Document And Entity Information
Document And Entity Information - shares | 3 Months Ended | 6 Months Ended | |
Jun. 25, 2020 | Jun. 25, 2020 | Jul. 31, 2020 | |
Document Information [Line Items] | |||
Document Transition Report | false | ||
Document Quarterly Report | true | ||
Title of 12(b) Security | Common Stock, par value $0.01 per share | ||
Entity Incorporation, State or Country Code | DE | ||
Entity Tax Identification Number | 20-5665602 | ||
Entity Address, Address Description | 6300 S. Syracuse Way, Suite 300 | ||
Entity Address, City or Town | Centennial | ||
Entity Address, State or Province | CO | ||
Entity Address, Postal Zip Code | 80111 | ||
City Area Code | 303 | ||
Local Phone Number | 792-3600 | ||
Trading Symbol | NCMI | ||
Security Exchange Name | NASDAQ | ||
Entity Interactive Data Current | Yes | ||
Document Type | 10-Q | 10-Q | |
Amendment Flag | false | ||
Document Period End Date | Jun. 25, 2020 | ||
Entity File Number | 001-33296 | ||
Document Fiscal Year Focus | 2020 | ||
Document Fiscal Period Focus | Q1 | ||
Entity Registrant Name | National CineMedia, Inc. | NATIONAL CINEMEDIA, INC. | |
Entity Central Index Key | 0001377630 | ||
Entity Filer Category | Accelerated Filer | Accelerated Filer | |
Entity Emerging Growth Company | false | ||
Entity Small Business | false | ||
Entity Current Reporting Status | Yes | Yes | |
Current Fiscal Year End Date | --12-31 | ||
Entity Shell Company | false | false | |
Entity Common Stock, Shares Outstanding | 79,610,497 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Millions | Jun. 25, 2020 | Dec. 26, 2019 |
CURRENT ASSETS: | ||
Cash and cash equivalents | $ 245.4 | $ 55.9 |
Short-term marketable securities | 1.5 | 17.5 |
Receivables, net of allowance of $3.2 and $6.2, respectively | 26.7 | 170.8 |
Amounts due from founding members, net | 0 | 6.6 |
Prepaid expenses and other current assets | 4.1 | 3.5 |
Total current assets | 277.7 | 254.3 |
NON-CURRENT ASSETS: | ||
Property and equipment, net of accumulated depreciation of $75.6 and $70.7, respectively | 29.9 | 33.2 |
Intangible assets, net of accumulated amortization of $211.0 and $198.9, respectively | 640.5 | 643.7 |
Deferred tax assets, net of valuation allowance of $72.4 and $81.6, respectively | 166.9 | 162.1 |
Other investments | 1 | 1 |
Long-term marketable securities | 3 | 7.5 |
Debt issuance costs, net | 3.9 | 3.9 |
Other assets | 25 | 24.3 |
Total non-current assets | 870.2 | 875.7 |
TOTAL ASSETS | 1,147.9 | 1,130 |
CURRENT LIABILITIES: | ||
Amounts due to founding members, net | 0 | 36.8 |
Payable to founding members under tax receivable agreement (including payables to related parties of $10.0 and $10.3, respectively) | 14.2 | 14.2 |
Accrued expenses | 18.8 | 22.1 |
Accrued payroll and related expenses | 5.8 | 13.8 |
Accounts payable | 12.3 | 20.7 |
Deferred revenue | 7.7 | 7.6 |
Short-term debt | 2.7 | 2.7 |
Other current liabilities | 1.7 | 1.6 |
Total current liabilities | 63.2 | 119.5 |
NON-CURRENT LIABILITIES: | ||
Long-term debt, net of debt issuance costs of $8.7 and $9.0, respectively | 1,050.9 | 923.9 |
Payable to founding members under tax receivable agreement (including payables to related parties of $134.7 and $133.5, respectively) | 185.1 | 183.8 |
Other liabilities | 23.7 | 24 |
Total non-current liabilities | 1,259.7 | 1,131.7 |
Total liabilities | 1,322.9 | 1,251.2 |
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, 78,000,338 and 77,568,986 issued and outstanding, respectively | 0.8 | 0.8 |
Additional paid in capital/(deficit) | (209.1) | (209.2) |
Retained earnings (distributions in excess of earnings) | (207.4) | (171.1) |
Total NCM, Inc. stockholders’ equity/(deficit) | (415.7) | (379.5) |
Noncontrolling interests | 240.7 | 258.3 |
