National CineMedia, Inc.

Previous 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.

Current wording

National CineMedia is the largest cinema advertising platform in the U.S. 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. within the NCM Network, and the Cinelife®Show within the Spotlight Cinema Network. We present multiple formats of The Noovie®Show and Cinelife®Show depending on the theater circuit in which it runs, with almost all theater circuits including Post-Showtime advertising inventory after the advertised showtime. The movie trailers presented by the theater circuits that run before the feature film are not part of our preshows.

Previous wording

We also sell advertising on our LEN, a series of strategically-placed screens located in movie theater lobbies, as well as other forms of advertising, promotions and experiences in theater lobbies. In addition, we sell digital advertising through NCMx and NCM Boost, to connect brands with audiences across all screens, both in theaters and beyond, before, during and after their moviegoing experience. As of December 26, 2024, approximately 7.4 million moviegoers have downloaded our mobile apps. These downloads and the acquisition of second- and third-party data sets have resulted in unique data records of approximately 824.4 million as of December 26, 2024. We have long-term ESAs (approximately 14.1 weighted average years) with the ESA Parties and multi-year agreements with network affiliates, which expire at various dates between July 7, 2025 and July 13, 2033, with our largest affiliate agreement expiring on July 13, 2033. The weighted average remaining term of the ESAs and the network affiliate agreements is 11.3 years as of December 26, 2024. The ESAs and network affiliate agreements grant NCM LLC exclusive rights in their theaters to sell advertising, subject to limited exceptions. The Noovie Show and our LEN programming are distributed predominantly via satellite through our proprietary DCN.

Current wording

We also sell advertising on our LEN, a series of strategically-placed screens located in movie theater lobbies, as well as other forms of advertising, promotions and experiences in theater lobbies. In addition, we sell 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. We have long-term ESAs (approximately 15.6 weighted average years) with the ESA Parties and multi-year agreements with network affiliates, which expire at various dates between March 31, 2026 and July 13, 2033, with our largest affiliate agreement expiring on July 13, 2033. The weighted average remaining term of the ESAs and the network affiliate agreements is 11.8 years as of January 1, 2026. The ESAs and network affiliate agreements grant NCM LLC exclusive rights in their theaters to sell advertising, subject to limited exceptions. Our advertising preshows and LEN programming are distributed predominantly through our proprietary DCN and Media Director.

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 agreement provides for a $45.0 million senior secured revolving credit facility (the “2025 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 2023 Revolving Credit Facility, 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 2023 Revolving Credit Facility. As of March 6, 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

Debt Agreement—On January 24, 2025, NCM LLC, entered into a Loan and Security Agreement with U.S. Bank National Association, as lender. The agreement provides for a $45.0 million senior secured revolving credit facility (the “2025 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 2023 Revolving Credit Facility, and 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 2023 Revolving Credit Facility. As of January 1, 2026, NCM LLC has an outstanding balance of $12.0 million 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 year ended December 26, 2024, 2,524,991 shares were repurchased on the open market or privately negotiated purchases. In accordance with Accounting Standards Codification (“ASC”)505—Equity, these shares were retired and the excess over par value paid of $13.4 million was recorded as a reduction to retained earnings during the year ended December 26, 2024.

Current 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 year ended January 1, 2026 and December 26, 2024, 4.1 million and 2.5 million shares were repurchased on the open market, respectively. In accordance with ASC 505 —Equity, the Company elected to retire the shares. Upon the retirement of these shares, the excess over par value paid, inclusive of direct costs, of $22.3 million and $13.4 million was recorded as a reduction to retained earnings for the year ended January 1, 2026 and December 26, 2024, respectively.

Previous wording

Reverse Stock Split—On August 3, 2023, the Company effected a one-for-ten (1:10) reverse stock split of its common stock, par value $0.01 per share. The reverse stock split, which was authorized by its Board of Directors, was approved by the Company’s stockholders on August 2, 2023. The reverse stock split reduced the number of outstanding shares of the Company’s common stock from 174,112,385 shares as of August 3, 2023, to 17,411,323 shares outstanding post-split. After the cancellation of Regal’s shares on August 7, 2023, there were 13,343,065 shares outstanding. The primary purpose of the reverse stock split was to comply with the Company’s obligations under the NCMI 9019 Settlement so that the Plan could become effective, as well as, to increase the per share market price of the Company’s common stock in an effort to maintain compliance with applicable Nasdaq continued listing standards with respect to the closing price of the Company’s common stock.

