Movie Distribution Income Fund Announces Second Quarter Results
- Movie Distribution Income Fund sale at $10.00 cash per unit is
scheduled to close on August 15, 2007
TSX: FLM.UN
TORONTO, Aug. 13 /CNW/ - Movie Distribution Income Fund (the "Fund")
today announced financial and operating results for Motion Picture
Distribution LP (the "Partnership") for the three months and six months ended
June 30, 2007.
"As expected, results from our European operations continue to be strong
in the second quarter as the success of the theatrical releases from the first
quarter translate favourably into strong performances in the DVD windows,"
said John Bailey, Chief Executive Officer. "The Canadian results were
disappointing in the second quarter but we are looking forward to a solid
line-up of theatrical releases in the second half of the year."
SECOND QUARTER RESULTS
Revenue
Consolidated revenue from the Partnership for the second quarter was
$87.4 million, an increase of $2.5 million compared to the prior year's
quarter. Revenue from the Partnership's library was $14.6 million in the
quarter, an increase of 23% compared to $11.9 million in the prior year's
quarter.
In Canada, revenue of $53.6 million was down 4% compared to the prior
year's quarter. The theatrical slate which included Fracture and Hot Fuzz was
up against stronger comparables in the prior year's quarter with Scary Movie 4
and Take the Lead. A stronger DVD slate was offset by lower Canadian library
television sales in the quarter to domestic broadcasters. Television revenue
decreased to $11.8 million in the second quarter compared to $16.5 million in
the prior year's quarter. Revenue fluctuations for television series can be
significant when multiple seasons of series become available for sale.
UK revenue of $21.5 million was down from $23.5 million in the prior
year's quarter. The decrease was mainly attributable to the decline in
television revenues as the prior year included TV sales of Lost in Translation
and Racing Stripes. The decline was partially mitigated by a stronger DVD
slate which included Miss Potter and Hannibal Rising.
Revenue of $12.3 million in Spain was up significantly from $5.6 million
in last year's quarter. Theatrical revenue increased $4.5 million and included
The Messengers, Because I Said So and Happily N'Ever After. DVD revenue
increased $2.6 million from the prior year and included sales of The
Illusionist, Apocalypto and The Grudge 2. Television sales decreased
$0.4 million due to the timing of sales.
Adjusted EBITDA(2)
Consolidated adjusted EBITDA(2) of $5.3 million compared to $6.0 million
in the prior year's quarter.
In Canada, adjusted EBITDA(2) of $3.9 million was down compared to
$8.0 million in the prior year's quarter. These results reflect lower
theatrical and television revenues and the impact of the P&A costs incurred in
the quarter relating to certain third quarter theatrical releases including
Hairspray. Retention costs accrued in the quarter also contributed to the
lower adjusted EBITDA.
In the UK, EBITDA(1) of $1.0 million compared to a loss of $0.3 million
in the prior year's quarter. Direct profit margin of 21% in the current
quarter reflects the relative weighting of the higher DVD revenues and the
reductions in P&A spend in the quarter.
In Spain, EBITDA(1) of $0.4 million compared to a loss of $1.7 million in
the prior year's quarter. Direct profit margins in the quarter reflect the
higher theatrical and DVD revenues.
Amortization
Amortization in the quarter was $0.1 million compared to $1.5 million in
the prior year's quarter. Amortization in the prior year's quarter includes a
$1.2 million partial write-down of intangible assets.
Interest Expense
Interest expense of $1.8 million in the quarter was comparable to the
prior year's quarter of $1.9 million.
Tax Provision
Income taxes of $0.4 million compared to an income tax recovery of
$0.7 million in the prior year's quarter.
Net Income
The Partnership's net income for the second quarter was $0.9 million
compared to $3.1 million in the prior year's quarter.
Distributable Cash(3)
Distributable Cash for the quarter was $3.3 million or $0.08 per unit
with a declared distribution per unit of $0.29 per unit. In the prior year's
quarter the Partnership recorded Distributable Cash of $4.8 million or
$0.12 per unit with a declared distribution per unit of $0.29.
On a LTM basis, the Partnership has recorded Distributable Cash of
$43.2 million and a payout ratio of 105%.
Liquidity
Net debt(4) for the Partnership was $93.9 million at June 30, 2007
compared to $79.8 million at March 31, 2007. At June 30, 2007, the Partnership
had unused credit facilities totaling $15.5 million. The Partnership has
extended the maturity of its senior secured credit facilities through to
December 31, 2007.
