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 September 30, 1995
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____
<PAGE>
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
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INDEX
PAGE
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Balance Sheets at September 30, 1995 and December 31,
1994............3
Statements of Operations for the Three and Nine Months Ended
September 30, 1995 and
1994........................................................
...4
Statements of Cash Flows for the Nine Months Ended
September 30, 1995 and
1994........................................................
...5
Notes to Financial
Statements..................................................
...............6
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<PAGE>
CINEMA PLUS, L.P
(A Delaware Limited Partnership)
BALANCE SHEETS
Unaudited
(000's Omitted)
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<CAPTION>
Unaudited
September December
30, 31,
1 1
995 994
<S> <C> <C>
ASSETS
Cash and Cash Equivalents $ $
87 359
Short-Term Investments 2,333 2,746
Receivable from HBO (Note 2) 418 1,380
Assured Return of Film
Investment Payment
Receivable (Note 4) 21,852 20,684
Motion Picture Production
Costs, net of
accumulated amortization of
$97,226 and
$96,814, respectively
1,034 1,609
Total $ $
Assets 25,724 26,778
LIABILITIES AND PARTNERS'
CAPITAL
Liabilities:
Accrued Expenses and Accounts $ $
Payable 84 207
Payable to General Partners 708 929
(Note 5)
Deferred Revenue 83 60
Payable to HBO (Notes 3 & 4)
4,919 6,000
Total $ $
Liabilities 5,794 7,196
Partners' Capital (Note 7):
General Partners $ $
(176) (180)
Limited Partners
20,106 19,762
Total $ $
Partners' Capital 19,930 19,582
Total
Liabilities and Partners'
$ $
Capital 25,724 26,778
See accompanying notes to the financial statements.
</TABLE>
<PAGE>
CINEMA PLUS, L.P.
(A Delaware Limited Partnership)
STATEMENTS OF OPERATIONS
(000's Omitted, except net income per unit)
Unaudited
<TABLE>
<CAPTION>
For
the Three Months For the Nine Months
Ended September 30, Ended September 30,
1995
1994 1995 1994
<S> <C> <C> <C> <C>
Net Revenue from Motion
Pictures
(Note 7) $ $ $ $
218 1,072 655 2,285
Expenses:
Motion Picture 122 852 412 1,796
Production Costs
Professional and
Other Fees 86 85 262 273
208 937 674 2,069
Income (Loss) from
Operations 10 135 (19) 216
Assured Return of Film
Investment
Payment (Note 4) 324 205 1,168 1,060
HBO Interest Recoupment (39) (138) (247) (182)
(Note 4)
Interest Expense (Notes (56) (79) (202) (232)
3 & 6)
Interest Income
28 20 85 54
Net Income $ $ $ $
267 143 785 916
Net Income Attributable
to General
Partners $ $ $ $
3 1 8 9
Net Income Attributable
to Limited
Partners $ $ $ $
264 142 777 907
Net Income Per Unit of
Limited
Partnership Interest $ $ $ $
(43,286 units) 6.10 3.27 17.95 20.96
See accompanying notes to the financial statements.
</TABLE>
<PAGE>
CINEMA PLUS, L.P.
(A Delaware Limited Partnership)
STATEMENTS OF CASH FLOWS
Unaudited
(000's Omitted)
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For the Nine Months Ended September 30,
1995 1994
<S>
<C> <C>
Operating Activities:
Net Income $ $
785 916
Adjustments to Reconcile Net
Income to Net
Cash Provided by Operating
Activities:
Decrease in Receivable from 962 76
HBO
Increase in Assured Return of
Film Investment
Payment Receivable (1,168) (1,060)
Decrease in Motion Picture 163 199
Production Costs
Amortization of Motion
Picture Production
Costs 412 1,796
Decrease in Accrued Expenses
and Accounts
Payable (123) (129)
Decrease in Payable to (221) (227)
General Partners
Increase (Decrease) in
Deferred Revenue 23 (804)
Net Cash Provided by
Operating Activities 833 767
Investing Activities:
Purchase of Short-Term (5,245) (4,636)
Investments
Redemption of Short-Term
Investments 5,658 4,601
Net Cash Provided (Used)
by Investing
Activities
413 (35)
Financing Activities:
Decrease in Payable to HBO
(1,081) (1,106)
Distributions Paid to Partners
(437) --
Net Cash Used by
Financing Activities (1,518) (1,106)
Decrease In Cash and Cash (272) (374)
Equivalents
Cash and Cash Equivalents at
beginning of year 359 403
Cash and Cash Equivalents at end $ $
of period 87 29
See accompanying notes to the financial statements.
