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Item 8. Financial Statements and Supplementary Data

2024-03-18 compared with 2023-04-13 · 623 added, 547 removed, 698 unchanged (63% of the section changed)

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National CineMedia, Inc.

and Subsidiary

and Subsidiaries

Report of Deloitte & Touche LLP , Independent Registered Public Accounting Firm (PCAOB ID:

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the stockholders and the Board of Directors of

National CineMedia, Inc.

To the Stockholders and the Board of Directors of National CineMedia, Inc.

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of National CineMedia, Inc.

and subsidiary (the "Company") as of December 29, 2022 and December 30, 2021, the related consolidated statements of operations, equity/(deficit), and cash flows, for each of the two years in the period ended December 29, 2022, and the related notes (collectively referred to as the "financial statements").

and subsidiaries (the "Company") as of December 28, 2023 and December 29, 2022, the related consolidated statements of operations, equity/(deficit), and cash flows, for each of the two years in the period ended December 28, 2023, and the related notes (collectively referred to as the "financial statements").

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 28, 2023 and December 29, 2022, and the results of its operations and its cash flows for each of the two years in the period ended December 28, 2023, in conformity with accounting principles generally accepted in the United States of America.

Going Concern

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern.

As discussed in Note 1 to the financial statements, National CineMedia LLC, the consolidated subsidiary of the Company, filed a petition for reorganization under Chapter 11 of the United States Bankruptcy Code on April 11th, 2023 which made its outstanding debt balances immediately due and payable.

The Company does not have sufficient available liquidity to repay its outstanding debt balances which raises substantial doubt about its ability to continue as a going concern.

Management's plans in regard to these matters are also described in Note 1— Basis of Presentation .

The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Bankruptcy Proceedings

As discussed in Note 1— Basis of Presentation to the financial statements, National CineMedia LLC, the consolidated subsidiary of the Company, has filed for reorganization under Chapter 11 of the U.S.

Bankruptcy Code.

The accompanying financial statements do not purport to reflect or provide for the consequences of the bankruptcy proceedings.

In particular, such financial statements do not purport to show (1) as to assets, their realizable value on a liquidation basis or their availability to satisfy liabilities;

(2) as to prepetition liabilities, the settlement amounts for allowed claims, or the status and priority thereof;

(3) as to shareholder accounts, the effect of any changes that may be made in the capitalization of the Company;

or (4) as to operations, the effect of any changes that may be made in its business.

Basis for Opinion

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We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current-period audit of the financial statements that was communicated or required to be communicated to the audit committee and that (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments.

The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Income Taxes – Tax Receivable Agreements — Refer to Notes 7 and 9 to the Consolidated Financial Statements

Critical Audit Matters

The critical audit matters communicated below are matters arising from the current-period audit of the financial statements that were communicated or required to be communicated to the audit committee and that (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments.

The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

Income Taxes – Tax Receivable Agreement — Refer to Notes 1, 7 and 9 to the Consolidated Financial Statements

Critical Audit Matter Description

The Company and the founding members entered into the Tax Receivable Agreement (“TRA”) at the time of the Company’s initial public offering.

Under the terms of this agreement, the Company will make cash payments to the founding members in amounts equal to 90% of the Company’s actual tax benefit realized primarily from the tax amortization of the intangible assets described below, which is recorded as a deferred tax asset.

For purposes of the TRA, cash savings in income and franchise tax will be computed by comparing the Company’s actual income and franchise tax liability to the amount of such taxes that the Company would have been required to pay had there been no increase in the Company’s proportionate share of tax basis in National CineMedia, LLC’s tangible and intangible assets had the Company not entered into the TRA.

The Company and the ESA Parties entered into the Tax Receivable Agreement (“TRA”) at the time of the Company’s initial public offering (“IPO”).

Under the terms of this agreement, the Company will make cash payments to the ESA Parties in amounts equal to 90% of the Company’s actual tax benefit realized primarily from the tax amortization of the intangible assets described below, which is recorded as a deferred tax asset.

For purposes of the TRA, cash savings in income and franchise tax will be computed by comparing the Company’s actual income and franchise tax liability to the amount of such taxes that the Company would have been required to pay had there been no increase in the Company’s proportionate share of tax basis in National CineMedia, LLC’s (“NCM LLC”) tangible and intangible assets had the Company not entered into the TRA.

The TRA applies to the Company’s taxable years up to and including the 30th anniversary of the IPO.

During the fiscal year ended December 29, 2022, the Company paid the founding members $0.0 million for the 2021 tax year.

During the fiscal year ended December 28, 2023, the Company paid the ESA Parties $0.0 million for the 2022 tax year.

In addition, changes in the deferred tax rate and in the Company’s realization assessment of its deferred tax assets, and therefore changes to future amounts probable to be paid under the TRA led to a re-measurement of the payable, resulting in an increase of $24.2 million during the fiscal year.

At December 29, 2022, the Company’s payable to founding members under the TRA liability (“PFML”) was $35.6 million;

At December 28, 2023, the Company’s payable under the TRA was $59.8 million;

of which $0.0 million is presented as a component of current liabilities and $59.8 million is presented as a component of non-current liabilities.

We identified the computation of adjustments to the PFML as a critical audit matter because of the complex calculations required to arrive at the correct tax basis upon which to calculate the corresponding PFML and deferred tax asset adjustments.

This involved complexity in applying the tax law, and calculations of (a) incremental amortizable step-up in tax basis, (b) the iterative impact of the computation of adjustments to the PFML to owners and (c) the overall PFML.

The amount of the PFML, as well as the timing of such payments, is dependent upon a number of complex items including:

(i) the tax basis in the units of NCM LLC being issued as part of a common unit adjustment or exchanged for common stock of the Company, (ii) the allocation of the tax basis step up to the applicable assets, (iii) the amount and timing of taxable income the Company generates in future periods until the PFML is settled, (iv) the portion of the Company’s payments under the TRA that constitute imputed interest or give rise to depreciable or amortizable tax basis and (v) the amount and timing of tax attribute utilization on a with and without basis in accordance with the TRA.

We identified the computation of adjustments to the payable under the TRA as a critical audit matter because of the complex calculations required to arrive at the correct tax basis upon which to calculate the corresponding payable under the TRA and deferred tax asset adjustments.

The amount of the payable under the TRA, as well as the timing of such payments, is dependent upon a number of complex items including:

(i) the tax basis in the units of NCM LLC being issued as part of a common unit adjustment or exchanged for common stock of the Company, (ii) the allocation of the tax basis step up to the applicable assets, (iii) the amount and timing of taxable income the Company generates in future periods until the payable under the TRA is settled, (iv) the portion of the Company’s payments under the TRA that constitute imputed interest or give rise to depreciable or amortizable tax basis and (v) the amount and timing of tax attribute utilization on a with and without basis in accordance with the TRA.

How the Critical Audit Matter Was Addressed in the Audit

With the assistance of our income tax specialists, our audit procedures related to the computation of adjustments to the PFML included the following procedures, among others:

• We tested the effectiveness of controls over the computation of adjustments to the PFML and deferred tax asset.

• We read the individual TRA and Exhibitor Services Agreement to compare the terms in each agreement for consistency with the mathematical model used by management to calculate the adjustments to the PFML and deferred tax asset.

• We evaluated management’s computation of adjustments to the year-end balance of the PFML amount by recalculating the PFML at the end of the year, taking into account the various unit exchanges occurring during the year as well as the additions in the PFML for each Common Unit Adjustment.

• We analyzed the impact of any taxable income limitations on the PFML.

• We prepared our own model to independently recompute the PFML and compare to the recorded balance.

• We reconciled realization of tax payments and deductions to the PFML.

With the assistance of our income tax specialists, our audit procedures related to the computation of adjustments to the payable under the TRA included the following procedures, among others:

• We read the individual TRA and Exhibitor Services Agreements to compare the terms in each agreement for consistency with the mathematical model used by management to calculate the adjustments to the payable under the TRA and deferred tax asset.

• We evaluated management’s computation of adjustments to the year-end balance of the payable under the TRA amount by recalculating the payable under the TRA at the end of the year, taking into account the various unit exchanges occurring during the year as well as the additions in the payable under the TRA for each Common Unit Adjustment, termination of the Regal Exhibitor Service Agreement, and bankruptcy emergence, among others.

• We analyzed the impact of any taxable income limitations on the payable under the TRA.

• We prepared our own model to independently recompute the payable under the TRA and compare to the recorded balance.

• We reconciled realization of tax payments and deductions to the payable under the TRA.

Reconsolidation of National CineMedia, LLC — Refer to Notes 1 and 5 to the Consolidated Financial Statements

Critical Audit Matter Description

On April 11, 2023, NCM LLC filed a voluntary petition for reorganization with a prearranged Chapter 11 plan under Chapter 11 of Title 11 of the United States Code in the Bankruptcy Code in the Bankruptcy Court.

During the Chapter 11 Case, the Company was deemed to no longer control NCM LLC for accounting purposes and NCM LLC was deconsolidated from the Company’s financial statements prospectively as of April 11, 2023.

Upon emergence from bankruptcy, the Company regained control and retained 100.0% ownership of NCM LLC, after taking into account elections by the holders of secured debt claims to receive NCM, Inc.

common stock in lieu of NCM LLC common units.

Therefore, NCM LLC was reconsolidated into the Company’s financial statements prospectively as of August 7, 2023.

The Company accounted for the reconsolidation of NCM LLC as a business combination using the acquisition method of accounting.

Accordingly, the purchase price was allocated to the assets acquired and liabilities assumed based on their estimated fair values as of the date of reconsolidation, including exhibitor service agreements of $250.0 million and network affiliate agreements of $75.0 million.

Management estimated the fair values of the exhibitor service agreements and network affiliate agreements using the multi-period excess earnings method.

The fair value determination of the exhibitor service agreements and network affiliate agreements requires management to make significant estimates and assumptions to determine forecasted cash flows, including those related to future revenue growth rates and the weighted average cost of capital.

As such, performing audit procedures to evaluate the reasonableness of these estimates and assumptions required a high degree of auditor judgment and an increased extent of effort, including the need to involve our fair value specialists.

How the Critical Audit Matter Was Addressed in the Audit

Our auditing procedures related to the future revenue growth rates and the weighted average cost of capital included the following, among others:

• We obtained an understanding of management’s key assumptions in developing the forecasted revenue.

• We evaluated management’s ability to accurately forecast revenue growth rates by comparing actual results to management’s historical forecasts.

• We assessed the reasonableness of management’s forecast of future revenue growth rates by comparing projections to historical results, macroeconomic data, industry data, analyst reports, and certain of its peer companies.

• We evaluated whether the forecast of future revenue growth rates was consistent with projections used by the Company in other areas of the audit.

• With the assistance of our fair value specialists, we evaluated the reasonableness of management’s long-term revenue growth rate by analyzing inflation, economic, and industry growth statistics.

• With the assistance of our fair value specialists, we evaluated the reasonableness of management’s weighted average cost of capital by:

◦ Testing the source information underlying the determination of the weighted average cost of capital and testing the mathematical accuracy of the calculation.

◦ Developing a range of independent estimates and comparing those to the weighted average cost of capital selected by management.

/s/ Deloitte & Touche LLP

Denver, Colorado

April 13, 2023

March 18, 2024

We have served as the Company's auditor since 2006.

NATIONAL CINEMEDIA, INC.

AND SUBSIDIARY

AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

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CURRENT LIABILITIES:

Amounts due to founding members, net (related party payables of $ 15.2 and $ 11.4 , respectively)

$ 18.2 $ 11.8

Payable to founding members under the TRA (related party payables of $ 0.2 and $ 0.0 , respectively)

Amounts due to ESA Parties, net (related party payables of $ 0.0 and $ 15.2 , respectively)

Payable under the TRA (related party payables of $ 0.0 and $ 0.2 , respectively)

Accrued expenses 1.6 17.8

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NON-CURRENT LIABILITIES:

Long-term debt, net of debt issuance costs of $ 0.0 and $ 10.5 , respectively

Payable to founding members under the TRA (related party payables of $ 25.5 and $ 11.9 , respectively)

Long-term debt 10.0 —

Payable under the TRA (related party payables of $ 0.0 and $ 25.5 , respectively)

Other liabilities 5.0 18.0

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Preferred stock, $ 0.01 par value;

10,000,000 shares authorized, none issued and outstanding, respectively

10,000,000 shares authorized, 50 and 0 issued and outstanding,

Common stock, $ 0.01 par value;

260,000,000 and 175,000,000 shares authorized, 128,402,636 and

80,626,889 issued and outstanding, respectively

260,000,000 shares authorized, 96,837,039 and 12,840,264 issued and

outstanding, respectively

Additional paid in capital (deficit) 115.3 ( 146.2 )

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NATIONAL CINEMEDIA, INC.

AND SUBSIDIARY

AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

6 unchanged sentences

Network costs 6.3 8.4

Theater access fees and revenue share to founding members (including fees to related

parties of $ 59.4 and $ 34.3 , respectively)

ESA theater access fees and revenue share (including fees to related parties of $ 16.5 and

$ 59.4 , respectively)

Selling and marketing costs 29.6 42.8

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Depreciation expense 3.1 6.5

Amortization of intangibles recorded for network theater screen leases 25.0 24.7

Amortization expense 22.4 25.0

Total 192.5 242.3

OPERATING INCOME (LOSS) 6.9 ( 68.6 )

NON-OPERATING EXPENSES:

OPERATING (LOSS) INCOME ( 27.3 ) 6.9

NON-OPERATING (INCOME) EXPENSES:

Interest on borrowings 27.9 79.7

(Gain) loss on early retirement of debt, net ( 5.9 ) 1.2

Loss (gain) on re-measurement of the payable to founding members under the TRA 2.2 ( 16.1 )

Loss (gain) on modification and retirement of debt, net 0.4 ( 5.9 )

Loss on re-measurement of the payable under the tax receivable agreement 9.3 2.2

Gain on sale of asset ( 0.3 ) ( 2.2 )

Gain on deconsolidation of affiliate ( 557.7 ) —

Gain on re-measurement of investment in NCM LLC ( 35.5 ) —

Gain on reconsolidation of NCM LLC ( 167.8 ) —

Other non-operating income, net ( 0.3 ) ( 0.7 )

Total ( 724.0 ) 73.1

LOSS BEFORE INCOME TAXES ( 66.2 ) ( 118.4 )

INCOME (LOSS) BEFORE INCOME TAXES 696.7 ( 66.2 )

Income tax expense — —

CONSOLIDATED NET LOSS ( 66.2 ) ( 118.4 )

CONSOLIDATED NET INCOME (LOSS) 696.7 ( 66.2 )

Net loss attributable to noncontrolling interests ( 8.5 ) ( 37.5 )

NET LOSS ATTRIBUTABLE TO NCM, INC.

NET INCOME (LOSS) ATTRIBUTABLE TO NCM, INC.

705.2 ( 28.7 )

COMPREHENSIVE LOSS ATTRIBUTABLE TO NCM, INC.

COMPREHENSIVE INCOME (LOSS) ATTRIBUTABLE TO NCM, INC.

$ 705.2 $ ( 28.7 )

NET LOSS PER NCM, INC.

NET INCOME (LOSS) PER NCM, INC.

COMMON SHARE:

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NATIONAL CINEMEDIA, INC.

AND SUBSIDIARY

AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF EQUITY/ (DEFICIT)

(In millions, except share and per share data)

Common Stock Additional

Common Stock Preferred Stock Additional

(Deficit) Retained

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Earnings) Noncontrolling

Consolidated Shares Amount

Consolidated Shares Amount Shares Amount

Balance—December 30, 2021 $ ( 383.5 ) 8,062,689 $ 0.8 — $ — $ ( 195.5 ) $ ( 332.0 ) $ 143.2

NCM LLC equity issued for purchase of

intangible asset 14.2 — — 6.8 — 7.4

Income tax and other impacts of NCM LLC

ownership changes ( 0.3 ) — — 1.7 — ( 2.0 )

Issuance of shares to founding members 6.6 1,390,567 — 6.6 — —

Distributions to ESA Parties ( 4.9 ) — — — — — — ( 4.9 )

NCM LLC equity issued for

purchase of intangible asset 10.4 — — — — 4.9 — 5.5

Income tax and other impacts of

NCM LLC ownership changes ( 17.3 ) — — — — 39.8 — ( 57.1 )

Issuance of shares 12.4 4,663,845 0.4 — — 12.0 — —

investment in NCM LLC ( 12.4 ) — — — — ( 12.4 ) — —

Comprehensive loss, net of tax ( 66.2 ) — — — — — ( 28.7 ) ( 37.5 )

Share-based compensation issued, net of tax ( 1.9 ) 1,195,504 — ( 1.9 ) — —

Share-based compensation expense/capitalized 8.4 — — 5.4 — 3.0

Cash dividends declared $ 0.20 per share

Share-based compensation issued,

net of tax ( 0.1 ) 113,730 0.1 — — ( 0.2 ) — —

Share-based compensation expense/

capitalized 7.3 — — — — 5.2 — 2.1

Cash dividends declared $ 0.11 per

( 9.7 ) — — — — — ( 9.7 ) —

Balance—December 29, 2022 $ ( 464.0 ) 12,840,264 $ 1.3 — $ — $ ( 146.2 ) $ ( 370.4 ) $ 51.3

Accrued Distributions to founding members ( 4.9 ) — — — — ( 4.9 )

NCM LLC equity issued for purchase of

intangible asset 10.4 — — 4.9 — 5.5

Income tax and other impacts of NCM LLC

ownership changes ( 17.3 ) — — 39.8 — ( 57.1 )

Issuance of shares to founding members 12.4 46,638,443 0.4 12.0 — —

investment in NCM LLC ( 12.4 ) — — ( 12.4 ) — —

Comprehensive loss, net of tax ( 66.2 ) — — — ( 28.7 ) ( 37.5 )

Share-based compensation issued, net of tax ( 0.1 ) 1,137,304 0.1 ( 0.2 ) — —

Share-based compensation expense/capitalized 7.3 — — 5.2 — 2.1

Cash dividends declared $ 0.11 per share

( 9.7 ) — — — ( 9.7 ) —

Deconsolidation of affiliate ( 33.4 ) — — — — ( 15.3 ) ( 18.1 ) —

Income tax and other impacts of

NCM LLC ownership changes ( 9.5 ) — — — — 33.6 ( 0.1 ) ( 43.0 )

Issuance of shares 242.5 83,722,159 1.2 50.0 — 241.3 — —

NCM LLC common membership

unit redemption ( 2.6 ) — — — — ( 2.6 ) — —

Comprehensive income, net of tax 696.7 — — — — — 705.2 ( 8.5 )

Share-based compensation issued,

net of tax 0.1 274,616 0.1 — — — — —

Share-based compensation expense/

capitalized 4.7 — — — — 4.5 — 0.2

Balance—December 28, 2023 $ 434.5 96,837,039 $ 2.6 50.0 $ — $ 115.3 $ 316.6 $ —

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NATIONAL CINEMEDIA, INC.

