FORM 10 - Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
(Mark One)
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended: September 30, 1997
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission file number: 1-9454
CINEPLEX ODEON CORPORATION
(Exact name of Registrant as specified in its charter)
Ontario, Canada Non-Resident Alien
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
1303 Yonge Street, Toronto, Ontario M4T 2Y9
(Address of principal executive offices) (Postal Code)
416-323-6600
(Registrant's telephone number
including area code)
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter periods
that the Registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days. Yes X or No
As of November 2, 1997, 103,352,907 shares of Cineplex Odeon Corporation
Common Stock were outstanding.
TOTAL NO. OF PAGES
EXHIBIT INDEX PAGE
CINEPLEX ODEON CORPORATION
FORM 10-Q
SEPTEMBER 30, 1997
Index
PART I - FINANCIAL INFORMATION Page No.
ITEM 1 - Financial Statements (Unaudited)
Consolidated Balance Sheet
September 30, 1997 and December 31, 1996
Consolidated Income Statement
Three Months Ended September 30, 1997 and
September 30, 1996 and;
Nine Months Ended September 30, 1997 and
September 30, 1996
Consolidated Statement of Changes in Cash Resources
Nine Months Ended September 30, 1997 and
September 30, 1996
Notes to the Consolidated Financial Statements -
September 30, 1997
ITEM 2 - Management's Discussion and Analysis of Results of
Operations and Financial Condition
PART II - OTHER INFORMATION
ITEM 1 - Legal Proceedings
ITEM 6 - Exhibits and Reports on Form 8-K
SIGNATURE PAGE
CINEPLEX ODEON CORPORATION
CONSOLIDATED BALANCE SHEET
(in thousands of U.S. dollars)
Unaudited Audited
September 30, 1997 December 31, 1996
------------------ -----------------
ASSETS
CURRENT ASSETS
Cash $ 3,086 $ 2,718
Accounts receivable 12,494 9,552
Other 12,743 8,852
--------------- ---------------
28,323 21,122
PROPERTY, EQUIPMENT AND LEASEHOLDS 576,574 579,841
OTHER ASSETS
Long-term investments and receivables 2,141 2,535
Goodwill 31,980 32,816
Deferred charges 8,556 7,857
-------------- ---------------
42,677 43,208
-------------- ---------------
TOTAL ASSETS $ 647,574 $ 644,171
============== ===============
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable and accruals $ 58,453 $ 59,474
Deferred income 18,085 17,150
Current portion of long-term debt
and other obligations 7,068 6,926
------------- --------------
83,606 83,550
LONG-TERM DEBT 354,334 326,058
CAPITALIZED LEASE OBLIGATIONS 6,803 8,317
DEFERRED INCOME 4,392 6,594
PENSION OBLIGATION 786 1,072
SHAREHOLDERS' EQUITY
Capital stock 555,399 555,374
Translation adjustment 2,700 4,016
Retained earnings (deficit) (360,446) (340,810)
------------- ------------
197,653 218,580
COMMITMENTS AND CONTINGENCIES (notes 2 and 4)
------------- ------------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 647,574 $ 644,171
============= ============
The accompanying notes are an integral part of these consolidated
financial statements.
