Ellis Jacob - President & Chief Executive Officer Gord Nelson - Chief Financial Officer Pat Marshall - Vice President of Communications & Investor Relations

Adam Shine - National Bank Financial Ben Mogil - Stifel Nicolaus Haran Posner - RBC Capital Markets Paul Steep - Scotia Capital Tim Casey - BMO Capital Markets Michael Elkins - TD Securities Rob Goff - Byron Capital Markets Kenric Tyghe - Raymond James Aravinda Galappatthige - Canaccord Genuity Colin Moore - Credit Suisse Steve Li - Industrial Alliance Securities

Good morning. Before beginning the call we’d like to remind you that certain statements being made are forward-looking and subject to various risks and uncertainties.

Such forward-looking statements are based on management’s beliefs and assumptions regarding the information currently available. Actual results could differ materially from those expressed in the forward-looking statements.

Factors that could cause results to vary include among other things adverse factors, generally encountered in the film exhibition industry, risks associated with national and world events, discovery of undisclosed material liabilities and general economic conditions. I will now turn the call over to Ellis Jacob.

Thank you, Pat. Good morning and welcome to our first quarter conference call of 2013.

We appreciate you joining us today. I will begin the call this morning by commenting on our first quarter performance, highlighting some of our accomplishments during the quarter and will conclude with a look at the film slate for the balance of the year.

I will then turn the call over to Gord Nelson, our Chief Financial Officer, who will speak more specifically to the details of our financial results during this quarter. Once Gord has concluded his remarks, we will hold a question-and-answer period.

After experiencing our best annual results yet in 2012, including the record quarterly results for Q4, 2012, the first quarter of 2013 was a tough comparative. It was especially difficult given last years tremendous success of the Hunger Games, which was the highest grossing movie ever released in a first quarter.

Films such as The Hobbit, Django Unchained, Sliver Lining Playbook and Life of Pi carried over into the first quarter, but the lack of blockbuster hits and less compelling children’s product within this period resulted in a difficult first quarter for the industry and for Cineplex. Total revenues for the quarter were down 0.4% versus the first quarter of 2012.

Box office and concession revenues while comparable to the first quarter of 2012 were impacted by the 5.5% decrease in attendance. However, other revenues increased significantly, primarily due to higher media revenues.

This helped to somewhat offset the box office and concession declines. The Canadian industry box office for the quarter decreased 9.1% versus Q1 of 2012.

Cineplex’s first quarter box office revenues decreased by 2.8% compared to the Canadian industry. The decrease was primarily due to the decrease in attendance, which was a result of the current periods weak film product and was partially offset by the addition of the AMC Theaters acquired in July 2012.

Premium entertainment choices such as 3D, UltraAVX, VIP and IMAX continue to be very popular with our guests and accounted for 35.5% of our box office during the current period. This was up significantly from the prior year period of 27.1% and was a record high.

It contributed to a new first quarter record BPP of $8.97. Concession revenue decreased 1.5%, due primarily to the attendance decrease.

However we achieved a new all-time quarterly record for CPP of $4.69. We continue to attribute this success to a number of factors, including a focus on revised concession offerings, our retail branded outlet program and improved product promotions through the expansion of our digital menu boards.

I am pleased to report that other revenue increased a substantial 20% in the first quarter of 2013 compared to the prior year period. Now let’s take a look at some of our accomplishments for the quarter.

We announced a number of new and continuing initiatives, including the acquisition of two Vancouver theaters from Festival Cinemas. These include the Park Theatre and the Fifth Avenue Cinema, the latter theater is well known in Vancouver for programming the highest quality art, independent and foreign films, and we are pleased to add these two iconic Vancouver locations to our theater circuit.

This brings Cineplex’s total number of theaters to 136 with 1,455 screens across six provinces as of March 31. Due to positive guest response and the tremendous success of UltraAVX, we continue the expansion of UltraAVX auditorium, adding five new UltraAVX auditoriums to the circuit, including three at former AMC theaters.

This brings the total count to 44 UltraAVX auditoriums at March 31. Our plans are to add at least seven more UltraAVX locations throughout the remainder of the year.

We also added 3D screens in strategic locations across the circuit, increasing the number of 3D screens to 551. Looking at merchandising; in addition to the record CPP results mentioned earlier, other highlights in this area of the business during the quarter included the opening of a new Xscape Entertainment Centre at the Scotiabank Theater in Edmonton, bringing our total to nine.

Also contributing to our success in merchandising was the continued rollout of digital menu boards at our concession stands and RBOs throughout the circuit. These digital menu boards provide an appealing and flexible platform to communicate pricing, promotions and many merchandising programs.