FIRST HALF RESULTS
Consolidated revenue from the Partnership for the six months ended June
30, 2007 was $197.4 million, an increase of $9.7 million or 5% from the prior
year's period.
Consolidated adjusted EBITDA of $12.7 million was comparable to the prior
year's period.
The Partnership's net earnings for the first half was $5.3 million
compared to $8.3 million in the first half of 2006.
Please refer to the attached appendix listing current and prior period
releases and library revenues. Selected titles from our 2007 release slate can
be found on the website at: www.moviedistributionincomefund.com.
2007 OUTLOOK
In Canada in the second half of 2007, we released Rush Hour 3 starring
Jackie Chan and Chris Tucker and expect to release The Nanny Diaries starring
Scarlett Johansson and Paul Giamatti, The Golden Compass (His Dark Materials)
starring Nicole Kidman, Daniel Craig and Ian McShane and Atonement starring
Keira Knightley and James McAvoy. On DVD in Canada, we expect to release Hot
Fuzz, Fracture, Hairspray, The Nanny Diaries and Rush Hour 3.
In the United Kingdom in the second half of 2007, we expect to release
Control, The Last Legion starring Colin Firth and Ben Kingsley, P.S. I Love
You, Bratz, Death Proof and Planet Terror. On DVD we released The Illusionist
and Amazing Grace and expect to release Bratz.
In Spain, we released Planet Terror and Next starring Nicolas Cage and
Julianne Moore and expect to release Death Proof, Bratz, School for Scoundrels
and The Hoax. DVD releases in 2007 are expected to include Next, Bratz, Death
Proof and Planet Terror.
Basis of Presentation
The Fund holds an indirect 49% limited partnership interest in the
Partnership and Alliance Atlantis Communications Inc. ("Alliance Atlantis")
indirectly holds the remaining 51% limited partnership interest.
The financial statements released today include the presentation of the
consolidated financial and operating results of the Partnership for the three
and six months ended June 30, 2007.
About Motion Picture Distribution LP and Movie Distribution Income Fund
The Partnership is a leading distributor of motion pictures in Canada,
with a presence in motion picture distribution operations in the United
Kingdom and Spain. The Partnership distributes filmed entertainment to
theatres, on video and DVD, and to television broadcasters. Alliance Atlantis
(TSX: AAC.A, AAC.B) indirectly holds a 51% ownership interest in the
Partnership and Movie Distribution Income Fund (TSX: FLM.UN) indirectly holds
the remaining ownership interest in the Partnership.
Forward-Looking Statements
This press release, in particular the "2007 Outlook" section, includes
forward-looking statements, which are based on certain assumptions and reflect
the current expectations of Movie Distribution Income Fund (the "Fund") and
the Partnership. Forward-looking statements are those which are not historical
fact and include, but are not limited to, statements of the Fund's or the
Partnership's expectations and intentions. The reader should not place undue
reliance on them. They involve known and unknown risks, uncertainties and
other factors that may cause them to differ materially from the anticipated
future results or expectations expressed or implied by such forward-looking
statements. Important factors that could cause actual results to differ
materially from those set forth in the forward-looking statements include:
failure to complete, or a significant delay in completing, the Alliance
Atlantis Acquisition and the Movie Distribution Income Fund Sale, audience
acceptance of our filmed entertainment, our relationship with filmed
entertainment content suppliers; the loss of key personnel, technological
change that increases competition or facilitates the infringement of our
intellectual property, changes to the regulatory environment, actions of our
competitors and changes in the general economy. Additional information about
these factors and other factors are described in materials filed by the Fund
with the security regulatory authorities in Canada from time to time,
including the Fund's 2006 Annual Information Form. Neither the Fund nor the
Partnership undertakes any obligation to publicly update or revise any
forward- looking statements or information, whether as a result of new
information, future events or otherwise.
This press release - including financial statements - is distributed via
Canada NewsWire (www.newswire.ca) and posted to Movie Distribution Income
Fund's website (www.moviedistributionincomefund.com). Notes to the
Consolidated Financial Statements are not distributed via Canada NewsWire and
are available on the Movie Distribution Income Fund's website.
