Document And Entity Information
Document And Entity Information - shares | 9 Months Ended | |
Sep. 26, 2019 | Nov. 01, 2019 | |
Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Sep. 26, 2019 | |
Document Fiscal Year Focus | 2019 | |
Document Fiscal Period Focus | Q3 | |
Entity Registrant Name | National CineMedia, Inc. | |
Entity Central Index Key | 0001377630 | |
Entity Filer Category | Accelerated Filer | |
Entity Emerging Growth Company | false | |
Entity Small Business | false | |
Entity Current Reporting Status | Yes | |
Current Fiscal Year End Date | --12-26 | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 79,241,224 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Millions | Sep. 26, 2019 | Dec. 27, 2018 |
CURRENT ASSETS: | ||
Cash and cash equivalents | $ 46.3 | $ 41.4 |
Short-term marketable securities | 8.1 | 24 |
Receivables, net of allowance of $6.0 and $6.0, respectively | 121.6 | 149.9 |
Income tax receivable | 0.2 | 0.3 |
Amounts due from founding members, net | 3.7 | 5.8 |
Current portion of notes receivable - founding members (including receivables from related parties of $2.8 and $4.2, respectively) | 4.2 | 5.6 |
Prepaid expenses and other current assets | 3.5 | 3.9 |
Total current assets | 187.6 | 230.9 |
NON-CURRENT ASSETS: | ||
Property and equipment, net of accumulated depreciation of $66.7 and $62.5, respectively | 32.1 | 33.6 |
Intangible assets, net of accumulated amortization of $186.2 and $172.7, respectively | 658.3 | 684.5 |
Deferred tax assets, net of valuation allowance of $77.5 and $80.1, respectively | 167.9 | 173.9 |
Other investments | 1.1 | 3 |
Long-term marketable securities | 8.5 | 10.2 |
Debt issuance costs, net | 4.2 | 5 |
Other assets | 24.4 | 0.7 |
Total non-current assets | 896.5 | 910.9 |
TOTAL ASSETS | 1,084.1 | 1,141.8 |
CURRENT LIABILITIES: | ||
Amounts due to founding members, net | 24.8 | 30 |
Payable to founding members under tax receivable agreement (including payables to related parties of $11.1 and $11.2, respectively) | 15.3 | 15.5 |
Accrued expenses | 21.6 | 21.7 |
Accrued payroll and related expenses | 11.7 | 15.3 |
Accounts payable | 16.5 | 18 |
Deferred revenue | 10.4 | 7.3 |
Short-term debt | 2.7 | 2.7 |
Other current liabilities | 1.5 | 0 |
Total current liabilities | 104.5 | 110.5 |
NON-CURRENT LIABILITIES: | ||
Long-term debt, net of debt issuance costs of $6.9 and $7.8, respectively | 894 | 920.9 |
Payable to founding members under tax receivable agreement (including payables to related parties of $133.7 and $141.1, respectively) | 183.4 | 195.6 |
Other liabilities | 24.5 | 4 |
Total non-current liabilities | 1,101.9 | 1,120.5 |
Total liabilities | 1,206.4 | 1,231 |
COMMITMENTS AND CONTINGENCIES (NOTE 8) | ||
EQUITY/(DEFICIT): | ||
Preferred stock, $0.01 par value; 10,000,000 shares authorized, none issued and outstanding, respectively | 0 | 0 |
Common stock, $0.01 par value; 175,000,000 shares authorized, 77,349,628 and 76,976,398 issued and outstanding, respectively | 0.8 | 0.8 |
Additional paid in capital/(deficit) | (210.8) | (215.2) |
Retained earnings (distributions in excess of earnings) | (176.9) | (153.6) |
Total NCM, Inc. stockholders’ equity/(deficit) | (386.9) | (368) |
Noncontrolling interests | 264.6 | 278.8 |
Total equity/(deficit) | (122.3) | (89.2) |
TOTAL LIABILITIES AND EQUITY/(DEFICIT) | $ 1,084.1 | $ 1,141.8 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (PARENTHETICAL) - USD ($) $ in Millions | Sep. 26, 2019 | Dec. 27, 2018 |
Allowance for doubtful accounts receivable | $ 5.7 | $ 6 |
Receivables from related parties, current | 4.2 | 5.6 |
Accumulated depreciation, property and equipment | 70 | 62.5 |
Accumulated amortization, intangible assets | 193 | 172.7 |
Deferred tax assets, valuation allowance | 78.9 | 80.1 |
Current payable to founding members under tax receivable agreement | 15.3 | 15.5 |
Long-term payable to founding members under tax receivable agreement | 183.4 | 195.6 |
Debt issuance costs, long-term | $ 6.6 | $ 7.8 |
Preferred stock, par value (in usd per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized (in shares) | 10,000,000 | 10,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Common stock, par value (in usd per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 175,000,000 | 175,000,000 |
Common stock, shares issued (in shares) | 77,362,387 | 76,976,398 |
Common stock, shares outstanding (in shares) | 77,362,387 | 76,976,398 |
Founding Members | ||
Receivables from related parties, current | $ 2.8 | $ 4.2 |
Current payable to founding members under tax receivable agreement | 11.1 | 11.2 |
Long-term payable to founding members under tax receivable agreement | $ 133.2 | $ 141.1 |
CONDENSED STATEMENTS OF INCOME
CONDENSED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 26, 2019 | Sep. 27, 2018 | Sep. 26, 2019 | Sep. 27, 2018 | |
Income Statement [Abstract] | ||||
REVENUE (including revenue from related parties of $6.5, $8.6, $11.8 and $16.6, respectively) | $ 110.5 | $ 110.1 | $ 297.6 | $ 304 |
OPERATING EXPENSES: | ||||
Advertising operating costs | 9.6 | 10.3 | 26.8 | 26.5 |
Network costs | 3.2 | 3.2 | 10.1 | 10 |
Theater access fees—founding members (including fees to related parties of $14.5, $21.5, $27.4 and $42.1, respectively) | 20.1 | 19.7 | 60.8 | 61.8 |
Selling and marketing costs | 17 | 15.3 | 48.4 | 48 |
Administrative and other costs | 10.4 | 9.3 | 32.2 | 34.7 |
Depreciation expense | 3.4 | 3.1 | 10 | 9 |
Amortization expense | 0 | 6.9 | 0 | 20.5 |
Amortization of intangibles recorded for network theater screen leases | 6.8 | 0 | 20.7 | 0 |
Total | 70.5 | 67.8 | 209 | 210.5 |
OPERATING INCOME | 40 | 42.3 | 88.6 | 93.5 |
NON-OPERATING EXPENSES: | ||||
Interest on borrowings | 13.8 | 14.4 | 42.4 | 42.3 |
Interest income | (0.4) | (0.3) | (1.4) | (1) |
Loss (gain) on early retirement of debt, net | 0 | (0.3) | (0.3) | 0.9 |
Loss (gain) on re-measurement of the payable to founding members under the tax receivable agreement | (0.5) | 3.2 | 1 | (4.6) |
Other non-operating income | 0 | (0.1) | (0.3) | (0.1) |
Total | 12.9 | 16.9 | 41.4 | 37.5 |
INCOME BEFORE INCOME TAXES | 27.1 | 25.4 | 47.2 | 56 |
Income tax expense (benefit) | 4.3 | (0.3) | 6 | 16.7 |
CONSOLIDATED NET INCOME | 22.8 | 25.7 | 41.2 | 39.3 |
Less: Net income attributable to noncontrolling interests | 13.6 | 14.5 | 24.2 | 25.8 |
NET INCOME ATTRIBUTABLE TO NCM, INC. | 9.2 | 11.2 | 17 | 13.5 |
COMPREHENSIVE INCOME ATTRIBUTABLE TO NCM, INC. | $ 9.2 | $ 11.2 | $ 17 | $ 13.5 |
NET INCOME PER NCM, INC. COMMON SHARE: | ||||
Basic (in usd per share) | $ 0.12 | $ 0.15 | $ 0.22 | $ 0.18 |
Diluted (in usd per share) | $ 0.12 | $ 0.14 | $ 0.22 | $ 0.16 |
WEIGHTED AVERAGE SHARES OUTSTANDING: | ||||
Basic (in shares) | 77,356,833 | 76,924,983 | 77,293,234 | 76,825,828 |
Diluted (in shares) | 77,883,571 | 77,485,561 | 77,687,393 | 156,987,736 |
CONDENSED STATEMENTS OF INCOM_2
CONDENSED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME (PARENTHETICAL) (UNAUDITED) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 26, 2019 | Sep. 27, 2018 | Sep. 26, 2019 | Sep. 27, 2018 | |
Revenue | $ 110,500,000 | $ 110,100,000 | $ 297,600,000 | $ 304,000,000 |
Founding Members | ||||
Revenue | 5,700,000 | 5,800,000 | 17,500,000 | 21,800,000 |
Fees to related parties | $ 13,500,000 | $ 13,400,000 | $ 40,900,000 | $ 55,500,000 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) | 9 Months Ended | |
Sep. 26, 2019 | Sep. 27, 2018 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Consolidated net income | $ 41,200,000 | $ 39,300,000 |
Adjustments to reconcile consolidated net income to net cash provided by operating activities: | ||
Deferred income tax expense | 6,000,000 | 16,600,000 |
Depreciation expense | 10,000,000 | 9,000,000 |
Amortization expense | 0 | 20,500,000 |
Amortization of intangibles recorded for network theater screen leases | 20,700,000 | 0 |
Non-cash share-based compensation | 4,200,000 | 6,200,000 |
Impairment on investment | 2,000,000 | 400,000 |
Amortization of debt issuance costs | 1,900,000 | 2,000,000 |
Proceeds from Deposits Applied to Debt Retirements | 300,000 | 900,000 |
Non-cash loss (gain) on re-measurement of the payable to founding members under the tax receivable agreement | 1,000,000 | (4,600,000) |
Other | (900,000) | (900,000) |
Payments to Acquire Intangible Assets | (600,000) | 0 |
Proceedsfromdispositionofintangibleassetsbynetworkaffiliates | 500,000 | 0 |
Founding member integration and other encumbered theater payments (including payments from related parties of $0.6 in 2019) | 16,300,000 | 0 |
Changes in operating assets and liabilities: | ||
Receivables, net | 28,300,000 | 46,500,000 |
Accounts payable and accrued expenses | (3,000,000) | (400,000) |
Amounts due to/from founding members, net | (200,000) | (500,000) |
Increase (Decrease) In Due To Related Parties Under Tax Receivable Agreement, Current | (14,000,000) | (17,600,000) |
Deferred revenue | 3,100,000 | (600,000) |
Other, net | (2,600,000) | 2,000,000 |
Net cash provided by operating activities | 113,600,000 | 118,800,000 |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Purchases of property and equipment | (9,800,000) | (10,000,000) |
Purchases of marketable securities | (9,900,000) | (30,900,000) |
Proceeds from sale and maturities of marketable securities | 28,300,000 | 20,900,000 |
Proceeds from notes receivable - founding members | 1,400,000 | 0 |
Net cash provided by (used in) investing activities | 10,000,000 | (20,000,000) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Payment of dividends | (40,400,000) | (41,200,000) |
Proceeds from revolving credit facility | 100,000,000 | 139,200,000 |
Repayments of revolving credit facility | (121,000,000) | (137,200,000) |
Repayments of Notes due 2026 | (4,600,000) | (7,200,000) |
Proceeds from (Repayments of) Debt | 0 | 270,000,000 |
Repayment of term loan facility | (2,000,000) | (270,700,000) |
Payments of Debt Issuance Costs | 0 | (6,600,000) |
Founding member integration and other encumbered theater payments (including payments from related parties of $11.5 in 2018) | 0 | 17,200,000 |
Distributions to founding members | (49,400,000) | (63,000,000) |
Repurchase of stock for restricted stock tax withholding | (1,300,000) | (2,200,000) |
Net cash used in financing activities | (118,700,000) | (101,700,000) |
CHANGE IN CASH AND CASH EQUIVALENTS: | 4,900,000 | (2,900,000) |
Cash and cash equivalents at beginning of period | 41,400,000 | 30,200,000 |
Cash and cash equivalents at end of period | 46,300,000 | 27,300,000 |
Supplemental disclosure of non-cash financing and investing activity: | ||
Purchase of an intangible asset with NCM LLC equity | 7,600,000 | 15,900,000 |
Accrued distributions to founding members | 22,500,000 | 19,100,000 |
Accrued integration and other encumbered theater payments due from founding members (including accrued payments due from related parties of $0.2 and $5.3, respectively) | 5,200,000 | 5,100,000 |
Noncash or Part Noncash Acquisition, Fixed Assets Acquired | 1,000,000 | |
Increase in dividend equivalent accrual not requiring cash in the period | 800,000 | (1,300,000) |
Supplemental disclosure of cash flow information: | ||
Cash paid for interest | 37,100,000 | 38,200,000 |
Cash paid for income taxes, net of refunds | $ 300,000 | $ 300,000 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (PARENTHETICAL) - USD ($) $ in Millions | 3 Months Ended | |
Sep. 26, 2019 | Sep. 27, 2018 | |
Founding Members | ||
Integration and other encumbered payments, related parties - operating activities | $ 0.4 | $ 0 |
Integration and other encumbered payments, related parties - financing activities | 0 | 9.4 |
Accrued integration and other encumbered theater payments, related parties | $ 0.1 | $ 1.9 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF EQUITY/(DEFICIT) - USD ($) $ in Millions | Total | Common Stock | Additional Paid in Capital (Deficit) | Retained Earnings (Distribution in Excess of Earnings) | Noncontrolling Interest |
Balance at Dec. 28, 2017 | $ (74.8) | $ 0.8 | $ (233.1) | $ (130.2) | $ 287.7 |
Balance (in shares) at Dec. 28, 2017 | 76,242,222 | ||||
Distributions to founding members | (44.5) | (44.5) | |||
NCM LLC equity issued for purchase of intangible asset | 15.9 | 7.7 | 8.2 | ||
Income tax and other impacts of NCM LLC ownership changes | 9.6 | 6.9 | 2.7 | ||
Comprehensive income, net of tax | 39.3 | 13.5 | 25.8 | ||
Share-based compensation issued | (2.1) | (2.1) | |||
Share-based compensation issued (in shares) | 690,272 | ||||
Share-based compensation expense/capitalized | 6.3 | 4.4 | 1.9 | ||
Cash dividends declared | (39.9) | (39.9) | |||
Balance at Sep. 27, 2018 | (90.4) | $ 0.8 | (216.2) | (156.8) | 281.8 |
Balance (in shares) at Sep. 27, 2018 | 76,932,494 | ||||
Balance at Jun. 28, 2018 | (95.1) | $ 0.8 | (227.1) | (154.9) | 286.1 |
Balance (in shares) at Jun. 28, 2018 | 76,915,532 | ||||
Distributions to founding members | (19.1) | (19.1) | |||
Income tax and other impacts of NCM LLC ownership changes | 9.9 | 10 | (0.1) | ||
Comprehensive income, net of tax | 25.7 | 11.2 | 14.5 | ||
Share-based compensation issued (in shares) | 16,962 | ||||
Share-based compensation expense/capitalized | 1.3 | 0.9 | 0.4 | ||
Cash dividends declared | (13.1) | (13.1) | |||
Balance at Sep. 27, 2018 | (90.4) | $ 0.8 | (216.2) | (156.8) | 281.8 |
Balance (in shares) at Sep. 27, 2018 | 76,932,494 | ||||
Balance at Dec. 27, 2018 | $ (89.2) | $ 0.8 | (215.2) | (153.6) | 278.8 |
Balance (in shares) at Dec. 27, 2018 | 76,976,398 | 76,976,398 | |||
Distributions to founding members | $ (44) | (44) | |||
NCM LLC equity issued for purchase of intangible asset | 7.6 | 3.7 | 3.9 | ||
Income tax and other impacts of NCM LLC ownership changes | (0.6) | (1.2) | 0.6 | ||
Comprehensive income, net of tax | 41.2 | 17 | 24.2 | ||
Share-based compensation issued | (1.3) | (1.3) | |||
Share-based compensation issued (in shares) | 385,989 | ||||
Share-based compensation expense/capitalized | 4.3 | 3.2 | 1.1 | ||
Cash dividends declared | (40.3) | (40.3) | |||
Balance at Sep. 26, 2019 | $ (122.3) | $ 0.8 | (210.8) | (176.9) | 264.6 |
Balance (in shares) at Sep. 26, 2019 | 77,362,387 | 77,362,387 | |||
Balance at Jun. 27, 2019 | $ (110.5) | $ 0.8 | (211.9) | (172.6) | 273.2 |
Balance (in shares) at Jun. 27, 2019 | 77,349,628 | ||||
Distributions to founding members | (22.5) | (22.5) | |||
Income tax and other impacts of NCM LLC ownership changes | 0 | 0.1 | (0.1) | ||
Comprehensive income, net of tax | 22.8 | 9.2 | 13.6 | ||
Share-based compensation issued | 0 | 0 | |||
Share-based compensation issued (in shares) | 12,759 | ||||
Share-based compensation expense/capitalized | 1.4 | 1 | 0.4 | ||
Cash dividends declared | (13.5) | (13.5) | |||
Balance at Sep. 26, 2019 | $ (122.3) | $ 0.8 | $ (210.8) | $ (176.9) | $ 264.6 |
Balance (in shares) at Sep. 26, 2019 | 77,362,387 | 77,362,387 |
CONDENSED CONSOLIDATED STATEM_4
CONDENSED CONSOLIDATED STATEMENTS OF EQUITY/(DEFICIT) (PARENTHETICAL) (UNAUDITED) | 3 Months Ended |
Sep. 26, 2019$ / shares | |
Statement of Stockholders' Equity [Abstract] | |
Dividends per share (in usd per share) | $ 0.51 |
The Company
The Company | 9 Months Ended |
Sep. 26, 2019 | |
Accounting Policies [Abstract] | |
