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

Adam Shine - National Bank Financial Paul Steep - Scotia Bank Aravinda Galappatthige - Canaccord Genuity Derek Lessard - TD Securities Rob Goff - Euro Pacific Haran Posner - RBC Capital Markets Kenric Tyghe - Raymond James

Good morning. Before beginning the call, we would 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 would now like to turn the call over to Ellis Jacob.

Thank you, Pat. Welcome to Cineplex Inc's first quarter 2015 conference call.

Thank you for joining us today. I will begin by providing a brief overview of our first quarter results as well as a summary of our key accomplishments during the first three months of the year.

I will also discuss the film slate for 2015, a year many experts predict, will be the biggest year at the box office. At the conclusion of my remarks, our Chief Financial Officer, Gord Nelson will provide an in-depth overview of our financials.

As always, once Gord has concluded his remarks, we will hold the question-and-answer period. Cineplex delivered strong results for the first quarter of 2015.

Total revenue increased 3.5% and adjusted EBITDA increased 30.3 % on the strength of higher media and food service revenues coupled with lower operating costs. At the box office, attendance was up 1.5 %, unfortunately, we were impacted by weather conditions and the underperformance of certain titles in Canada versus the U.S., particularly American Sniper.

Box office revenue was flat versus the prior year period, largely as a result of lower box office per patron closed by the release of fewer 3D in the quarter versus last year. Now, let us take a look at our key accomplishments for the first quarter.

We open two new theaters since the beginning of the year, Cineplex Cinemas Lansdowne and VIP in Ottawa and Markham and VIP just Northeast Toronto. These locations ideally situated in their communities and offer a wide range of premium experiences, including our VIP Cinemas, D-Box motion seats and premium large format auditoriums.

In addition to these new builds, we add our popular Cineplex VIP Cinemas to Galaxy Cinemas Saskatoon. The theater has been renamed to carry the Scotia Bank theater brand as part of an expanded naming rights agreement announced in 2014.

The expansion of our premium experiences remains the strategic priority for Cineplex. We plan to open two theaters in the fourth quarter of this year.

The first is the new 11-screen theater with three VIP auditoriums at Marine Gateway in Vancouver. The second is part of the expansion of our Yonge Eglinton location in Toronto to include VIP.

Staying with few premium experiences, we also continue the expansion of our UltraAVX auditoriums adding eight locations so far this year to bring the total to 74 today. 10 of these are second screens at a location that already offers UltraAVX.

This strategy allows us to generate incremental box office revenue from major releases. As an example of the success of this offering, this past weekend UltraAVX accounted for the top-10, highest grossing proprietary premium large-format screens in North America.

Switching to foodservice, we set new records for food service revenue and CPP in the first quarter of 2015, with CPP increasing 2.6 % to $5.18 versus $5.05 in the prior year. Food service revenues from VIP Cinemas also contributed to our growth this quarter.

We also continue to focus on the expansion of proprietary food service offerings opening new locations for Outtakes, YoYo’s Yogurt Café and Poptopia. Throughout 2015, we will continue to grow both, our core concessions and proprietary offerings by refining out menu, offering targeted marketing and promotional programs and leveraging the flexibility of our digital menu boards.

In January, we announced plans to launch a new social entertainment destination called The Rec Room. The Rec Room features three main offerings, a large attraction area featuring state-of-the-art simulation games, redemption games and recreational games, a performance venue offering live entertainment such as musical acts, bands and comedians and a theater-sized screen and an up-scaled casual dining restaurant.

With the strategic and concept development work largely behind us, we are entering the next phase of this project focusing on execution and building our first location at South Edmonton Common. We expect this location to open in the first quarter of 2016.

Also, on the amusement gaming front, we continue to expand our presence as a leading distributor of amusement games creating Brady Starburst LLC with Brady Distributing Company. With this venture, we have become one of North America's largest distributors of amusement and vending equipment.

Later this year, Cineplex will acquire the remaining 50% equity that it does not already own, Cineplex Starburst Inc. Our media business experienced strong growth in the first quarter compared to the prior year period.

Cineplex Media revenues increased as a result of robust showtime advertising sales, particularly among media and automotive clients. To grow this business, we created offering that leveraging technology to offer interactive customer experiences.

These include Cineplex TimePlay, digital poster cases and particularly our interactive media zone. The interactive media zone provides clients with interactive brand experiences featuring a lot of stuff screens that offer gesture motion image and video capture technologies as well as social media conductivity and participant data capture.

