National CineMedia Inc

Previous wording

We are America’s Movie Network. As the largest cinema advertising network in North America, we are a media company dedicated to uniting brands with young, diverse audiences through the power of movies and pop culture. We currently derive revenue principally from the sale of advertising to national, regional and local businesses in The Noovie®Show, our cinema advertising and entertainment show seen on movie screens across the U.S.

Current wording

National CineMedia is the largest cinema advertising platform in the US. With unparalleled reach and scale, NCM connects brands to sought-after young, diverse audiences through the power of movies and pop culture. A premium video, full-funnel marketing solution for advertisers, NCM enhances marketers’ ability to measure and drive results. We currently derive revenue principally from the sale of advertising to national, regional and local businesses in The Noovie®Show, our cinema advertising and entertainment show seen on movie screens across the U.S.

Previous wording

We present multiple formats of The Noovie Show depending on the theater circuit in which it runs, which may include Post-Showtime advertising inventory after the advertised showtime. As of June 27, 2024, theaters presenting The Noovie Show format with Post-Showtime Inventory made up approximately 64.8% of our network. All other NCM network theater circuits, which make up the remaining 35.2% of our network, present The Noovie Show, without Post-Showtime advertising inventory. The movie trailers presented by the theater circuits that run before the feature film are not part of The Noovie Show.

Current wording

We present multiple formats of The Noovie Show depending on the theater circuit in which it runs, which may include Post-Showtime advertising inventory after the advertised showtime. As of September 26, 2024, theaters presenting The Noovie Show format with Post-Showtime Inventory made up approximately 65.2% of our network. All other NCM network theater circuits, which make up the remaining 34.8% of our network, present The Noovie Show, without Post-Showtime advertising inventory. The movie trailers presented by the theater circuits that run before the feature film are not part of The Noovie Show.

Previous wording

We also sell advertising on our lobby network (“LEN”), a series of strategically placed screens located in movie theater lobbies, as well as other forms of advertising and promotions in theater lobbies. In addition, we sell online and mobile advertising through our Audience Accelerator, across our suite of Noovie digital properties, as well as a variety of complementary out of home venues in order to reach entertainment audiences beyond the theater. As of June 27, 2024, 7.4 million moviegoers have downloaded our mobile apps. These downloads and the acquisition of second- and third-party data have resulted in approximately 824.2 million data sets as of June 27, 2024. We have long-term exhibitor service agreements (“ESAs”) (approximately 14.6 weighted average years remaining) and multi-year agreements with our network affiliates, which expire at various dates between January 2025 and July 2033. The weighted average remaining term of the ESAs and the network affiliate agreements is 10.6 years as of June 27, 2024. The ESAs and network affiliate agreements grant NCM LLC exclusive rights in their theaters to sell advertising, subject to limited exceptions. Our Noovie Show and LEN programming are distributed predominantly via satellite through our proprietary digital content network (“DCN”).

Current wording

We also sell advertising on our lobby network (“LEN”), a series of strategically placed screens located in movie theater lobbies, as well as other forms of advertising and promotions in theater lobbies. In addition, we sell online and mobile advertising through our Noovie Audience Accelerator service, across our suite of Noovie digital properties, as well as a variety of complementary out of home venues in order to reach entertainment audiences beyond the theater. As of September 26, 2024, 7.4 million moviegoers have downloaded our mobile apps. These downloads and the acquisition of second- and third-party data have resulted in approximately 815.0 million data sets as of September 26, 2024. We have long-term exhibitor service agreements (“ESAs”) (approximately 14.4 weighted average years remaining) and multi-year agreements with our network affiliates, which expire at various dates between January 2025 and July 2033. The weighted average remaining term of the ESAs and the network affiliate agreements is 11.5 years as of September 26, 2024. The ESAs and network affiliate agreements grant NCM LLC exclusive rights in their theaters to sell advertising, subject to limited exceptions. Our Noovie Show and LEN programming are distributed predominantly via satellite through our proprietary digital content network (“DCN”).

Previous wording

Share Repurchase Program—On March 18, 2024, the Board of Directors of the Company approved a stock repurchase program under which the Company is authorized to use assets of the Company to repurchase up to $100.0 million of shares of the Company’s Common Stock, exclusive of any fees, commissions or other expenses related to such repurchases, from time to time over a period of three years. Shares may be repurchased under the program through open market purchases, block trades, or accelerated or other structured share repurchase programs. During the three and six months ended June 27, 2024, 1,911,587 and 1,919,587 shares, respectively, were repurchased on the open market. In accordance with Accounting Standards Codification ("ASC") 505 —Equity, these shares were retired and any excess over par value paid was recorded as a reduction to retained earnings of $9.3 million and $9.5 million for the three and six months ended June 27, 2024, respectively.

Current wording

Company’s Common Stock, exclusive of any fees, commissions or other expenses related to such repurchases, from time to time over a period of three years. Shares may be repurchased under the program through open market purchases, block trades, or accelerated or other structured share repurchase programs. During the three and nine months ended September 26, 2024, 304,901 and 2,224,488 shares, respectively, were repurchased on the open market. In accordance with Accounting Standards Codification (“ASC”) 505 —Equity, these shares were retired and any excess over par value paid was recorded as a reduction to retained earnings of $1.9 million and $11.3 million for the three and nine months ended September 26, 2024, respectively.