In media, our success this quarter was primarily due to higher media revenues from both our in-theater and digital media businesses. Our focus on regional advertising campaigns, in addition to national campaigns contributed to this success.

Cineplex Digital Media revenues increased 32.9% compared to the prior year period, and this area of the business continues to show strong growth potential. In alternative programming, our accomplishments in this area include the continued success of the highly acclaimed Met Opera, Live in HD series from Lincoln Center, New York, as well as a number of programs, including classics, ethnic films, concerts, live sporting events, World Wrestling Entertainment, and the Family Favorites film series.

Our loyalty program SCENE continues to grow its membership base with over 4.5 million members at March 31, 2013. Approximately 200,000 members joined the program during the first quarter of 2013.

As of today, our total enrollment in the program is over 4.6 million members. Looking at our interactive business, it continued to deliver good results in the first quarter of 2013.

Cineplex.com registered a 12% increase in page views to $107 million, and an 11% increase in unique visitors. The Cineplex app has now been downloaded more than 6 million times and recorded more than 138.5 million app sessions.

We were also very pleased to learn earlier this week, the Cineplex Mobile app was just announced as one of the top 25 all-time free apps for iPhone in Canada. We also completed deals to include digital content from all major studios on the Cineplex store.

The Cineplex Mobile brand app maintained its position of seventh place in Canada, based on the most recent ComScore MobiLens ranking. We also launched new BlackBerry Z10 and Windows 8 Tablet apps and will continue development to allow the app to be available on even more devices.

This quarter we also integrated the Cineplex Store app onto Toshiba Smart Television and 2013 LG and Samsung smart devices. We also finalized an agreement with Panasonic to integrate our Cineplex Store app onto their 2013 Smart TVs.

As for ultraviolet, we added 2,500 plus UV enabled titles available for purchase on the Cineplex Store from major partners including Sony, Warner and Universal. We also continue to offer the ability for our guest to redeem UV pins on the Cineplex Store to gain a free e-copy of the DVD or BluRay movie, when they purchased it from the Cineplex Store.

Looking ahead, we will continue to add mode studios to the list for UV pin redemption. Now, let’s take a look at the film slate for the balance of the year.

Looking ahead, I am encouraged by what appears to be a strong schedule of films to be released throughout the summer and second half of the year. Tonight The Great Gatsby opens starring Leonardo DiCaprio.

This film seems to have generated a great deal of buzz, especially among DiCaprio fans. Superhero fans are still reeling from last week’s much anticipated release of Ironman 3.

The film opened to more than $175 million and represents the second-best opening in box office history, and although the film remains number one at the box office, there may be competition for that film when Star Trek Into Darkness hits screens next week. Man of Steel, with it’s stellar cast and directed by Zach Snyder will be flying into theaters on June 14.

Other noteworthy titles include Fast and Furious 6, The Hangover 3, The Heat, World War Z, Disney’s Monsters University. The Lone Ranger and Despicable Me 2 kick off the third quarter.

Pacific Rim, Smurfs 2, 300 - Rise of an Empire, Planes and Elysium highlight the third quarter. Ending the year we look forward to the highly anticipated second film in the series, the Hunger Games - Catching Fire, followed by The Hobbit - The Desolation of Smaug, Anchorman 2, Saving Mr.

Banks and Jack Ryan, among others. Before I conclude I’m very pleased to announce the Board of Directors approved a 6.7% dividend increase that will be effective with the May 2013 dividend.

Now I will turn the call over to Gord, who will go into the financials in greater detail.

Thanks Ellis. I am pleased to present the first quarter financial results for Cineplex Inc.

For your further reference, our financial statements and MD&A have been filed on SEDAR this morning and are also available in our Investor Relations website at cineplex.com. Prior to commenting on the results, I would like to mention that we adopted IFRS 11 - Joint Arrangements retrospectively, commencing with the release of our Q1, 2013 results.

Under IFRS 11, our 50% interest in the SCENE is classified as a joint operation and we now proportionately consolidate for our interest in SCENE. Note two to our interim financial statements provide a detailed reconciliation between the previously reported amounts and the revised amounts for the current quarter.

In addition, Section 17 of our MD&A provides a summary of the quarterly statements of operations for 2012, revised for the retrospective application of IFRS 11. The adoption of IFRS did not result in any changes to net income or adjusted EBITDA for the prior year periods.

For the first quarter total revenues decreased 0.4% and adjusted EBITDA decreased 23%. The results for the quarter were impacted by lower business volumes and the acquisition of AMC Ventures Inc.

Cineplex’s first quarter box office revenue decreased 2.8% to $145.2 million from $49.4 million in the prior year. Oz, The Great and Powerful was our top film generating 6.8% of our box office revenue.