CINEPLEX ODEON CORPORATION
CONSOLIDATED INCOME STATEMENT
(in thousands of U.S. dollars except per share figures)
Unaudited
3 Months Ended 3 Months Ended 9 Months Ended 9 Months Ended
Sept. 30, 1997 Sept. 30, 1996 Sept. 30, 1997 Sept. 30, 1996
-------------- -------------- -------------- --------------
REVENUE
Admissions $ 104,161 $ 99,893 $ 298,485 $ 274,094
Concessions 39,130 36,169 110,680 97,101
Other 6,669 5,914 18,556 16,915
------------- ------------ ----------- ----------
149,960 141,976 427,721 388,110
EXPENSES
Theatre operations
and other expenses 119,366 113,412 346,148 316,400
Cost of concessions 8,150 6,473 21,513 17,323
General and administrative 4,944 4,625 15,152 13,330
Depreciation and amortization 11,091 10,943 33,267 32,376
------------ ------------ ----------- -----------
143,551 135,453 416,080 379,429
------------ ------------ ----------- -----------
Income before the undernoted 6,409 6,523 11,641 8,681
Other expenses (4,716) (458) (5,284) (1,295)
------------ ------------ ------------- -----------
Income before interest
on long-term debt
and income taxes 1,693 6,065 6,357 7,386
Interest on long-term debt 8,589 8,736 25,159 27,478
------------ ------------ ------------- -----------
Loss before income taxes (6,896) (2,671) (18,802) (20,092)
Income taxes 268 299 834 1,105
------------ ------------ ------------- ------------
NET LOSS $ (7,164) $ (2,970) $ (19,636) $ (21,197)
============ ============ ============= ============
BASIC
Weighted average
shares outstanding 176,799,000 176,765,000 176,793,000 159,007,000
Loss per share ($0.04) ($0.02) ($0.11) ($0.13)
FULLY DILUTED
Weighted average
shares outstanding 191,254,000 183,362,000 191,265,000 166,082,000
Loss per share ($0.04) ($0.02) ($0.11) ($0.13)
The accompanying notes are an integral part of these consolidated
financial statements.
CONSOLIDATED STATEMENT OF CHANGES IN CASH RESOURCES
(in thousands of U.S. dollars except per share figures)
Unaudited
9 Months Ended 9 Months Ended
Sept. 30, 1997 Sept. 30, 1996
-------------- --------------
CASH PROVIDED BY(USED FOR)
OPERATING ACTIVITIES
Net loss $ (19,636) $ (21,197)
Depreciation and amortization 33,267 32,376
Other non-cash items (2,124) (1,569)
--------------- ---------------
11,507 9,610
Net change in non-cash working capital (6,955) (3,027)
--------------- ---------------
4,552 6,583
FINANCING ACTIVITIES
Decrease in long-term debt
and other obligations (2,981) (67,835)
Increase in long-term debt
and other obligations 29,606 -
Issue of share capital, net of issue costs 26 82,877
Other (255) (1,474)
-------------- ---------------
26,396 13,568
INVESTMENT ACTIVITIES
Additions to property, equipment
and leaseholds (32,940) (18,981)
Long-term investments - (260)
Proceeds on sale of certain theatre properties 2,827 1,901
Other (467) (2,488)
-------------- --------------
(30,580) (19,828)
-------------- --------------
NET INCREASE DURING PERIOD 368 323
CASH AT BEGINNING OF PERIOD 2,718 1,604
-------------- --------------
CASH AT END OF PERIOD $ 3,086 $ 1,927
============== ==============
CASH FLOW FROM OPERATING ACTIVITIES PER SHARE
Basic $ 0.03 $ 0.04
Fully Diluted $ 0.02 $ 0.04
The accompanying notes are an integral part of these consolidated
financial statements.
CINEPLEX ODEON CORPORATION
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 1997
(in U.S. dollars)
(Unaudited)
1. BASIS OF PRESENTATION
The consolidated financial statements in this quarterly report to
shareholders are prepared in accordance with accounting principles
generally accepted in Canada. For the three and nine months ended
September 30, 1997, the application of accounting principles generally
accepted in the United States did not have a material effect on the
measurement of the Corporation's net loss and shareholders' equity. For
information on differences between Canadian and United States generally
accepted accounting principles, reference is made to the Corporation's
1996 annual report to shareholders.
The consolidated financial statements in this quarterly report to
shareholders are based in part on estimates, and include all adjustments
consisting of normal recurring accruals that management believes are
necessary for a fair presentation of the Corporation's financial position
as at September 30, 1997, and the results of its operations for the three
and nine months then ended. Operating results for the three and nine
months ended September 30, 1997 are not necessarily indicative of the
results that may be expected for the year ending December 31, 1997.