Management believes that, in addition to net earnings, EBITDA, Adjusted
EBITDA and Distributable Cash are useful complementary measures of operating
performance. However, EBITDA, Adjusted EBITDA and Distributable Cash are not
recognized measures under Canadian generally accepted accounting principles
("Canadian GAAP") and do not have a standardized meaning prescribed by
Canadian GAAP. Readers or users are cautioned that EBITDA, Adjusted EBITDA and
Distributable Cash should not be construed as an alternative to net earnings
determined in accordance with Canadian GAAP, as an indicator of performance,
or as an alternative to cash flows from operating, investing and financial
activities as a measure of liquidity and cash flows. Motion Picture
Distribution LP's method of calculating EBITDA, Adjusted EBITDA and
Distributable Cash may differ from the methods used by other entities and
accordingly, EBITDA, Adjusted EBITDA and Distributable Cash may not be
comparable to similarly titled measures used by other entities.
(1) EBITDA is defined as earnings before interest, income taxes,
amortization, non-controlling interest and foreign exchange gains and
losses.
(2) Adjusted EBITDA is defined as EBITDA less Fund expenses reimbursed by
Distribution LP, plus non-cash compensation costs funded by the
controlling shareholder.
(3) Distributable cash is defined as EBITDA less maintenance property and
equipment expenditures, interest expense, income taxes, the portion
of EBITDA attributable to minority interests, Fund expenses
reimbursed by Distribution LP and adding non-cash employee
compensation charges.
(4) Net debt is defined as amounts drawn on the term loan and revolving
credit facilities less cash and cash equivalents
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Movie Distribution Income Fund
Q2 - 2007
Consolidated Financial Statements and
Supplemental Information
For the Three and Six Months ended
June 30, 2007 and 2006
(Unaudited)
-------------------------------------------------------------------------
The interim Consolidated Financial Statements have
not been reviewed by an auditor.
Movie Distribution Income Fund
Management's responsibility for financial reporting
The accompanying unaudited interim consolidated financial statements,
Management's Discussion and Analysis ("MD&A") and all information contained in
this report of Movie Distribution Income Fund (the "Fund") are the
responsibility of management and have been approved by the Board of Trustees.
The unaudited interim consolidated financial statements have been
prepared by management in accordance with Canadian generally accepted
accounting principles. When alternative methods of accounting exist,
management has chosen those it deems most appropriate in the circumstances.
The unaudited interim consolidated financial statements and MD&A include
amounts based on informed judgments and estimates of the expected effects of
current events and transactions with appropriate consideration to materiality.
In addition, in preparing the financial information management must make
determinations as to the relevancy of information to be included, and make
estimates and assumptions that affect reported information. The MD&A also
includes information regarding the impact of current transactions and events,
sources of liquidity and capital resources, operating trends, risks and
uncertainties. Actual results in the future may differ materially from the
present assessment of this information because future events and circumstances
may not occur as expected.
Management maintains a system of internal accounting and administrative
controls. Such systems are designed to provide reasonable assurance that the
financial information is relevant, reliable and accurate, and assets are
appropriately accounted for and adequately safeguarded.
The Board of Trustees of the Fund (the "Board") is responsible for
ensuring that management fulfills its responsibilities for financial reporting
and internal control, and is ultimately responsible for reviewing and
approving the unaudited interim consolidated financial statements and MD&A.
The Board is assisted in exercising its responsibilities through the Audit
Committee of the Board of Motion Picture Distribution Inc. (the "Audit
Committee").