Followed by The Hobbit - an Unexpected Journey, Identity Thief, Django Unchained, and Jack the Giant Slayer. This compared to the first quarter of 2012 where The Hunger Games was our top film with 8.3% of our box office.

Our average ticket price for the quarter increased 2.9% or $0.25 to $8.97 from $8.72 last year. Premium product, including 3-D, UltraAVX, VIP and IMAX products represented 35.5% of our box office revenue during the first quarter of 2013, as compared to 27.1% in the first quarter of 2012.

The 35.5% represents our highest premium product mix percentage ever. The impact of premium priced product and the average ticket price was $0.78 for this quarter as compared to $0.59 in the prior year.

Excluding premium product, our average ticket price increased to 2.7% to $8.19 from $8.13. Concession revenue decreased 1.5% to $75.9 million as a result of the 5.5% attendance decrease; partially offset by a 4.2% increase in the concession revenue per patron, to $4.69, a new quarterly record.

Revised concession offerings, our RBO program and improved product promotion through the expansion of a digital menu board program, all contributed to this increase. Other revenues for Cineplex were $27 million versus the prior year actual of $22.5 million, an increase of $4.5 million or approximately 20%.

Media revenue represented 60% of the Q1, 2013 total, and increased $3.6 million or 28.6% to $16.3 million. As Ellis mentioned, our focus on enhancing our regional sales strategies and the return of key national advertisers contributed to this increase.

Turning briefly to our expense line items. Film costs for the quarter came in at 50.6% of box office revenue, which was slightly below the 51.3% reported in the prior year.

Concession costs for Q1, 2013 were 21.4% of concession revenue as compared to 20.5% in the prior year. Our retentions from concession sales or concession margin per patron, increased 2.5% during the quarter to $3.68 from $3.59.

Under IFRS we now report other costs as one line item in our income statement. This category includes costs, which had previously been included in our occupancy, other operating and general and administrative expense categories.

Other costs of $127.5 million increased to $11.6 million or 10%. As detailed in our MD&A and press release, the $127.5 million in other costs is comprised of $46.6 million of theater occupancy expenses, $64.5 million of other operating expenses and $16.5 million of general and administrative expenses.

I will discuss each of these categories separately. Theater occupancy expenses were $46.6 million for the quarter versus a prior year actual of $41.7 million, an increase of $4.9 million.

For Q1, 2013 theater occupancy expense was impacted by the acquisition of the four AMC locations, which accounted for $4.9 million of the increase. Other operating expenses were $64.5 million for the quarter versus a prior year actual of $58.5 million, an increase of $5.9 million.

Major reasons for the increase include a $3.1 million increase related to the new and acquired theaters, including the acquisition of the four AMC theaters, a $1.3 million increase in media expenses related to its revenue growth, and a $0.8 million increase related to 3D royalties and projection bulk purchases. Theater level payroll costs represented approximately 43.5% of other operating expenses for the quarter, as compared to 45.7% in the prior year.

G&A expenses were $16.5 million for the quarter, which was $0.8 million higher than the prior year. In part due to a $0.8 million increase in long-term and short-term incentive program expenses, as a result of the recent operating and stock performance strength.

Adjusted EBITDA for the quarter was $31.7 million versus a prior year amount of $41.1 million, a decrease of 23%. The primary contributor to the EBITDA decrease was the reduced business volume.

Interest expense of $1.7 million was $2.7 million, lower than the prior year amount of $4.4 million. Contributing to the decrease was a $1.2 million or 39.5% reduction in cash interest, as a result of the lower rates in the new swap and lower debt balances, in part due to the maturity of the convertible debentures on December 31, 2012.

In addition, there was a $1.4 million decrease in non-cash interest related to interest rate swaps. The company recorded a tax expense of $2.6 million during the first quarter of 2013, of which $0.8 million was a current tax recovery and $3.3 million was deferred.

Our blended federal and provincial statutory tax rate was 26.2% in both periods. With the $147 million in non-capital tax losses acquired on the AMC acquisition, we do not expect to be in a significant current tax paying position in 2013.

Net CapEx was defined as total capital expenditures net of tenant inducements, net CapEx for the first quarter was $13.9 million as compared to $10.7 million in the prior year. For the full year we expect our net CapEx to be approximately $60 million to $70 million, with approximately $25 million coming from maintenance CapEx, $20 million to $25 million coming from new construction, and $15 million to $20 million from CapEx related to additional premium experience rollouts, CapEx at AMC locations, and CapEx related to new initiatives, including our interactive and digital signage initiative.

We remain very comfortable with where Cineplex Inc is positioned today. We have a strong balance sheet with a low leveraged ratio and a low payout ratio.

