-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Vg4Z607I6JmwryUGRr9vXc9FMxpnyGzpbx1RHD1JoOxHk23Fk1OQeQ0Xv1RuvQya 1arpPVFdV+8fAZD0Z/Cbow== 0000822368-97-000004.txt : 19970520 0000822368-97-000004.hdr.sgml : 19970520 ACCESSION NUMBER: 0000822368-97-000004 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19970331 FILED AS OF DATE: 19970515 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: CINEMA PLUS LP CENTRAL INDEX KEY: 0000822368 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-MOTION PICTURE & VIDEO TAPE PRODUCTION [7812] IRS NUMBER: 133437795 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-17469 FILM NUMBER: 97607741 BUSINESS ADDRESS: STREET 1: C/O MAGERA MANAGEMENT CORP STREET 2: 666 THIRD AVE CITY: NEW YORK STATE: NY ZIP: 10017 BUSINESS PHONE: 2125121000 MAIL ADDRESS: STREET 1: C/O MAGERA MANAGEMENT CORP STREET 2: 666 THIRD AVE CITY: NEW YORK STATE: NY ZIP: 10017 FORMER COMPANY: FORMER CONFORMED NAME: TAKE ONE PREFERRED PARTNERS LP DATE OF NAME CHANGE: 19871117 10-Q 1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q X Quarterly Report Under Section 13 or 15(d) of the Securities Exchange Act of 1934 For the Quarter Ended March 31, 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 0-17469 CINEMA PLUS, L.P. (Exact name of registrant as specified in its certificate of Limited Partnership) Delaware 13-3437795 (State or other jurisdiction of (IRS Employer incorporation or organization) Identification No.) 1100 Avenue of the Americas, New York, New York 10036 (Address of principal executive offices) (Zip Code) (212) 512-1000 (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 period 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 No____ PART I - FINANCIAL INFORMATION Item 1. Financial Statements
INDEX PAGE Balance Sheets at March 31, 1997 and December 31, 1996...................3 Statements of Operations for the Three Months Ended March 31, 1997 and 1996........................................................ ..........4 Statements of Cash Flows for the Three Months Ended March 31, 1997 and 1996........................................................ ..........5 Notes to Financial Statements.................................................. ...............6
CINEMA PLUS, L.P (A Delaware Limited Partnership) BALANCE SHEETS Unaudited (000's Omitted)
Unaudited March December 31, 31, 1 1 997 996 ASSETS Cash and Cash Equivalents $ $ 896 176 Short-Term Investments 2,227 2,275 Receivable from HBO (Note 2) 1,431 2,098 Assured Return of Film Investment Payment Receivable (Note 4) 21,798 21,540 Motion Picture Production Costs, net of accumulated amortization of $98,136 and $98,067, respectively 331 316 Total $ $ Assets 26,683 26,405 LIABILITIES AND PARTNERS' CAPITAL Liabilities: Accrued Expenses and Accounts $ $ Payable 163 216 Payable to General Partners 490 484 (Note 5) Payable to HBO (Notes 3 & 4) 4,828 4,805 Total $ $ Liabilities 5,481 5,505 Partners' Capital (Note 7): General Partners $ $ (164) (167) Limited Partners 21,366 21,067 Total $ $ Partners' Capital 21,202 20,900 Total Liabilities and Partners' $ $ Capital 26,683 26,405 See accompanying notes to the financial statements.
CINEMA PLUS, L.P. (A Delaware Limited Partnership) STATEMENTS OF OPERATIONS Unaudited (000's Omitted, except net profit (loss) per unit)
For the Three Months Ended March 31, 1997 1996 Net Revenue from Motion Pictures (Note 7) $ $ 263 162 Expenses: Motion Picture 69 144 Production Costs Professional and Other Fees 52 69 121 213 Profit (Loss) from Operations 142 (51) Assured Return of Film Investment Payment (Note 4) 258 (368) HBO Interest Recoupment (79) (77) (Note 4) Interest Expense (Notes (41) (43) 3 & 6) Interest Income 22 35 Net Profit (Loss) $ $ 302 (504) Net Profit (Loss) Attributable to General Partners $ $ 3 (5) Net Profit (Loss) Attributable to Limited Partners $ $ 299 (499) Net Profit (Loss) Per Unit of Limited Partnership Interest (43,286 units) $ $(11.5 6.91 3) See accompanying notes to the financial statements.