Previous wording

On June 27, 2023, the Bankruptcy Court entered an order (the “Confirmation Order”) confirming NCM LLC’s Modified First Amended Plan of Reorganization of National CineMedia, LLC Pursuant to Chapter 11 of the Bankruptcy Code [Docket No. 428] (as may be amended, modified, or supplemented form time to time, the “Plan”) and approving the Amended Disclosure Statement for First Amended Chapter 11 Plan of Reorganization of National CineMedia, LLC [Docket No. 250] (the “Disclosure Statement”) on a final basis. Following confirmation of the Plan on August 7, 2023 (the “Effective Date’), all the conditions to effectiveness of the Plan were satisfied or waived, the Restructuring Transactions (as defined in the “Plan”) were substantially consummated and NCM LLC emerged from bankruptcy. Among other things, on the Effective Date, in accordance with the Plan, all common units under the NCM LLC’s Third Amended and Restated Limited Liability Company Operating Agreement (the “NCM LLC Operating Agreement”) were canceled and extinguished, NCM, Inc. received NCM LLC common units and transferred the NCM Capital Contribution (as defined in the Plan) of approximately $15.5 million to NCM LLC, NCM LLC assumed certain unexpired Executory Contracts and Unexpired Leases (each, as defined in the Plan), including AMC’s and Cinemark’s ESAs, NCM LLC transferred $8.8 million of cash to a professional fees escrow account and $15.0 million to an unsecured creditor settlements escrow account for the General Unsecured Claim Pool (as defined in the Plan). NCM LLC commenced distributions to creditors, including the issuance of shares of NCM, Inc. common stock to holders of Secured Debt Claims (as defined in the Plan) and NCM LLC entered into an Exit Facility (as defined in the Plan) to support operations upon emergence. As a result of the Plan, all historical debt of NCM LLC was discharged and NCM LLC recorded a gain on bankruptcy of $916.4 million for the year ended December 28, 2023.

Current wording

On June 27, 2023, the Bankruptcy Court entered an order (the “Confirmation Order”) confirming NCM LLC’s Modified First Amended Plan of Reorganization of National CineMedia, LLC Pursuant to Chapter 11 of the Bankruptcy Code [Docket No. 428] (as may be amended, modified, or supplemented form time to time, the “Plan”) and approving the Amended Disclosure Statement for First Amended Chapter 11 Plan of Reorganization of National CineMedia, LLC [Docket No. 250] (the “Disclosure Statement”) on a final basis. Following confirmation of the Plan on August 7, 2023 (the “Effective Date’), all the conditions to effectiveness of the Plan were satisfied or waived, the Restructuring Transactions (as defined in the “Plan”) were substantially consummated and NCM LLC emerged from bankruptcy. Among other things, on the Effective Date, in accordance with the Plan, all common units under the NCM LLC’s Third Amended and Restated Limited Liability Company Operating Agreement (the “NCM LLC Operating Agreement”) were canceled and extinguished, NCM, Inc. received NCM LLC common units and transferred the NCM Capital Contribution (as defined in the Plan) of approximately $15.5 million to NCM LLC, NCM LLC assumed certain unexpired Executory Contracts and Unexpired Leases (each, as defined in the Plan), including AMC’s and Cinemark’s ESAs, NCM LLC transferred $8.8 million of cash to a professional fees escrow account and $15.0 million to an unsecured creditor settlements escrow account for the General Unsecured Claim Pool (as defined in the Plan). NCM LLC commenced distributions to creditors, including the issuance of shares of NCM, Inc. common stock to holders of Secured Debt Claims (as defined in the Plan) and NCM LLC entered into an Exit Facility (as defined in the Plan) to support operations upon emergence. As a result of the Plan, all historical debt of NCM LLC was discharged and NCM LLC recorded a gain on bankruptcy of $916.4 million for the nine months and year ended December 28, 2023.

Previous wording

Additionally, upon emergence from bankruptcy, NCM, Inc., regained control and retained 100.0% ownership of NCM LLC, after taking into account elections by the holders of Secured Debt Claims to receive NCM, Inc. common stock in lieu of NCM LLC common units and was therefore reconsolidated into the Company’s financial statements prospectively as of August 7, 2023 akin to an acquisition under ASC 805 – Business Combinations. In accordance with ASC 805– Business Combinations, the assets and liabilities of NCM LLC were adjusted to their estimated fair value as of the Effective Date.

Current wording

Additionally, upon emergence from bankruptcy, NCM, Inc., regained control and retained 100.0% ownership of NCM LLC, after taking into account elections by the holders of Secured Debt Claims to receive NCM, Inc. common stock in lieu of NCM LLC common units and was therefore reconsolidated into the Company’s financial statements prospectively as of August 7, 2023 akin to an acquisition under ASC 805 – Business Combinations. In accordance with ASC 805– Business Combinations, the assets and liabilities of NCM LLC were adjusted to their estimated fair value as of the Effective Date. All activity during the Chapter 11 Case from April 11, 2023 to August 7, 2023 when NCM LLC was deconsolidated from NCM, Inc. represents activity and balances for NCM, Inc. standalone. All activity and balances prior to the deconsolidation of NCM LLC on April 11, 2023 and after the reconsolidation of NCM LLC on August 7, 2023 represent NCM, Inc. consolidated, inclusive of NCM LLC.

Previous wording

The results of operations data for the three months ended June 27, 2024 (second quarter of 2024) and June 29, 2023 (second quarter of 2023) and the six months ended June 27, 2024 and June 29, 2023 were derived from the unaudited Condensed Consolidated Financial Statements and accounting records of NCM, Inc. and should be read in conjunction with the accompanying notes.