AND SUBSIDIARY

AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

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CASH FLOWS FROM OPERATING ACTIVITIES:

Consolidated net loss $ ( 66.2 ) $ ( 118.4 )

Adjustments to reconcile consolidated net loss to net cash used in operating activities:

Consolidated net income (loss) $ 696.7 $ ( 66.2 )

Adjustments to reconcile consolidated net income (loss) to net cash used in operating activities:

Depreciation expense 3.1 6.5

Amortization of intangibles recorded for network theater screens 25.0 24.7

Amortization expense 22.4 25.0

Non-cash share-based compensation 4.5 7.1

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Amortization of debt issuance costs 3.4 8.9

(Gain) loss on early retirement of debt, net ( 5.9 ) 1.2

Non-cash loss (gain) on re-measurement of the payable to founding members under the TRA 2.2 ( 16.1 )

Loss (gain) on modification and retirement of debt, net 0.4 ( 5.9 )

Non-cash loss on re-measurement of the payable under the TRA 9.3 2.2

Gain on sale of asset ( 0.3 ) ( 2.2 )

Gain on deconsolidation of affiliate ( 557.7 ) —

Gain on re-measurement of NCM LLC ( 35.5 ) —

Gain on reconsolidation of NCM LLC ( 167.8 ) —

Other ( 0.4 ) ( 0.4 )

Founding member integration and encumbered theater payments (including

payments from related parties of $ 0.0 and $ 0.0 , respectively)

Payment to founding members under the TRA — ( 0.9 )

Common membership unit adjustment received — 9.3

ESA Party integration and encumbered theater payments (including payments from related parties of $ 0.0 and $ 0.0 ,

respectively)

Other cash flows from operating activities, net ( 0.8 ) 0.1

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Accounts payable and accrued expenses ( 2.7 ) 14.2

Amounts due to founding members, net 1.0 10.9

Amounts due to ESA Parties, net ( 4.2 ) 1.0

Deferred revenue ( 5.4 ) ( 4.8 )

Prepaid expenses ( 11.0 ) —

Other, net ( 2.0 ) ( 2.4 )

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Purchases of property and equipment ( 3.3 ) ( 2.9 )

Cash contributed in reconsolidation ( 15.5 ) —

Cash, cash equivalents and restricted cash reconsolidated 49.5 —

Proceeds from sale and maturities of marketable securities 1.0 0.3

Proceeds from sale of asset 0.3 2.2

Net cash used in investing activities ( 0.4 ) ( 5.4 )

Proceeds received from equity method investment 0.6 —

Net cash provided by investing activities 32.6 ( 0.4 )

CASH FLOWS FROM FINANCING ACTIVITIES:

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Issuance of revolving credit facility — 50.0

Issuance of term loans — 50.0

Repayments of term loan facility ( 0.8 ) ( 3.2 )

Removal of cash, cash equivalents and restricted cash of unconsolidated affiliate ( 49.6 ) —

Repayment Notes due 2028 — ( 19.8 )

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Repurchase of stock for restricted stock tax withholding — ( 0.2 )

Net cash provided by financing activities 10.3 21.5

Net cash used in financing activities ( 52.1 ) 10.3

CHANGE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH ( 26.2 ) ( 37.4 )

Cash and cash equivalents at beginning of period 101.2 180.3

Cash, cash equivalents and restricted cash at beginning of period 63.8 101.2

Cash, cash equivalents and restricted cash at end of period $ 37.6 $ 63.8

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NATIONAL CINEMEDIA, INC.

AND SUBSIDIARY

AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)

3 unchanged sentences

Purchase of an intangible asset with NCM LLC equity $ — $ 10.4

Accrued distributions to founding members (including accrued payments due to

related parties of $ 4.9 and $ 0.0 , respectively)

Accrued distributions to ESA Parties (including accrued payments due to related parties

of $ 0.0 and $ 4.9 , respectively)

Issuance of shares upon the reconsolidation of NCM LLC $ 245.3 $ —

Fair value of NCM LLC net assets reconsolidated, net of cash $ 433.8 $ —

Purchase of subsidiary equity with NCM, Inc.

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Cash paid for interest $ 12.5 $ 66.5

Cash payments (refunds) for income taxes $ 0.1 $ ( 0.1 )

Cash payments for income taxes $ — $ 0.1

Refer to accompanying notes to Consolidated Financial Statements.

NATIONAL CINEMEDIA, INC.

AND SUBSIDIARY

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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was incorporated in Delaware as a holding company formed with the purpose of becoming a member and sole manager of NCM LLC, a limited liability company owned by NCM, Inc.

and Cinemark.

The terms “NCM”, “the Company” or “we” shall, unless the context otherwise requires, be deemed to include the consolidated entity.

The Company operates the largest cinema advertising network reaching movie audiences in the U.S., allowing NCM LLC to sell advertising under long-term ESAs with the founding members and certain third-party network affiliates, under long-term network affiliate agreements.

The impacts from the COVID-19 Pandemic have had and continue to have an effect on the world and our business.

All of the theaters within the Company’s network are open and the release of major motion pictures resumed in the third quarter of 2021.

The movie slate for 2022 improved from prior years but continued to be limited by post-production delays and major motion picture release schedule changes.

Attendance levels increased from the prior year, but have not met historical levels and were not consistent throughout the year due to timing of major motion picture releases.

In-theater advertising revenue for the year ended December 30, 2021 and the year ended December 29, 2022 also remained below historical levels due in part to a lag between the recovery of attendees and advertisers, as well as current macroeconomic factors.

On September 17, 2019, NCM LLC entered into the 2019 ESA Amendments.

The 2019 ESA Amendments extended the contract life of the ESAs with Cinemark and Regal by four years resulting in a weighted average remaining term of the ESAs with the founding members of approximately 16.8 years as of December 29, 2022.

The network affiliate agreements expire at various dates between May 29, 2023 and December 31, 2037.

The weighted average remaining term (based on pre-COVID-19 attendance levels) of the ESAs and the network affiliate agreements together is 14.0 years as of December 29, 2022.

In December 2022, AMC and Regal each redeemed all of their outstanding membership units, 5,954,646 and 40,683,797 , respectively, in exchange for shares of NCM, Inc.

has no business operations or material assets other than its cash and ownership interest of 100.0 % of the common membership units in NCM LLC as of December 28, 2023.

The Company operates the largest cinema advertising network reaching movie audiences in the U.S., allowing NCM LLC to sell advertising under long-term ESAs with the ESA Parties and certain third-party network affiliates, under long-term network affiliate agreements.

As of December 28, 2023, the weighted average remaining term of the ESAs is approximately 12.2 years.

The network affiliate agreements expire at various dates between March 24, 2024 and July 13, 2033.

The weighted average remaining term of the ESAs and the network affiliate agreements together is 11.9 yea rs as of December 28, 2023.

In December 2022, AMC and Regal each redeemed all of their outstanding membership units in exchange for shares of NCM, Inc.

common stock, reducing AMC’s and Regal’s ownership to 0.0 % as of December 29, 2022.

On February 23, 2023 and March 23, 2023, Cinemark redeemed all of their outstanding membership units in exchange for shares of NCM, Inc.

common stock reducing Cinemark’s ownership interest in NCM LLC to 0.0 % as of December 28, 2023.

NCM, Inc.’s primary source of cash flow from operations is distributions from NCM LLC pursuant to the NCM LLC Operating Agreement.

also receives management fees pursuant to a management services agreement with NCM LLC in exchange for providing specified management services to NCM LLC.

As of December 29, 2022, NCM LLC had 172,093,433 common membership units outstanding, of which 128,402,636 ( 74.6 %) were owned by NCM, Inc., 43,690,797 ( 25.4 %) were owned by Cinemark, 0 ( 0.0 %) were owned by Regal and 0 ( 0.0 %) were owned by AMC.

The membership units held by the founding members are exchangeable into NCM, Inc.

common stock on a one -for-one basis, at the discretion of the holder.

Going Concern —The accompanying audited Consolidated Financial Statements are prepared in accordance with GAAP applicable to a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business.

NCM LLC filed a petition for reorganization under Chapter 11 of the United States Bankruptcy Code in the Southern District of Texas on April 11, 2023.

expects to continue to manage NCM LLC, the “debtor in possession”, under the jurisdiction of the Bankruptcy Court and in accordance with the applicable provisions of the Bankruptcy Code and orders of the Bankruptcy Court.

In general, as debtor in possession under the Bankruptcy Code, NCM LLC is authorized to continue to operate as an ongoing business but may not engage in transactions outside the ordinary course of business without the prior approval of the Bankruptcy Court.

As a result of the bankruptcy petition, the realization of NCM LLC’s assets and the satisfaction of liabilities are subject to significant uncertainty.

These conditions and events raise substantial doubt about the Company’s ability to continue as a going concern.

Given the Chapter 11 Case, NCM LLC’s outstanding debt became immediately due and payable and was reclassified as current within the Company’s audited Consolidated Balance Sheet as of December 29, 2022.

Further, a Chapter 11 plan of reorganization for NCM LLC is likely to materially change the amounts and classifications of assets and other liabilities reported in the Company’s audited Consolidated Balance Sheet as of December 29, 2022.

As the progress of these plans and transactions is subject to approval of the Bankruptcy Court and therefore not within our control, NCM LLC’s successful reorganization and emergence from bankruptcy cannot be considered probable.

As a result, the proceedings do not alleviate the substantial doubt about the Company’s ability to continue as a going concern.

The audited Consolidated Financial Statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might result from the outcome of the going concern uncertainty.

Basis of Presentation

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in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and the rules and regulations of the Securities and Exchange Commission (“SEC”).

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In the opinion of management, all adjustments necessary to present fairly in all material respects the financial position, results of operations and cash flows for all periods presented have been made and all intercompany accounts have been eliminated in consolidation.

The Company’s business is seasonal and for this and other reasons operating results for interim periods may not be indicative of the Company’s full year results or future performance.

As a result of the various related-party agreements discussed in Note 9— Related Party Transactions , the operating results as presented are not necessarily indicative of the results that might have occurred if all agreements were with non-related third parties.

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Estimates —The preparation of the financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.

Significant estimates include those related to the reserve for uncollectible accounts receivable, share-based compensation, income taxes, intangible assets and forecasts utilized to evaluate the Company’s ability to continue as a going concern.

Significant estimates include those related to the reserve for uncollectible accounts receivable, share-based compensation, income taxes, intangible assets and the valuation of NCM LLC upon deconsolidation and reconsolidation.

Actual results could differ from those estimates.

Bankruptcy Filing, Deconsolidation and Reconsolidation of NCM LLC —On April 11, 2023, NCM LLC filed a voluntary petition for reorganization with a prearranged Chapter 11 plan under Chapter 11 of Title 11 of the United States Code in the Bankruptcy Code in the Bankruptcy Court (the “Chapter 11 Case”).

NCM LLC does not have a readily determinable fair value.

Upon the deconsolidation of NCM LLC, the original cost of the investment was valued based upon NCM, Inc.'s ownership of the secured debt of NCM LLC and the estimation of the enterprise value of NCM LLC utilizing a combination of a market approach and income approach.

The market approach relied upon a comparison with guideline public companies and entails selecting relevant financial information of the subject company and capitalizing those amounts using valuation multiples that are based on empirical market observation.

The income approach relied upon an analysis of NCM LLC’s projected economic earnings discounted to present value.

Significant assumptions utilized within these analyses include the weighted average cost of capital and NCM LLC’s forecasted cash flows.

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Upon emergence from bankruptcy, NCM, Inc., regained control and retained 100.0 % ownership of NCM LLC, after taking into account elections by the holders of Secured Debt Claims to receive NCM, Inc.

common stock in lieu of NCM LLC common units and was therefore reconsolidated into the Company’s financial statements prospectively as of August 7, 2023 akin to an acquisition under ASC 805 – Business Combinations .

The acquisition method requires the Company to make significant estimates and assumptions, especially at the acquisition date as the Company allocates the estimated fair values of acquired tangible and intangible assets and the liabilities assumed.

The Company also uses our best estimates to determine the useful lives of the tangible and definite-lived intangible assets, which impact the periods over which depreciation and amortization of those assets are recognized.

All balances within the Company’s financial statements reflect NCM LLC activity only for the periods while consolidated, December 30, 2022 through April 11, 2023 and August 7, 2023 through December 28, 2023.

Significant Accounting Policies

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Revenue Recognition —The Company 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 across the U.S., as well as on our 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, the Company sells online and mobile advertising, including through Noovie Audience Accelerator, through NCM's digital gaming products including Noovie Trivia, Name That Movie and Noovie Shuffle, which can be played on the mobile apps and through partnerships with certain internet platforms.

In addition, the Company sells online and mobile advertising, including through Noovie Audience Accelerator, through NCM’s digital gaming products, which can be played on the mobile apps and through partnerships with certain internet platforms.

Further the Company sells advertising in a variety of complementary out of home venues, including restaurants, convenience stores and college campuses.

The Company also has a long-term agreement to exhibit the advertising of the founding members’ beverage suppliers.

The Company also has a long-term agreement to exhibit the advertising of the ESA Parties’ beverage suppliers.

The Company considers the terms of each arrangement to determine the appropriate accounting treatment as more fully discussed in Note 2— Revenue from Contracts with Customers .

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Network costs —This balance consists of personnel, satellite bandwidth, repairs and other costs of maintaining and operating the digital network as well as preparing advertising and other content for transmission across the digital network.

Theater access fees and revenue share to founding members —This balance consists of payments to the founding members in return for the rights to advertise in their theaters comprised of a payment per theater attendee, a payment for post-showtime advertising, a payment per digital screen and a payment per digital cinema projector equipped in the theaters, all of which escalate over time, and revenue share for the Platinum Spot, when sold.

ESA theater access fees and revenue share —This balance consists of payments to the ESA Parties in return for the rights to advertise in their theaters comprised of a payment per theater attendee, a payment for post-showtime advertising, a payment per digital screen and a payment per digital cinema projector equipped in the theaters, all of which escalate over time, and revenue share for the Platinum Spot, when sold.

Selling and marketing costs —This balance consists primarily of sales personnel costs including sales commissions and selling related expenses such as travel, barter and bad debt expense, marketing expenses including research subscriptions and studies and production costs for internal segments shown within The Noovie® Show, lease expense for the Company’s sales offices and costs associated with digital inventory, including revenue shares paid to DOOH and other partners.

This balance also includes advertising-related costs incurred promoting the Company's digital products.

The Company recognized advertising costs of $ 0.0 million and $ 0.1 million for the years ended December 29, 2022 and December 30, 2021, respectively.

These costs are expensed when incurred.

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headquarters, legal and professional fees, cloud computing costs for the Company’s cinema advertising management system and repairs and maintenance costs.

Administrative and other costs —This balance consists of personnel costs for the Company’s executives as well as administrative functions including legal, information technology and accounting, lease expense for the Company’s headquarters, legal and professional fees, cloud computing costs for the Company’s cinema advertising management system and repairs and maintenance costs.

Cash and Cash Equivalents —All highly liquid debt instruments and investments purchased with an original maturity of three months or less are classified as cash equivalents and are considered available-for-sale securities.

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The cash equivalents are valued at fair value at each balance sheet date and the change in value from the prior period is recognized within “Other non-operating income, net” on the audited Consolidated Statements of Operations.

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Restricted Cash — The Company’s restricted cash balance was $ 3.0 million and $ 2.1 million for the years ended December 28, 2023 and December 29, 2022, respectively.

The balance as of December 28, 2023 is related to unsettled, agreed upon payments to NCM LLC’s unsecured creditors within the escrow accounts and “Accounts payable” on the audited Consolidated Balance Sheet.

The balance as of December 29, 2022 related to fees due to Regal in accordance with the ESA which were held in escrow in conjunction with the Cineworld Proceeding.

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The Company also considers current economic conditions and trends to determine whether adjustments to historical loss rates are necessary.

The Company decreased the expected rate of default related to local and regional customers within the calculation of the allowance for doubtful accounts as of December 29, 2022, as compared to December 30, 2021, given the recovery of the previously identified at-risk small businesses (e.g.

restaurants, travel, etc.) from the adverse impact of the COVID-19 Pandemic.

The Company also reserves for specific receivable balances that it expects to write off based on known concerns regarding the financial health of the customer.

Receivables are written off when management determines amounts are uncollectible.

As of December 29, 2022 and December 30, 2021 there was one advertising agency group through which the Company sources national advertising revenue that accounted for 13.0 % and 15.7 %, respectively, of the Company’s outstanding gross receivable balance.

The Company had no agencies through which it sourced advertising revenue that accounted for more than 10% of the Company’s gross outstanding receivable balance as of December 28, 2023.

As of December 29, 2022 there was one advertising agency group through which the Company sources national advertising revenue that accounted for 13.0 % of the Company’s outstanding gross receivable balance.

During the years ended December 28, 2023 and December 29, 2022, the Company had one customer that accounted for 11.2 % and 12.9 %, respectively, of the Company's revenue.

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Trade accounts $ 98.0 $ 93.1

Other 0.6 1.0

Allowance for doubtful accounts ( 1.4 ) ( 1.7 )

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Long-lived Assets —Property and equipment is stated at cost, net of accumulated depreciation or amortization.

Generally, the equipment associated with the digital network of the founding member theaters is owned by the founding members, while the equipment associated with network affiliate theaters is owned by the Company.

Generally, the equipment associated with the digital network of the ESA Party theaters is owned by the ESA Parties, while the equipment associated with network affiliate theaters is owned by the Company.

Major renewals and improvements are capitalized, while replacements, maintenance, and repairs that do not improve or extend the lives of the respective assets are expensed as incurred.

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Leasehold improvements Lesser of lease term or asset life

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Software and website development costs developed or obtained for internal use are accounted for in accordance with ASC 350— Internal Use Software and ASC 350– Website Development Costs .

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Depreciation expense related to software and website development was approximately $ 1.8 million and $ 3.8 million for the years ended December 28, 2023 and December 29, 2022, respectively.

The subtopics also require the capitalization of certain implementation costs related to qualifying Cloud Computing Arrangements (“CCAs”) upon adoption of ASU 2018-15— Intangibles - Goodwill and Other - Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract as of September 28, 2018.

As of December 29, 2022 and December 30, 2021 the Company had a net book value of $ 3.7 million and $ 4.0 million of capitalized implementation costs for CCAs, respectively.

The subtopics also require the capitalization of certain implementation costs related to qualifying Cloud

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Computing Arrangements (“CCAs”) upon adoption of ASU 2018-15— Intangibles - Goodwill and Other - Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract as of September 28, 2018.

