largest digital out of home(DOOH)shopping media network(in public spaces such as shopping malls and office towers)with the recent addition of Cominar to develop,install and maintain a state-of-
171、the-art digital signage network in five Cominar managed shopping centres across Quebec.Cineplex Digital Medias project management,system design,network operations,and creative services teams,combined with the support of Cineplexs Media sales team have Cineplex well positioned to expand its media rea
172、ch throughout its current infrastructure as well as in numerous place-based advertising locations across the country.Cineplex believes that the strength of its digital place-based media assets make it a leader in the indoor digital signage industry and provide a platform for significant growth throu
173、ghout North America.LOCATION-BASED ENTERTAINMENTLocation-based EntertainmentCineplex operates LBE establishments under the brand names The Rec Room and Playdium.The Rec Room is a social entertainment destination targeting millennials featuring a wide range of entertainment options including simulati
174、on,redemption,video,recreational gaming,attractions,and a live entertainment venue for watching a wide range of entertainment programming.These entertainment options are complemented with an upscale casual dining environment,featuring an open kitchen and contemporary menu,as well as a larger bar wit
175、h a wide range of digital monitors and a large screen for watching sporting and other major events.The Rec Room earns revenues from food and beverage service,from amusement,gaming and leisure attraction play,and from ticket sales for events held within the destination.Cineplex has twelve locations o
176、f The Rec Room.Playdium targets families and teens in mid-sized communities across Canada.Cineplex has four locations of Playdium.Cineplex opened three new LBE locations in 2024,The Rec Room Royalmount in Mont-Royal,Quebec,The Rec Room Granville in Vancouver,British Columbia,and Playdium Fairview in
177、 Toronto,Ontario.Cineplex Inc.Managements Discussion and AnalysisCINEPLEX INC.2024 ANNUAL REPORTMANAGEMENTS DISCUSSION&ANALYSIS19In-Theatre GamingCineplexs in-theatre gaming business features Cineplexs 47 XSCAPE Entertainment Centres as well as arcade games in select Cineplex theatres,LBE venues and
178、 Junxion locations,with all of the games supplied by P1AG.LOYALTYAs co-owners of the Scene+loyalty program,Cineplex,Scotiabank and Empire Company Limited bring together the full benefits of SCENE with Scotia Rewards and Empires family of brands.The Scene+loyalty program also provides Cineplex with s
179、ignificant data and a more comprehensive understanding of the demographics and behaviours of its audience.Scene+is a customer loyalty program designed to offer members discounts and the opportunity to earn and redeem points.Scene+members can earn and redeem points for purchases at Cineplexs theatres
180、,at its location-based entertainment establishments,as well as at locations operated by select program partners,including Home Hardware.Scene+members can also earn and redeem points at a wide variety of popular retailers,including Empires family of brands and redeem points as statement credits on ce
181、rtain Scotiabank products,as well as book flexible travel.The Scene+loyalty program has been well received as evidenced by the strong membership,high engagement and satisfaction levels of its program members.Management believes Scene+will drive further growth and engagement,expanding the membership
182、base by providing members with more reward options and ways to earn and redeem points.Through Scene+,Cineplex has gained a more thorough understanding of its customers,driven increased customer frequency,increased overall customer spending across its businesses and provides Cineplex with the targete
183、d ability to communicate directly and regularly with customers.With the growth in the Scene+membership base,Cineplex is able to gain access to new customers and expand its base and penetration rates through targeted offers by Scene+.The Scene+customer database has allowed Cineplex to segment the mem
184、ber population and provide special offers to Cineplexs guests,implement targeted marketing programs and deliver tailored messages to subsets of the membership base,providing members with relevant information and offers which in turn drive increased frequency and spend.Cineplex continues to influence
185、 consumer behavior through the use of Scene+points and experience upgrades for Scene+members through its initiatives as well as in partnership with movie studios.Cineplex has gained tremendous insight into customer behavior with over 18 years of data collected.Cineplex will continue to focus on leve
186、raging this data through marketing automation to drive customer behavior as well as accelerating the adoption of artificial intelligence and machine learning for more robust consumer insights.Scene+will continue to build its strategic marketing partnerships with participating partners across Canada,
187、providing promotions and offerings.4.OVERVIEW OF OPERATIONSRevenuesCineplex generates revenues primarily from box office and food service sales.These revenues are affected primarily by theatre attendance levels and by changes in BPP and CPP.Box office revenue represented 42.3%of revenue in the 2024.
188、Cineplex Inc.Managements Discussion and AnalysisCINEPLEX INC.2024 ANNUAL REPORTMANAGEMENTS DISCUSSION&ANALYSIS20The following table presents the revenue mix for comparative periods:Revenue mix%by period20242023202220212020(Section 1)(Section 1)(Section 1)Box office 42.3%43.2%41.9%42.5%37.0%Food serv
189、ice 34.7%34.8%34.6%33.6%30.2%Media 10.1%8.5%10.1%11.8%18.4%Amusement 7.0%6.9%7.3%6.1%5.0%Other 5.9%6.6%6.1%6.0%9.4%Total 100.0%100.0%100.0%100.0%100.0%Cineplex has three reportable segments,film entertainment and content,media,and location-based entertainment.The reportable segments are business uni
190、ts offering differing products and services and are managed separately due to their distinct natures and are based on the information used by Cineplexs chief operating decision makers.Revenue mix%by periodFull Year20242023Film Entertainment and Content 80.3%82.0%Media 10.1%8.5%LBE 9.6%9.5%Total 100.
