National CineMedia, Inc.

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 March 27, 2025, 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. Following the 2025 AMC Agreement defined within “Recent Developments” below, 96.5% of our network will present the Noovie Show format with Post-Showtime 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 June 26, 2025, theaters presenting The Noovie Show format with Post-Showtime Inventory made up approximately 96.4% of our network. All other NCM network theater circuits, which make up the remaining 3.6% 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 data and digital advertising through NCMx™, NCM Boost SM and NCM Boomerang SM services and through our Noovie digital properties. We also sell advertising across a variety of complementary out of home venues. In combination, our multimedia advertising connects brands with audiences across all screens, both in theaters and beyond, before, during and after their moviegoing experience. As of March 27, 2025, 7.4 million moviegoers have downloaded our mobile apps. These downloads and the acquisition of second- and third-party data have resulted in approximately 1.3 billion data sets as of March 27, 2025. We have long-term ESAs (approximately 13.8 weighted average years remaining, 16.4 years remaining subsequent to the 2025 AMC Agreement, as defined below) and multi-year agreements with our network affiliates, which expire at various dates between July 2025 and July 2033. The weighted average remaining term of the ESAs and the network affiliate agreements is 11.0 years as of March 27, 2025. Subsequent to the 2025 AMC Agreement, defined within “Recent Developments” below, the weighted average remaining term of the ESAs and the network affiliate agreements is 12.6 years. 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 data and digital advertising through the NCMx™ suite of products and through our Noovie digital properties. We also sell advertising across a variety of complementary out of home venues. In combination, our multimedia advertising connects brands with audiences across all screens, both in theaters and beyond, before, during and after their moviegoing experience. As of June 26, 2025, 7.4 million moviegoers have downloaded our mobile apps. These downloads and the acquisition of second- and third-party data have resulted in approximately 1.4 billion data sets as of June 26, 2025. We have long-term ESAs (approximately 16.2 weighted average years remaining) and multi-year agreements with our network affiliates, which expire at various dates between January 2026 and July 2033. The weighted average remaining term of the ESAs and the network affiliate agreements is 12.4 years as of June 26, 2025. 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

Debt Agreement—On January 24, 2025, NCM LLC, as borrower, entered into a Loan and Security Agreement with U.S. Bank National Association, as lender (the “2025 Credit Facility”). The agreement provides for a $45.0 million senior secured revolving credit facility that matures on January 24, 2028. In connection with entering into the 2025 Credit Facility, NCM LLC repaid in full the $10.0 million balance outstanding and terminated all commitments under its Revolving Credit Facility 2023, and in connection with this termination, paid a prepayment fee equal to 1% of the total commitment. The 2025 Credit Facility is expected to result in a meaningful reduction of the Company’s overall interest expense, extends the maturity date to 2028 and is a cash flow-based revolving loan compared to the asset-based revolving loan of the Revolving Credit Facility 2023. As of March 27, 2025, NCM LLC has not made any borrowings under the 2025 Credit Facility. Borrowings under the 2025 Credit Facility may be used for, among other things, working capital and other general corporate purposes of the Company and bear interest at a floating rate equal to term SOFR (subject to a floor of zero) plus an applicable margin of 2.00%, which is subject to increase by an additional 2.00% upon the occurrence of an event of default.

Current wording

On January 24, 2025, NCM LLC, as borrower, entered into a Loan and Security Agreement with U.S. Bank National Association, as lender (the “2025 Credit Facility”). The agreement provides for a $45.0 million senior secured revolving credit facility that matures on January 24, 2028. In connection with entering into the 2025 Credit Facility, NCM LLC repaid in full the $10.0 million balance outstanding and terminated all commitments under its Revolving Credit Facility 2023, and in connection with this termination, paid a prepayment fee equal to 1% of the total commitment. The 2025 Credit Facility is expected to result in a meaningful reduction of the Company’s overall interest expense, extends the maturity date to 2028 and is a cash flow-based revolving loan compared to the asset-based revolving loan of the Revolving Credit Facility 2023. As of June 26, 2025, NCM LLC has not made any borrowings under the 2025 Credit Facility. Borrowings under the 2025 Credit Facility may be used for, among other things, working capital and other general corporate purposes of the Company and bear interest at a floating rate equal to term SOFR (subject to a floor of zero) plus an applicable margin of 2.00%, which is subject to increase by an additional 2.00% upon the occurrence of an event of default.

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 months ended March 27, 2025, 1,455,668 shares 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 $9.0 million for the three months ended March 27, 2025. As of March 27, 2025, 4,804,257 shares have been repurchased on the open market since the program's inception.

