Cineplex Inc.

Cineplex Inc. Interim Condensed Consolidated Balance Sheets (Unaudited)

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(expressed in thousands of Canadian dollars)

Assets Current assets Cash and cash equivalents Trade and other receivables Income taxes receivable Inventories Prepaid expenses and other current assets Non-current assets Property, equipment and leaseholds (note 3) Right-of-use assets (note 3 and 4) Interests in joint ventures and associates Intangible assets Goodwill (note 3)	June 30, 2021 $ 29,202 44,517 10,809 21,609 13,514	December 31, 2020 $ 16,254 51,834 66,551 21,712 11,613
	119,651 500,311 812,707 3,852 84,364 635,352	167,964 555,340 881,418 8,644 84,922 635,582
	$ 2,156,237	$ 2,333,870

COVID-19 business impacts, risks and liquidity ( note 2)

The accompanying notes are an integral part of these interim condensed consolidated financial statements.

CINEPLEX INC. 2021 SECOND QUARTER REPORTS - CONSOLIDATED BALANCE SHEETS

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Interim Condensed Consolidated Balance Sheets... continued (Unaudited)

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(expressed in thousands of Canadian dollars)

Liabilities Current liabilities Accounts payable and accrued liabilities Share-based compensation (note 6) Income taxes payable Deferred revenue (note 8) Lease obligations (note 9) Fair value of interest rate swap agreements Non-current liabilities Share-based compensation (note 6) Long-term debt (note 7) Fair value of interest rate swap agreements Lease obligations (note 9) Post-employment benefit obligations Other liabilities Total liabilities Shareholders’ (deficit) equity Share capital (note 10) Deficit Hedging reserves and other Contributed surplus Cumulative translation adjustment Total shareholders’ (deficit) equity Approved by the Board of Directors “Phyllis Yaffe” Director	June 30, 2021 $ 91,071 824 1,946 224,932 110,775 9,151	December 31, 2020 $ 82,992 482 802 219,983 97,259 7,202
	438,699	408,720
	4,907 755,996 12,383 1,033,396 10,637 68,527	2,670 725,271 19,157 1,073,666 11,503 68,649
	1,885,846	1,900,916
	2,324,545	2,309,636
	852,448 (1,096,786) (131) 77,571 (1,410)	852,379 (903,394) (131) 75,882 (502)
	(168,308)	24,234
	$ 2,156,237	$ 2,333,870

The accompanying notes are an integral part of these interim condensed consolidated financial statements.

CINEPLEX INC. 2021 SECOND QUARTER REPORTS - CONSOLIDATED BALANCE SHEETS

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Interim Condensed Consolidated Statements of Operations (Unaudited)

Cineplex Inc.

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(expressed in thousands of Canadian dollars, except per share amounts)

Three months ended June 30,	Three months ended June 30,	Six months ended June 30,	Six months ended June 30,
2021 $ 12,498 13,258 9,401 22,184 7,585	2020 $ 27 3,256 7,880 3,731 7,094	2021 $ 16,316 19,783 18,475 36,058 15,706	2020 $ 111,029 82,621 40,037 51,068 20,034
64,926	21,988	106,338	304,789
5,611 2,867 25,737 27,735 179 73,352 1,052 14,741 17,899 (108) 365 (800) —	10 789 34,185 31,759 478 62,175 3,192 11,353 9,719 (57) 1,059 — —	6,846 4,279 52,055 57,244 (29,881) 142,057 3,466 29,100 31,564 (134) 595 (800) —	56,510 22,998 69,718 65,721 1,295 219,723 3,927 23,031 26,605 (129) (868) — 173,054
168,630	154,662	296,391	661,585
(103,704)	(132,674)	(190,053)	(356,796)
— —	(7,632) (26,808)	3,339 —	(7,865) (76,542)
—	(34,440)	3,339	(84,407)
$(103,704)	$ (98,234)	$(193,392)	$(272,389)
—	(693)	—	(4,952)
$(103,704)	$ (98,927)	$(193,392)	$(277,341)
(103,704) —	(98,230) (4)	$ (193,392) —	$ (272,384) (5)
$(103,704)	$ (98,234)	$(193,392)	$(272,389)
$ (103,704) —	$ (98,923) (4)	$ (193,392) —	$ (277,336) (5)
$(103,704)	$ (98,927)	$(193,392)	$(277,341)
	$ (1.55) (0.01)	$ (3.05) —	$ (4.30) (0.08)
$ (1.64)	$ (1.56)	$ (3.05)	$ (4.38)

The accompanying notes are an integral part of these interim condensed consolidated financial statements.

CINEPLEX INC. 2021 SECOND QUARTER REPORTS - CONSOLIDATED STATEMENTS OF OPERATIONS

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Interim Condensed Consolidated Statements of Comprehensive Loss (Unaudited)

Cineplex Inc.

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(expressed in thousands of Canadian dollars)

Three months ended June 30,	Three months ended June 30,	Six months ended June 30,	Six months ended June 30,
2021 $(103,704)	2020 $ (98,234)	2021 $(193,392)	2020 $(272,389)
(480) —	(2,259) (160)	(908) —	3,385 (160)
(480)	(2,419)	(908)	3,225
(104,184) — —	(100,653) (693) 545	(194,300) — —	(269,164) (4,952) 7
$(104,184)	$(100,801)	$(194,300)	$(274,109)
$ (104,184) —	$ (100,649) (4)	$ (194,300) —	$ (269,159) (5)
$(104,184)	$(100,653)	$(194,300)	$(269,164)
$ (104,184) —	$ (100,797) (4)	$ (194,300) —	$ (274,104) (5)
$(104,184)	$(100,801)	$(194,300)	$(274,109)

The accompanying notes are an integral part of these interim condensed consolidated financial statements. CINEPLEX INC. 2021 SECOND QUARTER REPORTS - CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

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Interim Condensed Consolidated Statements of Changes in Equity (Unaudited)

Cineplex Inc.

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(expressed in thousands of Canadian dollars)

January 1, 2021 Net loss Other comprehensive loss (page 4) Total comprehensive loss Share option expense PSU/RSU expense Settlement for cancelled options Issuance of shares on exercise of options June 30, 2021 January 1, 2020 Net loss Other comprehensive income (page 4) Total comprehensive loss Dividends declared Share option expense Conversion to equity- settled option plan June 30, 2020	Share capital Contributed surplus Hedging reserves and other Cumulative translation adjustment Deficit Non- controlling interests Total $ 852,379 $ 75,882 $ (131) $ (502) $ (903,394) $ — $ 24,234 — — — — (193,392) — (193,392) — — — (908) — — (908)
	— — — (908) (193,392) — (194,300) — 844 — — — — 844 — 974 — — — — 974 — (60) — — — — (60) 69 (69) — — — — —
	$ 852,448 $ 77,571 $ (131)$ (1,410)$(1,096,786)$ — $ (168,308)
	$ 852,379 $ 4,052 $ (131) $ (887) $ (264,310) $ (109) $ 590,994 — — — — (277,336) (5) (277,341) — — — 3,392 (160) — 3,232
	— — — 3,392 (277,496) (5) (274,109) — — — — (9,500) — (9,500) — 160 — — — — 160 — 3,944 — — — — 3,944
	$ 852,379 $ 8,156 $ (131)$ 2,505 $ (551,306)$ (114)$ 311,489

The accompanying notes are an integral part of these interim condensed consolidated financial statements.

CINEPLEX INC. 2021 SECOND QUARTER REPORTS - CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

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Interim Condensed Consolidated Statements of Cash Flows (Unaudited)

Cineplex Inc.

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(expressed in thousands of Canadian dollars)

Three months ended June 30,	Three months ended June 30,	Six months ended June 30,
2021 $ (103,704) 27,735 25,737 245 (1,849) 4,021 177 179 — 1,194 (800) — 1,576 62,622	2020 (note 16) $ (98,234) 31,759 34,185 739 1,909 — 328 478 (26,808) 160 — — 4,178 69,401	2021 2020 (note 16) $ (193,392) $ (272,389) 57,244 65,721 52,055 69,718 456 (690) (5,377) 11,295 7,759 — 624 677 (29,881) 1,295 — (76,542) 1,818 4,104 (800) — — 173,054 4,792 6,069 86,203 58,973 (18,499) 41,285 59,916 50 (13,741) (51,944) (5,078) (5,481) 5,665 18,299 — 3,910 46,762 (35,166) — (19,000) (221,000) 39,000 (38,543) (34,812) 243,996 — (321) (800) (15,868) (15,612) 553 (390) 12,948 (9,883) — (2,391) 16,254 26,080 $ 29,202 $ 13,806 $ 26,772 $ 11,521 $ 21,512 $ 11,443 $ (53,515) $ (11,515)
17,133	18,095
3,252 (5,026) (1,992) 2,005 —	50 (14,441) (1,760) 6,422 782
(1,761)	(8,947)
— 13,000 (19,086) — —	— (1,000) (993) — (800)
(6,086)	(2,793)
413 9,699 — 19,503	560 6,915 (253) 7,144
$ 29,202	$ 13,806
$ 14,167 $ 5,918 $ (49,028)	$ 166 $ 5,964 $ (12,997)

The accompanying notes are an integral part of these condensed consolidated financial statements. CINEPLEX INC. 2021 SECOND QUARTER REPORTS- CONSOLIDATED STATEMENTS OF CASH FLOWS

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Notes to Interim Condensed Consolidated Financial Statements For the three and six months ended June 30, 2021 and 2020 (Unaudited)

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Cineplex Inc.

(expressed in thousands of Canadian dollars, except per share amounts)

1. General information

Cineplex Inc. (“Cineplex”) an Ontario, Canada corporation, is one of Canada’s largest entertainment organizations, with theatres and location-based entertainment venues in ten provinces. Cineplex also operates businesses in digital commerce, cinema media, digital place-based media and amusement solutions through its wholly owned subsidiaries, Cineplex Entertainment Limited Partnership (the “Partnership”), Famous Players Limited Partnership (“Famous Players”), Galaxy Entertainment Inc. (“GEI”), Cineplex Digital Media Inc. (“CDM”), and Player One Amusement Group Inc. (“P1AG”). Cineplex is headquartered at 1303 Yonge Street, Toronto, Ontario, M4T 2Y9.