We have installed an additional 21 interactive media zones in theater lobbies this year, bringing our total to 45 across Canada. We believe these interactive and exponential media properties will provide significant future media revenue growth.

Cineplex Digital Media revenues also grew in the first quarter. Thanks to project installation advertising revenue from the TimsTV and Oxford Properties networks.

We see an opportunity to further grow our Digital Media business throughout North America by leveraging our proprietary technology as well as network installation, management, creative services and advertising sales capabilities. Our digital commerce offerings continue to gain traction in the first quarter of this year with Cineplex.com registering an 11% increase in unique visitors and a 15% increase in visits versus the prior year period.

The Cineplex mobile app has been downloaded more than 11.6 million times as of March 31, 2015, recording nearly $600 million app sessions and making it Canada's ninth most popular mobile brand. The Cineplex mobile app has an incredible 18% penetration of the Canadian market.

The Cineplex Store saw a significant increase in the number of new uses the device activations during the first quarter of this year as a result of initiatives implemented 2014. SCENE loyalty program continue to exceed our expectations adding more than 300,000 members to finish the first quarter at 6.6 million members.

In addition SCENE announced that later this year members will be able to earn and redeem points at more than 800 CARA restaurant locations across Canada. Much like last year's addition of SportChek these strategic marketing partnerships help us grow our member base and make the program even more valuable to existing members.

Now, let's take a look at some of the films we have coming this summer and for the balance of this year's. The second quarter got off to a strong start with Furious 7.

This latest installment of the popular Furious franchise has already become the industry's fourth highest grossing film of all time. Summer officially kicked off last weekend with Avengers Age of Ultron, is highly anticipated film of a new Cineplex record for advanced ticket sales, which exceeded $4 million.

The film had the second highest opening of all time with an opening weekend growth of $191 million. Later this month, we have Mad Max Fury Road's, the Tom Hardy and Charlize Theron, Pitch Perfect 2 starring Anna Kendrick and Tomorrowland with George Clooney.

The return of the Jurassic series headlines our June line up with Jurassic World. The first Jurassic film, Jurassic Park is one of the best performing films and Cineplex history and there is plenty more to get excited about as June continues.

We have Entourage based on the popular television show. Spy featuring Melissa McCarthy and Jason Statham.

Inside Out highly anticipated animated film by Pixar and the return of Ted in Ted 2. We are also looking at a strong lineup in July with Terminator Genesis, the latest in the popular Despicable Me franchise with Minions, Ant Man, Pixels and Mission Impossible Rogue Nation starring Tom Cruise.

Finally, we round up with Fantastic Four and the Man from U.N.C.L.E. Looking ahead through the fall, we have the latest installment of the James Bond series Spectre, and the final film in The Hunger Games Series Mockingjay Part 2.

Finally, in December, we are looking forward to one of the most anticipated films in the years Star Wars: The Force Awakens. It is easy to see why 2015 is one of the most exciting film years in recent memory.

We believe, we are well-positioned to amplify the strength of this year's film slate with our premium experiences and also throughout food service and media offerings. Outside our theaters, we will continue to diversify Cineplex reducing our reliance on the cyclical nature of Hollywood film product, particularly through our Digital Media and amusement gaming business as well as the upcoming launch of The Rec Room.

Before I turn the call over to Gord, who will provide an in-depth overview of our financials, we would like to announce the 4% increase to our dividend. The dividend will increase to $1.56 per share on an annual basis effective with the May 2015 dividend payable in June 2015.

I am proud to say that Cineplex has increased its dividend every year since the company converted to a corporation. Now, I will turn it over to Gord.

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 on our investor relations website at cineplex.com. For the first quarter, total revenues increased 3.5% to $289.8 million and adjusted EBITDA increased 30.3% to $40.2 million.

The results for the quarter were positively impacted by the record CPP of $5.18, Media growth of 19.4% and lower operating costs. Cineplex's first quarter box office revenue was $156 million compared $156.2 million in the prior year, and attendance increase of 1.5% was offset by average ticket price decreased of 1.5%.

Our average ticket price for the quarter decreased to $8.90 from the $9.04 reported in the first quarter of 2014, as a result of the reduction in the contribution of 3D films. None of our top films in 2015 were presented in 3D as compared to four of the top-five in 2014.