191、0%100.0%A key component of Cineplexs business strategy is to position itself as the leading exhibitor in the Canadian market by providing customers with an exceptional entertainment experience.Cineplexs share of the Canadian theatre exhibition market based on Canadian industry box office revenues wa
192、s approximately 74%for both the quarter and for the year ended December 31,2024.The commercial appeal of the films and alternative content released during a given period,and the success of marketing as well as promotion for those films by film studios,distributors and content providers all drive the
193、atre attendance.BPP is affected by the mix of film and alternative content product that appeals to certain audiences(such as children or seniors who pay lower ticket prices),ticket prices during a given period and the appeal of available premium priced product that increases BPP.While BPP is impacte
194、d by CineClub,the Cineplex Tuesdays program and the Scene+loyalty program,these value offering programs are designed to increase theatre attendance frequency at Cineplexs theatres.Cineplexs main focus is to drive incremental visits to theatres,to employ a ticket price strategy which takes into accou
195、nt the local demographics at each theatre and to maximize BPP through premium offerings.Food service revenues are comprised primarily of concession revenues,arising from food and beverage sales at theatre locations including the Junxion concept,and LBE venues including The Rec Room and Playdium.In a
196、ddition,food service revenues include home delivery services by Uber Eats,Skip the Dishes and DoorDash.CPP represents theatre food service revenues divided by theatre attendance,and is impacted by the theatre food service product mix,theatre food service prices,film genre,promotions,discounts for Ci
197、neClub members,and the Scene+loyalty program.CPP can fluctuate from quarter to quarter depending on the genre of film product playing.Cineplex believes the Scene+and CineClub programs drive incremental purchase incidence,increasing overall revenues.Cineplex focuses primarily on growing CPP by optimi
198、zing the product offerings,improving operational excellence,improving the guest experience with enhancements to the Cineplex Mobile App and providing greater flexibility with online food and beverage ordering,and strategic pricing to increase purchase incidence and transaction value.Food service rev
199、enues from LBE include food and beverage revenues from the various bars and restaurants located throughout the venues.Cineplex Inc.Managements Discussion and AnalysisCINEPLEX INC.2024 ANNUAL REPORTMANAGEMENTS DISCUSSION&ANALYSIS21Media revenues include both cinema media(Cineplex Media)and digital pl
200、ace-based media(CDM)revenues.Cineplex Media generates revenues primarily from selling pre-show and show-time advertising in Cineplexs theatres.Cineplexs media advertising arrangements are impacted by theatre attendance levels which drive impressions and ultimately impact media revenue generated by C
201、ineplex.Additionally,Cineplex Media sells media placements throughout Cineplexs circuit including digital poster cases,as well as sponsorship and advertising in LBE venues.Cineplex Media also sells digital advertising for ,the Cineplex mobile app and on third party networks operated by CDM.CDM desig
202、ns,installs,maintains and operates digital signage networks in four verticals including DOOH in public spaces such as shopping malls and office towers,quick service restaurants,financial institutions and retailers.CDM advertising revenue is impacted by mall attendance which affect impressions and re
203、venue generated.Amusement revenues include revenues generated at LBE venues as well as XSCAPE Entertainment Centres and game rooms in theatres.Cineplex generates other revenues from the online booking fees,promotional activities,screenings,private parties,corporate events and breakage on gift card s
204、ales and prepaid products.Cost of Sales and ExpensesFilm cost represents the film rental fees paid to distributors for films exhibited in Cineplexs theatres.Film costs are calculated as a percentage of box office revenue and are dependent on various factors including the performance of the film.Film
205、 costs are accrued on the related box office receipts at either mutually agreed-upon terms established prior to the opening of a film,or estimated terms where a mutually agreed settlement is reached upon conclusion of a films run,depending upon the film licensing arrangement.There can be significant
206、 variances in film cost percentage between quarters due to,among other things,the concentration of box office revenues amongst the top films in the period with stronger performing films typically having a higher film cost percentage.Cost of food service represents the cost of concession items and ot
207、her theatre food service items sold,and varies with changes in concession and other theatre food service revenues as well as the quantity and mix of concession and other food service offerings sold.Cost of food and beverages sold at LBE is also included in cost of food service.Depreciation-right-of-
208、use assets,represents the depreciation of Cineplexs right-of-use assets related to leases.Depreciation is calculated on a straight-line basis from the date of commencement of the lease to the earlier of the end of the useful life of the asset or the end of the lease term.Depreciation and amortizatio
209、n-other,represents the depreciation and amortization of Cineplexs property,equipment and leaseholds,as well as certain of its intangible assets.Depreciation and amortization are calculated on a straight-line basis over the useful lives of the assets.(Gain)loss on disposal of assets represents the ga
210、in recognized on assets or components of assets that were sold or otherwise disposed.Other costs are comprised of theatre occupancy expenses,other operating expenses and general and administrative expenses.These categories are described below.Theatre occupancy expenses include lease related expenses
211、,percentage rent,property related taxes,business related taxes and insurance and exclude cash rent accounted for as obligations or interest under IFRS 16,Leases.Other operating expenses consist of fixed and variable expenses,with the largest component being theatre salaries and wages.Although theatr
212、e salaries and wages include a fixed cost component,these expenses vary in relation to revenues as theatre staffing levels are adjusted to handle fluctuations in theatre attendance.Other components of this category include cleaning,marketing which includes the cost of Scene+points issued,advertising
213、,media,LBE,loyalty,digital commerce,supplies and services,utilities and maintenance.To the extent these costs are variable,they can be managed with changes in business volumes.Cineplex Inc.Managements Discussion and AnalysisCINEPLEX INC.2024 ANNUAL REPORTMANAGEMENTS DISCUSSION&ANALYSIS22General and
214、administrative expenses are primarily costs associated with managing Cineplexs business,including film buying,marketing and promotions,operations and theatre food service management,accounting and financial reporting,legal,treasury,design and construction,real estate development,communications and i
215、nvestor relations,digital and technology and administration.Included in these costs are payroll(including Cineplexs Omnibus Incentive Plan costs),occupancy costs related to Cineplexs corporate offices,professional fees(such as public accountant and legal fees)and travel and related costs.Cineplex ma
216、intains general and administrative staffing and associated costs at a level that it deems appropriate to manage and support the size and nature of its theatre and LBE portfolio and its business activities.Accounting for Joint ArrangementsThe financial statements incorporate the operating results of
217、joint arrangements in which Cineplex has an interest using either the equity accounting method(for joint ventures and associates)or recognizing Cineplexs share of the assets,liabilities,revenues and expenses in Cineplexs consolidated results(for joint operations).Under IFRS 11,Cineplexs 33.3%interes
218、t in Scene+and 50%share of one IMAX auditorium in Ontario are classified as joint ventures or associates.Through equity accounting,Cineplexs share of the results of operations for these joint ventures and associates are reported as a single item in the statements of operations,Share of income of joi
219、nt ventures and associates.Theatre attendance for the IMAX auditorium held in a joint venture is not reported in Cineplexs consolidated theatre attendance as the line-by-line results of the joint venture are not included in the relevant lines in the statement of operations.In addition to the joint v
220、entures which are equity accounted,Cineplex consolidates its 50%share of assets,liabilities,revenues and expenses of its joint operation which recognizes the revenues and costs of redemptions of points issued prior to the launch of Scene+.Cineplex Inc.Managements Discussion and AnalysisCINEPLEX INC.