On December 15, 2019, Cineplex entered into an arrangement agreement (the “Arrangement Agreement”) with Cineworld Group, plc (“Cineworld”), pursuant to which an indirect wholly-owned subsidiary of Cineworld agreed to acquire all of the issued and outstanding common shares of Cineplex (“Shares”) for $34.00 per share in cash (the “Cineworld Transaction”). The Cineworld Transaction was to be implemented by way of a statutory plan of arrangement under the Business Corporation Act (Ontario).

On June 12, 2020, Cineworld delivered a notice (the “Termination Notice”) to Cineplex purporting to terminate the Arrangement Agreement. In the Termination Notice, Cineworld alleged that Cineplex took certain actions that constituted breaches of Cineplex’s covenants under the Arrangement Agreement including failing to operate its business in the ordinary course. In addition, Cineworld alleged that a material adverse effect had occurred with respect to Cineplex. Cineworld’s repudiation of the Arrangement Agreement has been acknowledged by Cineplex and the Cineworld Transaction will not proceed. Cineplex vigorously denies Cineworld’s allegations. The Arrangement Agreement explicitly excludes any “outbreaks of illness or other acts of God” from the definition of material adverse effect and all of Cineworld’s allegations stem from an outbreak of illness and act of God (COVID-19). Cineplex believes that Cineworld had no legal basis to terminate the Arrangement Agreement and that Cineworld breached the Arrangement Agreement and its other contractual obligations because, among other failures, it did not use reasonable best efforts to obtain approval under the Investment Canada Act as soon as reasonably practicable (“ICA Approval”). If Cineworld had complied with its obligation to obtain ICA Approval, Cineplex believes the ICA Approval would have been obtained and the Cineworld Transaction would have closed well before the outside date for completion in the Arrangement Agreement. No amounts are due to be paid by Cineplex as a result of the Termination Notice and no amounts have been accrued in the financial statements with respect to the Termination Notice.

On July 3, 2020, Cineplex announced that it had commenced an action in the Ontario Superior Court of Justice against Cineworld and 1232743 B.C. Ltd. seeking damages arising from what Cineplex claims was a wrongful repudiation of the Arrangement Agreement. The claim seeks damages, including the approximately $2,180,000 that Cineworld would have paid upon the closing of the Cineworld Transaction for Cineplex’s securities, reduced by the value of the Cineplex securities retained by its security holders, as well as compensation for other losses including the failure of Cineworld to repay or refinance Cineplex’s approximately $664,000 in debt and transaction expenses. Cineplex has also advanced alternative claims for damages for the loss of benefits to its security holders, and to require Cineworld to disgorge the benefits it improperly received by wrongfully repudiating the Cineworld Transaction.

Cineplex claims that Cineworld breached its contractual obligations and its duty of good faith and honesty in contractual performance. Cineworld purports to rely upon alleged adverse impacts of COVID-19 on Cineplex’s business to terminate the Arrangement Agreement, which it is not entitled to do. The contractual agreements between the parties expressly exclude outbreaks of illness, such as the COVID-19 pandemic, as a circumstance entitling Cineworld to terminate the Arrangement Agreement.

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Notes to Interim Condensed Consolidated Financial Statements For the three and six months ended June 30, 2021 and 2020 (Unaudited)

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Cineplex Inc.

(expressed in thousands of Canadian dollars, except per share amounts)

On July 6, 2020, Cineworld announced that it would defend Cineplex’s claim, and on September 2, 2020, filed its Statement of Defence and Counterclaim in which it denied Cineplex’s claims and advanced a counterclaim seeking reimbursement of an unspecified amount for costs incurred with respect to the transaction and an unspecified amount for punitive damages. Cineplex responded to Cineworld’s defence and counterclaim on September 15, 2020, denying all claims levied by Cineworld.

While a trial date has been set for September 2021, due to uncertainties inherent in litigation, it is not possible for Cineplex to predict the timing or final outcome of the legal proceedings against Cineworld or to determine the amount of damages, if any, that may be awarded. Further, even if Cineplex’s action against Cineworld is successful, Cineworld may not have the ability to pay the full amount of any damages awarded.

The Board of Directors approved these consolidated financial statements on August 11, 2021.

2. COVID-19 business impacts, risks and liquidity

In early 2020, the outbreak of COVID-19 was confirmed in multiple countries throughout the world and on March 11, 2020, it was declared a global pandemic by the World Health Organization (“WHO”). In response, Cineplex immediately introduced enhanced cleaning protocols and reduced theatre capacities to promote social distancing. By mid-March 2020, each of Canada’s provinces and territories had declared a state of emergency resulting in, among other things, the mandated closure of non-essential businesses, restrictions on public gatherings and quarantining of people who may have been exposed to the virus.

On March 16, 2020, Cineplex announced the temporary closure of all of its theatres and LBE venues across Canada, as well as substantially all route locations operated by P1AG. In response to the ongoing government directives and guidance from Canadian public health authorities, the majority of Cineplex’s theatre circuit and LBE venues across Canada were closed or operating under stringent restrictions for the duration of 2020, continuing into 2021. The full reopening of such locations is being reassessed on an ongoing basis as further guidance as provided by Canadian public health authorities and applicable government authorities. Cineplex has gradually reopened its theatres and LBE venues in permitted markets and will continue to adjust operating capacity in accordance with government directives.

To mitigate the negative impact of COVID-19 and support its long-term stability, Cineplex has undertaken a variety of measures including:

Liquidity measures:

June 2020: entered into the First Credit Agreement Amendment with The Bank of Nova Scotia as administrative agent to Cineplex’s seventh amended and restated credit agreement (Credit Facilities) providing certain financial covenant relief in light of the COVID-19 pandemic and its impact on Cineplex’s business (note 7, Long-term debt);
July 2020: issued convertible unsecured subordinated debentures for net proceeds of $303,000, (note 7, Long-term debt);
November 2020: entered into the Second Credit Agreement Amendment providing further financial covenant relief (note 7, Long-term debt);
December 2020: entered into an agreement to enhance and expand the SCENE Scotiabank loyalty program receiving $60,000 with respect to the reorganization;
January 2021: completed the sale and leaseback of Cineplex’s head office buildings located at 1303 Yonge Street and 1257 Yonge Street, Toronto, Ontario for gross proceeds of $57,000, (note 7, Long-term debt);
January 2021: filed tax returns for the 2020 taxation year claiming a $62,624 recovery of income taxes paid in prior periods ($53,554 had been received by June 30, 2021);

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Cineplex Inc.

Notes to Interim Condensed Consolidated Financial Statements For the three and six months ended June 30, 2021 and 2020 (Unaudited)

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(expressed in thousands of Canadian dollars, except per share amounts)

February 2021: entered into the Third Credit Agreement Amendment providing further financial covenant relief (note 7, Long-term debt); and
February 2021: issued 7.50% senior secured second lien notes due February 26, 2026 (the “Notes Payable”) for net proceeds of $243,266, (note 7, Long-term debt).

Cost reduction and subsidy measures undertaken upon the declaration of the pandemic and on an ongoing basis:

temporary layoffs of all part-time and full-time hourly employees as well as a number of full-time employees who chose a temporary layoff rather than a salary reduction during the second quarter of 2020;
reduced full-time employee salaries by agreement with such employees during the second and third quarters of 2020;
suspended or deferred current capital spending, reviewing all capital projects to consider either deferral or cancellation;
reduced non-essential discretionary operational expenditures (such as spending on marketing, travel and entertainment);
implemented a more stringent review and approval process for all outgoing procurement and payment requests;
continued negotiations with landlords for cash payments in exchange for the sale of contractual rights or negotiating rent relief, including abatements;
worked with major suppliers and other business partners to modify the timing and quantum of certain contractual payments;
reviewed and applied for government subsidy programs where available, including municipal and provincial property tax and energy rebates or subsidies;
applied for the ongoing Canada Emergency Wage Subsidy (“CEWS”), which was launched by the Government of Canada, providing a variable subsidy for employee wages incurred from March 2020 to October 23, 2021;
applied for the ongoing Canada Emergency Rent Subsidy (“CERS”), which was launched by the Government of Canada as a result of government mandated lockdowns, providing a variable subsidy for rent and other occupancy-related costs incurred from September 27, 2020 through October 23, 2021;
continued evaluation of Cineplex’s eligibility under other relief programs; and
continued the suspension of dividends.

In addition to cost savings associated with the temporary layoffs of its employees, reductions in salaries and other mitigation efforts, Cineplex has suspended or deferred certain capital spending and plans to reduce purchases of property, plant and equipment. Cineplex continues to focus on revenue driving opportunities including the expansion of Cineplex Store offerings and food home delivery from theatres and LBE venues.

Since the closure of its theatres and LBE venues in March 2020, Cineplex diligently prepared for their safe reopening, carefully re-examining all of its buildings and processes and implementing an industry-leading program with end-to-end health and safety protocols.

In June 2021, Cineplex introduced its VenueSafe program, which encompasses all of Cineplex’s health and safety protocols, in accordance with Canada’s public health guidelines.

Although restrictions on social gatherings were temporarily lifted in many of the markets in which Cineplex operated over the summer and into the fall of 2020, social gathering restrictions were reinstituted in the late fall and winter with the increased number of COVID-19 cases and the onset of a third wave involving more transmissible variants in the latter half of the first quarter of 2021. This resulted in ongoing lockdown measures with prolonged mandatory closures and operating restrictions on the theatres and LBE businesses extending through the second quarter of 2021. Despite the beginning of lifting some restrictions on the theatre and LBE businesses near the end of the second quarter of 2021, due to the uncertainty of the timing of the reductions of many remaining governmentimposed restrictions and the potential long-term effect that the COVID-19 pandemic may have on the exhibition and

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Notes to Interim Condensed Consolidated Financial Statements For the three and six months ended June 30, 2021 and 2020 (Unaudited)

Cineplex Inc.