As a result, our premium product percentage decreased to 25.3% of Box office revenue in 2015 from 38.3% in 2014. The impact of premium price product and the average ticket price was $0.57 for the quarter as compared to $0.84 in the prior year.

Excluding premium product our average ticket price increased by 1.6 % as compared to the prior year quarter to $8.33. Food service revenue increased 4.2% to $90.8 million as a result of the 2.6 % increase in concession revenue per patron to $5.18 and all time quarterly record.

The CPP growth was primarily a result of higher average transaction values as a result of expanded offerings, including offerings at Cineplex's VIP cinemas. Total media revenue increased $4.7 million or 19.4 % to $29.1 million for the quarter.

Cineplex Media revenue which is primarily theater-based increased 21.9 % and Cineplex Digital Media revenue increased 14.2% due to continued growth of new business opportunities, including the TimsTV network deployment and the Oxford Properties digital installation. These new business deployments will provide opportunities for continued advertising revenue growth in the future.

Turning briefly to our key expense line items, film cost for the quarter came in at 51.4% of box office revenue as compared to 51.5% reported in the prior year. Cost of food service for Q1 2015 was 21.4% as compared to 21.7% in the prior year.

Other costs $150.9 million increased $0.5 million or 0.3%. Other costs include theater occupancy expenses, other operating expenses and general and administrative expenses.

Theater occupancy expenses were $51.1 million for the quarter versus the prior year actual of $51 million. Other operating expenses were $80.9 million for the quarter versus the prior year actual of $84.2 million, a decrease of $3.3 million.

Major reasons for the decrease include a decrease of $1.4 million due to lower spending in new business initiatives, due to one-time digital commerce platform development cost incurred during the prior year, lower marketing cost of $1.3 million due to the timing of campaigns, a decrease in 3D royalty cost of $0.9 million due to less hat three products and lower ongoing theater maintenance cost of $1 million, due to timing of expenditures. These decreases were offset by an increase of $0.5 million due to the impact of new and acquired theaters net of disposed theaters and higher media cost of $0.6 million due to higher media business volumes during the quarter as compared to the prior year.

G&A expenses were $18.9 million for the quarter versus $3.7 million higher than the prior year, primarily due to a $3.3 million increase in long-term and short-term incentive program expenses resulting from the $5.05 increase in the share price during the first quarter of 2015 as compared to a decrease in share price of the $1.99 during the first quarter of 2014. Interest expense of $5.7 million was $0.5 million higher than the prior year amount of $5.2 million contributing to the increase of $0.3 million increase in cash interest as a result of increased borrowing.

The company recorded tax expense of $2.4 million during the first quarter of 2015 comprised substantially of current tax expense. Our blended federal and provincial statutory tax rate currently is 26.3%.

As a reminder, the losses acquired under AMC acquisition were fully utilized in 2014. Net CapEx for the first quarter was $26.2 million as compared to $28.6 million in the prior year.

We continue to estimate that net CapEx will be approximately $100 million for 2015. CapEx for 2015 will include rollout of The Rec Room, a continued rollout of premium offerings, new theater construction and digital signage and media initiatives.

While the weaker 3D film performance negatively impacted our first quarter Box office revenues, successes in food service, media and cost control contributed to our strong Q1 results. We continue to remain comfortable with where Cineplex Inc is positioned today.

Our strong balance sheet and lower leverage ratio allows us to continue to invest in future growth for the company and benefit from future stronger film product. That concludes our remarks for this morning, and we would now like to turn the call over to the conference operators for questions.

Thanks a lot. Good morning.

Ellis, can you talk a little bit about some of the items in the news within last few weeks, heading in obviously to the Avengers 2 release as it related to Disney sort of pushing for some incremental cost items going forward? Thanks.

As has been mentioned, I feel that we do not like to discuss our relationships with our partners in public, but all that being said, we have always had a great relationship with Disney. You are always going to have back and forths when you have got your supplier relationship and it is a partnership for us and we basically negotiate with them and work hard to get the best results for both sides into partnership.

I guess, I would just push you a little bit further, because in contrast to some of the prior disclosures, where indeed there is a bit of back and forth between some of the movie studios and ultimately the theatre chains and usually the theatre chains win out. Just go around obviously Disney is flexing its muscles a little bit in the context of a very robust pipeline of product and we also know in the past that Lucas used to push very aggressively on his film costs, when each of the Star Wars movies came out, so maybe just in the context of helping us think about cost maybe in the aggregate.

