National CineMedia, Inc.

Previous wording

Some of the information in this Quarterly Report on Form 10-Q includes “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934 (the “Exchange Act”), as amended. All statements other than statements of historical facts included in this Form 10-Q, including, without limitation, certain statements under “Management’s Discussion and Analysis of Financial Condition and Results of Operations” may constitute forward-looking statements. In some cases, you can identify these “forward-looking statements” by the specific words, including but not limited to “may,” “should,” “expects,” “plans,” “anticipates,” “believes,” “estimates,” “forecasts,” “predicts,” “potential” or “continue” or the negative of those words and other comparable words. These forward-looking statements involve risks and uncertainties. Our actual results could differ materially from those indicated in these statements as a result of certain factors as more fully discussed under the heading “Risk Factors” in our Quarterly Report on Form 10-Q for the three months ended April 2, 2026 and in our Annual Report on Form 10-K for the Company’s fiscal year ended January 1, 2026. Investors are cautioned not to place undue reliance on any such forward-looking statements, which speak to the information only as of the date they are made. We undertake no obligation to update any forward-looking statement, whether as a result of new information, future events or otherwise, except as required by law. The following discussion and analysis is a supplement to and should be read in conjunction with the unaudited Condensed Consolidated Financial Statements and notes thereto included herein and the audited financial statements and other disclosure included in our Annual Report on Form 10-K for the Company’s fiscal year ended January 1, 2026. In the following discussion and analysis, the term net income refers to net income attributable to the Company.

Current wording

Some of the information in this Quarterly Report on Form 10-Q includes “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934 (the “Exchange Act”), as amended. All statements other than statements of historical facts included in this Form 10-Q, including, without limitation, certain statements under “Management’s Discussion and Analysis of Financial Condition and Results of Operations” may constitute forward-looking statements. In some cases, you can identify these “forward-looking statements” by the specific words, including but not limited to “may,” “should,” “expects,” “plans,” “anticipates,” “believes,” “estimates,” “forecasts,” “predicts,” “potential” or “continue” or the negative of those words and other comparable words. These forward-looking statements involve risks and uncertainties. Our actual results could differ materially from those indicated in these statements as a result of certain factors as more fully discussed under the heading “Risk Factors” in our Quarterly Report on Form 10-Q for the three months ended October 1, 2026 and in our Quarterly Report on Form 10-Q for the three months ended April 2, 2026 and in our Annual Report on Form 10-K for the Company’s fiscal year ended January 1, 2026. Investors are cautioned not to place undue reliance on any such forward-looking statements, which speak to the information only as of the date they are made. We undertake no obligation to update any forward-looking statement, whether as a result of new information, future events or otherwise, except as required by law. The following discussion and analysis is a supplement to and should be read in conjunction with the unaudited Condensed Consolidated Financial Statements and notes thereto included herein and the audited financial statements and other disclosure included in our Annual Report on Form 10-K for the Company’s fiscal year ended January 1, 2026. In the following discussion and analysis, the term net income refers to net income attributable to the Company.

Previous wording

We also sell advertising on our lobby entertainment 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. We have long-term ESAs (approximately 15.1 weighted average years remaining) and multi-year agreements with our network affiliates, which expire at various dates between August 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 11.4 years as of July 2, 2026. 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”) and Media Director.

Current wording

NCM LLC derives revenue principally from the sale of advertising to national, regional and local businesses in Noovie®, our cinema advertising and entertainment show seen on movie screens within the NCM Network across the U.S. and the CineLife® Show seen within the Spotlight Cinema Network. NCM LLC presents 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. NCM LLC also sells advertising on our lobby entertainment 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, NCM LLC sells data and digital advertising through the NCMx™ suite of products and through our Noovie digital properties. NCM LLC also sells advertising across a variety of complementary out of home venues. NCM LLC has long-term exhibitor service agreements (“ESAs”) with Cinemark and AMC and long-term agreements with certain cinema affiliates, including Regal, which grant the Company the exclusive right in their respective theaters to sell advertising, subject to limited exceptions. As of October 1, 2026, the weighted average remaining term of the cinema affiliate agreements, including the ESAs, is 11.1 years as of October 1, 2026, expiring at various dates between December 31, 2026 and February 13, 2042. Our Noovie Show and LEN programming are distributed predominantly via satellite through our proprietary digital content network (“DCN”) and Media Director.

Previous wording

Management focuses on several measurements that we believe provide us with the necessary ratios and key performance indicators to manage our business, determine how we are performing versus our internal goals and targets, and against the performance of our competitors and other benchmarks in the marketplace in which we operate. We focus on many operating metrics including revenue, Adjusted OIBDA and Adjusted OIBDA margin, as some of our primary measurement metrics. In addition, we monitor our monthly advertising performance measurements, including advertising inventory utilization, advertising pricing (“CPM”), local advertising rate per theater per week, advertising revenue per attendee, as well as significant operating expenses and related trends. We also monitor free cash flow, cash balances, the fixed charge coverage ratio and revolving credit facility availability to ensure financial debt covenant compliance and that there is adequate cash availability to fund our working capital needs, debt obligations and any future dividends declared by our Board of Directors

Current wording

Management focuses on several measurements that we believe provide us with the necessary ratios and key performance indicators to manage our business, determine how we are performing versus our internal goals and targets, and against the performance of our competitors and other benchmarks in the marketplace in which we operate. We focus on many operating metrics including revenue, Adjusted OIBDA and Adjusted OIBDA margin, as some of our primary measurement metrics. In addition, we monitor our monthly advertising performance measurements, including advertising inventory utilization, advertising pricing (“CPM”), local cinema advertising rate per theater per week, cinema advertising revenue per attendee, as well as significant operating expenses and related trends. We also monitor free cash flow, cash balances, the total net leverage ratio and revolving credit facility availability to ensure financial debt covenant compliance and that there is adequate cash availability to fund our working capital needs, debt obligations and any future stock repurchases approved by and dividends declared by our Board of Directors.