221、2024 ANNUAL REPORTMANAGEMENTS DISCUSSION&ANALYSIS235.RESULTS OF OPERATIONSOther than where disclosed,discussions of results and Non-GAAP financial measures,including EBITDA,adjusted EBITDA and adjusted EBITDAaL,in this MD&A are of continuing operations.5.1 SELECTED FINANCIAL DATAThe following table
222、presents summarized financial data for Cineplex for the three most recently completed financial years(expressed in thousands of dollars except shares outstanding,per share data and per patron data,unless otherwise noted):Year ended December 31,2024Year ended December 31,2023Year ended December 31,20
223、22(Section 1)(vi)Box office revenues$562,151$599,903$461,272 Food service revenues 462,052 483,149 381,386 Media revenues 134,831 118,655 111,728 Amusement revenues 92,691 96,507 80,920 Other revenues 78,713 90,680 67,575 Total revenues 1,330,438 1,388,894 1,102,881 Select ExpensesFilm cost 303,926
224、323,412 238,897 Cost of food service 108,126 113,987 87,702 Depreciation-right-of-use assets 94,160 87,657 93,512 Depreciation and amortization-other assets 83,789 88,881 89,466(Gain)Loss on disposal of assets(7,652)2,910 (57,748)Other costs including employee benefits(a)652,928 624,771 553,583(Reve
225、rsal)impairment of long-lived assets (19,880)Net(loss)income from continuing operations(105,684)138,051 (9,679)Net income from discontinued operations,including gain on disposition(vi)68,003 29,113 9,792 Net(loss)income(v)(37,681)167,164 113 Adjusted EBITDA(i)$263,925$322,962$220,168 Adjusted EBITDA
226、aL(i)$93,267$157,363$54,201 Adjusted EBITDAaL from discontinued operations(i)$508$35,732$27,471 Adjusted EBITDAaL including discontinued operations(i)$93,775$193,095$81,672(a)Other costs include:Theatre occupancy expenses 72,171 71,557 62,378 Other operating expenses including employee benefits 501,
227、560 482,112 426,743 General and administrative expenses including employee benefits(v)79,197 71,102 64,462 Total other costs including employee benefits$652,928$624,771$553,583(Loss)earnings per share from continuing operations-basic(v)$(1.66)$2.18$(0.15)Earnings per share from discontinued operatio
228、ns-basic$1.07$0.46$0.15(Loss)earnings per share -basic(v)$(0.59)$2.64$(Loss)earnings per share from continuing operations-diluted(v)$(1.66)$1.80$(0.15)Earnings per share from discontinued operations-diluted$1.07$0.32$0.15(Loss)earnings per share-diluted(v)$(0.59)$2.12$Total assets$2,287,317$2,271,49
229、2$2,150,454 Long-term debt(iv)$736,468$817,439$824,888 Average shares outstanding at period end 63,585,187 63,401,529 63,359,240 Adjusted free cash flow per share(ii)$(0.112)$1.320$(0.213)Box office revenue per patron(iii)$13.09$12.53$12.12 Concession revenue per patron(iii)$9.47$8.90$8.72 Film cost
230、 as a percentage of box office revenues 54.1%53.9%51.8%Theatre attendance(in thousands of patrons)(iii)42,946 47,862 38,045 Theatre locations(at period end)156 158 158 Cineplex Inc.Managements Discussion and AnalysisCINEPLEX INC.2024 ANNUAL REPORTMANAGEMENTS DISCUSSION&ANALYSIS24Theatre screens(at p
231、eriod end)1,617 1,631 1,637(i)Represents a non-GAAP financial measure.See Section 17,Non-GAAP and other financial measures.(ii)Represents a non-GAAP ratio.See Section 17,Non-GAAP and other financial measures.(iii)Represents a supplementary financial measure.See Section 17,Non-GAAP and other financia
232、l measures.(iv)Represents the principal component as presented on the financial statements net of any equity component and unamortized costs of long-term debt,Convertible Debentures,and Notes Payable.Excludes share-based compensation,lease obligations,fair value of interest rate swap agreements,post
233、-employment benefit obligations and other liabilities.(v)2024 includes the loss on the 2024 Refinancing of$56.0 million for full year,and expenses related to other transactions or litigation outside the normal course of business in the amount of$2.5 million(2023-$3.4 million)for full year.The full y
234、ear also includes the$39.2 million provision for the Competition Tribunals administrative monetary penalty.(vi)The results of discontinued operations(P1AG)have been excluded from prior period figures as applicable per IFRS 5 to conform to current period presentation.All amounts are from continuing o
235、perations unless noted.See Section 13,Accounting policies.Cineplex Inc.Managements Discussion and AnalysisCINEPLEX INC.2024 ANNUAL REPORTMANAGEMENTS DISCUSSION&ANALYSIS255.2 OPERATING RESULTS FOR THE THREE MONTHS AND YEAR ENDED DECEMBER 31,2024 Total revenuesTotal revenues for the three months ended
236、 December 31,2024 increased$47.7 million or 15.1%to$362.7 million as compared to the prior year.Total revenues for the year ended December 31,2024 decreased$58.5 million or 4.2%to$1.3 billion as compared to the prior year.A discussion of the factors affecting the changes in box office,food service,m
237、edia,amusement and other revenues for the period is provided below.Non-GAAP and other financial measures discussed throughout this MD&A,including adjusted EBITDA,adjusted EBITDAaL,adjusted store level EBITDAaL,adjusted EBITDAaL margin,adjusted store level EBITDAaL margin,adjusted free cash flow,thea
238、tre 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 Section 17,Non-GAAP and other financial measures.Box office revenuesThe following table highlights the movement in box of
239、fice revenues,theatre attendance and BPP for the quarter and full year(in thousands of dollars,except theatre attendance reported in thousands of patrons and per patron amounts,unless otherwise noted):Box office revenuesFourth QuarterFull Year20242023Change20242023ChangeBox office revenues$147,728$1