Current wording

Reverse Stock Split—On August 3, 2023, the Company effected a one-for-ten (1:10) reverse stock split of its common stock, par value $0.01 per share. The reverse stock split reduced the number of outstanding shares of the Company’s common stock from 174,112,385 shares as of August 3, 2023, to 17,411,323 shares outstanding post-split. After the cancellation of Regal’s shares on August 7, 2023, there were 13,343,065 shares outstanding. The primary purpose of the reverse stock split was to comply with the Company’s obligations under the NCMI 9019 Settlement, as well as, to increase the per share market price of the Company’s common stock in an effort to maintain compliance with applicable Nasdaq continued listing standards.

Previous wording

As of December 26, 2024, the Company has not completed all agreed upon payments to the General Unsecured Claim Pool, due to the existence of one pre-petition litigation matter that is ongoing in the Bankruptcy Court, the result of which could impact the payments to other unsecured creditors from the General Unsecured Claims Pool and held a total of $3.0 million within the escrow accounts and accruals, presented within ‘Restricted cash’ and ‘Accounts Payable’ on the audited Consolidated Balance Sheets as of December 26, 2024 and December 28, 2023, respectively.

Current wording

As of January 1, 2026, the Company has not completed all agreed upon payments to the General Unsecured Claim Pool, due to the existence of one pre-petition litigation matter that is ongoing in the Bankruptcy Court, which could impact the payments to other unsecured creditors from the General Unsecured Claims Pool. As a result, the Company held a total of $3.0 million within the escrow accounts and accruals, presented within ‘Restricted cash’ and ‘Accounts Payable’ on the audited Consolidated Balance Sheets as of January 1, 2026 and December 26, 2024, respectively.

Previous wording

Pursuant to the Regal Termination Agreement, effective on July 14, 2023, Regal rejected and terminated the ESA. Additionally Regal and Regal’s affiliates’ waived all rights and interests as to the Tax Receivable Agreement, the Common Unit Adjustment Agreement, the Software License Agreement, the Director Designation Agreement, the Registration Rights Agreement and all the other joint venture agreements described in NCM LLC’s Company Operating Agreement and Regal and Regal’s affiliates waived and released claims against other parties thereto. In connection with the Regal Advertising

Current wording

Pursuant to the Regal Termination Agreement, effective on July 14, 2023, Regal rejected and terminated the ESA. Additionally Regal and Regal’s affiliates’ waived all rights and interests as to the Tax Receivable Agreement, the Common Unit Adjustment Agreement, the Software License Agreement, the Director Designation Agreement, the Registration Rights Agreement and all the other joint venture agreements described in NCM LLC’s Company Operating Agreement and Regal and Regal’s affiliates waived and released claims against other parties thereto. In connection with the Regal Advertising Agreement, NCM LLC and Regal also agreed to dismiss with prejudice the ongoing litigation between the parties related to NCM LLC’s request to enforce certain provisions of the ESA, including the exclusivity provision. Following the effective date of the Regal Termination Agreement of July 14, 2023, Regal is no longer an ESA Party or related party and is included within the network affiliate metrics.

Previous wording

The results of operations data for the years ended December 26, 2024 and December 28, 2023 and the balance sheet data as of December 26, 2024 and December 28, 2023 are derived from the audited Consolidated Financial Statements of NCM, Inc. included elsewhere in this document. Within the financial results outlined below, 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. The operating results for NCM LLC, which management believes better represent the Company’s historical consolidated performance, are presented separately subsequent to the operating data for NCM, Inc., which is presented below (dollars in millions, except share and margin data):

Current wording

The results of operations data for the years ended January 1, 2026, December 26, 2024 and December 27, 2023 and the balance sheet data as of January 1, 2026 and December 26, 2024 are derived from the audited Consolidated Financial Statements of NCM, Inc. included elsewhere in this document (dollars in millions, except share and margin data):

Previous wording

We have a 52-week or 53-week fiscal year ending on the first Thursday after December 25. Fiscal year 2024 contained 52 weeks and fiscal year 2023 contained 52 weeks. Our 2025 fiscal year will contain 53 weeks. Throughout this document, we refer to our fiscal years as set forth below:

Current wording

We have a 52-week or 53-week fiscal year ending on the first Thursday after December 25. Fiscal year 2025 contained 53 weeks and fiscal year 2024 contained 52 weeks. Our 2026 fiscal year will contain 52 weeks. Throughout this document, we refer to our fiscal years as set forth below:

Previous wording

Revenue. Total revenue increased $75.6 million, or 45.8%, from $165.2 million for 2023 to $240.8 million for 2024. The following is a summary of revenue by category (in millions):

Current wording

Revenue. Total revenue increased $2.4 million, or 1.0%, from $240.8 million for 2024 to $243.2 million for 2025. The following is a summary of revenue by category (in millions):

Previous wording

Represents the total attendance within NCM LLC’s advertising network, excluding screens and attendance associated with AMC Carmike theaters that are currently part of another cinema advertising network for each of the periods presented. Refer to Note 6 to the audited Consolidated Financial Statements included elsewhere in this document.