Current wording

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 26, 2025 and June 27, 2024, 1.8 million, 1.9 million, 3.3 million and 1.9 million shares 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 $9.9 million, $9.3 million, $18.8 million and $9.5 million for the three and six months ended June 26, 2025 and June 27, 2024. As of June 26, 2025, 5.8 million shares have been repurchased on the open market since the program's inception.

Previous wording

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 and also referred to as the "Revolving Credit Facility 2023") 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 26, 2024.

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 and also referred to as the "Revolving Credit Facility 2023") 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 26, 2024.

Previous wording

Our Operating Data——The following table presents operating data and Adjusted OIBDA (dollars in millions, except share and margin data):

Current wording

Our Operating Data——The following table presents operating data and Adjusted OIBDA (dollars in millions, except share, margin and screen data):

Previous wording

Adjusted OIBDA and Adjusted OIBDA margin are financial measures that are not calculated in accordance with GAAP in the United States. Adjusted OIBDA represents operating income before depreciation and amortization expense adjusted to also exclude non-cash share-based compensation costs, impairment of long-lived assets, workforce reorganization costs, system optimization costs, satellite transitions costs and advisor fees related to involvement in Regal’s Chapter 11 case (the “Cineworld Proceeding”) and the Chapter 11 Case. Adjusted OIBDA margin is calculated by dividing Adjusted OIBDA by total revenue. Our management uses these non-GAAP financial measures to evaluate operating performance, to forecast future results and as a basis for compensation. The Company believes these are important supplemental measures of operating performance because they eliminate items that have less bearing on its operating performance and highlight trends in its core business that may not otherwise be apparent when relying solely on GAAP financial measures. The Company believes the presentation of these measures is relevant and useful for investors because it enables them to view performance in a manner similar to the method used by the Company’s management, helps improve their ability to understand the Company’s operating performance and makes it easier to compare the Company’s results with other companies that may have different depreciation and amortization policies, non-cash share-based compensation programs, impairment of long-lived assets, workforce reorganization costs, system optimization costs, satellite transition costs and advisor fees related to involvement in the Cineworld Proceeding and Chapter 11 Case, interest rates, debt levels or income tax rates. A limitation of these measures, however, is that they exclude depreciation and amortization, which represent a proxy for the periodic costs of certain capitalized tangible and intangible assets used in generating revenues in the Company’s business. In addition, Adjusted OIBDA has the limitation of not reflecting the effect of the Company’s share-based payment costs, impairments of long-lived assets, workforce reorganization costs, system optimization costs, satellite transition costs and advisor fees related to involvement in the Cineworld Proceeding and Chapter 11 Case. Adjusted OIBDA should not be regarded as an alternative to operating income, net income or as indicators of operating performance, nor should it be considered in isolation of, or as substitutes for financial measures prepared in accordance with GAAP. The Company believes that operating income is the most directly comparable GAAP financial measure to Adjusted OIBDA, and operating margin is the most directly comparable GAAP financial measure to Adjusted AOIBDA margin. Because not all companies use identical calculations, these non-GAAP presentations may not be comparable to other similarly titled measures of other companies, or calculations …

Excerpt shortened here; the source contains the full paragraph.

Current wording

Adjusted OIBDA and Adjusted OIBDA margin are financial measures that are not calculated in accordance with GAAP in the United States. Adjusted OIBDA represents operating income before depreciation and amortization expense adjusted to also exclude non-cash share-based compensation costs, workforce reorganization costs, system optimization costs, satellite transitions costs and advisor fees related to involvement in Regal’s Chapter 11 case (the “Cineworld Proceeding”) and the Chapter 11 Case. Adjusted OIBDA margin is calculated by dividing Adjusted OIBDA by total revenue. Our management uses these non-GAAP financial measures to evaluate operating performance, to forecast future results and as a basis for compensation. The Company believes these are important supplemental measures of operating performance because they eliminate items that have less bearing on its operating performance and highlight trends in its core business that may not otherwise be apparent when relying solely on GAAP financial measures. The Company believes the presentation of these measures is relevant and useful for investors because it enables them to view performance in a manner similar to the method used by the Company’s management, helps improve their ability to understand the Company’s operating performance and makes it easier to compare the Company’s results with other companies that may have different depreciation and amortization policies, non-cash share-based compensation programs, workforce reorganization costs, system optimization costs, satellite transition costs and advisor fees related to involvement in the Cineworld Proceeding and Chapter 11 Case, interest rates, debt levels or income tax rates. A limitation of these measures, however, is that they exclude depreciation and amortization, which represent a proxy for the periodic costs of certain capitalized tangible and intangible assets used in generating revenues in the Company’s business. In addition, Adjusted OIBDA has the limitation of not reflecting the effect of the Company’s share-based payment costs, workforce reorganization costs, system optimization costs, satellite transition costs and advisor fees related to involvement in the Cineworld Proceeding and Chapter 11 Case. Adjusted OIBDA should not be regarded as an alternative to operating income, net income or as indicators of operating performance, nor should it be considered in isolation of, or as substitutes for financial measures prepared in accordance with GAAP. The Company believes that operating income is the most directly comparable GAAP financial measure to Adjusted OIBDA, and operating margin is the most directly comparable GAAP financial measure to Adjusted AOIBDA margin. Because not all companies use identical calculations, these non-GAAP presentations may not be comparable to other similarly titled measures of other companies or calculations in the Company’s debt agreement.