Previous wording

Our operating results may be affected by a variety of internal and external factors and trends described more fully in the section entitled “Risk Factors” in our Annual Report on Form 10-K, filed with the SEC on February 26, 2026, for our fiscal year ended January 1, 2026 and in the Quarterly Report on Form 10-Q filed with the SEC on May 12, 2026 for the quarter ended April 2, 2026.

Current wording

Our operating results may be affected by a variety of internal and external factors and trends described more fully in the section entitled “Risk Factors” in our Annual Report on Form 10-K, filed with the SEC on February 26, 2026, for our fiscal year ended January 1, 2026 and in the Quarterly Report on Form 10-Q filed with the SEC on May 12, 2026 for the quarter ended April 2, 2026 and in this Quarterly Report on Form 10-Q filed with the SEC on November 10, 2026 for the quarter ended October 1, 2026.

Previous wording

On March 31, 2026, the Company introduced a transformation initiative to increase operational efficiencies and allow for the ultimate automation of certain functions (“2026 Transformation Initiative”). The Company eliminated the positions of approximately 10.0% of its workforce and transitioned the positions of an additional portion of its workforce to an outsourced service provider. The 2026 Transformation Initiative is expected to be completed in the third quarter of 2026. For the three and six months ended July 2, 2026, the Company recognized severance expense and other incremental personnel costs of $1.7 million and $2.7 million, respectively, related to the eliminated positions and will recognize additional severance and transition costs in the third quarter of 2026 related to transitioning employees to the outsourced service provider. In conjunction with this initiative, the Company reviewed all vendor relationships and is in the process of terminating its relationship with certain vendors resulting in estimated termination fees of $0.5 million and $3.1 million for the three and six months ended July 2, 2026, respectively. The Company also engaged the services of third-party consultants to assist with the 2026 Transformation Initiative and recorded a charge of $0.5 million and $1.6 million in the three and six months ended July 2, 2026, respectively, related to these services.

Current wording

On March 31, 2026, the Company introduced a transformation initiative to increase operational efficiencies and allow for the ultimate automation of certain functions (the “2026 Transformation Initiative”). The Company eliminated the positions of approximately 10.0% of its workforce and transitioned the positions of an additional portion of its workforce to an outsourced service provider. The 2026 Transformation Initiative was completed in the third quarter of 2026. For the three and nine months ended October 1, 2026, the Company recognized severance expense and other incremental personnel costs of $0.5 million and $3.2 million, respectively, related to eliminated positions. In conjunction with this initiative, the Company reviewed all vendor relationships and terminated its relationship with certain vendors resulting in termination fees of $0.3 million and $3.4 million for the three and nine months ended October 1, 2026, respectively. The Company also engaged the services of third-party consultants and an outsourced service provider to assist with the 2026 Transformation Initiative and recorded a charge of $0.0 million and $1.8 million in the three and nine months ended October 1, 2026, respectively, related to these services.

Previous wording

On November 14, 2025, NCM LLC entered into a Membership Interest Purchase Agreement (“MIPA”) with Spotlight Cinema Networks (“Spotlight”), a niche cinema advertising company, whereby the Company acquired 100.0% of Spotlight. The acquisition of Spotlight added high-scale luxury screens and exhibitors that offer unique and engaging customer experiences to the Company’s platform, unlocking new advertising and preshow entertainment inventory. Spotlight’s exhibitor partners, including Cinépolis Luxury Cinema, Landmark Theatres, Flix Brewhouse and LOOK Dine-In Cinemas, complement NCM’s national theater network and extend NCM’s reach among culturally engaged premium audiences. The addition of Spotlight’s footprint increased NCM’s national market share by more than 6.0% and expanded its theater presence by approximately 30.0% in the critical New York and Los Angeles markets. Spotlight was consolidated within the Company's financial statements as of November 15, 2025. Refer to Note 4—Business Combinations for more information regarding the acquisition and consolidation of Spotlight.

Current wording

On November 14, 2025, NCM LLC entered into a Membership Interest Purchase Agreement (“MIPA”) with Spotlight Cinema Networks (“Spotlight”), a niche cinema advertising company, whereby the Company acquired 100.0% of Spotlight. The acquisition of Spotlight added high-scale luxury screens and exhibitors that offer unique and engaging customer experiences to the Company’s platform, unlocking new advertising and preshow entertainment inventory. Spotlight’s exhibitor partners, including Cinépolis Luxury Cinema, Landmark Theatres, Flix Brewhouse and LOOK Dine-In Cinemas, complemented NCM LLC’s national theater network and extended NCM LLC’s reach among culturally engaged premium audiences. The addition of Spotlight’s footprint increased NCM LLC’s national market share by more than 6.0% and expanded its theater presence by approximately 30.0% in the critical New York and Los Angeles markets. Spotlight was consolidated within the Company's financial statements as of November 15, 2025. Refer to Note 4—Business Combinations for more information regarding the acquisition and consolidation of Spotlight.