We are pleased to announce the dividend increase today and we believe the shareholders can count on the sustainability of their dividend. That concludes our remarks for this morning and we’d now like to turn the call over to the conference operator for questions.

Thanks a lot, good morning. Maybe I’ll start with Gord’s couple of housekeeping items.

In terms of working capital, I can’t recall if you had previously indicated that it might be sort of neutral for this year. Maybe you can just update that dynamic?

Sure. I mean I think as you guys have seen the historic trend, there tends to be a significant draw down of working capital during the first quarter.

We are getting gift card and corporate coupon redemptions during the quarter, as well as we are paying the liabilities which are established at the end of December, at the end of the prior fiscal year, which is that month of December tends to be one of the highest volumes months of the year. We tend to be relatively neutral in the second and third quarter and then in the fourth quarter we have a big build up of working capital as we are selling, again gift cards and it’s coming into the busier season.

So we tend to expect over the long-term to have small sources of working capital on an annualized basis.

Okay, super. Thanks for that reminder.

And just in terms of AMC, you gave us some I think incremental revenue data points the last call. I can see what the EBITDA contribution was.

Can you give us anything in regards to total revenue and may be box office revenue from AMC?

Sure. In terms of total revenue, total revenue for the AMC location was roughly $11.1 million, the box office representing about $7.7 million of that total.

Now you recall during the fourth quarter the locations were EBITDA positive of about $600,000 and it was a strong box office quarter and those locations are in major urban centers and do particularly well. First quarter of 2013 as Ellis mentioned, not as strong a quarter at the box office and so the expectation would be that there would be a small loss at those locations.

Okay, super, thanks for that. I’ll try to get you involved now Ellis.

With respect to – I don’t want to dwell obviously on sort of what we saw a few weeks ago in regards to Disney Regal and the Ironman 3 film cost, but maybe I can tie that into the idea or context there there’s probably something like 22 big blockbuster titles expected this summer, which is significantly greater than what we saw a year ago. So maybe in that context, can you speak to the prospect of the film cost trend, maybe moving up incrementally higher, both on the back of what Disney was trying to push and also just the context of the number of titles coming through that are poised to do $100 million plus this summer?

Well Adam, I mean a lot of the studios today continue to push on these big sure hits, as we see with the number of sequels and the strong box office from these larger pictures. Again, if a picture performs at an extremely high-level, our film rental does get higher as we saw with the Avatar quarter in 2010 and basically it’s a negotiation we have with the studio.

And the bottom line is, for Cineplex as a company, we have so many touch points with our partners, all the way from our Media business, to our loyalty programs, to our websites. So our discussions are a lot more wholesome, including the eCommerce business.

So we kind of look at it as a total package and that’s the partnership that we work on. Will film rental go up?

It depends largely on the performance of the films during the summer, but I don’t see substantial spikes, unless we see movies doing $400 million, $500 million and $600 million in North America.

Okay, thanks for that color. That’s it for me.

Thank you.

Hi guys. Good morning and thanks for taking my question.

So I’ve got a couple of them. Ellis, you talked a lot about the initiatives eCommerce store and on the loyalty card front for a while now.

Can you give us a sense of what this is doing from a revenue perspective and I totally appreciate that some of it is coming through higher incidence levels that are hard for you to track. But on the loyalty card side, beyond the higher concession sales, are you seeing the studios start to use that database for licensing on the ad campaigns?

And on the eCommerce side, can you give us a sense of sales or how many units of DVD you’ve sold? I mean I’m kind of surprised about the interest in it, just given that the world’s clearly moved from a physical to digital one, but also more from an ownership to a rental one or an SVOD one.

So I’m curious, your thoughts on that from a larger perspective?

Yes, so breaking up your question in to a couple of parts, as it relates to the studios, we are starting to see more and more incidences where the studios are using our assets to market their films, because it’s more about target marketing rather than carpet bombing and given the loyalty program, again it’s a relatively new program, it’s seven years-old and we are now have 4.6 million members, which is close to 15% of the Canadian population. So for them to be able to use those assets to drive increased incidence is really, really important, and given our digital assets, our websites, all of those things, they add up to a real ability to use our media to promote movies.

Is it where we’d like it to be? Not yet Ben, but again, history and the information and the strength of the theatre makes a big difference to the success of using that information.

So I see it continuing to evolve and SCENE was a major drag on our bottom line over the last number of years, and now we are starting to see a bit of an improvement. But again, it’s where the revenues are generated, depending – that’s where it affects the bottom line with SCENE.