Current wording

(1) Represents the total attendance within the NCM Network, excluding screens and attendance associated with certain AMC Carmike theaters that were part of another cinema advertising network during the periods presented, as well as, estimated attendance for the Spotlight Cinema Network for the period included within the Company's consolidated results (November 14, 2025 to January 1, 2026).

Previous wording

Local and regional advertising revenue decreased by $12.0 million, or 23.5%, from $51.1 million in 2023 to $39.1 million in 2024. The decrease in local and regional advertising revenue was primarily due to a decrease in contract activity and average size within education, dining, entertainment and consumer packaged goods, due in part to a 11.0% decrease in attendance as well as a decreased movie slate in 2024, caused by the writer and actor strikes in 2023. The decrease was partially offset by an increase in contract activity and size within automotive, government, and technology in 2024, as compared to 2023.

Current wording

Local and regional advertising revenue. Local and regional advertising revenue decreased by $4.5 million, or 11.5%, from $39.1 million in 2024 to $34.6 million in 2025. The decrease in local and regional advertising revenue was primarily due to a decrease in contract activity and size within the pharmaceutical, travel, government and automotive categories in 2025, as compared to 2024. These decreases were partially offset by an increase in contract activity and size within the gaming, technology, beverages, retail and apparel and healthcare categories in 2025, as compared to 2024.

Previous wording

ESA Party beverage revenue decreased by $4.9 million, or 26.3%, from $18.6 million in 2023 to $13.7 million for 2024. The decrease was due to Regal's termination of its ESA in 2023 and the resulting discontinuation of its beverage revenue as well as a 6.2% decrease in ESA Party attendance in 2024, as compared to 2023.

Current wording

ESA Party beverage revenue. ESA Party beverage revenue increased $0.4 million, or 2.9%, from $13.7 million in 2024 to $14.1 million in 2025. The increase in ESA Party beverage revenue was primarily due to a 3.7% increase in ESA Party attendance in 2025, as compared to 2024.

Previous wording

Operating expenses. Total operating expenses increased $67.8 million, or 35.2%, from $192.5 million for 2023 to $260.3 million for 2024. The following table shows the changes in operating expense for 2024 and 2023 (in millions):

Current wording

Operating expenses. Total operating expenses decreased $3.2 million, or 1.2%, from $260.3 million for 2024 to $257.1 million for 2025. The following table shows the changes in operating expense for 2025 and 2024 (in millions):

Previous wording

Depreciation expense. Depreciation expense remained at $4.6 million in 2023 and 2024.

Current wording

Depreciation expense. Depreciation expense remained at $4.6 million in 2025, consistent with $4.6 million in 2024.

Previous wording

Non-operating expense (income). Total non-operating expense increased $726.6 million, or 100.4%, from non-operating income of $724.0 million in 2023 to non-operating expense of $2.6 million in 2024. The following table shows the changes in non-operating expense for 2024 and 2023 (in millions):

Current wording

Non-operating (income) expense. Total non-operating expense decreased $5.9 million, or 226.9%, from non-operating expense of $2.6 million in 2024 to non-operating income of $3.3 million in 2025. The following table shows the changes in non-operating expense for 2025 and 2024 (in millions):

Previous wording

Adjusted OIBDA represents operating income before depreciation and amortization expense adjusted to also exclude non-cash share-based payment costs, impairment of long-lived assets, workforce reorganization costs, termination of the Regal ESA, system optimization costs, satellite transitions costs and advisor fees related to involvement in the Cineworld Proceeding and Chapter 11 Case. Our management uses this non-GAAP financial measure to evaluate operating performance, to forecast future results and as a basis for compensation. The Company believes this is an important supplemental measure of operating performance because it eliminates items that have less bearing on its operating performance and highlights trends in its core business that may not otherwise be apparent when relying solely on GAAP financial measures. The Company believes the presentation of this measure 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 payment costs, impairment of long-lived assets, workforce reorganization costs, termination of the Regal ESA, 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.