The Company | THE COMPANY Description of Business National CineMedia, Inc. (“NCM, Inc.”) was incorporated in Delaware as a holding company with the sole purpose of becoming a member and sole manager of National CineMedia, LLC (“NCM LLC”), a limited liability company. NCM LLC is currently owned by NCM, Inc., Regal Cinemas, Inc. and Regal CineMedia Corporation, wholly owned subsidiaries of Cineworld Group plc and Regal Entertainment Group (“Regal”), Cinemark Media, Inc. and Cinemark USA, Inc., wholly owned subsidiaries of Cinemark Holdings, Inc. (“Cinemark”) and American Multi-Cinema, Inc., a wholly owned subsidiary of AMC Entertainment, Inc. (“AMC”). The terms “NCM”, “the Company” or “we” shall, unless the context otherwise requires, be deemed to include the consolidated entity. AMC, Regal, Cinemark and their affiliates are referred to in this document as “founding members”. NCM LLC operates the largest cinema advertising network reaching movie audiences in North America, allowing NCM LLC to sell advertising under long-term exhibitor services agreements (“ESAs”) with the founding members and certain third-party theater circuits, referred to in this document as “network affiliates” under long-term network affiliate agreements. On September 17, 2019, NCM LLC entered into amendments to the ESAs with Cinemark and Regal (collectively, 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 (based on attendance) of approximately 20.0 years as of September 26, 2019 . The network affiliate agreements expire at various dates between December 2019 and July 2031. The weighted average remaining term (based on attendance) of the ESAs and the network affiliate agreements together is 17.4 years as of September 26, 2019 . As of September 26, 2019 , NCM LLC had 159,067,874 common membership units outstanding, of which 77,362,387 ( 48.6% ) were owned by NCM, Inc., 41,770,669 ( 26.3% ) were owned by Regal, 39,737,700 ( 25.0% ) were owned by Cinemark and 197,118 ( 0.1% ) 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. Basis of Presentation The Company has prepared the unaudited Condensed Consolidated Financial Statements and related notes of NCM, Inc. in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and the rules and regulations of the Securities and Exchange Commission (“SEC”). Certain reclassifications have been made to the prior year's financial statements to conform to the current presentation (refer to the Condensed Consolidated Statements of Income and Condensed Consolidated Statement of Cash Flows, whereby the Company presented depreciation expense and amortization expense as two separate lines and refer to the Condensed Consolidated Statements of Income, whereby the Company presented loss (gain) on retirement of debt, net as a separate line). Certain information and footnote disclosures typically included in an annual report have been condensed or omitted for this quarterly report. The balance sheet as of December 27, 2018 is derived from the audited financial statements of NCM, Inc. Therefore, the unaudited Condensed Consolidated Financial Statements should be read in conjunction with the audited Consolidated Financial Statements and notes thereto included in the Company’s annual report on Form 10-K filed for the fiscal year ended December 27, 2018 . 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. 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 5— 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. The Company manages its business under one reportable segment of advertising. 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 and income taxes. Actual results could differ from those estimates. Significant Accounting Policies The Company’s annual financial statements included in its Form 10-K filed for the fiscal year ended December 27, 2018 contain a complete discussion of the Company’s significant accounting policies. Following is additional information related to the Company’s accounting policies. Revenue Recognition —The Company derives revenue principally from the advertising business, which includes on-screen and lobby network (LEN) advertising and lobby promotions and advertising on websites and mobile applications owned by NCM LLC and other companies. Revenue is recognized over time as the customer receives the benefits provided by NCM LLC’s advertising services and the Company has the right to payment for performance to date. The Company considers the terms of each arrangement to determine the appropriate accounting treatment. Concentration of Credit Risk and Significant Customers —Bad debts are provided for using the allowance for doubtful accounts method based on historical experience and management’s evaluation of outstanding receivables at the end of the period. Receivables are written off when management determines amounts are uncollectible. Trade accounts receivable are uncollateralized and represent a large number of geographically dispersed debtors. The collectability risk with respect to national and regional advertising is reduced by transacting with founding members or large, national advertising agencies that have strong reputations in the advertising industry and clients with stable financial positions. The Company has smaller contracts with thousands of local clients that are not individually significant. As of September 26, 2019 and December 27, 2018 , there were no advertising agency groups or individual customers through which the Company sources national advertising revenue representing more than 10% of the Company’s outstanding gross receivable balance. During the three and nine months ended September 26, 2019 and September 27, 2018 , the Company had no customers that accounted for more than 10% of revenue. Share-Based Compensation —The Company has issued stock options and restricted stock to certain employees and restricted stock units to its independent directors. In 2018 and 2019, the restricted stock grants for Company management vest upon the achievement of Company performance measures and/or service conditions, while non-management grants vest only upon the achievement of service conditions. Compensation expense of restricted stock that vests 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 of restricted stock expected to vest. Ultimately, the Company adjusts the expense recognized to reflect the actual vested shares following the resolution of the performance conditions. Dividends are accrued when declared on unvested restricted stock that is expected to vest and are only paid with respect to shares that actually vest. During the three months ended September 26, 2019 and September 27, 2018 and the nine months ended September 26, 2019 and September 27, 2018 , 18,889 , 21,807 , 568,584 and 997,403 shares of restricted stock and restricted stock units vested, respectively. Consolidation —NCM, Inc. consolidates the accounts of NCM LLC under the provisions of ASC 810, Consolidation (“ASC 810”). The following table presents the changes in NCM, Inc.’s equity resulting from net income attributable to NCM, Inc. and transfers to or from noncontrolling interests (in millions): Three Months Ended Nine Months Ended September 26, September 27, September 26, September 27, Net income attributable to NCM, Inc. $ 9.2 $ 11.2 $ 17.0 $ 13.5 NCM LLC equity issued for purchase of intangible asset — — 3.7 7.7 Income tax and other impacts of subsidiary ownership changes 0.1 10.0 (1.2 ) 6.9 Change from net income attributable to NCM, Inc. and transfers from noncontrolling interests $ 9.3 $ 21.2 $ 19.5 $ 28.1 Recently Adopted Accounting Pronouncements During the first quarter of 2019, the Company adopted Accounting Standards Update 2016-2 and subsequent amendments, Leases (Topic 842) (together “ASC 842”) utilizing the Comparatives Under 840 option where only the current period financial statements and related disclosures are presented in accordance with the new standard. As of the adoption date of December 28, 2018 the Company recognized the following on the unaudited Condensed Consolidated Balance Sheets: a right-of-use (“ROU”) asset of $21.7 million within 'Other assets', a short-term lease liability of $1.4 million within Other current liabilities', a long-term lease liability of $24.5 million within 'Other liabilities' and reversed the related deferred rent liability balance of $4.2 million for all leases with terms longer than twelve months related to its building operating leases. The Company elected to utilize the following practical expedients: (i) not being required to separate lease and non-lease components when accounting for the lease for all asset classes; and (ii) not accounting for short-term leases under the new standard. The Company also determined that the ESAs and affiliate agreements are considered leases under ASC 842. However, the identification of the asset and determination of the period of control is dependent upon the scheduling of the showtimes by the exhibitors. As the schedules are typically not determined until one week in advance of the showtime, on average, the leases are considered short term in nature, specifically less than one month. As such, no ROU assets or lease liabilities were recognized for these agreements. The issuance of NCM LLC membership units to the founding members in accordance with NCM LLC’s Common Unit Adjustment Agreement and upfront cash payments to affiliates for the contractual rights to provide services within their theaters will continue to be classified as intangible assets. However, the amortization of these intangible assets is now considered lease expense and has been reclassified within the current period from 'Depreciation and amortization expense' to 'Amortization of intangibles recorded for network theater screen leases' on the unaudited Condensed Consolidated Statement of Income. Additionally, these upfront cash payments to affiliates and receipt of integration payments from the founding members, as defined within Note 4 - Intangible Assets , will be considered cash flows from operating activities on the unaudited Condensed Consolidated Statement of Cash Flows when incurred as they are related to operating leases and will be reclassified from cash flows from investing and financing activities, respectively. The Company has also incorporated additional disclosures in Note 8 - Commitments and Contingencies to comply with ASC 842. During the first quarter of 2019, the Company adopted Accounting Standards Update 2018-7, Compensation – Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting (“ASU 2018-7”), which amends Topic 718 to include share-based payment transactions for acquiring goods and services from nonemployees. The adoption of ASU 2018-7 had no impact on the unaudited Condensed Consolidated Financial statements or notes thereto. During the first quarter of 2019, the Company adopted a final rule issued by the SEC in March 2019 simplifying certain Regulation S-K requirements. The rule eliminated the following requirements in certain circumstances: (1) to disclose discussion of the earliest year of three years of audited financial statements presented within Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations section of the Form 10-K, (2) to request permission from the SEC to redact confidential information from exhibits in the event the information is not material to the agreement and would cause competitive harm, (3) to disclose immaterial physical property and (4) to disclose schedules and attachments to exhibits which do not contain material information. The rule also adds the requirement to disclose the registrant's trading symbol on the cover page of certain SEC forms. The applicable amended disclosure requirements have been incorporated within this Quarterly Report on Form 10-Q. During the fourth quarter of 2018, the Company adopted a final rule issued by the SEC amending certain disclosure requirements deemed by the SEC to be redundant, duplicative, overlapping, outdated or superseded. The rule also added requirements to disclose (1) the changes in each caption of stockholders’ equity and non-controlling interests for the current and comparative year-to-date periods, with subtotals for each interim period and (2) the amount of dividends per share for each class of shares. The Company's adoption of the guidance resulted in changes to the presentation of the unaudited Consolidated Statement of Equity as a quarter to date equity rollforward is now also required for the current and comparable period. The Company implemented the amended disclosure requirements in the first quarter of 2019. The codification was updated to reflect the aforementioned SEC changes within Accounting Standards Update 2019-7, Codification Updates to SEC Sections ("ASU 2019-7") issued and effective during the third quarter of 2019. Recently Issued Accounting Pronouncements In June 2016, the FASB issued Accounting Standards Update 2016-13, Financial Instruments – Credit Losses (Topic 326), Measurement of Credit Losses on Financial Statements (“ASU 2016-13”), which requires a financial asset (or group of financial assets) measured at amortized cost basis to be presented at the net amount expected to be collected. The allowance for credit losses is a valuation account that is deducted from the amortized cost basis of the financial asset(s) to present the net carrying value at the amount expected to be collected on the financial asset. ASU 2016-13 is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years, with early adoption permitted and is to be adopted on a modified retrospective basis. The Company is currently evaluating the impact that adopting this guidance will have on the unaudited Condensed Consolidated Financial Statements or notes thereto. In August 2018, the FASB issued Accounting Standards Update 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement (“ASU 2018-13”), which modifies the disclosure requirements on fair value measurements. ASU 2018-13 is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years, with partial early adoption permitted for eliminated disclosures. The method of adoption varies by the disclosure. The Company does not expect the adoption of ASU 2018-13 to have a material impact on the unaudited Condensed Consolidated Financial Statements or notes thereto. 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 unaudited Condensed Consolidated Financial Statements or notes thereto. |
Revenue from Contracts with Cus
Revenue from Contracts with Customers | 9 Months Ended |
Sep. 26, 2019 | |
Revenue from Contract with Customer [Abstract] | |
Revenue from Contracts with Customers | REVENUE FROM CONTRACTS WITH CUSTOMERS Revenue Recognition The Company derives revenue principally from the sale of advertising to national, regional and local businesses in Noovie , the Company’s cinema advertising and entertainment pre-show. The Company also sells advertising through the 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 through Cinema Accelerator and NCM's digital gaming products including Noovie ARcade, Fantasy Movie League, Name That Movie and Noovie Shuffle, which can be played on the mobile apps or at Noovie.com . The Company also has a long-term agreement to exhibit the advertising of the founding members’ beverage suppliers. The Company makes contractual guarantees to deliver a specified number of impressions to view the customers’ advertising. If the contracted number of impressions are not delivered, the Company will run additional advertising to deliver the contracted impressions at a later date. The deferred portion of the revenue associated with undelivered impressions is referred to as a make-good provision. The Company defers the revenue associated with the make-good until the advertising airs to the theater attendance specified in the advertising contract. The make-good provision is recorded within accrued expenses in the Condensed Consolidated Balance Sheet. As of September 26, 2019 and December 27, 2018 , the Company had a make-good provision of $4.8 million and $ 8.0 million, respectively. The Company has certain contracts with two -year terms that are noncancelable following a specified date within the contract period. The estimated revenue expected to be recognized in the future related to these contracted performance obligations that are unsatisfied (or partially unsatisfied) as of September 26, 2019 , was $25.5 million , which is expected to be recognized in 2019 . Agreements with a duration less than one year are not included within this disclosure as the Company elected to use the practical expedient in ASC 606-10-50-14 for those contracts. In addition, other of the Company’s contracts longer than one year that are cancelable are not included within this disclosure. Disaggregation of Revenue The Company disaggregates revenue based upon the type of customer: national, local, regional and beverage concessionaire. This method of disaggregation is in alignment with how revenue is reviewed by management and discussed with and historically disclosed to investors. The following table summarizes revenue from contracts with customers for the three and nine months ended September 26, 2019 and September 27, 2018 (in millions): Three Months Ended Nine Months Ended September 26, September 27, September 26, September 27, National advertising revenue $ 82.3 $ 80.8 $ 213.9 $ 214.4 Local advertising revenue 16.8 17.4 47.3 49.0 Regional advertising revenue 4.1 4.5 14.2 16.6 Founding member advertising revenue from beverage concessionaire agreements 7.3 7.4 22.2 24.0 Total revenue $ 110.5 $ 110.1 $ 297.6 $ 304.0 Deferred Revenue and Unbilled Accounts Receivable The changes in deferred revenue for the nine months ended September 26, 2019 were as follows (in millions): Nine Months Ended September 26, Balance at beginning of period $ 7.3 Performance obligations satisfied (7.3 ) New contract liabilities 10.4 Balance at end of period $ 10.4 As of September 26, 2019 and December 27, 2018 , the Company had $11.6 million and $6.0 million in unbilled accounts receivable, respectively. |
Loss Per Share
Loss Per Share | 9 Months Ended |
Sep. 26, 2019 | |
Earnings Per Share [Abstract] | |