"John Bailey" "Lloyd A. Wiggins"
JOHN BAILEY LLOYD A. WIGGINS
Chief Executive Officer Chief Financial Officer
August 13, 2007
Toronto, Canada
Movie Distribution Income Fund
Consolidated Balance Sheets
(In millions of Canadian dollars)
(unaudited)
June 30, December 31, June 30,
2007 2006 2006
-------------------------------------------------------------------------
Assets
Distribution receivable 1.9 1.9 1.9
Investment in Motion Picture
Distribution LP 139.8 154.8 148.2
Future income taxes 1.7 - -
-----------------------------------
143.4 156.7 150.1
-------------------------------------------------------------------------
Liabilities
Distribution payable to Unitholders 1.9 1.9 1.9
Unitholders' equity
Unitholders' equity 141.5 154.8 148.2
-----------------------------------
143.4 156.7 150.1
-------------------------------------------------------------------------
Movie Distribution Income Fund
Consolidated Statements of Earnings (Loss)
(In millions of Canadian dollars - except per unit amounts)
(unaudited)
Three months ended Six months ended
June 30, June 30,
2007 2006 2007 2006
-------------------------------------------------------------------------
Equity earnings (loss) from
Investment in Motion Picture
Distribution LP (1.0) (0.1) (0.2) 0.8
Less: Administrative expenses 0.2 0.2 1.0 0.4
-------------------------------------
Earnings (loss) before income taxes (1.2) (0.3) (1.2) 0.4
Recovery of income taxes (1.7) - (1.7) -
-------------------------------------
Net earnings (loss) for the period 0.5 (0.3) 0.5 0.4
-------------------------------------------------------------------------
Earnings (loss) per Unit $0.03 $(0.02) $0.03 $0.02
-------------------------------------------------------------------------
Weighted average Fund Units
outstanding 19.3 19.3 19.3 19.3
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Movie Distribution Income Fund
Consolidated Statements of Comprehensive Income (Loss)
(In millions of Canadian dollars)
(unaudited)
Three months ended Six months ended
June 30, June 30,
2007 2006 2007 2006
-------------------------------------------------------------------------
Net earnings (loss) for the period 0.5 (0.3) 0.5 0.4
Other comprehensive income
Fund's share of Motion Picture
Distribution LP's other
comprehensive income (loss) (3.2) 0.6 (3.2) 1.7
-------------------------------------
Total comprehensive income (loss) (2.7) 0.3 (2.7) 2.1
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Movie Distribution Income Fund
Consolidated Statements of Unitholders' Equity
(In millions of Canadian dollars)
(unaudited)
Accumu-
lated
Accumu- other
Accumu- lated Contri- Unit- compre-
lated distrib- buted holders' hensive
earnings utions surplus capital income Total
-------------------------------------------------------------------------
Balance at
December
31, 2006 29.5 (70.5) 0.7 193.5 - 153.2
Transition
adjustment - - - - 1.6 1.6
--------------------------------------------------------
Balance at
January 1, 2007 29.5 (70.5) 0.7 193.5 1.6 154.8
Distributions
declared - (11.1) - - - (11.1)
Expenses borne
by Distribution
LP - - 0.5 - - 0.5
Net earnings
for the period 0.5 - - - - 0.5
Other
comprehensive
income (loss) - - - - (3.2) (3.2)
--------------------------------------------------------
Balance at
June 30, 2007 30.0 (81.6) 1.2 193.5 (1.6) 141.5
-------------------------------------------------------------------------
Accumu-
lated
Accumu- other
Accumu- lated Contri- Unit- compre-
lated distrib- buted holders' hensive
earnings utions surplus capital income Total
-------------------------------------------------------------------------
Balance at
December 31,
2005 15.7 (48.3) 0.3 193.5 - 161.2
Transition
adjustment - - - - (4.2) (4.2)
--------------------------------------------------------
Balance at
January 1,
2006 15.7 (48.3) 0.3 193.5 (4.2) 157.0
Distributions
declared - (11.1) - - - (11.1)
Expenses borne
by Distribution
LP - - 0.2 - - 0.2
Net earnings
for the period 0.4 - - - - 0.4
Other
comprehensive
income - - - - 1.7 1.7
--------------------------------------------------------
Balance at
June 30, 2006 16.1 (59.4) 0.5 193.5 (2.5) 148.2
-------------------------------------------------------------------------
Movie Distribution Income Fund
Consolidated Statements of Cash Flows
(In millions of Canadian dollars)
(unaudited)
Three months ended Six months ended
June 30, June 30,
2007 2006 2007 2006
-------------------------------------------------------------------------
Cash and cash equivalents provided
by (used in)
Operating activities
Net earnings (loss) for the period 0.5 (0.3) 0.5 0.4
Items not affecting cash
Future income taxes (1.7) - (1.7) -
Equity (earnings) loss from
Investment in Motion Picture
Distribution LP 1.0 0.1 0.2 (0.8)
Expenses borne by Motion
Picture Distribution LP 0.1 0.1 0.5 0.2
Distributions received on
Ordinary LP Units of
Motion Picture Distribution LP 5.6 5.6 11.1 11.1
------------------------------------
5.5 5.5 10.6 10.9
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Financing activities
Distributions paid to Unitholders (5.6) (5.6) (11.1) (11.1)
Expenses borne by Motion Picture
Distribution LP, contributed
surplus 0.1 0.1 0.5 0.2
------------------------------------
(5.5) (5.5) (10.6) (10.9)
-------------------------------------------------------------------------
Change in cash and cash equivalents - - - -
Cash and cash equivalents
- beginning and end of period - - - -
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Movie Distribution Income Fund
Supplemental Information
For the Three and Six Months Ended
June 30, 2007 and 2006
(Unaudited)
-------------------------------------------------------------------------
The interim Supplemental Information has not been reviewed by an auditor.