Current wording

Adjusted OIBDA represents operating income before depreciation and amortization expense adjusted to also exclude non-cash share-based payment costs, impairment of long-lived assets, workforce reorganization costs, termination of the Regal ESA, system optimization costs, satellite transitions costs, Spotlight acquisition and transition related costs and advisor fees related to involvement in the Cineworld Proceeding and Chapter 11 Case. Our management uses this non-GAAP financial measure to evaluate operating performance, to forecast future results and as a basis for compensation. The Company believes this is an important supplemental measure of operating performance because it eliminates items that have less bearing on its operating performance and highlights trends in its core business that may not otherwise be apparent when relying solely on GAAP financial measures. The Company believes the presentation of this measure 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 payment costs, impairment of long-lived assets, workforce reorganization costs, termination of the Regal ESA, system optimization costs, satellite transition costs, acquisition related costs and advisor fees related to involvement in the Cineworld Proceeding and Chapter 11 Case, interest rates, debt levels or income tax rates.

Previous wording

Adjusted OIBDA margin is calculated by dividing Adjusted OIBDA by total revenue. Our management uses this non-GAAP financial measure to evaluate operating performance, to forecast future results and as a basis for compensation. The Company believes this is an important supplemental measure of operating performance because it eliminates 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 this measure 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 payment costs, impairment of long-lived assets, workforce reorganization costs, termination of the Regal ESA, system optimization costs, satellite transitions costs, advisor fees related to involvement in the Cineworld Proceeding and Chapter 11 Case, interest rates, debt levels or income tax rates.

Current wording

Adjusted OIBDA margin is calculated by dividing Adjusted OIBDA by total revenue. Our management uses this non-GAAP financial measure to evaluate operating performance, to forecast future results and as a basis for compensation. The Company believes this is an important supplemental measure of operating performance because it eliminates 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 this measure 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 payment costs, impairment of long-lived assets, workforce reorganization costs, termination of the Regal ESA, system optimization costs, satellite transitions costs, acquisition related costs, advisor fees related to involvement in the Cineworld Proceeding and Chapter 11 Case, interest rates, debt levels or income tax rates.

Previous wording

A limitation of both 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 NCM LLC’s business. In addition, Adjusted OIBDA and Adjusted OIBDA margin have the limitation of not reflecting the effect of the Company’s depreciation and amortization expense, non-cash share-based payment costs, impairment of long-lived assets, workforce reorganization costs, termination of the Regal ESA, system optimization costs, satellite transitions 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 OIBDA 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 NCM LLC’s Revolving Credit Facility 2023.

Current wording

A limitation of both 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 NCM LLC’s business. In addition, Adjusted OIBDA and Adjusted OIBDA margin have the limitation of not reflecting the effect of the non-cash share-based payment costs, impairment of long-lived assets, workforce reorganization costs, termination of the Regal ESA, system optimization costs, satellite transitions costs, acquisition related 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 OIBDA 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 NCM LLC’s 2025 Credit Facility.

Previous wording

The following table reconciles operating income to Adjusted OIBDA for NCM LLC for the periods presented (dollars in millions):

Current wording

The following table reconciles operating income to Adjusted OIBDA for the periods presented (dollars in millions):

Previous wording

Share-based compensation costs are included in network operations, selling and marketing and administrative expense in the accompanying 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 audited 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 and redundancy costs associated with changes to the Company's sales force implemented during the first quarter of 2022.

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 net impact of Regal’s termination of the ESA resulting from the disposal of the intangible asset partially offset by the surrender of Regal’s ownership in the Company and the forgiveness of prepetition claims.

Current wording

The net impact of Regal's termination of the ESA resulting from the disposal of the intangible asset partially offset by the surrender of Regal's ownership in the Company and the forgiveness of the prepetition claims.

Previous wording

System optimization costs represent costs incurred related to a one-time assessment of the technology surrounding the Company's programmatic offerings beginning in 2024.

Current wording

System optimization costs represent costs incurred related to a one-time assessment of the technology surrounding the Company's programmatic offerings beginning in the third quarter of 2024 and an assessment of operating efficiencies beginning in the third quarter of 2025.

Previous wording

Advisor and legal fees and expenses incurred in connection with the Company’s involvement in the Cineworld Proceeding and Chapter 11 Case and related appeals, as well as insurance and retention related expenses and retainers related to the members of the special and restructuring committees of the Company’s Board of Directors.

Current wording

Advisor and legal fees and expenses incurred in connection with the Company’s involvement in the Cineworld Proceeding and Chapter 11 Case and related appeals, as well as insurance and retention related expenses.