Current wording

The results of operations data for the three months ended September 26, 2024 (third quarter of 2024) and September 28, 2023 (third quarter of 2023) and the nine months ended September 26, 2024 and September 28, 2023 were derived from the unaudited Condensed Consolidated Financial Statements and accounting records of NCM, Inc. and should be read in conjunction with the accompanying notes.

Previous wording

Our Network—The change in the number of screens in our network by the ESA Parties and network affiliates during the six months ended June 27, 2024 was as follows.

Current wording

Our Network—The change in the number of screens in our network by the ESA Parties and network affiliates during the nine months ended September 26, 2024 was as follows.

Previous wording

Represents the loss of two of our affiliates following the end of their affiliate agreements resulting in a reduction of 89 affiliate screens to our network as of June 27, 2024.

Current wording

Represents the loss of three of our affiliates following the end of their affiliate agreements resulting in a reduction of 167 affiliate screens to our network as of September 26, 2024.

Previous wording

Represents the closure of 35 screens, net of new screens added, across our ESA Parties and network affiliates.

Current wording

Represents the closure of 95 screens, net of new screens added, across our ESA Parties and network affiliates.

Previous wording

Revenue. Total revenue increased $39.9 million, or 269.6%, from $14.8 million for the second quarter of 2023 to $54.7 million for the second quarter of 2024. The following is a summary of revenue by category (in millions):

Current wording

Revenue. Total revenue increased $37.7 million, or 152.6%, from $24.7 million for the third quarter of 2023 to $62.4 million for the third quarter of 2024. The following is a summary of revenue by category (in millions):

Previous wording

Local and regional advertising revenue. Local and regional advertising revenue increased by $8.7 million, or 790.9%, from $1.1 million for the second quarter of 2023 to $9.8 million for the second quarter of 2024. The increase in local and regional advertising revenue was primarily due to the deconsolidation of NCM LLC during the majority of the second quarter of 2023 while NCM LLC's Chapter 11 Case was ongoing. The $1.1 million of revenue within the second quarter of 2023 represents the 12 days of activity of NCM LLC prior to the deconsolidation event upon the filing of the Chapter 11 Case, compared to the $9.8 million of revenue in the second quarter of 2024 representing a full quarter of consolidated activity.

Current wording

Local and regional advertising revenue. Local and regional advertising revenue increased by $6.3 million, or 123.5%, from $5.1 million for the third quarter of 2023 to $11.4 million for the third quarter of 2024. The increase in local and regional advertising revenue was primarily due to the reconsolidation of NCM LLC during the third quarter of 2023. The $5.1 million of revenue within the third quarter of 2023 represents the activity of NCM LLC after the reconsolidation of NCM LLC on August 7, 2023, compared to the $11.4 million of revenue in the third quarter of 2024 representing a full quarter of consolidated activity.

Previous wording

Management fee reimbursement. Management fee reimbursement decreased $7.7 million, or 100.0%, from $7.7 million for the second quarter of 2023 to $0.0 million for the second quarter of 2024. The $7.7 million represents the revenue recognized by NCM, Inc. for managing unconsolidated NCM LLC during the second quarter of 2023. This amount is equal to the expenses incurred by NCM, Inc. that were paid by NCM LLC. In the second quarter of 2024, NCM LLC is consolidated by NCM, Inc. following the completion of NCM LLC's Chapter 11 Case and these amounts have been eliminated upon consolidation.

Current wording

Management fee reimbursement. Management fee reimbursement decreased $2.4 million, or 100.0%, from $2.4 million for the third quarter of 2023 to $0.0 million for the third quarter of 2024. The $2.4 million represents the revenue recognized by NCM, Inc. for managing unconsolidated NCM LLC during a portion of the third quarter of 2023. This amount is equal to the expenses incurred by NCM, Inc. that were paid by NCM LLC. In the third quarter of 2024, NCM LLC is reconsolidated by NCM, Inc. following the completion of NCM LLC's Chapter 11 Case and these amounts have been eliminated upon consolidation.

Previous wording

Operating expenses. Total operating expenses increased $44.3 million, or 224.9%, from $19.7 million for the second quarter of 2023 to $64.0 million for the second quarter of 2024. The following table shows the changes in operating expense for the second quarter of 2024 (in millions):

Current wording

Operating expenses. Total operating expenses increased $32.9 million, or 88.9%, from $37.0 million for the third quarter of 2023 to $69.9 million for the third quarter of 2024. The following table shows the changes in operating expense for the third quarter of 2024 (in millions):

Previous wording

ESA Parties and network affiliate fees. ESA Parties and network affiliate fees increased by $22.2 million, or 493.3%, from $4.5 million for the second quarter of 2023 to $26.7 million for the second quarter of 2024. The increase in ESA Parties and network affiliate fees was primarily due to the deconsolidation of NCM LLC during the majority of the second quarter of 2023 while NCM LLC's Chapter 11 Case was ongoing. The $4.5 million of expense within the second quarter of 2023 represents the

Current wording

ESA Parties and network affiliate fees. ESA Parties and network affiliate fees increased by $18.4 million, or 126.9%, from $14.5 million for the third quarter of 2023 to $32.9 million for the third quarter of 2024. The increase in ESA Parties and network affiliate fees was primarily due to the reconsolidation of NCM LLC during the third quarter of 2023. The $14.5 million of expense within the third quarter of 2023 represents the activity of NCM LLC after the reconsolidation of NCM LLC on August 7, 2023, compared to the $32.9 million of expense in the third quarter of 2024 representing a full quarter of consolidated activity.