Previous wording

On April 17, 2025, the Company and AMC, entered into the Second Amended and Restated Exhibitor Services Agreement (the “2025 AMC Agreement”) and a separate termination agreement (the “AMC Termination Agreement”) by and among NCM LLC, NCM, Inc. and AMC. The 2025 AMC Agreement extends the term of the ESA by five years and more closely aligns the program distributed by NCM LLC in AMC theaters to the predominant pre-feature program show structure in the rest of NCM LLC's advertising network and adjusts the consideration paid by NCM LLC. The AMC Termination Agreement waives AMC’s rights under certain agreements entered into at the time of the IPO. The agreements were accounted for in accordance with the lease modification guidance within ASC 842—Leases as the amended ESA contains a short-term operating lease of AMC’s screens. The agreements were considered combined as they were entered into contemporaneously by the same parties. As a result of the agreements, in the year ended January 1, 2026, NCM LLC released $24.8 million of the 'Payable under the TRA' and reversed the receivable of $10.6 million from AMC, related to unpaid integration payments and the receivable under the Common Unit Adjustment Agreement within 'Prepaid expenses and other assets' on the Company's unaudited Condensed Consolidated Balance Sheet. NCM will no longer have an obligation to make TRA payments to AMC, provide common units as a part of the Common Unit Adjustment Agreement or distribute NCM LLC's available cash to AMC and the Company received the benefits of the revised ESA, including enhancements related to the pre-feature show structure and NCM's exclusive right to advertise in AMC's theaters. The net impact of these reversals was recorded to the 'Intangible Assets, net of amortization' as AMC's forfeiture of this net payable was considered akin to a lease incentive. The reduction in the intangible asset for the ESAs and the extension of the term of the ESA will result in reduced amortization expense, as it is considered akin to lease expense, for the remainder of the contract term. Refer to Note 5—Intangible Assets, Note 8—Income Taxes, and Note 9—Commitments and Contingenciesand the Company’s Form 8-K filed with the SEC on April 23, 2025 for additional detail surrounding these agreements.

Current wording

On April 17, 2025, the Company and AMC, entered into the Second Amended and Restated Exhibitor Services Agreement (the “2025 AMC Agreement”) and a separate termination agreement (the “AMC Termination Agreement”) by and among NCM LLC, NCM, Inc. and AMC. The 2025 AMC Agreement extended the term of the ESA by five years, more closely aligned the program distributed by NCM LLC in AMC theaters to the predominant pre-feature program show structure in the rest of NCM LLC's advertising network and adjusted the consideration paid by NCM LLC. The AMC Termination Agreement waives AMC’s rights under certain agreements entered into at the time of the Company's initial public offering. The agreements were accounted for in accordance with the lease modification guidance within ASC 842—Leases as the amended ESA contains a short-term operating lease of AMC’s screens. The agreements were considered combined as they were entered into contemporaneously by the same parties. As a result of the agreements, in the year ended January 1, 2026, NCM LLC released $24.8 million of the 'Payable under the TRA' and reversed the receivable of $10.6 million from AMC, related to unpaid integration payments and the receivable under the Common Unit Adjustment Agreement within 'Prepaid expenses and other assets' on the Company's unaudited Condensed Consolidated Balance Sheet. NCM no longer has an obligation to make TRA payments to AMC, provide common units as a part of the Common Unit Adjustment Agreement or distribute NCM LLC's available cash to AMC and the Company received the benefits of the revised ESA, including enhancements related to the pre-feature show structure and NCM's exclusive right to advertise in AMC's theaters. The net impact of these reversals was recorded to the 'Intangible Assets, net of amortization' as AMC's forfeiture of this net payable was considered akin to a lease incentive. The reduction in the intangible asset for the ESAs and the extension of the term of the ESA will result in reduced amortization expense, as it is considered akin to lease expense, for the remainder of the contract term. Refer to Note

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 “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 July 2, 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.

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 provided 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 previous revolving credit facility, and in connection with this termination, paid a prepayment fee equal to 1% of the total commitment. The 2025 Credit Facility resulted in a meaningful reduction of the Company’s overall interest expense, extended the maturity date to 2028 and was a cash flow-based revolving loan compared to the asset-based revolving loan of the previous revolving credit facility. On September 18, 2026, the Company repaid the full amount outstanding under the 2025 Credit Facility and terminated the agreement, resulting in a loss on debt extinguishment of $0.5 million.

Previous 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. There were 0.1 million, 1.8 million, 0.3 million and 3.3 million shares repurchased on the open market during the three and six months ended July 2, 2026 and June 26, 2025, respectively. 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 $0.2 million, $9.9 million, $0.8 million and $18.8 million for the three and six months ended July 2, 2026 and June 26, 2025, respectively. As of July 2, 2026, 6.9 million 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. There were 0.0 million, 0.0 million, 0.3 million and 3.3 million shares repurchased on the open market during the three and nine months ended October 1, 2026 and September 25, 2025, respectively. 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 $0.0 million, $0.0 million, $0.8 million and $18.8 million for the three and nine months ended October 1, 2026 and September 25, 2025, respectively. As of October 1, 2026, 6.9 million shares have been repurchased on the open market since the program's inception.

Previous wording

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

Current wording

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

Previous wording

(1) Represents the total attendance within NCM LLC’s advertising network, including Spotlight subsequent to November 15, 2025.

Current wording

Represents the total theater attendance within NCM LLC's advertising network, including Spotlight subsequent to November 15, 2025.

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, workforce and system transformation costs, satellite transition costs, Spotlight acquisition and integration costs and advisor fees related to involvement in Regal’s Chapter 11 case (the “Cineworld Proceeding”) and NCM LLC's Chapter 11 Case (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, improves 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 and system transformation costs, satellite transition costs, Spotlight acquisition and integration 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 and system transformation costs, satellite transition costs, Spotlight acquisition and integration 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 calc…

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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 and system transformation costs, satellite transition costs, acquisition and integration costs and advisor fees related to involvement in Regal’s Chapter 11 case (the “Cineworld Proceeding”) and NCM LLC's Chapter 11 Case (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, improves 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 and system transformation costs, satellite transition costs, acquisition and integration 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 and system transformation costs, satellite transition costs, acquisition and integration 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 the Company’s debt…

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Previous wording

Advisor and legal fees incurred in connection with the acquisition of Spotlight in the fourth quarter of 2025, as well as temporary transition costs incurred during the integration of Spotlight into the Company's processes during the first and second quarters of 2026.