The consolidated financial statements and related notes have been
prepared in accordance with generally accepted accounting principles
applicable to interim periods; consequently they do not include all
generally accepted accounting disclosures required for annual
consolidated financial statements. For more complete information these
consolidated financial statements should be read in conjunction with the
consolidated financial statements and notes contained in the
Corporation's 1996 annual report to shareholders.
2. COMMITMENTS AND CONTINGENCIES
i) The Corporation and its subsidiaries are currently subject to audit by
taxation authorities in several jurisdictions. The taxation authorities
have proposed to reassess taxes in respect of certain transactions and
income and expense items. The Corporation and its subsidiaries are
vigorously contesting the adjustments proposed by the taxation
authorities. Although such matters cannot be predicted with certainty,
management does not consider the Corporation's exposure to such
litigation to be material to these financial statements.
ii) The Corporation and its subsidiaries are also involved in certain
litigation arising out of the ordinary course and conduct of its
business. The outcome of this litigation is not currently determinable.
Although such matters cannot be predicted with certainty, management does
not consider the Corporation's exposure to such litigation to be material
to these financial statements.
iii) As at September 30, 1997, the Corporation was in compliance with the
financial covenants contained in its bank credit facilities. Given the
uncertainty with respect to the admission and concession revenues that
the Corporation will generate, there is a possibility that the
Corporation may not meet certain financial covenants in future periods.
The Corporation believes that the banking syndicate participating in the
bank credit facilities would waive the particular financial covenants if
the Corporation is not in compliance at a measurement date during the
next twelve month period.
3. SUMMARY FINANCIAL INFORMATION
The following is consolidated summarized financial information of the
Corporation's wholly owned subsidiary Plitt Theatres, Inc.:
- ---------------------------------------------------------------------------------------------
Unaudited
3 Months Ended 3 Months Ended 9 Months Ended 9 Months Ended
Sept 30, 1997 Sept 30, 1996 Sept 30, 1997 Sept 30, 1996
- ----------------------------------------------------------------------------------------------
Revenue $ 95,922,000 $ 95,433,000 $ 273,263,000 $ 266,447,000
=============================================================================================
Income before general
and administrative expenses,
depreciation and amortization,
interest on long-term debt
and income taxes $ 7,431,000 $ 14,993,000 $ 26,227,000 $ 35,463,000
============================================================================================
Net loss $ (11,823,000) $ (4,222,000) $ (31,899.000) $ (22,291,000)
===========================================================================================
- ---------------------------------------------------------
Sept 30, 1997 December 31, 1996
- ---------------------------------------------------------
Current assets $ 22,043,000 $ 17,105,000
Noncurrent assets 471,579,000 484,618,000
Current liabilities 83,201,000 55,078,000
Noncurrent liabilities 277,923,000 265,386,000
=========================================================
Current liabilities at September 30, 1997 include a net payable to the
Corporation and other corporations within the consolidated group in the
amount of $21,984,000 (December 31, 1996 - net payable of $9,551,000).
Noncurrent liabilities at September 30, 1997 and December 31, 1996
include $10,000,000 that is owed to the Corporation.
4. PROPOSED MERGER
On September 30, 1997, the Corporation announced that it has entered
into an agreement with Sony Pictures Entertainment Inc. (Sony Pictures)
and LTM Holdings, Inc. (LTM) which provides for the combination of the
businesses of the Corporation and LTM. LTM is a private Delaware
corporation wholly-owned by Sony Pictures. The transaction will involve
combining the Corporation with the Loews Theatres Exhibition Group,
which consists of Sony/Loews Theatres and its joint ventures with Star
Theatres and Magic Johnson Theatres. It is proposed that the combined
company will be named Loews Cineplex Entertainment Corporation (LCE).
LCE will have over 2,600 screens in approximately 460 locations in North
America.