As of December 28, 2023 and December 29, 2022 the Company had a net book value of $ 4.5 million and $ 3.7 million of capitalized implementation costs for CCAs, respectively, recorded within “Other assets” in the Consolidated Balance Sheets.

These costs primarily relate to the Company's hosted cinema advertising management system which was implemented in January 2021.

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These costs are amortized to “Administrative and other costs” within the audited Consolidated Statements of Operations over the life of the hosting arrangement beginning at implementation.

For the years ended December 29, 2022 and December 30, 2021, the Company recorded $ 4.6 million and $ 1.7 million in research and development expense, respectively.

For the years ended December 28, 2023 and December 29, 2022, the Company recorde d $ 3.0 milli on and $ 4.6 million in research and development expense, respectively.

The Company assesses impairment of long-lived assets pursuant with ASC 360 – Property, Plant and Equipment.

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The Company recorded losses of $ 0.0 million and $ 5.8 million related to the write-off of certain internally developed software during the years ended December 28, 2023 and December 29, 2022, respectively, which has been included within “Impairment of long-lived assets” within the respective audited Consolidated Statements of Operations.

The Company also recorded losses of $ 0.0 million and $ 0.2 million related to the write-off of equipment during the years ended December 29, 2022 and December 30, 2021, respectively, which has been included within “Depreciation expense” within the respective audited Consolidated Statements of Operations given the immaterial nature of the balances.

Intangible Assets —Intangible assets consist of contractual rights to provide its services within the theaters of the founding members and network affiliates and are stated at cost, net of accumulated amortization.

The Company records amortization using the straight-line method over the contractual life of the intangibles, corresponding to the term of the ESAs or the term of the contract with the network affiliate.

Intangible Assets —The Company’s intangible assets consist of contractual rights to provide its services within the theaters under the ESAs and the network affiliate agreements, customer relationships developed and maintained by the Company’s sales force and trademarks held and used by the Company.

The intangible assets are stated at their estimated fair values upon the reconsolidation of NCM LLC on August 7, 2023 as further described within Note 5— Reconsolidation of NCM LLC, net of accumulated amortization.

The Company records amortization using the straight-line method over the estimated useful life of the intangibles, corresponding to the expected term of the ESAs, the average renewable term of the contracts with the network affiliates and industry standard lives for customer relationships and trademarks.

Intangible assets are tested for impairment whenever events or changes in circumstances indicate the carrying value may not be fully recoverable.

In its impairment testing, the Company estimates the fair value of its ESAs or network affiliate agreements by determining the estimated future cash flows associated with the ESAs or network affiliate agreements.

In its impairment testing, the Company estimates the fair value of the intangible asset by determining the estimated future cash flows associated with the ESAs, network affiliate agreements and trademarks or the estimated replacement cost of the customer relationships.

If after determining that gross cash flows are insufficient to recover the asset, the estimated fair value is less than the carrying value, the intangible asset is written down to its estimated fair value.

Significant judgment is involved in estimating long-term cash flow forecasts.

Refer to Note 5— Intangible Assets to the audited Consolidated Financial Statements for discussion of the Company's consideration of the impact of the Cineworld Proceeding within the impairment testing performed over the Company's intangible assets during the year ended December 29, 2022.

The Company recorded $ 0.0 million and $ 0.0 million, respectively, in impairment charges related to intangible assets during the years ended December 29, 2022 and December 30, 2021.

The Company has elected to capitalize extension costs on its intangible assets and thus capitalized the legal and professional costs incurred in conjunction with the 2019 ESA Amendments.

Amounts Due to/from Founding Members —Amounts due to/from founding members include amounts due for the theater access fees and revenue share, offset by a receivable for advertising time purchased by the founding members on behalf of their beverage concessionaire, plus any amounts outstanding under other contractually obligated payments.

Payments to or received from the founding members against outstanding balances are made monthly.

Available cash distributions are made quarterly contingent upon the Company's compliance with the covenants outlined within the Credit Agreement Second and Third Amendments and in accordance with the NCM LLC Operating Agreement.

Significant judgment is involved in estimating long-term cash flow forecasts and replacement costs.

Amounts Due to/from ESA Parties —Amounts due to/from ESA Parties include amounts due for the theater access fees and revenue share, offset by a receivable for advertising time purchased by the ESA Parties on behalf of their beverage concessionaire, plus any amounts outstanding under other contractually obligated payments.

Payments to or received from the ESA Parties against outstanding balances are made monthly.

Available cash distributions are made quarterly contingent upon the ESA Parties’ ownership of NCM LLC membership units, the Company's compliance with the covenants outlined within the 2023 Revolving Credit Facility and in accordance with the NCM LLC Operating Agreement.

Income Taxes —Income taxes are accounted for under the asset and liability method, which requires recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements.

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The Company records a valuation allowance if it is deemed more likely than not that all or a portion of its deferred income tax assets will not be realized, which will be assessed on an on-going basis.

Only the portion of deferred income tax assets deemed more likely than not to be realized are considered within the calculation of the payable to the founding members

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under the TRA which is equal to 90 % of the Company’s actual tax benefit realized from the tax amortization of the basis difference for qualifying deferred income tax assets.

Only the portion of deferred income tax assets deemed more likely than not to be realized are considered within the calculation of the payable to the ESA Parties under the TRA which is equal to 90 % of the Company’s actual tax benefit realized from the tax amortization of the basis difference for qualifying deferred income tax assets.

Refer to Note 7— Income Taxes to the audited Consolidated Financial Statements for discussion of changes within the Company's valuation allowance on its deferred tax assets during the years ended December 28, 2023 and December 29, 2022.

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Only tax positions that meet the more likely than not recognition threshold are recognized.

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The Company recognizes the tax benefits from uncertain tax positions only when it is more likely than not, based on the technical merits of the position, the tax position will be sustained upon examination, including the resolution of any related appeals or litigation.

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Debt issuance costs 0.9 5.1

Deconsolidation of NCM LLC ( 8.9 ) —

Reconsolidation for NCM LLC 2.4 —

Amortization of debt issuance costs ( 3.4 ) ( 8.9 )

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The Company recognizes share-based compensation net of an estimated forfeiture rate.

Compensation expense of restricted stock units that vest upon the achievement of Company performance measures is based on management’s financial projections and the probability of achieving the projections, which require considerable judgment.

A cumulative adjustment is recorded to share-based compensation expense in periods that management changes its estimate of the number of shares expected to vest.

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Level 2 – Observable inputs other than quoted prices in active markets for identical assets and liabilities, quoted prices for identical or similar assets or liabilities in inactive markets, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

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Level 3 – Inputs that are generally unobservable and typically reflect management’s estimate of assumptions that market participants would use in pricing the asset or liability.

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has evaluated the provisions of the NCM LLC membership agreement and has concluded that the various rights of the non-managing members are not substantive participating rights under ASC 810, as they do not limit NCM, Inc.’s ability to make decisions in the ordinary course of business.

As such, the Company concluded that NCM LLC is a variable interest entity and determined that NCM, Inc.

should consolidate the accounts of NCM LLC pursuant to ASU 2015-2 because 1) it has the power to direct the activities of NCM LLC in its role as managing member and 2) NCM, Inc.

The Company concluded that NCM LLC is a variable interest entity and determined that NCM, Inc.

should consolidate the accounts of NCM LLC pursuant to ASU 2015-2 because 1) it has the power to direct the activities of NCM LLC in its role as managing member

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and 2) NCM, Inc.

has the obligation to absorb losses of, or the right to receive benefits from NCM LLC, that could potentially be significant provided its 100.0 % ownership in NCM LLC.

Prior to the prospective adoption of ASU 2015-2 in the first quarter of 2016, the Company reached the same conclusion under previous guidance in ASC 810 to consolidate NCM LLC.

Upon NCM LLC’s emergence from bankruptcy, it was determined that NCM, Inc.

continues to hold the current rights that give it power to direct activities of NCM LLC that most significantly impact NCM LLC’s economic performance and that NCM, Inc.

continues to have the rights to receive the significant benefits or the obligations to absorb potentially significant losses, resulting in NCM, Inc.

having a controlling financial interest in NCM LLC.

As a result, NCM, Inc.

was deemed to be the primary beneficiary of NCM LLC and the Company has consolidated NCM LLC under the variable interest entity provisions of ASC 810— Consolidation.

The following table presents the changes in NCM, Inc.’s equity resulting from net income attributable to NCM, Inc.

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December 28, 2023 December 29, 2022

Net loss attributable to NCM, Inc.

Net income (loss) attributable to NCM, Inc.

$ 705.2 $ ( 28.7 )

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investment in NCM LLC ( 2.6 ) ( 12.4 )

Issuance of shares to founding members 12.0 6.6

Change from net loss attributable to NCM, Inc.

Issuance of shares 241.3 12.0

Change from net income (loss) attributable to NCM, Inc.

and transfers from

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Recently Adopted Accounting Pronouncements

The Company did not adopt any new accounting pronouncements during the year ended December 29, 2022.

Recently Issued Accounting Pronouncements

In March 2020, the FASB issued Accounting Standards Update No.

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The Company concluded the LIBOR transition did not have a material impact on the Company’s Consolidated Financial Statements.

The Company did not adopt any other accounting pronouncements during the year ended December 28, 2023.

Recently Issued Accounting Pronouncements

In January 2024, the FASB issued Accounting Standards Update No.

2023-09, Income Tax Disclosures (“ASU 2023-09”), which establishes new income tax disclosure requirements in addition to modifying and eliminating certain existing requirements.

Under the new guidance, entities must consistently categorize and provide greater disaggregation of information in the rate reconciliation.

They must also further disaggregate income taxes paid.

This guidance is effective upon issuance on December 15, 2024.

The Company does not believe this will have a material impact on the Company’s Consolidated Financial Statements.

The Company has considered all other recently issued accounting pronouncements and does not believe the adoption of such pronouncements will have a material impact on its Consolidated Financial Statements or notes thereto.

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Revenue Recognition

The Company 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 across the U.S., as well as on our 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, the Company sells online and mobile advertising, including through Noovie Audience Accelerator, through NCM's digital gaming products including Noovie Trivia, Name That Movie and Noovie Shuffle, which can be played on the mobile app and through partnerships with certain internet platforms.

derives revenue principally from its role as sole manager of NCM LLC.

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 across the U.S., as well as on our 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, the Company sells online and mobile advertising, including through Audience Accelerator, through NCM's digital gaming products which can be played on the mobile app and through partnerships with certain internet platforms.

Further the Company sells advertising in a variety of complementary out of home venues, including restaurants, convenience stores and college campuses.

The Company also has a long-term agreement to exhibit the advertising of the founding members’ beverage suppliers.

The Company also has a long-term agreement to exhibit the advertising of the ESA Parties’ beverage suppliers.

National and regional advertising, including advertising under the beverage concessionaire and courtesy PSA agreements, are sold on a CPM basis.

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National advertising is also sold to content partners.

The content partners provide the Company

The content partners provide the Company with original entertainment content segments, typically 90 seconds in length, that are entertaining, informative, or educational

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with original entertainment content segments, typically 90 seconds in length, that are entertaining, informative, or educational in nature in the Noovie show and they make commitments to buy a portion of the Company’s advertising inventory at a specified CPM.

in nature in The Noovie® Show and they make commitments to buy a portion of the Company’s advertising inventory at a specified CPM.

The Company recognizes revenue for the content segments ratably over time as the content segments air.

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local and regional;

and beverage concessionaire.

beverage concessionaire;

and management fee reimbursement revenue related to NCM LLC.

This method of disaggregation is in alignment with how revenue is reviewed by management and discussed with and historically disclosed to investors.

The Company has changed the presentation of revenues in the table below, retrospectively, to have Regional advertising revenue now be included with Local advertising revenue rather than with National advertising revenue as of December 29, 2022.

This presentation change did not affect total consolidated revenue.

The following table summarizes revenue from contracts with customers for the years ended December 28, 2023 and December 29, 2022 (in millions):

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Local and regional advertising revenue 30.4 43.5

Founding member advertising revenue from beverage concessionaire agreements 18.6 11.1

ESA advertising revenue from beverage concessionaire agreements 9.9 18.6

Management fee reimbursement 10.1 —

Total revenue $ 165.2 $ 249.2

Deferred Revenue and Unbilled Accounts Receivable

The Company has changed the classification of the make good provision, retrospectively, to now be included within “Deferred Revenue” on the audited Consolidated Balance Sheet rather than “Accrued Expenses” as of December 29, 2022.

Revenue recognized in the year ended December 28, 2023 that was included within the Deferred Revenue balance as of December 29, 2022 was $ 8.6 million.

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Unbilled accounts receivable is classified as a current asset as it is expected to be billed within the next twelve months.

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Practical Expedients and Exemptions

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The Company expenses sales commissions when incurred as the amortization period would have been one year or less.

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Balance at end of period $ 0.1 $ 1.3 $ 0.3 $ 1.4

LOSS PER SHARE

Basic loss per share is computed on the basis of the weighted average number of common shares outstanding.

Diluted loss per share is computed on the basis of the weighted average number of common shares outstanding plus the effect of potentially dilutive common stock options, restricted stock and exchangeable NCM LLC common units using the treasury stock method.

The components of basic and diluted loss per NCM, Inc.

INCOME PER SHARE

Basic income (loss) per share is computed on the basis of the weighted average number of common shares outstanding.

Diluted income (loss) per share is computed on the basis of the weighted average number of common shares outstanding plus the effect of potentially dilutive common stock options, restricted stock and exchangeable NCM LLC common units using the treasury stock method.

The components of basic and diluted income (loss) per NCM, Inc.

share are as follows:

December 28, 2023 December 29, 2022

Net loss attributable to NCM, Inc.

Net income (loss) attributable to NCM, Inc.

(in millions) $ 705.2 $ ( 28.7 )

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Diluted 48,574,583 8,196,801

Loss per NCM, Inc.

Income (loss) per NCM, Inc.

Basic $ 14.73 $ ( 3.50 )

Diluted $ 14.34 $ ( 3.50 )

The effect of the 88,801,009 and 85,748,080 weighted average exchangeable NCM LLC common membership units held by the founding members for the years ended December 29, 2022 and December 30, 2021, respectively, was excluded from the calculation of diluted weighted average shares and earnings per NCM, Inc.

share as it was antidilutive in these periods.

The effect of the 8,880,101 weighted average exchangeable NCM LLC common membership units held by the ESA Parties for the year ended December 29, 2022 was excluded from the calculation of diluted weighted average shares and earnings per NCM, Inc.

share as it was antidilutive.

The weighted average exchangeable NCM LLC common membership units held by the ESA Parties for the year ended December 28, 2023 was 685,404 and are included in diluted weighted average shares.

In addition, there were 979,176 and 727,338 , stock options and non-vested (restricted) shares for the years ended December 28, 2023 and December 29, 2022, respectively, excluded from the calculation as they were antidilutive.

The Company’s non-vested (restricted) shares do not meet the definition of a participating security as the dividends will not be paid if the shares do not vest.

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.

In accordance with ASC 260— Earnings Per Share, income (loss) per share for the year ended December 29, 2022 was retrospectively adjusted for the reverse stock split.

Additionally, unaudited (loss) income per share for the quarterly periods through the years ended December 28, 2023 and December 29, 2022, are stated as follows:

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Three Months Ended

March 30, 2023 March 31, 2022

Net loss attributable to NCM, Inc.

(in millions) $ ( 45.5 ) $ ( 25.2 )

Weighted average shares outstanding:

Basic 14,550,799 8,104,066

Dilutive effect of stock options, restricted

stock, and exchangeable NCM LLC common

membership units — —

Diluted 14,550,799 8,104,066

Loss per NCM, Inc.

Basic $ ( 3.13 ) $ ( 3.11 )

Diluted $ ( 3.13 ) $ ( 3.11 )

The effect of th e 2,741,617 and 8,623,385 weighted average exchangeable NCM LLC common membership units held by the ESA Parties for the three months ended March 30, 2023 and March 31, 2022, respectively, were excluded from the calculation of diluted weighted average shares and earnings per NCM, Inc.

share as it was antidilutive.

In addition, there were 494,695 and 346,330 , stock options and non-vested (restricted) shares for the quarters ended March 30, 2023 and March 31, 2022, respectively, excluded from the calculation as they were antidilutive.

The Company’s non-vested (restricted) shares do not meet the definition of a participating security as the dividends will not be paid if the shares do not vest.

Three Months Ended Six Months Ended

June 29, 2023 June 30, 2022 June 29, 2023 June 30, 2022

Net loss attributable to NCM, Inc.

(in millions) $ 545.3 $ ( 0.7 ) $ 499.8 $ ( 25.9 )

Weighted average shares outstanding:

Basic 17,405,864 8,146,766 15,978,331 8,125,415

Dilutive effect of stock options, restricted

stock, and exchangeable NCM LLC common

membership units — — 1,370,808 —

Diluted 17,405,864 8,146,766 17,349,139 8,125,415

Loss per NCM, Inc.

Basic $ 31.33 $ ( 0.09 ) $ 31.28 $ ( 3.19 )

Diluted $ 31.33 $ ( 0.09 ) $ 28.32 $ ( 3.19 )

The effect of t he 9,037,475 and 8,828,155 w eighted average exchangeable NCM LLC common membership units held by the ESA Parties for the three and six months ended June 30, 2022 was excluded from the calculation of diluted weighted average shares and earnings per NCM, Inc.

share as it was antidilutive.

The weighted average exchangeable NCM LLC common membership units held by the ESA Parties for the three and six months ended June 29, 2023 was 0 and 1,370,808 and are included in diluted weighted average shares.

In addition, there were 491,517 , 644,216 , 491,517 and 644,216 stock options and non-vested (restricted) shares for the three months ended June 29, 2023 and June 30, 2022 and six months ended June 29, 2023 and June 30, 2022, respectively, excluded from the calculation as they were antidilutive.

The Company’s non-vested (restricted) shares do not meet the definition of a participating security as the dividends will not be paid if the shares do not vest.

PROPERTY AND EQUIPMENT

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Total property and equipment $ 15.8 $ 13.0

INTANGIBLE ASSETS

The Company’s intangible assets consist of contractual rights to provide its services within the theaters of the founding members and network affiliates.

The Company’s intangible assets with the founding members are recorded at the fair market value of NCM, Inc.’s publicly traded stock as of the date on which the common membership units were issued.

The NCM LLC common membership units are fully convertible into NCM, Inc.’s common stock.

The Company also records intangible assets for upfront fees paid to network affiliates upon commencement of a network affiliate agreement.

Pursuant to ASC 350-10— Intangibles—Goodwill and Other, the Company’s intangible assets have a finite useful life and the Company amortizes the assets over the remaining useful life corresponding with the ESAs or the term of the contract with the network affiliate.