Current wording

Advisor and legal fees incurred in connection with the acquisition of Spotlight in the fourth quarter of 2025 and the acquisition of Captivate in the third quarter of 2026, as well as temporary transition costs incurred during the integration of Spotlight and Captivate into the Company's processes.

Previous wording

The results of operations data for the three months ended July 2, 2026 (second quarter of 2026) and June 26, 2025 (second quarter of 2025) 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 October 1, 2026 (third quarter of 2026) and September 25, 2025 (third quarter of 2025) 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 increased $6.6 million, or 12.7%, from $51.8 million for the second quarter of 2025 to $58.4 million for the second quarter of 2026. The following is a summary of revenue by category (in millions):

Current wording

Revenue. Total revenue decreased $2.0 million, or 3.2%, from $63.4 million for the third quarter of 2025 to $61.4 million for the third quarter of 2026. The following is a summary of revenue by category (in millions):

Previous wording

ESA Party beverage revenue. ESA Party beverage revenue decreased by $0.2 million, or 4.8%, from $4.2 million for the second quarter of 2025 to $4.0 million for the second quarter of 2026. The decrease in ESA Party beverage revenue was primarily due to a decrease in the length of the on-screen advertising purchased by an ESA party in accordance with its underlying beverage concessionaire agreement in the second quarter of 2026, as compared to the second quarter of 2025. This decrease was offset by a 12.6% increase in ESA Party attendance in the second quarter of 2026, as compared to the second quarter of 2025.

Current wording

Other revenue. Other revenue remained consistent at $3.9 million for the third quarter of 2025 and the third quarter of 2026. The decrease in other revenue was primarily due to a $0.3 million decrease in ESA Party beverage revenue caused by a decrease in the amount of the onscreen advertising purchased by an ESA party in accordance with its underlying beverage concessionaire agreement in the third quarter of 2026, as compared to the third quarter of 2025. This decrease was partially offset by a 14.7% increase in ESA Party attendance in the third quarter of 2026, as compared to the third quarter of 2025. This decrease was also offset by other revenue from Captivate of $0.3 million, representing activity from September 19, 2026 through October 1, 2026, in the third quarter of 2026, subsequent to the acquisition on September 18, 2026.

Previous wording

Operating expenses. Total operating expenses increased $7.4 million, or 11.6%, from $63.8 million for the second quarter of 2025 to $71.2 million for the second quarter of 2026. The following table shows the changes in operating expense for the second quarter of 2026 and the second quarter of 2025 (in millions):

Current wording

Operating expenses. Total operating expenses increased $17.8 million, or 27.3%, from $65.2 million for the third quarter of 2025 to $83.0 million for the third quarter of 2026. The following table shows the changes in operating expense for the third quarter of 2026 and the third quarter of 2025 (in millions):

Previous wording

Theater exhibition fees. Theater exhibition fees increased by $6.7 million, or 21.7%, from $30.9 million for the second quarter of 2025 to $37.6 million for the second quarter of 2026. The increase was primarily related to a $3.8 million increase due to the 19.3% increase in network attendance partially driven by the acquisition of Spotlight, a $1.8 million increase driven by contractual rate increases within and renegotiations of our exhibitor agreements and a $0.9 million increase corresponding to the increase in platinum revenue in the second quarter of 2026, as compared to the second quarter of 2025.

Current wording

Theater exhibition fees. Theater exhibition fees increased by $7.9 million, or 24.5%, from $32.3 million for the third quarter of 2025 to $40.2 million for the third quarter of 2026. The increase was primarily related to a $6.2 million increase due to the 24.3% increase in network attendance partially driven by the acquisition of Spotlight, a $1.1 million increase driven by contractual rate increases within and renegotiations of our exhibitor agreements and a $0.6 million increase corresponding to the increase in platinum revenue in the third quarter of 2026, as compared to the third quarter of 2025.

Previous wording

Selling and marketing costs. Selling and marketing costs decreased by $0.2 million, or 2.0%, from $9.8 million for the second quarter of 2025 to $9.6 for the second quarter of 2026. This was primarily due to a $1.3 million decrease in selling related expenses due to the 2026 Transformation Initiative, primarily caused by the cancellation of certain contracts as well as decreased personnel related costs. These decreases were partially offset by a $0.3 million increase in commission expense driven by the increase in revenue in the second quarter of 2026, as compared to the second quarter of 2025, a $0.3 million increase in medical costs driven by higher claim activity due in part to transitioning employees to an outsourced service provider, a $0.3 million increase in other transition costs incurred in conjunction with the 2026 Transformation Initiative and $0.2 million increase in bad debt expense in the second quarter of 2026, as compared to the second quarter of 2025.

Current wording

Selling and marketing costs. Selling and marketing costs decreased $1.1 million, or 10.9%, from $10.1 million for the third quarter of 2025 to $9.0 million for the third quarter of 2026. The decrease was primarily related to a $0.8 million decrease in selling related expenses due to the 2026 Transformation Initiative, primarily caused by the cancellation of certain contracts, a $0.6 million decrease in performance related compensation correlating to the decrease in revenue, a $0.5 million decrease in personnel related costs due to the 2026 Transformation Initiative and a $0.3 million decrease in bad debt expense for the third quarter of 2026 compared to the third quarter of 2025. These decreases were partially offset by $0.8 million in expense attributable to Captivate’s operating activity following its consolidation on September 19, 2026 through October 1, 2026 and a $0.2 million increase in variable partnership costs in the third quarter of 2026, as compared to the third quarter of 2025.