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(expressed in thousands of Canadian dollars, except per share amounts)

amusement and leisure businesses, COVID-19 may have a prolonged material negative impact on Cineplex’s operations.

Beginning during the closures, some previously expected theatrical releases have instead been redirected to streaming services. Also, some highly anticipated theatrical releases were released during the second quarter of 2021 with major markets reopened, including the United States, however, with limited theatres open in Canada, Cineplex was unable to fully benefit from these new releases. The impact of the reduction of new releases in combination with the ongoing restrictions on the reopening of Cineplex’s businesses, has and continues to negatively impact the timing of Cineplex’s return to profitability.

Canada’s vaccination rate has made tremendous progress during the year with a high percentage of the eligible population receiving at least one dose of a COVID-19 vaccine and an increasing segment having received two doses. While vaccinations rates continue to improve, many Canadian jurisdictions are taking a cautious approach to reopening with more restrictive measures continuing in place compared to other major markets such as the United States, creating a slower reopening of Cineplex’s theatre and LBE businesses. The growing concern of more transmissible variants, particularly the Delta variant, raises the risk for a potential fourth wave of COVID-19 cases which could further prolong the full reopening of Cineplex’s businesses and have negative implications on Cineplex’s operations and cash flows.

With the unknown duration of the pandemic and yet to be determined timing of the phased complete reopening of Cineplex’s businesses, as well as consumers’ future risk tolerance regarding health matters, it is not possible to know the impact of the pandemic on future results. However, Cineplex is optimistic that all of its businesses will recover over time. Cineplex believes consumer demand for the theatrical experience combined with a backlog of anticipated releases of strong film content will help drive visitation, and that LBE activities will increase as people seek out-of-home experiences they have been restricted from enjoying for over a year.

Management continues to pursue viable options to maintain adequate liquidity to fund operations for the currently anticipated duration of the pandemic. This includes but is not limited to asset sales such as Cineplex’s head office buildings in Toronto which was completed during the first quarter, issuance of Notes Payable (note 7, Long-term debt), amendments to existing Credit Facilities (note 7, Long-term debt), and the sale of certain lease rights which was undertaken during the second quarter of 2021 in exchange for gross proceeds of $6,436. The proceeds received were primarily used to repay Cineplex’s existing Credit Facilities and fund continuing operations.

As at June 30, 2021, Cineplex had a cash balance of $29,202 and $245,700 available under its Revolving Facility subject to the liquidity covenants set forth in the Credit Facilities as amended (note 7, Long-term debt). Cineplex also expects to receive the remaining $9,070 recovery of previously paid income taxes, having received $53,554 as of June 30, 2021 of the total $62,624 claimed. Combined with the continued focus on reducing costs and capital expenditures, management believes that it has adequate liquidity to fund operations for the currently anticipated duration of the pandemic in the regions in which Cineplex operates.

3. Impairment of long-lived assets and goodwill

Cineplex generally performs its annual test for impairment of goodwill and indefinite-lived intangible assets in the fourth quarter, in accordance with the policy described in its annual consolidated financial statements. Assessment of impairment for long-lived assets, including property, equipment, leaseholds, right-of-use assets, intangible assets and goodwill is performed more frequently as specific events or circumstances dictate triggering events and changes in circumstances indicate that the carrying amount of the asset group may not be fully recoverable.

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Cineplex Inc.

Notes to Interim Condensed Consolidated Financial Statements For the three and six months ended June 30, 2021 and 2020 (Unaudited)

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(expressed in thousands of Canadian dollars, except per share amounts)

On June 30, 2021, Cineplex reassessed the underlying key assumptions and inputs used during the impairment testing completed at December 31, 2020 and determined that there were no material changes in those key judgements and conclusions.

In early 2020, in response to the outbreak of the COVID-19 pandemic as declared by the WHO, the government of Canada announced mandated closure of schools, public facilities and non-essential businesses. Consequently, effective March 16, 2020 and continuing throughout the remainder of the year, Cineplex had to either temporarily close its theatres and location-based entertainment venues or operate with strict capacity restrictions across Canada, resulting in material decreases in revenues, results of operations and cash flows and a material decrease in Cineplex’s market value due to a sharp decline in its share price. These represented triggering events at each balance sheet date in 2020. As a result of the triggering events, Cineplex performed impairment testing and recognized noncash impairment charges in each of the three months ended March 31, September 30, and December 31, 2020 as follows:

	2020	2020
Q1	Q3	Q4 Total
$ 33,949 50,610 88,495 —	$ — — 65,634 —	$ 5,243 $ 39,192 21,236 71,846 26,906 181,035 2,790 2,790
$ 173,054	$ 65,634	$ 56,175 $ 294,863

In assessing long-lived assets and goodwill for impairment, Cineplex compared the aggregate recoverable amount of the assets included in the relevant Cash Generating Units (“CGUs”) to their respective carrying amounts. The recoverable amount was determined based on the fair value less costs of disposal of the groups CGUs.

The determination of fair value less costs of disposal is sensitive to the growth rates, discount rates, and long-term growth rates used. The risk premiums expected by market participants related to uncertainties about the industry and assumptions relating to future cash flows may differ, depending on economic conditions and other events. Accordingly, it is reasonably possible that future changes in assumptions may negatively impact future assessments of the recoverable amount for groups of CGUs.

Impairment of long-lived assets and goodwill for the six months ended June 30, 2021 and 2020 were as follows:

Impairment of property, equipment and leaseholds Impairment of right-of-use assets Impairment of goodwill Impairment of long-lived assets and goodwill	2021 $ — — —	2020 $ 33,949 50,610 88,495
	$ —	$ 173,054

Despite the reopening of all of Cineplex’s venues by the third quarter of 2021, ongoing restrictions on capacity limit Cineplex’s ability to resume full operations for the foreseeable future. In addition, if the return to more regular business continues to be delayed for longer than currently anticipated as a result of actions outside of the control of management, including but not limited to additional changes to the film slate release schedule, ongoing government restrictions impacting the re-opening of entertainment venues and future impacts caused by more transmissible variants, management's estimates of operating results and further cash flows for the forecasted period may be negatively impacted. As a result, cash flows may be insufficient to support the recoverability of goodwill and long

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Cineplex Inc.

Notes to Interim Condensed Consolidated Financial Statements For the three and six months ended June 30, 2021 and 2020 (Unaudited)

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(expressed in thousands of Canadian dollars, except per share amounts)

lived assets in certain CGUs, thus requiring further impairment charges. Cineplex will continue to evaluate the recoverability of goodwill at the cash generating unit level on an annual basis during its fourth quarter and whenever events or changes in circumstances indicate there may be a potential impairment.

4. Right-of-use assets

The following table presents right-of-use assets for Cineplex for the six months ended June 30, 2021 and 2020:

Right-of-use assets consists of:

Property	Equipment	Total
$ 1,111,985 (307,658)	$ 19,775 (11,395)	$ 1,131,760 (319,053)
$ 804,327	$ 8,380	$ 812,707
$ 871,741 (17,528) (140) (49,746)	$ 9,677 1,012 — (2,309)	$ 881,418 (16,516) (140) (52,055)
$ 804,327	$ 8,380	$ 812,707
Property	Equipment	Total
$ 1,290,712 (206,292)	$ 19,851 (7,621)	$ 1,310,563 (213,913)
$ 1,084,420	$ 12,230	$ 1,096,650
$ 1,218,054 (16,460) 589 (67,153) (50,610)	$ 14,795 (4) 4 (2,565) —	$ 1,232,849 (16,464) 593 (69,718) (50,610)
$ 1,084,420	$ 12,230	$ 1,096,650

Starting with the second quarter of 2020, Cineplex agreed to a variety of arrangements with landlords to reduce or defer payments. The effect of those reductions or deferrals reduced both lease obligations and right-of-use assets by approximately $19,190 and $540 for the three months ended June 30, 2021 and 2020, and $27,812 and $540 for the six months ended June 30, 2021 and 2020.

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Notes to Interim Condensed Consolidated Financial Statements For the three and six months ended June 30, 2021 and 2020 (Unaudited)

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Cineplex Inc.

(expressed in thousands of Canadian dollars, except per share amounts)

5. Deferred income taxes

Based on substantively enacted corporate tax rates, expected timing of reversals and expected taxable income allocation to various tax jurisdictions, deferred income taxes are as follows:

Deferred income tax assets Property, equipment and leaseholds and deferred tenant inducements - difference between net carrying value and undepreciated capital cost Accounting provisions not currently deductible Deferred revenue Interest rate swap agreements Income tax credits available Operating losses available for carry-forward Total gross deferred income tax assets Future deferred tax liabilities Intangible assets Goodwill Other Convertible debentures Total gross deferred income tax liabilities Net deferred income tax recognized	June 30, 2021 $ 14,550 93,423 15,973 5,533 3,789 70,534	December 31, 2020 $ 12,494 83,900 16,243 6,943 397 24,656
	203,802	144,633
	(10,054) (28,578) 6,254 (23,961)	(10,151) (27,841) 4,892 (24,464)
	(56,339)	(57,564)
	$ —	$ —

At December 31, 2020 the recoverability of the net deferred income tax assets in the normal course of business was uncertain and accordingly the net deferred tax assets were derecognized. Cineplex will evaluate the likelihood of recoverability in the ordinary course of business at each balance sheet date, and will recognize net deferred tax assets when and if appropriate.

Cineplex expects to recover income taxes paid in prior periods of $62,624 a result of its tax returns filed for the 2020 taxation year ($53,554 has been received as of June 30, 2021). The net amount of $9,070 is included in income taxes receivable on the consolidated balance sheet as June 30, 2021.