Loss Per Share | PER SHARE Basic earnings per share is computed on the basis of the weighted average number of common shares outstanding. Diluted earnings 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 restricted stock units using the treasury stock method. The components of basic and diluted income per NCM, Inc. share are as follows: Three Months Ended Nine Months Ended September 26, September 27, September 26, September 27, Net income attributable to NCM, Inc. (in millions) $ 9.2 $ 11.2 $ 17.0 $ 13.5 Net income attributable to NCM, Inc. following conversion of dilutive membership units (net of estimated taxes of $0.0, $0.0, $0.0 and $14.7)(in millions) $ 9.2 $ 11.2 $ 17.0 $ 24.6 Weighted average shares outstanding: Basic 77,356,833 76,924,983 77,293,234 76,825,828 Add: Dilutive effect of stock options, restricted stock and exchangeable membership units 526,738 560,578 394,159 80,161,908 Diluted 77,883,571 77,485,561 77,687,393 156,987,736 Earnings per NCM, Inc. share: Basic $ 0.12 $ 0.15 $ 0.22 $ 0.18 Diluted $ 0.12 $ 0.14 $ 0.22 $ 0.16 The effect of 81,705,487 , 80,660,822 and 81,410,838 weighted average exchangeable NCM LLC common units held by the founding members for the three months ended September 26, 2019 and September 27, 2018 and the nine months ended September 26, 2019 , respectively, have been excluded from the calculation of diluted weighted average shares and loss per NCM, Inc. share as they were anti-dilutive. The diluted weighted average shares outstanding for the nine months ended September 27, 2018 assumes the conversion of all founding member common units to NCM, Inc. shares as they were dilutive. Upon the conversion of all common units, all of the consolidated NCM LLC net income would be attributable to NCM, Inc. and thus has been utilized as the numerator of the diluted earnings per share calculation for the nine months ended September 27, 2018. Consolidated NCM LLC net income for the nine months ended September 27, 2018 has been tax effected utilizing NCM, Inc.’s effective tax rate of 55.3% for the respective period. NCM LLC common units do not participate in dividends paid on NCM, Inc.’s common stock. In addition, there were 2,553,449 , 2,016,709 , 2,593,231 and 2,223,440 stock options and non-vested (restricted) shares for the three months ended September 26, 2019 and September 27, 2018 and the nine months ended September 26, 2019 and September 27, 2018 , respectively, excluded from the calculation as they were anti-dilutive. 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. |
Intangible Assets
Intangible Assets | 9 Months Ended |
Sep. 26, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Assets | INTANGIBLE ASSETS Intangible assets consist of contractual rights to provide the Company’s services within the theaters of the founding members and network affiliates and are stated at cost, net of accumulated amortization. The Company’s intangible assets with its founding members are recorded at 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. In addition, the Company records intangible assets for up-front fees paid to network affiliates upon commencement of a network affiliate agreement. 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 network affiliate agreement. The Company extended the useful life of the intangible asset for Cinemark and Regal following the extension of the ESA term in conjunction with the 2019 ESA Amendments. The Company has adopted an accounting policy to capitalize extension costs on its intangible assets and thus capitalized the legal and professional costs incurred in conjunction with the ESA amendments. During the three months ended September 26, 2019 and September 27, 2018 and the nine months ended September 26, 2019 and September 27, 2018 , the Company capitalized $1.1 million , $0.0 million , $1.1 million , and $0.0 million within the intangible asset balance. 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. 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. During the first quarter of 2019 , NCM LLC issued 1,044,665 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 2018 fiscal year and NCM LLC recorded a net intangible asset of $7.6 million during the first quarter of 2019 as a result of the Common Unit Adjustment. During the first quarter of 2018 , NCM LLC issued 2,821,710 ( 3,736,860 issued, net of 915,150 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 2017 fiscal year and NCM LLC recorded a net intangible asset of $15.9 million during the first quarter of 2018 as a result of the Common Unit Adjustment. 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 ("encumbered theaters"), the founding members may elect to receive common 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”). Because the Carmike Cinemas, Inc. (“Carmike”) theaters acquired by AMC are subject to an existing on-screen advertising agreement with an alternative provider, AMC will make integration payments to NCM LLC. The integration payments will continue until the earlier of (i) the date the theaters are transferred to NCM LLC’s network or (ii) the expiration of the ESA. 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 ESAs additionally entitle NCM LLC to payments related to the founding members’ on-screen advertising commitments under their beverage concessionaire agreements for encumbered theaters. These payments are also accounted for as a reduction to the intangible asset. During the three months ended September 26, 2019 and September 27, 2018 and the nine months ended September 26, 2019 and September 27, 2018 , the Company recorded a reduction to net intangible assets of $5.6 million , $5.5 million , $13.7 million and $13.3 million , respectively, related to integration and other encumbered theater payments. These payments received from AMC related to its acquisitions of theaters from Carmike and Rave Cinemas and from Cinemark related primarily to its acquisition of theaters from Rave Cinemas. During the three months ended September 26, 2019 and September 27, 2018 and the nine months ended September 26, 2019 and September 27, 2018 , AMC and Cinemark paid a total of $5.7 million , $5.6 million , $16.3 million and $17.2 million , respectively, in integration and other encumbered theater payments (as payments are made one quarter and one month in arrears, respectively). 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. |
Related Party Transactions
Related Party Transactions | 9 Months Ended |
Sep. 26, 2019 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | 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 as of September 26, 2019 , AMC is no longer a related party. AMC remains a party to the ESA, Common Unit Adjustment Agreement, Tax Receivable Agreement ("TRA") 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 is greater than zero), TRA payments and theater access fees. Further, AMC will continue to pay beverage revenue, among other things. AMC's ownership percentage does not impact future integration payments and other encumbered theater payments owed to NCM LLC by AMC. AMC is considered a related party through the date its ownership fell below the 5% threshold (July 5, 2018) and related party transactions with AMC through this period are included within the disclosures below (specifically the first quarter and first six months of 2018). The material agreements with the founding members are as follows: • ESAs. 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). The advertising services include the use of the digital content network (“DCN”) equipment required to deliver the on-screen advertising and other content included in the Noovie pre-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 pre-show is sold to NCM LLC’s 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. In conjunction with the 2019 ESA Amendments, NCM LLC agreed to pay 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 with Cinemark and Regal are considered leases with related parties under ASC 842. • 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 construction of new theaters or sale or closure of theaters that are operated by each founding member 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. 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 NCM LLC’s 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 NCM LLC’s founding members, if any. The following tables provide summaries of the transactions between the Company and the founding members (in millions): Three Months Ended Nine Months Ended Included in the unaudited Condensed Consolidated Statements of Income: (1) September 26, September 27, September 26, September 27, Revenue: Beverage concessionaire revenue (included in advertising revenue) (2) $ 5.7 $ 5.8 $ 17.5 $ 21.8 Operating expenses: Theater access fee (3) 13.5 13.4 40.9 55.5 Purchase of movie tickets and concession products and rental of theater space (included in selling and marketing costs) (4) 0.1 0.2 0.3 0.9 Purchase of movie tickets and concession products and rental of theater space (included in advertising operating costs) (4) 0.1 0.1 0.1 0.1 Non-operating expenses: Interest income from notes receivable (included in interest income) (5) 0.1 0.1 0.2 0.3 ________________________________________ (1) AMC is no longer considered a related party as of July 5, 2018, as described further above. As such, the figures within the table above only include related party activity with AMC for the six months ended June 28, 2018. (2) For the three and nine months ended September 26, 2019 and September 27, 2018 , two of the founding members purchased 60 seconds of on-screen advertising time and one founding member purchased 30 seconds (with 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 seconds equivalent CPM rate specified by the ESA. (3) Comprised of payments per theater attendee and payments per digital screen with respect to the founding member theaters included in the Company’s network, including payments for access to higher quality digital cinema equipment. (4) Used primarily for marketing to NCM LLC’s advertising clients. (5) On December 26, 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. In consideration for the sale, NCM LLC received a total of $25.0 million in promissory notes from its founding members (one-third or approximately $8.3 million from each founding member). The notes bear interest at a fixed rate of 5.0% per annum, compounded annually. Interest and principal payments are due annually in six equal installments commencing on the first anniversary of the closing. As of Included in the unaudited Condensed Consolidated Balance Sheets: September 26, December 27, Current portion of notes receivable - related parties (1) (2) 2.8 4.2 Interest receivable on notes receivable (included in other current assets) (1) (2) 0.2 0.1 Common unit adjustments, net of amortization and integration payments (included in intangible assets) (3) 633.2 657.6 Current payable to founding members under tax receivable agreement (1)(4) 11.1 11.2 Long-term payable to founding members under tax receivable agreement (1)(4) 133.2 141.1 _________________________________ (1) AMC is no longer considered a related party as of July 5, 2018, as described further above. As such, the figures as of September 26, 2019 and December 27, 2018 do not include AMC. (2) Refer to the discussion of notes receivable from the founding members above. (3) Refer to Note 4— Intangible Assets for further information on common unit adjustments and integration payments. This balance includes common unit adjustments issued to all of the founding members (including AMC) as the Company's intangible balance is considered one asset inclusive of all common unit adjustment activity. (4) The Company paid Cinemark and Regal $ 3.5 million and $ 6.3 million, respectively, in payments pursuant to the TRA during 2019 which was for the 2018 tax year. The Company paid AMC, Cinemark and Regal $5.4 million , $ 4.6 million and $ 8.4 million, respectively, in payments pursuant to the TRA during 2018 which was for the 2017 tax year. As AMC is no longer considered a related party as of July 5, 2018, the AMC TRA payment includes only related party activity with AMC for the six months ended June 28, 2018. Pursuant to the terms of the NCM LLC Operating Agreement in place since the completion of the Company’s 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. Mandatory distributions of available cash for the three and nine months ended September 26, 2019 and September 27, 2018 were as follows (in millions): Three Months Ended Nine Months Ended September 26, September 27, September 26, September 27, AMC $ — $ — $ — $ 2.2 Cinemark 10.9 9.4 21.4 20.7 Regal 11.5 9.7 22.5 21.5 Total distributions to related parties 22.4 19.1 43.9 44.4 NCM, Inc. 21.3 18.2 41.7 42.5 Total $ 43.7 $ 37.3 $ 85.6 $ 86.9 The mandatory distributions of available cash by NCM LLC to Regal and Cinemark for the three months ended September 26, 2019 of $22.4 million are included in amounts due to founding members, net on the unaudited Condensed Consolidated Balance Sheets as of September 26, 2019 and will be made in the fourth quarter of 2019. AMC’s distribution for the three months ended June 28, 2018 was split equally between Cinemark and Regal because NCM LLC used a record date of July 6, 2018 (following the sale of AMC's membership units to Cinemark and Regal) to accommodate an agreement between each of AMC and Cinemark and AMC and Regal. These agreements entitled AMC to half of the second quarter of 2018 available cash distribution, or approximately $2.2 million , of which Cinemark and Regal each independently paid AMC approximately $1.1 million . The mandatory distributions to NCM, Inc. are eliminated in consolidation. Amounts due to founding members, net as of September 26, 2019 were comprised of the following (in millions): Cinemark Regal Total Theater access fees, net of beverage revenues and other encumbered theater payments $ 1.0 $ 1.4 $ 2.4 Distributions payable to founding members 10.9 11.5 22.4 Total amounts due to founding members, net $ 11.9 $ 12.9 $ 24.8 Amounts due to founding members, net as of December 27, 2018 were comprised of the following (in millions): Cinemark Regal Total Theater access fees, net of beverage revenues and other encumbered theater payments $ 1.0 $ 1.5 $ 2.5 Distributions payable to founding members 13.7 14.2 27.9 Integration payments due from founding members (0.4 ) — (0.4 ) Total amounts due to founding members, net $ 14.3 $ 15.7 $ 30.0 The Amounts due from founding members, net balance as of September 26, 2019 and December 27, 2018 per the Condensed Consolidated Balance Sheets relates to payments due from AMC to NCM LLC. Given that AMC ceased being a related party as of July 5, 2018, the detail of that balance has not been included within the tables above. During the three and nine months ended September 27, 2018 , AMC received cash dividends of approximately $0.1 million and $0.4 million , respectively, on its shares of NCM, Inc. common stock held at that time. 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. 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. The Company’s investment in AC JV, LLC was $1.0 million and $0.9 million as of September 26, 2019 and December 27, 2018 , respectively. During the three months ended September 26, 2019 and September 27, 2018 and the nine months ended September 26, 2019 and September 27, 2018 , NCM LLC received cash distributions from AC JV, LLC of $0.1 million , $0.0 million , $0.2 million and $0.0 million , respectively. Equity in earnings from AC JV, LLC for the three months ended September 26, 2019 and September 27, 2018 and the nine months ended September 26, 2019 and September 27, 2018 , were $0.0 million , $0.0 million , $0.3 million and $0.1 million , respectively, and is included in non-operating expenses in the unaudited Condensed Consolidated Statements of Income. NCM LLC also received fees from AC JV, LLC of $0.1 million , $0.1 million , $0.1 million , and $0.2 million in the three months ended September 26, 2019 and September 27, 2018 and the nine months ended September 26, 2019 and September 27, 2018 , respectively, related to the transition services agreement with AC JV, LLC whereby the Company provides certain corporate overhead or creative services or use of facilities in exchange for a fee. These fees received by NCM LLC are included as an offset to network costs in the unaudited Condensed Consolidated Statements of Income. |
Borrowings
Borrowings | 9 Months Ended |
Sep. 26, 2019 | |
Debt Disclosure [Abstract] | |