Previous wording

Depreciation expense. Depreciation expense increased $0.4 million, or 36.4%, from $1.1 million for the second quarter of 2025, to $1.5 million for the second quarter of 2026. The increase was primarily due to assets placed in service in late 2025 related to the completion of certain leasehold improvements.

Current wording

Depreciation expense. Depreciation expense increased $0.5 million, or 45.5%, from $1.1 million for the third quarter of 2025, to $1.6 million for the third quarter of 2026. The increase was primarily due to assets placed in service in late 2025 related to the completion of certain leasehold improvements as well as $0.1 million in expense attributable to Captivate’s operating activity following its consolidation on September 19, 2026 through October 1, 2026.

Previous wording

Non-operating income. Total non-operating income increased $1.6 million, or 123.1%, from $1.3 million for the second quarter of 2025 to $2.9 million for the second quarter of 2026. The following table shows the changes in non-operating income for the second quarter of 2026 and the second quarter of 2025 (in millions):

Current wording

Non-operating expense (income). Total non-operating expense increased $41.3 million, or 1214.7%, from $3.4 million in income for the third quarter of 2025 to $37.9 million in loss for the third quarter of 2026. The following table shows the changes in non-operating expense (income) for the third quarter of 2026 and the third quarter of 2025 (in millions):

Previous wording

Revenue. Total revenue increased $5.8 million, or 6.7%, from $86.6 million for the six months ended June 26, 2025 to $92.4 million for the six months ended July 2, 2026. The following is a summary of revenue by category (in millions):

Current wording

Revenue. Total revenue increased $3.8 million, or 2.5%, from $150.0 million for the nine months ended September 25, 2025 to $153.8 million for the nine months ended October 1, 2026. The following is a summary of revenue by category (in millions):

Previous wording

ESA Party beverage revenue. ESA Party beverage revenue decreased $0.6 million, or 8.8%, from $6.8 million for the six months ended June 26, 2025 to $6.2 million for the six months ended July 2, 2026. The decrease in ESA Party beverage revenue was primarily due to a decrease in the length of the on-screen advertising purchased by an ESA party in accordance with its underlying beverage concessionaire agreement for the six months ended July 2, 2026, as compared to the six months ended June 26, 2025. This decrease was offset by a 9.3% increase in ESA Party attendance, as well as contractual rate increases within the ESAs for the six months ended July 2, 2026, as compared to the six months ended June 26, 2025.

Current wording

Other revenue. Other revenue decreased by $0.6 million, or 5.6%, from $10.7 million for the nine months ended September 25, 2025 to $10.1 million for the nine months ended October 1, 2026. The decrease in other revenue was primarily due to a $0.9 million decrease in ESA Party beverage revenue driven by a decrease in the length of the on-screen advertising purchased by an ESA party in accordance with its underlying beverage concessionaire agreement. This decrease was partially offset by an 11.3% increase in ESA Party attendance and contractual rate increases within the ESAs for the nine months ended October 1, 2026, as compared to the nine months ended September 25, 2025. The decrease was also partially offset by other revenue from Captivate of $0.3 million, representing activity from September 19, 2026 through October 1, 2026, in the third quarter of 2026, subsequent to the acquisition on September 18, 2026.

Previous wording

Operating expenses. Total operating expenses increased $9.6 million, or 7.8%, from $122.5 million for the six months ended June 26, 2025 to $132.1 million for the six months ended July 2, 2026. The following table shows the changes in operating expense for the six months ended July 2, 2026 and June 26, 2025 (in millions):

Current wording

Operating expenses. Total operating expenses increased $27.4 million, or 14.6%, from $187.7 million for the nine months ended September 25, 2025 to $215.1 million for the nine months ended October 1, 2026. The following table shows the changes in operating expense for the nine months ended October 1, 2026 and September 25, 2025 (in millions):

Previous wording

Network operating costs. Network operating costs increased $1.5 million, or 24.2%, from $6.2 million for the six months ended June 26, 2025 to $7.7 million for the six months ended July 2, 2026. The increase was primarily related to a $0.5 million increase in severance, transition and retention related compensation incurred in conjunction with the 2026 Transformation Initiative, a $0.4 million increase in medical costs driven by higher claim activity due in part to transitioning employees to an outsourced service provider, a $0.2 million increase in annual licensing costs, a $0.1 million increase in network delivery costs due to temporary duplicative costs incurred during the transition from satellite to broadband delivery during 2026 and $0.1 million incurred during the integration of Spotlight into the Company's processes for the six months ended July 2, 2026, compared to the six months ended June 26, 2025.

Current wording

Network operating costs. Network operating costs increased $1.5 million, or 16.0%, from $9.4 million for the nine months ended September 25, 2025 to $10.9 million for the nine months ended October 1, 2026. The increase was primarily related to a $0.6 million increase in severance, transition and retention related compensation incurred in conjunction with the 2026 Transformation Initiative, a $0.4 million increase in medical costs driven by higher claim activity due in part to transitioning employees to an outsourced service provider, a $0.4 million increase due to expenses related to Captivate's operating results from September 19, 2026 through October 1, 2026, a $0.2 million increase in annual licensing costs and a $0.2 million increase in network delivery costs due to temporary duplicative costs incurred during the transition from satellite to broadband delivery for the nine months ended October 1, 2026, compared to the nine months ended September 25, 2025. These increases were partially offset by a $0.5 million decrease in personnel related costs due to the 2026 Transformation Initiative during the nine months ended October 1, 2026, compared to the nine months ended September 25, 2025.