By Notice of Reassessment (“NOR”) dated January 22, 2019, the Canada Revenue Agency (“CRA”), disallowed the deduction of $26,600 of losses of AMC Ventures Inc (“AMC”) that Cineplex had obtained on the acquisition of AMC in 2012. The disallowance of the losses, which offset taxable income generated in 2014, increased taxes and interest payable by approximately $8,600, 50% of which was required to be paid immediately (interest continues to accrue on the unpaid amount). Cineplex disagrees with the CRA’s position. The Department of Justice has confirmed the CRA’s position in response to Cineplex’s subsequent appeal to the Tax Court of Canada in respect of the NOR. Cineplex is continuing the process to defend its original filing position and believes it should prevail, although no assurance can be given in this regard as the appeal process proceeds.

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Cineplex Inc. Notes to Interim Condensed Consolidated Financial Statements For the three and six months ended June 30, 2021 and 2020 (Unaudited)

~~—————————————————————————————————————————————~~

(expressed in thousands of Canadian dollars, except per share amounts)

6. Share-based compensation

Omnibus Incentive Plan

On November 12, 2020, the Board of Directors approved a new Omnibus Incentive Plan (the “Incentive Plan”). This plan supersedes the former incentive plans (“Legacy Plan”) that included Options, Performance Share Units (“PSUs”) and Restricted Share Units (“RSUs”). All employees and consultants are eligible to participate in the Incentive Plan. The Incentive Plan consists of stock options, RSUs and PSUs. Awards of RSUs and PSUs granted during a service year will be subject to a service period as determined by management at the time of issuance. The aggregate number of Shares that may be issued under the Incentive Plan is 1,756,834 provided that no more than 1,200,000 Shares may be issued in aggregate pursuant to the settlement of RSUs and PSUs. Options that were issued under the Legacy Plan and are subsequently cancelled will be available to be issued under the Incentive Plan. The base Share equivalents granted as RSU and PSU awards attract compounding notional dividends at the same rate as outstanding Shares, which are notionally re-invested as additional base Share equivalents. PSU and RSU awards may be settled in Shares issued from treasury, cash, or a mix of Shares and cash, at Cineplex’s option at the time of settlement. Awards outstanding under prior plans shall remain in full force and effect under the prior plans according to their respective terms. Under the prior plans, the effects of changes in estimates of performance results are recognized in the year of change.

Stock Options

Stock options issued under the Incentive Plan will be administered by the Board of Directors which will establish the exercise price at the time each option is granted, which in all cases will not be less than the market price on the grant date. All of the options must be exercised over specified periods not to exceed ten years from the date granted. Options issued under the Incentive Plan may be exercised for cash or on a cashless basis, both of which result in the issuance of Shares from treasury. Options granted will be accounted for as equity-settled.

Effective December 15, 2019, as a result of the terms of the Arrangement Agreement, options were considered cashsettled, and the fair value of the options outstanding in excess of their respective exercise price was recognized as a current share-based compensation liability, and changes in value were reflected in the statement of operations. Stock options impacted by the termination of the Arrangement Agreement were revalued and accounted for as equitysettled and any previously recognized share based compensation liability was reclassified to contributed surplus. The accelerated recognition of unvested options was reversed and is being recognized over their remaining vesting periods at the value determined at March 31, 2020. Forfeitures are estimated to be nominal, based on historical forfeiture rates.

Cineplex recorded employee benefits expense of $445 and $844 with respect to the options during the three and six months ended June 30, 2021 (2020 - expense of $160 and $(2,194) recovery, respectively). At June 30, 2021, $nil associated with options is reflected in current share-based compensation liability on the consolidated balance sheets (2020 - $113). In the first quarter of 2021, 165,146 stock options issued under the Legacy Plan were cancelled as part of a voluntary stock option cancellation program that was initiated in the fourth quarter of 2020 for total consideration of $60.

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Cineplex Inc.

Notes to Interim Condensed Consolidated Financial Statements For the three and six months ended June 30, 2021 and 2020 (Unaudited)

~~—————————————————————————————————————————————~~

(expressed in thousands of Canadian dollars, except per share amounts)

The fair value of options granted in 2021 were determined using the Black-Scholes valuation model using the following significant inputs:

	2021
Number of options granted	459,501
Share price	$12.41-$12.87
Exercise price	$12.41-$12.87
Expected option life (years)	4.00
Volatility	47 %
Dividend yield	—
Annual risk-free rate	0.68%-0.72%
Fair value of options granted	$3.70-$3.83

Upon cashless exercises, the options exercised in excess of shares issued are cancelled and returned to the pool available for future grants. At June 30, 2021, 1,680,841 options are available for grant.

A summary of option activities in 2021 and 2020 is as follows:

Weighted average remaining contractual life (years) Options outstanding, January 1 7.64 Granted Cancelled Exercised Forfeited Options outstanding, June 30 7.94 Options vested and exercisable	2021	2020
	Number of underlying shares Weighted average exercise price 2,042,019 $ 25.37 459,501 12.69 (188,303) 43.90 (21,761) 8.25 (38,620) 21.87 2,252,836 $ 21.46 943,394	Number of underlying shares Weighted average exercise price 3,123,521 $ 38.62 — — — — — — (37,857) 34.68 3,085,664 $ 38.67 2,193,514

The exercise price was equal to the market price of Cineplex shares at the grant date.

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Notes to Interim Condensed Consolidated Financial Statements For the three and six months ended June 30, 2021 and 2020 (Unaudited)

Cineplex Inc.

—————————————————————————————————————————————

(expressed in thousands of Canadian dollars, except per share amounts)

RSU and PSU awards

The grants of Share equivalents were as follows:

	PSU Share equivalents granted	RSU Share equivalents granted	PSU Share equivalents minimumpayout	PSU Share equivalents maximumpayout
2021 LTIP awards granted in Q2 2021 2020 LTIP award granted in Q3 2020 2019 LTIP awardgranted inQ1 2019	167,546 284,214 105,777	315,619 277,105 54,940	— — 7,788	335,092 568,428 211,553

During the period, Cineplex issued 262,487 equity settled RSUs with a fair value $12.87 per unit (total fair value of $3,378 on issuance) and 167,546 equity settled PSUs with a fair value of $12.87 per unit (total fair value of $2,156 on issuance). The fair value was assessed based on Cineplex’s closing share price on the grant date. The RSU and PSU awards issued will vest in the fourth quarter of 2023. Cineplex also issued 53,132 cash settled RSUs during the period with a fair value of $14.95 (total fair value of $794 on issuance). The valuation was assessed based on Cineplex’s closing share price on the grant date and will fluctuate in value based on Cineplex’s share price. The RSU awards will vest in the second quarter of 2023.

Compensation expense is recorded based on the number of units expected to vest, the current market price of Cineplex’s common shares, and the application of a performance multiplier that ranges from a minimum of zero to a maximum of two. Performance multipliers are developed based on Total Shareholder Return percentile rank relative to a select peer group and composite group. Participants will receive one fully paid share issued from treasury that can vary depending on the achievement of established performance targets. Performance conditions are reflected in Cineplex’s estimate of the grant-date fair value for equity instruments granted.

Incentive Plan costs are estimated at the grant date based on expected performance results then accrued and recognized on a graded basis over the vesting period. Forfeitures are estimated to be nominal, based on historical forfeiture rates . Cineplex recognized compensation expense of $908 and $1,310 for the three and six month period ended June 30, 2021 (2020 - recovery of $(905) and $(5,204), respectively) under the Incentive Plan relating to RSU and PSU. At June 30, 2021, $719 (2020 - $3,013) was included in share-based compensation liability, and $1,361 in contributed surplus (2020 - $nil).

Deferred equity units

Members of the Board of Directors and certain officers of Cineplex may elect to defer a portion of their compensation in the form of deferred equity units. For the period ended June 30, 2021, Cineplex recognized compensation expense of $887 and $1,789 during the three and six month period June 30, 2021 (2020 - recovery of $(780) and $(7,805), respectively) associated with the deferred equity units. At June 30, 2021, $5,012 (2020 - $3,473) was included in share-based compensation liability.

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Cineplex Inc.

Notes to Interim Condensed Consolidated Financial Statements For the three and six months ended June 30, 2021 and 2020 (Unaudited)

~~—————————————————————————————————————————————~~

(expressed in thousands of Canadian dollars, except per share amounts)

7. Long-term debt

Long-term debt consists of the following as at June 30, 2021:

Credit Facilities Convertible Debentures Notes Payable Total	June 30, 2021 December 31, 2020 285,000 506,000 226,672 219,271 244,324 —
	$ 755,996 $ 725,271

Cineplex has bank facilities with a syndicate of lenders which includes a revolving facility (the “Revolving Facility”) and non-revolving credit facility (the “Term Facility”, and together with the Revolving Facility, the “Credit Facilities”) pursuant to a seventh amended and restated credit agreement between Cineplex, Cineplex Entertainment Limited Partnership, the guarantors from time to time party thereto, and a syndicate of lenders dated November 13, 2018 (as further amended from time to time, the “Credit Agreement”). The Term Facility was repaid in full in the first quarter of 2021 and is no longer available for future borrowing.

The Credit Facilities bear interest at a floating rate based on the Canadian dollar prime rate, U.S. Base Rate, LIBOR or bankers’ acceptances rates plus, in each case, an applicable margin to those rates. The Revolving Facility matures in November 2023. Borrowings on the Revolving Facility can be made in either Canadian or US dollars.

Cineplex’s Credit Facilities contain restrictive covenants that limit the discretion of Cineplex’s management with respect to certain business matters. These covenants place limits and restrictions on, among other things, the ability of Cineplex to create liens or other encumbrances, to pay dividends or make certain other payments, minimum liquidity covenants, anti-hoarding provisions, investments, loans and guarantees and to sell or otherwise dispose of assets and merge or consolidate with another entity. The Credit Facilities are secured by all of Cineplex’s assets. The Revolving Facility is drawn upon and repaid on a regular basis and as such is presented on a net basis in the Statement of Cash flows.