The Company extended the useful life of the intangible asset for Cinemark and Regal in 2019 following the extension of the ESA term in conjunction with the 2019 ESA Amendments.

There was no impact to the Payable to founding members under tax receivable agreement as the useful life of the intangible assets were not deemed to be extended for tax purposes and there were no changes made to the tax receivable agreements.

During the third quarter of 2022, Cineworld Group plc, the parent company of Regal, and certain of its subsidiaries, including Regal, Regal Cinemas, Inc., a party to the ESA, and Regal CineMedia Holdings, LLC, a party to other agreements with NCM LLC and NCM, Inc., filed petitions of reorganization under Chapter 11 of the United States Bankruptcy Code in the Southern District of Texas.

On October 21, 2022, Regal filed a motion to reject the ESA without specifying an effective date for the rejection and indicated that Regal currently plans on negotiating with the Company regarding the ESA.

NCM LLC has also filed a complaint against Regal seeking declaratory relief and an injunction prohibiting Regal from breaching certain exclusivity, non-compete, non-negotiate and confidentiality provisions in the ESA by entering into a new agreement with a third-party or bringing any of the services performed by NCM LLC in-house.

On February 1, 2023, Cineworld filed a motion for summary judgment on NCM LLC’s adversary proceeding with a hearing scheduled during the second quarter of 2023.

The Company determined that this announced restructuring and subsequent developments constituted a triggering event for the Company’s intangible asset group, including the amount related to Regal, under ASC No.

360, Impairment and Disposal of Long-Lived Assets during the third and fourth quarter of 2022.

Management considered possible scenarios in a probability-weighted estimated future undiscounted cash flow analysis, including the potential of further permanent closure of the theaters within the Company's network, renegotiation of the ESA terms and other potential adverse impacts to the Company’s intangible asset group resulting from the Cineworld Proceeding.

The estimated future cash flows calculated within the probability-weighted analysis were in excess of the net book value of the Company’s intangible assets and no impairment charge was recorded in the year ended December 29, 2022.

Such analysis required management to make estimates and assumptions based on historical data and consideration of future market conditions.

While the Company believes that the rights will survive any attempted rejection in the bankruptcy court by Regal, given the uncertainty inherent in any projection, heightened by the possibility of unforeseen additional effects of the Cineworld Proceeding, actual results may differ from the estimates and assumptions used, or conditions may change, which could result in impairment charges in the future.

Common Unit Adjustments— In accordance with NCM LLC’s Common Unit Adjustment Agreement with its founding members, on an annual basis NCM LLC determines the amount of common membership units to be issued to or returned by the founding members based on theater additions or dispositions during the previous year.

In addition, NCM LLC’s Common Unit Adjustment Agreement requires that a Common Unit Adjustment occur for a specific founding member if its acquisition or disposition of theaters, in a single transaction or cumulatively since the most recent Common Unit Adjustment, results in an attendance increase or decrease in excess of two percent of the annual total attendance at the prior adjustment date.

Integration Payments and Other Encumbered Theater Payments— If an existing on-screen advertising agreement with an alternative provider is in place with respect to any acquired theaters, the founding members may elect to receive common

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membership units related to those encumbered theaters in connection with the Common Unit Adjustment.

If the founding members make this election, then they are required to make payments on a quarterly basis in arrears in accordance with certain run-out provisions pursuant to the ESAs (“integration payments”).

RECONSOLIDATION OF NCM LLC

Upon filing the Chapter 11 Case and in accordance with applicable GAAP, the Company concluded that NCM, Inc.

no longer controlled NCM LLC for accounting purposes as of April 11, 2023 (the “Petition Date”), the date on which NCM LLC filed its Chapter 11 petition, as NCM LLC was under the control of the Bankruptcy Court, and therefore, NCM LLC was deconsolidated from the Company’s consolidated financial statements prospectively, resulting in a $ 557.7 million gain recorded in “Gain on deconsolidation of affiliate” in the Consolidated Statement of Operations.

The recorded gain was measured as the excess of the estimated fair value of the investment in NCM LLC retained over the Net Liabilities of NCM LLC as of April 11, 2023.

The investment of NCM LLC was measured at cost minus any impairment in accordance with the measurement alternative outlined in ASC 321— Investments—Equity Securities .

While NCM LLC remained in bankruptcy, NCM, Inc.

accounted for the retained equity interest in NCM LLC at cost less impairment, if any, plus or minus changes resulting from observable price changes in orderly market transactions.

Upon the deconsolidation of NCM LLC, the original cost of the investment was valued based upon NCM, Inc.'s ownership of the secured debt of NCM LLC and an estimation of the enterprise value of NCM LLC developed utilizing discounted cash flows and comparable company analysis as of the Petition Date.

Significant assumptions utilized within these analyses included the weighted average cost of capital and NCM LLC’s forecasted cash flows.

On August 7, 2023, NCM LLC emerged from bankruptcy and NCM, Inc.

contributed $ 15.0 million in cash to NCM LLC in exchange for 2.8 % of additional ownership of NCM LLC in accordance with the NCMI Capital Contribution and $ 0.5 million to assist with payments to unsecured creditors in accordance with the settlement with the unsecured creditors.

also issued 83,421,135 shares to the secured creditors in accordance with the NCMI 9019 Settlement and terms of the Plan with a fair value of $ 245.3 million based on the closing stock price of $ 2.94 .

Upon NCM LLC’s emergence from bankruptcy, NCM, Inc.

retained 100.0 % of NCM LLC, regained control of and reconsolidated NCM LLC.

The Company accounted for the NCM LLC reconsolidation as a business combination under ASC 805 — Business Combinations and accordingly, the purchase price was allocated to the assets acquired and liabilities assumed based on their estimated fair values as of the date of reconsolidation, the Effective Date.

The determination of fair values required management to make significant estimates and assumptions.

The estimated fair values of the assets acquired and liabilities assumed are considered provisional and are based on currently available information.

The Company believes that the information available provides a reasonable basis for estimating the fair values of assets acquired and liabilities assumed;

however, these provisional estimates may be adjusted upon the availability of new information regarding facts and circumstances which existed at the reconsolidation date.

The Company expects to finalize the valuation of assets and liabilities as soon as practicable, but not later than one year from the reconsolidation date.

The following table summarizes the fair value of NCM LLC and provisional fair values of the assets acquired and liabilities assumed as of the reconsolidation date:

Fair value of assets acquired:

Cash, cash equivalents and restricted cash $ 49.6

Receivables, net (1)

Prepaid expenses and other current assets 7.2

Property and equipment, net 14.8

Other investments 0.9

Debt issuance costs, net 2.4

Fair value of intangible assets 415.0

Other assets 10.0

Total assets acquired 574.7

Fair value of liabilities assumed:

Amounts due to members, net ( 15.3 )

Accrued expenses ( 0.7 )

Accrued payroll and related expenses ( 9.9 )

Accounts payable ( 37.3 )

Deferred revenue ( 11.1 )

Other current liabilities ( 1.5 )

Long-term debt ( 10.0 )

Other liabilities ( 5.5 )

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Total liabilities assumed ( 91.3 )

Fair value of NCM LLC $ 483.4

(1) Includes a valuation adjustment recorded during the three months ended December 28, 2023 that decreased accounts receivable, net by $ 0.2 million.

The provisional identifiable intangible assets of $ 415.0 million are subject to amortization.

The following table summarizes the major classes of intangible assets acquired and their respective weighted-average estimated useful lives.

Estimated Fair Value Useful Life (years)

Exhibitor service agreements $ 250.0 13.0

Network affiliates agreements 75.0 16.0

Customer relationships 75.0 6.0

Trademarks 15.0 8.0

Total intangible assets $ 415.0

The estimated fair values of the ESAs, network affiliate agreements and trademarks were estimated using the income approach.

The multi-period excess earnings method starts with a forecast of all of the expected future net cash flows associated with the asset.

The forecasts are then adjusted to present value by applying an appropriate discount rate that reflects the risks associated with the company specific cash flow streams.

Significant assumptions utilized within the income approach include the weighted average cost of capital and forecasted cash flows.

The estimated fair values of the customer relationships were estimated using the cost approach.

The cost approach included estimating the investment required to replace the contracts with customers, with significant assumptions including the replacement cost.

The Company elected the practical expedients allowed in ASC 805-20-30-29a in estimating the fair value of the contract liabilities assumed.

Upon NCM LLC’s emergence from the Chapter 11 Case, NCM, Inc.

remeasured the value of the investment in NCM LLC to the estimated fair value calculated as NCM, Inc.’s percentage ownership of NCM LLC, due to NCM, Inc.’s ownership of the secured debt of NCM LLC and the NCMI Capital Contribution, multiplied by the fair value of NCM LLC as of the Effective Date of $ 483.4 million.

The value of the cost investment of NCM LLC immediately prior to the Effective Date was $ 11.9 million based upon NCM, Inc.’s ownership of the secured debt of NCM LLC and an estimation of the enterprise value of NCM LLC developed utilizing discounted cash flows and comparable company analysis as of the Petition Date.

The increase in the fair value resulted in a gain on remeasurement of the investment in NCM LLC of $ 35.5 million.

Upon reconsolidation, NCM, Inc.

recorded the provisional fair values of the assets acquired and liabilities assumed as of the reconsolidation date and the investment in NCM LLC was further adjusted to the full purchase price value of $ 483.4 million.

The difference between the purchase price of NCM LLC and the fair value of NCM, Inc.’s investment in NCM LLC as calculated above, the $ 15.5 million of cash contributed by NCM, Inc.

(consisting of $ 0.5 million related to the General Unsecured Claim Pool and $ 15.0 million under the NCMI Capital Contribution) and the shares issued to NCM LLC’s secured lenders of $ 245.3 million resulted in a gain of $ 167.8 million upon the reconsolidation of NCM LLC.

The Company recognized a gain due to the variance between the fair value of NCM LLC’s assets and liabilities and NCM, Inc.’s depressed stock price on the Effective Date and the NCM, Inc.

shares retained by the existing shareholders as part of the NCMI 9019 Settlement.

NCM, Inc.’s stock price has been negatively impacted beginning with the COVID-19 pandemic followed by Cineworld’s bankruptcy proceeding and NCM LLC’s Chapter 11 Case, as well as by other socioeconomic factors.

The Company’s Consolidated Statements of Operations include total net revenues and net loss attributable to NCM LLC of $ 155.1 million and $ 42.0 million, respectively, for the total of the consolidated periods of December 30, 2022 through April 11, 2023 and August 7, 2023 through December 28, 2023.

Pro Forma Financial Information (Unaudited)

The following table presents unaudited pro forma financial information as if the NCM LLC reconsolidation had occurred on December 31, 2021.

The unaudited pro forma results reflect adjustments for depreciation of acquired property and equipment, amortization of acquired intangible assets and amortization of acquired debt issuance costs.

The unaudited pro forma financial information is presented for informational purposes only and is not necessarily indicative of future operations or results had the NCM LLC reconsolidation been completed as of December 31, 2021.

December 28, 2023 December 29, 2022

Revenue $ 259.8 $ 249.2

Net (Loss) Income $ ( 200.5 ) $ 755.9

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INTANGIBLE ASSETS

The Company’s intangible assets consist of contractual rights to provide its services within the theaters under the ESAs and network affiliates agreements, customer relationships developed and maintained by the Company’s sales force and trademarks held and used by the Company.

The Company records amortization using the straight-line method over the contractual life of the intangibles, corresponding to the term of the ESAs, the average renewable term of the contract with the network affiliates and industry standard lives for customer relationships and trademarks.

In accordance with ASC 360 — Property, Plant and Equipment, the Company continuously monitors the performance of the underlying assets for potential triggering events suggesting an impairment review should be performed.

No such triggering events were identified in the period since the reconsolidation of NCM LLC on August 7, 2023.

Common Unit Adjustments— In accordance with NCM LLC’s Common Unit Adjustment Agreement, on an annual basis NCM LLC determines the amount of common membership units to be issued to or returned by AMC and Cinemark based on theater additions, new builds or dispositions during the previous year.

In the event AMC or Cinemark does not have sufficient common membership units to return, the adjustment is satisfied in cash in an amount calculated pursuant to NCM LLC’s Common Unit Adjustment Agreement.

In addition, NCM LLC’s Common Unit Adjustment Agreement requires that a Common Unit Adjustment occur for either AMC or Cinemark if its acquisition or disposition of theaters, in a single transaction or cumulatively since the most recent Common Unit Adjustment, results in an attendance increase or decrease in excess of two percent of the annual total attendance at the prior adjustment date.

Upon the issuance of common membership units, the Company records an addition to the intangible asset related to AMC and Cinemark’s respective ESAs equal to the fair market value of NCM, Inc.’s publicly traded stock as of the date on which the common membership units were issued.

The NCM LLC common membership units are fully convertible into NCM, Inc.’s common stock.

During the first quarter of 2022, NCM LLC issued 4,140,896 ( 6,483,893 issued, net of 2,342,997 returned) common membership units to AMC, Cinemark, and Regal for the rights to exclusive access to the theater screens and attendees added, net of dispositions, to NCM LLC’s network during the 2021 fiscal year.

The net impact as a result of the Common Unit Adjustment to the intangible asset was $ 10.4 million during the first quarter of 2022.

Pursuant to the Plan and in connection with the Chapter 11 Case, during the year ended December 28, 2023, NCM LLC did not issue common membership units to Cinemark for the rights to exclusive access to the theater screens and attendees added, net of dispositions, to NCM LLC’s network for the 2022 fiscal year and the 16,581,829 units issued to AMC were issued and cancelled on the Effective Date.

If the ESA Parties make this election, then they are required to make payments on a quarterly basis in arrears in accordance with certain run-out provisions pursuant to the ESAs (“integration payments”).

Because the Carmike Cinemas, Inc.

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Integration payments are calculated based upon the advertising cash flow that the Company would have generated if it had exclusive access to sell advertising in the theaters with pre-existing advertising agreements.

The ESA additionally entitles NCM LLC to payments related to the founding members’ on-screen advertising commitments under their beverage concessionaire agreements for encumbered theaters (“encumbered theater payments”).

The ESA additionally entitles NCM LLC to payments related to the ESA Parties’ on-screen advertising commitments under their beverage concessionaire agreements for encumbered theaters (“encumbered theater payments”).

These payments are also accounted for as a reduction to the intangible asset.

If common membership units are issued to a founding member for newly acquired theaters that are subject to an existing on-screen advertising agreement with an alternative provider, the amortization of the intangible asset commences after the existing agreement expires and NCM LLC can utilize the theaters for all of its services.

If common membership units are issued to an ESA Party for newly acquired theaters that are subject to an existing on-screen advertising agreement with an alternative provider, the amortization of the intangible asset commences after the existing agreement expires and NCM LLC can utilize the theaters for all of its services.

The following is a summary of the Company’s intangible asset’s activity (in millions) during December 28, 2023 and December 29, 2022:

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2022 Additions (1)

Disposals Amortization Integration

Disposals (2)

Amortization Integration

and other encumbered theater payments (3)

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Total intangible assets, net $ 606.3 $ 10.8 $ — $ ( 25.0 ) $ ( 5.4 ) $ 586.7

(1) During the first quarter of 2022, NCM LLC issued 4,140,896 common membership units, net of 2,342,997 returned common membership units, to its founding members for the rights to exclusive access to the theater screens and attendees added, net of dispositions by the founding members to NCM LLC’s network during the 2021 fiscal year and NCM LLC recorded a net intangible asset of $ 10.4 million during the first quarter of 2022 as a result of the Common Unit Adjustment.

Additionally, there were $ 0.4 million of additions related to upfront affiliate payments in 2022.

(1) On August 7, 2023, NCM, Inc.

reconsolidated NCM LLC’s intangible assets of $ 415.0 million.

Refer to Note 5 - Reconsolidation of NCM LLC for further information.

Additionally, there were $ 0.8 million in upfront payments made to network affiliates prior to the deconsolidation of NCM LLC on April 11, 2023.

(2) On April 11, 2023, the intangible asset balance of NCM LLC was deconsolidated from NCM, Inc.

Refer to Note 5 - Reconsolidation of NCM LLC for further information.

(3) Carmike theaters had pre-existing advertising agreements for some of the theaters it owned prior to their acquisitions by AMC.

As a result, AMC will make integration and other encumbered theater payments over the remaining term of those agreements.

During the years ended December 29, 2022 and December 30, 2021, NCM LLC recorded a reduction to net intangible assets of $ 5.4 million and $ 1.6 million, respectively, related to integration and other encumbered theater payments due from AMC.

For the periods while consolidated, December 30, 2022 through April 11, 2023 and August 7, 2023 through December 28, 2023 and for the year ended December 29, 2022, NCM LLC recorded a reduction to net intangible assets of $ 6.0 million and $ 5.4 million, respectively, related to integration and other encumbered theater payments due from AMC.

During the year ended December 28, 2023 and December 29, 2022, AMC paid a total of $ 4.2 million and $ 2.8 million, respectively, related to integration and other encumbered theater payments.

(3) During the first quarter of 2021, the Company issued 3,047,582 common membership units to its founding members for the rights to exclusive access to the theater screens and attendees added, net of dispositions by the founding members to the Company’s network during the 2020 fiscal year and the Company recorded a net intangible asset of $ 4.8 million during the first quarter of 2021 as a result of the Common Unit Adjustment.

As of December 29, 2022 and December 30, 2021, the Company’s intangible assets related to the founding members, net of accumulated amortization, was $ 572.4 million and $ 589.6 million, respectively, with weighted average remaining lives of 16.3 years and 17.4 years, respectively.

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(4) During the first quarter of 2022, NCM LLC issued 4,140,896 common membership units, net of 2,342,997 returned common membership units, to its ESA Parties for the rights to exclusive access to the theater screens and attendees added, net of dispositions by the ESA Parties to NCM LLC’s network during the 2021 fiscal year and NCM LLC recorded a net intangible asset of $ 10.4 million during the first quarter of 2022 as a result of the Common Unit Adjustment.

Additionally, there were $ 0.4 million of additions related to upfront affiliate payments in 2022.

As of December 28, 2023 and December 29, 2022, the Company’s intangible assets related to the ESA Parties, net of accumulated amortization, was $ 236.7 million and $ 572.4 million, respectively, with weighted average remaining lives of 12.6 years and 16.3 years, respectively.

As of December 28, 2023 and December 29, 2022, the Company’s intangible assets related to the network affiliates, net of accumulated amortization, was $ 73.2 million and $ 14.3 million, respectively, with weighted average remaining lives of 15.6 years and 6.1 years, respectively.

As of December 28, 2023 and December 29, 2022, the Company’s intangible assets related to the customer relationships, was $ 70.1 million and $ 0.0 million, respectively, with weighted average remaining lives of 5.6 years and 0.0 years, respectively.