Previous wording

Theater exhibition fees. Theater exhibition fees increased $9.5 million, or 18.1%, from $52.6 million for the six months ended June 26, 2025 to $62.1 million for the six months ended July 2, 2026. The increase was primarily related to a $5.7 million increase due to the 17.6% increase in network attendance partially driven by the acquisition of Spotlight, a $2.5 million increase driven by contractual rate increases within our exhibitor agreements and a $1.4 million increase corresponding to the increase in platinum revenue for the six months ended July 2, 2026, compared to the six months ended June 26, 2025.

Current wording

Theater exhibition fees. Theater exhibition fees increased $17.4 million, or 20.5%, from $84.9 million for the nine months ended September 25, 2025 to $102.3 million for the nine months ended October 1, 2026. The increase was primarily related to a $11.9 million increase due to the 19.9% increase in network attendance partially driven by the acquisition of Spotlight, a $3.7 million increase driven by contractual rate increases within our exhibitor agreements and a $1.9 million increase corresponding to the increase in platinum revenue for the nine months ended October 1, 2026, compared to the nine months ended September 25, 2025. This was partially offset by a decrease of $0.1 million related to a decrease in average active screens at the ESA Parties for the nine months ended October 1, 2026, compared to the nine months ended September 25, 2025.

Previous wording

Selling and marketing costs. Selling and marketing costs decreased $1.2 million, or 5.9%, from $20.4 million for the six months ended June 26, 2025 to $19.2 million for the six months ended July 2, 2026. The decrease in selling and marketing costs was primarily due to a $1.7 million decrease in selling related expenses driven by the timing of our periodic company-wide sales meeting during the first quarter of 2025 and the cancellation of certain contracts in relation to the 2026 Transformation Initiative, a $0.9 million decrease in personnel related costs due to the 2026 Transformation Initiative and a $0.3 million decrease in variable partnership costs for the six months ended July 2, 2026 compared to the six months ended June 26, 2025. These decreases were partially offset by a $0.6 million increase in severance expense and a $0.5 million increase in medical costs driven by higher claim activity due in part to transitioning employees to an outsourced service provider in conjunction with the 2026 Transformation Initiative, $0.2 million increase in barter expenses, a $0.2 million in transformation costs incurred in conjunction with the 2026 Transformation Initiative and a $0.2 million increase in production related expenses for the six months ended July 2, 2026, compared to the six months ended June 26, 2025.

Current wording

Selling and marketing costs. Selling and marketing costs decreased $2.3 million, or 7.5%, from $30.6 million for the nine months ended September 25, 2025 to $28.3 million for the nine months ended October 1, 2026. The decrease in selling and marketing costs was primarily due to a $2.6 million decrease in selling related expenses driven by the timing of our periodic company-wide sales meeting during the first quarter of 2025 and the cancellation of certain contracts in relation to the 2026 Transformation Initiative, a $2.1 million decrease in personnel related costs due to the 2026 Transformation Initiative, a $0.2 million decrease in bad debt expense and a $0.2 million decrease in variable partnership costs for the nine months ended October 1, 2026 compared to the nine months ended September 25, 2025. These decreases were partially offset by a $1.1 million increase in legal and professional costs, severance and transition related expenses due to the 2026 Transformation Initiative and a $0.5 million increase in medical costs driven by higher claim activity due in part to transitioning employees to an outsourced service provider in conjunction with the 2026 Transformation Initiative, $0.3 million increase in barter expenses and a $0.2 million increase in production related expenses for the nine months ended October 1, 2026, compared to the nine months ended September 25, 2025. This was further offset by $0.8 million in expenses related to Captivate's operating results from September 19, 2026 through October 1, 2026.

Previous wording

Administrative and other costs. Administrative and other costs increased $0.6 million, or 2.6%, from $23.5 million for the six months ended June 26, 2025 to $24.1 million for the six months ended July 2, 2026. The increase is primarily due to a $4.6 million increase in transition related administrative expenses and severance, transition and retention expenses incurred in conjunction with the 2026 Transformation Initiative, a $0.5 million increase in medical costs driven by higher claim activity due in part to transitioning employees to an outsourced service provider in conjunction with the 2026 Transformation Initiative and a $0.2 million increase temporary transition costs incurred during the integration of Spotlight into the Company's processes. These increases were partially offset by a $1.7 million decrease in legal and professional fees related to the Chapter 11 Case and Cineworld Proceeding, a $1.3 million decrease in stock-based compensation due to the completion of the amortization of the expense associated with the 2024 management equity incentive plan in 2025, a $0.7 million decrease in other administrative expenses partially related to disciplined cost management, a $0.6 million decrease in personnel related expenses due to the 2026 Transformation Initiative and a $0.3 million decrease in lease related expenses for the six months ended July 2, 2026, compared to the six months ended June 26, 2025.