Previous wording

Share-based compensation costs are included in network operations, selling and marketing and administrative expense in the Company's unaudited Condensed Consolidated Financial Statements.

Current wording

Share-based compensation costs are included in 'network operating costs', 'selling and marketing costs' and 'administrative and other costs' in the Company's unaudited Condensed Consolidated Financial Statements.

Previous wording

Workforce reorganization costs represent redundancy costs associated with changes to the Company’s workforce primarily implemented during 2024, as well as related office relocations.

Current wording

Workforce reorganization costs represent eliminated positions and redundancy costs associated with changes to the Company’s workforce, as well as related office relocations.

Previous wording

The results of operations data for the three months ended March 27, 2025 (first quarter of 2025) and March 28, 2024 (first quarter of 2024) 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 June 26, 2025 (second quarter of 2025) and June 27, 2024 (second quarter of 2024) 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

Revenue. Total revenue decreased $2.5 million, or 6.7%, from $37.4 million for the first quarter of 2024 to $34.9 million for the first quarter of 2025. The following is a summary of revenue by category (in millions):

Current wording

Revenue. Total revenue decreased $2.9 million, or 5.3%, from $54.7 million for the second quarter of 2024 to $51.8 million for the second quarter of 2025. The following is a summary of revenue by category (in millions):

Previous wording

National advertising revenue. National advertising revenue decreased by $2.1 million, or 7.1%, from $29.5 million for the first quarter of 2024 to $27.4 million for the first quarter of 2025. The decrease in national advertising revenue was primarily due to a 7.6% decrease in national advertising utilization in the first quarter of 2025, as compared to the first quarter of 2024 as well as a 4.6% decrease in network attendance. These decreases were partially offset by a 1.3% increase in national advertising CPMs in the first quarter of 2025, as compared to the first quarter of 2024.

Current wording

National advertising revenue. National advertising revenue decreased by $0.5 million, or 1.2%, from $41.7 million for the second quarter of 2024 to $41.2 million for the second quarter of 2025. Macroeconomic uncertainty negatively affected advertisers' willingness to spend in the second quarter of 2025 across the advertising industry. To remain competitive in this environment, the Company decreased national advertising CPMs by 28.1% in the second quarter of 2025, as compared to the second quarter of 2024. This decrease was partially offset by a 12.3% increase in national advertising utilization, as well as a 24.2% increase in network attendance in the second quarter of 2025, as compared to the second quarter of 2024.

Previous wording

Local and regional advertising revenue. Local and regional advertising revenue decreased by $0.4 million, or 7.5%, from $5.3 million for the first quarter of 2024 to $4.9 million for the first quarter of 2025. The decrease in local and regional advertising revenue was primarily due to a decrease in contract activity and size within the dining, automotive, wireless and healthcare categories for the first quarter of 2025 compared to the first quarter of 2024 due in part to the 11.6% decline in the domestic box office as well as advertisers' decreased spending due to economic uncertainty. These decreases were partially offset by an increase in contract activity and size within the travel and professional services categories in the first quarter of 2025, as compared to the first quarter of 2024.

Current wording

Local and regional advertising revenue. Local and regional advertising revenue decreased by $3.4 million, or 34.7%, from $9.8 million for the second quarter of 2024 to $6.4 million for the second quarter of 2025. Macroeconomic uncertainty negatively affected the advertisers' willingness to spend in the second quarter of 2025 across the advertising industry. As such, the decrease in local and regional advertising revenue was primarily due to a decrease in contract activity and size within the technology, retail and apparel and automotive categories for the second quarter of 2025 compared to the second quarter of 2024. These decreases were partially offset by an increase in contract activity and size within the travel category in the second quarter of 2025, as compared to the second quarter of 2024.

Previous wording

Operating expenses. Total operating expenses decreased $1.3 million, or 2.2%, from $60.1 million for the first quarter of 2024 to $58.8 million for the first quarter of 2025. The following table shows the changes in operating expense for the first quarter of 2025 (in millions):

Current wording

Operating expenses. Total operating expenses decreased $0.2 million, or 0.3%, from $64.0 million for the second quarter of 2024 to $63.8 million for the second quarter of 2025. The following table shows the changes in operating expense for the second quarter of 2025 (in millions):

Previous wording

Network operating costs. Network operating costs decreased $0.5 million, or 13.9%, from $3.6 million for the first quarter of 2024 to $3.1 million for the first quarter of 2025. The decrease in network operating costs was primarily due to a $0.2 million decrease in personnel related expenses, a $0.2 million decrease in costs associated with our digital offerings in line with the decrease in revenue and a $0.1 million decrease in satellite costs for the first quarter of 2025, as compared to the first quarter of 2024.