Total equity/(deficit) | (175) | (121.2) |
TOTAL LIABILITIES AND EQUITY/(DEFICIT) | $ 1,147.9 | $ 1,130 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (PARENTHETICAL) - USD ($) $ in Millions | Jun. 25, 2020 | Dec. 26, 2019 |
Allowance for doubtful accounts receivable | $ 3.2 | $ 6.2 |
Accumulated depreciation, property and equipment | 75.6 | 70.7 |
Accumulated amortization, intangible assets | 211 | 198.9 |
Deferred tax assets, valuation allowance | 72.4 | 81.6 |
Current payable to founding members under tax receivable agreement | 14.2 | 14.2 |
Long-term payable to founding members under tax receivable agreement | 185.1 | 183.8 |
Debt issuance costs, long-term | $ 8.7 | $ 9 |
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) | 78,000,338 | 77,568,986 |
Common stock, shares outstanding (in shares) | 78,000,338 | 77,568,986 |
Founding Members | ||
Current payable to founding members under tax receivable agreement | $ 10 | $ 10.3 |
Long-term payable to founding members under tax receivable agreement | $ 134.7 | $ 133.5 |
CONDENSED STATEMENTS OF INCOME
CONDENSED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 25, 2020 | Jun. 27, 2019 | Jun. 25, 2020 | Jun. 27, 2019 | |
Document Period End Date | Jun. 25, 2020 | |||
REVENUE (including revenue from related parties of $0.0, $6.5, $4.3 and $11.8, respectively) | $ 4 | $ 110.2 | $ 68.7 | $ 187.1 |
OPERATING EXPENSES: | ||||
Advertising operating costs | 1.1 | 9.9 | 7.3 | 17.2 |
Network costs | 1.6 | 3.4 | 4.5 | 6.9 |
Theater access fees and revenue share to founding members (including fees to related parties of $0.0, $14.5, $12.5 and $27.4, respectively) | 0 | 21.6 | 17.7 | 40.7 |
Selling and marketing costs | 6.7 | 16.2 | 20.6 | 31.4 |
Administrative and other costs | 7.4 | 11.1 | 17.2 | 21.8 |
Asset Impairment Charges | 1.7 | 0 | 1.7 | 0 |
Depreciation expense | 3.2 | 3.3 | 6.4 | 6.6 |
Depreciation, Depletion and Amortization, Nonproduction | 6.4 | 6.6 | ||
Amortization of intangibles recorded for network theater screen leases | 6.1 | 7 | 12.2 | 13.9 |
Total | 27.8 | 72.5 | 87.6 | 138.5 |
OPERATING (LOSS) INCOME | (23.8) | 37.7 | (18.9) | 48.6 |
NON-OPERATING EXPENSES: | ||||
Interest on borrowings | 13.6 | 14.2 | 27.2 | 28.6 |
Interest income | (0.3) | (0.5) | (0.5) | (1) |
Loss on re-measurement of the payable to founding members under the tax receivable agreement | 0.1 | 0.8 | 0.3 | 1.5 |
Other non-operating expense (income) | 0.1 | (0.1) | 0 | (0.3) |
Total | 13.8 | 14.4 | 27.3 | 28.5 |
(LOSS) INCOME BEFORE INCOME TAXES | (37.6) | 23.3 | (46.2) | 20.1 |
Income tax (benefit) expense | (4.2) | 2.3 | (4.6) | 1.7 |
CONSOLIDATED NET (LOSS) INCOME | (33.4) | 21 | (41.6) | 18.4 |
Less: Net (loss) income attributable to noncontrolling interests | (19.6) | 12.1 | (24.1) | 10.6 |
NET (LOSS) INCOME ATTRIBUTABLE TO NCM, INC. | (13.8) | 8.9 | (17.5) | 7.8 |
COMPREHENSIVE (LOSS) INCOME ATTRIBUTABLE TO NCM, INC. | $ (13.8) | $ 8.9 | $ (17.5) | $ 7.8 |
NET (LOSS) INCOME PER NCM, INC. COMMON SHARE: | ||||
Basic (in usd per share) | $ (0.18) | $ 0.11 | $ (0.22) | $ 0.10 |
Diluted (in usd per share) | $ (0.18) | $ 0.11 | $ (0.22) | $ 0.10 |
WEIGHTED AVERAGE SHARES OUTSTANDING: | ||||
Basic (in shares) | 77,995,951 | 77,343,093 | 77,879,959 | 77,261,435 |
Diluted (in shares) | 77,995,951 | 77,636,096 | 77,879,959 | 77,575,081 |
Debt [Member] | ||||
NON-OPERATING EXPENSES: | ||||
Nonoperating Gains (Losses) | $ (0.3) | $ 0 | $ (0.3) | $ 0.3 |
CONDENSED STATEMENTS OF INCOM_2
CONDENSED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME (PARENTHETICAL) (UNAUDITED) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 25, 2020 | Jun. 27, 2019 | Jun. 25, 2020 | Jun. 27, 2019 | |
Revenue | $ 4 | $ 110.2 | $ 68.7 | $ 187.1 |
Founding Members | ||||
Revenue | 0 | 6.5 | 4.3 | 11.8 |