Current wording

Administrative and other costs. Administrative and other costs increased $9.6 million, or 28.2%, from $34.0 million for the nine months ended September 25, 2025 to $43.6 million for the nine months ended October 1, 2026. The increase was primarily related to an $8.9 million increase in legal and professional expenses incurred in connection with the acquisition of Captivate on September 18, 2026, a $3.1 million increase in legal and professional fees related to the 2026 Transformation Initiative, $1.5 million in bad debt expense incurred to establish Captivate's allowance for credit losses in accordance with ASC 805, $0.6 million in expenses attributable to Captivate’s operating activity following its consolidation on September 19, 2026 through October 1, 2026, a $0.5 million increase in medical costs driven by higher claim activity due in part to transitioning employees to an outsourced service provider, a $0.2 million increase in annual licensing costs and a $0.2 million increase in temporary transition costs incurred during the integration of Spotlight into the Company's processes for the nine months ended October 1, 2026, compared to the nine months ended September 25, 2025. These increases were partially offset by a $2.4 million decrease in personnel related costs due to the 2026 Transformation Initiative and the Company's projected performance as compared to compensation targets, a $1.2 million decrease in legal and professional fees related to the Cineworld Proceeding and Chapter 11 Case, a $0.8 million decrease in share-based compensation due to the completion of the amortization of the expense associated with the 2024 management equity incentive plan in 2025, and a $0.5 million decrease in lease related expenses and a $0.2 million decrease in cloud computing costs both due to the 2026 Transformation Initiative for the nine months ended October 1, 2026, compared to the nine months ended September 25, 2025.

Previous wording

Depreciation expense. Depreciation expense increased $0.8 million, or 36.4%, from $2.2 million for the six months ended June 26, 2025 to $3.0 million for the six months ended July 2, 2026. The increase was primarily due to assets placed in service in late 2025 related to the completion of certain leasehold improvements.

Current wording

Depreciation expense. Depreciation expense increased $1.2 million, or 36.4%, from $3.3 million for the nine months ended September 25, 2025 to $4.5 million for the nine months ended October 1, 2026. The increase was primarily due to assets placed in service in late 2025 related to the completion of certain leasehold improvements as well as $0.1 million in expense attributable to Captivate’s operating activity following its consolidation on September 19, 2026 through October 1, 2026.

Previous wording

Amortization expense. Amortization expense decreased $1.6 million, or 9.1%, from $17.6 million for the six months ended June 26, 2025 to $16.0 million for the six months ended July 2, 2026. The decrease was due to the reduction in and extension of the useful life of the intangible asset related to the ESA Parties following the 2025 AMC Agreement in the second quarter of 2025, as further discussed in Note 5—Intangible Assets and Note 8—Income Taxes.

Current wording

Amortization expense. Amortization expense decreased $0.6 million, or 2.4%, from $25.5 million for the nine months ended September 25, 2025 to $24.9 million for the nine months ended October 1, 2026. The decrease was due to the reduction in and extension of the useful life of the intangible asset related to the ESA Parties following the effectiveness of the 2025 AMC Agreement in the second quarter of 2025, as further discussed in Note 5—Intangible Assets and Note 8—Income Taxes. This decrease was partially offset by $1.0 million in amortization related to intangible assets related to the acquisition of Captivate on September 18, 2026.

Previous wording

Non-operating (income) expense. Total non-operating income increased $6.6 million, or 120.0%, from $5.5 million of expense for the six months ended June 26, 2025 to $1.1 million of income for the six months ended July 2, 2026. The following table shows the changes in non-operating (income) expense for the six months ended July 2, 2026 and June 26, 2025 (in millions):

Current wording

Non-operating expense. Total non-operating expense increased $34.6 million, or 1572.7%, from $2.2 million for the nine months ended September 25, 2025 to $36.8 million for the nine months ended October 1, 2026. The following table shows the changes in non-operating expense for the nine months ended October 1, 2026 and September 25, 2025 (in millions):

Previous wording

The increase in non-operating (income) expense was primarily due to a $4.9 million increase in (gain) loss on the re-measurement of the payable under the tax receivable agreement largely due to the addition of one new forecasted year in 2026 to replace the completed prior year within the calculation, the subsequent decrease in the forecast during the six months ended July 2, 2026, as compared to the original forecast and the inclusion of the AMC Termination Agreement within the calculation in 2026. The increase was also due to a $1.8 million decrease in loss on debt extinguishment incurred in the six months ended July 2, 2026, compared to the six months ended June 26, 2025. The increase is also due to a $0.4 million increase in other operating income in the six months ended July 2, 2026, compared to the six months ended June 26, 2025. These increases were partially offset by a $0.3 million decrease in interest income and a $0.2 million increase in interest expense in the six months ended July 2, 2026, compared to the six months ended June 26, 2025.

Current wording

The increase in non-operating expense was primarily due to a $34.5 million increase in the loss on the re-measurement of the payable under the tax receivable agreement largely due to the inclusion of additional periods within the forecast due to stabilization of the cinema business and the addition of the Captivate forecasted results following the Captivate Acquisition. The increase was also caused by a $1.6 million increase in interest expense due to the 2026 Credit Agreement entered into in the third quarter of 2026 in conjunction with the Captivate Acquisition. The increases were partially offset by a $1.3 million decrease in loss on debt extinguishment based on the difference between the loss upon extinguishment of debt in the first quarter of 2025 compared to the loss on extinguishment of the 2025 Credit Facility in the third quarter of 2026, as well as a $0.5 million increase in other non-operating income for the nine months ended October 1, 2026, compared to the nine months ended September 25, 2025.

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 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 2026, one ESA party began purchasing less on-screen advertising time for nine months of the year in accordance with its beverage concessionaire agreement. This change in the ESA party's obligation will result in lower beverage revenue in 2026, as compared to 2025. The price for the time sold will increase at a fixed rate of 2.0% each year.

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, one ESA party purchased 60 seconds of on-screen advertising time and one ESA party purchased 30 seconds to satisfy their obligations under their beverage concessionaire agreements. In 2026, one ESA party began purchasing less on-screen advertising time for nine months of the year in accordance with its beverage concessionaire agreement. This change in the ESA party's obligation will result in lower beverage revenue in 2026, as compared to 2025. The price for the time sold will increase at a fixed rate of 2.0% each year. Beverage revenue is included within ‘Other revenue’ within the disaggregation of revenue table presented within Note 2—Revenue from contracts with customers and accounts receivable.