Current wording

Network operating costs. Network operating costs decreased $0.5 million, or 13.5%, from $3.7 million for the second quarter of 2024 to $3.2 million for the second quarter of 2025. The decrease in network operating costs was primarily due to a $0.2 million decrease in satellite costs due to transition costs incurred in the prior year and a $0.2 million decrease in personnel-related expenses for the second quarter of 2025, as compared to the second quarter of 2024.

Previous wording

Administrative and other costs. Administrative and other costs decreased $0.6 million, or 4.4%, from $13.5 million for the first quarter of 2024 to $12.9 million for the first quarter of 2025. The decrease was primarily due to a $1.0 million decrease in personnel costs primarily due to retention related expenses in 2024 related to the Chapter 11 proceedings with no comparable activity in 2025, a $0.6 million decrease in severance expense due to the workforce reorganization in the first quarter of 2024 and a $0.3 million decrease in other personnel related costs. These decreases were partially offset by a $0.6 million increase in legal and professional fees related to the Chapter 11 Case and Cineworld Proceeding due to the timing of certain hearings, a $0.5 million increase in stock based compensation following new grant activity in the first quarter of 2024 and a $0.5 million increase in cloud computing costs for the first quarter of 2025, as compared to the first quarter of 2024.

Current wording

Administrative and other costs. Administrative and other costs decreased $2.8 million, or 20.9%, from $13.4 million for the second quarter of 2024 to $10.6 million for the second quarter of 2025. The decrease was primarily due to a $1.2 million decrease in severance expense following the non-renewal of the former President - Sales, Marketing and Partnerships' contract in the second quarter of 2024, a $1.2 million decrease in legal and professional fees related to the Chapter 11 Case and Cineworld Proceeding, a $0.5 million decrease in performance-based compensation expense driven by the decrease in revenue in the second quarter of 2025, as compared to the second quarter of 2024, and a $0.5 million decrease in stock-based compensation expense due to the grant of a management equity incentive plan in the first quarter of 2024, compared to normalized grant activity in 2025. These decreases were partially offset by a $0.2 million increase in cloud computing expenses and a $0.2 million increase in other business taxes in the second quarter of 2025, as compared to the second quarter of 2024.

Previous wording

Depreciation expense. Depreciation expense increased $0.1 million, or 10.0%, from $1.0 million for the first quarter of 2024 to $1.1 million in the first quarter of 2025.

Current wording

Depreciation expense. Depreciation expense remained at $1.1 million for the second quarter of 2025, consistent with $1.1 million in the second quarter of 2024.

Previous wording

Non-operating expense. Total non-operating expense decreased $5.2 million, or 43.3%, from $12.0 million for the first quarter of 2024 to $6.8 million for the first quarter of 2025. The following table shows the changes in non-operating expense for the first quarter of 2025 and the first quarter of 2024 (in millions):

Current wording

Non-operating income. Total non-operating income increased $0.7 million, or 116.7%, from $0.6 million for the second quarter of 2024 to $1.3 million for the second quarter of 2025. The following table shows the changes in non-operating income for the second quarter of 2025 and the second quarter of 2024 (in millions):

Previous wording

The following table shows data on theater attendance and revenue per attendee for the three months ended March 27, 2025 and March 28, 2024:

Current wording

The following table shows data on theater attendance and revenue per attendee for the six months ended June 27, 2025 and June 27, 2024:

Previous wording

Theater exhibition fees. Theater exhibition fees decreased by $0.8 million, or 3.6%, from $22.5 million for the first quarter of 2024 to $21.7 million for the first quarter of 2025. The decrease was primarily related to a $0.9 million decrease in fees caused by the 4.6% decrease in network attendance and a $0.1 million decrease in fees related to the number of active screens in the first quarter of 2025 compared to the first quarter of 2024. These decreases were partially offset by a $0.4 million increase in fees due to contractual rate increases primarily within the ESAs for the first quarter of 2025, as compared to the first quarter of 2024.

Current wording

Theater exhibition fees. Theater exhibition fees increased $3.4 million, or 6.9%, from $49.2 million for the six months ended June 27, 2024 to $52.6 million for the six months ended June 26, 2025. The increase in theater exhibition fees was primarily related to a $2.9 million increase caused by the 11.3% increase in network attendance and a $1.0 million increase due to contractual rate increases primarily within the ESAs for the six months ended June 26, 2025, as compared to the six months ended June 27, 2024. These increases were partially offset by a $0.3 million decrease in costs related to revenue share agreements and $0.2 million decrease related to the number of active screens in the six months ended June 26, 2025, compared to the six months ended June 27, 2024.