</TABLE>
<PAGE>
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 September 30, 1995
and the results of its operations and changes in cash flows
for the periods ended September 30, 1995 and 1994. Results
of operations for the period ended September 30, 1995 are
not necessarily indicative of the results that may be
expected for the entire year.
2. Receivable from HBO
(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 nine month period ended September 30, 1995, the
Partnership received $848,000 with respect to "Ricochet."
As of September 30, 1995, $403,000 is recorded as a network
receivable from HBO with respect to the Film "Ricochet."
(b) 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 nine
month period ended September 30, 1995, the Partnership
received $l49,000 with respect to "Switch." During the nine
month period ended September 30, 1995, the Partnership
recognized net revenue from syndicated television of
$27,000. As of September 30, 1995, $7,000 is recorded as a
syndication receivable from HBO.
(c) Foreign Receivable from HBO
As the HBO Commitment with respect to "Richochet" has
been fully repaid, any future foreign receipts for this Film
shall be remitted to the Partnership net of any guild
residuals, distribution fees and expenses. As of September
30, 1995, $8,000 is recorded as a foreign receivable from
HBO.
3. Payable to HBO
The payable to HBO at September 30, 1995 and December
31, 1994 (including accrued interest) consists of the
following amounts:
9/30/95 12/31/94
HBO Commitment $ $
638,000 1,276,000
Shortfall Production Advance 0 728,000
Print and Advertising 238,000 236,000
Expenditures
HBO Interest Recoupment (See 3,997,000 3,750,000
Note 4)
Net Domestic Video
46,000 10,000
Total $ $
4,919,000 6,000,000
(a) HBO Commitment
During the nine month period ended September 30, 1995,
an aggregate of $662,000 (including interest) of the HBO
Commitments with respect to "Don't Tell Mom," "Mom and Dad
Save the World" and "Ricochet" was repaid from net Foreign
Distribution Advances with respect to these Films. The HBO
Commitment with respect to "Ricochet" has been fully repaid
as of September 30, 1995. In addition, interest was accrued
in the amount of $182,000 for the nine months ended
September 30, 1995. Based upon current revised estimates of
ultimate net foreign revenues, the Partnership's Payable to
HBO has been (reduced) by an additional ($174,000) for "Mom
and Dad Save the World" and increased by an additional
$16,000 for "Don't Tell Mom" during the nine months ended
September 30, 1995, with a corresponding (reduction)
increase to the capitalized Motion Picture Production Costs
of these Films.
(b) Shortfall Production Advance
During the nine month period ended September 30, 1995,
the Partnership repaid $753,000 (including interest) of the
Shortfall Production Advance to HBO from the net
domestic video and network revenue received with respect to
the Film "Ricochet." As of September 30, 1995 HBO has fully
recouped this loan.
(c) Print and Advertising Expenditures
During the nine month period ended September 30, 1995,
the Partnership recognized $9,000 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. In addition, during the nine months ended
September 30, 1995, the Partnership increased its payable
for print and advertising expenses incurred for the Film
"Mom & Dad Save the World" in the amount of $11,000
(including interest) to HBO primarily due to net domestic
video returns with respect to that Film.
(d) Net Domestic Video
During the nine month period ended September 30, 1995,
the Partnership received $40,000 from the net domestic video
distribution of all of its Films and recognized net expenses
of $16,000 from the net domestic video distribution of all
of its Films. In addition, during the nine months ended
September 30, 1995, the Partnership reduced its payable to
HBO by $20,000 due to net domestic video returns.
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 September 30, 1995, 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, $21,852,000 (amount present valued) was
recorded by the Partnership as a receivable from HBO in the
accompanying financial statements as of September 30, 1995.
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 this 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
$3,997,000 (amount present valued) has been recorded by the
Partnership and included in the Payable to HBO in the
accompanying financial statements as of September 30, 1995.
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 September 30,
1995, $708,000 is recorded as a Payable to General Partners
in the accompanying financial statements.
6. Supplemental Disclosure of Cash Flow Information
The Partnership paid $323,000 and $266,000 of interest
in the nine months ended September 30, 1995 and 1994,
respectively.
7. Current Operations
The Partnership has financed four Films. All of these
Films have completed their domestic theatrical and initial
video releases and are being distributed in various
ancillary media. No other films will be financed by the
Partnership.