Previous wording

Administrative and other costs. Administrative and other costs increased $0.9 million, or 7.2%, from $12.5 million for the second quarter of 2023 to $13.4 million for the second quarter of 2024. The increase was primarily due to a $2.5 million increase in stock based compensation following the grant of a management equity incentive plan in the first quarter of 2024 compared to no grant activity in 2023, a $1.7 million increase in other corporate expenses due to the deconsolidation of NCM LLC during the majority of the second quarter of 2023 while NCM LLC's Chapter 11 Case was ongoing and a $1.0 million increase in severance expense due to the non-renewal of the former President - Sales, Marketing and Partnerships' contract. These increases were partially offset by a $4.3 million decrease in advisor and legal fees related to the Chapter 11 Case and Cineworld Proceeding for the second quarter of 2024, compared to the second quarter of 2023.

Current wording

Administrative and other costs. Administrative and other costs increased $5.6 million, or 76.7%, from $7.3 million for the third quarter of 2023 to $12.9 million for the third quarter of 2024. The increase was primarily due to a $3.8 million increase in advisor and legal fees related to the Chapter 11 Case and Cineworld Proceeding for the third quarter of 2024, compared to the third quarter of 2023, due to the deconsolidation of NCM LLC during a portion of the third quarter of 2023 while NCM LLC's Chapter 11 Case was ongoing, as well as additional costs incurred in the third quarter of 2024 related to ongoing litigation regarding unsettled claims. The increase is also due to a $1.7 million increase in stock based compensation following the grant of a management equity incentive plan in the first quarter of 2024 compared to limited grant activity in 2023 and a $0.4 million increase in other corporate expenses due to the deconsolidation of NCM LLC during a portion of the third quarter of 2023 while NCM LLC's Chapter 11 Case was ongoing. These increases were partially offset by a $0.5 million decrease in personnel costs due to the workforce reorganization in the first quarter of 2024.

Previous wording

Depreciation expense. Depreciation expense increased $0.9 million, or 450.0%, from $0.2 million for the second quarter of 2023 to $1.1 million in the second quarter of 2024. The increase in depreciation expense was primarily due to the deconsolidation of NCM LLC during the majority of the second quarter of 2023 while NCM LLC's Chapter 11 Case was ongoing. The $0.2 million of expense within the second quarter of 2023 represents the 12 days of activity of NCM LLC prior to the deconsolidation event upon the filing of the Chapter 11 Case, compared to the $1.1 million of expense in the second quarter of 2024 representing a full quarter of consolidated activity.

Current wording

Depreciation expense. Depreciation expense increased $0.6 million, or 100.0%, from $0.6 million for the third quarter of 2023 to $1.2 million in the third quarter of 2024. The increase in depreciation expense was primarily due to the reconsolidation of NCM LLC during the third quarter of 2023. The $0.6 million of expense within the third quarter of 2023 represents the activity of NCM LLC after the reconsolidation of NCM LLC on August 7, 2023, compared to the $1.2 million of expense in the third quarter of 2024 representing a full quarter of consolidated activity.

Previous wording

Amortization expense. Amortization expense increased $8.6 million, or 955.6%, from $0.9 million for the second quarter of 2023 to $9.5 million for the second quarter of 2024. The increase in amortization expense was primarily due to the deconsolidation of NCM LLC during the majority of the second quarter of 2023 while NCM LLC's Chapter 11 Case was ongoing. The $0.9 million of expense within the second quarter of 2023 represents the 12 days of activity of NCM LLC prior to the deconsolidation event upon the filing of the Chapter 11 Case, compared to the $9.5 million of expense in the second quarter of 2024 representing a full quarter of consolidated activity.

Current wording

Amortization expense. Amortization expense increased $3.8 million, or 66.7%, from $5.7 million for the third quarter of 2023 to $9.5 million for the third quarter of 2024. The increase in amortization expense was primarily due to the reconsolidation of NCM LLC during the third quarter of 2023. The $5.7 million of expense within the third quarter of 2023 represents the activity of NCM LLC after the reconsolidation of NCM LLC on August 7, 2023, compared to the $9.5 million of expense in the third quarter of 2024 representing a full quarter of consolidated activity.

Previous wording

Non-operating income. Total non-operating income decreased $549.6 million, or 99.9%, from $550.2 million in non-operating income for the second quarter of 2023 to $0.6 million in non-operating income for the second quarter of 2024. The following table shows the changes in non-operating income/expense for the second quarter of 2024 and the second quarter of 2023 (in millions):

Current wording

Non-operating (income) expense. Total non-operating (income) expense decreased $190.2 million, or 98.0%, from $194.1 million in non-operating income for the third quarter of 2023 to $3.9 million in non-operating income for the third quarter of 2024. The following table shows the changes in non-operating (income) expense for the third quarter of 2024 and the third quarter of 2023 (in millions):

Previous wording

The decrease in non-operating income was primarily due to a $557.7 million decrease in the gain on deconsolidation of LLC in the second quarter of 2024, as compared to the second quarter of 2023, due to the Chapter 11 Case filed by NCM LLC in the second quarter of 2023. This was partially offset by a $4.0 million decrease on the gain on re-measurement of the payable under the tax receivable agreement, a $2.7 million decrease in interest on borrowings primarily due to the discharge of historical debt that occurred upon NCM LLC’s emergence from bankruptcy and reconsolidation by NCM, Inc. on August 7, 2023, a $0.7 million increase in interest income and a $0.7 million increase in other non-operating income.