Previous wording

Selling and marketing costs. Selling and marketing costs increased $0.7 million, or 7.0%, from $10.0 million for the first quarter of 2024 to $10.7 million for the first quarter of 2025. The increase in selling and marketing costs was primarily due to a $1.3 million increase in selling related expenses largely driven by the timing of our company-wide sales meeting which occurred in the first quarter of 2025 and did not occur in 2024 and a $0.3 million increase in variable costs associated with certain sales partnerships for the first quarter of 2025, compared to the first quarter of 2024. These increases were partially offset by a $0.5 million decrease in severance expense due to the workforce reorganization in the first quarter of 2024, a $0.2 million decrease in other personnel related expenses and a $0.2 million decrease in lease related expenses for the first quarter of 2025, as compared to the first quarter of 2024 following the relocation of two offices during 2024.

Current wording

Selling and marketing costs. Selling and marketing costs increased $0.8 million, or 4.1%, from $19.6 million for the six months ended June 27, 2024 to $20.4 million for the six months ended June 26, 2025. The increase in selling and marketing costs was primarily due to a $1.7 million increase in selling related expenses partly driven by the timing of our company-wide sales meeting and a $0.5 million increase in variable costs associated with certain sales partnerships for the six months ended June 26, 2025, as compared to the six months ended June 27, 2024. These increases were partially offset by a $1.4 million decrease in personnel-related expenses primarily due to a decrease in performance-based compensation expense in line with the decrease in revenue and a decrease in severance expenses due to the workforce reorganization in the first quarter of 2024 for the six months ended June 26, 2025, as compared to the six months ended June 27, 2024.

Previous wording

The decrease in non-operating expense was primarily due to a $6.8 million decrease in the loss on the re-measurement of the payable under the tax receivable agreement largely due to the addition of two years of estimates in management's forecast for future years in 2024 following increased insight into the respective movie slates and market demand as compared to the addition of one new forecasted year in the first quarter of 2025 to replace the completed prior year within the calculation. The decrease is also due to a $0.3 million increase in interest income and a $0.2 million decrease in interest expense in the first quarter of 2025 compared to the first quarter of 2024. These decreases were partially offset by a $1.8 million increase in loss on debt extinguishment in the first quarter of 2025 following the Company's termination of its Revolving Credit Facility 2023 and a $0.3 million decrease in non-operating income related to the Company's equity method investment in ACJV, LLC.

Current wording

The decrease in non-operating expense was primarily due to a $7.6 million decrease in the loss on the re-measurement of the payable under the tax receivable agreement largely due to the addition of two years of estimates in management's forecast for future years in 2024 following increased insight into the respective movie slates and market demand as compared to the addition of one new forecasted year in the first quarter of 2025 to replace the completed prior year within the calculation. The decrease is also due to a $0.6 million decrease in interest expense in the six months ended June 26, 2025, compared to the six months ended June 27, 2024, following the termination of all of the Company's debt in the first quarter of 2025. These decreases were partially offset by a $1.8 million increase in loss on debt extinguishment in the first quarter of 2025 following the Company's termination of its Revolving Credit Facility 2023, a $0.3 million decrease in non-operating income related to the Company's equity method investment in ACJV,

Previous wording

ESA Party beverage revenue—Under the ESAs, up to 90 seconds of The Noovie®Show program can be sold to the ESA Parties to satisfy their on-screen advertising commitments under their beverage concessionaire agreements. In the first quarter of 2025, Cinemark purchased 60 seconds of on-screen advertising time and AMC purchased 30 seconds to satisfy their obligations under their beverage concessionaire agreements. In 2024, Cinemark purchased 60 seconds of on-screen advertising time and AMC purchased 30 seconds to satisfy their obligations under their beverage concessionaire agreements. The ESA Parties’ current long-term contracts with their beverage suppliers require the 30 or 60 seconds of beverage advertising, although such commitments could change in the future. Per the ESA with AMC, the time sold to the beverage supplier is priced equal to the greater of (1) the advertising CPM charged by NCM LLC in the previous year for the time sold to the beverage supplier and (2) the advertising CPM for the previous year charged by NCM LLC to unaffiliated third parties during segment one (closest to showtime) of The Noovie Show in the ESA Parties’ theaters, limited to the highest advertising CPM being then-charged by NCM LLC. Beginning in 2020 and in accordance with the 2019 ESA Amendment, the price for the time sold to Cinemark's beverage supplier and Regal’s beverage suppliers, prior to the termination of Regal's ESA, now increases at a fixed rate of 2.0% each year. Beginning in 2026 and in accordance with the 2025 AMC Agreement, the time sold to AMC's beverage supplier will also increase at a fixed rate of 2.0% each year.