Borrowings | BORROWINGS The following table summarizes NCM LLC’s total outstanding debt as of September 26, 2019 and December 27, 2018 and the significant terms of its borrowing arrangements (in millions): Outstanding Balance as of Borrowings September 26, December 27, Maturity Date Interest Rate Senior secured notes due 2022 $ 400.0 $ 400.0 April 15, 2022 6.000% Revolving credit facility 6.0 27.0 June 20, 2023 (1) Term loan 267.3 269.4 June 20, 2025 (1) Senior unsecured notes due 2026 230.0 235.0 August 15, 2026 5.750% Total borrowings 903.3 931.4 Less: debt issuance costs related to term loan and senior notes (6.6 ) (7.8 ) Total borrowings, net 896.7 923.6 Less: current portion of debt (2.7 ) (2.7 ) Carrying value of long-term debt $ 894.0 $ 920.9 ___________________________________________________ (1) The interest rates on the revolving credit facility and term loan are described below. Senior Secured Credit Facility —On June 20, 2018, NCM LLC entered into a credit agreement to replace NCM LLC's senior secured credit facility, dated as of February 13, 2007, as amended (the “previous facility”). Consistent with the structure of the previous facility, the agreement consists of a term loan facility and a revolving credit facility. As of September 26, 2019 , NCM LLC’s senior secured credit facility consisted of a $175.0 million revolving credit facility and a $267.3 million term loan. The obligations under the senior secured credit facility are secured by a lien on substantially all of the assets of NCM LLC. Revolving Credit Facility —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 September 26, 2019 , NCM LLC’s total availability under the $175.0 million revolving credit facility was $164.2 million, net of $6.0 million outstanding and $4.8 million in 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 1.75% to 2.25% or the base rate plus an applicable margin ranging from 0.75% to 1.25% . 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 revolving credit facility as of September 26, 2019 was 6.00% . Term Loan —The interest rate on the term loan is a rate chosen at NCM LLC’s option of either the LIBOR index plus 3.00% or the base rate plus 2.00% . The interest rate on the term loan as of September 26, 2019 was 5.19% . The term loan amortizes at a rate equal to 1.00% annually, to be paid in equal quarterly installments. As of September 26, 2019 , NCM LLC has paid principal of $ 2.7 million, reducing the outstanding balance to $267.3 million. The term loan will mature on June 20, 2025. The senior secured credit facility contains a number of covenants and various financial ratio requirements, including, (i) a consolidated net total leverage ratio covenant of 6.25 times 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. In addition, NCM LLC is permitted to make quarterly dividend payments and other restricted payments with its available cash as long as NCM LLC’s consolidated net senior secured leverage ratio (after giving effect to any such payment) is below 5.50 times and no default or event of default has occurred and continues to occur under the senior secured credit facility. As of September 26, 2019 , NCM LLC’s consolidated net senior secured leverage ratio was 3.11 times (versus the dividend payment restriction of 5.50 times and the covenant of 4.50 times) and NCM LLC's consolidated net total leverage ratio was 4.17 times (versus the covenant of 6.25 times). Senior Secured Notes due 2022 —On April 27, 2012, NCM LLC completed a private placement of $400.0 million in aggregate principal amount of 6.000% Senior Secured Notes (the “Notes due 2022”) for which the registered exchange offering was completed on November 26, 2012. The Notes due 2022 pay interest semi-annually in arrears on April 15 and October 15 of each year, which commenced on October 15, 2012 . The Notes due 2022 share in the same collateral that secures NCM LLC's obligations under the senior secured credit facility. 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 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. NCM LLC repurchased and canceled a total of $5.0 million and $15.0 million of the Notes due 2026 during 2019 and 2018, respectively, reducing the principal amount to $230.0 million as of September 26, 2019 . These repurchases were treated as partial debt extinguishments and resulted in the realization of a non-operating gain, net of written off debt issuance costs, of $0.3 million and $0.3 million during the nine months ended September 26, 2019 and September 27, 2018 , respectively. |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 26, 2019 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | INCOME TAXES Changes in the Company’s Effective Tax Rate —The Company’s effective tax rate increased from (2.8)% for the three months ended September 27, 2018 to 33.4% for the three months ended September 26, 2019 primarily due to lower deferred tax expense for the three months ended September 27, 2018 from the Company's remeasurement of its deferred tax assets as a result of revised state tax apportionment rates. The Company’s effective tax rate decreased from 55.3% for the nine months ended September 27, 2018 to 26.9% for the nine months ended September 26, 2019 primarily due to a decrease in tax expense recorded for the change in the state effective tax rate. The decrease in income tax expense was primarily due to a decrease in deferred tax expense for the nine months ended September 26, 2019 , compared to the nine months ended September 27, 2018 related to the Company's remeasurement of its deferred taxes as a result of a 2018 state tax law change. The Company's current blended state and federal rate is 24.3% as of September 26, 2019 as compared to 25.6% as of September 27, 2018 . |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 26, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | COMMITMENTS AND CONTINGENCIES 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 or in the aggregate on its financial position, results of operations or cash flows. Operating Commitments - Facilities - The Company has entered into operating lease agreements for its corporate headquarters and other regional offices. The Company has right-of-use (“ROU”) assets of $21.9 million and short-term and long-term lease liabilities of $1.5 million and $24.5 million , respectively, on the balance sheet as of September 26, 2019 for all material leases with terms longer than twelve months. These balances are included within 'Other assets', 'Other current liabilities' and 'Other liabilities', respectively, on the unaudited Condensed 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 termination fees would be due upon exercise of the early termination options as outlined within the underlying agreements. None of these options were considered reasonably certain of exercise and thus have not been recognized as part of the ROU assets and lease liabilities. As of September 26, 2019 , the Company had a weighted average remaining lease term of 10.25 years on these leases. The Company has also entered into certain short-term leases with a term of less than one year. These leases are not included within the Company’s ROU assets or lease liabilities due to the Company’s election of the practical expedient in ASC 842-20-25-2 for short-term leases. During the three and nine months ended September 26, 2019 , the Company recognized the following components of total lease cost (in millions). These costs are presented within selling and marketing costs and administrative and other costs within the unaudited Condensed Consolidated Statements of Income depending upon the nature of the use of the facility. Three Months Ended Nine Months Ended September 26, September 26, Operating lease cost $ 0.7 $ 2.3 Short-term lease cost 0.1 0.2 Variable lease cost 0.1 0.4 Total lease cost $ 0.9 $ 2.9 The Company made total lease payments of $0.9 million and $2.5 million during the three and nine months ended September 26, 2019 . These payments are included within cash flows from operating activities within the unaudited Condensed Consolidated Statement of Cash Flows. The minimum lease payments under noncancelable operating leases as of December 27, 2018 were as follows (in millions). Year Minimum Lease Payments 2019 $ 3.5 2020 3.3 2021 3.4 2022 3.4 2023 3.4 Thereafter 22.1 Total $ 39.1 The future lease payments under noncancelable operating leases as of September 26, 2019 were as follows (in millions). Year Future Lease Payments 2019 (September 27, 2019 - December 26, 2019) $ 0.8 2020 3.5 2021 3.5 2022 3.7 2023 3.7 2024 3.7 Thereafter 18.6 Total 37.5 Less: Imputed interest on future lease payments (11.5 ) Total lease liability as of September 26, 2019 per the Condensed Consolidated Balance Sheet $ 26.0 When measuring the ROU assets and lease liabilities recorded, the Company utilized its incremental borrowing rate in order to determine the present value of the lease payments as the leases do not provide an implicit rate. The Company used the rate of interest that it would have paid to borrow on a collateralized basis over a similar term for an amount equal to the lease payments in a similar economic environment. As of September 26, 2019 , the Company’s weighted average annual discount rate used to establish the ROU assets and lease liabilities was 7.35% . 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. 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 4 - 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. As such, the leases are considered short-term in nature, specifically less than one month. Within ASC 842, leases with terms of less than one month are exempt from the majority of the accounting and disclosure requirements, including disclosure of short-term lease expense. 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. However, the amortization of these intangible assets is considered lease expense and was therefore, reclassified in the current period from 'Depreciation and amortization expense' to 'Amortization of intangibles recorded for network theater screen leases' within the unaudited Condensed Consolidated Statement of Income. 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. 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. The payment per theater patron increases by 8% every five years , with this next increase occurring in fiscal year 2022, and 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. As of September 26, 2019 and December 27, 2018 , 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 will 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 beginning at $0.025 per patron on November 1, 2019, (ii) $0.0375 per patron beginning on November 1, 2020, (iii) $0.05 per patron beginning on November 1, 2021, (iv) $0.052 per patron beginning on November 1, 2022 and (v) increase 8% every five years beginning November 1, 2027. Additionally, following the 2019 ESA Amendments, beginning on November 1, 2019, NCM LLC will be entitled to display an additional single unit that is either 30 or 60 seconds of the Noovie pre-show in the trailer position directly prior to the “attached” trailers preceding the feature film (the “Platinum Spot”). The “attached” trailers are those provided by studios to Cinemark and Regal that are with the feature film, which is at least one trailer, but sometimes two trailers. In consideration for the utilization of the theaters for the Platinum Spots, Cinemark and Regal will be 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 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. As of September 26, 2019 , the maximum potential amount of future payments the Company could be required to make pursuant to the minimum revenue guarantees is $83.6 million over the remaining terms of the network affiliate agreements. These minimum guarantees relate to various affiliate agreements ranging in term from one to twenty years , prior to any renewal periods of which some are at the option of the Company. During the three months ended September 26, 2019 and September 27, 2018 and the nine months ended September 26, 2019 and September 27, 2018 , the Company paid $0.3 million , $0.7 million , $0.3 million and $0.7 million related to these minimum guarantees. Additionally, the Company accrued $0.4 million and $0.1 million related to affiliate agreements with guaranteed minimums in excess of the revenue share agreement as of September 26, 2019 and December 27, 2018 , respectively. |
Fair Value Measurements
Fair Value Measurements | 9 Months Ended |
Sep. 26, 2019 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | FAIR VALUE MEASUREMENTS Fair value is the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Fair value is estimated by applying the following hierarchy, which prioritizes the inputs used to measure fair value into three levels and bases the categorization within the hierarchy upon the lowest level of input that is available and significant to the fair value measurement: Level 1 —Quoted prices in active markets for identical assets or liabilities. 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. 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. Non-Recurring Measurements —Certain assets are measured at fair value on a non-recurring basis. These assets are not measured at fair value on an ongoing basis but are subject to fair value adjustments in certain circumstances. These assets include long-lived assets, intangible assets, other investments, notes receivable and borrowings. Long-Lived Assets, Intangible Assets, Other Investments and Notes Receivable —The Company regularly reviews long-lived assets (primarily property, plant and equipment), intangible assets, investments accounted for under the cost or equity method and notes receivable for impairment whenever certain qualitative factors, events or changes in circumstances indicate that the carrying amounts of the assets may not be fully recoverable. When the estimated fair value is determined to be lower than the carrying value of the asset, an impairment charge is recorded to write the asset down to its estimated fair value. Other investments consisted of the following (in millions): As of September 26, December 27, Investment in AC JV, LLC (1) $ 1.0 $ 0.9 Other investments (2) 0.1 2.1 Total $ 1.1 $ 3.0 _______________________________________ (1) Refer to Note 5— Related Party Transactions . This investment is accounted for utilizing the equity method. (2) The Company received equity securities in privately held companies as consideration for a portion of advertising contracts. The equity securities are accounted for at adjusted cost in accordance with the practicability exception under Accounting Standards Update 2016-1, Recognition and Measurement of Financial Assets and Financial Liabilities , and represent an ownership of less than 20% . The Company does not exert significant influence on these companies’ operating or financial activities. During the three months ended September 26, 2019 and September 27, 2018 and the nine months ended September 26, 2019 and September 27, 2018 , the Company recorded impairment charges of $2.0 million , $0.0 million , $2.0 million and $0.4 million , respectively, on certain of its investments due to a significant deterioration in the business prospects of the investee or 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 September 26, 2019 and September 27, 2018 . As of September 26, 2019 , no other observable price changes or impairments have been recorded as a result of the Company’s qualitative assessment of identified events or changes in the circumstances of the remaining investments. The investment in AC JV, LLC was initially valued using comparative market multiples. The other investments were recorded based upon the fair value of the services provided in exchange for the investment. 