Current wording

The decrease in non-operating income was primarily due to a $168.0 million decrease in the gain on reconsolidation of NCM LLC and a $35.3 million decrease in gain on re-measurement of investment in NCM LLC in the third quarter of 2024, as compared to the third quarter of 2023. This was partially offset by a $12.3 million increase in the gain on the re-measurement of the payable under the tax receivable agreement due to adjustments in management's forecast for future years following increased insight into the respective movie slates and market demand and a $0.7 million increase in interest income in the third quarter of 2024, as compared to the third quarter of 2023.

Previous wording

The following table presents operating data and Adjusted OIBDA (dollars in millions, except share and margin data) for the three months ended June 27, 2024 (second quarter of 2024) and June 29, 2023 (second quarter of 2023) for NCM LLC:

Current wording

The following table presents operating data and Adjusted OIBDA (dollars in millions, except share and margin data) for the three months ended September 26, 2024 (third quarter of 2024) and September 28, 2023 (third quarter of 2023) for NCM LLC:

Previous wording

Revenue. Revenue decreased $7.2 million, or 7.3%, from $99.3 million for the six months ended June 29, 2023 to $92.1 million for the six months ended June 27, 2024.

Current wording

Revenue. Revenue decreased $7.2 million, or 10.3%, from $69.6 million for the third quarter of 2023 to $62.4 million for the third quarter of 2024.

Previous wording

National advertising revenue decreased by $2.6 million, or 5.9%, from $44.3 million for the second quarter of 2023 to $41.7 million for the second quarter of 2024. The decrease in national advertising revenue was primarily due to a 31.2% decrease in attendance due to a decreased movie slate in the second quarter of 2024 compared to the second quarter of 2023, caused by the writer and actor strikes in 2023. The decrease was partially offset by a 26.1% increase in national advertising utilization in the second quarter of 2024, as compared to the second quarter of 2023, as well as a 5.0% increase in CPMs in the second quarter of 2024, as compared to the second quarter of 2023. Inventory utilization is calculated as utilized impressions divided by total advertising impressions, which is based on eleven 30-second salable national advertising units in NCM LLC’s Noovie show, which can be expanded should market demand dictate.

Current wording

National advertising revenue decreased by $5.2 million, or 10.0%, from $52.0 million for the third quarter of 2023 to $46.8 million for the third quarter of 2024. The decrease in national advertising revenue was primarily due to a 7.7% decrease in attendance due to a decreased movie slate in the third quarter of 2024 compared to the third quarter of 2023, caused by the writer and actor strikes in 2023 and a 4.5% decrease in CPMs in the third quarter of 2024, as compared to the third quarter of 2023.

Previous wording

Local and regional advertising revenue decreased by $3.6 million, or 26.9%, from $13.4 million for the second quarter of 2023 to $9.8 million for the second quarter of 2024. The decrease in local and regional advertising revenue was primarily due to a decrease in contract activity and size within the government, education and travel categories due in part to a 31.2% decrease in attendance due to a decreased movie slate in the second quarter of 2024 compared to the second quarter of 2023, caused by the writer and actor strikes in 2023. The decrease was partially offset by an increase in contract activity and size within the retail and apparel, technology and automotive categories as well as the launch of the new programmatic offering in the second quarter of 2024, as compared to the second quarter of 2023.

Current wording

Local and regional advertising revenue decreased by $1.5 million, or 11.6%, from $12.9 million for the third quarter of 2023 to $11.4 million for the third quarter of 2024. The decrease in local and regional advertising revenue was primarily due to a decrease in contract activity and size within the government, consumer packaged goods, entertainment, and education categories partially driven by a decreased movie slate in the third quarter of 2024 compared to the third quarter of 2023 due to the writer and actor strikes in 2023. The decrease was partially offset by an increase in contract activity and size within the automotive, healthcare, wireless and insurance categories, in the third quarter of 2024, as compared to the third quarter of 2023, as well as by the launch of the new programmatic offering in early 2024.

Previous wording

ESA Parties and network affiliate fees. ESA Parties and network affiliate fees decreased by $3.2 million, or 10.7%, from $29.9 million for the second quarter of 2023 to $26.7 million for the second quarter of 2024. The decrease was primarily due to a 31.2% decrease in network attendance, as well as the rejection of certain affiliate agreements through the bankruptcy proceedings in 2023. These decreases were partially offset by the increase in fees owed under the Regal Advertising Agreement, which commenced on July 14, 2023, as well as due to contractual rate increases with the ESA parties for the second quarter of 2024, as compared to the second quarter of 2023.

Current wording

ESA Parties and network affiliate fees. ESA Parties and network affiliate fees decreased by $1.9 million, or 5.5%, from $34.8 million for the third quarter of 2023 to $32.9 million for the third quarter of 2024. The decrease was primarily due to a 7.7% decrease in network attendance, as well as the rejection of certain affiliate agreements through the bankruptcy proceedings in 2023. These decreases were partially offset by contractual rate increases with the ESA parties for the third quarter of 2024, as compared to the third quarter of 2023.