Pursuant to a series of related transactions to be effected pursuant to
a Plan of Arrangement under the Business Corporations Act (Ontario), the
Corporation's shares will be exchanged for shares of LCE with the result
that the Corporation will become a wholly-owned subsidiary of LCE. Upon
closing of the transaction, Sony Pictures will own approximately 51.1%
of LCE's shares (representing 49.9% of LCE's voting shares); Universal
Studios, Inc. (Universal) will own approximately 26% of LCE's shares
(subsequent to a cash subscription of approximately $84.5 million);
the Charles Rosner Bronfman Family Trust and certain
related parties (the Bronfman Trust) will own approximately 9.6% of
LCE's shares; and the shareholders of the Corporation, other than
Universal and the Bronfman Trust, will own approximately 13.3% of LCE's
shares. It is intended that the LCE shares will be listed on the New
York Stock Exchange and The Toronto Stock Exchange.
The merger is subject to approval by the shareholders of the Corporation
and regulatory approval in both Canada and the United States. It is
anticipated that closing of this transaction will take place in
approximately five months.
5. RECLASSIFICATION
Certain of the prior period's balances have been reclassified to conform
with the presentation adopted in the current period.
Management's Discussion and Analysis of
Results of Operations and Financial Condition
(All figures are in U.S. dollars except where otherwise noted)
The Corporation's net loss for the three months ended September 30, 1997
was $7,164,000 or $0.04 per share compared to a net loss of $2,970,000 or
$0.02 per share for the same period in 1996. Total revenue for the three
months ended September 30, 1997 was $149,960,000 compared to $141,976,000
for the comparable period in the prior year. The increase in revenue in
the third quarter of 1997 was offset by an increase in occupancy costs
associated with the Corporation's new theatres. For the nine months ended
September 30, 1997 the Corporation reported a net loss of $19,636,000 or
$0.11 per share compared to a net loss of $21,197,000 or $0.13 per share
for the nine months ended September 30, 1996. Total revenue for the nine
months ended September 30, 1997 was $427,721,000 compared to $388,110,000
for the comparable period in the prior year
On September 30, 1997, the Corporation announced that it has entered into
an agreement with Sony Pictures Entertainment Inc. (Sony Pictures) and
LTM Holdings, Inc. (LTM) which provides for the combination of the
businesses of the Corporation and LTM. LTM is a private Delaware
corporation wholly-owned by Sony Pictures. The transaction will involve
combining the Corporation with the Loews Theatres Exhibition Group, which
consists of Sony/Loews Theatres and its joint ventures with Star Theatres
and Magic Johnson Theatres. It is proposed that the combined company will
be named Loews Cineplex Entertainment Corporation (LCE). LCE will have
over 2,600 screens in approximately 460 locations in North America.
Pursuant to a series of related transactions to be effected pursuant to a
Plan of Arrangement under the Business Corporations Act (Ontario), the
Corporation's shares will be exchanged for shares of LCE with the result
that the Corporation will become a wholly-owned subsidiary of LCE. Upon
closing of the transaction, Sony Pictures will own approximately 51.1% of
LCE's shares (representing 49.9% of LCE's voting shares); Universal
Studios, Inc. (Universal) will own approximately 26% of LCE's shares
(subsequent to a cash subscription of approximately $84.5 million); the
Charles Rosner Bronfman Family Trust and certain related parties (the
Bronfman Trust) will own approximately 9.6% of LCE's shares; and the
shareholders of the Corporation, other than Universal and the Bronfman
Trust, will own approximately 13.3% of LCE's shares. It is intended that
the LCE shares will be listed on the New York Stock Exchange and The
Toronto Stock Exchange.
The merger is subject to approval by the shareholders of the Corporation
and regulatory approval in both Canada and the United States. It is
anticipated that closing of this transaction will take place in
approximately five months.