During the nine months ended September 30, 1995, the
Partnership recognized net revenue (expense) in the amounts
of $9,000, $648,000, $27,000 and ($16,000) with respect to
the domestic theatrical, foreign, syndication and net
domestic video markets,
respectively, of its Films. During the nine months ended
September 30, 1995, the third party participation expense
for "Don't Tell Mom" was increased by $13,000 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.
8. Additional Information
Additional information, including the audited 1994
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, 1994 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 defendants believe the
lawsuit to be without merit and are vigorously defending it.
<PAGE>
Item 2. Management's Discussion and Analysis of Financial
Condition and Results
of Operations
a. Financial Condition
As of September 30, 1995, the Partnership held cash and
cash equivalents of $87,000 and short-term investments of
$2,333,000.
The Partnership invested in the production of four Films.
As of September 30, 1995, an aggregate of $98,260,000
(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 of September 30, 1995, the Partnership's net payable
to HBO totaled $4,919,000. Of this amount, $3,997,000
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 September 30, 1995 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 September 30, 1995
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
signficant 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 September 30, 1995, the
Partnership recorded net revenue of $218,000 due primarily
to the performance of its Films in the foreign markets
offset by related Motion Picture Production Costs of
$122,000. For the three months ended September 30, 1995,
the Partnership recorded an increase in the Assured Return
of Film Investment Payment of $324,000 primarily due to the
decrease in the discount period. The Partnership recorded
HBO Interest Recoupment expense of $39,000 due primarily to
the decrease in the discount period.
For the three month period ended September 30, 1994, the
Partnership recorded net revenue of $1,072,000 due primarily
to the performance of its Films in the foreign markets.
These revenues were offset by related Motion Picture
Production Costs of $852,000. In addition, the Partnership
recorded an increase in the Assured Return of Film
Investment Payment of $205,000 due primarily to the decrease
in the discount period, offset, in part, by an increase in
ultimate net expense projections with respect to "Ricochet."
The Partnership recorded HBO Interest Recoupment expense of
$138,000 due to the decrease in the discount period and to a
decrease in ultimate net expense projections with respect to
"Don't Tell Mom."
For the nine month period ended September 30, 1995, the
Partnership recorded net revenue of $655,000 due primarily
to the performance of its Films in the foreign markets
offset by related Motion Picture Production Costs of
$412,000. For the nine months ended September 30, 1995, the
Partnership recorded an increase in the Assured Return of
Film Investment Payment of $1,168,000 primarily due to the
decrease in the discount period. The Partnership recorded
HBO Interest Recoupment expense of $247,000 due primarily to
the decrease in the discount period.
For the nine month period ended September 30, 1994, the
Partnership recorded net revenue of $2,285,000 due primarily
to the performance of its Films in the foreign markets.
These revenues were offset by related Motion Picture
Production Costs of $1,796,000. In addition, the Partnership
recorded an increase in the Assured Return of Film
Investment Payment of $1,060,000 and recorded HBO Interest
Recoupment expense of $182,000, both due primarily to the
decrease in the discount period.
<PAGE>
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 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
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EXHIBIT
NUMBERDESCRIPTIONPAGE NUMBER
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<C>
27 Financial Data Schedule
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B). The Partnership did not file any reports on Form 8-
K during the quarter ended
September 30, 1995.
<PAGE>
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
November 10, 1995 By: /s/ Bradley J. Wechsler
Date Bradley J. Wechsler
President
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<ARTICLE> 5
<LEGEND> This schedule contains summary financial
information extracted from Balance Sheets and Statements of
Operations for the third quarter ended September 30, 1995
Form 10Q of Cinema Plus, L.P. and is qualified in its
entirety by reference to such financial statements.
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> SEP-30-1995
<CASH> 87,000
<SECURITIES> 2,333,000
<RECEIVABLES> 22,270,000
<ALLOWANCES> 0
<INVENTORY> 1,034,000
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 25,724,000
<CURRENT-LIABILITIES> 0
<BONDS> 0
<COMMON> 0
0
0
<OTHER-SE> 19,930,000
<TOTAL-LIABILITY-AND-EQUITY> 25,724,000
<SALES> 0
<TOTAL-REVENUES> 1,908,000
<CGS> 0
<TOTAL-COSTS> 674,000
<OTHER-EXPENSES> 247,000
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 202,000
<INCOME-PRETAX> 785,000
<INCOME-TAX> 0
<INCOME-CONTINUING> 785,000
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 785,000
<EPS-PRIMARY> 17.95
<EPS-DILUTED> 0
</TABLE>