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. As of September 26, 2019 and December 27, 2018 , the Company had notes receivable totaling $4.2 million and $5.6 million , respectively, from its founding members related to the sale of Fathom Events, as described in Note 5— Related Party Transactions . These notes were initially valued using comparative market multiples. There were no identified events or changes in circumstances that had a significant adverse effect on the fair value of the notes receivable. The notes are classified as Level 3 in the fair value hierarchy as the inputs to the determination of fair value are based upon non-identical assets and use significant unobservable inputs. Borrowings —The carrying amount of the revolving credit facility is considered a reasonable estimate of fair value due to its floating-rate terms. The estimated fair values of the Company’s financial instruments where carrying values do not approximate fair value were as follows (in millions): As of September 26, As of December 27, Carrying Value Fair Value (1) Carrying Value Fair Value (1) Term loan $ 267.3 $ 267.5 $ 269.4 $ 261.2 Notes due 2022 400.0 406.0 400.0 401.8 Notes due 2026 230.0 224.4 235.0 211.0 ____________________________________________ (1) If the Company were to measure the borrowings in the above table at fair value on the balance sheet they would be classified as Level 2 based upon the inputs utilized. Recurring Measurements —The fair values of the Company’s assets and liabilities measured on a recurring basis pursuant to ASC 820-10, Fair Value Measurements and Disclosures are as follows (in millions): Fair Value Measurements at Reporting Date Using Fair Value as of September 26, Quoted Prices in Active Markets for Identical Assets Significant Other Significant Unobservable Inputs ASSETS: Cash equivalents (1) $ 36.9 $ 15.2 $ 21.7 $ — Short-term marketable securities (2) 8.1 — 8.1 — Long-term marketable securities (2) 8.5 — 8.5 — Total assets $ 53.5 $ 15.2 $ 38.3 $ — Fair Value Measurements at Reporting Date Using Fair Value as of December 27, Quoted Prices in Active Markets for Identical Assets Significant Other Significant Unobservable Inputs ASSETS: Cash equivalents (1) $ 18.2 $ 11.2 $ 7.0 $ — Short-term marketable securities (2) 24.0 — 24.0 — Long-term marketable securities (2) 10.2 — 10.2 — Total assets $ 52.4 $ 11.2 $ 41.2 $ — ___________________________________________ (1) Cash Equivalents —The Company’s cash equivalents are carried at estimated fair value. Cash equivalents consist of money market accounts which the Company has classified as Level 1 given the active market for these accounts and commercial paper with original maturities of three months or less, which are classified as Level 2 and are valued as described below. (2) Short-Term and Long-Term Marketable Securities —The carrying amount and fair value of the marketable securities are equivalent since the Company accounts for these instruments at fair value. The Company’s government agency bonds, commercial paper and certificates of deposit are valued using third party broker quotes. The value of the Company’s government agency bonds is derived from quoted market information. The inputs in the valuation are classified as Level 1 if there is an active market for these securities; however, if an active market does not exist, the inputs are recorded at a lower level in the fair value hierarchy. The value of commercial paper and certificates of deposit is derived from pricing models using inputs based upon market information, including contractual terms, market prices and yield curves. The inputs to the valuation pricing models are observable in the market, and as such are generally classified as Level 2 in the fair value hierarchy. For the three and nine months ended September 26, 2019 and September 27, 2018 , there was an inconsequential amount of net realized gains (losses) recognized in interest income and an inconsequential amount of net unrealized holding gains (losses) included in interest income. Original cost of short-term marketable securities is based on the specific identification method. As of September 26, 2019 and December 27, 2018 , there was an inconsequential amount and $0.2 million , respectively, of gross unrealized losses related to individual securities of $6.5 million and $11.8 million , respectively, that had been in a continuous loss position for 12 months or longer. The Company has not recorded an impairment because it has the intention and ability to hold these securities to maturity. The amortized cost basis, aggregate fair value and maturities of the marketable securities the Company held as of September 26, 2019 and December 27, 2018 were as follows: As of September 26, 2019 Amortized Cost Aggregate Fair Maturities (1) MARKETABLE SECURITIES: Short-term U.S. government agency bonds $ 3.0 $ 3.0 0.6 Short-term commercial paper: Industrial 2.0 2.0 0.2 Short-term municipal bonds 1.2 1.2 0.8 Short-term certificates of deposit 1.9 1.9 0.1 Total short-term marketable securities 8.1 8.1 Long-term U.S. government agency bonds 5.9 6.0 3.0 Long-term certificates of deposit 2.5 2.5 2.5 Total long-term marketable securities 8.4 8.5 Total marketable securities $ 16.5 $ 16.6 As of December 27, 2018 Amortized Cost Aggregate Fair Maturities (1) MARKETABLE SECURITIES: Short-term U.S. government agency bonds $ 3.9 $ 3.9 0.5 Short-term U.S. government treasury bonds 0.3 0.3 0.5 Short-term certificates of deposit 3.6 3.6 0.6 Short-term municipal bonds 0.5 0.5 0.1 Short-term commercial paper: Financial 3.8 3.8 0.1 Industrial 12.0 11.9 0.1 Total short-term marketable securities 24.1 24.0 Long-term municipal bonds 1.2 1.3 1.5 Long-term U.S. government agency bonds 6.9 6.8 2.1 Long-term certificates of deposit 2.4 2.1 2.9 Total long-term marketable securities 10.5 10.2 Total marketable securities $ 34.6 $ 34.2 ___________________________________ (1) Maturities —Securities available for sale include obligations with various contractual maturity dates some of which are greater than one year. The Company considers the securities to be liquid and convertible to cash within 30 days. |
Subsequent Event
Subsequent Event | 9 Months Ended |
Sep. 26, 2019 | |
Subsequent Events [Abstract] | |
Subsequent Event | SUBSEQUENT EVENTS 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. 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. Also, on October 8, 2019, NCM LLC called for redemption the entire $400.0 million aggregate principal amount of NCM LLC’s existing Notes due 2022. The redemption price for the Notes due 2022 is 101.000% of the principal amount thereof plus accrued and unpaid interest thereon, to but not including the redemption date. The redemption date will be November 7, 2019. Following the delivery of the redemption notice for the Notes due 2022, NCM LLC deposited funds with the trustee for the Notes due 2022 in an amount that is sufficient for the trustee to pay the full redemption price (including accrued and unpaid interest) to the holders of the Notes due 2022 on the redemption date. On November 4, 2019 , the Company declared a cash dividend of $0.17 per share (approximately $13.2 million ) on each share of the Company’s common stock (not including outstanding restricted stock which will accrue dividends until the shares vest) to stockholders of record on November 14, 2019 to be paid on November 29, 2019 . |
The Company (Policies)
The Company (Policies) | 9 Months Ended |
Sep. 26, 2019 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The Company has prepared the unaudited Condensed Consolidated Financial Statements and related notes of NCM, Inc. in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and the rules and regulations of the Securities and Exchange Commission (“SEC”). Certain reclassifications have been made to the prior year's financial statements to conform to the current presentation (refer to the Condensed Consolidated Statements of Income and Condensed Consolidated Statement of Cash Flows, whereby the Company presented depreciation expense and amortization expense as two separate lines and refer to the Condensed Consolidated Statements of Income, whereby the Company presented loss (gain) on retirement of debt, net as a separate line). Certain information and footnote disclosures typically included in an annual report have been condensed or omitted for this quarterly report. The balance sheet as of December 27, 2018 is derived from the audited financial statements of NCM, Inc. Therefore, the unaudited Condensed Consolidated Financial Statements should be read in conjunction with the audited Consolidated Financial Statements and notes thereto included in the Company’s annual report on Form 10-K filed for the fiscal year ended December 27, 2018 . 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. 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 5— 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. The Company manages its business under one reportable segment of advertising. |
Estimates | 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 and income taxes. Actual results could differ from those estimates. |
Revenue Recognition | Revenue Recognition —The Company derives revenue principally from the advertising business, which includes on-screen and lobby network (LEN) advertising and lobby promotions and advertising on websites and mobile applications owned by NCM LLC and other companies. Revenue is recognized over time as the customer receives the benefits provided by NCM LLC’s advertising services and the Company has the right to payment for performance to date. The Company considers the terms of each arrangement to determine the appropriate accounting treatment. |
Concentration of Credit Risk and Significant Customers | Concentration of Credit Risk and Significant Customers —Bad debts are provided for using the allowance for doubtful accounts method based on historical experience and management’s evaluation of outstanding receivables at the end of the period. Receivables are written off when management determines amounts are uncollectible. Trade accounts receivable are uncollateralized and represent a large number of geographically dispersed debtors. The collectability risk with respect to national and regional advertising is reduced by transacting with founding members or large, national advertising agencies that have strong reputations in the advertising industry and clients with stable financial positions. The Company has smaller contracts with thousands of local clients that are not individually significant. As of September 26, 2019 and December 27, 2018 , there were no advertising agency groups or individual customers through which the Company sources national advertising revenue representing more than 10% of the Company’s outstanding gross receivable balance. During the three and nine months ended September 26, 2019 and September 27, 2018 , the Company had no customers that accounted for more than 10% of revenue. |
Share-Based Compensation | Share-Based Compensation —The Company has issued stock options and restricted stock to certain employees and restricted stock units to its independent directors. In 2018 and 2019, the restricted stock grants for Company management vest upon the achievement of Company performance measures and/or service conditions, while non-management grants vest only upon the achievement of service conditions. Compensation expense of restricted stock that vests 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 of restricted stock expected to vest. Ultimately, the Company adjusts the expense recognized to reflect the actual vested shares following the resolution of the performance conditions. Dividends are accrued when declared on unvested restricted stock that is expected to vest and are only paid with respect to shares that actually vest. |
Consolidation | Consolidation —NCM, Inc. consolidates the accounts of NCM LLC under the provisions of ASC 810, Consolidation (“ASC 810”). The following table presents the changes in NCM, Inc.’s equity resulting from net income attributable to NCM, Inc. and transfers to or from noncontrolling interests (in millions): Three Months Ended Nine Months Ended September 26, September 27, September 26, September 27, Net income attributable to NCM, Inc. $ 9.2 $ 11.2 $ 17.0 $ 13.5 NCM LLC equity issued for purchase of intangible asset — — 3.7 7.7 Income tax and other impacts of subsidiary ownership changes 0.1 10.0 (1.2 ) 6.9 Change from net income attributable to NCM, Inc. and transfers from noncontrolling interests $ 9.3 $ 21.2 $ 19.5 $ 28.1 |
Recently Adopted Accounting Pronouncements | Recently Adopted Accounting Pronouncements During the first quarter of 2019, the Company adopted Accounting Standards Update 2016-2 and subsequent amendments, Leases (Topic 842) (together “ASC 842”) utilizing the Comparatives Under 840 option where only the current period financial statements and related disclosures are presented in accordance with the new standard. As of the adoption date of December 28, 2018 the Company recognized the following on the unaudited Condensed Consolidated Balance Sheets: a right-of-use (“ROU”) asset of $21.7 million within 'Other assets', a short-term lease liability of $1.4 million within Other current liabilities', a long-term lease liability of $24.5 million within 'Other liabilities' and reversed the related deferred rent liability balance of $4.2 million for all leases with terms longer than twelve months related to its building operating leases. The Company elected to utilize the following practical expedients: (i) not being required to separate lease and non-lease components when accounting for the lease for all asset classes; and (ii) not accounting for short-term leases under the new standard. The Company also determined that the ESAs and affiliate agreements are considered leases under ASC 842. However, the identification of the asset and determination of the period of control is dependent upon the scheduling of the showtimes by the exhibitors. As the schedules are typically not determined until one week in advance of the showtime, on average, the leases are considered short term in nature, specifically less than one month. As such, no ROU assets or lease liabilities were recognized for these agreements. The issuance of NCM LLC membership units to the founding members in accordance with NCM LLC’s Common Unit Adjustment Agreement and upfront cash payments to affiliates for the contractual rights to provide services within their theaters will continue to be classified as intangible assets. However, the amortization of these intangible assets is now considered lease expense and has been reclassified within the current period from 'Depreciation and amortization expense' to 'Amortization of intangibles recorded for network theater screen leases' on the unaudited Condensed Consolidated Statement of Income. Additionally, these upfront cash payments to affiliates and receipt of integration payments from the founding members, as defined within Note 4 - Intangible Assets , will be considered cash flows from operating activities on the unaudited Condensed Consolidated Statement of Cash Flows when incurred as they are related to operating leases and will be reclassified from cash flows from investing and financing activities, respectively. The Company has also incorporated additional disclosures in Note 8 - Commitments and Contingencies to comply with ASC 842. During the first quarter of 2019, the Company adopted Accounting Standards Update 2018-7, Compensation – Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting (“ASU 2018-7”), which amends Topic 718 to include share-based payment transactions for acquiring goods and services from nonemployees. The adoption of ASU 2018-7 had no impact on the unaudited Condensed Consolidated Financial statements or notes thereto. During the first quarter of 2019, the Company adopted a final rule issued by the SEC in March 2019 simplifying certain Regulation S-K requirements. The rule eliminated the following requirements in certain circumstances: (1) to disclose discussion of the earliest year of three years of audited financial statements presented within Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations section of the Form 10-K, (2) to request permission from the SEC to redact confidential information from exhibits in the event the information is not material to the agreement and would cause competitive harm, (3) to disclose immaterial physical property and (4) to disclose schedules and attachments to exhibits which do not contain material information. The rule also adds the requirement to disclose the registrant's trading symbol on the cover page of certain SEC forms. The applicable amended disclosure requirements have been incorporated within this Quarterly Report on Form 10-Q. |
Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements In June 2016, the FASB issued Accounting Standards Update 2016-13, Financial Instruments – Credit Losses (Topic 326), Measurement of Credit Losses on Financial Statements (“ASU 2016-13”), which requires a financial asset (or group of financial assets) measured at amortized cost basis to be presented at the net amount expected to be collected. The allowance for credit losses is a valuation account that is deducted from the amortized cost basis of the financial asset(s) to present the net carrying value at the amount expected to be collected on the financial asset. ASU 2016-13 is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years, with early adoption permitted and is to be adopted on a modified retrospective basis. The Company is currently evaluating the impact that adopting this guidance will have on the unaudited Condensed Consolidated Financial Statements or notes thereto. In August 2018, the FASB issued Accounting Standards Update 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement (“ASU 2018-13”), which modifies the disclosure requirements on fair value measurements. ASU 2018-13 is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years, with partial early adoption permitted for eliminated disclosures. The method of adoption varies by the disclosure. The Company does not expect the adoption of ASU 2018-13 to have a material impact on the unaudited Condensed Consolidated Financial Statements or notes thereto. 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 unaudited Condensed Consolidated Financial Statements or notes thereto. |
The Company (Tables)
The Company (Tables) | 9 Months Ended |
Sep. 26, 2019 | |
Accounting Policies [Abstract] | |
Changes In Equity | The following table presents the changes in NCM, Inc.’s equity resulting from net income attributable to NCM, Inc. and transfers to or from noncontrolling interests (in millions): Three Months Ended Nine Months Ended September 26, September 27, September 26, September 27, Net income attributable to NCM, Inc. $ 9.2 $ 11.2 $ 17.0 $ 13.5 NCM LLC equity issued for purchase of intangible asset — — 3.7 7.7 Income tax and other impacts of subsidiary ownership changes 0.1 10.0 (1.2 ) 6.9 Change from net income attributable to NCM, Inc. and transfers from noncontrolling interests $ 9.3 $ 21.2 $ 19.5 $ 28.1 |