Is there anything that maybe Gord can add in regards to an assumption of some incremental cost, be it, film cost percentages, Q2, Q3, Q4? What else could we add to that?

Well, if you looked at the first quarter is basically of film cost percentage was flat. Again, it all is dependent on the performance of the films, because the performance of the films drives the higher film rentals.

I think to predict what is going to be will largely depend on the success of the box office for the balance of the year. Yes, if film does $1 billion, you would expect that it would cost us more.

If you look over the last five years, our film rental has remained pretty constant other than a little bump here or there when box office increased quite significantly from quarter-to-quarter, so I do not think one needs to assume, there is going to be a dramatic change in the film rental or the relationships we have with our studios at this point.

Okay. Perfect.

I appreciate that extra color. Just one quick little context in terms of The Rec Room, or the first Rec Room I guess initially was supposed to debut late 2015.

I guess there has been maybe a modest push-off, let us call it. I am sure you want to get that first one right, any additional color beyond just trying to get it right and maybe a few extra weeks of delay accordingly?

Yes. I mean Adam, obviously we have tried to get that in open for the holiday season.

Yes.

I think in terms of just a slights development and permitting I think we will recognize now that is maybe a challenge to get up until for holiday season, so we are just more accurately, I think, indicating that will probably be Q1 2016.

Okay. That is what I figured.

Thanks a lot.

Thanks, Adam.

Thanks. I guess for Gord, maybe in Media on CDM, Gord, how should we think now that Tims and Oxford are ramped up and the installs were done, how should we think about that rollout sort of pacing in on a year-on-year basis in terms of contribution or is there still some install revenue to come in to Q2?

Paul, with respect to the Tims, that network was fully deployed in the back half of last year. What you are going to see is, and what we will typically see these networks, is we are going to see a ramp up in the advertising revenue as advertiser see the benefits of being on that network, so you will see that ramping up over time.

With respect to the other one as we continue to add and announce kind of new properties kind of in mall-type environment, you will see there is additional installation revenues going forward and I would also like to remind you that we do have some other clients that are not fully deployed at this time, so you will continue to see installation revenue. As you may recall, we kind of referred to the business as we are whale hunters, so we worked for a large clients with a significant number of locations.

Some of those clients like to deploy and install as quickly as they can, and within say a one-year timeframe and others are those clients these are multi-year installations.

Okay. Great.

Then the second one is on SCENE. You now had SportChek as a new partner.

I do not know what feedback you can provide. Obviously, you do not want to talk too much for them, but just in terms a new major partner into the network.

What they found or some of the benefits or comments that may be said back with regards to partnering in the program?

It has been a great relationship and they are very happy with the SCENE program and the actual update for their customers and guests, which to me is a huge for us. As we mentioned, CARA is also signing up with us and that will be implemented for second quarter, so we think that the program will continue to be robust and move forward, also the SCENE members seem to be extremely happy with the whole addition of these extra opportunities to earns points and also redeem them.

Great. Before I pass on, maybe one last one.

Just on Brady and the relationship there. I do not think a lot of us have spent a lot of time on gaming given the strong position in Canada.

Maybe just a little more context around why partner up, why go in the U.S. I think the rationale being bigger made sense, but maybe there is something else that is not jumping out to us in terms of that opportunity?

Thanks.

Yes. Let me first described kind of the environment that we operated in Canada and then I will describe a little bit about the U.S.

environment and what we did not have now and now what we do have with the Brady partnership. In Canada, we think about what we do in terms of gaming, I would kind of break it that as a kind of three elements.

The first is, managing our own sites. We have XSCAPE, we have our gaming rooms, CSI owns Playdium and we are going to have the record going forward, so we are managing our own facilities.

We are driving revenue streams off of people within our own venues. Secondly, there is what we will call kind of root operations, so this is the supply of gaming equipment to the third parties in which we were operating and providing kind of technical expertise placing games in those facilities and driving a direct share off of those gaming deployments.

As was said before, some of the customers include Canada's Wonderland and amongst others. Then the third element, I would call kind of distribution and game sales.

In this side, we have relationship with the manufactures, our gaming equipment which allows us to get our gaming equipment in Canada at a low cost so we can drive better revenue stream through our root operations and in the management of our facilities. Now let us talk about intellectual we have in Canada.