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 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 paid to NCM, Inc.’s common stockholders.

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 2026 Credit Facilities, 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 paid 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 July 2, 2026, NCM LLC had 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.

Current wording

On September 18, 2026, NCM Holdings, together with NCM LLC and Captivate, as borrowers, entered into the 2026 Credit Agreement. The 2026 Credit Agreement provides for a $275.0 million senior secured first lien term loan and for a $25.0 million revolving credit facility that both mature on September 18, 2031. In connection with entering into the 2026 Credit Agreement, NCM LLC repaid in full the $12.0 million balance outstanding and terminated all commitments under its 2025 Credit Facility. As of October 1, 2026, NCM Holdings had an outstanding balance of $275.0 million under the 2026 Term Loan Facility and $10.0 million outstanding under the 2026 Revolving Facility. Borrowings under the 2026 Revolving Facility may be used for, among other things, working capital and other general corporate purposes of the Company. The 2026 Credit Agreement bears interest at a margin over a reference rate selected at the option of the borrower. The margin for the 2026 Credit Agreement is 7.00% per annum for SOFR borrowings and 6.00% per annum for base rate borrowings.

Previous wording

Included in cash, cash equivalents and marketable securities as of July 2, 2026, January 1, 2026 and June 26, 2025, was $36.7 million, $23.8 million and $18.2 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 October 1, 2026, January 1, 2026 and September 25, 2025, was $19.3 million, $23.8 million and $11.6 million, respectively, of cash held by NCM LLC, and $2.4 million, $0.0 million, and $0.0 million respectively, of cash held by Captivate, that is not available to satisfy dividends declared by NCM, Inc., income tax, TRA payments and other obligations.

Previous wording

The 2025 Credit Facility portion of NCM LLC’s total borrowings that is 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 is available for letters of credit. NCM LLC’s total capacity under the 2025 Credit Facility is $45.0 million as of July 2, 2026, January 1, 2026 and June 26, 2025. As of July 2, 2026, January 1, 2026 and June 26, 2025, the amount available under the 2025 Credit Facility in the table above is net of letters of credit of $0.6 million.

Current wording

The 2025 Credit Facility portion of NCM LLC’s total borrowings 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 2025 Credit Facility was $45.0 million as of January 1, 2026 and September 25, 2025. As of January 1, 2026 and September 25, 2025, the amount available under the 2025 Credit Facility in the table above was net of letters of credit of $0.6 million and the amounts which were outstanding.

Previous wording

As of July 2, 2026, the weighted average remaining maturity of our debt facility was 1.6 years. As of July 2, 2026, NCM LLC has an outstanding balance of $12.0 million under the 2025 Credit Facility. All 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 October 1, 2026, the weighted average remaining maturity of our debt was 5.0 years. As of October 1, 2026, 100.0% of our borrowings bear interest at variable rates and as such, 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 $15.5 million increase in cash provided by operating activities for the six months ended July 2, 2026, as compared to the six months ended June 26, 2025, was due to (1) a $12.2 million increase in the change in deferred revenue, (2) a $6.6 million decrease in payments of accounts payable and accrued expenses, (3) a $6.1 million increase in accounts receivable collections, (4) a $0.5 million increase in the change in prepaid expenses and (5) a $0.3 million decrease in payments to the ESA Parties under the tax receivable agreement. These increases in cash provided by operating activities were partially offset by (1) a $7.8 million increase in net loss adjusted for non-cash items, (2) a $1.8 million increase in the change in ESA amounts due to/from, net and (3) a $0.6 million decrease in ESA integration and other encumbered theater payments received for the six months ended July 2, 2026, as compared to the six months ended June 26, 2025.

Current wording

Operating Activities. The $13.6 million increase in cash provided by operating activities for the nine months ended October 1, 2026, as compared to the nine months ended September 25, 2025, was due to (1) a 19.8 million decrease in payments of accounts payable and accrued expenses, (2) a $13.5 million increase in the change in deferred revenue, (3) a $6.1 million increase in accounts receivable collections and (4) a $1.5 million increase in the change in prepaid expenses. These increases in cash provided by operating activities were partially offset by (1) $24.4 million decrease in net loss adjusted for non-cash items, (2) a $2.3 million decrease in the change in ESA amounts due to/from, net and (3) a $0.7 million decrease in ESA integration and other encumbered theater payments received for the nine months ended October 1, 2026 as compared to the nine months ended September 25, 2026.

Previous wording

Investing Activities. The $1.3 million decrease in cash used in investing activities for the six months ended July 2, 2026, as compared to the six months ended June 26, 2025, was primarily due to a $1.4 million decrease in purchases of property and equipment and a $0.3 million increase in proceeds received from an equity method investment for the six months ended July 2, 2026, as compared to the six months ended June 26, 2025. These decreases were partially offset by a $0.4 million increase in purchases of intangible assets for the six months ended July 2, 2026, as compared to the six months ended June 26, 2025.

Current wording

Investing Activities. The $267.1 million increase in cash used in investing activities for the nine months ended October 1, 2026, as compared to the nine months ended September 25, 2025, was primarily due to $271.1 million in cash used in the Captivate Acquisition. This increase was offset by a $2.0 million decrease in purchases of property and equipment and a $2.0 million decrease in the purchase of a cost method investment for the nine months ended October 1, 2026 as compared to the nine months ended September 25, 2026.