Previous wording

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 2023, Cinemark and Regal, prior to the termination of Regal's ESA, 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 Amendments, the price for the time sold to Cinemark and Regal’s beverage suppliers now increases at a fixed rate of 2.0% each year. As of July 14, 2023, the effective date of the Regal Advertising Agreement, the Company no longer receives ESA beverage revenue from Regal.

Current wording

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 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 effect in 2025. In 2026, such obligations are expected to decrease resulting in lower beverage revenue in 2026, as compared to 2025. The price for the time sold to Cinemark's beverage supplier and AMC's beverage supplier will increase at a fixed rate of 2.0% each year.

Previous wording

ESA Parties and network affiliate 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 audited 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, or a fee per digital cinema screen. 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 audited 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 or principal payments on our Revolving Credit Facility 2023, income tax payments, TRA payments, 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 and any amount of dividends to NCM, Inc.’s common stockholders. We have sufficient sources of liquidity to meet our material cash commitments for the next 12 months and the foreseeable future.

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 or principal payments on our 2025 Credit Facility, income tax payments, TRA payments, available cash payments (as defined in the NCM LLC Operating Agreement) to Cinemark in the event Cinemark holds NCM LLC membership units and any amount of dividends to NCM, Inc.’s common stockholders. We have sufficient sources of liquidity to meet our material cash commitments for the next 12 months and the foreseeable future.

Previous 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 agreement provides for a $45.0 million senior secured revolving credit facility, the 2025 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 2023 Revolving Credit Facility, and in connection with this termination, paid a prepayment fee equal to 1% of the total commitment. As of March 6, 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 entered into a Loan and Security Agreement with U.S. Bank National Association, as lender. The agreement provides for a $45.0 million senior secured revolving credit facility, the 2025 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 2023 Revolving Credit Facility, and in connection with this termination, paid a prepayment fee equal to 1% of the total commitment. As of January 1, 2026, NCM LLC has an outstanding balance of $12.0 million 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

On August 7, 2023, NCM LLC entered into the Revolving Credit Facility 2023 with CIT Northbridge Credit LLC as agent. The Revolving Credit Facility 2023 is an asset backed line facility where the capacity depends upon NCM LLC’s trade accounts receivable balance, as adjusted for aged balances and other considerations. The maximum availability NCM LLC has access to under the revolver is $55.0 million. The proceeds of the Revolving Credit Facility 2023 may be used for, inter alia, working capital and capital expenditures. The Revolving Credit Facility 2023 will mature on August 7, 2026. The interest rate under the Revolving Credit Facility 2023 is a base rate or SOFR benchmark plus (i) 3.75% if less than 50% of revolving commitments are utilized or (ii) 4.50% if 50% or more of revolving commitments are utilized (utilizing the average revolver usage for the prior calendar month as a benchmark for this determination). The Revolving Credit Facility 2023 also contains a financial maintenance covenant requiring that the fixed charge coverage ratio ending on the last day of each fiscal month is at least 1.1 to 1.0 during a “Trigger Period.” A Trigger Period begins upon (i) an event of default or (ii) if availability is less than the greater of (a) $5.0 million and (b) 10% of aggregate revolving commitments. A Trigger Period ends only if (i) no event of default existed for the preceding 30 consecutive days and (ii) availability is greater than both (a) $5.0 million and (b) 10% of aggregate revolving commitments. Upon the effectiveness of the Revolving Credit Facility 2023, NCM LLC immediately drew $10.0 million from the facility, which represents the only amount currently outstanding under the Revolving Credit Facility 2023, as of December 26, 2024. This balance was subsequently repaid on January 24, 2025 upon the termination of the Revolving Credit Facility 2023, effective on January 24, 2025.