LIQUIDITY AND CAPITAL RESOURCES
Cash flow from operations for the nine months ended September 30, 1997
amounted to a net inflow of $4,552,000 compared to a net inflow of
$6,583,000 for the same period in 1996. Excluding the impact of the net
change in non-cash working capital, the Corporation's cash flow from
operations for the nine months ended September 30, 1997 amounted to a net
inflow of $11,507,000 compared to a net inflow of $9,610,000 for the same
period in 1996. The increase in cash flow resulted primarily from the
increase in revenue noted above.
In the first nine months of 1997 the Corporation opened five new theatre
locations (adding 45 new screens) and refurbished two theatre locations
(adding eight new screens). Management expects to open 14 new theatre
locations (adding 150 new screens) and refurbish a total of two theatres
(adding 15 new screens) during the fourth quarter of 1997 at an estimated
net cost of less than $25,000,000. The Corporation's current strategy is
to develop and build additional theatres and screens in target markets
that complement the Corporation's existing position in such markets or
that provide the Corporation with a strategic position in a newmarket.
Management is considering opportunities in international markets to
complement its existing theatre in Budapest, Hungary, although at this
stage it is premature to comment on either the possibility of further
international expansion or the potential magnitude of the Corporation's
capital commitment relating to its international expansion strategy. The
Corporation plans to fund its expansion programs by drawing on its bank
credit facilities and through internally generated cash flow. The
Corporation had approximately $28,300,000 available under its bank credit
facilities at September 30, 1997. As noted below, subsequent to
September 30, 1997 the Corporation was provided with an additional bank
facility of $20,600,000. Management believes that the availability under
the bank credit facilities is the primary indicator of the Corporation's
liquidity position.
At September 30, 1997 the Corporation's long-term debt was $354,334,000
compared to $326,058,000 at December 31, 1996. This increase is the
result of the capital expenditures incurred under the Corporation's
expansion program. Subsequent to September 30, 1997 the Corporation and
the banks participating in the bank credit facilities reached an
agreement whereby (i) the scheduled principal repayment of $10,000,000
due December 31, 1997 under the bank credit facilities will be deferred
until December 31, 1998; and (ii) an additional facility of $20,600,000
will be provided to the Corporation by the banks participating in the
bank credit facilities. This additional facility is subject to the same
interest rates as the remainder of the Corporation's bank credit
facilities and requires a principal repayment of $5,000,000 on December
31, 1998 with the balance maturing on December 31, 1999.
As at September 30, 1997, the Corporation was in compliance with the
financial covenants contained in its bank credit facilities. Given the
uncertainty with respect to the admission and concession revenues that
the Corporation will generate, there is a possibility that the
Corporation may not meet certain financial covenants in future periods.
The Corporation believes that the banking syndicate participating in the
bank credit facilities would waive the particular financial covenants if
the Corporation is not in compliance at a measurement date during the
next twelve month period.
RESULTS OF OPERATIONS
The Corporation reports its results in U.S. dollars. In order to
eliminate the impact of exchange rate fluctuations on the yearly
comparison of both admission and concession revenue, the results of the
Corporation's Canadian operations as discussed below are measured in
Canadian dollars.
The Corporation's United States theatres recorded a decrease in admission
revenue of 0.5% for the three months ended September 30, 1997 compared to
the same period in 1996. This admission revenue decrease was the result
of a 0.7% decrease in attendance and a 0.2% increase in box office
revenue per patron. For the nine months ended September 30, 1997 the
Corporation's United States theatres recorded an increase in admission
revenue of 1.2% compared to the same period in the prior year. This
increase was comprised of a decrease in attendance of 0.3% and an
increase in box office revenue per patron of 1.5%.
The Corporation's Canadian theatres reported an increase in admission
revenue of 12.2% (when measured in Canadian dollars) for the three months
ended September 30, 1997 compared to the same period in 1996. This
increase was the result of an increase in attendance of 11.4% and an
increase in box office revenue per patron of 0.8% over the same period in
1996. For the nine months ended September 30, 1997, the Corporation's
Canadian theatres reported an increase in admission revenue of 24.0% when
compared to the same period in the prior year. This increase was
comprised of a 19.7% increase in attendance and a 4.3% increase in box
office revenue per patron.