Now let us talk about the U.S., so in the U.S. historically we had about 15% of our gaming revenue coming from the U.S.

and that was primarily from the root operation side of things, so we were placing gaming equipments in facilities and driving our rev share on that through our company called Premier Amusement in the U.S. Our partnership with Brady now give us distribution rights in the U.S., so that is going to give us rights to acquire the gaming equipment at lower costs to make our whole gaming infrastructure in the U.S.

just operate more efficiently and on a better cost basis, so that is really kind of in a nutshell what we are doing in the U.S. and why Brady absolutely makes sense in partnering with them to establish those lower cost base and we are now the number two distributor of gaming equipment in the U.S.

and number one in Canada.

Great. Thanks, guys.

Good morning. Thanks for taking my questions.

I just wanted to start with the digital signage business. I think originally you guys had talked about sort of an objective of doubling that back revenue line over a two-year to three-year period.

I think it was about $40 million at that time. Now it is closer to $50 million, just wanted to get your updated thoughts on that trajectory.

Also, with respect to sort of the traction you could potentially get the U.S., just talk about some initial steps you have taken there. I mean, do you have some infrastructure in the U.S.

now, any sales people? Just want to get some color on that as well.

Sure. Aravinda.

We continue to be very excited about the space and encouraged by where we are today. We have opened an office in the U.S.

We have built up the infrastructure. In part, that is one of our discussion points on why the digital media margins are a little bit muted throughout 2015 as we have built up infrastructure.

I would like to again kind of remind everyone that look, our client base is typically large customers with a significant number of locations and the sales process can take in excess of the year when you think of lead identification, pilot testing and final negotiation. I would say that we are involved in a number a processes at this time.

We are very encouraged with where we sit in these processes and if we are successful we will announce something.

Okay, great. Thanks a lot.

Then just moving on to the OpEx side, I mean, you had the operating expense line pulled back a little bit. It seems like it is mostly timing-related.

Just want to get a sense, Gord, in terms of the annual run rates, should we still be looking at sort of some inflation of that line item when we look at it on an annual basis?

Yes. I would say that over time, if you look at the majority of that cost about 40% of that cost is payroll, and payroll tends to be volume based and obviously rate base too.

To the extent that the attendants volumes based on what we are expecting for 2015 will be higher and as well as you have got some incremental wage increases impacting that - yes you will see kind of cost, CPI-type increases in that category. Now, we try and identify in our disclosures if there is kind of one-time things or timing things that are up and down.

As we mentioned this quarter, the 3D product was not as strong, so the licensing fees were about $900,000 less than last year. We had some development costs in the last year statements related to our digital commerce platform, which we obviously do not have this year, but you will likely see some develop costs related record and kind of continuing onto this year.

Then the last one was really marketing spend and we were associated with the Winter Olympics last year, but we may have some associations with some other events this year, so I would say you are right, Aravinda, to use that kind of a small kind of rate of increase in that category in the year.

Thanks, Gord. My last question is sort of more on a longer-term issue.

With respect to pricing at the box office, I mean, sooner or later we are going to get a point where the premium formats are going to get closer to maturity. I just wanted to get your thoughts on going back to base prices and driving price increments there, any thoughts about how you would implement that and how think about dynamic pricing et cetera?

That is a great question and we continue to look at the pricing and our theaters and we have been very, very careful and modest when it has come to price increases on the base 2D movies. As I have publicly we said, it was cheaper to see a movie today than it was 10 years ago and that to me is something that we have been able to manage as a result of the premium offerings and our execution, but there is flexibility and we are also looking at other opportunities as to how we can get the best value from a pricing perspective and that is a study that we have undertaken and we will continue to focus on it.

Thank you, Ellis. I will pass the line.

Yes. Thanks.

Good morning everyone. Most of my questions have been asked, but maybe if you can just talk about your expectations for the 3D lineup this year.

I mean, it has been two quarters in a row sort of where we are talking 20%-ish premium content, so I would just maybe like to get your outlook on that?

I think, 3D in the first quarter as we saw from the results was not really part of the offerings that we had from the movie perspective, but with the commencement of the Avengers, Mad Max, San Andreas, Jurassic World, Inside Out, Minions, Pixels, there is a lot of 3D pictures coming through in the next three months, so I think you are going to see a turnaround in the 3D numbers as we move forward.

Okay. Thanks for that.

That is all for me.

Good morning and thank you for taking my question. My question would be on the sustainability of the category strength within the media revenues had 21.9% on the quarter and you noted the social media broadcast and automotive.