Current wording

On August 7, 2023, NCM LLC entered into the Revolving Credit Facility 2023 with CIT Northbridge Credit LLC as agent. The Revolving Credit Facility 2023 was an asset backed line facility where the capacity depended upon NCM LLC’s trade accounts receivable balance, as adjusted for aged balances and other considerations. The maximum availability NCM LLC had access to under the revolver was $55.0 million. The proceeds of the Revolving Credit Facility 2023 could have been used for, inter alia, working capital and capital expenditures. The Revolving Credit Facility 2023 would have matured on August 7, 2026. The interest rate under the Revolving Credit Facility 2023 was a base rate or SOFR benchmark plus (i) 3.75% if less than 50% of revolving commitments were utilized or (ii) 4.50% if 50% or more of revolving commitments were utilized (utilizing the average revolver usage for the prior calendar month as a benchmark for this determination). The Revolving Credit Facility 2023 also contained a financial maintenance covenant requiring that the fixed charge coverage ratio ending on the last day of each fiscal month was at least 1.1 to 1.0 during a “Trigger Period.” A Trigger Period begins upon (i) an event of default or (ii) if availability is less than the greater of (a) $5.0 million and (b) 10% of aggregate revolving commitments. A Trigger Period ends only if (i) no event of default existed for the preceding 30 consecutive days and (ii) availability is greater than both (a) $5.0 million and (b) 10% of aggregate revolving commitments. Upon the effectiveness of the Revolving Credit Facility 2023, NCM LLC immediately drew $10.0 million from the facility, which represented the only amount outstanding under the Revolving Credit Facility 2023, as of December 26, 2024. This balance was subsequently repaid on January 24, 2025 upon the termination of the Revolving Credit Facility 2023, effective on January 24, 2025.

Previous wording

Included in cash and cash equivalents as of December 26, 2024 and December 28, 2023 there was $63.5 million and $31.9 million, respectively, of cash held by NCM LLC which is not available to satisfy NCM, Inc.'s dividend payments and other NCM, Inc. obligations.

Current wording

Included in cash and cash equivalents as of January 1, 2026 and December 26, 2024, there was $23.8 million and $63.5 million, respectively, of cash held by NCM LLC which is not available to satisfy dividends declared by NCM, Inc., income tax, TRA payments and other NCM, Inc. obligations.

Previous wording

NCM LLC’s total capacity under the Revolving Credit Facility 2023, which is subject to fluctuations in the underlying assets, is $55.0 million as of December 26, 2024. As of December 26, 2024, the amount available under the NCM LLC Revolving Credit Facility 2023 in the table above is net of the amount outstanding under the Revolving Credit Facility 2023 of $10.0 million and the outstanding letters of credit of $0.6 million.

Current wording

The Revolving Credit Facility 2023 portion of NCM LLC’s total borrowings that was available, subject to certain conditions, for general corporate purposes of NCM LLC in the ordinary course of business and for other transactions permitted under the senior secured credit facility, and a portion was available for letters of credit. NCM LLC’s total capacity under the Revolving Credit Facility 2023, which was subject to fluctuations in the underlying assets, was $55.0 million prior to its extinguishment. As of December 26, 2024, the amount available under the Revolving Credit Facility 2023 in the table above is net of letters of credit of $0.6 million and the amount outstanding under the Revolving Credit Facility 2023 of $10.0 million.

Previous wording

Operating Activities. The $67.0 million increase in cash provided by operating activities for 2024, as compared to 2023, was due to 1) a $59.1 million decrease in net loss adjusted for non-cash items, 2) an $18.6 million increase in deferred revenue, 3) a $6.7 million increase in amounts due from to ESA Parties, net, 4) a $6.1 million decrease in the change in prepaid expenses, 5) a $2.6 million decrease in payments of accounts payable and accrued expenses and 6) a $2.6 million increase in other operating assets and liabilities for 2024, as compared to 2023. These increases in cash provided by operating activities were partially offset by a $25.7 million decrease in the change in account receivable collections and a $3.8 million reduction in the receipts of ESA Party integration and encumbered theater payments in 2024, as compared to 2023.

Current wording

Operating Activities. The $51.9 million decrease in cash provided by operating activities for 2025, as compared to 2024, was due to 1) a $27.8 million increase in the change in deferred revenue, 2) a $19.5 million decrease in account receivable collections, 3) a $4.4 million decrease in net loss adjusted for non-cash items and 4) a $3.2 million increase in payments of accounts payable and accrued expenses in 2025, as compared to 2024. These decreases in cash provided by operating activities were partially offset by a $5.4 million decrease in prepaid expenses in 2025, as compared to 2024.

Previous wording

Financing Activities. The $38.0 million decrease in cash used in financing activities for 2024, as compared to 2023, was primarily due to the removal of $49.6 million of cash caused by the deconsolidation of NCM LLC in the second quarter of 2023. Additionally, there was a $1.2 million decrease in payments of debt issuance costs and a $0.8 million decrease in repayments of the term loan facility due to an amendment to the Credit Agreement 2018 and Revolving Credit Agreement 2022 in the year ended December 28, 2023, as compared to the year ended December 26, 2024. These decreases were partially offset by a $13.1 million increase in payments made to repurchase shares of NCM, Inc.'s common stock and $0.7 million increase in cash redemptions of NCM LLC common membership units during 2024, as compared to 2023.