On June 29, 2020, Cineplex entered into the First Credit Agreement Amendment, following which, on November 12, 2020 Cineplex entered into the Second Credit Agreement Amendment, as described in further detail in the AIF. Both amendments provided certain financial covenant relief in light of the COVID-19 pandemic and its effects on Cineplex’s businesses, while applying additional restrictive covenants and required repayments in certain circumstances.

On February 8, 2021, Cineplex entered into the Third Credit Agreement Amendment, which, among other things, extended the suspension of financial covenant testing for two additional fiscal quarters beyond prior relief and extended the liquidity covenant requirement until December 2021. The following is a summary of the key terms of the Third Credit Agreement Amendment:

The following amendments to the Credit Facilities became effective upon the completion of the issuance of $250,000 Notes Payable during the first quarter of 2021:
The suspension of financial covenant testing is extended until the fourth quarter of 2021. On resumption of financial covenant testing in the fourth quarter of 2021:
- for the fourth quarter of 2021, testing will be based on an annualized calculation of Adjusted EBITDA (as further adjusted in accordance with the Credit Agreement definitions) based on the actual results for such quarter;

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Notes to Interim Condensed Consolidated Financial Statements For the three and six months ended June 30, 2021 and 2020 (Unaudited)

Cineplex Inc.

—————————————————————————————————————————————

(expressed in thousands of Canadian dollars, except per share amounts)

for the quarter ending on March 31, 2022, testing will be based on an annualized calculation of Adjusted EBITDA based on actual results for the fourth quarter of 2021 and the first quarter of 2022 multiplied by 2; and
for the quarter ending on June 30, 2022, testing will be based on an annualized calculation of Adjusted EBITDA for the fourth quarter of 2021, the first quarter of 2022 and the second of 2022 multiplied by 4/3.
Thereafter, testing will be based on an annualized calculation of the cumulative Adjusted EBITDA on a trailing four fiscal quarter basis;
The Total Leverage Ratio of 3.75x will apply when financial covenants are reinstated, and will be reduced until the third quarter of 2022 at which point it will reach a level of 3.00x;
The liquidity covenant will continue and be amended and extended beginning in February 2021, through to and including December 2021, requiring available liquidity as defined on a monthly basis (November 1, 2020 through January 31, 2021 - $100,000; February 2021 - $75,000; March 2021 - $60,000; April 1, 2021 through December 31, 2021 - $100,000;
The addition of a Senior Leverage Ratio to be based on annualized Adjusted EBITDA and set at 1.0x lower than the Total Leverage Ratio. Senior Leverage Ratio to be defined as (i) Total Debt (as defined in the Credit Agreement) less any Notes Payable to (ii) Adjusted EBITDA;
Effective with the fourth quarter of 2021, additional growth capital expenditures will be subject to pro-forma Total Leverage covenant of 2.75x (both prior to and immediately after giving effect to any such growth capital expenditure) based on actual last 12 months’ EBITDA; and
Distributions continue to be blocked during the extended financial covenant suspension period and only permitted when the Total Leverage ratio is less than 2.75x (both prior to and immediately after giving effect to any such distribution).

During the first quarter, Cineplex completed a sale-leaseback transaction for its head office buildings located at 1303 Yonge Street and 1257 Yonge Street, Toronto Ontario for gross proceeds of $57,000, recognizing a gain of $30,061. Net proceeds from the sale, in addition to net proceeds from the issuance of the Notes Payable (discussed below) were used to repay the Credit Facilities, a portion of which was permanent. As a result, Cineplex permanently repaid the remaining $50,000 balance of its outstanding Term Facility.

This summary of the Credit Agreement (as amended) is qualified in its entirety by reference to the provisions of the Credit Agreement (as amended) which contains a complete statement of those terms and conditions. The Credit Agreement and each of the First Credit Agreement Amendment, Second Credit Agreement Amendment and Third Credit Agreement Amendment are available on SEDAR at www.sedar.com.

Following the Third Credit Agreement Amendment, including mandatory repayments, the Credit Facilities consist of the following:

a) a five-year, $542,000 senior secured Revolving Facility; $285,000 that has been drawn; $11,000 reserved and $245,700 remaining available balance.

Convertible debentures

Convertible debentures consist of the following:

Face value of convertible debentures outstanding Unaccreted deferred financing fees and discount Convertible debentures	June 30, 2021 $ 316,250 (89,578)	December 31, 2020 $ 316,250 (96,979)
	$ 226,672	$ 219,271

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Notes to Interim Condensed Consolidated Financial Statements For the three and six months ended June 30, 2021 and 2020 (Unaudited)

Cineplex Inc.

—————————————————————————————————————————————

(expressed in thousands of Canadian dollars, except per share amounts)

On July 17, 2020, Cineplex issued $316,260 aggregate principal amount of convertible unsecured subordinated debentures (the “Debentures”), which mature on September 30, 2025 (the “Maturity Date”) and bear interest at a rate of 5.75% per annum, payable semi-annually in arrears on September 30 and March 31 in each year.

The Debentures are not redeemable by Cineplex prior to September 30, 2023. On or after September 30, 2023 and prior to September 30, 2024, Cineplex may, at its option, redeem the Debentures in whole or in part from time to time provided that the volume weighted average trading price of the Shares on the Toronto Stock Exchange during the 20 consecutive trading days ending on the fifth trading day preceding the date on which the notice of redemption is given is not less than 125% of the conversion price. On or after September 30, 2024, the Debentures may be redeemed in whole or in part from time to time at the option of Cineplex at a price equal to their principal amount plus accrued and unpaid interest. Redemption may in the form of cash or in the form of Shares, at the option of Cineplex.

At the holder’s option, the Debentures may be converted into Shares at a conversion price of $10.94 per Share at any time prior to the close of business on the earlier of: (i) five business days prior to the Maturity Date, and (ii) if called for redemption, five business days immediately preceding the dated fixed for redemption of the Debentures, at a conversion price to be determined at the time of pricing. Holders who convert their Debentures into Shares will receive accrued and unpaid interest for the period from the date of the latest Interest Payment Date to the date of conversion. Conversion of outstanding Debentures will result in the issuance of Shares from treasury.

The fair value of the liability component of the Debentures was assessed at inception based on an estimated market discount rate of 14.1% less the pro-rata portion of transaction costs, and will be accreted to the full face value over the term of the Debentures. Cineplex recorded cash interest expense on the Debentures during the quarter and year to date period of $4,534 (2020 - $nil) and $8,993 (2020 - $nil), respectively. Furthermore, Cineplex recorded accretion expense during the quarter and year to date period of of $3,744 (2020 - $nil) and $7,402 (2020 - $nil), respectively, both of which are included as part of the interest expense in the consolidated statement of operations. As at June 30, 2021, Cineplex has $316,250 principal amount of Debentures outstanding. The residual value was allocated to the equity component less the pro-rata portion of transaction costs as prescribed by IFRS 9, Financial instruments .

The foregoing is a summary of the key terms of the Debentures. This summary is qualified in its entirety by reference to the provisions of the Debentures trust indenture which contains a complete statement of those terms and conditions. The Debenture trust indenture is available on SEDAR.

Notes payable

Notes Payable outstanding as of June 30, 2021 are as follows:

Face value of Notes Payable Unaccreted deferred financing fees and discount Notes Payable	2021 $ 250,000 (5,676)
	$ 244,324

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Cineplex Inc.

Notes to Interim Condensed Consolidated Financial Statements For the three and six months ended June 30, 2021 and 2020 (Unaudited)

~~—————————————————————————————————————————————~~

(expressed in thousands of Canadian dollars, except per share amounts)

On February 26, 2021, Cineplex completed the $250,000 Notes Payable offering. The Notes Payable mature on February 26, 2026 and bear interest at a rate of 7.50% per annum, payable semi-annually in arrears on January 31 and July 31 of each year, commencing July 31, 2021. The Notes Payable are subordinate to the security granted for the obligations under the Credit Facilities, and are subject to the terms of an intercreditor agreement with the agent under the Credit Facilities.

Cineplex recorded cash interest expense on the Notes Payable during the quarter and year to date period of $4,675 (2020 - $nil) and $6,370 (2020 - $nil), respectively. Furthermore, Cineplex recorded accretion expense during the quarter and year to date period of $277 (2020 - $nil) and $357 (2020 - $nil), respectively, both of which are included as part of interest expense in the consolidated statement of operations. As at June 30, 2021, Cineplex has $250,000 principal amount of Notes Payable outstanding. Cineplex has estimated the fair value of this embedded derivative at $1,250 as at June 30, 2021, which is presented on the consolidated balance sheets in prepaid expenses and other current assets.

The foregoing is a summary of the key terms of the Notes Payable. This summary is qualified in its entirety by reference to the provisions of the Notes Payable trust indenture which contain a complete statement of those terms and conditions. The Notes Payable trust indenture is available on SEDAR.

8. Revenue

The following tables disclose the changes in deferred revenue for the six months ended June 30, 2021 and 2020:

Gift cards SCENE loyalty program Advances and deposits Gift cards SCENE loyalty program Advances and deposits	December 31, 2020 Additions Revenue Recognized June 30, 2021 $ 164,025 $ 2,383 $ 3,647 $ 162,761 36,109 14,900 8,024 42,985 19,849 2,148 2,811 19,186
	$ 219,983 $ 19,431 $ 14,482 $ 224,932
	December 31, 2019 Additions Revenue Recognized June 30, 2020 $ 184,755 $ 18,047 $ 39,352 $ 163,450 21,277 16,000 10,240 27,037 16,966 22,146 17,128 21,984
	$ 222,998 $ 56,193 $ 66,720 $ 212,471

The following tables provide the disaggregation of revenue into categories by nature for the three and six months ended June 30, 2021 and 2020:

Box revenues Box office revenues	Three months ended June 30, 2021 2020 $ 12,498 $ 27	Six months ended June 30, 2021 2020 $ 16,316 $ 111,029

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Cineplex Inc.