As of December 28, 2023 and December 29, 2022, the Company’s intangible assets related to trademark, was $ 14.3 million and $ 0.0 million, respectively, with weighted average remaining lives of 7.6 years and 0.0 years, respectively.

The estimated aggregate amortization expense for each of the five succeeding years is as follows (in millions):

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Year Amortization

ACCRUED EXPENSES

The following is a summary of the Company’s accrued expenses (in millions):

December 29, 2022 December 30, 2021

Accrued interest $ 16.3 $ 12.2

Other accrued expenses 1.5 1.2

Total accrued expenses $ 17.8 $ 13.4

The Company is subject to taxation in the U.S.

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Tax Receivable Agreement —On the IPO date, NCM, Inc.

and the founding members entered into a TRA.

and the ESA Parties entered into a TRA.

Under the terms of this agreement, NCM, Inc.

will make cash payments to the founding members in amounts equal to 90 % of NCM, Inc.’s actual tax benefit realized from the tax amortization of the intangible assets described below.

will make cash payments to the ESA Parties in amounts equal to 90 % of NCM, Inc.’s actual tax benefit realized from the tax amortization of the intangible assets described below.

For purposes of the TRA, cash savings in income and franchise tax will be computed by comparing NCM, Inc.’s actual income and franchise tax liability to the amount of such taxes that NCM, Inc.

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The TRA applies to NCM, Inc.’s taxable years up to and including the 30t h anniversary date of the offering.

For the 2021 tax year, the Company paid the founding members $ 0.0 million in the year ended December 29, 2022.

The Company paid the founding members $ 0.9 million in the year ended December 30, 2021 for the 2019 tax year.

recorded a long-term payable to the founding members related to the TRA.

The Company recorded an increase of $ 19.2 million and reduction of $ 16.1 million to the “Payable to founding members under the tax receivable agreement” during the years ended December 29, 2022 and December 30, 2021, respectively.

The increase in the year ended December 29, 2022 was primarily due to the increase in NCM, Inc.’s ownership percentage of NCM LLC during the year.

The reduction in the year ended December 30, 2021 was primarily related to the Company’s utilization of the Non-TRA net operating losses as of December 30, 2021.

The ownership related changes to the “Payable to founding members under the tax receivable agreement” were recorded within “Additional paid in capital, deficit” on the Consolidated Balance Sheet and the non-ownership related changes were recorded within “Non-operating income” within the Consolidated Statements of Operations.

For the 2022 tax year, the Company paid the ESA Parties $ 0.0 million in the year ended December 28, 2023.

The Company paid the ESA Parties $ 0.9 million in the year ended December 29, 2022 for the 2019 tax year.

recorded a long-term payable to the ESA Parties related to the TRA.

The Company recorded an increase of $ 24.2 million and $ 19.2 million to the “Payable to ESA Parties under the tax receivable agreement” during the years ended December 28, 2023 and December 29, 2022, respectively.

The increases in the year ended December 28, 2023 and December 29, 2022 was primarily due to the increase in NCM, Inc.’s ownership percentage of NCM LLC.

The ownership related changes to the “Payable to ESA Parties under the tax receivable agreement” were recorded within “Additional paid in capital, deficit” on the Consolidated Balance Sheet and the non-ownership related changes were recorded within “Non-operating income” within the Consolidated Statements of Operations.

Following the Regal Termination Agreement whereby Regal waived all rights and interests as to the TRA, the Company reduced the “Payable under the TRA” on the Consolidated Balance Sheets for the amounts expected to be owed to Regal.

This decrease was ultimately offset by the increase in the ‘Payable under the TRA’ on the Consolidated Balance Sheets due to the additional basis created upon the revaluation and reconsolidation of NCM LLC on the Effective Date.

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Share-based compensation 1.4 0.6

Cancellation of debt income attributable to NCM LLC 16.5 —

Deconsolidation effects of NCM LLC ( 37.2 ) —

Effects of NCM LLC Bankruptcy ( 4.8 ) —

Tax attribute reduction (1)

Change in the valuation allowance (1)

NCM LLC membership unit issuance to NCM, Inc.

( 208.4 ) 3.6

Executive compensation 0.9 0.5

Change in effective ownership 1.2 —

Other ( 5.3 ) 1.3

Total income tax provision $ — $ —

(1) Refer to the discussion of changes to the valuation allowance during the year ended December 28, 2023 within the Deferred Tax Assets table below.

Deferred Tax Assets —Significant components of the Company’s deferred tax assets consisted of the following (in millions):

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The Company evaluated its deferred tax assets as of December 28, 2023 and December 29, 2022 and considered both positive and negative evidence in determining whether it is more likely than not that all or some portion of its deferred tax assets will be realized.

The Company generated a three-year cumulative pre-tax book loss during 2021 driven by the impact of the COVID-19 Pandemic on the Company’s operations in 2021 and 2020, the effect of which continued into 2022.

Given the associated weight assigned to this item as negative evidence within the Company’s analysis, the Company determined it is more-likely-than-not that the Company will not be able to realize certain of the Company’s deferred tax assets and the Company increased the valuation allowance against certain deferred tax assets.

Once the Company returns to a more normal operating level and emerges from a three-year cumulative pre-tax book loss position, part or all the valuation allowance is expected to reverse, resulting in an inverse impact to the payable to founding members under the tax receivable agreement which would increase to reflect future payments to the founding members at that time.

Once the valuation allowance is reversed, the payable to founding members under the tax receivable agreement would be increased to reflect expected future payments to the founding members at that time.

Carryforwards —As of December 29, 2022, the Company had gross federal net operating loss carryforwards of approximately $ 308.0 million, of which $ 47.0 million will expire between 2034 through 2037 and $ 260.8 million will be

Once the Company returns to a more normal operating level and emerges from a three-year cumulative pre-tax book loss position, part or all the valuation allowance is

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carried forward indefinitely.

As of December 29, 2022, the Company had gross state net operating loss carryforwards of approximately $ 244.7 million, of which $ 167.7 million will expire between 2023 and 2042 and $ 76.9 million will be carried forward indefinitely.

As of December 29, 2022, the Company had gross capital loss carryforwards of approximately $ 0 .0 million.

As of December 29, 2022, the Company had gross federal and state research and experimentation tax credit carryforwards of approximately $ 1.6 million, which expire at various dates between 2030 and 2038.

expected to reverse, resulting in an inverse impact to the payable to ESA Parties under the tax receivable agreement which would increase to reflect future payments to the ESA Parties at that time.

Once the valuation allowance is reversed, the payable to ESA Parties under the tax receivable agreement would be increased to reflect expected future payments to the ESA Parties at that time.

(2) The decrease within the Net operating losses deferred tax asset from December 29, 2022 to December 28, 2023 was due to the reduction of the Company’s tax attributes in recognition of cancellation of debt income in conjunction with NCM LLC’s emergence from the Chapter 11 Case on August 7, 2023.

As of December 28, 2023, the Company has authorized capital stock of 260,000,000 shares of common stock, par value of $ 0.01 per share, and 10,000,000 shares of preferred stock, par value of $ 0.01 per share.

There were no shares of preferred stock issued or outstanding as of December 29, 2022.

There were 128,402,636 shares of common stock issued and outstanding as of December 29, 2022.

There were 50 shares of preferred stock issued and outstanding and 96,837,039 shares of common stock issued and outstanding as of December 28, 2023.

The holders of NCM, Inc.

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The authorized but unissued shares of common stock and preferred stock are available for future issuance without stockholder approval.

These additional shares may be used for a variety of corporate purposes, including share-based compensation, future public offerings to raise additional capital, corporate acquisitions and exchange on a one-for-one basis under the founding members’ right to convert their NCM LLC membership units into Company common stock.

NCM LLC’s founding members received all proceeds from NCM, Inc.’s IPO and related issuances of debt, except for amounts needed to pay out-of-pocket costs of the financings and other expenses.

The ESAs with the founding members were amended and restated in conjunction with the IPO under which NCM LLC became the exclusive provider of advertising services to the founding members for a 30 -year term.

In conformity with accounting guidance of the SEC concerning monetary consideration paid to promoters, such as the founding members, in exchange for property conveyed by the promoters, the excess over predecessor cost was treated as a special distribution.

Because the founding members had no cost basis in the ESAs, nearly all payments to the founding members with the proceeds of the IPO and related debt, have been accounted for as distributions.

The distributions by NCM LLC to the founding members made at the date of the IPO resulted in a consolidated stockholders’ deficit.

As a noncontrolling interest cannot be shown as an asset, the founding members’ interest in NCM LLC’s members equity is included in distributions in excess of paid in capital in the accompanying Consolidated Balance Sheets.

These additional shares may be used for a variety of corporate purposes, including share-based compensation, future public offerings to raise additional capital, corporate acquisitions and exchange on a one-for-one basis under the ESA Parties’ right to convert their NCM LLC membership units into Company common stock.

Prior to the deconsolidation of NCM LLC on April 11, 2023, in conformity with accounting guidance of the SEC concerning monetary consideration paid to promoters, such as the ESA Parties, in exchange for property conveyed by the promoters, the excess over predecessor cost was treated as a special distribution.

Because the ESA Parties had no cost basis in the ESAs, nearly all payments to the ESA Parties with the proceeds of the IPO and related debt, have been accounted for as distributions.

The distributions by NCM LLC to the ESA Parties made at the date of the IPO resulted in a consolidated stockholders’ deficit.

As a noncontrolling interest cannot be shown as an asset, the ESA Parties’ interest in NCM LLC’s members equity was included in distributions in excess of paid in capital in the Consolidated Balance Sheets.

On April 11, 2023, the historical Equity balances of NCM LLC were deconsolidated from the Consolidated Financial Statements.

On August 7, 2023, the Company accounted for the NCM LLC reconsolidation as a business combination under ASC 805 — Business Combinations and accordingly, the purchase price was allocated to the assets acquired and liabilities assumed based on their estimated fair values as of the date of reconsolidation, the Effective Date, with no allocation to any equity balances.

The reconsolidation reduced NCM LLC’s equity balances to $ 0 and removed the impact of the IPO discussed above.

For further information regarding the deconsolidation and reconsolidation of NCM LLC, refer to Note 5 - Reconsolidation of NCM LLC.

RELATED PARTY TRANSACTIONS

Founding Member Transactions —In connection with NCM, Inc.’s IPO, the Company entered into several agreements to define and regulate the relationships among NCM, Inc., NCM LLC and the founding members which are outlined below.

As AMC owns less than 5% of NCM LLC, on an as converted basis, as of December 29, 2022, AMC is not a related party.

AMC was also not a related party as of December 30, 2021.

AMC remains a party to the ESA, Common Unit Adjustment Agreement, TRA and certain other original agreements, and AMC will continue to participate in the annual Common Unit Adjustment, receive TRA payments, receive theater access fee payments, and make payments under the beverage concessionaire agreements, among other things.

Further, AMC’s ownership percentage does not impact future integration payments and other encumbered theater payments owed to NCM LLC by AMC.

The material agreements with the founding members are as follows:

Under the ESAs, NCM LLC is the exclusive provider within the United States of advertising services in the founding members’ theaters (subject to pre-existing contractual obligations and other limited exceptions for the benefit of the founding members).

ESA Party and Managing Member Transactions —In connection with NCM, Inc.’s IPO, the Company entered into several agreements to define and regulate the relationships among NCM LLC, NCM, Inc.

and AMC, Cinemark and Regal which are outlined below.

AMC has owned less than 5 % of NCM LLC, on an as converted basis, since July 2018 and is no longer a related party.

AMC remains a party to the ESA, Common Unit Adjustment Agreement and certain other original agreements and is a member under the terms of the NCM LLC Operating Agreement, subject to fulfilling the requirements of Section 3.1 of the NCM LLC Operating Agreement.

AMC will continue to participate in the annual Common Unit Adjustment and receive available cash distributions or allocation of earnings and losses in NCM LLC (as long as its ownership in NCM LLC is greater than zero) and theater access fees.

Further, AMC will continue to pay beverage revenue, among other things, to NCM LLC.

AMC’s ownership percentage does not impact future integration payments and other encumbered theater payments owed to NCM LLC by AMC.

As of December 28, 2023, AMC’s ownership was 0.0 % of NCM LLC and NCM, Inc.

Cinemark has owned less than 5 % of NCM LLC, on an as converted basis, since NCM LLC emerged from bankruptcy on August 7, 2023 and is no longer a related party.

Cinemark remains a party to the ESA, Common Unit Adjustment Agreement and certain other original agreements and is a member under the terms of the NCM LLC Operating Agreement, subject to fulfilling the requirements of Section 3.1 of the NCM LLC Operating Agreement.

Cinemark will continue to participate in the annual Common Unit Adjustment and receive available cash distributions or allocation of earnings and losses in NCM LLC (as long as its ownership in NCM LLC is greater than zero) and theater access fees.

Further, Cinemark will continue to pay beverage revenue, among other things, to NCM LLC.

Cinemark’s ownership percentage does not impact future integration payments and other encumbered theater payments owed to NCM LLC by Cinemark.

As of December 28, 2023, Cinemark’s ownership was 4.5 % of NCM, Inc.

and 0.0 % of NCM LLC.

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On June 3, 2023, NCM LLC entered into the Regal Advertising Agreement and Regal Termination Agreement which became effective on July 14, 2023.

Pursuant to the Regal Termination Agreement, Regal rejected and terminated its ESA with NCM LLC.

Additionally Regal and Regal’s affiliates’ waived all rights and interests as to the TRA, 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 the NCM LLC Operating Agreement and the Company and NCM LLC, and Regal and Regal’s affiliates waived and released claims against the other party.

Regal also agreed to support NCM LLC’s Plan and surrendered all 4,068,381 shares in the Company, totaling $ 13.0 million, upon the effective date of the Plan.

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.

Subsequent to July 14, 2023, Regal is no longer an ESA Party or related party to NCM, Inc.

The material agreements with the ESA Parties are as follows:

Under the ESAs, NCM LLC is the exclusive provider within the United States of advertising services in the ESA Parties’ theaters (subject to pre-existing contractual obligations and other limited exceptions for the benefit of the ESA Parties).

The advertising services include the use of the DCN equipment required to deliver the on-screen advertising and other content included in The Noovie® Show, use of the LEN and rights to sell and display certain lobby promotions.

Further, 30 to 60 seconds of advertising included in the Noovie show is sold to the founding members to satisfy the founding members’ on-screen advertising commitments under their beverage concessionaire agreements.

In consideration for access to the founding members’ theaters, theater patrons, the network equipment required to display on-screen and LEN video advertising and the use of theaters for lobby promotions, the founding members receive a monthly theater access fee.

Further, 30 to 60 seconds of advertising included in The Noovie Show is sold to the ESA Parties to satisfy the ESA Parties’ on-screen advertising commitments under their beverage concessionaire agreements.

In consideration for access to the ESA Parties’ theaters, theater patrons, the network equipment required to display on-screen and LEN video advertising and the use of theaters for lobby promotions, the ESA Parties receive a monthly theater access fee.

In conjunction with the 2019 ESA Amendments, NCM LLC also pays Cinemark and Regal incremental monthly theater access fees and, subject to NCM LLC's use of specified inventory, a revenue share in consideration for NCM LLC's access to certain on-screen advertising inventory after the advertised showtime of a feature film beginning November 1, 2019 and the underlying term of the ESAs were extended until 2041.

The ESAs and 2019 ESA Amendments are considered leases with related parties under ASC 842.

As described above, the Regal ESA was rejected by Regal in connection with Regal’s Chapter 11 case and terminated by the Regal Termination Agreement.

• Common Unit Adjustment Agreement.

The common unit adjustment agreement provides a mechanism for increasing or decreasing the membership units held by the founding members based on the acquisition or

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construction of new theaters or sale of theaters that are operated by each founding member and included in NCM LLC’s network.

The Common Unit Adjustment Agreement provides a mechanism for increasing or decreasing the membership units held by the ESA Parties based on the acquisition or construction of new theaters or sale of theaters that are operated by each ESA Party and included in NCM LLC’s network.

• Tax Receivable Agreement.

The TRA provides for the effective payment by NCM, Inc.

to the founding members of 90 % of the amount of cash savings, if any, in U.S.

to the ESA Parties of 90 % of the amount of cash savings, if any, in U.S.

federal, state and local income tax or franchise tax that is actually realized as a result of certain increases in NCM, Inc.’s proportionate share of tax basis in NCM LLC’s tangible and intangible assets resulting from the IPO and related transactions.

• Software License Agreement.

At the date of the Company’s IPO, NCM LLC was granted a perpetual, royalty-free license from the founding members to use certain proprietary software that existed at the time for the delivery of digital advertising and other content through the DCN to screens in the U.S.

NCM LLC has made improvements to this software since the IPO date and NCM LLC owns those improvements, except for improvements that were developed jointly by NCM LLC and the founding members, if any.

Following is a summary of the related party transactions between the Company and the founding members (in millions):

At the date of the Company’s IPO, NCM LLC was granted a perpetual, royalty-free license from the ESA Parties to use certain proprietary software that existed at the time for the delivery of digital advertising and other content through the DCN to screens in the U.S.

NCM LLC has made improvements to this software since the IPO date and NCM LLC owns those improvements, except for improvements that were developed jointly by NCM LLC and the ESA Parties, if any.

Following is a summary of the related party transactions between the Company and the ESA Parties (in millions):

Included in the Consolidated Statements of Operations:

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advertising revenue) (2)

Management fee reimbursement (3)

Operating expenses:

Theater access fee and revenue share to founding members (2)

ESA theater access fee and revenue share (4)

$ 16.5 $ 59.4

Selling and marketing costs (5)

Advertising operating costs (3)

(1) For the full years ended December 29, 2022 and December 30, 2021, Regal and Cinemark purchased 60 seconds of on-screen advertising time (all three founding members having a right to purchase up to 90 seconds ) from NCM LLC to satisfy their obligations under their beverage concessionaire agreements at a 30 second equivalent CPM rate specified by the ESA.

(2) Comprised of payments per theater attendee, payments per digital screen with respect to the founding member theaters included in the Company’s network, payments for access to higher quality digital cinema equipment and payments to Cinemark and Regal for their portion of the Platinum Spot revenue for the utilization of the theaters post-showtime in accordance with the 2019 ESA Amendments.

(3) Includes purchase of movie tickets, concession products, rental of theater space primarily for marketing to NCM LLC’s advertising clients and other payments made to the founding members in the ordinary course of business.

(1) For the year ended December 28, 2023 there was no related party activity subsequent to the deconsolidation of NCM LLC on April 11, 2023 for AMC, Cinemark and Regal as they were not considered related parties of NCM, Inc.

nor was there any activity following the reconsolidation of NCM LLC on August 7, 2023, as AMC, Cinemark and Regal were no longer considered related parties.