Current wording

Financing Activities. The $19.4 million increase in cash used in financing activities for 2025, as compared to 2024, was primarily due to a $11.1 million increase in the payment of dividends and an $8.9 million increase in payments made to repurchase shares of NCM, Inc.'s common stock in 2025, as compared to 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 and cash equivalents balances, which as of December 26, 2024 were $78.2 million (including $66.5 million of cash and restricted cash held by NCM LLC). NCM LLC’s primary sources of liquidity and capital resources are (i) its cash provided by operating activities, (ii) cash on hand and (iii) as of January 24, 2025, availability under the new 2025 Credit Facility. NCM LLC's previous Revolving Credit Facility 2023 was terminated and repaid on January 24, 2025. NCM LLC drew down $10.0 million of its Revolving Credit Facility 2023 immediately upon emergence from bankruptcy on August 7, 2023. The $66.5 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

$23.8 million of cash and restricted cash held by NCM LLC). NCM LLC’s primary sources of liquidity and capital resources are (i) its cash provided by operating activities, (ii) cash on hand and (iii) availability under the 2025 Credit Facility. The $23.8 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 (only NCM, Inc. and AMC as of December 26, 2024). The other members are only able to receive available cash when they hold units. The available cash distribution to the members of NCM LLC for the year ended December 26, 2024 was calculated as approximately $26.2 million, due almost entirely to NCM, Inc, as the primary holder of NCM LLC units as of December 26, 2024. The $26.2 million is comprised of negative available cash generated by NCM LLC to NCM, Inc. for the first quarter of 2024 of $10.2 million and positive available cash generated by NCM LLC to NCM, Inc. for the second, third and fourth quarter of 2024 totaling $36.4 million. The positive available cash generated by NCM LLC for the second quarter of 2024, of $1.3 million, was completely offset against the accumulated negative available cash amounts generated in prior years in accordance with the terms of the NCM LLC Operating Agreement. The cumulative negative available cash balance as of December 26, 2024 is $223.6 million (including $165.1 million for NCM, Inc., $56.3 million for Cinemark and $2.2 million for AMC). These amounts can only be offset against positive available cash within the second quarter of future years. NCM, Inc. has the option to defer payment of any available cash distributions payable to NCM, Inc. at its discretion. As of December 26, 2024, NCM LLC owed NCM, Inc. $46.3 million in deferred available cash distributions.

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 (only NCM, Inc. as of January 1, 2026). The members are only able to receive available cash when they hold units. The available cash distribution to the members of NCM LLC for the year ended January 1, 2026 was calculated as approximately $20.8 million, due entirely to NCM, Inc., as the only holder of NCM LLC units as of January 1, 2026. The $20.8 million is comprised of negative available cash generated by NCM LLC to NCM, Inc. for the first and second quarter of 2025 of $13.4 million and $3.7 million, respectively, and positive available cash generated by NCM LLC to NCM, Inc. for the third and fourth quarter of 2025 of $7.1 million and $30.8 million, respectively. The cumulative negative available cash balance as of January 1, 2026 is $238.6 million (including $182.3 million for NCM, Inc. and $56.3 million for Cinemark). These amounts can only be offset against positive available cash within the second quarter of future years. NCM, Inc. has the option to defer payment of any available cash distributions payable to NCM, Inc. at its discretion. As of January 1, 2026, NCM LLC owed NCM, Inc. $52.7 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 Revolving Credit Facility 2023) to fund payments associated with the TRA, stock repurchases, strategic initiatives and future dividends if and when declared by the Board of Directors. The Company does expect to 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. 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 Tax Receivable Agreement ("TRA"), stock repurchases, strategic initiatives and future dividends if and when declared by the Board of Directors. The Company made an estimated 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. 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. 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. As of January 1, 2026, the Company has $64.8 million remaining within the authorized program. 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.