Current wording

ESA Party beverage revenue—Under the ESAs, up to 90 seconds of The Noovie®Show program can be sold to the ESA Parties to satisfy their on-screen advertising commitments under their beverage concessionaire agreements. In the second quarter of 2025, Cinemark purchased 60 seconds of on-screen advertising time and AMC purchased 30 seconds to satisfy their obligations under their beverage concessionaire agreements. In 2024, Cinemark purchased 60 seconds of on-screen advertising time and AMC purchased 30 seconds to satisfy their obligations under their beverage concessionaire agreements. The ESA Parties’ current long-term contracts with their beverage suppliers require the 30 or 60 seconds of beverage advertising, although such commitments could change in the future. In accordance with the 2019 ESA Amendment, the price for the time sold to Cinemark's beverage supplier increases at a fixed rate of 2.0% each year. Beginning in 2026 and in accordance with the 2025 AMC Agreement, the time sold to AMC's beverage supplier will also increase at a fixed rate of 2.0% each year.

Previous wording

Theater exhibition fees—In consideration for NCM LLC’s access to the ESA Parties’ and network affiliate theaters for on-screen and LEN advertising and lobby promotions, the ESA Parties and network affiliates receive access fees based either upon number of attendees, a revenue share or a combination, including a minimum revenue guarantee per attendee. Many of these agreements contain annual increases to the respective fee structures or guaranteed minimums, either per patron, per theater and/or per digital screen. The payments under the ESA Parties' agreements and network affiliate agreements are recorded within ‘ESA Parties and network affiliate fees’ in the unaudited Condensed Consolidated Statement of Operations.

Current wording

Theater exhibition fees—In consideration for the Company’s access to the ESA Parties’ and network affiliate theaters for on-screen and LEN advertising and lobby promotions, the ESA Parties and network affiliates receive access fees based either upon number of attendees, a revenue share or a combination, including a minimum revenue guarantee per attendee. Many of these agreements contain annual increases to the respective fee structures or guaranteed minimums, either per patron, per theater and/or per digital screen. The payments under the ESA Parties' agreements and network affiliate agreements are recorded within ‘Theater exhibition fees’ in the unaudited Condensed Consolidated Statement of Operations.

Previous wording

Our cash balances can fluctuate due to the seasonality of our business and related timing of collections of accounts receivable balances and operating expenditure payments, as well as interest and principal payments on our 2025 Credit Facility, if any, income tax payments, TRA payments and available cash payments (as defined in the NCM LLC Operating Agreement) to Cinemark and AMC in the event the ESA Parties hold NCM LLC membership units, as well as the amount of dividends to NCM, Inc.’s common stockholders. Upon the effectiveness of the 2025 AMC Agreement, AMC will no longer be eligible to receive available cash payments.

Current wording

Our cash balances can fluctuate due to the seasonality of our business and related timing of collections of accounts receivable balances and operating expenditure payments, as well as interest and principal payments on our 2025 Credit Facility, if any, income tax payments, TRA payments to Cinemark and available cash payments (as defined in the NCM LLC Operating Agreement) to Cinemark in the event Cinemark holds NCM LLC membership units, as well as the amount of dividends to NCM, Inc.’s common stockholders.

Previous wording

On January 24, 2025, NCM LLC, as borrower, entered into the 2025 Credit Facility with U.S. Bank National Association, as lender. The agreement provides for a $45.0 million senior secured revolving credit facility that matures on January 24, 2028. In connection with entering into the 2025 Credit Facility, NCM LLC repaid in full the $10.0 million balance outstanding as of December 26, 2024 and terminated all commitments under its Revolving Credit Facility 2023(as defined below), and in connection with this termination, paid a prepayment fee equal to 1% of the total commitment. As of March 27, 2025, NCM LLC had not made any borrowings under the 2025 Credit Facility. Borrowings under the 2025 Credit Facility may be used for, among other things, working capital and other general corporate purposes of the Company and bear interest at a floating rate equal to term SOFR (subject to a floor of zero) plus an applicable margin of 2.00%, which is subject to increase by an additional 2.00% upon the occurrence of an event of default. No amounts have been drawn under the facility as of March 27, 2025.