You’re other question as it related to digital, sales through the first quarter of 2013 were up compared to the prior year and we continue to see improvements in the whole area of UltraViolet and digital sales. Now this business is not going to jump through hoops overnight, but I think it is a business that will continue to improve over time and eventually, using SCENE and all of the other assets we have, we feel we can get a significant improvement in this business as it evolves.

What are your thoughts on the consumers sort of continuing to move away from ownerships to rental and how you can use SCENE to help sort of spur that on your own?

Ben, what SCENE provides us with is the ability to basically get information about that consumer and what they’ve seen and not seen at the movie theater. So we can either prompt them to come into the theater or we can prompt them to buy the digital download or rent it, depending on the circumstances.

Okay, that’s fair enough. Thank you for that.

On the capital front, I mean you’ve obviously got say, way more limited M&A opportunities than the guys in the U.S. who have been more harboring capital for M&A.

So when you look at it from that perspective, what do you think a target pay out ratio should be? I mean obviously every year will fluctuate a little bit, but in general, what are you thinking on target payout ratio on the dividend front?

Ben, we have a stated target payout ration of 60% to 85% of adjusted free cash flow. I mean that gives us the opportunity to have some capital available for some M&A.

I think you’ve mentioned limited opportunities in the traditional exhibition space, but as you know, we are showing great success in our digital signage business and we are constantly looking for opportunities to kind of grow that business.

And on the adjusted free cash flow, are you including revenue CapEx in that…

Yes, so really the distinction was between free cash flow and adjusted free cash flow as we exclude growth CapEx.

Okay, fair enough. And then lastly for me, on the tax benefit side from the AMC acquisition, should we assume that it’s largely going to be finished by next year?

Well, we give you the amount of the net operating losses of $147 million, so you can use your own model and figure out when you think those are going to get used up.

Okay, that’s great. Thanks guys.

Thank you.

Thanks and good morning. Maybe just wanted to ask a question on media.

Obviously a great quarter for that segment. I wanted to focus more on the in-theater business and just your effort to kind of grow local advertising dollars.

It seems like you’re making good progress. Wondering if you can comment on that?

Yes, we continue to make significant progress, both on the regional side and also on the national side and we were very happy with the results of the first quarter from a media perspective and we continue to see that trend through the balance of the first half of 2013.

Is it fair to still assume that the regional sales or local advertising dollars that you are getting there are still a fairly small part of the total of media revenues?

Yes, but we have basically deployed retail sales reps within the organization to focus on those kinds of opportunities, and we continue to see an uplift in that area of the business, especially in the Digital & Media business, because we have a strong position in the underground pass with our digital signage. We’ve also got the digital signage in our theaters, and also on the en route highway signage that you see.

So the business is way beyond just the theater itself, and that’s part of what we continue to focus on and try to grow.

Okay, that’s great, and maybe one other one for you Ellis. You talked about in the last conference call, you alluded to some experimentation that you were doing with respect to satellite delivery I guess to your theaters or a couple of them.

I was wondering if there was any update in terms of potential to roll that out? And obviously some of the U.S.

cinemas have talked a lot about the potential to increase alternative programming with that technology?

Look, we are always in the forefront of technology and basically as you saw with the digital rollout, we started later and we’ve now completed a digital rollout of our circuit. And when it comes to satellite, we’ve already got about 80 locations that are equipped.

So it’s a matter of how long will it take to rollout with then the product coming through. So, we are continuously looking at opportunities.

I mean, when you look at sound systems with Dolby, I think we are one of the leaders in the world as far as installation in Dolby Atmos sound systems.

And I guess do see that as a catalyst to really kind of ramp up alternative programming?

Yes, it definitely helps. I mean when we were in digital it helped and I think with satellite delivery it will take it to another level.

Thanks very much.

You’re welcome.

Thanks. Morning.

So first I guess on the concession strategy, Ellis or Gord, maybe talk a little bit about the build out and the thought beyond where we’d see Outtakes and Poptopia sort of expand to over this year and next year in terms of breadth across the circuit?

Well, we’ve continued to deploy new locations and we feel with the 70 odd million guests coming through our doors on an annual basis, it’s a great way to brand these particular locations. And then eventually long-term is to see if we can take these locations beyond just the movie theater and into specialty food courts and other places around the country and I think we are going to see that happen as we look at opportunities both in Poptopia and also in the Outtakes bistros that we’ve got.

So, it could be a business using the guest and the theater to eventually grow it beyond just the locations that we have today.

Great. The second one, Gord you talk about this last quarter, with CBS, a number of big contract wins there and you sort of alluded to it earlier, but maybe give us the outside the circuit sort of reach of the network and then maybe talk about how you are thinking about expanding that.

Is that straight build-out through contract wins or is it through sort of acquiring new facilities and building out from there?