240、23,841 19.3%$562,151$599,903 -6.3%Theatre attendance(i)11,141 9,599 16.1%42,946 47,862 -10.3%Box office revenue per patron(i)$13.26$12.90 2.8%$13.09$12.53 4.5%BPP excluding premium priced product(i)$11.50$11.36 1.2%$11.28$10.91 3.4%Same theatre box office revenues(i)$147,457$123,430 19.5%$555,580$59
241、4,283 -6.5%Same theatre attendance(i)11,118 9,561 16.3%42,457 47,395 -10.4%Total box from premium priced product(i)41.4%36.3%5.1%41.6%41.4%0.2%(i)Represents a supplementary financial measure.See Section 17,Non-GAAP and other financial measures.Box office continuityFourth QuarterFull YearBox OfficeTh
242、eatre AttendanceBox OfficeTheatre Attendance2023 as reported$123,841 9,599$599,903 47,862 Same theatre attendance change 20,104 1,558 (61,924)(4,939)Impact of same theatre BPP change 3,924 23,221 New and acquired theatres(i)271 22 2,498 171 Disposed and closed theatres(i)(412)(38)(1,547)(148)2024 as
243、 reported$147,728 11,141$562,151 42,946(i)See Section 17,Non-GAAP and other financial measures.Represents theatres opened,acquired,disposed or closed subsequent to the start of the prior year comparative period and is used to report on Cineplexs supplementary financial measures.Fourth Quarter 2024 T
244、op Cineplex Films3D%Box Fourth Quarter 2023 Top Cineplex Films3D%Box 1 Wickeda 14.3%1 TAYLOR SWIFT|THE ERAS TOUR 9.6%2 Moana 2a 13.9%2 The Hunger Games:The Ballad of Songbirds andSnakes 9.4%3 Gladiator II 7.8%3 Five Nights at Freddys 7.1%4 Venom:The Last Dancea 6.6%4 Wonka 6.5%5 The Wild Robota 6.2%
245、5 Animal 4.5%Cineplex Inc.Managements Discussion and AnalysisCINEPLEX INC.2024 ANNUAL REPORTMANAGEMENTS DISCUSSION&ANALYSIS26Full Year 2024 Top Cineplex Films3D%Box Full Year 2023 Top Cineplex Films3D%Box 1 Deadpool&Wolverinea 8.6%1 Barbie 8.1%2 Inside Out 2a 6.7%2 The Super Mario Bros.Moviea 6.6%3
246、Dune:Part Two 4.8%3 Oppenheimer 4.9%4 Despicable Me 4a 4.2%4 Avatar:The Way of Watera 4.6%5 Wickeda 3.8%5 Spider-Man:Across The Spider-Verse 4.0%The following table compares 2024 monthly box office revenues to 2019 and 2023 monthly box office revenues:Month2019 Box office(i)2023 Box office(i)2024 Bo
247、x office(i)2024 as a percentage of 2019 2024 as a percentage of 2023January$52,034$45,744$37,62072%82%February$41,892$36,950$28,22267%76%March$62,571$40,644$59,21995%146%April$63,759$61,278$29,18346%48%May$68,697$47,514$33,93649%71%June$56,918$55,701$51,35990%92%July$76,935$86,388$72,46894%84%August
248、$56,537$67,592$67,198119%99%September$44,393$34,253$35,21879%103%October$54,528$37,354$34,03162%91%November$52,314$34,640$48,91894%141%December$74,946$51,847$64,77886%125%$705,524$599,905$562,15080%94%(i)Amounts are in thousands of dollars.Fourth QuarterBox office revenues increased by$23.9 million
249、or 19.3%to$147.7 million,compared to$123.8 million recorded in the prior year.This increase was primarily due to a 1.5 million or 16.1%increase in theatre attendance to 11.1 million.The fourth quarter box office revenues included the highly successful films Wicked,which achieved the highest grossing
250、 movie based on a Broadway musical at the North American box office,and Moana 2,which had the highest five day opening of all time,surpassing The Super Mario Bros.Movie at the North American box office.BPP for the three months ended December 31,2024 was$13.26,representing a fourth quarter and all-ti
251、me quarterly record,and an increase of$0.36 or 2.8%from$12.90 reported in the prior year.The increase in BPP is primarily due to inflationary and strategic pricing initiatives,and from premium priced products.Premium priced products increased to 41.4%of the total box office during the fourth quarter
252、,compared to 36.3%in the prior year as the highly successful films,Wicked,and Moana 2 drove guests to premium experiences,particularly 3D content,compared to the prior year,where none of the top five films were released with 3D offerings.Full YearFor the full year period,box office revenues decrease
253、d$37.8 million to$562.2 million,compared to$599.9 million recorded in the prior year period.This decrease was primarily due to a 4.9 million or 10.3%decrease in theatre attendance from 47.9 million to 42.9 million,partially as a result of marketing and production delays related to the impact of the
254、writers and actors strikes in the first half of 2024.The following films were all originally scheduled to be released in 2024 and were moved to 2025 and beyond:Elio,Snow White,Mickey 17,Spider-Man:Beyond the Spider-Verse,Captain America:Brave New World,Ballerina,Mission:Impossible-The Final Reckonin
255、g,Thunderbolts*,Dog Man,Saw XI,The Amateur,The Fantastic Four:First Steps,Karate Kid:Legends and Avatar:Fire and Ash.The prior year also included strong titles including Avatar:The Way of Water,one of Cineplexs highest grossing titles ever and the Barbenheimer phenomenon.Cineplexs BPP for the period
256、 ended December 31,2024 was$13.09,which increased$0.56 or 4.5%from$12.53 reported in the prior year period.This increase was due to inflationary and strategic pricing initiatives.Cineplexs Cineplex Inc.Managements Discussion and AnalysisCINEPLEX INC.2024 ANNUAL REPORTMANAGEMENTS DISCUSSION&ANALYSIS2
257、7main focus is to drive incremental visits to theatres,and employ a ticket price strategy which takes into account the local demographics at each theatre while maximizing BPP through premium offerings.Food service revenues The following table highlights the movement in food service revenues,theatre
258、attendance and CPP for the quarter and full year(in thousands of dollars,except theatre attendance and same store attendance reported in thousands of patrons and per patron amounts):Food service revenuesFourth QuarterFull Year20242023Change20242023ChangeFood service-theatres$104,866$89,101 17.7%$406