Revenue from Contracts with C_2
Revenue from Contracts with Customers (Tables) | 9 Months Ended |
Sep. 26, 2019 | |
Revenue from Contract with Customer [Abstract] | |
Summary of Revenue from Contracts with Customers | The following table summarizes revenue from contracts with customers for the three and nine months ended September 26, 2019 and September 27, 2018 (in millions): Three Months Ended Nine Months Ended September 26, September 27, September 26, September 27, National advertising revenue $ 82.3 $ 80.8 $ 213.9 $ 214.4 Local advertising revenue 16.8 17.4 47.3 49.0 Regional advertising revenue 4.1 4.5 14.2 16.6 Founding member advertising revenue from beverage concessionaire agreements 7.3 7.4 22.2 24.0 Total revenue $ 110.5 $ 110.1 $ 297.6 $ 304.0 |
Summary of Changes in Deferred Revenue | The changes in deferred revenue for the nine months ended September 26, 2019 were as follows (in millions): Nine Months Ended September 26, Balance at beginning of period $ 7.3 Performance obligations satisfied (7.3 ) New contract liabilities 10.4 Balance at end of period $ 10.4 |
Loss Per Share (Tables)
Loss Per Share (Tables) | 9 Months Ended |
Sep. 26, 2019 | |
Earnings Per Share [Abstract] | |
Schedule of Loss Per Share, Basic and Diluted | The components of basic and diluted income per NCM, Inc. share are as follows: Three Months Ended Nine Months Ended September 26, September 27, September 26, September 27, Net income attributable to NCM, Inc. (in millions) $ 9.2 $ 11.2 $ 17.0 $ 13.5 Net income attributable to NCM, Inc. following conversion of dilutive membership units (net of estimated taxes of $0.0, $0.0, $0.0 and $14.7)(in millions) $ 9.2 $ 11.2 $ 17.0 $ 24.6 Weighted average shares outstanding: Basic 77,356,833 76,924,983 77,293,234 76,825,828 Add: Dilutive effect of stock options, restricted stock and exchangeable membership units 526,738 560,578 394,159 80,161,908 Diluted 77,883,571 77,485,561 77,687,393 156,987,736 Earnings per NCM, Inc. share: Basic $ 0.12 $ 0.15 $ 0.22 $ 0.18 Diluted $ 0.12 $ 0.14 $ 0.22 $ 0.16 |
Related Party Transactions (Tab
Related Party Transactions (Tables) | 9 Months Ended |
Sep. 26, 2019 | |
Related Party Transactions [Abstract] | |
Schedule of Related Party Transactions | The following tables provide summaries of the transactions between the Company and the founding members (in millions): Three Months Ended Nine Months Ended Included in the unaudited Condensed Consolidated Statements of Income: (1) September 26, September 27, September 26, September 27, Revenue: Beverage concessionaire revenue (included in advertising revenue) (2) $ 5.7 $ 5.8 $ 17.5 $ 21.8 Operating expenses: Theater access fee (3) 13.5 13.4 40.9 55.5 Purchase of movie tickets and concession products and rental of theater space (included in selling and marketing costs) (4) 0.1 0.2 0.3 0.9 Purchase of movie tickets and concession products and rental of theater space (included in advertising operating costs) (4) 0.1 0.1 0.1 0.1 Non-operating expenses: Interest income from notes receivable (included in interest income) (5) 0.1 0.1 0.2 0.3 ________________________________________ (1) AMC is no longer considered a related party as of July 5, 2018, as described further above. As such, the figures within the table above only include related party activity with AMC for the six months ended June 28, 2018. (2) For the three and nine months ended September 26, 2019 and September 27, 2018 , two of the founding members purchased 60 seconds of on-screen advertising time and one founding member purchased 30 seconds (with 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 seconds equivalent CPM rate specified by the ESA. (3) Comprised of payments per theater attendee and payments per digital screen with respect to the founding member theaters included in the Company’s network, including payments for access to higher quality digital cinema equipment. (4) Used primarily for marketing to NCM LLC’s advertising clients. (5) On December 26, 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. In consideration for the sale, NCM LLC received a total of $25.0 million in promissory notes from its founding members (one-third or approximately $8.3 million from each founding member). The notes bear interest at a fixed rate of 5.0% per annum, compounded annually. Interest and principal payments are due annually in six equal installments commencing on the first anniversary of the closing. As of Included in the unaudited Condensed Consolidated Balance Sheets: September 26, December 27, Current portion of notes receivable - related parties (1) (2) 2.8 4.2 Interest receivable on notes receivable (included in other current assets) (1) (2) 0.2 0.1 Common unit adjustments, net of amortization and integration payments (included in intangible assets) (3) 633.2 657.6 Current payable to founding members under tax receivable agreement (1)(4) 11.1 11.2 Long-term payable to founding members under tax receivable agreement (1)(4) 133.2 141.1 _________________________________ (1) AMC is no longer considered a related party as of July 5, 2018, as described further above. As such, the figures as of September 26, 2019 and December 27, 2018 do not include AMC. (2) Refer to the discussion of notes receivable from the founding members above. (3) Refer to Note 4— Intangible Assets for further information on common unit adjustments and integration payments. This balance includes common unit adjustments issued to all of the founding members (including AMC) as the Company's intangible balance is considered one asset inclusive of all common unit adjustment activity. (4) The Company paid Cinemark and Regal $ 3.5 million and $ 6.3 million, respectively, in payments pursuant to the TRA during 2019 which was for the 2018 tax year. |
Schedule of Mandatory Distributions to Members | Mandatory distributions of available cash for the three and nine months ended September 26, 2019 and September 27, 2018 were as follows (in millions): Three Months Ended Nine Months Ended September 26, September 27, September 26, September 27, AMC $ — $ — $ — $ 2.2 Cinemark 10.9 9.4 21.4 20.7 Regal 11.5 9.7 22.5 21.5 Total distributions to related parties 22.4 19.1 43.9 44.4 NCM, Inc. 21.3 18.2 41.7 42.5 Total $ 43.7 $ 37.3 $ 85.6 $ 86.9 |
Schedule of Amounts Due to Founding Members, Net | Amounts due to founding members, net as of September 26, 2019 were comprised of the following (in millions): Cinemark Regal Total Theater access fees, net of beverage revenues and other encumbered theater payments $ 1.0 $ 1.4 $ 2.4 Distributions payable to founding members 10.9 11.5 22.4 Total amounts due to founding members, net $ 11.9 $ 12.9 $ 24.8 Amounts due to founding members, net as of December 27, 2018 were comprised of the following (in millions): Cinemark Regal Total Theater access fees, net of beverage revenues and other encumbered theater payments $ 1.0 $ 1.5 $ 2.5 Distributions payable to founding members 13.7 14.2 27.9 Integration payments due from founding members (0.4 ) — (0.4 ) Total amounts due to founding members, net $ 14.3 $ 15.7 $ 30.0 |
Borrowings (Tables)
Borrowings (Tables) | 9 Months Ended |
Sep. 26, 2019 | |
NCM, LLC. | |
Schedule of Outstanding Debt | The following table summarizes NCM LLC’s total outstanding debt as of September 26, 2019 and December 27, 2018 and the significant terms of its borrowing arrangements (in millions): Outstanding Balance as of Borrowings September 26, December 27, Maturity Date Interest Rate Senior secured notes due 2022 $ 400.0 $ 400.0 April 15, 2022 6.000% Revolving credit facility 6.0 27.0 June 20, 2023 (1) Term loan 267.3 269.4 June 20, 2025 (1) Senior unsecured notes due 2026 230.0 235.0 August 15, 2026 5.750% Total borrowings 903.3 931.4 Less: debt issuance costs related to term loan and senior notes (6.6 ) (7.8 ) Total borrowings, net 896.7 923.6 Less: current portion of debt (2.7 ) (2.7 ) Carrying value of long-term debt $ 894.0 $ 920.9 ___________________________________________________ (1) The interest rates on the revolving credit facility and term loan are described below. |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 9 Months Ended |
Sep. 26, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Lease Cost | These costs are presented within selling and marketing costs and administrative and other costs within the unaudited Condensed Consolidated Statements of Income depending upon the nature of the use of the facility. Three Months Ended Nine Months Ended September 26, September 26, Operating lease cost $ 0.7 $ 2.3 Short-term lease cost 0.1 0.2 Variable lease cost 0.1 0.4 Total lease cost $ 0.9 $ 2.9 |
Future Minimum Lease Payments Under Topic 840 | The minimum lease payments under noncancelable operating leases as of December 27, 2018 were as follows (in millions). Year Minimum Lease Payments 2019 $ 3.5 2020 3.3 2021 3.4 2022 3.4 2023 3.4 Thereafter 22.1 Total $ 39.1 |
Future Minimum Lease Payments Under Topic 842 | The future lease payments under noncancelable operating leases as of September 26, 2019 were as follows (in millions). Year Future Lease Payments 2019 (September 27, 2019 - December 26, 2019) $ 0.8 2020 3.5 2021 3.5 2022 3.7 2023 3.7 2024 3.7 Thereafter 18.6 Total 37.5 Less: Imputed interest on future lease payments (11.5 ) Total lease liability as of September 26, 2019 per the Condensed Consolidated Balance Sheet $ 26.0 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 9 Months Ended |
Sep. 26, 2019 | |
Fair Value Disclosures [Abstract] | |
Schedule of Other Assets | Other investments consisted of the following (in millions): As of September 26, December 27, Investment in AC JV, LLC (1) $ 1.0 $ 0.9 Other investments (2) 0.1 2.1 Total $ 1.1 $ 3.0 _______________________________________ (1) Refer to Note 5— Related Party Transactions . This investment is accounted for utilizing the equity method. (2) The Company received equity securities in privately held companies as consideration for a portion of advertising contracts. The equity securities are accounted for at adjusted cost in accordance with the practicability exception under Accounting Standards Update 2016-1, Recognition and Measurement of Financial Assets and Financial Liabilities , and represent an ownership of less than 20% . The Company does not exert significant influence on these companies’ operating or financial activities. |
Estimated Fair Values of Company's Financial Instruments | The estimated fair values of the Company’s financial instruments where carrying values do not approximate fair value were as follows (in millions): As of September 26, As of December 27, Carrying Value Fair Value (1) Carrying Value Fair Value (1) Term loan $ 267.3 $ 267.5 $ 269.4 $ 261.2 Notes due 2022 400.0 406.0 400.0 401.8 Notes due 2026 230.0 224.4 235.0 211.0 ____________________________________________ (1) If the Company were to measure the borrowings in the above table at fair value on the balance sheet they would be classified as Level 2 based upon the inputs utilized. |
Fair Values of the Company's Assets | The fair values of the Company’s assets and liabilities measured on a recurring basis pursuant to ASC 820-10, Fair Value Measurements and Disclosures are as follows (in millions): Fair Value Measurements at Reporting Date Using Fair Value as of September 26, Quoted Prices in Active Markets for Identical Assets Significant Other Significant Unobservable Inputs ASSETS: Cash equivalents (1) $ 36.9 $ 15.2 $ 21.7 $ — Short-term marketable securities (2) 8.1 — 8.1 — Long-term marketable securities (2) 8.5 — 8.5 — Total assets $ 53.5 $ 15.2 $ 38.3 $ — Fair Value Measurements at Reporting Date Using Fair Value as of December 27, Quoted Prices in Active Markets for Identical Assets Significant Other Significant Unobservable Inputs ASSETS: Cash equivalents (1) $ 18.2 $ 11.2 $ 7.0 $ — Short-term marketable securities (2) 24.0 — 24.0 — Long-term marketable securities (2) 10.2 — 10.2 — Total assets $ 52.4 $ 11.2 $ 41.2 $ — ___________________________________________ (1) Cash Equivalents —The Company’s cash equivalents are carried at estimated fair value. Cash equivalents consist of money market accounts which the Company has classified as Level 1 given the active market for these accounts and commercial paper with original maturities of three months or less, which are classified as Level 2 and are valued as described below. (2) Short-Term and Long-Term Marketable Securities —The carrying amount and fair value of the marketable securities are equivalent since the Company accounts for these instruments at fair value. The Company’s government agency bonds, commercial paper and certificates of deposit are valued using third party broker quotes. The value of the Company’s government agency bonds is derived from quoted market information. The inputs in the valuation are classified as Level 1 if there is an active market for these securities; however, if an active market does not exist, the inputs are recorded at a lower level in the fair value hierarchy. The value of commercial paper and certificates of deposit is derived from pricing models using inputs based upon market information, including contractual terms, market prices and yield curves. The inputs to the valuation pricing models are observable in the market, and as such are generally classified as Level 2 in the fair value hierarchy. For the three and nine months ended September 26, 2019 and September 27, 2018 , there was an inconsequential amount of net realized gains (losses) recognized in interest income and an inconsequential amount of net unrealized holding gains (losses) included in interest income. Original cost of short-term marketable securities is based on the specific identification method. As of September 26, 2019 and December 27, 2018 , there was an inconsequential amount and $0.2 million , respectively, of gross unrealized losses related to individual securities of $6.5 million and $11.8 million , respectively, that had been in a continuous loss position for 12 months or longer. The Company has not recorded an impairment because it has the intention and ability to hold these securities to maturity. |
Schedule of Marketable Securities | The amortized cost basis, aggregate fair value and maturities of the marketable securities the Company held as of September 26, 2019 and December 27, 2018 were as follows: As of September 26, 2019 Amortized Cost Aggregate Fair Maturities (1) MARKETABLE SECURITIES: Short-term U.S. government agency bonds $ 3.0 $ 3.0 0.6 Short-term commercial paper: Industrial 2.0 2.0 0.2 Short-term municipal bonds 1.2 1.2 0.8 Short-term certificates of deposit 1.9 1.9 0.1 Total short-term marketable securities 8.1 8.1 Long-term U.S. government agency bonds 5.9 6.0 3.0 Long-term certificates of deposit 2.5 2.5 2.5 Total long-term marketable securities 8.4 8.5 Total marketable securities $ 16.5 $ 16.6 As of December 27, 2018 Amortized Cost Aggregate Fair Maturities (1) MARKETABLE SECURITIES: Short-term U.S. government agency bonds $ 3.9 $ 3.9 0.5 Short-term U.S. government treasury bonds 0.3 0.3 0.5 Short-term certificates of deposit 3.6 3.6 0.6 Short-term municipal bonds 0.5 0.5 0.1 Short-term commercial paper: Financial 3.8 3.8 0.1 Industrial 12.0 11.9 0.1 Total short-term marketable securities 24.1 24.0 Long-term municipal bonds 1.2 1.3 1.5 Long-term U.S. government agency bonds 6.9 6.8 2.1 Long-term certificates of deposit 2.4 2.1 2.9 Total long-term marketable securities 10.5 10.2 Total marketable securities $ 34.6 $ 34.2 ___________________________________ (1) Maturities —Securities available for sale include obligations with various contractual maturity dates some of which are greater than one year. The Company considers the securities to be liquid and convertible to cash within 30 days. |
The Company (Narrative) (Detail
The Company (Narrative) (Details) $ in Millions | 3 Months Ended | 9 Months Ended | 48 Months Ended | |||
Sep. 26, 2019USD ($)shares | Sep. 27, 2018shares | Sep. 26, 2019USD ($)Segmentshares | Sep. 27, 2018shares | Feb. 13, 2041 | Dec. 28, 2018USD ($) | |
General Company Information [Line Items] | ||||||
2019 ESA Amendment extension date | 4 years | |||||
Remaining term (in years) | 20 years | |||||
Membership units exchangeable into common stock ratio | 100.00% | |||||
Number of reportable segment | Segment | 1 | |||||
Number of shares of restricted stock and stock units vested | shares | 18,889 | 21,807 | 568,584 | 997,403 | ||
Operating lease, right-of-use asset | $ 21.9 | $ 21.9 | ||||
Short-term lease liability | 1.5 | 1.5 | ||||
Long-term lease liability | $ 24.5 | $ 24.5 | ||||
Accounting Standards Update 2016-02 | ||||||
General Company Information [Line Items] | ||||||
Operating lease, right-of-use asset | $ 21.7 | |||||
Short-term lease liability | 1.4 | |||||
Long-term lease liability | 24.5 | |||||
Reversal of related deferred rent liability | $ (4.2) | |||||
NCM, LLC. | ||||||
General Company Information [Line Items] | ||||||