Notes to Interim Condensed Consolidated Financial Statements For the three and six months ended June 30, 2021 and 2020 (Unaudited)

—————————————————————————————————————————————

(expressed in thousands of Canadian dollars, except per share amounts)

Food service revenues Food service - theatres Food delivery - theatres Food service - location-based entertainment Food delivery - location-based entertainment Total food service revenues	Three months ended June 30, 2021 2020 $ 9,022 $ 62 3,676 3,024 516 87 44 83 $ 13,258 $ 3,256	Six months ended June 30, 2021 2020 $ 11,561 $ 72,743 7,454 3,024 687 6,771 81 83 $ 19,783 $ 82,621

Media revenues


Media revenues Cinema media Digital place-based media Total media revenues	Three months ended June 30, 2021 2020 $ 2,412 $ 1,604 6,989 6,276 $ 9,401 $ 7,880		Six months ended June 30, 2021 2020 $ 4,311 $ 18,866 14,164 21,171 $ 18,475 $ 40,037
	$ 9,401	$ 7,880

Amusement revenues Amusement solutions excluding exhibition Amusement solutions - exhibition Amusement solutions - location based entertainment Total amusement revenues Other revenues Other revenues	Three months ended June 30, 2021 2020 $ 20,446 $ 3,687 199 12 1,539 32 $ 22,184 $ 3,731 Three months ended June 30, 2021 2020 $ 7,585 $ 7,094	Six months ended June 30, 2021 2020 $ 33,005 $ 38,648 271 2,208 2,782 10,212 $ 36,058 $ 51,068 Six months ended June 30, 2021 2020 $ 15,706 $ 20,034

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Notes to Interim Condensed Consolidated Financial Statements For the three and six months ended June 30, 2021 and 2020 (Unaudited)

Cineplex Inc.

~~—————————————————————————————————————————————~~

(expressed in thousands of Canadian dollars, except per share amounts)

9. Lease obligations

The following table presents lease obligations for Cineplex for the six months ended June 30, 2021 and 2020:

Property	Equipment	Total
$ 1,160,849 3,688 4,964 (64,553) 28,944 (200)	$ 10,076 1,011 — (763) 156 (1)	$ 1,170,925 4,699 4,964 (65,316) 29,100 (201)
1,133,692 105,215	10,479 5,560	1,144,171 110,775
$ 1,028,477	$ 4,919	$ 1,033,396
Property	Equipment	Total
$ 1,352,541 (16,437) 17,073 (44,488) 22,800 609	$ 15,054 (4) — (1,840) 231 4	$ 1,367,595 (16,441) 17,073 (46,328) 23,031 613
$ 1,332,098 154,109	$ 13,445 5,667	$ 1,345,543 159,776
$ 1,177,989	$ 7,778	$ 1,185,767

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Cineplex Inc.

Notes to Interim Condensed Consolidated Financial Statements For the three and six months ended June 30, 2021 and 2020 (Unaudited)

~~—————————————————————————————————————————————~~

(expressed in thousands of Canadian dollars, except per share amounts)

10. Share capital

Cineplex is authorized to issue an unlimited number of common shares and 10,000,000 preferred shares of which none are outstanding.

Share capital balances at June 30, 2021 and 2020 and transactions during the periods are as follows:

2021		Amount
	Number of common shares issued and outstanding	Common shares Total
Balance - December 31, 2020 Issuance of shares on exercise of options	63,333,238 8,948	$ 852,379 $ 852,379 69 69
Balance - June 30,2021	63,342,186	$ 852,448 $ 852,448

2020		Amount
	Number of common shares issued and outstanding	Common shares Total
	63,333,238	$ 852,379 $ 852,379
Balance - December 31,2019 and June 30,2020

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Notes to Interim Condensed Consolidated Financial Statements For the three and six months ended June 30, 2021 and 2020 (Unaudited)

Cineplex Inc.

~~—————————————————————————————————————————————~~

(expressed in thousands of Canadian dollars, except per share amounts)

11. Other costs

Employee salaries and benefits Rent Realty and occupancy taxes and maintenance fees Utilities Purchased services Other inventories consumed, including amusement and digital place-based media Venue revenue share Repairs and maintenance Advertising and promotion Office and operating supplies Licenses and franchise fees Insurance Professional and consulting fees Telecommunications and data Bad debts Equipment rental Other costs	Three months ended June 30,	Three months ended June 30,	Six months ended June 30, 2021 2020 $ 43,927 $ 64,741 (11,896) 447 24,892 38,001 6,840 12,773 12,769 21,459 22,732 22,021 8,426 10,136 8,315 13,831 2,801 5,531 1,096 4,249 6,916 9,117 3,227 2,619 7,783 6,387 2,428 2,854 (135) 1,630 469 (117) 1,467 4,044 $ 142,057 $ 219,723	Six months ended June 30, 2021 2020 $ 43,927 $ 64,741 (11,896) 447 24,892 38,001 6,840 12,773 12,769 21,459 22,732 22,021 8,426 10,136 8,315 13,831 2,801 5,531 1,096 4,249 6,916 9,117 3,227 2,619 7,783 6,387 2,428 2,854 (135) 1,630 469 (117) 1,467 4,044 $ 142,057 $ 219,723
	2021 $ 22,588 (4,849) 10,580 2,107 6,608 12,794 5,440 4,709 1,522 577 3,678 1,559 3,918 1,247 57 259 558	2020 $ 11,572 (125) 18,879 5,330 5,518 3,860 680 3,829 1,524 662 4,474 1,305 2,952 1,069 725 (466) 387		2020 $ 64,741 447 38,001 12,773 21,459 22,021 10,136 13,831 5,531 4,249 9,117 2,619 6,387 2,854 1,630 (117) 4,044
	$ 73,352	$ 62,175		$ 219,723

Management continued to focus on cost cutting measures to mitigate the negative impact of COVID-19 on Cineplex’s business, in addition to applying for government subsidy programs where available. During the three and six months ended June 30, 2021, Cineplex recorded the following subsidies which have all been offset against their related costs:

Subsidies	Second	Quarter	Year to Date	Year to Date
	2021	2020	2021	2020
Wage subsidy (CEWS)	$ 15,665	$20,239	$30,500	$20,308
Rent subsidy (CERS) Realty tax subsidy Utility subsidy	4,845 5,729 2,307	— — —	11,848 10,514 3,888	— — —
Total	$ 28,546	$ 20,239	$ 56,750	$ 20,308

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Cineplex Inc. Notes to Interim Condensed Consolidated Financial Statements For the three and six months ended June 30, 2021 and 2020 (Unaudited)

~~—————————————————————————————————————————————~~

(expressed in thousands of Canadian dollars, except per share amounts)

12. Net loss per share

Basic

Basic earnings per share (“EPS”) is calculated by dividing the net loss by the weighted average number of shares outstanding during the period.

Three months ended June 30, 2021 2020 $ (103,704)$ (98,230) $ (103,704) $ (98,923) 63,339,618 63,333,238 $ (1.64) $ (1.55) — (0.01) $ (1.64)$ (1.56)	Six months ended June 30,	Six months ended June 30,
2020 $ (98,230) $ (98,923) 63,333,238 $ (1.55) (0.01) $ (1.56)	2021 $ (193,392)	2020 $ (272,384)
	$ (193,392) 63,337,300	$ (277,336) 63,333,238
	$ (3.05) —	$ (4.30) (0.08)
	$ (3.05)	$ (4.38)

Diluted

Diluted EPS is calculated by adjusting the weighted average number of shares outstanding to assume conversion of all dilutive potential shares. A calculation is done to determine the number of shares that could have been acquired at fair value (determined as the average market share price of the outstanding shares for the period), based on the monetary value of the rights attached to the potentially dilutive shares. The number of shares calculated above is compared with the number of shares that would have been issued assuming exercise of conversions, exchanges or options. The options and convertible debentures are anti-dilutive in 2021 and 2020, as applicable.

Three months	ended June 30,	Six months ended June 30,	Six months ended June 30,
2021	2020	2021	2020 $ (272,384) $ (277,336) 63,333,238 $ (4.30) (0.08) $ (4.38)
$ (103,704)	$ (98,230)	$ (193,392)
$ (103,704)	$ (98,923)	$ (193,392)
63,339,618	63,333,238	63,337,300
$ (1.64) —	$ (1.55) (0.01)	$ (3.05) —
$ (1.64)	$ (1.56)	$ (3.05)

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Cineplex Inc.

Notes to Interim Condensed Consolidated Financial Statements For the three and six months ended June 30, 2021 and 2020 (Unaudited)

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(expressed in thousands of Canadian dollars, except per share amounts)

13. Changes in operating assets and liabilities

The following summarizes the changes in operating assets and liabilities:

Trade and other receivables Inventories Prepaid expenses and other current assets Accounts payable and accrued liabilities Income taxes receivable Deferred revenue Post-employment benefit obligations Share-based compensation Other liabilities	Three months ended June 30,	Three months ended June 30,	Six months ended June 30,
	2021 $ (2,999) (482) (2,056) 15,262 49,018 2,851 23 1,047 (42)	2020 $ 23,311 944 3,390 27,317 (208) 16,897 181 (1,685) (746)	2021 2020 $ 9,542 $ 117,018 675 1,998 (1,217) 3,895 14,825 (38,763) 56,843 4,025 5,004 (10,623) (866) (28) 2,125 (17,026) (728) (1,523) $ 86,203 $ 58,973
	$ 62,622	$ 69,401

Property, equipment and leasehold purchases are included in accounts payable and accrued liabilities as at June 30, 2021, in the amount of $1,553 (2020 - $11,996).

14. Operating segments

Cineplex has four reportable segments; Film Entertainment and Content, Media, Amusement and Leisure and Location-Based Entertainment. The reportable segments are business units offering differing products and services and managed separately due to their distinct natures. These four reportable segments have been determined by Cineplex’s chief operating decision makers. The Film Entertainment and Content reporting segment does not charge an access fee to the Media reporting segment. All other inter-segment transactions are eliminated in the Corporate and other category, which includes all corporate general and administrative costs not directly associated with a segment.