Current wording

On January 24, 2025, NCM LLC, as borrower, entered into the 2025 Credit Facility with U.S. Bank National Association, as lender. The agreement provides for a $45.0 million senior secured revolving credit facility that matures on January 24, 2028. In connection with entering into the 2025 Credit Facility, NCM LLC repaid in full the $10.0 million balance outstanding, as of December 26, 2024, and terminated all commitments under its Revolving Credit Facility 2023 (as defined below), and in connection with this termination, paid a prepayment fee equal to 1% of the total commitment. As of June 26, 2025, NCM LLC had not made any borrowings under the 2025 Credit Facility. Borrowings under the 2025 Credit Facility may be used for, among other things, working capital and other general corporate purposes of the Company and bear interest at a floating rate equal to term SOFR (subject to a floor of zero) plus an applicable margin of 2.00%, which is subject to increase by an additional 2.00% upon the occurrence of an event of default.

Previous wording

Included in cash, cash equivalents and marketable securities as of March 27, 2025, December 26, 2024 and March 28, 2024, was $26.9 million, $63.5 million and $54.8 million, respectively, of cash held by NCM LLC that is not available to satisfy dividends declared by NCM, Inc., income tax, TRA payments and other obligations.

Current wording

Included in cash, cash equivalents and marketable securities as of June 26, 2025, December 26, 2024 and June 27, 2024, was $18.2 million, $63.5 million and $51.9 million, respectively, of cash held by NCM LLC that is not available to satisfy dividends declared by NCM, Inc., income tax, TRA payments and other obligations.

Previous wording

As of March 27, 2025, the weighted average remaining maturity of our debt facility was 2.8 years. However, no amounts have been drawn on the 2025 Credit Facility as of March 27, 2025. As of March 27, 2025, 100.0% of our borrowings bear interest at variable rates and our net income and earnings per share could fluctuate with market interest rate fluctuations that could increase or decrease the interest paid on our borrowings.

Current wording

As of June 26, 2025, the weighted average remaining maturity of our debt facility was 2.6 years. However, no amount has been drawn on the 2025 Credit Facility as of June 26, 2025. If drawn upon, 100.0% of our borrowings bear interest at variable rates and our net income and earnings per share could fluctuate with market interest rate fluctuations that could increase or decrease the interest paid on our borrowings.

Previous wording

Operating Activities. The $18.1 million decrease in cash provided by operating activities for the three months ended March 27, 2025, as compared to the three months ended March 28, 2024, was due to 1) $9.2 million decrease in accounts receivable collections, 2) an $8.4 million decrease in the change in deferred revenue, 3) a $1.0 million decrease in net loss adjusted for non-cash items and 4) a $0.9 million decrease in the change in prepaid expenses. These decreases in cash provided by operating were partially offset by a $0.9 million increase in the change in ESA amounts due to/from, net and a $0.3 million decrease in payments of accounts payable and accrued expenses for the three months ended March 27, 2025, as compared to the three months ended March 28, 2024.

Current wording

Operating Activities. The $30.7 million decrease in cash provided by operating activities for the six months ended June 26, 2025, as compared to the six months ended June 27, 2024, was due to 1) $17.5 million decrease in accounts receivable collections inline with the decrease in revenue, 2) an $8.3 million decrease in the change in deferred revenue inline with the decrease in revenue, 3) a $5.6 million decrease in net loss adjusted for non-cash items and 4) a $1.3 million increase in the payments to ESA Parties under the tax receivable agreement. These decreases in cash provided by operating activities were partially offset by a $2.3 million increase in the change in ESA amounts due to/from for the six months ended June 26, 2025, as compared to the six months ended June 27, 2024.

Previous wording

Financing Activities. The $20.1 million increase in cash used in financing activities for the three months ended March 27, 2025, as compared to the three months ended March 28, 2024, was primarily due to the $10.0 million repayment of the Revolving Credit Facility 2023, the $8.8 million increase in payments made to repurchase shares of NCM, Inc.'s common stock and a $1.5 million increase in payments of debt issuance costs associated with the termination of the Revolving Credit Facility 2023 and commencement of the Credit Facility 2025 during the three months ended March 27, 2025.

Current wording

Financing Activities. The $26.3 million increase in cash used in financing activities for the six months ended June 26, 2025, as compared to the six months ended June 27, 2024, was primarily due to the $10.0 million repayment of the Revolving Credit Facility 2023, a $9.5 million increase in payments made to repurchase shares of NCM, Inc.'s common stock, the $5.4 million increase in payment of dividends, a $1.5 million increase in payments of debt issuance costs associated with the termination of the Revolving Credit Facility 2023 and commencement of the Credit Facility 2025 and $0.6 million increase in repurchase of stock for restricted stock tax withholding. These increases were partially offset by the $0.7 million decrease in cash redemptions of NCM LLC common membership units during the six months ended June 26, 2025, compared to the six months ended June 27, 2024.