Weighted average term, esa and affiliate (in years) | 17 years 5 months | |||||
Common membership units outstanding | shares | 159,067,874 | 159,067,874 | ||||
NCM Inc. | ||||||
General Company Information [Line Items] | ||||||
Common membership units outstanding | shares | 77,362,387 | 77,362,387 | ||||
Percentage of common membership units outstanding | 48.60% | |||||
AMC | ||||||
General Company Information [Line Items] | ||||||
Common membership units outstanding | shares | 197,118 | 197,118 | ||||
Percentage of common membership units outstanding | 0.10% | |||||
Cinemark | ||||||
General Company Information [Line Items] | ||||||
Common membership units outstanding | shares | 39,737,700 | 39,737,700 | ||||
Percentage of common membership units outstanding | 25.00% | |||||
Regal | ||||||
General Company Information [Line Items] | ||||||
Common membership units outstanding | shares | 41,770,669 | 41,770,669 | ||||
Percentage of common membership units outstanding | 26.30% |
The Company (Changes In Equity)
The Company (Changes In Equity) (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 26, 2019 | Sep. 27, 2018 | Sep. 26, 2019 | Sep. 27, 2018 | |
Accounting Policies [Abstract] | ||||
Net income attributable to NCM, Inc. | $ 9.2 | $ 11.2 | $ 17 | $ 13.5 |
NCM LLC equity issued for purchase of intangible asset | 0 | 0 | 3.7 | 7.7 |
Income tax and other impacts of subsidiary ownership changes | 0.1 | 10 | (1.2) | 6.9 |
Change from net income attributable to NCM, Inc. and transfers from noncontrolling interests | $ 9.3 | $ 21.2 | $ 19.5 | $ 28.1 |
Revenue from Contracts with C_3
Revenue from Contracts with Customers (Narrative) (Details) - USD ($) | 9 Months Ended | |
Sep. 26, 2019 | Dec. 27, 2018 | |
Revenue from Contract with Customer [Abstract] | ||
Make-good provision | $ 4,800,000 | $ 8 |
Noncancelable contract terms | 2 years | |
Estimated revenue to be recognized on noncancelable leases | $ 25,500,000 | |
Unbilled accounts receivable | $ 11,600,000 | $ 6,000,000 |
Revenue from Contracts with C_4
Revenue from Contracts with Customers (Remaining Performance Obligations) (Details) $ in Millions | Sep. 26, 2019USD ($) |
Revenue from Contract with Customer [Abstract] | |
Remaining performance obligation | $ 25.5 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2019-03-29 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue from contract, payment due period from the customer | 9 months |
Revenue from Contracts with C_5
Revenue from Contracts with Customers (Summary of Revenue from Contracts with Customers) (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 26, 2019 | Sep. 27, 2018 | Sep. 26, 2019 | Sep. 27, 2018 | |
Disaggregation of Revenue [Line Items] | ||||
Revenue | $ 110.5 | $ 110.1 | $ 297.6 | $ 304 |
National advertising revenue | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 82.3 | 80.8 | 213.9 | 214.4 |
Local advertising revenue | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 16.8 | 17.4 | 47.3 | 49 |
Regional advertising revenue | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 4.1 | 4.5 | 14.2 | 16.6 |
Founding member advertising revenue from beverage concessionaire agreements | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | $ 7.3 | $ 7.4 | $ 22.2 | $ 24 |
Revenue from Contracts with C_6
Revenue from Contracts with Customers (Summary of Changes in Deferred Revenue) (Details) $ in Millions | 9 Months Ended |
Sep. 26, 2019USD ($) | |
Contract Liabilities | |
Balance at beginning of period | $ 7.3 |
Performance obligations satisfied | (7.3) |
New contract liabilities | 10.4 |
Balance at end of period | $ 10.4 |
Loss Per Share (Schedule of Los
Loss Per Share (Schedule of Loss Per Share, Basic and Diluted) (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 26, 2019 | Sep. 27, 2018 | Sep. 26, 2019 | Sep. 27, 2018 | |
Earnings Per Share [Abstract] | ||||
Net income attributable to NCM, Inc. (in millions) | $ 9.2 | $ 11.2 | $ 17 | $ 13.5 |
Weighted average shares outstanding: | ||||
Basic (in shares) | 77,356,833 | 76,924,983 | 77,293,234 | 76,825,828 |
Add: Dilutive effect of stock options and restricted stock (in shares) | 526,738 | 560,578 | 394,159 | 80,161,908 |
Diluted (in shares) | 77,883,571 | 77,485,561 | 77,687,393 | 156,987,736 |
Earnings per NCM, Inc. share: | ||||
Basic (in usd per share) | $ 0.12 | $ 0.15 | $ 0.22 | $ 0.18 |
Diluted (in usd per share) | $ 0.12 | $ 0.14 | $ 0.22 | $ 0.16 |
Loss Per Share (Narrative) (Det
Loss Per Share (Narrative) (Details) - shares | 3 Months Ended | 9 Months Ended | ||
Sep. 26, 2019 | Sep. 27, 2018 | Sep. 26, 2019 | Sep. 27, 2018 | |
Stock Options And Non-Vested Restricted Stock | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Shares excluded from the calculation of diluted weighted average shares | 2,553,449 | 2,016,709 | 2,593,231 | 2,223,440 |
Common Units | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Shares excluded from the calculation of diluted weighted average shares | 81,705,487 | 80,660,822 | 81,410,838 |
Intangible Assets (Narrative) (
Intangible Assets (Narrative) (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 26, 2019 | Sep. 27, 2018 | Sep. 26, 2019 | Sep. 27, 2018 | |
Finite-Lived Intangible Assets [Line Items] | ||||
Finite-Lived Intangible Assets, Cost Incurred to Renew or Extend | $ 1.1 | $ 0 | $ 1.1 | $ 0 |
Integration and other encumbered payments, related parties - financing activities | 0 | 17.2 | ||
NCM, LLC. | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Common membership units issued, net of returned | 1,044,665 | 2,821,710 | ||
Increase (decrease) in intangible assets, net | $ 7.6 | $ 15.9 | ||
Common membership units issued | 3,736,860 | |||
Common membership units returned | 915,150 | |||
NCM, LLC. | AMC and Cinemark | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Increase (decrease) in intangible assets, net | 5.6 | $ 5.5 | 13.7 | 13.3 |
Integration and other encumbered payments, related parties - financing activities | $ 5.7 | $ 5.6 | $ 16.3 | $ 17.2 |
Minimum | NCM, LLC. | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Percentage increase (decrease) in theater attendance for Common Unit adjustment to occur | (2.00%) | |||
Maximum | NCM, LLC. | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Percentage increase (decrease) in theater attendance for Common Unit adjustment to occur | 2.00% |
Related Party Transactions (Nar
Related Party Transactions (Narrative) (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||||
Sep. 26, 2019 | Sep. 27, 2018 | Sep. 26, 2019 | Sep. 27, 2018 | Dec. 27, 2018 | Dec. 26, 2013 | |
Related Party Transaction [Line Items] | ||||||
On-screen advertising time to satisfy agreement obligations, in seconds | 30 seconds | 30 seconds | ||||
Percentage of cash savings related to taxes | 90.00% | |||||
Cash payment due to founding members/managing member | $ 22.4 | $ 22.4 | $ 27.9 | |||
Cash dividends on shares of NMC Inc | 13.5 | $ 13.1 | 40.3 | $ 39.9 | ||
AC JV, LLC | ||||||
Related Party Transaction [Line Items] | ||||||
Investment in AC JV, LLC | 1 | 1 | 0.9 | |||
Distributed Earnings | 0.1 | 0 | 0.2 | 0 | ||
Equity in earnings of non-consolidated entities | 0 | 0 | 0.3 | 0.1 | ||
Revenue from Related Parties | 0.1 | 0.1 | 0.1 | 0.2 | ||
NCM, LLC. | AC JV, LLC | ||||||
Related Party Transaction [Line Items] | ||||||
Ownership percentage | 4.00% | |||||
Founding Members | ||||||
Related Party Transaction [Line Items] | ||||||
Cash payment due to founding members/managing member | 22.4 | 22.4 | ||||
AMC | ||||||
Related Party Transaction [Line Items] | ||||||
Cash payment due to founding members/managing member | 2.2 | 2.2 | ||||
Cash dividends on shares of NMC Inc | 0.1 | 0.4 | ||||
AMC | AC JV, LLC | ||||||
Related Party Transaction [Line Items] | ||||||
Ownership percentage | 32.00% | |||||
Cinemark | ||||||
Related Party Transaction [Line Items] | ||||||
Cash payment due to founding members/managing member | 10.9 | 10.9 | 13.7 | |||
Cinemark | AC JV, LLC | ||||||
Related Party Transaction [Line Items] | ||||||
Ownership percentage | 32.00% | |||||
Regal | ||||||
Related Party Transaction [Line Items] | ||||||
Cash payment due to founding members/managing member | $ 11.5 | $ 11.5 | $ 14.2 | |||
Regal | AC JV, LLC | ||||||
Related Party Transaction [Line Items] | ||||||
Ownership percentage | 32.00% | |||||
Cinemark and Regal | ||||||
Related Party Transaction [Line Items] | ||||||
Cash payment due to founding members/managing member | $ 1.1 | $ 1.1 | ||||
Minimum | NCM, LLC. | ||||||
Related Party Transaction [Line Items] | ||||||
On-screen advertising time to satisfy agreement obligations, in seconds | 30 seconds | |||||
Maximum | NCM, LLC. | ||||||
Related Party Transaction [Line Items] | ||||||
On-screen advertising time to satisfy agreement obligations, in seconds | 60 seconds |
Related Party Transactions (Sum
Related Party Transactions (Summary of Transactions Between the Company and the Founding Members Included in Statements of Income) (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 26, 2019 | Sep. 27, 2018 | Sep. 26, 2019 | Sep. 27, 2018 | |
Related Party Transaction [Line Items] | ||||
Revenue | $ 110,500,000 | $ 110,100,000 | $ 297,600,000 | $ 304,000,000 |
Selling and marketing costs | 17,000,000 | 15,300,000 | 48,400,000 | 48,000,000 |
Founding Members | ||||
Related Party Transaction [Line Items] | ||||
Revenue | 5,700,000 | 5,800,000 | 17,500,000 | 21,800,000 |
Theater access fee | 13,500,000 | 13,400,000 | 40,900,000 | 55,500,000 |
Selling and marketing costs | 100,000 | 200,000 | 300,000 | 900,000 |
Marketing and Advertising Expense | 100,000 | 100,000 | 100,000 | 100,000 |
Interest income from notes receivable (included in interest income) | $ 100,000 | $ 100,000 | $ 200,000 | $ 300,000 |
Related Party Transactions (S_2
Related Party Transactions (Summary of Transactions Between the Company and the Founding Members Included in Statements of Income) (Additional Information) (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 26, 2019 | Sep. 26, 2019 | Sep. 27, 2018 | Dec. 27, 2018 | Dec. 26, 2013 | |
Related Party Transaction [Line Items] | |||||
On-screen advertising time to satisfy agreement obligations, in seconds | 30 seconds | 30 seconds | |||
NCM, LLC. | AC JV, LLC | |||||
Related Party Transaction [Line Items] | |||||
Ownership percentage | 4.00% | ||||
One Founding Members | |||||
Related Party Transaction [Line Items] | |||||
On-screen advertising time purchased, in seconds | 30 seconds | 30 seconds | |||
Two Founding Members | |||||
Related Party Transaction [Line Items] | |||||
On-screen advertising time purchased, in seconds | 60 seconds | 60 seconds | |||
AMC | |||||
Related Party Transaction [Line Items] | |||||
Payments to affiliates for tax sharing agreement | $ 5.4 | ||||
AMC | AC JV, LLC | |||||
Related Party Transaction [Line Items] | |||||
Ownership percentage | 32.00% | ||||
AMC | NCM, LLC. | AC JV, LLC | |||||
Related Party Transaction [Line Items] | |||||
Promissory notes receivable from founding members | $ 8.3 | ||||
Regal | |||||
Related Party Transaction [Line Items] | |||||
Payments to affiliates for tax sharing agreement | 8.4 | ||||
Regal | AC JV, LLC | |||||
Related Party Transaction [Line Items] | |||||
Ownership percentage | 32.00% | ||||
Regal | NCM, LLC. | AC JV, LLC | |||||
Related Party Transaction [Line Items] | |||||
Promissory notes receivable from founding members | $ 8.3 | ||||
Cinemark | |||||
Related Party Transaction [Line Items] | |||||
Payments to affiliates for tax sharing agreement | $ 4.6 | ||||
Cinemark | AC JV, LLC | |||||
Related Party Transaction [Line Items] | |||||
Ownership percentage | 32.00% | ||||
Cinemark | NCM, LLC. | AC JV, LLC | |||||
Related Party Transaction [Line Items] | |||||
Promissory notes receivable from founding members | $ 8.3 | ||||
Founding Members | |||||
Related Party Transaction [Line Items] | |||||
Promissory notes receivable from founding members | $ 4.2 | $ 4.2 | $ 5.6 | ||
Founding Members | NCM, LLC. | AC JV, LLC | |||||
Related Party Transaction [Line Items] | |||||
Interest rate on notes receivable | 5.00% | ||||
Promissory notes receivable from founding members | $ 25 | ||||
Founding Members | Promissory Notes | NCM, LLC. | AC JV, LLC | |||||
Related Party Transaction [Line Items] | |||||
Debt payment terms | Interest and principal payments are due annually in six equal installments commencing on the first anniversary of the closing. | ||||
Maximum | |||||
Related Party Transaction [Line Items] | |||||
On-screen advertising time which founding members have right to purchase, in seconds | 90 seconds | 90 seconds | |||
Maximum | NCM, LLC. | |||||
Related Party Transaction [Line Items] | |||||
On-screen advertising time to satisfy agreement obligations, in seconds | 60 seconds | ||||
Minimum | NCM, LLC. | |||||
Related Party Transaction [Line Items] | |||||
On-screen advertising time to satisfy agreement obligations, in seconds | 30 seconds |
Related Party Transactions (S_3
Related Party Transactions (Summary of Transactions Between the Company and the Founding Members Included in Balance Sheets) (Details) - USD ($) $ in Millions | Sep. 26, 2019 | Dec. 27, 2018 |
Related Party Transaction [Line Items] | ||
Receivables from related parties, current | $ 4.2 | $ 5.6 |
Common unit adjustments, net of amortization and integration payments (included in intangible assets) | 658.3 | 684.5 |
Current payable to founding members under tax receivable agreement | 15.3 | 15.5 |
Long-term payable to founding members under tax receivable agreement | 183.4 | 195.6 |
Founding Members | ||
Related Party Transaction [Line Items] | ||
Receivables from related parties, current | 2.8 | 4.2 |
Interest receivable on notes receivable (included in other current assets) | 0.2 | 0.1 |
Common unit adjustments, net of amortization and integration payments (included in intangible assets) | 633.2 | 657.6 |
Current payable to founding members under tax receivable agreement | 11.1 | 11.2 |
Long-term payable to founding members under tax receivable agreement | $ 133.2 | $ 141.1 |
Related Party Transactions (S_4
Related Party Transactions (Summary of Transactions Between the Company and the Founding Members Included in Balance Sheets) (Additional Information) (Details) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 26, 2019 | Sep. 27, 2018 | |
Cinemark | ||
Related Party Transaction [Line Items] | ||
Payments to affiliates for tax sharing agreement | $ 4.6 | |
Cinemark | Tax Year 2017 | ||
Related Party Transaction [Line Items] | ||
Payments to affiliates for tax sharing agreement | $ 3.5 | |
Regal | ||
Related Party Transaction [Line Items] | ||
Payments to affiliates for tax sharing agreement | $ 8.4 | |
Regal | Tax Year 2017 | ||
Related Party Transaction [Line Items] | ||
Payments to affiliates for tax sharing agreement | $ 6.3 |
Related Party Transactions (Sch
Related Party Transactions (Schedule of Mandatory Distributions to Members) (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 26, 2019 | Sep. 27, 2018 | Sep. 26, 2019 | Sep. 27, 2018 | |
Related Party Transaction [Line Items] | ||||
Cash distributions declared to members | $ 43.7 | $ 37.3 | $ 85.6 | $ 86.9 |
AMC | ||||
Related Party Transaction [Line Items] | ||||
Cash distributions declared to members | 2.2 | |||
Cinemark | ||||
Related Party Transaction [Line Items] | ||||
Cash distributions declared to members | 10.9 | 9.4 | 21.4 | 20.7 |
Regal | ||||
Related Party Transaction [Line Items] | ||||
Cash distributions declared to members | 11.5 | 9.7 | 22.5 | 21.5 |
Founding Members | ||||
Related Party Transaction [Line Items] | ||||
Cash distributions declared to members | 22.4 | 19.1 | 43.9 | 44.4 |
NCM Inc. | ||||
Related Party Transaction [Line Items] | ||||
Cash distributions declared to members | 21.3 | 18.2 | 41.7 | 42.5 |
A C J V L L C [Member] | ||||
Related Party Transaction [Line Items] | ||||
Income (Loss) from Equity Method Investments | $ 0 | $ 0 | $ 0.3 | $ 0.1 |
Related Party Transactions (S_5
Related Party Transactions (Schedule of Amounts Due to Founding Members, Net) (Details) - USD ($) $ in Millions | Sep. 26, 2019 | Dec. 27, 2018 | Sep. 27, 2018 |
Related Party Transaction [Line Items] | |||
Theater access fees, net of beverage revenues and other encumbered theater payments | $ 2.4 | $ 2.5 | |
Distributions payable to founding members | 22.4 | 27.9 | |
Integration payments due from founding members | (0.4) | ||
Total amounts due to founding members, net | 24.8 | 30 | |
AMC | |||
Related Party Transaction [Line Items] | |||
Distributions payable to founding members | $ 2.2 | ||
Cinemark | |||
Related Party Transaction [Line Items] | |||
Theater access fees, net of beverage revenues and other encumbered theater payments | 1 | 1 | |
Distributions payable to founding members | 10.9 | 13.7 | |
Integration payments due from founding members | (0.4) | ||
Total amounts due to founding members, net | 11.9 | 14.3 | |
Regal | |||
Related Party Transaction [Line Items] | |||
Theater access fees, net of beverage revenues and other encumbered theater payments | 1.4 | 1.5 | |