259、,784$425,865 -4.5%Food delivery-theatres 1,998 2,060 -3.0%7,802 8,568 -8.9%Food service-LBE 13,445 13,292 1.2%47,466 48,716 -2.6%Total food service revenues$120,309$104,453 15.2%$462,052$483,149 -4.4%Theatre attendance(i)11,141 9,599 16.1%42,946 47,862 -10.3%CPP(i)(ii)$9.41$9.28 1.4%$9.47$8.90 6.4%S
260、ame theatre food service revenues(i)$104,687$88,705 18.0%$401,934$421,325 -4.6%Same theatre attendance(i)11,118 9,561 16.3%42,457 47,395 -10.4%(i)Represents a supplementary financial measure.See Section 17,Non-GAAP and other financial measures.(ii)Food service revenue from LBE and delivery is not in
261、cluded in the CPP calculation.Theatre food service revenue continuityFourth QuarterFull YearTheatre Food ServiceTheatre AttendanceTheatre Food ServiceTheatre Attendance2023 as reported$89,101 9,599$425,865 47,862 Same theatre attendance change 14,447 1,558 (43,903)(4,939)Impact of same theatre CPP c
262、hange 1,534 24,511 New and acquired theatres(i)180 22 1,703 171 Disposed and closed theatres(i)(396)(38)(1,392)(148)2024 as reported$104,866 11,141$406,784 42,946(i)Represents theatres opened,acquired,disposed or closed subsequent to the start of the prior year comparative period and is used to repo
263、rt on Cineplexs supplementary financial measures.See Section 17,Non-GAAP and other financial measuresFood service revenues are comprised primarily of concession revenues,which includes food service sales at theatre locations,and through delivery services including Uber Eats,Skip the Dishes,and DoorD
264、ash.Food service revenues also include food and beverage sales at The Rec Room and Playdium.Fourth QuarterFood service revenues increased by$15.9 million or 15.2%to$120.3 million during the fourth quarter,compared to$104.5 million recorded in the prior year.Theatre food service revenues increased by
265、$15.8 million or 17.7%to$104.9 million as compared to the prior year.The increase in theatre food service revenue was primarily due to a 16.1%increase in theatre attendance.During the fourth quarter,CPP increased by$0.13 or 1.4%from the prior year,from$9.28 to a fourth quarter record of$9.41,primari
266、ly due to inflationary price increases resulting in higher average guest spend compared to the prior year.Full YearFor the full year period,food service revenues decreased by$21.1 million or 4.4%from$483.1 million to$462.1 million,primarily due to a$19.1 million decrease in theatre food service reve
267、nues.The decrease in theatre food service revenues is primarily due to a decrease in theatre attendance which decreased by 4.9 million to 42.9 million.Cineplexs CPP during the full year period was$9.47,which increased by$0.57 or 6.4%.LBE food service revenue also decreased$1.3 million from$48.7 mill
268、ion to$47.5 million.Cineplex Inc.Managements Discussion and AnalysisCINEPLEX INC.2024 ANNUAL REPORTMANAGEMENTS DISCUSSION&ANALYSIS28Media revenuesThe following table highlights the movement in media revenues for the quarter and full year(in thousands of dollars):Media revenuesFourth QuarterFull Year
269、20242023Change20242023ChangeCinema media$30,077$28,466 5.7%$79,149$80,057 -1.1%Digital place-based media 21,847 12,836 70.2%55,682 38,598 44.3%Total media revenues$51,924$41,302 25.7%$134,831$118,655 13.6%Theatre attendance(i)11,141 9,599 16.1%42,946 47,862 -10.3%Cinema media per patron(CMPP)(i)$2.7
270、0$2.97 -9.1%$1.84$1.67 10.2%(i)Represents a supplementary financial measure.See Section 17,Non-GAAP and other financial measures.Fourth QuarterTotal media revenues increased by$10.6 million or 25.7%to$51.9 million during the fourth quarter,compared to$41.3 million recorded in the prior year.The incr
271、ease during the fourth quarter was primarily due to the$9.0 million or 70.2%increase in digital place-based media revenues,including digital out of home(“DOOH”)media revenue primarily related to an agreement with Cadillac Fairview that began in the first quarter.The digital place-based media revenue
272、s increase is also attributed to growth in digital services due to the higher number of active networks,and incremental creative project revenue.Cinema Media revenues increased by$1.6 million or 5.7%during the fourth quarter due primarily to the increase in theatre attendance levels.Cinema media per
273、 patron(CMPP)decreased by$0.27 or 9.1%to$2.70,compared to$2.97 recorded in the prior year as theatre attendance increased 16.1%compared to cinema media revenue increase of 5.7%.Full YearFor the full year period,total media revenues increased$16.2 million or 13.6%to$134.8 million.Digital placed-based
274、 media revenues increased by$17.1 million or 44.3%for the full year period compared to the prior year period as a result of digital advertising on DOOH networks and higher project installation revenues.Cineplexs cinema media decreased by$0.9 million as arrangements are impacted by theatre attendance
275、 levels which drive impressions and ultimately impact media revenue generated by Cineplex.Cinema media per patron(CMPP)increased by$0.17 or 10.2%to$1.84,compared to$1.67 recorded in the prior year.The following table shows a breakdown of the nature of digital place-based media revenues for the quart
276、er and full year(in thousands of dollars):Digital place-based media revenuesFourth QuarterFull Year20242023Change20242023ChangeProject revenues(i)$6,252$2,941 112.6%$18,328$11,774 55.7%Other revenues(ii)15,595 9,895 57.6%37,354 26,824 39.3%Total digital place-based media revenues$21,847$12,836 70.2%