Previous wording

Administrative and other costs. Administrative and other costs decreased $2.1 million, or 13.5%, from $15.5 million for the second quarter of 2023 to $13.4 million for the second quarter of 2024. The decrease was primarily related to a $2.9 million decrease in legal and professional fees related to the Chapter 11 Case and Cineworld Proceeding incurred in the second quarter of 2023 prior to the filing of the Chapter 11 Case compared to fees related to the Chapter 11 Case and Cineworld Proceeding incurred in the second quarter of 2024. All fees incurred in the second quarter of 2023 related to the Chapter 11 Case subsequent to the filing of the Chapter 11 Case were presented separately within ‘Reorganization Items’ on the unaudited

Current wording

Administrative and other costs. Administrative and other costs decreased $13.1 million, or 50.4%, from $26.0 million for the third quarter of 2023 to $12.9 million for the third quarter of 2024. The decrease was primarily related to a $12.9 million decrease in legal and professional fees related to the Chapter 11 Case and Cineworld Proceeding incurred in the third quarter of 2023 compared the third quarter of 2024. Additionally, the decrease was due to a $1.9 million decrease in personnel related costs due to the workforce reorganization in the first quarter of 2024 and a retention program implemented to ensure continuity of the management team during the Chapter 11 Case in place during the third quarter of 2023. These decreases were partially offset by a $1.5 million increase in stock based compensation following the grant of a management equity incentive plan in the first quarter of 2024 compared to limited grant activity in 2023.

Previous wording

Depreciation expense. Depreciation expense decreased $0.2 million, or 15.4%, from $1.3 million for the second quarter of 2023 to $1.1 million in the second quarter of 2024. This decrease was primarily due to the fair value adjustments to NCM LLC's property and equipment upon reconsolidation by NCM, Inc. on August 7, 2023.

Current wording

Depreciation expense. Depreciation expense increased $0.2 million, or 20.0%, from $1.0 million for the third quarter of 2023 to $1.2 million in the third quarter of 2024. This decrease was primarily due to the fair value adjustments to NCM LLC's property and equipment upon reconsolidation by NCM, Inc. on August 7, 2023, as well as, accelerated depreciation recognized on leasehold improvements in conjunction with the relocation of one office location.

Previous wording

Amortization expense. Amortization expense increased $3.3 million, or 53.2%, from $6.2 million for the second quarter of 2023 to $9.5 million for the second quarter of 2024. The increase was primarily due to the fair value adjustments to NCM LLC's intangible assets upon reconsolidation by NCM, Inc. on August 7, 2023.

Current wording

Amortization expense. Amortization expense increased $1.7 million, or 21.8%, from $7.8 million for the third quarter of 2023 to $9.5 million for the third quarter of 2024. The increase was primarily due to the fair value adjustments to NCM LLC's intangible assets upon reconsolidation by NCM, Inc. on August 7, 2023.

Previous wording

Six months ended June 27, 2024 and June 29, 2023 for NCM, Inc.

Current wording

Nine months ended September 26, 2024 and September 28, 2023 for NCM, Inc.

Previous wording

Revenue. Total revenue increased $42.4 million, or 85.3%, from $49.7 million for the six months ended June 29, 2023 to $92.1 million for the six months ended June 27, 2024. The following is a summary of revenue by category (in millions):

Current wording

Revenue. Total revenue increased $80.1 million, or 107.7%, from $74.4 million for the nine months ended September 28, 2023 to $154.5 million for the nine months ended September 26, 2024. The following is a summary of revenue by category (in millions):

Previous wording

ESA Party beverage revenue. National advertising revenue from the ESA Parties’ beverage concessionaire agreement increased $0.5 million, or 9.3%, from $5.4 million for the six months ended June 29, 2023 to $5.9 million for the six months ended June 27, 2024. The increase in ESA Party beverage revenue was primarily due to the deconsolidation of NCM LLC during a portion of the six months ended June 29, 2023 while NCM LLC's Chapter 11 Case was ongoing. The $5.4 million of revenue within the six months ended June 29, 2023 represents the 103 days of activity of NCM LLC prior to the deconsolidation event upon the filing of the Chapter 11 Case, compared to the $5.9 million of revenue in the six months ended June 27, 2024 representing two full quarters of consolidated activity. This increase was partially offset by the discontinuation of Regal's beverage revenue following Regal’s termination of their ESA in 2023, as well as, the impact of a 19.3% decrease in ESA Party attendance for the six months ended June 27, 2024, as compared to the six months ended June 29, 2023.

Current wording

ESA Party beverage revenue. ESA Party beverage revenue increased $3.0 million, or 42.3%, from $7.1 million for the nine months ended September 28, 2023 to $10.1 million for the nine months ended September 26, 2024. The increase in ESA Party beverage revenue was primarily due to the deconsolidation and reconsolidation of NCM LLC within the nine months ended September 28, 2023. The $7.1 million of revenue within the nine months ended September 28, 2023 represents the activity of NCM LLC prior to the deconsolidation of NCM LLC on April 11, 2023 and after the reconsolidation of NCM LLC on August 7, 2023, compared to the $10.1 million of revenue in the nine months ended September 26, 2024 representing three full quarters of consolidated activity. This increase was partially offset by the discontinuation of Regal's beverage revenue following Regal’s termination of their ESA in 2023, as well as the impact of a 13.7% decrease in ESA Party attendance for the nine months ended September 26, 2024, as compared to the nine months ended September 28, 2023.

Previous wording

Management fee reimbursement. Management fee reimbursement decreased $7.7 million, or 100%, from $7.7 million for the six months ended June 29, 2023 to $0.0 million for the six months ended June 27, 2024. The $7.7 million represents the revenue recognized by NCM, Inc. for managing unconsolidated NCM LLC during the six months ended June 29, 2023. This amount is equal to the expenses incurred by NCM, Inc. that were paid by NCM LLC. In the six months ended June 27, 2024, NCM LLC is consolidated by NCM, Inc., following the completion of NCM LLC's Chapter 11 Case and these amounts have been eliminated upon consolidation.