Distributions payable to founding members | 11.5 | 14.2 | |
Integration payments due from founding members | 0 | ||
Total amounts due to founding members, net | $ 12.9 | $ 15.7 |
Borrowings (Schedule of Outstan
Borrowings (Schedule of Outstanding Debt) (Details) - USD ($) $ in Millions | Oct. 08, 2019 | Sep. 26, 2019 | Dec. 27, 2018 | Aug. 19, 2016 | Apr. 27, 2012 |
Debt Instrument [Line Items] | |||||
Debt issuance costs, long-term | $ (6.6) | $ (7.8) | |||
Carrying value of long-term debt | 894 | 920.9 | |||
NCM, LLC. | |||||
Debt Instrument [Line Items] | |||||
Outstanding borrowings | 903.3 | 931.4 | |||
Debt issuance costs, long-term | (6.6) | (7.8) | |||
Long-term Debt | 896.7 | 923.6 | |||
Carrying value of long-term debt | 894 | 920.9 | |||
Less: current portion of debt | (2.7) | (2.7) | |||
Interest Rate | 5.875% | ||||
NCM, LLC. | Senior secured notes due 2022 | |||||
Debt Instrument [Line Items] | |||||
Outstanding borrowings | $ 400 | 400 | |||
Interest Rate | 6.00% | 6.00% | |||
NCM, LLC. | Senior unsecured notes due 2026 | |||||
Debt Instrument [Line Items] | |||||
Outstanding borrowings | $ 230 | 235 | |||
Interest Rate | 5.75% | 5.75% | |||
NCM, LLC. | Term loan | |||||
Debt Instrument [Line Items] | |||||
Outstanding borrowings | $ 267.3 | 269.4 | |||
Interest Rate | 5.19% | ||||
NCM, LLC. | Revolving credit facility | |||||
Debt Instrument [Line Items] | |||||
Outstanding borrowings | $ 6 | $ 27 |
Borrowings (Narrative) (Details
Borrowings (Narrative) (Details) | 3 Months Ended | 9 Months Ended | |||||
Sep. 26, 2019USD ($) | Sep. 26, 2019USD ($) | Sep. 27, 2018USD ($) | Oct. 08, 2019USD ($) | Dec. 27, 2018USD ($) | Aug. 19, 2016USD ($) | Apr. 27, 2012USD ($) | |
Debt Instrument [Line Items] | |||||||
Repayment of term loan facility | $ 2,000,000 | $ 270,700,000 | |||||
NCM, LLC. | |||||||
Debt Instrument [Line Items] | |||||||
Debt Instrument, carrying value | $ 903,300,000 | 903,300,000 | $ 931,400,000 | ||||
Cash and cash equivalents used in determining senior secured leverage ratio | $ 100,000,000 | ||||||
Debt instrument face amount | $ 400,000,000 | ||||||
Stated interest rate | 5.875% | ||||||
Debt instrument issued percentage of face value | 101.00% | ||||||
NCM, LLC. | Senior Secured Credit Facility | |||||||
Debt Instrument [Line Items] | |||||||
Net total leverage ratio, covenant | 6.25 | 6.25 | |||||
Net senior secured leverage ratio | 4.50 | 4.50 | |||||
Senior secured leverage ratio | 311.00% | 311.00% | |||||
Net total leverage ratio | 4.17 | 4.17 | |||||
NCM, LLC. | Senior secured notes due 2022 | |||||||
Debt Instrument [Line Items] | |||||||
Debt Instrument, carrying value | $ 400,000,000 | $ 400,000,000 | 400,000,000 | ||||
Debt instrument face amount | $ 400,000,000 | ||||||
Stated interest rate | 6.00% | 6.00% | 6.00% | ||||
Debt instrument, frequency of periodic payment | The Notes due 2022 pay interest semi-annually in arrears on April 15 and October 15 of each year, which commenced on October 15, 2012. | ||||||
NCM, LLC. | Senior unsecured notes due 2026 | |||||||
Debt Instrument [Line Items] | |||||||
Debt Instrument, carrying value | $ 230,000,000 | $ 230,000,000 | 235,000,000 | ||||
Debt instrument face amount | $ 250,000,000 | ||||||
Stated interest rate | 5.75% | 5.75% | 5.75% | ||||
Debt instrument, frequency of periodic payment | 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. | ||||||
Debt instrument issued percentage of face value | 100.00% | ||||||
Debt instrument, repurchase amount | $ 5,000,000 | $ 5,000,000 | 15,000,000 | ||||
Write-off of debt issuance costs | $ 300,000 | $ 300,000 | |||||
NCM, LLC. | Maximum | Senior Secured Credit Facility | |||||||
Debt Instrument [Line Items] | |||||||
Net senior secured leverage ratio | 5.50 | 5.50 | |||||
NCM, LLC. | Term loan | |||||||
Debt Instrument [Line Items] | |||||||
Debt Instrument, carrying value | $ 267,300,000 | $ 267,300,000 | 269,400,000 | ||||
Amortization rate | 1.00% | ||||||
Repayment of term loan facility | $ 2,700,000 | ||||||
Stated interest rate | 5.19% | 5.19% | |||||
NCM, LLC. | Term loan | LIBOR | |||||||
Debt Instrument [Line Items] | |||||||
Basis spread on variable rate, percent | 3.00% | ||||||
NCM, LLC. | Term loan | Base Rate | |||||||
Debt Instrument [Line Items] | |||||||
Basis spread on variable rate, percent | 2.00% | ||||||
NCM, LLC. | Revolving credit facility | |||||||
Debt Instrument [Line Items] | |||||||
Borrowing amount of credit facility | $ 175,000,000 | $ 175,000,000 | |||||
Debt Instrument, carrying value | 6,000,000 | 6,000,000 | $ 27,000,000 | ||||
Remaining borrowing capacity of credit facility | $ 164,200,000 | $ 164,200,000 | |||||
Unused line fee, percent | 0.50% | ||||||
Weighted-average interest rate | 6.00% | 6.00% | |||||
NCM, LLC. | Revolving credit facility | LIBOR | Minimum | |||||||
Debt Instrument [Line Items] | |||||||
Basis spread on variable rate, percent | 1.75% | ||||||
NCM, LLC. | Revolving credit facility | LIBOR | Maximum | |||||||
Debt Instrument [Line Items] | |||||||
Basis spread on variable rate, percent | 2.25% | ||||||
NCM, LLC. | Revolving credit facility | Base Rate | Minimum | |||||||
Debt Instrument [Line Items] | |||||||
Basis spread on variable rate, percent | 0.75% | ||||||
NCM, LLC. | Revolving credit facility | Base Rate | Maximum | |||||||
Debt Instrument [Line Items] | |||||||
Basis spread on variable rate, percent | 1.25% | ||||||
NCM, LLC. | Revolving credit facility | Letter of Credit | |||||||
Debt Instrument [Line Items] | |||||||
Outstanding letters of credit | $ 4,800,000 | $ 4,800,000 |
Income Taxes (Narrative) (Detai
Income Taxes (Narrative) (Details) | 3 Months Ended | 9 Months Ended | ||
Sep. 26, 2019 | Sep. 27, 2018 | Sep. 26, 2019 | Sep. 27, 2018 | |
Income Tax Contingency [Line Items] | ||||
Effective tax rate | 33.40% | (2.80%) | 26.90% | 55.30% |
State and Federal | ||||
Income Tax Contingency [Line Items] | ||||
Effective tax rate | 24.30% | 25.60% |
Commitments and Contingencies_2
Commitments and Contingencies (Narrative) (Details) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | 60 Months Ended | 160 Months Ended | |||||
Sep. 26, 2019 | Sep. 27, 2018 | Sep. 26, 2019 | Sep. 27, 2018 | Oct. 31, 2022 | Oct. 31, 2021 | Oct. 31, 2027 | Feb. 13, 2041 | Nov. 01, 2019 | Dec. 27, 2018 | |
Other Commitments [Line Items] | ||||||||||
Operating lease, right-of-use asset | $ 21,900,000 | $ 21,900,000 | ||||||||
Short-term lease liability | 1,500,000 | 1,500,000 | ||||||||
Long-term lease liability | $ 24,500,000 | $ 24,500,000 | ||||||||
Weighted average remaining lease term | 10 years 3 months | 10 years 3 months | ||||||||
Operating lease payments | $ 900,000 | $ 2,500,000 | ||||||||
Weighted average discount rate | 7.35% | 7.35% | ||||||||
Maximum potential payment | $ 83,600,000 | $ 83,600,000 | ||||||||
Guarantee Obligations Amount Paid | 300,000 | $ 700,000 | 300,000 | $ 700,000 | ||||||
Additional amount accrued related to minimum guarantees | 400,000 | 400,000 | $ 100,000 | |||||||
Cinemark and Regal [Member] | ||||||||||
Other Commitments [Line Items] | ||||||||||
Amount Increase In Payment Per Theater Patron | $ 0.05 | $ 0.0375 | $ 0.052 | $ 0.08 | ||||||
Platinum Spot Revenue Percentage | 25.00% | |||||||||
NCM, LLC. | Founding Members | ||||||||||
Other Commitments [Line Items] | ||||||||||
Liabilities recorded for related party obligations | $ 0 | $ 0 | $ 0 | |||||||
Percentage of increase in payment per theatre patron | 8.00% | |||||||||
Term of increase in payment percentage per theater patron | 5 years | |||||||||
Percentage of increase in payment per digital screen and digital cinema equipment | 5.00% | |||||||||
Minimum | ||||||||||
Other Commitments [Line Items] | ||||||||||
Range of terms, in years | 1 year | |||||||||
Minimum | NCM, LLC. | Founding Members | ||||||||||
Other Commitments [Line Items] | ||||||||||
Aggregate percentage of theater access fee paid | 12.00% | 12.00% | ||||||||
Maximum | ||||||||||
Other Commitments [Line Items] | ||||||||||
Range of terms, in years | 20 years |
Commitments and Contingencies_3
Commitments and Contingencies (Operating Lease Cost) (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended |
Sep. 26, 2019 | Sep. 26, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | ||
Operating Lease, Cost | $ 0.7 | $ 2.3 |
Short-term Lease, Cost | 0.1 | 0.2 |
Variable Lease, Cost | 0.1 | 0.4 |
Lease, Cost | $ 0.9 | $ 2.9 |
Commitments and Contingencies_4
Commitments and Contingencies (Future Minimum Lease Payments) (Details) - USD ($) $ in Millions | Sep. 26, 2019 | Dec. 27, 2018 |
Future Minimum Lease Payments Under Topic 840 | ||
2019 | $ 3.5 | |
2020 | 3.3 | |
2021 | 3.4 | |
2022 | 3.4 | |
2023 | 3.4 | |
Thereafter | 22.1 | |
Total | $ 39.1 | |
Future Minimum Lease Payments Under Topic 842 | ||
2019 (March 29, 2019 - December 26, 2019) | $ 0.8 | |
2020 | 3.5 | |
2021 | 3.5 | |
2022 | 3.7 | |
2023 | 3.7 | |
2024 | 3.7 | |
Thereafter | 18.6 | |
Total | 37.5 | |
Less: Imputed interest on future lease payments | (11.5) | |
Total lease liability as of June 27, 2019 per the Condensed Consolidated Balance Sheet | $ 26 |
Fair Value Measurements (Schedu
Fair Value Measurements (Schedule of Other Investments) (Details) - USD ($) $ in Millions | Sep. 26, 2019 | Dec. 27, 2018 |
Schedule of Fair Value of Separate Accounts by Major Category of Investment [Line Items] | ||
Other investments | $ 0.1 | $ 2.1 |
Total other investments | 1.1 | 3 |
AC JV, LLC | ||
Schedule of Fair Value of Separate Accounts by Major Category of Investment [Line Items] | ||
Investment in AC JV, LLC | $ 1 | $ 0.9 |
Fair Value Measurements (Sche_2
Fair Value Measurements (Schedule of Other Investments) (Additional Information) (Details) | 9 Months Ended | 12 Months Ended |
Sep. 26, 2019 | Dec. 27, 2018 | |
Maximum | ||
Schedule of Fair Value of Separate Accounts by Major Category of Investment [Line Items] | ||
Cost-method ownership percentage | 20.00% | 20.00% |
Fair Value Measurements (Narrat
Fair Value Measurements (Narrative) (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 26, 2019 | Sep. 27, 2018 | Sep. 26, 2019 | Sep. 27, 2018 | Dec. 27, 2018 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Impairment of investment | $ 2 | $ 0 | $ 2 | $ 0.4 | |
Founding Members | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Promissory notes receivable from founding members | 4.2 | 4.2 | $ 5.6 | ||
Impaired Investments | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Fair value of cost method investment | $ 0 | $ 0 | $ 0 | $ 0 |
Fair Value Measurements (Estima
Fair Value Measurements (Estimated Fair Values of Company's Financial Instruments) (Details) - USD ($) $ in Millions | Sep. 26, 2019 | Dec. 27, 2018 |
Term loan | Carrying Value | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Debt Instrument | $ 267.3 | $ 269.4 |
Term loan | Fair Value | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Debt Instrument | 267.5 | 261.2 |
Notes due 2022 | Carrying Value | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Debt Instrument | 400 | 400 |
Notes due 2022 | Fair Value | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Debt Instrument | 406 | 401.8 |
Notes due 2026 | Carrying Value | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Debt Instrument | 230 | 235 |
Notes due 2026 | Fair Value | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Debt Instrument | $ 224.4 | $ 211 |
Fair Value Measurements (Fair V
Fair Value Measurements (Fair Values of the Company's Assets and Liabilities) (Details) - USD ($) $ in Millions | Sep. 26, 2019 | Dec. 27, 2018 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Short-term marketable securities | $ 8.1 | $ 24 |
Long-term marketable securities | 8.5 | 10.2 |
Fair Value, Measurements, Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 36.9 | 18.2 |
Short-term marketable securities | 8.1 | 24 |
Long-term marketable securities | 8.5 | 10.2 |
Total assets | 53.5 | 52.4 |
Quoted Prices in Active Markets for Identical Assets (Level 1) | Fair Value, Measurements, Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 15.2 | 11.2 |
Total assets | 15.2 | 11.2 |
Significant Other Observable Inputs (Level 2) | Fair Value, Measurements, Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 21.7 | 7 |
Short-term marketable securities | 8.1 | 24 |
Long-term marketable securities | 8.5 | 10.2 |
Total assets | $ 38.3 | $ 41.2 |
Fair Value Measurements (Fair_2
Fair Value Measurements (Fair Values of the Company's Assets and Liabilities) (Additional Information) (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 27, 2018 | Sep. 26, 2019 | |
Fair Value Disclosures [Abstract] | ||
Gross unrealized losses related to individual securities | $ 0.2 | |
Gross unrealized losses related to individual securities had been in continuous loss position for 12 months or longer | $ 11.8 | $ 6.5 |
Fair Value Measurements (Sche_3
Fair Value Measurements (Schedule of Marketable Securities) (Details) - USD ($) $ in Millions | 9 Months Ended | 12 Months Ended |
Sep. 26, 2019 | Dec. 27, 2018 | |
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost Basis | $ 16.5 | $ 34.6 |
Aggregate Fair Value - Short term marketable securities | 8.1 | 24 |
Aggregate Fair Value - Long term marketable securities | 8.5 | 10.2 |
Aggregate Fair Value - Total marketable securities | 16.6 | 34.2 |
Short-term Marketable Securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost Basis | 8.1 | 24.1 |
Aggregate Fair Value - Short term marketable securities | 8.1 | 24 |
Short-term Marketable Securities | Municipal Bonds | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost Basis | 0.5 | |
Aggregate Fair Value - Short term marketable securities | $ 0.5 | |
Maturities | 1 month | |
Short-term Marketable Securities | U.S. Government Agency Bonds | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost Basis | 3 | $ 3.9 |
Aggregate Fair Value - Short term marketable securities | $ 3 | $ 3.9 |
Maturities | 7 months | 6 months |
Short-term Marketable Securities | Commercial Paper [Member] | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost Basis | $ 2 | |
Short-term Marketable Securities | Short-Term U.S. Government Treasury Bonds | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost Basis | $ 0.3 | |
Aggregate Fair Value - Short term marketable securities | $ 0.3 | |
Maturities | 6 months | |
Short-term Marketable Securities | Certificates of Deposit | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost Basis | 1.9 | $ 3.6 |
Aggregate Fair Value - Short term marketable securities | $ 1.9 | $ 3.6 |
Maturities | 1 month 18 days | 7 months |
Short-term Marketable Securities | Financial Commercial Paper | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost Basis | $ 3.8 | |
Aggregate Fair Value - Short term marketable securities | $ 3.8 | |
Maturities | 1 month | |
Short-term Marketable Securities | Industrial Commercial Paper | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost Basis | $ 12 | |
Aggregate Fair Value - Short term marketable securities | $ 2 | $ 11.9 |
Maturities | 1 month 30 days | 1 month |
Short-term Marketable Securities | Municipal Notes [Member] | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost Basis | $ 1.2 | |
Aggregate Fair Value - Short term marketable securities | $ 1.2 | |
Maturities | 8 months 35 days | |
Long-term Marketable Securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost Basis | $ 8.4 | $ 10.5 |
Aggregate Fair Value - Long term marketable securities | 8.5 | 10.2 |
Long-term Marketable Securities | Municipal Bonds | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost Basis | 1.2 | |
Aggregate Fair Value - Long term marketable securities | $ 1.3 | |
Maturities | 1 year 6 months | |
Long-term Marketable Securities | U.S. Government Agency Bonds | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost Basis | 5.9 | $ 6.9 |
Aggregate Fair Value - Long term marketable securities | $ 6 | $ 6.8 |
Maturities | 3 years | 2 years 1 month |
Long-term Marketable Securities | Certificates of Deposit | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost Basis | $ 2.4 | |
Aggregate Fair Value - Long term marketable securities | $ 2.1 | |
Maturities | 2 years 11 months | |
Long-term Marketable Securities | Financial Certificates Of Deposit | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost Basis | $ 2.5 | |
Aggregate Fair Value - Long term marketable securities | $ 2.5 | |
Maturities | 2 years 5 months 15 days |
Subsequent Event (Narrative) (D
Subsequent Event (Narrative) (Details) - Subsequent Event $ / shares in Units, $ in Millions | Sep. 27, 2019USD ($)$ / shares |
Subsequent Events [Line Items] | |
Cash dividends declared (in usd per share) | $ / shares | $ 0.17 |
Dividends payable | $ | $ 13.2 |
Uncategorized Items - ncminc-20
Label | Element | Value |
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | $ (200,000) |
Retained Earnings [Member] | ||
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | $ (200,000) |