The increase in both the three and nine months attendance and admission
revenue in the Corporation's Canadian theatres in 1997 compared to the
same period in 1996 reflects the fact that films released by the
Corporation's primary film suppliers in Canada performed significantly
better during the first nine months of 1997 compared to films they
released during the same period in 1996. The Corporation obtains
licences to exhibit "first run" films primarily by directly negotiating
with film distributors. The Corporation has historical relationships
with certain Canadian film distributors and as a result is the major
exhibitor of pictures from these film distributors in that market.
The Corporation's United States concession revenue increased by 4.0% for
the three months ended September 30, 1997 compared to the same period in
1996. The attendance decrease of 0.7% experienced in the third quarter of
1997 was offset by an increase in concession revenue per patron of 4.7%.
For the nine months ended September 30, 1997 concession revenue for the
Corporation's United States theatres increased by 6.3%, when compared to
the same period in the prior year. This increase is attributable to the
attendance decrease of 0.3% and an increase in concession revenue per
patron of 6.6%.
The Corporation's Canadian concession revenue increased by 13.9% (when
measured in Canadian dollars) for the three months ended September 30,
1997 compared to the same period in 1996, reflecting the increase in
attendance of 11.4% and an increase in concession revenue per patron of
2.5%. For the nine months ended September 30, 1997 concession revenue for
the Corporation's Canadian theatres increased by 26.6%, when compared to
the same period in the prior year. This increase reflects an increase of
6.9% in concession revenue per patron accompanied by the increase in
attendance of 19.7%.
The increase in concession revenue per patron experienced in both the
Corporation's United States and Canadian theatres represents the impact
of management's concerted efforts in this area.
The gross margin from theatre operations (consisting of revenue from
theatre operations less film cost, cost of concessions, theatre
advertising, payroll, occupancy and supplies and services), when
expressed as a percentage of theatre operating revenue, decreased for the
three months ended September 30, 1997 to 16.3% from 17.2% for the same
period in 1996. For the nine months ended September 30, 1997 the gross
margin from theatre operations was 15.6% compared to 15.8% for the same
period in the prior year. The decrease in gross margin in the third
quarter of 1997 is directly attributable to the increased occupancy costs
associated with the Corporation's new theatres.
General and administrative expenses increased by 13.7% in the first nine
months of 1997 compared to the corresponding period in 1996. This
increase is the result of certain costs associated with the
infrastructure necessary for the Corporation's expansion program and
certain one-time charges.
Included in other expenses in the third quarter of 1997 is a charge of
approximately $5,300,000 associated with the cost of terminating leases
for a number of theatres. The selected review of the Corporation's
operating assets is a continuing process and has been intensified as a
result of the proposed combination with the Loews Theatres Exhibition
Group. This review of properties will be continued throughout the period
until the combination with the Loews Theatres Exhibition Group is
completed and consequently further leases may be terminated and certain
costs associated with such terminations incurred.
Interest on long-term debt decreased by 8.4% during the nine months ended
September 30, 1997 compared to the same period in 1996. This decrease is
primarily a result of the decision to denominate certain of the
Corporation's long-term debt in Canadian dollars which is subject to a
lower interest rate.
During 1997 the value of the Canadian dollar has weakened relative to the
United States dollar. While currency movements affect the reporting of
revenues and expenses of the Corporation's Canadian operations, the
financial impact is limited as the costs of operating the Canadian
theatres are supported by the revenue of such theatres.
FORWARD LOOKING STATEMENTS
The Corporation and its representatives have made, or may make, forward
looking statements including those contained in this Management's
Discussion and Analysis of Results of Operations and Financial Condition.
Use of the words "expects", "estimated", "plans", or similar expressions
identify such forward looking statements.