277、$55,682$38,598 44.3%(i)Project revenues include hardware sales and professional services.(ii)Other revenues include sales of software and its support as well as media advertising.Cineplex Inc.Managements Discussion and AnalysisCINEPLEX INC.2024 ANNUAL REPORTMANAGEMENTS DISCUSSION&ANALYSIS29Amusement
278、 revenuesThe following table highlights the movement in amusement revenues for the quarter and full year(in thousands of dollars):Amusement revenues Fourth QuarterFull Year20242023Change20242023ChangeAmusement revenue-LBE$18,828$19,027 -1.0%$77,824$80,300 -3.1%Amusement revenue-exhibition(i)3,620 3,
279、475 4.2%14,867 16,207 -8.3%Total amusement revenues from continuing operations$22,448$22,502 -0.2%$92,691$96,507 -4.0%(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
280、venue revenue share which is consistent with the historical presentation of Cineplexs amusement revenues.Fourth Quarter and Full YearCompared to the prior year,amusement revenues decreased by$0.1 million or 0.2%during the fourth quarter,to$22.4 million primarily due to lower LBE revenue.For the full
281、 year period,amusement revenues decreased$3.8 million or 4.0%to$92.7 million,also primarily due to lower exhibition attendance and LBE revenue.Following the sale of P1AG,Cineplex continues to receive a venue revenue share on games revenues earned at in-theatre gaming centres,under the same terms as
282、the prior agreement.The following table presents the LBE adjusted store level EBITDAaL for the quarter and full year(in thousands of dollars):LBE SummaryFourth QuarterFull Year20242023Change20242023ChangeFood service revenues$13,445$13,292 1.2%$47,466$48,716 -2.6%Amusement revenues 18,828 19,027 -1.
283、0%77,824 80,300 -3.1%Media and other revenues 1,358 1,674 -18.9%3,325 3,362 -1.1%Total revenues$33,631$33,993 -1.1%$128,615$132,378 -2.8%Cost of food service 3,667 3,472 5.6%13,117 13,559 -3.3%Operating expenses before adjustments(i)18,973 18,233 4.1%74,110 69,903 6.0%Cash rent related to lease obli
284、gations(ii)3,067 2,748 11.6%11,413 10,968 4.1%Total expenses$25,707$24,453 5.1%$98,640$94,430 4.5%Adjusted store level EBITDAaL(iii)$7,924$9,540 -16.9%$29,975$37,948 -21.0%Adjusted store level EBITDAaL Margin(iv)23.6%28.1%-4.5%23.3%28.7%-5.4%(i)Includes operating costs of LBE.Pre-opening costs relat
285、ing to LBE and overhead relating to management of LBE portfolio are not included as they are non-recurring costs.(ii)Cash rent that has been reallocated to offset the lease obligations.(iii)Represents a non-GAAP financial measure.See Section 17,Non-GAAP and other financial measures.(iv)Represents a
286、non-GAAP ratio.See Section 17,Non-GAAP and other financial measures.Fourth QuarterDuring the fourth quarter,revenues decreased by$0.4 million or 1.1%from the prior year to$33.6 million.The decrease in revenue during the fourth quarter is primarily due to a decrease in media,and ticketed events.Adjus
287、ted store level EBITDAaL during the fourth quarter was$7.9 million,and adjusted store level EBITDAaL margin was 23.6%.The decrease in adjusted store level EBITDAaL and decrease in adjusted store level EBITDAaL margin are primarily attributed to an increase in payroll(related to the minimum wage incr
288、eases in several provinces),and occupancy expenses.Cineplex Inc.Managements Discussion and AnalysisCINEPLEX INC.2024 ANNUAL REPORTMANAGEMENTS DISCUSSION&ANALYSIS30Full YearFor the full year period,revenues decreased by$3.8 million or 2.8%from the prior year.The decrease in revenue during the full ye
289、ar period was primarily due to weather-related guest behaviours,lower groups and events bookings,and the timing of the opening of the three new LBE locations.Adjusted store level EBITDAaL for the full year period was$30.0 million and adjusted store level EBITDAaL margin during the full year period w
290、as 23.3%.The decrease in adjusted store level EBITDAaL is consistent with the decrease in revenues and the decrease in adjusted store level EBITDAaL margin are due to higher operating costs including payroll,and occupancy costs.Other revenues The following table highlights the other revenues which i
291、ncludes revenues from online booking fees,Cineplex Pictures distribution,the Cineplex Store,promotional activities,screenings,private parties,corporate events,breakage on gift card sales and revenues from management fees for the quarter and full year(in thousands of dollars):Other revenuesFourth Qua
292、rterFull Year20242023Change20242023ChangeOnline Booking Fees$5,864$5,152 13.8%$22,184$27,283 -18.7%Other Revenues 14,470 17,828 -18.8%56,529 63,397 -10.8%Total other revenues$20,334$22,980 -11.5%$78,713$90,680 -13.2%Fourth Quarter and Full YearThe quarterly decrease is primarily due to the decrease
293、in distribution revenue this quarter compared to the release of The Hunger Games:The Ballad of Songbirds and Snakes,and The Boy and the Heron included in the prior year.The full year period decrease is primarily due to the decrease in online booking fee revenue related to lower attendance compared t
294、o the prior year,lower distribution revenue with the release of John Wick 4 included in the prior year,and lower venue rentals and breakage related to gift cards and coupons.The manner in which Cineplex displayed the online booking fee was contested by the Competition Bureau-not Cineplexs right to c
295、harge the online booking fee itself.Cineplex will continue to charge the online booking fee.Film cost The following table highlights the movement in film cost and the film cost percentage for the quarter and the full year(in thousands of dollars,except film cost percentage):Film costFourth QuarterFu