Current wording

Management fee reimbursement. Management fee reimbursement decreased $10.1 million, or 100%, from $10.1 million for the nine months ended September 28, 2023 to $0.0 million for the nine months ended September 26, 2024. The $10.1 million represents the revenue recognized by NCM, Inc. for managing unconsolidated NCM LLC during the nine months ended September 28, 2023. This amount is equal to the expenses incurred by NCM, Inc. that were paid by NCM LLC. In the nine months ended September 26, 2024, NCM LLC is consolidated by NCM, Inc., following the completion of NCM LLC's Chapter 11 Case and these amounts have been eliminated upon consolidation.

Previous wording

Operating expenses. Total operating expenses increased $38.9 million, or 45.7%, from $85.2 million for the six months ended June 29, 2023 to $124.1 million for the six months ended June 27, 2024. The following table shows the changes in operating expense for the six months ended June 27, 2024 and June 29, 2023 (in millions):

Current wording

Operating expenses. Total operating expenses increased $71.8 million, or 58.8%, from $122.1 million for the nine months ended September 28, 2023 to $193.9 million for the nine months ended September 26, 2024. The following table shows the changes in operating expense for the nine months ended September 26, 2024 and September 28, 2023 (in millions):

Previous wording

Selling and marketing costs. Selling and marketing costs increased $9.0 million, or 84.9%, from $10.6 million for the six months ended June 29, 2023 to $19.6 million for the six months ended June 27, 2024. The increase in selling and marketing costs was primarily due to the deconsolidation of NCM LLC during a portion of the six months ended June 29, 2023 while NCM LLC's Chapter 11 Case was ongoing. The $10.6 million of expense within the six months ended June 29, 2023 represents the 103 days of activity of NCM LLC prior to the deconsolidation event upon the filing of the Chapter 11 Case, compared to the $19.6 million of expense in the six months ended June 27, 2024 representing two full quarters of consolidated activity.

Current wording

Network operating costs. Network operating costs increased $3.7 million, or 53.6%, from $6.9 million for the nine months ended September 28, 2023, to $10.6 million for the nine months ended September 26, 2024. The increase in network operating costs was primarily due to the deconsolidation and reconsolidation of NCM LLC within the nine months ended September 28, 2023. The $6.9 million of expense within the nine months ended September 28, 2023 represents the activity of NCM LLC prior to the deconsolidation of NCM LLC on April 11, 2023 and after the reconsolidation of NCM LLC on August 7, 2023, compared to the $10.6 million of expense in the nine months ended September 26, 2024 representing three full quarters of consolidated activity.

Previous wording

ESA Parties and network affiliate fees. ESA Parties and network affiliate fees increased $20.9 million, or 73.9%, from $28.3 million for the six months ended June 29, 2023 to $49.2 million for the six months ended June 27, 2024. The increase in ESA Parties and network affiliate fees was primarily due to the deconsolidation of NCM LLC during a portion of the six months ended June 29, 2023 while NCM LLC's Chapter 11 Case was ongoing. The $28.3 million of expense within the six months ended June 29, 2023 represents the 103 days of activity of NCM LLC prior to the deconsolidation event upon the filing of the Chapter 11 Case, compared to the $49.2 million of expense in the six months ended June 27, 2024 representing two full quarters of consolidated activity.

Current wording

ESA Parties and network affiliate fees. ESA Parties and network affiliate fees increased $39.3 million, or 91.8%, from $42.8 million for the nine months ended September 28, 2023 to $82.1 million for the nine months ended September 26, 2024. The increase in ESA Parties and network affiliate fees was primarily due to the deconsolidation and reconsolidation of NCM LLC within the nine months ended September 28, 2023. The $42.8 million of expense within the nine months ended September 28, 2023 represents the activity of NCM LLC prior to the deconsolidation of NCM LLC on April 11, 2023 and after the reconsolidation of NCM LLC on August 7, 2023, compared to the $82.1 million of expense in the nine months ended September 26, 2024 representing three full quarters of consolidated activity.

Previous wording

Administrative and other costs. Administrative and other costs decreased $6.4 million, or 19.2%, from $33.3 million for the six months ended June 29, 2023 to $26.9 million for the six months ended June 27, 2024. The decrease is primarily due to a $12.7 million decrease in advisor and legal fees related to the Chapter 11 Case and Cineworld Proceeding for the six months ended June 27, 2024, compared to the six months ended June 29, 2023. The decrease was partially offset by a $3.5 million increase in stock based compensation following the grant of a management equity incentive plan in the first quarter of 2024 compared to no grant activity in 2023, a $1.6 million increase in other corporate expenses due to the deconsolidation of NCM LLC during the majority of the second quarter of 2023 while NCM LLC's Chapter 11 Case was ongoing and a $1.1 million increase in severance expense due to the non-renewal of the former President - Sales, Marketing and Partnerships' contract for the six months ended June 27, 2024, compared to the six months ended June 29, 2023.

Current wording

Administrative and other costs. Administrative and other costs decreased $0.8 million, or 2.0%, from $40.6 million for the nine months ended September 28, 2023 to $39.8 million for the nine months ended September 26, 2024. The decrease is primarily due to an $8.2 million decrease in advisor and legal fees related to the Chapter 11 Case and Cineworld Proceeding for the nine months ended September 26, 2024, compared to the nine months ended September 28, 2023. The decrease was partially offset by a $4.6 million increase in stock based compensation following the grant of a management equity incentive plan in the first quarter of 2024 compared to limited grant activity in 2023, a $1.5 million increase in other corporate expenses due to the deconsolidation of NCM LLC during a portion of the nine months ended September 28, 2023 while NCM LLC's Chapter 11 Case was ongoing and a $1.2 million increase in severance expense due to the non-renewal of the former President - Sales, Marketing and Partnerships' contract for the nine months ended September 26, 2024, compared to the nine months ended September 28, 2023.