The results contemplated by the Corporation's forward looking statements
are subject to certain risks and uncertainties that could result in
actual performance being materially different from anticipated results,
including without limitation, lack of high quality commercial film
product, construction risks and delays, failure to obtain future waivers
or amendments under the Corporation's bank credit facilities and other
factors described herein.
PART II - OTHER INFORMATION
ITEM 1 LEGAL PROCEEDINGS
On or about October 14, 1997, a purported class action was commenced in
the United States District Court for the Northern District of Illinois
against the Corporation, Sony Corporation of America and Sony Retail
Entertainment by Jerrold I. Rosenthal, on his own behalf and on the
behalf of persons allegedly similarly situated. The complaint alleges
that if the business combination of the Corporation and LTM Holdings,
Inc. (the "Transaction") is consummated, Loews Cineplex Entertainment
Corporation ("LCE"), the combined company, will own sixty percent or more
of all movie theaters in the metropolitan Chicago area, and, as a
consequence (i) the Transaction would violate the federal and Illinois
antitrust statutes because the consummation of the Transaction would
allegedly tend to lessen substantially competition among and/or tend to
create a monopoly over movie theaters in the metropolitan Chicago area
and other, unspecified geographical areas and (ii) consummation of the
Transaction would allegedly injure Rosenthal and the members of the
purported class by resulting in higher prices for movie tickets and
limitations on the variety of movies exhibited. Rosenthal is seeking
injunctive relief regarding the Transaction under federal and Illinois
antitrust laws preventing consummation of the Transaction or, if the
Transaction is consummated, requiring divestiture, and also seeks
attorney fees and costs. Rosenthal has not claimed monetary damages.
Rosenthal is seeking to represent a purported class of "all patrons of
movie theaters in Chicago, Illinois and outlying areas" and other,
unspecified "similar" geographical areas elsewhere where LCE will own
sixty percent or more of all movie theaters upon consummation of the
Transaction. No motion for certification of the purported class has yet
been made. The Corporation believes that Rosenthal's allegations are
without merit and intends to oppose them vigorously.
The Corporation has been, and continues to be, involved in numerous other
legal proceedings. However, although such matters cannot be predicted
with certainty, the Corporation does not believe that such lawsuits are
likely to result in a judgment which would have a material adverse effect
on the Corporation's financial condition.
ITEM 6 EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibit 10.1 Tenth Amendment Agreement dated as of November 7, 1997
by and among Cineplex Odeon Corporation, Plitt Theatres, Inc., the
Guarantors, the Bank of Nova Scotia as agent, and the Banks party
thereto.
(b) Exhibit 11.1 Statement re Computation of Per Share Earnings.
(c) Exhibit 27 Financial Data Schedule.
(d) The Corporation did not file any reports on Form 8-K during the quarter
ended September 30, 1997. On October 16, 1997 the Corporation filed a
Form 8-K in which it was reported that the Corporation, Sony Pictures
Entertainment Inc. and LTM Holdings, Inc. (LTM) have entered into an
agreement which provides for the combination of the businesses of the
Corporation and LTM.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by
the undersigned thereunto duly authorized.
CINEPLEX ODEON CORPORATION
(Registrant)
Date November 13, 1997 Allen Karp
----------------- ------------------
Allen Karp
President and Chief
Executive Officer
Date November 13, 1997 Stephen Brown
----------------- ------------------
Stephen Brown
Senior Vice President
and Chief Financial Officer
Commission File No. 1-9454
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
EXHIBITS
TO
QUARTERLY REPORT ON FORM 10-Q
OF
CINEPLEX ODEON CORPORATION
For the Quarterly Period Ended September 30, 1997
EXHIBIT INDEX
Exhibit Description
10.1 Tenth Amendment Agreement dated as of November 7, 1997
by and among Cineplex Odeon Corporation, Plitt Theatres, Inc.,
the Guarantors, the Bank of Nova Scotia as agent, and the Banks
party thereto.
11.1 Statement re Computation of Per Share Earnings.
27 Financial Data Schedule.