296、ll Year20242023Change20242023ChangeFilm cost$78,628$65,357 20.3%$303,926$323,412 -6.0%Film cost percentage(i)53.2%52.8%0.4%54.1%53.9%0.2%(i)Represents a supplementary financial measure.See Section 17,Non-GAAP and other financial measures.Cineplex Inc.Managements Discussion and AnalysisCINEPLEX INC.2
297、024 ANNUAL REPORTMANAGEMENTS DISCUSSION&ANALYSIS31Fourth Quarter and Full YearFilm 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 which vary by title and
298、distributor.The higher film cost during the fourth quarter and the full year,over the prior year,is due to the top films in the current period having higher settlement rates compared to the prior year.Cost of food serviceThe following table highlights the movement in cost of food service and food se
299、rvice cost as a percentage of food service revenues(“concession cost percentage”)for both theatres and LBE for the quarter and full year(in thousands of dollars,except percentages and margins per patron):Cost of food serviceFourth QuarterFull Year20242023Change20242023ChangeCost of food service-thea
300、tre$23,421$22,314 5.0%$95,009$100,428 -5.4%Cost of food service-LBE 3,667 3,472 5.6%13,117 13,559 -3.3%Total cost of food service$27,088$25,786 5.0%$108,126$113,987 -5.1%Theatre concession cost percentage(i)21.9%24.5%-2.6%22.9%23.1%-0.2%LBE food cost percentage(i)27.3%26.1%1.2%27.6%27.8%-0.2%Theatre
301、 concession margin per patron(i)$7.35$7.01 4.9%$7.30$6.84 6.7%(i)Represents a supplementary financial measure.See Section 17,Non-GAAP and other financial measures.Fourth Quarter and Full YearCost of food service at the theatres varies primarily with theatre attendance,the cost of food and materials
302、purchased 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 increase in theatre concession cost and LBE food costs is positive
303、ly correlated to the increase in food service revenues recognized during the quarter compared to the prior year.For the full year period,LBE food costs decreased marginally and the theatre concession cost decrease is positively correlated to the decrease in food service revenues.Depreciation and amo
304、rtization The following table highlights the movement in depreciation and amortization expenses during the quarter and full year(in thousands of dollars):Depreciation and amortization expensesFourth QuarterFull Year20242023Change20242023ChangeDepreciation of property,equipment and leaseholds$17,979$
305、19,463 -7.6%$73,653$79,246 -7.1%Amortization of intangible assets and other 2,460 2,356 4.4%10,136 9,635 5.2%Sub-total-depreciation and amortization-other assets$20,439$21,819 -6.3%$83,789$88,881 -5.7%Depreciation-right-of-use assets 22,467 22,259 0.9%94,160 87,657 7.4%Total depreciation and amortiz
306、ation from continuing operations$42,906$44,078 -2.7%$177,949$176,538 0.8%Cineplex Inc.Managements Discussion and AnalysisCINEPLEX INC.2024 ANNUAL REPORTMANAGEMENTS DISCUSSION&ANALYSIS32Fourth Quarter and Full YearDepreciation of property,equipment and leaseholds decreased by$1.5 million,or 7.6%durin
307、g the quarter and$5.6 million or 7.1%for the full year compared to the prior year period due to fully depreciated assets.Amortization of intangible assets remained flat during the quarter and full year compared to the prior year.Depreciation of right-of-use assets increased by$0.2 million or 0.9%dur
308、ing the quarter and$6.5 million or 7.4%for the full year compared to the prior year.The increase was primarily due to the addition of right-of-use assets associated with Cadillac Fairview in conjunction with the digital out-of-home agreement at the beginning of 2024.Impairment of long-lived assetsCi
309、neplex generally performs its annual test for impairment of goodwill and indefinite-lived intangible assets in the fourth quarter,in accordance with the policy described in its annual consolidated financial statements.Assessment of impairment for long-lived assets,including property,equipment,leaseh
310、olds,right-of-use assets,intangible assets and goodwill is performed more frequently as specific events or circumstances dictate triggering events and changes in circumstances indicate that the carrying amount of the asset group may not be fully recoverable.In addition,for assets other than goodwill
311、 and indefinite-lived intangible assets,indicators are assessed considering whether an impairment loss previously recognized may no longer exist or may have decreased.Cineplex completed impairment testing for goodwill and indefinite-lived intangible assets in the fourth quarter and concluded no impa
312、irment exists.Based on Cineplexs assessment for long-lived assets,no indicators of impairment or reversals were present and therefore no impairment testing was performed in the current period.No reversals or impairments of long-lived assets were recognized during the period ended December 31,2024 an
313、d 2023.Loss(gain)on disposal of assets The following table shows the movement in the loss(gain)on disposal of assets during the quarter and full year(in thousands of dollars):Loss(gain)on disposal of assetsFourth QuarterFull Year20242023Change20242023ChangeLoss(gain)on disposal of assets$218$1,553 -
314、86.0%$(7,652)$2,910 NMFourth Quarter and Full YearThe change in the loss on disposal of assets recognized during the quarter is due to nominal activity on the disposal of Cineplexs assets.For the full year period,Cineplex sold underutilized land adjacent to a theatre for cash proceeds of$11.9 millio
315、n,resulting in a gain of$8.7 million.Other costsOther costs include three main sub-categories of expenses:theatre occupancy expenses,which capture associated occupancy costs for Cineplexs theatre operations;other operating expenses,which include the costs related to running Cineplexs film entertainm