Previous wording

NCM, Inc.’s primary source of liquidity and capital resources is the quarterly available cash distributions from NCM LLC as well as its existing cash balances and marketable securities, which as of March 27, 2025 were $59.8 million (including $26.9 million of cash held by NCM LLC). NCM LLC’s primary sources of liquidity and capital resources are its cash provided by operating activities, availability under its 2025 Credit Facility and cash on hand. The $26.9 million of cash at NCM LLC will be used to fund operations. Cash at NCM, Inc. is used to fund income taxes, payments associated with the TRA, stock repurchases and for future payment of dividends to NCM, Inc. stockholders if and when declared by the Board of Directors.

Current wording

NCM, Inc.’s primary source of liquidity and capital resources is the quarterly available cash distributions from NCM LLC as well as its existing cash balances, which as of June 26, 2025, were $37.2 million (including $18.2 million of cash held by NCM LLC). NCM LLC’s primary sources of liquidity and capital resources are cash provided by its operating activities, availability under the 2025 Credit Facility and cash on hand. The $18.2 million of cash at NCM LLC will be used to fund operations. Cash at NCM, Inc. is used to fund income taxes, payments associated with the TRA, stock repurchases and for future payment of dividends to NCM, Inc. stockholders if and when declared by the Board of Directors.

Previous wording

Cash flows generated by NCM LLC’s distributions to NCM, Inc. and NCM LLC’s other members were deferred during the Chapter 11 Case. NCM LLC is required, pursuant to the terms of the NCM LLC Operating Agreement, to distribute its available cash, as defined in the NCM LLC Operating Agreement, quarterly to its members. The other members are only able to receive available cash when they hold units. The available cash amount to the members of NCM LLC for the three months ended March 27, 2025 was calculated as approximately negative $13.4 million, due almost entirely to NCM, Inc., as the primary holder of NCM LLC units as of March 27, 2025. NCM, Inc. has the option to defer payment of any available cash distributions payable to NCM, Inc. at its discretion. Any negative amounts can only be offset against positive available cash within the second quarter of future years, in accordance with the agreement. As of March 27, 2025, NCM LLC owed NCM, Inc. $14.8 million in deferred available cash distribution.

Current wording

NCM LLC is required, pursuant to the terms of the NCM LLC Operating Agreement, to distribute its available cash, as defined in the NCM LLC Operating Agreement, quarterly to its members. The members are only able to receive available cash when they hold units. The available cash amount to the members of NCM LLC, for the three months ended June 26, 2025, was calculated as approximately negative $3.7 million, related entirely to NCM, Inc., as the only holder of NCM LLC units as of June 26, 2025. NCM, Inc. has the option to defer payment of any available cash distributions payable to NCM, Inc. at its discretion. Any negative amounts can only be offset against positive available cash within the second quarter of future years, in accordance with the agreement. As of June 26, 2025, NCM LLC owed NCM, Inc. $14.8 million in deferred available cash distributions.

Previous wording

NCM, Inc. expects to use its cash balances and cash received from future available cash distributions (as allowed for under the 2025 Credit Facility) to fund payments associated with the TRA, stock repurchases and future dividends if and when declared by the Board of Directors. The Company will make a TRA payment in 2025 for the 2024 tax year and did not make a TRA payment in 2024 for the 2023 tax year. The Company also expects to make a TRA payment in 2026 for the 2025 tax year. Deferred distributions from NCM LLC and NCM, Inc. cash balances should be sufficient to fund payments associated with the TRA, income taxes and any stock repurchases or declared dividends for the foreseeable future at the discretion of the Board of Directors. At the discretion of the Board of Directors, the Company will consider returning a portion of its free cash flow to stockholders. The declaration, payment, timing and amount of any future stock repurchases or dividends payable will be at the sole discretion of the Board of Directors who will take into account general economic and advertising market business conditions, the Company’s financial condition, available cash, current and anticipated cash needs and any other factors that the Board of Directors considers relevant.

Current wording

NCM, Inc. expects to use its cash balances and cash received from future available cash distributions (as allowed for under the 2025 Credit Facility) to fund payments associated with the TRA, stock repurchases and future dividends if and when declared by the Board of Directors. The Company made an estimated TRA payment and will make a final TRA payment in 2025 for the 2024 tax year and did not make a TRA payment in 2024 for the 2023 tax year. The Company also expects to make a TRA payment in 2026 for the 2025 tax year. Deferred distributions from NCM LLC and NCM, Inc. cash balances should be sufficient to fund payments associated with the TRA, income taxes and any stock repurchases or declared dividends for the foreseeable future at the discretion of the Board of Directors. At the discretion of the Board of Directors, the Company will consider returning a portion of its free cash flow to stockholders. The declaration, payment, timing and amount of any future stock repurchases or dividends payable will be at the sole discretion of the Board of Directors who will take into account general economic and advertising market business conditions, the Company’s financial condition, available cash, current and anticipated cash needs and any other factors that the Board of Directors considers relevant.