Total theatre payroll costs accounted for 41.7% of total operating expenses during the fourth quarter of 2012 as compared to 41.4% for the same period one year earlier due in part to minimum wage increases.
Full Year
For the year ended December 31, 2012, other operating expenses increased $12.7 million, due in part to the higher business volumes in the 2012 period compared to the prior year. The impact of new and acquired net of disposed theatres was a $4.3 million increase to the category primarily due to the four theatres acquired from AMC which accounted for $3.9 million of the $4.3 million increase. Cost increases included higher same-store payroll expenses related to the increased business volumes ($4.4 million), higher marketing costs ($1.3 million) and the $6.1 million increase in the Other category. These cost increases were partially offset by lower media expenses due to the lower media sales during the period ($0.5 million) and the impact of NWS which was contributed into CSI in January 2012 ($1.9 million) as well as a $1.0 million termination payment paid to a landlord in the prior year period to refurbish theatre space for a disposed theatre.
The major movement in the Other category include the following:
-- Higher credit card service fees due to higher sales volumes during the period ($1.6 million).-- Increased spending for new business initiatives including Cineplex's interactive business ($0.7 million).-- Higher utility costs during 2012 compared to the prior year ($1.3 million).-- Higher digital projector rental costs due to the roll-out of digital projectors by CDCP that commenced in June 2011 ($0.9 million).-- Higher theatre operating costs including cleaning, ticket paper, and projector bulb expense relating to the higher business volumes during the year.
Total theatre payroll accounted for 44.4% of total other operating expenses in 2012, compared to 43.7% in the prior year due in part to minimum wage increases.
General and administrative expenses
The following table highlights the movement in general and administrative ("G&A") expenses during the quarter and the full year, including Share based compensation costs, and G&A net of these costs (in thousands of Canadian dollars):
----------------------------------------------------------------------------G&A expenses Fourth Quarter Full Year 2012 2011 Change 2012 2011 Change----------------------------------------------------------------------------G&A excluding LTIP and Option Plan expense $ 12,591 $ 10,779 16.8% $ 46,624 $ 40,832 14.2%LTIP (i) 2,176 1,503 44.8% 8,442 7,542 11.9%Option plan 433 699 -38.1% 2,071 8,066 -74.3% ---------------------------------------------------G&A expenses as reported $ 15,200 $ 12,981 17.1% $ 57,137 $ 56,440 1.2%----------------------------------------------------------------------------(i) LTIP includes the expense for the LTIP program as well as the expense for the executive and Board deferred share unit plans.
Fourth Quarter
G&A expenses increased $2.2 million during the fourth quarter of 2012 compared to the prior year period, due to a $0.7 million increase in LTIP expenses, a $0.2 million increase in professional fees and a $1.6 million increase in payroll related and general cost increases. These increases were partially offset by lower expenses under the option plan ($0.3 million).