Film Entertainment and Content

The Film Entertainment and Content reporting segment includes all direct and ancillary revenues from theatre attendance, including box office and food service revenues and the associated costs to provide those products and services. Also included in the Film Entertainment and Content segment are in-theatre amusement, theatre rentals and digital commerce rental and sales and associated costs.

Media

The Media reporting segment is comprised of the aggregation of two operating segments, cinema media and digital place-based media. Cinema media consists of all in-theatre advertising revenues and costs, including pre-show, showtime and lobby advertising. Digital place-based media is comprised of revenues and costs associated with the design, installation and operations of digital signage networks, along with advertising on certain networks. Aggregation of these operating segments is based on the segments having similar economic characteristics.

Amusement and Leisure

The Amusement and Leisure reporting segment includes the amusement solutions operating segment. Amusement solutions is comprised of revenues and costs associated with operating and distributing amusement, gaming and vending equipment. Previously reported periods included results for eSports in the Amusement and Leisure segment.

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Notes to Interim Condensed Consolidated Financial Statements For the three and six months ended June 30, 2021 and 2020 (Unaudited)

Cineplex Inc.

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(expressed in thousands of Canadian dollars, except per share amounts)

Location-Based Entertainment

Location-based entertainment is comprised of the social entertainment destinations featuring gaming, entertainment and dining. These entertainment options are complemented with an upscale casual dining environment, featuring an open kitchen and contemporary menu, as well as a larger bar with a wide range of digital monitors and a large screen for watching sporting and other major events.

In accordance with IFRS 8, Operating Segments , Cineplex discloses information about its reportable segments based upon the measures used by management in assessing the performance of those reportable segments. Cineplex uses adjusted EBITDAaL to measure the performance of its reportable segments.

Management defines EBITDA as earnings before interest income and expense, income taxes and depreciation and amortization expense. Adjusted EBITDA excludes the change in fair value of financial instrument, loss (gain) on disposal of assets, foreign exchange, the equity loss of CDCP, the non-controlling interests’ share of adjusted EBITDA of TG-CPX Limited Partnership, and impairment, depreciation, amortization, interest and taxes of Cineplex’s other joint ventures and associates. Adjusted EBITDAaL modifies adjusted EBITDA to deduct current period cash rent paid or payable related to lease obligations. During the year to date, Cineplex agreed to a variety of arrangements with landlords to reduce or defer cash rent paid or payable as a result of the impact of COVID-19. This includes agreements with landlords that are evidenced by way of written confirmation of the terms agreed upon to the date of approval of the financial statements, and are in the process of being formally documented.

Cineplex’s management believes that adjusted EBITDAaL is an important supplemental measure of Cineplex’s profitability at an operational level and provides analysts and investors with comparability in evaluating and valuing Cineplex’s performance period over period. EBITDA, adjusted for various unusual items, is also used to define certain financial covenants in Cineplex’s Credit Facilities.

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Cineplex Inc.

Notes to Interim Condensed Consolidated Financial Statements For the three and six months ended June 30, 2021 and 2020 (Unaudited)

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(expressed in thousands of Canadian dollars, except per share amounts)

The following tables disclose the results of the Film Entertainment and Content, Media, Amusement and Leisure and Location-Based Entertainment segments for the three and six months ended June 30, 2021 and 2020:

Three months ended June 30,2021	Film Entertainme nt and Content(i) Media(i) Amusement and Leisure Location- Based Entertainment Corporate and other (iii) Consolidated	Film Entertainme nt and Content(i) Media(i) Amusement and Leisure Location- Based Entertainment Corporate and other (iii) Consolidated
Major product and service lines Box office $ 12,498 $ — $ — $ — $ — $ 12,498 Food service 12,698 — — 560 — 13,258 Media — 9,395 — 6 — 9,401 Amusement 199 — 20,446 1,539 — 22,184 Other 7,592 — — (7) — 7,585 Total revenues $ 32,987 $ 9,395 $ 20,446 $ 2,098 $ — $ 64,926 Primary geographical markets Canada $ 32,987 $ 6,644 $ 3,174 $ 2,098 $ — $ 44,903 United States and other countries — 2,751 17,272 — — 20,023 Total revenues $ 32,987 $ 9,395 $ 20,446 $ 2,098 $ — $ 64,926 Timing of revenue recognition Transferred at a point in time $ 32,987 $ 2,937 $ 20,446 $ 2,098 $ — $ 58,468 Transferred over time — 6,458 — — — 6,458 Total revenues $ 32,987 $ 9,395 $ 20,446 $ 2,098 $ — $ 64,926 Adjusted EBITDAaL (37,380) 1,437 758 (3,210) (14,770) (53,165) Difference between the sum of depreciation of right-of-use assets and interest expense related to the lease obligations as compared to the cash rent paid or payable related to lease obligations with respect to the current period. 4,215 Other adjustments (ii) 1,598 Depreciation and amortization - other assets 27,735 Interest expense - other 17,899 Interest income (108) Net loss $ (104,504) Other operating segment disclosures Depreciation - right-of-use assets $ 23,164 $ 721 $ 798 $ 938 $ 116 $ 25,737 Depreciation and amortization - other assets $ 17,889 $ 288 $ 5,909 $ 3,649 $ — $ 27,735 Interest expense - lease obligations $ 13,013 $ 77 $ 139 $ 1,285 $ 227 $ 14,741 Goodwill balance $ 413,915 $ 206,385 $ 15,052 $ — $ — $ 635,352	$ 12,498 $ — $ — $ — $ — $ 12,498 12,698 — — 560 — 13,258 — 9,395 — 6 — 9,401 199 — 20,446 1,539 — 22,184 7,592 — — (7) — 7,585
	$ 32,987 $ 9,395 $ 20,446 $ 2,098 $ — $ 64,926
	$ 32,987 $ 6,644 $ 3,174 $ 2,098 $ — $ 44,903 — 2,751 17,272 — — 20,023
	$ 32,987 $ 9,395 $ 20,446 $ 2,098 $ — $ 64,926
	$ 32,987 $ 2,937 $ 20,446 $ 2,098 $ — $ 58,468 — 6,458 — — — 6,458
	$ 32,987 $ 9,395 $ 20,446 $ 2,098 $ — $ 64,926
		$ (104,504)
		$ 25,737 $ 27,735 $ 14,741 $ 635,352

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Cineplex Inc.

Notes to Interim Condensed Consolidated Financial Statements For the three and six months ended June 30, 2021 and 2020 (Unaudited)

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(expressed in thousands of Canadian dollars, except per share amounts)

Three months ended June 30,2020	Film Entertainment and Content (i) Media(i) Amusement and Leisure Location- Based Entertainment Corporate and other(iii) Consolidated	Film Entertainment and Content (i) Media(i) Amusement and Leisure Location- Based Entertainment Corporate and other(iii) Consolidated
Major product and service lines Box office $ 27 $ — $ — $ — $ — $ 27 Food service 3,086 — — 170 — 3,256 Media — 7,828 — 52 — 7,880 Amusement 12 — 3,687 32 — 3,731 Other 7,042 — — 52 — 7,094 Total revenues $ 10,167 $ 7,828 $ 3,687 $ 306 $ — $ 21,988 Primary geographical markets Canada $ 10,167 $ 5,340 $ 1,198 $ 306 $ — $ 17,011 United States and other countries — 2,488 2,489 — — 4,977 Total revenues $ 10,167 $ 7,828 $ 3,687 $ 306 $ — $ 21,988 Timing of revenue recognition Transferred at a point in time $ 10,167 $ 3,047 $ 3,687 $ 254 $ — $ 17,155 Transferred over time — 4,781 — 52 — 4,833 Total revenues $ 10,167 $ 7,828 $ 3,687 $ 306 $ — $ 21,988 Adjusted EBITDAaL (55,241) 1,100 (5,311) (3,483) (9,597) (72,532) Difference between the sum of depreciation of right-of-use assets and interest expense related to the lease obligations as compared to the cash rent paid or payable related to lease obligations with respect to the current period. 14,321 Other adjustments (ii) 4,400 Depreciation and amortization - other assets 31,759 Interest expense - other 9,719 Interest income (57) Income taxes expense (34,440) Net loss from continuing operations $ (98,234) Net loss from discontinued operations (note 16) (693) Net loss $ (98,927) Other operating segment disclosures Depreciation - right-of-use assets $ 31,956 $ 926 $ (69) $ 1,196 $ 176 $ 34,185 Depreciation and amortization - other assets $ 17,795 $ 3,241 $ 7,541 $ 3,182 $ — $ 31,759 Interest expense - lease obligations $ 10,184 $ 113 $ 154 $ 895 $ 7 $ 11,353 Goodwill balance $ 506,455 $ 206,385 $ 15,891 $ — $ — $ 728,731	$ 27 $ — $ — $ — $ — $ 27 3,086 — — 170 — 3,256 — 7,828 — 52 — 7,880 12 — 3,687 32 — 3,731 7,042 — — 52 — 7,094
	$ 10,167 $ 7,828 $ 3,687 $ 306 $ — $ 21,988
	$ 10,167 $ 5,340 $ 1,198 $ 306 $ — $ 17,011 — 2,488 2,489 — — 4,977
	$ 10,167 $ 7,828 $ 3,687 $ 306 $ — $ 21,988
	$ 10,167 $ 3,047 $ 3,687 $ 254 $ — $ 17,155 — 4,781 — 52 — 4,833
	$ 10,167 $ 7,828 $ 3,687 $ 306 $ — $ 21,988
		$ (98,234) (693)
		$ (98,927)
		$ 34,185 $ 31,759 $ 11,353 $ 728,731

(i) The Film Entertainment and Content reporting segment does not charge an access fee to the Media reporting segment for in-theatre advertising.