So, CBS yes. We are focused to-date on financial institutions, select retailers and landlords now and shopping malls.

So as we expand, that’s where sort of our expertise is and you’ll see organic growth more into those facilities. And then if there’s M&A opportunities, you may see that branch out into other types of facilities too.

I don’t know and maybe it’s a question for next quarter, is there anything you can give us around sort of the reach of that network, in terms of size or screen, just so we can sort of judge where you are? Because the sense is that business is growing actually fairly rapidly in terms of reach I would think?

Alright, I think what we can do is look at providing kind of network installs there as a disclosure item as we go forward to help you identify the size of that business.

Sure, that would be great. The last one was, and I think Ellis we talked about this last quarter, but it would be useful to sort of recap this on the AMC side of things.

Clearly that business, some costs were a little bit higher and you’ve given us a sense of the top line. How should we think about sort of bringing that on line to the Cineplex model?

Is that sort of end of this year into next year in terms of normalizing?

Well, we continue to work on the actual AMC boxes and we’ve put our UltraAVX in three of the locations that we took over of the four and we continue to look at opportunities as it relates to premium experiences and VIP. The issue with the AMC locations as Gord pointed out is the high fixed cost because of the rent and the benefits we garnered were the over $140 million of tax losses.

But we continue to work on getting these theaters to be cash flow positive and in strong quarters you will see that continue to happen. We’ve also improved the media sales in those locations, compared to what they were when AMC was doing it contractually through Cineplex.

So all of those things are going to continue to help us move forward. But I think as we said previously, it was a 12 to 18 month timeframe that we were looking at to get these locations to the positive cash flow position.

But again, let’s not forget the fact that we did get a significant amount of those tax losses, which will benefit us on a cash basis immediately.

Perfect. That’s great.

Thanks guys.

Thank you.

Thanks. Good morning.

Ellis, could you just sort of walk us through what your latest thoughts are on the format build plan, specifically as you are rolling out the new VIP formats? What are you learning from these and how do you think about that market and your willingness to commit capital there?

And second question, kind of a weird one, but kind of topical, can you remind us of your real estate portfolio of any owned properties you have, and the context of the question is there’s a lot of renewed speculation on REIT structures in the market today, and I field a couple of questions on whether you guys, if that’s a discussion point at all with you. I think most of your real estate is leased, but can you just remind us on that and if that’s a discussion point for Cineplex?

Thanks.

Yes, we continue to look at opportunities to enhance the guest experience, and our numbers are one of the highest in North America when you look at the number of guests that basically go to our premium experiences, which include UltraAVX, which includes VIP, which include 3D, and also the IMAX locations. So we will continue to focus on that, and we’ve opened a number of VIPs and we continue to work on the VIP experience, and we will open close to two to three new locations in the next 12 to 15 months, a number of them in the major markets across Canada.

Toronto will get the benefit of one at the Queensway, one at the Yonge-Eglinton theatre and then a standalone VIP for the first time in Canada, at the Don Mills, shops at Don Mills location. So there’s a lot of emphasis, because number one, is people are asking and want that experience.

Secondly, it basically allows us to better engage our guests. They stay longer at the theater.

The food sales and the liquor sales are much higher. Again these locations are only opened to 19 plus and we are also looking at downtown Toronto as an opportunity with the Yonge and Dundas location, because it’s one of the busiest squares in Canada and looking at the VIP opportunities there.

We’ve got one in Montreal at the 10 and 30 in Brassard. We’ve opened one in Edmonton.

We are looking to open one in Calgary. So there’s a lot of activity and willingness on CapEx in that area is high, because it is a different experience and people really, really like it at this point.

The UltraAVX, as I mentioned before, we’ll continue to add those too, because again UltraAVX, I’ve spoken to some of the guests myself and they say, hey, I’d never see a movie other than an UltraAVX. It’s such a great experience with the reserved seats, with bigger screen and the best sound system in the world today.

I’m sorry, on your second part of the question on real estate, again Tim, when we were an income fund, we basically focused on cash flow, not so much on the real estate. So today I would say the biggest piece of real estate that we have is our head office building, which is on a great location on Yonge Street, and a couple of smaller other locations in Victoria and Prince Rupert.

So there aren’t that many real estate opportunities from a Cineplex perspective. Hopefully that covered your question.

That’s great. Thanks Ellis.

Thanks Tim.

Hey, good morning. Just a couple of questions left.

On the integration of the Cineplex app into smart TV, can you provide a little bit of color on exactly how that works? Is the Cineplex app, say one of 20 apps on the desktop of the TV or is it kind of a larger collection, part of a larger collection of apps that are accessed elsewhere on the TV?