CINEMA PLUS, L.P. (A Delaware Limited Partnership) STATEMENTS OF CASH FLOWS Unaudited (000's Omitted)
For the Three Months Ended March 31, 1997 1996 Operating Activities: Net Profit (Loss) $ $ 302 (504) Adjustments to Reconcile Net Profit (Loss) to Net Cash Provided by Operating Activities: Decrease in Receivable from 667 982 HBO (Increase) Decrease in Assured Return of Film Investment Payment (258) 368 Receivable (Increase) Decrease in Motion Picture Production Costs (84) 43 Amortization of Motion Picture Production Costs 69 144 Decrease in Accrued Expenses and Accounts Payable (53) (4) Increase in Payable to 6 9 General Partners Decrease in Deferred Revenue 0 (177) Net Cash Provided by Operating Activities 649 861 Investing Activities: Purchase of Short-Term (1,936) (1,966) Investments Redemption of Short-Term Investments 1,984 1,920 Net Cash Provided (Used) by Investing Activities 48 (46) Financing Activities: Increase in Payable to HBO 23 25 Net Cash Provided by Financing Activities 23 25 Increase In Cash and Cash 720 840 Equivalents Cash and Cash Equivalents at beginning of year 176 192 Cash and Cash Equivalents at end $ $ of period 896 1,032 See accompanying notes to the financial statements.
CINEMA PLUS, L.P. (A Delaware Limited Partnership) NOTES TO FINANCIAL STATEMENTS Unaudited 1. Basis of Presentation The accompanying unaudited financial statements have been prepared in accordance with generally accepted accounting principles for interim financial reporting. They do not include all information and footnotes required by generally accepted accounting principles for complete financial statements. The information furnished includes all adjustments of a normal recurring nature which are, in the opinion of management, necessary to present fairly the Partnership's financial position as of March 31, 1997 and the results of its operations and changes in cash flows for the periods ended March 31, 1997 and 1996. Results of operations for the period ended March 31, 1997 are not necessarily indicative of the results that may be expected for the entire year. 2. Receivable from HBO The Receivable from HBO at March 31, 1997 and December 31, 1996 consists of the following amounts: 3/31/97 12/31/96 Network $1,352,000 $1,335,000 Foreign 3,000 11,000 Net Domestic Video 56,000 609,000 Syndication 20,000 0 Interest 0 143,000 $1,431,000 $2,098,000 (a) Network Receivable from HBO Pursuant to the HBO License Agreement, the Partnership has granted domestic network television distribution rights in the Films to HBO, and HBO has caused such rights to be licensed to Warner Bros. HBO and Warner Bros. receive in the aggregate a distribution fee of no more than 20% of the gross proceeds received from the exploitation of their network television distribution rights in each Film. The remaining revenues, less distribution expenses and guild residuals, are remitted to the Partnership. During the three month period ended March 31, 1997, the Partnership recognized net revenue of $17,000 with respect to "Ricochet." (b) Foreign Receivable from HBO As the HBO Commitment with respect to "Ricochet" has been fully repaid, any additional foreign receipts for this Film are being remitted to the Partnership net of any guild residuals, distribution fees and expenses. During the three month period ended March 31, 1997, the Partnership recognized foreign revenue (excluding UK non-standard television) of $3,000. During the three month period ended March 31, 1997, the Partnership received a cash payment of $11,000 (including interest) from the foreign distribution of the Film "Ricochet." (c) Net Domestic Video Receivable from HBO During the three month period ended March 31, 1997, the Partnership recognized revenues of $59,000 from net domestic home video distribution of all of its Films. During the three month period ended March 31, 1997, the Partnership received a cash payment of $612,000 from the net domestic video distribution of all of its Films. (d) Syndication Receivable from HBO Domestic syndication television rights in the Films are licensed by HBO (or a subdistributor designated by HBO) on behalf of the Partnership. HBO and its subdistributor, if any, receive distribution fees aggregating no more than 37.5% of the gross receipts from such license. Gross receipts less distribution fees and expenses and guild residuals are remitted to the Partnership. During the three month period ended March 31, 1997, the Partnership recognized net revenue from syndicated television of $20,000. (e) Interest Receivable During the three month period ended March 31, 1997, the Partnership received interest payments of $143,000 with respect to audits of the Film's domestic consumer video revenues. 3. Payable to HBO The payable to HBO at March 31, 1997 and December 31, 1996 (including accrued interest) consists of the following amounts:
3/31/97 12/31/96 HBO Commitment $ $ 305,000 357,000 Print and Advertising 193,000 197,000 Expenditures HBO Interest Recoupment (See Note 4) 4,330,000 4,251,000 Total $ $ 4,828,000 4,805,000
(a) HBO Commitment During the three month period ended March 31, 1997, an aggregate of $176,000 (including interest) of the HBO Commitments with respect to "Don't Tell Mom" and "Mom and Dad Save the World" was repaid from net Foreign Distribution Advances with respect to these Films. In addition, interest was accrued in the amount of $40,000 for the three months ended March 31, 1997. Furthermore, the Partnership's Payable to HBO has increased by $84,000 for "Mom and Dad Save the World." This increase of $84,000 is offset by a corresponding increase in the capitalized Motion Picture Production Costs of this Film. This adjustment was due to a change in the estimates of ultimate net foreign revenues as of March 31, 1997. It is currently anticipated that HBO will be unable to recoup the HBO Commitment in the amount of $2,520,000 (down from $2,604,000) with respect to "Mom and Dad Save the World." (b) Print and Advertising Expenditures During the three month period ended March 31, 1997, the Partnership recognized $4,000 from the domestic theatrical distribution of its Films, all of which has been applied to the payable of print and advertising expenditures incurred to date. 4. Assured Return of Film Investment Payment and the HBO Interest Recoupment Based on the anticipated performance of each of the four Films in release at March 31, 1997, it is expected that HBO will be required to make an Assured Return of Film Investment Payment ("ARFIP") with respect to each of these Films. Accordingly, $21,798,000 (amount present valued) was recorded by the Partnership as a receivable from HBO in the accompanying financial statements as of March 31, 1997. With respect to any Film for which an ARFIP is made, HBO will be thereafter entitled to receive from the Partnership any additional revenues received by the Partnership with respect to that Film until the entire amount of such ARFIP has been recouped by HBO. If HBO has not recouped the ARFIP for a Film by July 1999, the Partnership will be required to pay to HBO at that time an amount (the "HBO Interest Recoupment") equal to the lesser of: (a) the sum of the unrecouped ARFIP and the non-standard television residuals for such Film or (b) the Per Film Interest (as defined below). "Per Film Interest" represents the interest income earned on Partnership funds awaiting investment in Films divided by the four Partnership Films. Accordingly, an HBO Interest recoupment in the amount of $4,330,000 (amount present valued) has been recorded by the Partnership and included in the Payable to HBO in the accompanying financial statements as of March 31, 1997. 5. Payable to General Partners A portion of the Production and Overhead Fee is paid to the General Partners in accordance with a set schedule. Interest accrues on the balance at a rate equal to the interest rate earned by the Partnership on the short-term investment of its funds. Accordingly, as of March 31, 1997, $490,000 is recorded as a Payable to General Partners in the accompanying financial statements. 6. Supplemental Disclosure of Cash Flow Information The Partnership paid $57,000 and $11,000 of interest in the three months ended March 31, 1997 and 1996, respectively. 