Distributable Cash of Motion Picture Distribution LP
Distributable cash is not a recognized measure under Canadian GAAP and
does not have a standardized meaning prescribed by Canadian GAAP.
Distributable cash and related measures may or may not be consistent with the
calculation of similar measures for other companies and should not be viewed
as alternatives to net earnings or other measures of performance calculated in
accordance with Canadian GAAP.
Management uses distributable cash to measure operating performance and
therefore believes that distributable cash calculated from earnings before
undernoted is the most appropriate measure to help readers evaluate the
performance of the Fund.
Management calculates distributable cash per LP Unit for Distribution LP
as follows:
Three Three Six Six
months months months months
ended ended ended ended
June 30, June 30, June 30, June 30,
(In millions of Canadian dollars) 2007 2006 2007 2006
-------------------------------------------------------------------------
Cash from operating activities (3.4) (10.8) 8.1 (25.3)
Add: Net change in other non-cash
balances related to operations (2.6) 24.4 (4.3) 39.8
Investment in film and
television programs 30.3 17.0 54.2 45.0
Unrealized foreign exchange
(gains) losses 0.3 (1.2) - (2.2)
Future income taxes (0.4) 0.6 - 1.7
Less: Maintenance, property
and equipment expenditures 0.2 - 0.1 (0.2)
Fund expenses reimbursed by
Distribution LP (0.2) (0.2) (1.0) (0.4)
Amortization of film and
television programs (22.1) (25.9) (49.9) (49.7)
Amortization of intangible
and other assets - (0.2) (0.2) (0.4)
Non-controlling interest 0.1 - 0.1 -
Add: Cash to be received from
majority partner for
employee costs 1.1 1.1 2.1 2.2
-------------------------------------------------------------------------
Distributable cash of
Distribution LP 3.3 4.8 9.2 10.5
Distributable cash per
Distribution LP unit $0.08 $0.12 $0.23 $0.27
-------------------------------------------------------------------------
Distributions declared by
Distribution LP 11.3 11.3 22.6 22.6
49.0% attributable to the Fund 5.6 5.6 11.1 11.1
49.0% attributable to the
Fund per Unit of the Fund $0.29 $0.29 $0.58 $0.58
Distributions declared by
Distribution LP on Ordinary LP
Units held by the Fund 5.6 5.6 11.1 11.1
Distributions declared per
Fund Unit $0.29 $0.29 $0.58 $0.58
-------------------------------------------------------------------------
Distributions declared exceeded distributable cash for the three and six
months ended June 30, 2007 by $8.0 million and $13.4 million. Distributions
declared for the three and six months ended June 30, 2006 exceeded
distributable cash by $6.5 million and $12.1 million. Consequently,
$8.0 million and $13.4 million for the three and six months ended June 30,
2007 were funded by increased borrowings on the credit facilities ($6.5
million - three months ended June 30, 2006; $12.1 million - six months ended
June 30, 2006).
The distribution policy of Distribution LP is to distribute its available
cash to the maximum extent possible. Distributions will be made on the
Ordinary LP Units within 15 days of the end of each month and on the
Subordinated LP Units within 15 days of the end of each fiscal quarter.
Distributions will be paid to the limited partners of record on the last day
of the period in respect of which the distribution is to be paid.