(ii) Other adjustments include gain/loss on disposal of assets, CDCP equity loss, foreign exchange, non-controlling interest adjusted EBITDA, depreciation and amortization for joint ventures and taxes and interest - joint ventures.

(iii) Corporate and other represents the cost of centralized corporate overhead that is not allocated to the other operating segments and includes the change in fair value of financial instruments.

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Cineplex Inc.

Notes to Interim Condensed Consolidated Financial Statements For the three and six months ended June 30, 2021 and 2020 (Unaudited)

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(expressed in thousands of Canadian dollars, except per share amounts)

Six months ended June 30,2021	Film Entertainment and Content (i) Media(i) Amusement and Leisure Location- Based Entertainment Corporate and other(iii) Consolidated	Film Entertainment and Content (i) Media(i) Amusement and Leisure Location- Based Entertainment Corporate and other(iii) Consolidated
Major product and service lines Box office $ 16,316 $ — $ — $ — $ — $ 16,316 Food service 19,015 — — 768 — 19,783 Media — 18,469 — 6 — 18,475 Amusement 271 — 33,005 2,782 — 36,058 Other 15,678 — — 28 — 15,706 Total revenues $ 51,280 $ 18,469 $ 33,005 $ 3,584 $ — $ 106,338 Primary geographical markets Canada $ 51,280 $ 12,864 $ 5,942 $ 3,584 $ — $ 73,670 United States and other countries — 5,605 27,063 — — 32,668 Total revenues $ 51,280 $ 18,469 $ 33,005 $ 3,584 $ — $ 106,338 Timing of revenue recognition Transferred at a point in time $ 51,280 $ 5,792 $ 33,005 $ 3,584 $ — $ 93,661 Transferred over time — 12,677 — — — 12,677 Total revenues $ 51,280 $ 18,469 $ 33,005 $ 3,584 $ — $ 106,338 Adjusted EBITDAaL (79,328) 2,227 (2,253) (6,380) (29,521) (115,255) Difference between the sum of depreciation of right-of-use assets and interest expense related to the lease obligations as compared to the cash rent paid or payable related to lease obligations with respect to the current period. 12,907 Other adjustments (ii) (25,983) Depreciation and amortization - other assets 57,244 Interest expense - other 31,564 Interest income (134) Provision for income taxes 3,339 Net loss $ (194,192) Other operating segment disclosures Depreciation - right-of-use assets $ 46,672 $ 1,519 $ 1,540 $ 1,926 $ 398 $ 52,055 Depreciation and amortization - other assets $ 35,605 $ 2,324 $ 11,914 $ 7,401 $ — $ 57,244 Interest expense - lease obligations $ 25,808 $ 183 $ 279 $ 2,553 $ 277 $ 29,100 Goodwill balance $ 413,915 $ 206,385 $ 15,052 $ — $ — $ 635,352	$ 16,316 $ — $ — $ — $ — $ 16,316 19,015 — — 768 — 19,783 — 18,469 — 6 — 18,475 271 — 33,005 2,782 — 36,058 15,678 — — 28 — 15,706
	$ 51,280 $ 18,469 $ 33,005 $ 3,584 $ — $ 106,338
	$ 51,280 $ 12,864 $ 5,942 $ 3,584 $ — $ 73,670 — 5,605 27,063 — — 32,668
	$ 51,280 $ 18,469 $ 33,005 $ 3,584 $ — $ 106,338
	$ 51,280 $ 5,792 $ 33,005 $ 3,584 $ — $ 93,661 — 12,677 — — — 12,677
	$ 51,280 $ 18,469 $ 33,005 $ 3,584 $ — $ 106,338
		$ (194,192)
		$ 52,055 $ 57,244 $ 29,100 $ 635,352

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Cineplex Inc.

Notes to Interim Condensed Consolidated Financial Statements For the three and six months ended June 30, 2021 and 2020 (Unaudited)

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(expressed in thousands of Canadian dollars, except per share amounts)

Six months ended June 30,2020	Film Entertainment and Content (i) Media(i) Amusement and Leisure Location- Based Entertainment Corporate and other(iii) Consolidated	Film Entertainment and Content (i) Media(i) Amusement and Leisure Location- Based Entertainment Corporate and other(iii) Consolidated
Major product and service lines Box office $ 111,029 $ — $ — $ — $ — $ 111,029 Food service 75,767 — — 6,854 — 82,621 Media — 39,466 — 571 — 40,037 Amusement 2,208 — 38,648 10,212 — 51,068 Other 19,674 — — 360 — 20,034 Total revenues $ 208,678 $ 39,466 $ 38,648 $ 17,997 $ — $ 304,789 Primary geographical markets Canada $ 208,678 $ 30,815 $ 10,297 $ 17,997 $ — $ 267,787 United States and other countries — 8,651 28,351 — — 37,002 Total revenues $ 208,678 $ 39,466 $ 38,648 $ 17,997 $ — $ 304,789 Timing of revenue recognition Transferred at a point in time $ 208,678 $ 11,557 $ 34,962 $ 17,426 $ — $ 272,623 Transferred over time — 27,909 3,686 571 — 32,166 Total revenues $ 208,678 $ 39,466 $ 38,648 $ 17,997 $ — $ 304,789 Adjusted EBITDAaL (60,660) 13,890 (4,821) (3,747) (14,804) (70,142) Difference between the sum of depreciation of right-of-use assets and interest expense related to the lease obligations as compared to the cash rent paid or payable related to lease obligations with respect to the current period. 17,449 Other adjustments (ii) 3,954 Depreciation and amortization - other assets 65,721 Interest expense - other 26,605 Interest income (129) Income taxes expense (84,407) Impairment of long-lived assets and goodwill 173,054 Net loss from continuing operations $ (272,389) Net loss from discontinued operations (note 16) (4,952) Net loss $ (277,341) Other operating segment disclosures Depreciation - right-of-use assets $ 63,611 $ 1,750 $ 1,293 $ 2,713 $ 351 $ 69,718 Depreciation and amortization - other assets $ 37,537 $ 6,307 $ 14,976 $ 6,901 $ — $ 65,721 Interest expense - lease obligations $ 20,720 $ 230 $ 317 $ 1,748 $ 16 $ 23,031 Impairment of long-lived assets and goodwill $ 140,836 $ — $ — $ 32,218 $ — $ 173,054 Goodwill balance $ 506,455 $ 206,385 $ 15,891 $ — $ — $ 728,731	$ 111,029 $ — $ — $ — $ — $ 111,029 75,767 — — 6,854 — 82,621 — 39,466 — 571 — 40,037 2,208 — 38,648 10,212 — 51,068 19,674 — — 360 — 20,034
	$ 208,678 $ 39,466 $ 38,648 $ 17,997 $ — $ 304,789
	$ 208,678 $ 30,815 $ 10,297 $ 17,997 $ — $ 267,787 — 8,651 28,351 — — 37,002
	$ 208,678 $ 39,466 $ 38,648 $ 17,997 $ — $ 304,789
	$ 208,678 $ 11,557 $ 34,962 $ 17,426 $ — $ 272,623 — 27,909 3,686 571 — 32,166
	$ 208,678 $ 39,466 $ 38,648 $ 17,997 $ — $ 304,789
		$ (272,389) (4,952)
		$ (277,341)
		$ 69,718 $ 65,721 $ 23,031 $ 173,054 $ 728,731

(i) The Film Entertainment and Content reporting segment does not charge an access fee to the Media reporting segment for in-theatre advertising.

(iii) Corporate and other represents the cost of centralized corporate overhead that is not allocated to the other operating segments and includes the change in fair value of financial instruments.

Cineplex’s cash management and other treasury functions are centralized; interest expense not related to the lease obligations and interest income are not allocated to segments. Income taxes are accounted for by entity, and cannot

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Cineplex Inc. Notes to Interim Condensed Consolidated Financial Statements For the three and six months ended June 30, 2021 and 2020 (Unaudited)

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(expressed in thousands of Canadian dollars, except per share amounts)

be attributable to individual segments. Cineplex does not report balance sheet information by segment because that information is not used to evaluate performance or allocate resources between segments.

15. Basis of presentation and accounting standards

Basis of preparation and measurement

Cineplex prepares its unaudited interim condensed consolidated financial statements in accordance with Canadian generally accepted accounting principles (“Canadian GAAP”), defined as International Financial Reporting Standards (“IFRS”) as set out in the CPA Canada Handbook. The preparation of consolidated financial statements in accordance with IFRS requires the use of certain critical accounting estimates. It also requires that management exercise judgment in applying Cineplex’s accounting policies. These unaudited interim condensed consolidated financial statements are presented in accordance with International Accounting Standard (“IAS”) 34, Interim Financial Reporting . The disclosures contained in these unaudited interim condensed consolidated financial statements do not contain all requirements of Canadian GAAP for annual consolidated financial statements and should be read in conjunction with the audited consolidated financial statements for the year ended December 31, 2020. These unaudited interim condensed consolidated financial statements follow the same accounting policies and methods of application as the audited financial statements for the year ended December 31, 2020.

Cineplex is currently evaluating any possible impact with respect to the changes surrounding the Configuration or Customization Costs in a Cloud Computing Arrangement (IAS 38). As at June 30, 2021, no impact as a result of the changes has been quantified.

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AI assistant

Cineplex Inc. — Interim / Quarterly Report 2021

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1. General information

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2. COVID-19 business impacts, risks and liquidity

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3. Impairment of long-lived assets and goodwill

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4. Right-of-use assets

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5. Deferred income taxes

6. Share-based compensation

Omnibus Incentive Plan

Stock Options

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RSU and PSU awards

Deferred equity units

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Notes payable

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Media revenues

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9. Lease obligations

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10. Share capital

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11. Other costs

12. Net loss per share

Basic

Diluted

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13. Changes in operating assets and liabilities

14. Operating segments

Film Entertainment and Content

Media

Amusement and Leisure

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Location-Based Entertainment

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Basis of preparation and measurement

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