7. Current Operations The Partnership has financed four Films. All of these Films have completed their domestic theatrical and video releases and are being distributed in various ancillary media. No other films will be financed by the Partnership. During the three months ended March 31, 1997, the Partnership recognized net revenue in the amounts of $4,000, $180,000, $17,000, $59,000 and $20,000 with respect to the domestic theatrical, foreign, network television, net domestic video and domestic syndication markets, respectively, of its Films. During the three months ended March 31, 1997, the third party participation expense for "Don't Tell Mom" was increased by $17,000 thereby decreasing the Partnership's net revenue for the period. For the purpose of computing net income per unit, the income has been allocated 99% to the limited partners and 1% to the Administrative General Partner. As is required by its limited partnership agreement, the Partnership will dissolve at the expiration of its term on September 30, 1997, and the Partnership Assets shall thereupon be liquidated and distributed in accordance with such agreement. Provisions shall be made, as necessary, prior to such date for the establishment of a trust for the purpose, among others, of receiving and distributing the Assured Return of Film Investment Payments in accordance with the limited partnership agreement at the time, and to the limited partners to whom, they would otherwise become due. 8. Additional Information Additional information, including the audited 1996 Financial Statements and the Summary of Significant Accounting Policies, is included in the Partnership's Annual Report on Form 10-K for the year ended December 31, 1996 on file with the Securities and Exchange Commission. 9. Legal Proceedings On August 14, 1995 a lawsuit styled as a class action was filed by two holders of Cinema Plus limited partnership units in the United States District Court of the Western District of Pennsylvania against HBO Film Management, Inc. and Entertainment Finance Services, Inc., the general partners of Cinema Plus, Home Box Office, Inc., and Kidder, Peabody & Co., Incorporated and Smith Barney Inc., two of the underwriters of the original sale of limited partnership units of Cinema Plus. Cinema Plus has not been named as a defendant in the lawsuit. The lawsuit alleges various violations of law by the defendants in connection with the original sale of limited partnership units of Cinema Plus and the subsequent operation of Cinema Plus. The action was dismissed on March 4, 1996. On March 20, 1996 the plaintiffs filed a Notice of Appeal in the Third Circuit Court of Appeals. Oral argument before the Third Circuit Court of Appeals was heard on October 3, 1996. The defendants believe the lawsuit to be without merit and are vigorously defending it. Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations a. Financial Condition As of March 31, 1997, the Partnership held cash and cash equivalents of $896,000 and short-term investments of $2,227,000. The Partnership invested in the production of four Films. As of March 31, 1997, an aggregate of $98,467,000 (including the HBO Commitments) had been incurred toward the production and theatrical release of these Films. Prior to the receipt of the ARFIP receivable, no significant cash outlays are expected to be made by the Partnership other than its operating expenses and the satisfaction of the Partnership's payables to HBO (except for the HBO Interest Recoupment). Subsequent to the receipt of the ARFIP in 1998 and 1999, additional cash outlays are expected to be made to HBO for payment of the HBO Interest Recoupment, as well as to pay the Partnership's operating expenses and to make distributions to partners. As is required by its limited partnership agreement, the Partnership will dissolve at the expiration of its term on September 30, 1997, and the Partnership Assets shall thereupon be liquidated and distributed in accordance with such agreement. Provisions shall be made, as necessary, prior to such date for the establishment of a trust for the purpose, among others, of receiving and distributing the Assured Return of Film Investment Payments in accordance with the limited partnership agreement at the time, and to the limited partners to whom, they would otherwise become due. As of March 31, 1997, the Partnership's net payable to HBO totaled $4,828,000. Of this amount, $4,330,000 relates to the HBO Interest Recoupment which is not payable until one month after the last ARFIP proceeds are received from HBO. Based on current estimates of ultimate net revenues, it is anticipated that the remainder of the payable to HBO at March 31, 1997 will be substantially repaid to HBO within