Previous wording

Capital expenditures of NCM LLC include digital applications being developed primarily by our programmers and outside consultants, capitalized software development or upgrades for our Digital Content Software, audience targeting and data management systems, cinema advertising management system, equipment required for our Customer Experience Center and content production and post-production facilities, office leasehold improvements, desktop equipment for use by our employees, and in certain cases, the costs necessary to install equipment at or digitize all or a portion of a network affiliate’s theaters when they are added to our network. Capital expenditures in 2024 were $5.6 million (including $1.9 million associated with upgrades to our existing systems related to the continued upgrades of our cinema advertising management system; $1.7 million associated with leasehold improvements; $1.0 million associated with digital product development; $0.4 million associated with network affiliate additions and $0.4 million associated with certain implementation and prepaid costs associated with Cloud Computing arrangements) compared to $5.3 million in 2023 (including $2.0 million associated with upgrades to our existing systems related to the continued upgrades of our cinema advertising management system; $1.5 million associated with digital product development; $1.3 million associated with certain implementation and prepaid costs associated with Cloud Computing arrangements and $0.3 million associated with network affiliate additions). The capital expenditures have typically been satisfied through cash flow from operations. All capital expenditures related to the DCN within the ESA Parties’ theaters have been made by the ESA Parties under the ESAs. We expect they will continue to be made by the ESA Parties in accordance with the ESAs.

Current wording

Capital expenditures of NCM LLC include digital applications being developed primarily by our programmers and outside consultants, capitalized software development or upgrades for our Digital Content Software, audience targeting and data management systems, cinema advertising management system, equipment required for our content production and post-production facilities, office leasehold improvements, desktop equipment for use by our employees, and in certain cases, the costs necessary to install equipment at or digitize all or a portion of a network affiliate’s theaters when they are added to our network. Capital expenditures in 2025 were $8.3 million (including $2.9 million associated with network affiliate additions; $2.7 million associated with upgrades to our existing systems related to the continued upgrades of our cinema advertising management system and related reporting; $0.9 million associated with leasehold improvements; $0.7 million associated with digital product development and data; and $0.5 million associated with certain implementation and prepaid costs associated with Cloud Computing arrangements) compared to $5.6 million in 2024 (including $1.9 million associated with upgrades to our existing systems related to the continued upgrades of our cinema advertising management system; $1.7 million associated with leasehold improvements; $1.0 million associated with digital product development; $0.4 million associated with network affiliate additions and $0.4 million associated with certain implementation and prepaid costs associated with Cloud Computing arrangements). The capital expenditures have typically been satisfied through cash flow from operations. All capital expenditures related to the DCN within the ESA Parties’ theaters have been made by the ESA Parties under the ESAs. We expect they will continue to be made by the ESA Parties in accordance with the ESAs.

Previous wording

We expect to make approximately $10.5 million to $11.5 million of capital expenditures in fiscal 2025. We expect approximately $6.0 million of capital expenditures related to upgrades to our Digital Content distribution and management software and our other internal management systems, including our cinema advertising management system, reporting systems, network equipment and software licensing, $2.0 million towards network affiliate additions and upgrades to currently contracted network affiliates, $1.5 million towards digital products and audience measurement tools and $1.0 million towards leasehold improvements. Our capital expenditures may increase as we add additional network affiliates. We expect that additional expenditures, if any, would be funded in part by additional cash flows associated with those new network affiliates.

Current wording

We expect to make approximately $9.0 million to $10.0 million of capital expenditures in fiscal 2026. We expect approximately $4.0 million of capital expenditures related to upgrades to our Digital Content distribution and management software and our other internal management systems, including our cinema advertising management system, reporting systems, network equipment and software licensing, $4.0 million towards network affiliate additions and upgrades to currently contracted network affiliates, $1.0 million towards digital products and audience measurement tools and $1.0 million towards leasehold improvements. Our capital expenditures may increase as we add additional network affiliates. We expect that additional expenditures, if any, would be funded in part by additional cash flows associated with those new network affiliates.

Previous wording

As of January 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. A commitment fee of 0.25% is payable quarterly in arrears based on the average daily amount of the undrawn portion of the commitments under the 2025 Credit Facility for the preceding quarter. The 2025 Credit Facility has a $5.0 million sublimit for the issuance of letters of credit. Fees are payable on outstanding letters of credit at a per annum rate equal to 2.00%, plus certain customary fees payable in connection with the issuance, amendment, renewal and extension of letters of credit and the processing of drawings thereunder.

Current wording

As of January 1, 2026, NCM LLC has an outstanding balance of $12.0 million 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. A commitment fee of 0.25% is payable quarterly in arrears based on the average daily amount of the undrawn portion of the commitments under the 2025 Credit Facility for the preceding quarter. The 2025 Credit Facility has a $5.0 million sublimit for the issuance of letters of credit. Fees are payable on outstanding letters of credit at a per annum rate equal to 2.00%, plus certain customary fees payable in connection with the issuance, amendment, renewal and extension of letters of credit and the processing of drawings thereunder.