We are always thinking of ways to continue to increase media penetration, and with the diversification that has taken place within the Media segment, all the way from the magazine to our website, to our digital boards, we have seen continued increases in our media penetration. I think we have a lot to offer our clients when it comes to different ways to get the message across and TimePlay is another example of what we have done.

We are the pioneers as it relates to that around the world and have been very successful as we have rolled it out across Canada.

Okay. Thank you.

Just looking to see if you could give an update with respect to the VIP auditoriums, what is your finding as you get further and further into that rollout? I know you have 28 more within your obligations.

Do you think you can push that perhaps further or more quickly than you would originally anticipated?

We always do things on a systematic rollout and make sure that we keep refining the offerings and as we go from one VIP to the other, you continue to see enhancements and also benefits both, for the guests and the overall experience. Yes, we will roll out a number as we said we have got two more before the end of the year and we will continue to roll them out over the next number of years, but I would not expect that there would be a rush to deliver these VIPs in the short-term.

Okay. Thank you very much.

Yes. Thanks very much.

Good morning. First, maybe a couple for Gord, going back to the Brady, Starburst thing, you mentioned lower cost under this joint venture, but from a revenue perspective though, I think CSI had about $61 million of revenues in 2014.

Should we think about a pickup from that perspective?

Yes. You should, because that was made an, Haran, 80% acquisition of the company, so yes.

Is there any guidance you can help us with?

I would say the mid-teens in terms mid-teens - $1 million.

Okay. Thank you for that.

With respect to your occupancy cost, Gord, I was just wondering given all the challenges for sort of retail REITs out there with some box stores closing, do you see an opportunity to reduce occupancy expenses over the next couple of years?

We would love to do that, but we are contractually committed and have legal obligations, so with the exception of the existing facilities I would say that is likely a challenge. Where there is the opportunity though in The Rec Room, because it is an interesting real estate environment out there today and I think The Rec Room has really hit a point of interest with the development community and the landlords in Canada and they are all very excited to have us in their facility, so that bodes well for us, so the excitement in the concept as well as the availability of real estate in Canada I think that is where our opportunity is going to be in terms of occupancy.

Okay. That's great, Gord.

One for Ellis, when you look at industry statistics for movie going it certainly looks like even though the younger demo continues to account for a fairly significant size of movie going, the proportion has come down in the last couple of years and I am just curious if you would comment on what you can do from an exhibitor standpoint or is that mostly a studio issue?

Well, I always have said publicly reset the table we do not serve the stake and we do influence the studios, but I think they realize there is a great desire for the over 50 crowd to get the right product and to be able to come and engagement at the theaters, so that is when I look at the first quarter, for example it was reality the ladies quarter from the perspective of you had 50 Shades of Grey, Cinderella and Divergent were three of the bigger titles and then you had American Sniper and Kingsman and if SCENE helps us with the youth and that is part of the reason we develop the SCENE program, and we can basically communicate with them and drive incidents as a result of the program.

Thanks very much.

Thank you. Good morning.

Nice to see the dividend increase this morning, I am curious on your thoughts with respect to your target payout ratio going forward, certainly, beyond the lower end of that range for a number of years now. As you cycle what would appear to be sort of peak CapEx in 2015, how are you thinking or how should we perhaps should be thinking about return of capital through the out years or an acceleration of return capital through the out years?

Look, Kenric, I think in the near-term as was said, we have stepped up the CapEx guidance to $100 million for this year and next year, which incorporates the building The Rec Room and so we see opportunities to kind of grow and expand the business. As we have always said, we look to grow the business and pass on kind of the growth in earnings results to our shareholders in the form of dividend increases.

When we get to the point where if we get to the point where we do not see additional opportunities requiring excessive amount of the capital then obviously we would revisit the dividend and the payout ratio and we can potentially we move to the higher end of that range, but at this point in time we see opportunities and we have got CapEx committed.

Great. Thanks Gord.

Ellis and I would just switch gear for a second. Obviously, the strength of the slate in 2015 well documented and we have previously touched on 2016.

Could you just give me an update as your sort of current thinking or conviction levels around 2016 given that 2015 is sort of setting up as expected into the summer here, particularly in the context of Avatar now sort of a 2017 story. Just perhaps some incremental color around conviction levels on 2016 as things sort of evolving here in 2015?

It is a great question, because we always see and predict a particular year then movies get moved around, and if you look at 2014 and if we [Abrupt Ending]