the next two years. Since the Partnership is not anticipating significant future revenues (other than those used to repay HBO) until the Assured Return of Film Investment Payments are received from HBO in 1998 and 1999, the Partnership's future operating expenses are expected to be met from current cash and short-term investments. Management believes that the cash and short-term investments held at March 31, 1997 are sufficient to meet its liquidity needs without the need to obtain external financing from a third party or its General Partners. Cash distributions will be made only as significant cash becomes available from the exploitation of the Films in excess of the payables due to HBO or as the Assured Return of Film Investment Payments are received from HBO. b. Results of Operations For the three month period ended March 31, 1997, the Partnership recorded net revenue of $263,000 due primarily to the performance of its Films in the foreign markets and domestic consumer video markets. For the three months ended March 31, 1997, the Partnership recorded an increase in the Assured Return of Film Investment Payment of $258,000 primarily due to a decrease in the discount period. The Partnership recorded HBO Interest Recoupment expense of $79,000 due primarily to the decrease in the discount period. For the three month period ended March 31, 1996, the Partnership recorded net revenue of $162,000 due primarily to the performance of its Films in the foreign markets offset by amortization of related Motion Picture Production Costs of $144,000. For the three months ended March 31, 1996, the Partnership recorded a decrease in the Assured Return of Film Investment Payment of $368,000 due primarily to an increase in the ultimate net revenue projections with respect to "Ricochet" offset, in part, by the decrease in the discount period. The Partnership recorded HBO Interest Recoupment expense of $77,000 due primarily to the decrease in the discount period. PART II-OTHER INFORMATION Item 1. Legal Proceedings On August 14, 1995 a lawsuit styled as a class action was filed by two holders of Cinema Plus limited partnership units in the United States District Court of the Western District of Pennsylvania against HBO Film Management, Inc. and Entertainment Finance Services, Inc., the general partners of Cinema Plus, Home Box Office, Inc., and Kidder, Peabody & Co., Incorporated and Smith Barney Inc., two of the underwriters of the original sale of limited partnership units of Cinema Plus. Cinema Plus has not been named as a defendant in the lawsuit. The lawsuit alleges various violations of law by the defendants in connection with the original sale of limited partnership units of Cinema Plus and the subsequent operation of Cinema Plus. The action was dismissed on March 4, 1996. On March 20, 1996 the plaintiffs filed a Notice of Appeal in the Third Circuit Court of Appeals. Oral argument before the Third Circuit Court of Appeals was heard on October 3, 1996. The defendants believe the lawsuit to be without merit and are vigorously defending it. Item 2. Changes in Securities None Item 3.Defaults Upon Senior Securities None Item 4.Submission of Matters to a Vote of Security Holders None Item 5. Other Information None Item 6.Exhibits and Reports on Form 8-K A). Exhibits
EXHIBIT NUMBERDESCRIPTIONPAGE NUMBER 27 Financial Data Schedule
B). The Partnership did not file any reports on Form 8- K during the quarter ended March 31, 1997. SIGNATURES Pursuant to the requirements of the Securities and Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. CINEMA PLUS, L.P. a Delaware Limited Partnership By: Entertainment Finance Services, Inc., as Administrative General Partner May 14, 1997 By: /s/ Bradley J. Wechsler Date Bradley J. Wechsler President EX-27 2 ART. 5 FDS FOR THE 1997 FIRST QUARTER 10-Q
5 This schedule contains summary financial information extracted from Balance Sheets and Statements of Operations for the first quarter ended March 31, 1997 Form 10Q of Cinema Plus, L.P. and is qualified in its entirety by reference to such financial statements. 3-MOS DEC-31-1997 MAR-31-1997 896,000 2,227,000 23,229,000 0 331,000 0 0 0 26,683,000 0 0 0 0 0 21,202,000 26,683,000 0 543,000 0 121,000 79,000 0 41,000 302,000 0 0 0 0 0 302,000 6.91 0
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