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(2) For the full years ended December 28, 2023 and December 29, 2022, Regal and Cinemark purchased 60 seconds of on-screen advertising time (all three ESA Parties having a right to purchase up to 90 seconds ) from NCM LLC to satisfy their obligations under their beverage concessionaire agreements at a 30 second equivalent CPM rate specified by the ESA.

(3) Comprised of payments from NCM LLC to NCM, Inc.

for managing NCM LLC during the period where NCM LLC was deconsolidated of April 11, 2023 through August 7, 2023.

(4) Comprised of payments per theater attendee, payments per digital screen with respect to the ESA Party theaters included in the Company’s network, payments for access to higher quality digital cinema equipment and payments to Cinemark and Regal for their portion of the Platinum Spot revenue for the utilization of the theaters post-showtime in accordance with the 2019 ESA Amendments.

(5) Includes purchase of movie tickets, concession products, rental of theater space primarily for marketing to NCM LLC’s advertising clients and other payments made to the ESA Parties in the ordinary course of business.

Included in the Consolidated Balance Sheets:

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intangible assets) (1)

$ 312.2 $ 332.4

Current payable to founding members under the TRA (2)

Long-term payable to founding members under the TRA (2)

$ 25.5 $ 11.9

Current payable under the TRA (2)

Long-term payable under the TRA (2)

(1) Refer to Note 6— Intangible Assets for further information on common unit adjustments and integration payments.

This balance includes common unit adjustments issued to Cinemark and Regal.

(2) The Company paid Cinemark and Regal $ 0.2 million and $ 0.4 million, respectively, in payments pursuant to the TRA during 2021 which was for the 2019 tax year.

NCM LLC has made improvements to this software since the IPO date and NCM LLC owns those improvements, except for improvements that were developed jointly by NCM LLC and the founding members, if any.

Pursuant to the terms of the NCM LLC Operating Agreement in place since the completion of the IPO, NCM LLC is required to make mandatory distributions on a proportionate basis to its members of available cash, as defined in the NCM LLC Operating Agreement, on a quarterly basis in arrears, contingent upon the Company's compliance with the covenants outlined

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within the Credit Agreement Amendment, as amended, defined within Note 10—Borrowings.

The portion of positive available cash due to founding members is accrued within the “Amounts due to founding members, net” on the audited Consolidated Balance Sheet.

The positive available cash from NCM LLC for the years ended December 29, 2022 and December 30, 2021 were as follows (in millions):

As Cinemark and Regal are no longer related parties, there are no related party balances to reflect as of December 28, 2023.

(2) NCM, Inc.

paid Cinemark and Regal $ 0.0 million and $ 0.0 million during the year ended December 28, 2023 and December 29, 2022, respectively, in payments pursuant to the TRA for the 2022 or 2021 tax years.

As Cinemark and Regal are no longer related parties, there are no related party balances to reflect as of December 28, 2023.

NCM LLC has made improvements to this software since the IPO date and NCM LLC owns those improvements, except for improvements that were developed jointly by NCM LLC and the ESA Parties, if any.

The portion of positive available cash due to ESA Parties is accrued within the “Amounts due to ESA Parties, net” on the audited Consolidated Balance Sheet.

As Cinemark and Regal are no longer related parties, there are no related party balances to reflect as of December 28, 2023.

The positive available cash from NCM LLC for the three months ended December 28, 2023 and December 29, 2022 were as follows (in millions):

Three Months Ended

December 28, 2023 December 29, 2022

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Total $ 30.3 $ 19.3

Due to the adverse impacts of the COVID-19 Pandemic on the Company’s operations, the Company generated negative available cash by NCM LLC to its related party founding members and NCM, Inc.

for the nine months ended September 29, 2022 of $ 39.4 million (including negative $ 10.5 million for Cinemark, negative $ 9.3 million for Regal and negative $ 19.6 million for NCM, Inc.) and $ 93.7 million (including negative $ 24.3 million for Cinemark, negative $ 24.2 million for Regal and negative $ 45.2 million for NCM, Inc.) for the year ended December 30, 2021.

Under the terms of the NCM LLC Operating Agreement, these negative amounts and the positive amounts above will be netted against each other and future positive available cash distributions after the Extended Covenant Waiver Holiday, contingent upon the Company's compliance with the Credit Agreement Second Amendment and the Credit Agreement Third Amendment defined within Note 10—Borrowings.

Amounts due to founding members, net as of December 29, 2022 were comprised of the following (in millions):

Cinemark Regal Total

Theater access fees and revenue share, net of beverage revenues

and other encumbered theater payments $ 11.1 $ 4.1 $ 15.2

Total amounts due to founding members, net $ 11.1 $ 4.1 $ 15.2

Amounts due to founding members, net as of December 30, 2021 were comprised of the following (in millions):

The Company generated negative available cash by NCM LLC to its related party ESA Parties and NCM, Inc.

for the nine months ended September 28, 2023 of $ 50.6 million (including $ 0.0 million for Cinemark, $ 0.0 million for Regal and $ 50.6 million for NCM, Inc.) and $ 39.4 million (including negative $ 10.5 million for Cinemark, negative $ 9.3 million for Regal and negative $ 19.6 million for NCM, Inc.) for the year ended December 29, 2022.

Under the terms of the NCM LLC Operating Agreement, these negative amounts and the positive amounts above will be netted against each other and future positive available cash distributions.

For the year ended December 28, 2023 there was no related party activity subsequent to the deconsolidation of NCM LLC on April 11, 2023 for AMC, Cinemark and Regal as they were not considered related parties of NCM, Inc.

nor was there any activity following the reconsolidation of NCM LLC on August 7, 2023, as AMC, Cinemark and Regal were no longer

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considered related parties.

Amounts due to ESA Parties, net as of December 29, 2022 were comprised of the following (in millions):

Cinemark Regal Total

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and other encumbered theater payments $ 11.1 $ 4.1 $ 15.2

Total amounts due to founding members, net $ 5.1 $ 6.3 $ 11.4

Common Unit Membership Redemption — The NCM LLC Operating Agreement provides a redemption right of the founding members to exchange common membership units of NCM LLC for shares of the Company’s common stock on a one -for-one basis, or at the Company’s option, a cash payment based on the three -day variable weighted average closing price of NCM, Inc.’s common stock prior to the redemption date.

AC JV, LLC Transactions —In December 2013, NCM LLC sold its Fathom Events business to a newly formed limited liability company, AC JV, LLC, owned 32 % by each of the founding members and 4 % by NCM LLC.

The Company accounts for its investment in AC JV, LLC under the equity method of accounting in accordance with ASC 323-30, Investments—Equity Method and Joint Ventures (“ASC 323-30”) because AC JV, LLC is a limited liability company with the characteristics of a limited partnership and ASC 323-30 requires the use of equity method accounting unless the Company’s interest is so minor that it would have virtually no influence over partnership operating and financial policies.

Total amounts due to ESA Parties, net $ 11.1 $ 4.1 $ 15.2

Common Unit Membership Redemption — The NCM LLC Operating Agreement provides a redemption right of the ESA Parties to exchange common membership units of NCM LLC for shares of the Company’s common stock on a one -for- one basis, or at the Company’s option, a cash payment based on the three -day variable weighted average closing price of NCM, Inc.’s common stock prior to the redemption date.

AC JV, LLC Transactions —The Company accounts for its investment in AC JV, LLC under the equity method of accounting in accordance with ASC 323-30, Investments—Equity Method and Joint Ventures (“ASC 323-30”) because AC JV, LLC is a limited liability company with the characteristics of a limited partnership and ASC 323-30 requires the use of equity method accounting unless the Company’s interest is so minor that it would have virtually no influence over partnership operating and financial policies.

Although NCM LLC does not have a representative on AC JV, LLC’s Board of Directors or any voting, consent or blocking rights with respect to the governance or operations of AC JV, LLC, the Company concluded that its interest was more than minor under the accounting guidance.

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The commencement of the Chapter 11 Case constituted an event of default and caused the automatic and immediate acceleration of all debt outstanding under or in respect of, NCM LLC’s Credit Agreements and senior notes.

However, any efforts to enforce payment obligations under the debt agreements are automatically stayed as a result of the filing of the Chapter 11 Case, and the creditors’ rights of enforcement in respect of the debt agreements are subject to the applicable provisions of

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the Bankruptcy Code.

As of August 7, 2023, upon emergence from bankruptcy, all historical debt of NCM LLC was discharged and the historical credit agreements were terminated.

The following table summarizes NCM LLC’s total outstanding debt as of December 28, 2023 and December 29, 2022 and the significant terms of its borrowing arrangements:

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Borrowings ($ in millions) December 28, 2023 December 29, 2022 Maturity Date Interest Rate

Revolving credit facility 2023 $ 10.0 $ — August 7, 2026 (1)

Revolving credit facility 2018 — 167.0 June 20, 2023 (1)

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(1) The interest rates on the revolving credit facility and term loan are described below.

Senior Secured Credit Facility —NCM LLC’s credit agreement, as amended, (the “Credit Agreement”) consists of a term loan facility and a revolving credit facility.

As of December 29, 2022, NCM LLC’s senior secured credit facility consisted of a $ 175.0 million revolving credit facility, a $ 258.5 million term loan (first tranche) and a $ 49.3 million term loan (second tranche).

The obligations under the senior secured credit facility are secured by a lien on substantially all of the assets of NCM LLC.

Loan, Security and Guarantee Agreement – 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,

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and is secured by a lien on substantially all of assets of NCM LLC.

The maximum availability NCM LLC has access to under the Revolving Credit Facility 2023 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 thirty (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 28, 2023.

The Revolving Credit Facility 2023 also contains customary representations, warranties, covenants, events of default, terms and conditions, including limitations on liens, incurrence of debt, mergers and significant asset dispositions.

As of December 28, 2023, NCM LLC’s maximum availability under the $ 55.0 million Revolving Credit Facility 2023 was $ 44.4 million, net of $ 10.0 million outstanding and net letters of credit of $ 0.6 million.

The weighted-average interest rate on the Revolving Credit Facility 2023 as of December 28, 2023 was 9.2 %.

Upon execution of the Revolving Credit Facility 2023, NCM LLC recorded $ 2.4 million as debt issuance costs and received $ 9.1 million in proceeds.

The Revolving Credit Facility 2023 contains a number of covenants and financial ratio requirements, with which NCM LLC was in compliance at December 28, 2023, including maintaining a fixed charge coverage ratio in excess of 1.1 to 1.0 on a monthly basis while maintaining availability in excess of either (i) $ 8.25 million or (ii) 15.0 % of the aggregate revolver commitments (the “availability thresholds”).

NCM LLC is permitted to make quarterly dividend payments and other payments based on the fixed charge coverage ratio and availability thresholds so long as no default or event of default has occurred and continues to occur.

Dividend payments and other distributions are made if the fixed charge coverage ratio is in excess of 1.1 to 1.0 and availability, after the distribution, is in compliance with the availability thresholds.

There are no borrower distribution restrictions as long as NCM LLC’s fixed coverage ratio is 1.1 to 1.0 , NCM LLC maintains availability under the availability thresholds and NCM LLC is in compliance with its debt covenants.

If there are borrower distribution restrictions on the payments, NCM LLC may not declare or pay any dividends, or make any payments on account of NCM LLC or make any other distribution for obligations of NCM LLC.

When these restrictions are effective, NCM LLC may still pay the services fee and reimbursable costs pursuant to terms of a management services agreement, between NCM, Inc.

and NCM LLC, in exchange for NCM, Inc.

providing specified management services to NCM LLC.

NCM LLC can also make payments pursuant to the Common Unit Adjustment Agreement and Tax Receivable Agreement in the amount, and at the time necessary to satisfy the contractual obligations with respect to the actual cash tax benefits payable to NCM LLC’s founding members.

As of December 28, 2023, the NCM LLC’s fixed charge coverage ratio was 54.2 to 1.0 (versus the required ratio of 1.1 to 1.0 ) and had availability under the Revolving Credit Facility 2023 of $ 44.4 million (versus the applicable availability threshold of $ 8.25 million).

As of December 28, 2023, NCM LLC was in compliance with the financial covenants of the Revolving Credit Facility 2023 described above.

Senior Secured Credit Facility —NCM LLC’s credit agreement, as amended, (the “Credit Agreement”) consisted of a term loan facility and a revolving credit facility.

As of August 7, 2023, upon emergence from bankruptcy, all outstanding debt under the Credit Agreement was discharged and the Credit Agreement was terminated.

On March 8, 2021, NCM LLC entered into a second amendment to its Credit Agreement (“Credit Agreement Second Amendment”).

Among other things, the Credit Agreement Second Amendment provides for certain modifications to the negative covenants, with respect to NCM LLC’s audited financial statements for the fiscal year ended December 31, 2020, a waiver of the requirement to deliver such financial statements without a “going concern” or like qualification or exception, additional waivers and term changes outlined below and grants security interests in certain assets of NCM LLC and other potential loan parties that are not currently pledged to the lenders.

Among other things, the Credit Agreement Second Amendment provided for certain modifications to the negative covenants, additional waivers and term changes outlined below and granted security interests in certain assets of NCM LLC and other potential loan parties that were not then pledged to the lenders.

In addition, pursuant to the Credit Agreement Second Amendment, NCM LLC incurred a second tranche of the term loans in an aggregate principal amount of $ 50.0 million, the net proceeds of $ 43.0 million to be used for general corporate purposes.

Upon execution of the Credit Agreement Second Amendment, the Company recorded $ 2.3 million as a discount, $ 3.9 million as debt issuance costs and $ 0.8 million within “Loss on modification and retirement of debt, net”.

Given the uncertainty of the resolution of the Chapter 11 Case, conditions may change, which could result in impairment of any discounts or debt issuance costs in future periods.

On January 5, 2022, NCM LLC entered into the Credit Agreement Third Amendment to its Credit Agreement, dated as of June 20, 2018, among NCM LLC, the several banks and other financial institutions or entities from time to time parties thereto, and JPMorgan Chase Bank, N.A., as administrative agent, as previously amended.

Among other things, the Credit Agreement Third Amendment provides for:

On January 5, 2022, NCM LLC entered into a third amendment to its Credit Agreement (“Credit Agreement Third Amendment”).

Among other things, the Credit Agreement Third Amendment provided for:

(i) certain modifications to and extensions to modifications of the affirmative and negative covenants therein;

(ii) the suspension of the consolidated net total leverage and consolidated net senior secured leverage financial covenants through the fiscal quarter ending December 29, 2022 and (iii) the consolidated net total leverage ratio and consolidated net senior secured leverage ratio financial covenants to be set to 9.25 to 1.00 and 7.25 to 1.00 , respectively, for the fiscal quarter ending on or about March 30, 2023, 8.50 to 1.00 and 6.50 to 1.00 , respectively, for the fiscal quarter ending on or about June 29, 2023, 8.00 to 1.00 and 6.00 to 1.00 , respectively, for the fiscal quarter ending on or about September 28, 2023, and 6.25 to 1.00 and 4.50 to 1.00 , respectively, for the fiscal quarter ending on or about December 28, 2023 and each fiscal quarter thereafter.

The senior secured credit facility contains a number of covenants and financial ratio requirements, including (i) a consolidated net total leverage ratio covenant of 6.25 times for each for each quarterly period and (ii) with respect to the revolving credit facility, maintaining a consolidated net senior secured leverage ratio of equal to or less than 4.50 times on a quarterly basis for each quarterly period in which a balance is outstanding on the revolving credit facility, each of which has been modified by the Credit Agreement Third Amendment.

Pursuant to the terms of the Credit Agreement Third Amendment,

(ii) the suspension of the consolidated net total leverage and consolidated net senior secured leverage financial covenants through the fiscal quarter ending December 29, 2022;

and (iii) changes to the consolidated net total leverage ratio and consolidated net senior secured leverage ratio financial covenants.

Upon execution of the Credit Agreement Third Amendment, $ 6.4 million was recorded as debt issuance costs and $ 0.4 million was recorded within “Loss on modification and retirement of debt, net” during the year ended December 29, 2022.

Term Loans — First Tranche —The interest rate on the initial tranche of term loans was originally a rate chosen at NCM LLC’s option of either the LIBOR index plus 4.00 % or the base rate plus 3.00 %.

The rate increased from LIBOR index plus

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NCM LLC is restricted from making available cash distributions until after NCM LLC delivers a compliance certificate for the quarter ending on or about December 28, 2023, and, thereafter, NCM LLC may only make available cash distributions if:

(i) no default or event of default under the Credit Agreement has occurred and is continuing;

(ii) the consolidated net senior secured leverage ratio is equal to or less than 4.00 to 1.00 ;

and (iii) the aggregate principal amount of all outstanding revolving loans under the Credit Agreement is $ 39.0 million or less.

As of December 29, 2022, NCM LLC was in compliance with the financial requirements of the Credit Agreement Third Amendment described above.

The rate increased from LIBOR index plus 2.75 % or the base rate plus 1.75 %.

The interest rate on the term loans as of December 29, 2022 was 8.44 %.

The term loans amortize at a rate equal to 1.00 % annually, to be paid in equal quarterly installments.

As of December 29, 2022, NCM LLC has paid principal of $ 11.5 million, reducing the outstanding balance to $ 258.5 million.

Term Loans — Second Tranche —The interest rate on the second tranche of term loans is the LIBOR index plus 8.00 %.

The interest rate on the term loans as of December 29, 2022 was 12.44 %.

The term loans amortize at a rate equal to 1.00 % annually, to be paid in equal quarterly installments.

As of December 29, 2022, NCM LLC has paid principal of $ 0.7 million, reducing the outstanding balance to $ 49.3 million.

Revolving Credit Facility 2018 —The revolving credit facility portion of NCM LLC’s total borrowings 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.

As of December 29, 2022, NCM LLC’s total availability under the $ 175.0 million revolving credit facility was $ 7.2 million, net of $ 167.0 million outstanding and $ 0.8 million letters of credit.

The unused line fee is 0.50 % per annum which is consistent with the previous facility.

Borrowings under the revolving credit facility bear interest at NCM LLC’s option of either the LIBOR index plus an applicable margin ranging from 3.00 % to 3.50 % or the base rate plus an applicable margin ranging from 2.00 % to 2.50 %.

2.75 % or the base rate plus 1.75 %.

The term loans amortized at a rate equal to 1.00 % annually, paid in equal quarterly installments.

As of August 7, 2023, upon emergence from bankruptcy, all outstanding debt under the Credit Agreement, including the terms loans, was discharged and the Credit Agreement was terminated.

Term Loans — Second Tranche —The interest rate on the second tranche of term loans was the LIBOR index plus 8.00 %.

The term loans amortized at a rate equal to 1.00 % annually, paid in equal quarterly installments.