316、ent and content,media,and LBE businesses;and general and administrative expenses,which includes costs related to managing Cineplexs operations,including head office expenses.Please see the discussions below for more details on these categories.The following table highlights the movement in other cos
317、ts for the quarter and full year(in thousands of dollars):Cineplex Inc.Managements Discussion and AnalysisCINEPLEX INC.2024 ANNUAL REPORTMANAGEMENTS DISCUSSION&ANALYSIS33Other costs including employee benefitsFourth QuarterFull Year20242023Change20242023ChangeTheatre occupancy expenses$16,136$16,592
318、 -2.7%$72,171$71,557 0.9%Other operating expenses 134,450 121,810 10.4%501,560 482,112 4.0%General and administrative expenses 19,162 17,992 6.5%79,197 71,102 11.4%Total other costs$169,748$156,394 8.5%$652,928$624,771 4.5%Theatre occupancy expensesThe following table highlights the movement in thea
319、tre occupancy expenses for the quarter and full year(in thousands of dollars):Theatre occupancy expensesFourth QuarterFull Year20242023Change20242023ChangeCash rent paid/payable(i)$36,638$36,976 -0.9%$147,530$148,930 -0.9%Other occupancy 17,472 17,122 2.0%73,245 72,038 1.7%Retroactive adjustments(ii
320、)(1,063)(911)16.7%(1,590)(2,025)-21.5%Total theatre occupancy including cash lease payments$53,047$53,187 -0.3%$219,185$218,943 0.1%IFRS 16 adjustment(iii)(36,911)(36,595)0.9%(147,014)(147,386)-0.3%Theatre occupancy as reported$16,136$16,592 -2.7%$72,171$71,557 0.9%(i)Represents the cash payments fo
321、r theatre rent paid or payable during the quarter.(ii)Retroactive adjustments include amounts related to both theatre rent and other theatre occupancy costs including real estate taxes,business taxes and common area maintenance.They are isolated here to illustrate Cineplexs theatre rent and other th
322、eatre occupancy costs excluding these retroactive items.(iii)Cash rent paid/payable related to lease obligations.Theatre occupancy continuityFourth QuarterFull YearOccupancyOccupancy2023 as reported$16,592$71,557 Impact of new and acquired theatres 62 548 Impact of disposed theatres(273)(870)Same st
323、ore rent change(i)(167)(1,061)Retroactive adjustments(151)435 Decrease in subsidies (39)Other 389 1,229 Impact of IFRS 16:Cash rent related to lease obligations(316)372 2024 as reported$16,136$72,171(i)Represents a supplementary financial measure.See Section 17,Non-GAAP and other financial measures.
324、Fourth Quarter and Full YearTheatre occupancy expenses remained flat during the fourth quarter and the full year period compared to the prior year.Cash rent paid/payable related to lease obligations decreased 0.9%during the fourth quarter and 0.9%for the full year period.Cineplex Inc.Managements Dis
325、cussion and AnalysisCINEPLEX INC.2024 ANNUAL REPORTMANAGEMENTS DISCUSSION&ANALYSIS34Other operating expenses The following table highlights the movement in other operating expenses during the quarter and full year(in thousands of dollars):Other operating expensesFourth QuarterFull Year20242023Change
326、20242023ChangeTheatre payroll$41,960$36,997 13.4%$161,035$157,954 2.0%Theatre operating expenses 30,973 28,932 7.1%122,069 117,877 3.6%Media 22,101 13,678 61.6%68,654 51,767 32.6%LBE operating expenses(i)22,040 20,982 5.0%85,523 80,872 5.8%LBE pre-opening(ii)2,840 NM 3,523 NMRedemption cost of legac
327、y loyalty points 1,248 2,577 -51.6%6,432 16,773 -61.7%Marketing 3,831 4,157 -7.8%11,363 11,224 1.2%Scene+point issuance 6,290 5,023 25.2%24,688 25,130 -1.8%Other(ii)9,741 13,610 -28.4%39,596 36,401 8.8%Other operating expenses including cash lease payments$141,024$125,956 12.0%$522,883$497,998 5.0%I
328、FRS 16 adjustment(iii)(6,574)(4,146)58.6%(21,323)(15,886)34.2%Total other operating expenses from continuing operations$134,450$121,810 10.4%$501,560$482,112 4.0%(i)Includes operating costs of LBE locations.Overhead relating to management of LBE portfolio are included in the Other line.(ii)Other cat
329、egory includes direct costs of Cineplex Pictures,Cineplex Store and overhead costs related to LBE and other Cineplex internal departments.(iii)Cash rent paid/payable related to lease obligations of the LBE and digital place-based media businesses.Other operating expenses continuityFourth QuarterFull
330、 Year2023 as reported/revised$121,810$482,112 Impact of new and acquired theatres 151 1,454 Impact of disposed theatres(391)(1,138)Same theatre payroll change(i)5,049 3,097 Same theatre operating expenses change(i)1,484 3,913 Media operating expenses change 8,423 16,887 LBE operating expenses change
331、 1,058 4,651 LBE pre-opening change 2,840 3,523 Redemption cost of legacy loyalty points(1,329)(10,341)Marketing change(326)139 Scene+point issuance change 1,267 (442)Other(3,158)3,142 Impact of IFRS 16:Cash rent related to lease obligations$(2,428)$(5,437)2024 as reported$134,450$501,560(i)See Sect
332、ion 17,Non-GAAP and other financial measures.These are measures included as part of Cineplexs supplementary financial measure calculations.Fourth Quarter Other operating expenses increased by$12.6 million or 10.4%during the fourth quarter compared to the prior year.The increase in theatre payroll ex
333、penses is correlated to the increase in attendance and related box office and theatre food service revenues,as well as minimum wage increases across several provinces compared to the prior year.Media operating expenses increased$8.4 million primarily due to an increase in venue rental share expenses resulting from higher revenues,and LBE expenses increased due to pre-opening expenses of three new
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