Previous wording

Depreciation expense. Depreciation expense increased $0.7 million, or 46.7%, from $1.5 million for the six months ended June 29, 2023 to $2.2 million for the six months ended June 27, 2024. The increase in depreciation expense was primarily due to the deconsolidation of NCM LLC during a portion of the six months ended June 29, 2023 while NCM LLC's Chapter 11 Case was ongoing. The $1.5 million of expense for the six months ended June 29, 2023 represents the 103 days of activity of NCM LLC within the six months ended June 29, 2023 prior to the deconsolidation event upon the filing of the Chapter 11 Case, compared to the $2.2 million of expense in the six months ended June 27, 2024 representing two full quarters of consolidated activity.

Current wording

Depreciation expense. Depreciation expense increased $1.3 million, or 61.9%, from $2.1 million for the nine months ended September 28, 2023 to $3.4 million for the nine months ended September 26, 2024. The increase in depreciation expense was primarily due to the deconsolidation and reconsolidation of NCM LLC within the nine months ended September 28, 2023. The $2.1 million of expense for the nine months ended September 28, 2023 represents the activity of NCM LLC prior to the deconsolidation of NCM LLC on April 11, 2023 and after the reconsolidation of NCM LLC on August 7, 2023, compared to the $3.4 million of expense in the nine months ended September 26, 2024 representing three full quarters of consolidated activity.

Previous wording

Amortization expense. Amortization expense increased $11.8 million, or 166.2%, from $7.1 million for the six months ended June 29, 2023 to $18.9 million for the six months ended June 27, 2024. The increase in amortization expense was primarily due to the deconsolidation of NCM LLC during a portion of the six months ended June 29, 2023 while NCM LLC's Chapter 11 Case was ongoing. The $7.1 million of expense for the six months ended June 29, 2023 represents the 103 days of activity of NCM LLC within the six months ended June 29, 2023 prior to the deconsolidation event upon the filing of the Chapter 11 Case, compared to the $18.9 million of expense in the six months ended June 27, 2024 representing two full quarters of consolidated activity. The increase was also due to the fair value adjustments to NCM LLC's intangible assets upon reconsolidation by NCM, Inc. on August 7, 2023.

Current wording

Amortization expense. Amortization expense increased $15.6 million, or 121.9%, from $12.8 million for the nine months ended September 28, 2023 to $28.4 million for the nine months ended September 26, 2024. The increase in amortization expense was primarily due to the deconsolidation and reconsolidation of NCM LLC within the nine months ended September 28, 2023. The $12.8 million of expense for the nine months ended September 28, 2023 represents the activity of NCM LLC prior to the deconsolidation of NCM LLC on April 11, 2023 and after the reconsolidation of NCM LLC on August 7, 2023, compared to the $28.4 million of expense in the nine months ended September 26, 2024 representing three full quarters of consolidated activity. The increase was also due to the fair value adjustments to NCM LLC's intangible assets upon reconsolidation by NCM, Inc. on August 7, 2023.

Previous wording

Non-operating expense (income). Total non-operating expense increased $538.2 million, or 102.2%, from $526.8 million of non-operating income for the six months ended June 29, 2023 to $11.4 of non-operating expense for the six months ended June 27, 2024. The following table shows the changes in non-operating expense for the six months ended June 29, 2023 and June 27, 2024 (in millions):

Current wording

Non-operating expense (income). Total non-operating expense (income) increased $728.3 million, or 101.1%, from $720.7 million of non-operating income for the nine months ended September 28, 2023 to $7.6 of non-operating expense for the nine months ended September 26, 2024. The following table shows the changes in non-operating expense (income) for the nine months ended September 28, 2023 and September 26, 2024 (in millions):

Previous wording

The increase in non-operating expense was primarily due to the $557.7 million gain on deconsolidation of LLC recognized in the second quarter of 2023. Additionally, there was a $8.8 million increase in the loss on the re-measurement of the payable to the founding members under the tax receivable agreement due to the inclusion of three years of projected taxable book income/(loss) within the calculation of the TRA payable in the six months ended June 27, 2024, as compared to only one year in the six months ended June 29, 2023, due to management’s ability to more accurately forecast following the conclusion of the COVID-19 pandemic. This increase was partially offset by a $26.2 million decrease in interest on borrowings primarily due to the discharge of historical debt that occurred upon NCM LLC’s emergence from bankruptcy and reconsolidation by NCM, Inc. on August 7, 2023, a $1.1 million increase in interest income and a $1.0 million increase in other non-operating income.

Current wording

The increase in non-operating expense (income) was primarily due to the $557.7 million decrease in gain on deconsolidation of NCM LLC, the $168.0 million decrease in the gain on reconsolidation of NCM LLC and the $35.5 million decrease in gain on re-measurement of investment in NCM LLC. This increase was partially offset by a $26.2 million decrease in interest on borrowings primarily due to the discharge of historical debt that occurred upon NCM LLC's emergence from bankruptcy and reconsolidation by NCM, Inc, on August 7, 2023, a $3.4 million decrease in the loss on re-measurement of the payable under the tax receivable agreement due to the inclusion of three years of projected taxable book income/(loss) within the calculation of the TRA payable in the third quarter of 2024, as compared to only one year in the third quarter of 2023, due to management’s ability to more accurately forecast following the conclusion of the COVID-19 pandemic, $1.7 million increase in interest income and a $1.6 million increase in other non-operating income.