Alternatively, the calculation of distributable cash using the
consolidated statements of earnings as a reference point would be as follows:
Three Three Six Six
months months months months
ended ended ended ended
June 30, June 30, June 30, June 30,
(In millions of Canadian dollars) 2007 2006 2007 2006
-------------------------------------------------------------------------
Net earnings for the period as
reported in Distribution LP
under Canadian GAAP 0.9 3.1 5.3 8.3
Add: Amortization 0.1 1.5 1.2 1.8
Interest 1.8 1.9 3.6 3.7
Non-controlling Interest (0.1) - (0.1) (0.1)
Foreign exchange (gains) losses 1.0 (1.1) 1.0 (1.9)
Provision for (recovery of)
income taxes 0.4 (0.7) - (1.7)
Loss on disposal of assets 0.1 - 0.1 -
-------------------------------------------------------------------------
Earnings before undernoted as
reported in Distribution LP 4.2 4.7 11.1 10.1
Less: Fund expenses reimbursed by
Distribution LP 0.2 0.2 1.0 0.4
Add: Employee costs borne by
majority partner 1.3 1.5 2.6 3.0
-------------------------------------------------------------------------
Adjusted earnings before undernoted 5.3 6.0 12.7 12.7
Less: Maintenance, property and
equipment expenditures (0.2) - (0.1) 0.2
Interest expense 1.8 1.9 3.6 3.7
Provision for (recovery of)
income taxes 0.4 (0.7) - (1.7)
-------------------------------------------------------------------------
Distributable cash of
Distribution LP 3.3 4.8 9.2 10.5
Distributable cash per
Distribution LP unit $0.08 $0.12 $0.23 $0.27
-------------------------------------------------------------------------
Distributions declared by
Distribution LP 11.3 11.3 22.6 22.6
49.0% attributable to the Fund 5.6 5.6 11.1 11.1
49.0% attributable to the Fund
per Unit of the Fund $0.29 $0.29 $0.58 $0.58
Distributions declared by
Distribution LP on Ordinary LP
Units held by the Fund 5.6 5.6 11.1 11.1
Distributions declared per
Fund Unit $0.29 $0.29 $0.58 $0.58
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Motion Picture Distribution LP
Q2 - 2007
Consolidated Financial Statements
For the Three and Six Months Ended
June 30, 2007 and 2006
(Unaudited)
-------------------------------------------------------------------------
The interim Consolidated Financial Statements have not been
reviewed by an auditor.
Motion Picture Distribution LP
Management's responsibility for financial reporting
The accompanying unaudited interim consolidated financial statements and
Management's Discussion and Analysis ("MD&A") and all information contained in
this report of Motion Picture Distribution LP ("Distribution LP") are the
responsibility of management and have been approved by the Board of Directors.
The unaudited interim consolidated financial statements have been
prepared by management in accordance with Canadian generally accepted
accounting principles. When alternative methods of accounting exist,
management has chosen those it deems most appropriate in the circumstances.
The unaudited interim consolidated financial statements and MD&A include
amounts based on informed judgments and estimates of the expected effects of
current events and transactions with appropriate consideration to materiality.
In addition, in preparing the financial information management must make
determinations as to the relevancy of information to be included, and make
estimates and assumptions that affect reported information. The MD&A also
includes information regarding the impact of current transactions and events,
sources of liquidity and capital resources, operating trends, risks and
uncertainties. Actual results in the future may differ materially from the
present assessment of this information because future events and circumstances
may not occur as expected.
Management maintains a system of internal accounting and administrative
controls. Such systems are designed to provide reasonable assurance that the
financial information is relevant, reliable and accurate, and assets are
appropriately accounted for and adequately safeguarded.
The Board of Directors of Motion Picture Distribution Inc. (the "Board"),
as general partner of Distribution LP, is responsible for ensuring that
management fulfills its responsibilities for financial reporting and internal
control, and is ultimately responsible for reviewing and approving the
unaudited interim consolidated financial statements and MD&A. The Board is
assisted in exercising its responsibilities through the Audit Committee of the
Board (the "Audit Committee").