As of August 7, 2023, upon emergence from bankruptcy, all outstanding debt under the Credit Agreement, including the term loans, was discharged and the Credit Agreement was terminated.

Revolving Credit Facility 2018 —The revolving credit facility portion of NCM LLC’s senior secured credit facility 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 Credit Agreement, and a portion was available for letters of credit.

During March 2020, NCM LLC drew down an additional $ 110.0 million on the revolving credit facility to fund operations during the period of expected disrupted cash flows due to the temporary closure of the theaters within NCM LLC’s network due to the COVID-19 Pandemic.

As of August 7, 2023, upon emergence from bankruptcy, all outstanding debt under the Credit Agreement, including borrowings under the revolving credit facility, was discharged and the Credit Agreement was terminated.

The unused line fee was 0.50 % per annum which was consistent with the previous facility.

Borrowings under the revolving credit facility accrued interest at NCM LLC’s option of either the LIBOR index plus an applicable margin ranging from 3.00 % to 3.50 % or the base rate plus an applicable margin ranging from 2.00 % to 2.50 %.

The margin changed to the aforementioned range from a fixed margin of LIBOR index plus 2.00 % or the base rate plus 1.00 %.

The applicable margin for the revolving credit facility is determined quarterly and is subject to adjustment based upon a consolidated net senior secured leverage ratio for NCM LLC (the ratio of secured funded debt less unrestricted cash and cash equivalents of up to $ 100.0 million, divided by Adjusted EBITDA for debt purposes, defined as NCM LLC's net income before depreciation and amortization expense adjusted to also exclude non-cash share-based compensation costs for NCM LLC plus integration payments received).

The revolving credit facility will mature on June 20, 2023.

The weighted-average interest rate on the outstanding balance on the revolving credit facility as of December 29, 2022 was 8.03 %.

Revolving Credit Facility 2022 —On January 5, 2022, NCM LLC also entered into the Revolving Credit Agreement 2022 among NCM LLC, the lenders party thereto and Wilmington Savings Fund Society, FSB, as administrative agent and collateral agent.

The Revolving Credit Agreement 2022 provides for revolving loan commitments of $ 50.0 million of secured revolving loans, the entire amount of which was funded on January 5, 2022.

The Revolving Credit Agreement 2022 provides for (i) a cash interest rate of term SOFR plus 8.00 %, with a 1.00 % floor, (ii) a maturity date of June 20, 2023 and (iii) a termination premium if NCM LLC terminates the commitments under the Revolving Credit Agreement 2022 at any time before maturity.

The Revolving Credit Agreement 2022 also contains covenants, representations and warranties and events of default that are substantially similar to the Credit Agreement.

As of December 29, 2022, NCM LLC’s total availability under the $ 50.0 million revolving credit facility was $ 0.0 million.

The weighted-average interest rate on the revolving credit facility as of December 29, 2022 was 12.43 % As of December 29, 2022, NCM LLC was in compliance with the financial requirements of the Credit Agreement Third Amendment described above.

Senior Unsecured Notes due 2026 —On August 19, 2016, NCM LLC completed a private placement of $ 250.0 million in aggregate principal amount of 5.750 % Senior Unsecured Notes due 2026 (the “Notes due 2026”) for which the registered exchange offering was completed on November 8, 2016.

The Notes due 2026 pay interest semi-annually in arrears on February 15 and August 15 of each year, which commenced on February 15, 2017.

The Notes due 2026 were issued at 100 % of the face amount thereof and are the senior unsecured obligations of NCM LLC and will be effectively subordinated to all existing and future secured debt, including the Notes due 2028, its senior secured credit facility and any future asset backed loan facility.

The Notes due 2026 will rank equally in right of payment with all of NCM LLC’s existing and future senior indebtedness, including the Notes due 2028, NCM LLC’s existing senior secured credit facility, any future asset backed loan facility, in each case, without giving effect to collateral arrangements.

The Notes due 2026 will be effectively subordinated to all liabilities of any subsidiaries that NCM LLC may form or acquire in the future, unless those subsidiaries become guarantors of the Notes due 2026.

NCM LLC does not currently have any subsidiaries, and the Notes due 2026 will not be guaranteed by any subsidiaries that NCM LLC may form or acquire in the future except in very limited circumstances.

NCM LLC may redeem all or any portion of the Notes due 2026, at once or over time, on or after August 15, 2021 at specified redemption prices, plus accrued and unpaid interest, if any, to the redemption date.

In addition, at any time prior to August 15, 2019, NCM LLC may on any one or more occasions redeem up to 35% of the original aggregate principal amount of Notes due 2026 from the net proceeds of certain equity offerings at a redemption price equal to 105.750% of the principal

The applicable margin for the revolving credit facility was determined quarterly and was subject to adjustment based upon a consolidated net senior secured leverage ratio for NCM LLC (the ratio of secured funded debt less unrestricted cash and cash equivalents of up to $ 100.0 million, divided by Adjusted EBITDA for debt purposes, defined as NCM LLC’s net income before depreciation and amortization expense adjusted to also exclude non-cash share based compensation costs for NCM LLC plus integration payments received).

Revolving Credit Facility 2022 —On January 5, 2022, NCM LLC entered into a revolving credit agreement (the “Revolving Credit Agreement 2022”).

The Revolving Credit Agreement 2022 provided for revolving loan commitments of $ 50.0 million of secured revolving loans, the entire amount of which was funded on January 5, 2022.

As of August 7, 2023, upon emergence from bankruptcy, all outstanding debt under the Revolving Credit Agreement 2022 was discharged and the Revolving Credit Agreement 2022 was terminated.

The Revolving Credit Agreement 2022 provided for (i) a cash interest rate of term Secured Overnight Financing Rate (SOFR) plus 8.00 %, with a 1.00 % floor, (ii) a maturity date of June 20, 2023 and (iii) a termination premium if NCM LLC terminated the commitments under the Revolving Credit Agreement 2022 at any time before maturity.

Senior Unsecured Notes due 2026 —On August 19, 2016, NCM LLC completed a private placement of $ 250.0 million in aggregate principal amount of 5.750 % Senior Unsecured Notes (the “Notes due 2026”) for which the registered exchange offering was completed on November 8, 2016.

The Notes due 2026 paid interest semi-annually in arrears on February 15 and August 15 of each year, which commenced on February 15, 2017.

The Notes due 2026 were issued at 100 % of the face amount thereof and were the senior unsecured obligations of NCM LLC.

As of August 7, 2023, upon emergence from bankruptcy, all outstanding debt under the Notes due 2026 was discharged and the Notes due 2026 were terminated, following $ 10.0 million made in cure payments.

Senior Secured Notes due 2028 —On October 8, 2019, NCM LLC completed a private offering of $ 400.0 million aggregate principal amount of 5.875 % Senior Secured Notes due 2028 (the “Notes due 2028”) to eligible purchasers.

Interest on the Notes due 2028 accrued at a rate of 5.875 % per annum and was payable semi-annually in arrears on April 15 and October 15 of each year, commencing on April 15, 2020.

The Notes due 2028 were issued at 100 % of the face amount thereof and shared in the same collateral that secured NCM LLC’s obligations under the senior secured credit facility.

As of August 7, 2023, upon emergence from bankruptcy, all outstanding debt under the Notes due 2028 was discharged and the Notes due 2028 were terminated.

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amount of the Notes due 2026 redeemed, plus accrued and unpaid interest, if any to the redemption date.

Upon the occurrence of a Change of Control (as defined in the indenture), NCM LLC will be required to make an offer to each holder of the Notes due 2026 to repurchase all of such holder’s Notes due 2026 for a cash payment equal to 101.000 % of the aggregate principal amount of the Notes due 2026 repurchased, plus accrued and unpaid interest, if any, to the date of repurchase.

The indenture contains covenants that, among other things, restrict NCM LLC’s ability and the ability of its restricted subsidiaries, if any, to:

(1) incur additional debt;

(2) make distributions or make certain other restricted payments;

(3) make investments;

(4) incur liens;

(5) sell assets or merge with or into other companies;

and (6) enter into transactions with affiliates.

All of these restrictive covenants are subject to a number of important exceptions and qualifications.

In particular, NCM LLC has the ability to distribute all of its quarterly available cash as a restricted payment or as an investment, if it meets a minimum net senior secured leverage ratio.

NCM LLC was in compliance with the financial requirements of the Notes due 2026 as of December 29, 2022.

The Notes due 2028 will mature on April 15, 2028.

Interest on the Notes due 2028 accrues at a rate of 5.875 % per annum and is payable semi-annually in arrears on April 15 and October 15 of each year, commencing on April 15, 2020.

In the year ended December 29, 2022, NCM, Inc.

purchased $ 25.8 million of the Notes due 2028 on the open market, reducing the principal amount owed by NCM LLC to third parties to $ 374.2 million as of December 29, 2022 and resulting in a $ 6.0 million gain on extinguishment of debt in the year ended December 29, 2022.

NCM LLC may redeem all or any portion of the Notes due 2028 prior to April 15, 2023, at a redemption price equal to 100 % of the principal amount plus the applicable premium, plus accrued and unpaid interest, if any, to the redemption date.

NCM LLC may redeem all or any portion of the Notes due 2028, on or after April 15, 2023, at specified redemption prices, plus accrued and unpaid interest, if any, to the redemption date.

In addition, at any time prior to April 15, 2023, NCM LLC may on any one or more occasions redeem up to 35 % of the original aggregate principal amount of the Notes due 2028 from the net proceeds of certain equity offerings at a redemption price equal to 105.875 % of the principal amount of the Notes due 2028 redeemed, plus accrued and unpaid interest, if any, to the redemption date, provided that at least 65 % of the original aggregate principal amount of the Notes due 2028 remains outstanding after each such redemption and the redemption occurs within 90 days after the closing of such applicable equity offering.

The Indenture contains covenants that, among other things, restrict NCM LLC’s ability and the ability of its restricted subsidiaries, if any, to:

(1) incur additional debt;

(2) make distributions or make certain other restricted payments;

(3) make certain investments;

(4) incur certain liens;

(5) sell assets or merge with or into other companies;

and (6) enter into transactions with affiliates.

All of these restrictive covenants are subject to a number of important exceptions and qualifications.

In particular, NCM LLC may distribute all of its quarterly available cash as a restricted payment or as an investment, provided that NCM LLC satisfies a minimum net senior secured leverage ratio.

As of December 29, 2022, NCM LLC was in compliance with the financial requirements of the Notes due 2028, as described above.

Future Maturities of Borrowings – The scheduled annual maturities on the Senior Secured Credit Facility, Notes due 2026 and Notes due 2028 as of December 29, 2022 are as follows (in millions):

2023 $ 1,129.0

Total $ 1,129.0

Future Maturities of Borrowings – The scheduled annual maturities on the Revolving Credit Facility 2023 as of December 28, 2023 are as follows (in millions):

SHARE-BASED COMPENSATION

The NCM, Inc.

2020 Omnibus Equity Incentive Plan (the “2020 Plan”) was approved by NCM, Inc.'s stockholders on April 28, 2020 and approved 7,500,000 shares of common stock available for issuance or delivery under the 2020 Plan and an additional 7,500,000 shares of common stock available for issuance or delivery approved on May 4, 2022.

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 2020 Plan to 1,500,000 .

NCM, Inc.'s stockholders approved an additional 12,000,000 shares of common stock available for issuance or delivery under the 2020 Plan on November 2, 2023.

The Company began issuing shares under the 2020 Plan in the second quarter of 2020.

The 2020 Plan replaced NCM, Inc.’s 2016 Equity Incentive Plan (the “2016 Plan”), which replaced the 2007 Equity Incentive Plan (the “2007 Plan”).

The 2020 Plan also includes 2,388,302 shares related to the number of shares reserved for issuance under the 2016 Plan that remained available for grant as of the effective date of the 2020 Plan and the number of shares subject to awards granted under the 2007 Plan as of the effective date of the 2020 Plan, which can become available for grant again upon expiration, termination, cancellation or forfeiture of the

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original award.

As of December 28, 2023, 12,394,912 shares remain available for future grants (assuming 100 % achievement of targets on performance-based restricted stock).

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Stock Options —The Company granted stock options during 2023 and 2022.

Stock options granted in 2021 and a portion of the stock options awarded in 2022 were granted with an exercise price equal to the closing market price of NCM, Inc.

A portion of the stock options awarded in 2022 and 2023 were granted with an exercise price equal to the closing market price of NCM, Inc.

common stock on the date the Company’s Board of Directors approved the grant.

The remaining portion of stock options awarded in 2022 contained a market condition as the options were granted with an exercise price in excess of the closing market price of NCM, Inc.

The remaining portion of stock options awarded in 2022 and 2023 were

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granted with an exercise price in excess of the closing market price of NCM, Inc.

common stock on the date the Company’s Board of Directors approved the grant.

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The expected term of options granted was developed based on historical and peer company data and represents the period of time that options granted are expected to be outstanding.

The expected term of the options granted during 2022 were adjusted to include the Company's cost of equity in order to incorporate the impact of the option's market condition and simulate a lattice model.

The expected term of the options granted during 2023 and 2022 were adjusted to include the Company's cost of equity in order to incorporate the impact of the option's market condition and simulate a lattice model.

The risk-free rate for periods within the contractual life of the option is based on the U.S.

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A summary of option award activity as of December 28, 2023, and changes during the year then ended are presented below:

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Options Weighted

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Vested and expected to vest as of December 28, 2023 233,045 $ 42.59 7.3 $ —

Restricted Stock and Restricted Stock Units —Under the non-vested stock program, common stock of the Company may be granted at no cost to officers, independent directors and employees, subject to requisite service and/or financial performance targets.

Restricted Stock Units —Under the non-vested stock program, common stock of the Company may be granted at no cost to officers, independent directors and employees, subject to requisite service and/or financial performance targets.

As such restrictions lapse, the award vests in that proportion.

The participants are entitled to dividend equivalents and to vote their respective shares (in the case of restricted stock), although the sale and transfer of such shares is prohibited and the shares are subject to forfeiture during the restricted period.

Additionally, the accrued dividend equivalents are subject to forfeiture during the restricted period should the underlying shares not vest.

As of December 29, 2022 and December 30, 2021, accrued dividend equivalents totaled $ 0.8 million and $ 0.7 million, respectively and during the years ended December 29, 2022 and December 30, 2021, the Company paid $ 0.5 million and $ 1.0 million, respectively, for dividend equivalents upon vesting of the restricted stock and restricted stock units.

The Company has issued time-based restricted stock and restricted stock units to its employees which generally vest over a two or three -year period with one-half or one-third, respectively, vesting on each anniversary of the date of grant and performance-based restricted stock and restricted stock units which vest following a two or three -year measurement period to the extent that the Company achieves specified non-GAAP targets at the end of the measurement period.

The participants are entitled to dividend equivalents, although the sale and transfer of such shares is prohibited and the shares are subject to forfeiture during the restricted period.

Additionally, the accrued dividend equivalents are subject to forfeiture during the vesting period should the underlying units not vest.

As of December 28, 2023 and December 29, 2022, accrued dividend equivalents totaled $ 0.3 million and $ 0.8 million, respectively and during the years ended December 28, 2023 and December 29, 2022, the Company paid $ 0.5 million and $ 0.5 million, respectively, for dividend equivalents upon vesting of the restricted stock units.

The Company has issued time-based restricted stock units to its employees which generally vest over a two or three -year period with one-half or one-third, respectively, vesting on each anniversary of the date of grant and performance-based restricted stock units which vest following a two or three -year measurement period to the extent that the Company achieves specified non-GAAP targets at the end of the measurement period.

Certain other vesting periods have also been used.

The Company also grants restricted stock units to its non-employee directors that vest after approximately one year .

The grant date fair value of restricted stock and restricted stock units is based on the closing market price of NCM, Inc.

Non-employee directors serving on the Board as of August 18, 2023, received a one-time grant with a fair market value equal to $ 100,000 .

The RSUs will vest after four years.

The RSUs will be settled in shares of the Company’s common stock.

The RSU awards include the right to receive dividend equivalents, subject to vesting.

Additionally, non-employee directors will receive quarterly grants that vest immediately with a fair market value of $ 50,000 .

The number of shares will be determined by utilizing the weighted average closing price of the five days before and five days after the respective quarterly earnings release.

Non-employee directors may choose to elect up to 20 % of their quarterly grant in cash.

The grant date fair value of restricted stock units is based on the closing market price of NCM, Inc.

common stock on the date of grant.

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The total fair value of awards that vested during the years ended December 28, 2023 and December 29, 2022 was $ 7.1 million and $ 5.9 million, respectively.

A summary of restricted stock award and restricted stock unit activity as of December 29, 2022, and changes during the year then ended are presented below:

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A summary of restricted stock unit activity as of December 28, 2023, and changes during the year then ended are presented below:

Stock Units (1)

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Non-vested balance as of December 28, 2023 744,397 $ 10.55

(1) Includes 729,817 shares of performance-based restricted stock and restricted stock units as of December 29, 2022, including 427,231 shares granted during the year and 11,750 shares forfeited during the year.

(1) Includes 145,043 shares of performance-based restricted stock units as of December 28, 2023, including 74,560 shares granted during the year and 2,475 shares forfeited during the year.

(2) Includes 13,057 vested shares that were withheld to cover tax obligations and were subsequently canceled.

The above table reflects performance-based restricted stock granted at 100 % achievement of performance conditions and as such does not reflect the maximum or minimum number of shares of performance-based restricted stock contingently issuable.

As of December 29, 2022, the total number of restricted stock and restricted stock units that are ultimately expected to vest, after consideration of expected forfeitures and current projections of estimated vesting of performance-based restricted stock is 328,418 shares.

As of December 28, 2023, the total number of restricted stock units that are ultimately expected to vest, after consideration of expected forfeitures and current projections of estimated vesting of performance-based restricted stock is 737,232 shares.

EMPLOYEE BENEFIT PLANS

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The Company sponsors the NCM 401(k) Profit Sharing Plan (the “Plan”) under Section 401(k) of the Internal Revenue Code of 1986, as amended, for the benefit of substantially all full-time employees.

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Employee contributions are invested in various investment funds based upon election made by the employee.

In response to the COVID-19 Pandemic, the Company temporarily suspended its match of a portion of employees 401(k) contributions effective April 2020 through December 29, 2022.

In response to the COVID-19 Pandemic and Chapter 11 Case, the Company temporarily suspended its match of a portion of employees 401(k) contributions effective April 2020 through December 28, 2023.

COMMITMENTS AND CONTINGENCIES

Legal Actions —As discussed more fully in Note 16—Subsequent Events, on April 11, 2023, NCM, LLC filed a voluntary petition for reorganization with a prearranged Chapter 11 plan under Chapter 11 of the Bankruptcy Code in the Bankruptcy Court.

