Fourth Quarter
Theatre occupancy expenses increased $5.7 million during the fourth quarter of 2012 compared to the prior year period. This increase was primarily due to the four theatres acquired from AMC in the third quarter of 2012 ($4.9 million). The increase in the Other category primarily relates to higher real estate taxes in the current quarter compared to the prior year period.
Full Year
The increase in theatre occupancy expenses of $10.6 million for 2012 compared to the prior year was primarily due to the four theatres acquired from AMC in the third quarter of 2012 ($9.1 million). The increase in the Other category primarily relates to higher real estate taxes in the current year compared to the prior year period.
Other operating expenses
The following table highlights the movement in other operating expenses during the quarter and the full year (in thousands of Canadian dollars):
----------------------------------------------------------------------------Other operating Fourth Quarter Full Yearexpenses 2012 2011 Change 2012 2011 Change----------------------------------------------------------------------------Other operating expenses $ 74,056 $ 64,095 15.5% $ 258,973 $ 246,289 5.2%--------------------------------------------------------------------------------------------------------------------------------------------------------Other operating continuity Fourth Quarter Full YearIn thousands Other Operating Other Operating----------------------------------------------------------------------------2011 as reported $ 64,095 $ 246,289Impact of new theatres 2,853 6,119Impact of disposed theatres (212) (1,815)Same store payroll change 2,840 4,350Marketing change 178 1,297Media 1,786 (504)New Way Sales (855) (1,868)Theatre refurbishment payment - (1,014)Other 3,371 6,119----------------------------------------------------------------------------2012 as reported $ 74,056 $ 258,973----------------------------------------------------------------------------
Fourth Quarter
Other operating expenses during the fourth quarter of 2012 increased $10.0 million or 15.5% compared to the prior year period. The impact of new and acquired net of disposed theatres was a $2.6 million increase to the category primarily due to the four theatres acquired from AMC which accounted for $2.1 million of the $2.6 million increase. As a result of higher business volumes during the current year period, same-store payroll costs increased $2.8 million and media costs increased $1.8 million due to higher equipment sales by CDM. These increases were partially offset by the impact of NWS ($0.9 million) as expenses for NWS are included in other operating expenses in 2011 but not in 2012 due to the creation of CSI.
The major movement in the Other category include the following:
-- Higher credit card service fees due to the higher sales volumes during the period ($0.6 million).-- Increased spending for new business initiatives including Cineplex's interactive business ($0.6 million).-- Higher utility costs in the 2012 period compared to the prior year period ($0.2 million).-- Higher digital projector rental costs due to the roll-out of digital projectors by CDCP that commenced in June 2011 ($0.2 million).-- Higher theatre operating costs including cleaning, ticket paper, and projector bulb expense, due to the higher business volumes in the current year period.