"John Bailey" "Lloyd A. Wiggins"
JOHN BAILEY LLOYD A. WIGGINS
Chief Executive Officer Executive Vice President and
Chief Financial Officer
August 13, 2007
Toronto, Canada
Motion Picture Distribution LP
Consolidated Balance Sheets
(In millions of Canadian dollars)
(unaudited) (unaudited)
June 30, December June 30,
2007 31, 2006 2006
-------------------------------------------------------------------------
Assets
Cash and cash equivalents 15.5 18.7 11.6
Accounts receivable 128.0 161.8 91.7
Prepaid expenses and other assets 2.7 2.2 2.1
Future income taxes 3.7 3.9 4.5
Investment in film and television
programs 211.3 214.6 185.6
Property and equipment 1.3 1.7 2.8
Intangible assets - 0.9 1.2
Goodwill 54.8 58.4 54.0
--------------------------------------
417.3 462.2 353.5
-------------------------------------------------------------------------
Liabilities
Distributions payable 5.5 5.5 5.5
Revolving credit facilities 59.5 49.0 50.0
Term loan 49.9 50.0 50.0
Accounts payable and accrued
liabilities 234.8 271.3 175.7
Income taxes payable 2.8 3.8 2.9
Future income taxes 0.6 0.6 -
Deferred revenue 13.9 8.5 15.3
--------------------------------------
367.0 388.7 299.4
-------------------------------------------------------------------------
Non-controlling interest (0.1) - 0.8
Partners' Equity
Partners' equity 50.4 73.5 53.3
--------------------------------------
417.3 462.2 353.5
-------------------------------------------------------------------------
Motion Picture Distribution LP
Consolidated Statements of Earnings
(In millions of Canadian dollars)
(unaudited)
Three months ended Six months ended
June 30, June 30,
2007 2006 2007 2006
-------------------------------------------------------------------------
Revenue
Domestic Distribution 53.6 55.8 125.6 130.5
Momentum 21.5 23.5 44.8 42.6
Aurum 12.3 5.6 27.0 14.6
--------------------------------------
87.4 84.9 197.4 187.7
Direct operating expenses 71.5 70.2 162.6 157.2
Direct Profit (Loss)
Domestic Distribution 9.5 12.6 26.6 26.5
Momentum 4.5 2.4 7.8 3.9
Aurum 1.9 (0.3) 0.4 0.1
--------------------------------------
15.9 14.7 34.8 30.5
Operating expenses
Selling, general and administrative 10.4 8.5 21.1 17.4
Employee costs borne by majority
partner 1.3 1.5 2.6 3.0
--------------------------------------
11.7 10.0 23.7 20.4
Earnings (Loss) before undernoted
Domestic Distribution 2.8 6.7 12.7 15.0
Momentum 1.0 (0.3) 1.1 (2.1)
Aurum 0.4 (1.7) (2.7) (2.8)
--------------------------------------
4.2 4.7 11.1 10.1
Amortization 0.1 1.5 1.2 1.8
Interest 1.8 1.9 3.6 3.7
Non-controlling interest (0.1) - (0.1) (0.1)
Loss on disposal of assets 0.1 - 0.1 -
Foreign exchange (gains) losses 1.0 (1.1) 1.0 (1.9)
--------------------------------------
Earnings before income taxes 1.3 2.4 5.3 6.6
Provision for (recovery of) income
taxes 0.4 (0.7) - (1.7)
--------------------------------------
Net earnings for the period 0.9 3.1 5.3 8.3
-------------------------------------------------------------------------
Motion Picture Distribution LP
Consolidated Statements of Comprehensive Income
(In millions of Canadian dollars)
(unaudited)
Three months ended Six months ended
June 30, June 30,
2007 2006 2007 2006
-------------------------------------------------------------------------
Net earnings for the period 0.9 3.1 5.3 8.3
Other comprehensive income
Unrealized foreign currency
translation gains (losses) on net
assets of self-sustaining
operations (6.7) 1.1 (6.6) 3.3
--------------------------------------
Total comprehensive income (loss) (5.8) 4.2 (1.3) 11.6
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Motion Picture Distribution LP
Consolidated Statements of Partners' Equity
(In millions of Canadian dollars)
(unaudited)
Accumu-
lated
Accum- other
ulated Contri- compreh-
Accumulated distrib- buted Partners' ensive
earnings utions(1) surplus capital income Total
-------------------------------------------------------------------------
Balance at
January 1,
2007 146.6 (278.3) 32.1 169.9 3.2 73.5
Distributions
declared - (22.6) - - - (22.6)
Fund expenses
reimbursed by
Distribution LP - (1.0) - - - (1.0)
Employee costs
borne by majority
partner - - 1.8 - - 1.8
Net earnings for
the period 5.3 - - - - 5.3
Other
comprehensive
income - - - - (6.6) (6.6)
---------------------------------------------------------
Balance at
June 30, 2007 151.9 (301.9) 33.9 169.9 (3.4) 50.4
-------------------------------------------------------------------------
Accumu-
lated
Accum- other
ulated Contri- compreh-
Accumulated distrib- buted Partners' ensive
earnings utions(1) surplus capital income Total
-------------------------------------------------------------------------
Balance at
January 1,
2006 103.8 (232.2) 28.8 169.9 (8.5) 61.8
Distributions
declared - (22.6) - - - (22.6)
Fund expenses
reimbursed by
Distribution LP - (0.4) - - - (0.4)
Employee costs
borne by
majority partner - - 2.7 - - 2.7
LTIP
compensation
obligation - - 0.2 - - 0.2
Net earnings
for the period 8.3 - - - - 8.3
Other
comprehensive
income - - - - 3.3 3.3
---------------------------------------------------------
Balance at
June 30, 2006 112.1 (255.2) 31.7 169.9 (5.2) 53.3
-------------------------------------------------------------------------
(1) Accumulated distributions include an initial equity distribution of
$133.1 made on the transfer of net assets to Distribution LP as at
October 15, 2003.