There’d be a number of apps on the TV, but it’s on the top, so it would be no different than Netflix. We would be right beside Netflix as an opportunity to purchase your movie.

Great, thanks. And one more question, just on IMAX, you have been able to secure some exclusive early release windows for certain films.

Films where they have done this, are you able to screen those films in non-IMAX auditoriums during the early release window, in markets where there isn’t an IMAX or is that generally prohibited?

No, in all cases we have also released the movie in our UltraAVX format.

Okay, that’s great. Thanks very much.

Thank you.

Good morning and thank you very much. Can you give some comments on where you see your SCENE membership supporting or impacting your digital initiatives in terms of your app downloads or your website views or your UltraViolet and where you may see that evolving down the road?

Rob, the SCENE membership are the biggest users of our Digital Download business and we continue to see the up-tick from those members and I think that will continue as the data gets richer and our relationship with those customers get stronger.

Okay. Thank you.

Thanks.

Thank you. Good morning.

Ellis, I wonder if you can update us on the build of your UltraViolet enabled library just in terms of your Download business and all those titles, and also just with your thinking as regards to the evolution of that business through the back end of this year as more titles are enabled? You obviously have a good traction with your online initiatives.

Just looking for a little bit of an update on the strategy of the business as it evolves and what the time sensitivities are?

We continue to add titles. We’ve got, as we mentioned in the call, 2,500 additional titles that we added, and we will continue to do that throughout the year.

Our big focus though is on the user experience, and we want to continue to make that better and better, because to me what’s important is not only just the content, but the ease of access and we will continue to make that better as the year goes through and we see that there’s a lot of opportunities as we move forward.

Ellis, with respect to that ease of access and the experience, I mean would you throw out some color perhaps on specifically what you are thinking there or where the opportunities are if it’s competitively sensitive for some reason?

I think at the end of the day you want to be able, so people can go and click and be able to access and the ease to basically get the product they are looking for instead of having to search for a long period of time and we are going to relaunch the program in July 2013, with the ability to do a lot of the things that you can’t do in some of the other sites.

All right, thanks Ellis, I’ll leave it there.

Thanks.

Good morning. Thanks very much.

Ellis, I know you touched on this a little bit earlier, but any thoughts that you can share on the M&A activity that we’ve seen in that space in recent times and has there been a reassessment of your own position in terms of expanding outside of Canada in lieu of that?

We are going to continue to look at opportunities outside of Canada, but again, we have to be careful, because of the synergy benefits that we can derive outside Canada. There’s so much opportunity we still have in the different businesses that we are in, with eCommerce, loyalty, alternative programming, and for us it’s the focus of really being the best in Canada and not so much about getting distracted and going and being a minnow in an ocean, like I’ve said before, instead of being a big fish in a small pond, like we are in Canada.

But we will look at opportunities, and we have looked at opportunities. But again, it’s all about what does it do for our long-term focus and the growth of Cineplex’s EBITDA and bottom line value for shareholders.

Okay, thanks for that. And then, I know it’s not too material at this stage, but time play.

Anything you can share on the early results there in terms of participation rates and the take-up rates and perhaps talk a bit about how that could potentially drive up media over the longer run?

We are very pleased with the performance of time play and the up-tick is good. Again, it is basically limited to certain markets across Canada and we think that it does provide us some opportunities to grow the Media business.

And when you look at the up-tick, I mean I was at a location and I think it was a Pizza Pizza one and the up-tick was over 40%, which is unheard of for some of these kinds of opportunities. So, in response to your question, yes, there is some major growth prospects as it relates to the Media and Entertainment side of the business.

Okay, thanks Ellis; and a couple for Gord. The other operating cost line, are there any initiatives that we should think about that can cause some inflation in that line item, thinking about forecasting for the rest of the year, and also, can you give us a sense of how quickly you can impact that line item in response to a poor film slate or is it in a period of lighter box office?

I mean how dynamic does that line item become?

The remainder of the category, you got to remember that there are media expenses in there, so the media expenses will go up and down with the Media business and during the first quarter you’ll have significant growth in the media business, so we also saw an increase in expenses. The one thing that I’m not sure, when you are looking at the comparison of your models and your estimates versus our actuals for the first quarter, that perhaps some of you haven’t taken into consideration, is that we did adopt IFRS and we did proportionately consolidate to SCENE in the first quarter.

So when you are looking at your forecast, which were based on sort of the pre-proportionate consolidation of SCENE, that there is roughly $1.5 million in expenses related to SCENE, which are now in the first quarter results. There’s about $1 million in last year’s first quarter results.

So that’s also impacting you, as you look at some of the comparisons of versus your estimates. In terms of going forward, included in that category is also marketing related expenses, and as we expand into build up that UltraViolet and do the larger marketing launch for UltraViolet, you will see some additional expense in that category.