The Chapter 11 Case is being administered under the caption In re:

National CineMedia, LLC , Case No.

The Company will continue to act as the manager of NCM LLC, the “debtor in possession” under the jurisdiction of the Bankruptcy Court, and in accordance with the applicable provisions of the Bankruptcy Code and orders of the Bankruptcy Court.

Pursuant to “first day” motions filed with the Bankruptcy Court, the Bankruptcy Court authorized NCM LLC to conduct NCM LLC’s business activities in the ordinary course, including, among other things and subject to the terms and conditions of such orders, authorizing NCM LLC to consensually use cash collateral, pay employee wages and benefits, and pay vendors and suppliers in the ordinary course for all go forward goods and services.

NCM LLC will continue to pursue approval of a proposed plan of reorganization, which will incorporate the terms of the Restructuring Support Agreement.

NCM LLC’s normal operating cash flows are providing liquidity for the Company to operate as usual and fulfill ongoing commitments to stakeholders.

The Company is unable to predict when NCM LLC will emerge from this Chapter 11 process.

The Company is subject to claims and legal actions in the ordinary course of business.

Legal Actions —The Company is subject to claims and legal actions in the ordinary course of business.

The Company believes such claims will not have a material effect, individually and in aggregate, on its financial position, results of operations or cash flows.

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These balances are included within “Other assets”, “Other current liabilities” and “Other liabilities”, respectively, on the audited Consolidated Balance Sheets.

The Company has options on certain of these facilities to extend the lease or to terminate part or all of the leased space prior to the lease end date.

Certain leases were rejected or modified in conjunction with NCM LLC’s Chapter 11 Case and are no longer included within these balances.

The Company has options on existing facilities to extend the lease or to terminate part or all of the leased space prior to the lease end date.

Certain termination fees would be due upon exercise of the early termination options as outlined within the underlying agreements.

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As of December 28, 2023, the Company had a weighted average remaining lease term of 3.8 years on these leases.

Given the uncertainty of the resolution of the Chapter 11 Case, conditions may change, which could result in impairment of the Company’s ROU assets in future periods.

The Company has also entered into certain short-term leases with a term of less than one year.

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These costs are presented within “Selling and marketing costs” and “Administrative and other costs” within the audited Consolidated Statements of Operations depending upon the nature of the use of the facility.

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December 28, 2023 December 29, 2022

2 unchanged sentences

Total lease cost $ 3.7 $ 3.9

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The Company made lease payments for the year ended December 28, 2023 and December 29, 2022 of $ 3.6 million and $ 3.8 million, respectively.

These payments are included within cash flows from operating activities within the audited Consolidated Statement of Cash Flows.

The minimum lease payments under noncancellable operating leases as of December 29, 2022 were as follows (in millions):

The minimum lease payments under noncancellable operating leases, including leases executed but not yet commenced, as of December 28, 2023 were as follows (in millions):

Year Minimum Lease Payments

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As of December 28, 2023, the Company’s weighted average annual discount rate used to establish the ROU assets and lease liabilities was 6.9 %.

Operating Commitments - ESAs and Affiliate Agreements —The Company has entered into long-term ESAs with the founding members and multi-year agreements with certain network affiliates, or third-party theater circuits.

Operating Commitments - ESAs and Affiliate Agreements —The Company has entered into long-term ESAs with the ESA Parties and multi-year agreements with certain network affiliates, or third-party theater circuits.

The ESAs and network affiliate agreements grant NCM LLC exclusive rights in their theaters to sell advertising, subject to limited exceptions.

The Company recognizes intangible assets upon issuance of membership units to the founding members in accordance with NCM LLC’s Common Unit Adjustment Agreement and upfront cash payments to the affiliates for the contractual rights to provide the Company’s services within their theaters as further discussed within Note 5— Intangible Assets .

The Company recognizes intangible assets upon issuance of membership units to the ESA Parties in accordance with NCM LLC’s Common Unit Adjustment Agreement and upfront cash payments to the affiliates for the contractual rights to provide the Company’s services within their theaters as further discussed within Note 6— Intangible Assets .

These ESAs and network affiliate agreements are considered leases under ASC 842 once the asset is identified and the period of control is determined upon the scheduling of the showtimes by the exhibitors, typically one week prior to the showtime.

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No ROU assets or lease liabilities were recognized for these agreements and no change to the balance sheet presentation of the intangible assets was necessary.

In consideration for NCM LLC’s access to the founding members’ theater attendees for on-screen advertising and use of lobbies and other space within the founding members’ theaters for the LEN and lobby promotions, the founding members receive a monthly theater access fee under the ESAs.

In consideration for NCM LLC’s access to the ESA Parties’ theater attendees for on-screen advertising and use of lobbies and other space within the ESA Parties’ theaters for the LEN and lobby promotions, the ESA Parties receive a monthly theater access fee under the ESAs.

The theater access fee is composed of a fixed payment per patron, a fixed payment per digital screen (connected to the DCN) and a fee for access to higher quality digital cinema equipment.

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The payment per digital screen and for digital cinema equipment increases annually by 5 %.

The theater access fee paid in the aggregate to all founding members cannot be less than 12 % of NCM LLC’s aggregate advertising revenue (as defined in the ESA), or it will be adjusted upward to reach this minimum payment.

The theater access fee paid in the aggregate to all ESA Parties cannot be less than 12 % of NCM LLC’s aggregate advertising revenue (as defined in the ESA), or it will be adjusted upward to reach this minimum payment.

As of December 28, 2023 and December 29, 2022, the Company had no liabilities recorded for the minimum payment, as the theater access fee was in excess of the minimum.

Following the 2019 ESA Amendments, Cinemark and Regal receive an additional monthly theater access fee beginning November 1, 2019 in consideration for NCM LLC’s access to certain on-screen advertising inventory after the advertised showtime of a feature film.

Following the 2019 ESA Amendments, Cinemark and Regal (until July 14, 2023, when Regal ceased being a party to an ESA) receive an additional monthly theater access fee beginning November 1, 2019 in consideration for NCM LLC’s access to certain on-screen advertising inventory after the advertised showtime of a feature film.

These fees are also based upon a fixed payment per patron of (i) $ 0.0375 per patron beginning on November 1, 2020, (ii) $ 0.05 per patron beginning on November 1, 2021, (iii) $ 0.052 per patron beginning on November 1, 2022 and (iv) increase 8 % every five years beginning November 1, 2027.

Additionally, following the 2019 ESA Amendments, beginning on November 1, 2019, NCM LLC is entitled to display the Platinum Spot, an additional single unit that is either 30 or 60 seconds of the Noovie® show in the trailer position directly prior to the one or two trailers preceding the feature film.

In consideration for the utilization of the theaters for the Platinum Spots, Cinemark and Regal are entitled to receive 25 % of all revenue generated for the actual display of Platinum Spots in their applicable theaters, subject to a specified minimum.

If NCM LLC runs advertising in more than one concurrent advertisers’ Platinum Spot for any portion of the network over a period of time, then NCM LLC will be required to satisfy a minimum average CPM for that period of time.

The Company does not owe the founding members any theater access fees or any Platinum Spot revenue share when the theaters are not displaying the

Additionally, following the 2019 ESA Amendments, beginning on November 1, 2019, NCM LLC is entitled to display

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Company's show or when the Company does not have access to the theaters.

As such, the Company did not incur fees for the period of time the founding members' theaters were temporarily closed due to the COVID-19 Pandemic and future fees will be reduced if attendance remains lower than historical levels.

The digital screen fee is calculated based upon average screens in use during each month.

No digital screen fees were incurred for the period of time the founding member's theaters were temporarily closed due to the COVID-19 Pandemic and were reduced for months where screens were in use for only part of the month.

the Platinum Spot, an additional single unit that is either 30 or 60 seconds of The Noovie® Show in the trailer position directly prior to the one or two trailers preceding the feature film.

In consideration for the utilization of the theaters for the Platinum Spots, Cinemark and Regal (until July 14, 2023, when Regal ceased being a party to an ESA) are entitled to receive 25 % of all revenue generated for the actual display of Platinum Spots in their applicable theaters, subject to a specified minimum.

The network affiliates compensation is considered variable lease expense and varies by circuit depending upon the agreed upon terms of the network affiliate agreement.

The majority of agreements are centered around a revenue share where an agreed upon percentage of the advertising revenue received from a theater’s attendance is paid to the circuit.

As part of the network affiliate agreements entered into in the ordinary course of business under which the Company sells advertising for display in various network affiliate theater chains, the Company has agreed to certain minimum revenue guarantees on a per attendee basis.

If a network affiliate achieves the attendance set forth in their respective agreement, the Company has guaranteed minimum revenue for the network affiliate per attendee if such amount paid under the revenue share arrangement is less than its guaranteed amount.

If a network affiliate achieves the attendance or minimum revenue per attendee set forth in their respective agreement, the Company has guaranteed minimum revenue for the network affiliate per attendee if such amount paid under the revenue share arrangement is less than its guaranteed amount.

As of December 28, 2023, the maximum potential amount of future payments the Company could be required to make pursuant to the minimum revenue guarantees is $ 276.2 million over the remaining terms of the network affiliate agreements.

These minimum guarantees relate to various affiliate agreements ranging in term from one to fifteen years, prior to any renewal periods of which some are at the option of the Company.

These minimum guarantees relate to various affiliate agreements ranging in term from one to fourteen years, prior to any renewal periods of which some are at the option of the Company.

During the year ended December 28, 2023 and December 29, 2022 the Company paid $ 0.0 million and $ 0.0 million , respectively, related to these minimum guarantees.

12 unchanged sentences

Total $ 0.7 $ 0.9

(1) Refer to Note 9— Related Party Transactions .

(2) The Company received equity securities in privately held companies as consideration for a portion of advertising contracts.

The equity securities were accounted for under the cost method and represent an ownership of less than 20 %.

The Company does not exert significant influence on these companies’ operating or financial activities.

During the years ended December 28, 2023 and December 29, 2022, the Company recorded impairment charges of $ 0.0 million and $ 0.1 million, respectively, on certain of its investments due to new information regarding the fair value of the investee, which brought the total remaining value of the respective impaired investments to $ 0.0 million as of December 28, 2023.

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As the inputs to the determination of fair value are based upon non-identical assets and use significant unobservable inputs, they have been classified as Level 3 in the fair value hierarchy.

Borrowings —The carrying amount of the revolving credit facilities are considered a reasonable estimate of fair value due to its floating-rate terms.

As of August 7, 2023, upon emergence from bankruptcy, all historical debt of NCM LLC was discharged.

The estimated fair values of the Company’s financial instruments where carrying values did not approximate fair

NATIONAL CINEMEDIA, INC.

AND SUBSIDIARY

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Borrowings —The estimated fair values of the Company’s financial instruments where carrying values do not approximate fair value are as follows (in millions):

value are as follows (in millions):

As of December 28, 2023 As of December 29, 2022

Carrying Value Fair Value (1)

Carrying Value Fair Value Carrying Value Fair Value (1)

Revolving credit facilities $ — $ — $ 217.0 $ 58.0

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Total assets $ 1.8 $ 0.8 $ 1.0 $ —

Fair Value Measurements at

Reporting Date Using

Fair Value As of

December 30, 2021 Quoted Prices in Active Markets for Identical Assets

(Level 1) Significant Other Observable Inputs

(Level 2) Significant Unobservable Inputs

Cash equivalents (1)

$ 37.1 $ 37.1 $ — $ —

Short-term marketable securities (2)

Long-term marketable securities (2)

Total assets $ 38.4 $ 37.1 $ 1.3 $ —

(1) Cash Equivalents —The Company’s cash equivalents are carried at estimated fair value.

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Original cost of short term marketable securities is based on the specific identification method.

The Company did not recorded an allowance for credit losses for the marketable securities balance as of December 29, 2022 given the immaterial difference between the amortized cost basis and the aggregate fair value of the Company's securities.

The amortized cost basis, aggregate fair value and maturities of the marketable securities the Company held as of December 29, 2022 are as follows:

NATIONAL CINEMEDIA, INC.

AND SUBSIDIARY

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

As of December 29, 2022, there was $ 0.2 million of available-for-sale debt securities in unrealized loss positions without an allowance for credit losses.

The Company has not recorded an allowance for credit losses for the marketable securities balance as of December 29, 2022 given the immaterial difference between the amortized cost basis and the aggregate fair value of the Company's securities.

The amortized cost basis, aggregate fair value and maturities of the marketable securities the Company held as of December 29, 2022 and December 30, 2021 are as follows:

As of December 29, 2022

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Total marketable securities $ 1.0 $ 1.0

As of December 30, 2021

(in millions) Aggregate

(in millions) Maturities (1)

MARKETABLE SECURITIES:

Short-term certificates of deposit $ 0.3 $ 0.3 0.9

Total short-term marketable securities 0.3 0.3

Long-term certificates of deposit 1.0 1.0 2.0

Total long-term marketable securities 1.0 1.0

Total marketable securities $ 1.3 $ 1.3

(1) Maturities — Securities available for sale include obligations with various contractual maturity dates some of which are greater than one year.

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Balance at end of period $ 146.0 $ 245.5

(1) The increase within the valuation allowance during the years ended December 29, 2022 and December 30, 2021 relate to its deferred tax assets which the Company determined it is more-likely-than-not it will not be able to realize before they expire.

SUBSEQUENT EVENTS

Credit Agreement Amendment — Subsequent to year-end, on January 17, 2023, NCM LLC entered into (i) Credit Agreement Amendment Fourth Amendment to its Credit Agreement, dated as of June 20, 2018, among NCM LLC, the several banks and other financial institutions or entities from time to time parties thereto, and JPMorgan Chase Bank, N.A., as administrative agent, as previously amended and (ii) Revolving Credit Agreement Amendment.

The Credit Agreement

NATIONAL CINEMEDIA, INC.

AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Amendment Fourth Amendment and Revolving Credit Agreement Amendment provide for the addback of specified professional fees paid by NCM LLC during the period of January 6, 2023 through the date NCM LLC delivers a compliance certificate for the quarter ending on or about December 28, 2023, when calculating the sum of unrestricted cash on hand at NCM LLC and revolving credit facility availability under the Credit Agreement and Revolving Credit Agreement required to be maintained under each respective agreement.

On March 31, 2023, NCM LLC as the Borrower, entered into Amendment No.

5 (the “Fifth Credit Agreement Amendment”) to its Credit Agreement, dated as of June 20, 2018, among the Borrower, the several banks and other financial institutions or entities from time to time parties thereto, and JPMorgan Chase Bank, N.A., as administrative agent, as previously amended (the “Credit Agreement”).

The Fifth Credit Agreement Amendment extends the grace period available for certain payments under the Credit Agreement for nine business days.

Indenture Amendment — On February 15, 2023, NCM LLC elected to enter into a 30-day grace period for the interest payment in the amount of $ 6.6 million under the Senior Notes due 2026 under the indenture governing the Senior Notes due 2026.

The Company and NCM LLC are actively engaged in negotiations with certain of NCM LLC’s secured lenders regarding NCM LLC’s indebtedness.

On March 15, 2023, NCM LLC entered into a First Supplemental Indenture to the Indenture, dated as of August 19, 2016 (the “Indenture”) relating to NCM LLC’s 5.75% Senior Notes due 2026 with Computershare Trust Company, N.A., as Trustee.

The First Supplemental Indenture was approved by holders of the Senior Notes due 2026 holding at least a majority of the aggregate principal amount of the Senior Notes due 2026.

The First Supplemental Indenture amends Section 6.01(a) of the Indenture by extending the grace period for payment of interest due on the Senior Notes due 2026 from 30 days to 47 days.

On March 31, 2023, NCM LLC entered into a Second Supplemental Indenture to the Indenture, relating to NCM LLC’s 5.75% Senior Notes due 2026 with Computershare Trust Company, N.A., as Trustee.

The Second Supplemental Indenture was approved by holders of the Senior Notes due 2026 holding at least a majority of the aggregate principal amount of the Senior Notes due 2026.

The Second Supplemental Indenture amends Section 6.01(a) of the Indenture by extending the grace period for payment of interest due on the Senior Notes due 2026 from 47 days to 57 days.

Redemptions — On February 23, 2023 and March 23, 2023, Cinemark redeemed 41,969,862 and 1,720,935 , respectively, of their outstanding common membership units, in exchange for shares of NCM, Inc.

common stock.

These redemptions reduced Cinemark’s ownership interest to 0.0 % as of March 23, 2023.

This redemption will cause the “Payable to founding members under the TRA” to increase by approximately $15.0 million.

This is driven primarily by the increase in NCM, Inc.’s ownership in NCM LLC increasing and the corresponding increase in NCM, Inc.’s percentage of NCM LLC’s deferred tax liabilities.

Bankruptcy Petition — On April 11, 2023, NCM LLC filed a voluntary petition for reorganization with a prearranged Chapter 11 plan under Chapter 11 of the Bankruptcy Code in the U.S.

Bankruptcy Court for the Southern District of Texas.

The Chapter 11 Case is being administered under the caption In re:

National CineMedia, LLC , Case No.

Operation and Implications of the Bankruptcy Filing

expects to continue to manage NCM LLC, the debtor in possession, under the jurisdiction of the Bankruptcy Court and in accordance with the applicable provisions of the Bankruptcy Code and orders of the Bankruptcy Court.

The debtor in possession intends to continue to operate businesses in the ordinary course during the pendency of the Chapter 11 Case.

In general, as debtor in possession, under the Bankruptcy Code, NCM LLC is authorized to continue to operate as an ongoing business, but may not engage in transactions outside the ordinary course of business without the prior approval of the Bankruptcy Court.

Pursuant to “first day” motions filed with the Bankruptcy Court, the Bankruptcy Court authorized NCM LLC to conduct business activities in the ordinary course and, among other things and subject to the terms and conditions of such orders, authorized certain employees at NCM, Inc.

to continue providing day-to-day management services to NCM LLC and NCM LLC to pay employee wages and benefits and vendors and suppliers in the ordinary course for all goods and services going forward.

Ongoing Negotiations on Proposed Plan of Reorganization

NCM LLC will continue to pursue approval of a plan of reorganization, which will incorporate the terms of the Restructuring Support Agreement.

Confirmation of a plan of reorganization could materially alter the classifications and amounts reported in our consolidated financial statements.

The financial statements as of and for the year ended December 29, 2022, do not give effect to any adjustments to the carrying values of assets or amounts of liabilities that might be necessary as a consequence of confirmation of a plan of reorganization or other arrangement or the effect of any operational changes that may be implemented.

(1) The changes within the valuation allowance during the years ended December 28, 2023 and December 29, 2022 relate to its deferred tax assets which the Company determined it is more-likely-than-not it will not be able to realize before they expire.

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

1 unchanged sentence

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 8. Financial Statements and Supplementary Data