Motion Picture Distribution LP
Consolidated Statements of Cash Flows
(In millions of Canadian dollars)
(unaudited)
Three months ended Six months ended
June 30, June 30,
2007 2006 2007 2006
-------------------------------------------------------------------------
Cash and cash equivalents provided
by (used in)
Operating activities
Net earnings for the period 0.9 3.1 5.3 8.3
Items not affecting cash
Amortization of film and television
programs 22.1 25.9 49.9 49.7
Amortization of property and
equipment 0.1 0.2 0.3 0.5
Amortization of intangible and
other assets - 1.5 1.1 1.8
Employee costs borne by majority
partner, non-cash 0.2 0.4 0.5 0.8
Non-controlling interest (0.1) - (0.1) (0.1)
Future income taxes 0.4 (0.6) - (1.7)
Unrealized net foreign exchange
(gains) losses 0.7 0.1 1.0 0.2
Investment in film and television
programs (30.3) (17.0) (54.2) (45.0)
Net changes in other non-cash
balances related to operations 2.6 (24.4) 4.3 (39.8)
--------------------------------------
(3.4) (10.8) 8.1 (25.3)
-------------------------------------------------------------------------
Investing activities
Property and equipment 0.2 - 0.1 (0.2)
-------------------------------------------------------------------------
Financing activities
Revolving term credit facility 17.5 23.5 10.5 17.0
Deferred financing costs (0.3) - (0.3) -
Cash distributions paid (11.3) (11.3) (22.6) (22.6)
Employee costs borne by majority
partner, contributed surplus 0.2 0.2 1.3 2.1
Fund expense reimbursed by
Distribution LP (0.2) (0.2) (1.0) (0.4)
--------------------------------------
5.9 12.2 (12.1) (3.9)
-------------------------------------------------------------------------
Effect of exchange rate changes on
cash and cash equivalents 0.7 (0.2) 0.7 (0.7)
--------------------------------------
Change in cash and cash equivalents 3.4 1.2 (3.2) (30.1)
Cash and cash equivalents -
beginning of period 12.1 10.4 18.7 41.7
--------------------------------------
Cash and cash equivalents - end of
period 15.5 11.6 15.5 11.6
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Supplemental cash flow information:
Interest paid 1.9 1.7 3.5 3.4
Interest received - (0.1) (0.1) (0.2)
Income taxes paid 1.0 - 1.0 0.2
-------------------------------------------------------------------------
APPENDIX A
MOVIE DISTRIBUTION INCOME FUND
RELEASES SUMMARY
------------------------------------------------------------
RELEASES Three months ended Three months ended
June 30, 2007 June 30, 2006
------------------------------------------------------------
Theatrical DVD Theatrical DVD
Domestic 19 54 23 43
Momentum 3 22 6 19
Aurum 3 12 2 15
------------------------------------------------------------
------------------------------------------------------------
RELEASES Six months ended Six months ended
June 30, 2007 June 30, 2006
------------------------------------------------------------
Theatrical DVD Theatrical DVD
Domestic 41 111 40 85
Momentum 9 42 10 29
Aurum 9 28 5 25
------------------------------------------------------------
LIBRARY REVENUE
------------------------------------------------------------------
Three months ended Six months ended
June 30, 2007 vs 2006 June 30, 2007 vs 2006
------------------------------------------------------------------
Library Revenue 14.6 11.9 40.0 28.0
------------------------------------------------------------------
For further information: Lloyd. A. Wiggins, Executive VP & Chief
Financial Officer, Movie Distribution Income Fund, Tel: (416) 967-1174, Email:
lloyd.wiggins@allianceatlantis.com; Andrew Akman, Senior VP Finance -
Corporate Development & Investor Relations, Alliance Atlantis Communications,
Tel: (416) 966-7701, Email: andrew.akman@allianceatlantis.com
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