But I would say historically look at the ratio of other operating expenses as a percentage of total revenues and look at the variability from quarter-to-quarter, based on business volume levels, and that’s pretty good indicator of where those other operating expenses should be.

That’s great. Thanks very much, Gord.

And but lastly, the two Vancouver sites that you bought, can you give us an idea of say the relative size there, just to help us with modeling again? Thanks very much.

We gave you the purchase price of $3.8 million roughly. I mean you’ve seen some of the historic multiples that other circuits have transacted on in the U.S.

So they are important locations for us, but in terms of the contribution they are not significant contributors.

Okay, got it. Thanks very much.

I’ll leave it there.

Thank you.

Thanks and good morning. Just wanted to touch base on reserve seating.

I think one of your peers is starting to roll that out throughout all their auditoriums in a couple of theaters. We know other markets globally do that, and since you’re getting such good feedback on the premium side with that offer, is that something you would consider rolling out more broadly across your theater network?

It depends Colin at the individual location and where it is located and we’ll continue to evaluate the situation. We also have to be careful, because of our media business and the relative amount of time that people come into the auditorium.

And I think once you make it a general offering, it takes away that special feeling from the UltraAVXs and IMAXs that we have reserved seating in.

Makes sense. And just a final question on media; maybe look at it from a higher level.

We’ve always looked at the opportunity of media as maybe gaining share from other verticals. Is there any insight you can give on how you see your market share evolving?

I know the U.S. players there are really pushing in the TV upfront and their expanded networks, but any insight as to how you see your share evolving and the longer-term trend?

When you look at the theater advertising business, our penetration is less than one half of the 1% of the total advertising budget of Canada. So there’s a lot of opportunities we see as it relates to growing the business and capacity utilization.

Similar to the U.S. with like MCM and Swing Vision, we are going to do an up front for the first time on May 22 at our Scotia Bank Theatre.

And the reason we are doing it is, basically to try and more level out the business as we see it progressing through the year. Because what we do have is these large peaks and valleys and by doing some of these upfronts, we can get commitments earlier rather than later as it relates to the advertisers.

And again, as you know, we’ve got 93% of the box office penetration as it relates to the media business in Canada.

That’s all. Thank you.

Good morning. So maybe to follow up on the media advertising opportunity, maybe can you comment on your strategy regarding mobile and your SCENE membership database that you can probably leverage?

Well, the SCENE membership, again as we mentioned previously, we continue to be in discussions with our studio partners about using SCENE to better attract movie-goers and also be able to communicate with those specific movie-goers. So for example, with the movie coming out like Fast and Furious or Hangover, you can basically communicate with the guest that saw the previous movie and send them an e-mail or an e-blast, so we can get them into the theater.

So that’s something that we will continue to do. As far as mobile, I mean we’ve got one of the best mobile apps, but again as it relates to advertising, we continue to improve.

But it’s again off a very small base, so you don’t see the significant change from quarter-to-quarter, because it is a business that is just starting to evolve and is in a growth stage.

Okay, and maybe can you discuss whether your national advertiser clients did mention to you guys whether or not there’s going to be some interest in maybe to identify some of your current members, because you guys have great profiles on that database. If there’s any possibility to maybe do specific advertising to those member profiles?

Yes, in some cases we basically, with specific car companies or telecos, we can tie in the advertising that they see at the theater with the SCENE member who basically saw the movie and then have either kick back in some way, so that the advertiser continues to be engaged with the guest. So that’s a huge, huge benefit for an advertiser compared to just running a TV commercial.

And maybe VIP is still relatively new. Can you comment on the profitability of that initiative?

Yes, as mentioned before we will continue to expand the VIP offering and we are adding three in the Toronto market with the potential of a fourth one that we are also looking at and in all of the major markets across Canada we will focus on VIP. We’ve got one now in the greater Vancouver area; we’ve got one in Edmonton, one in Montreal.

We are adding a number in Toronto, and also Calgary. So we will continue to look at it, and the next theater that we are going to open later this year in Abbotsford, British Columbia will also have a VIP offering

So is it fair to say that your VIP initiative is profitable already?

No, it’s in progress and we will continue to look at opportunities within the VIP space.

Great. Thank you.

Oh, is it profitable? Sorry, I miss heard your question.

Yes, VIP is profitable, and again, it varies as to the profitability by location.

Okay, thank you very much.

Thank you.

Thank you. Thanks everyone for joining us this morning.

We are look for it seen you at our annual General Meeting scheduled for Tuesday, May 14 at 10:30 Eastern Standard Time at our Scotia Bank Theater in Toronto. Thank you.