Fees to related parties | $ 0 | $ 14.5 | $ 12.5 | $ 27.4 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Millions | 6 Months Ended | |
Jun. 25, 2020 | Jun. 27, 2019 | |
Adjustments to reconcile consolidated net (loss) income to net cash provided by operating activities: | ||
Deferred income tax (benefit) expense | $ (4.5) | $ 1.5 |
Depreciation expense | 6.4 | 6.6 |
Amortization of intangibles recorded for network theater screen leases | 12.2 | 13.9 |
Non-cash share-based compensation | 0.3 | 2.8 |
Asset Impairment Charges | 1.7 | 0 |
Amortization of debt issuance costs | 1.2 | 1.3 |
Non-cash loss on re-measurement of the payable to founding members under the tax receivable agreement | 0.3 | 1.6 |
Other | 0 | (1) |
Cost of Goods and Services Sold | 0 | 0.5 |
Other cash flows from operating activities | 9.7 | 10.6 |
Increase (Decrease) In Due To Related Parties Under Tax Receivable Agreement, Current | 0 | (13.9) |
Other Operating Activities, Cash Flow Statement | (0.2) | 0 |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Consolidated net (loss) income | (41.6) | 18.4 |
Changes in operating assets and liabilities: | ||
Receivables, net | 147.3 | 25 |
Accounts payable and accrued expenses | (17.9) | (8.9) |
Amounts due to/from founding members, net | (6.2) | 0.7 |
Deferred revenue | 0.1 | 3.4 |
Other, net | (1.7) | (2.9) |
Net cash provided by operating activities | 107.4 | 59.3 |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Purchases of property and equipment | (5.2) | (6.8) |
Purchases of marketable securities | (8.2) | (5.4) |
Proceeds from sale and maturities of marketable securities | 28.9 | 21.4 |
Proceeds from notes receivable - founding members (including payments from related parties of $0.0 and $1.4, respectively) | 0 | 1.4 |
Net cash provided by investing activities | 15.5 | 10.6 |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
CHANGE IN CASH AND CASH EQUIVALENTS: | 189.5 | 1.4 |
Cash and cash equivalents at beginning of period | 55.9 | 41.4 |
Cash and cash equivalents at end of period | 245.4 | 42.8 |
Payment of dividends | (21) | (27.2) |
Proceeds from revolving credit facility | 210 | 71 |
Repayments of revolving credit facility | (82) | (71) |
Repayment of term loan facility | (1.4) | (1.4) |
Repayment of Senior Notes due 2026 | 0 | (4.6) |
Payment of debt issuance costs | (1.2) | 0 |
Distributions to founding members | (36.8) | (34) |
Repurchase of stock for restricted stock tax withholding | (1) | (1.3) |
Net cash provided by (used in) financing activities | 66.6 | (68.5) |
Supplemental disclosure of non-cash financing and investing activity: | ||
Purchase of an intangible asset with NCM LLC equity | 10.5 | 7.6 |
Accrued distributions to founding members (including accrued distributions to related parties of $0.0 and $15.4, respectively) | 0 | 15.4 |
Accrued integration and other encumbered theater payments due from founding members (including accrued payments due from related parties of $0.0 and $0.2, respectively) | 0 | 5.3 |
(Decrease) increase in dividend equivalent accrual not requiring cash in the period | (0.3) | 0.4 |
Supplemental disclosure of cash flow information: | ||
Cash paid for interest | 27 | 27.3 |
Cash paid for income taxes, net of refunds | 0.3 | 0.1 |
Debt [Member] | ||
Adjustments to reconcile consolidated net (loss) income to net cash provided by operating activities: | ||
Nonoperating Gains (Losses) | $ (0.3) | $ 0.3 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (PARENTHETICAL) - USD ($) | 6 Months Ended | |
Jun. 25, 2020 | Jun. 27, 2019 | |
Integration and other encumbered payments, related parties - operating activities | $ 9,700,000 | $ 10,600,000 |
Payment To Founding Members Under Tax Sharing Arrangement | 0 | 9.8 |
Proceeds from related parties | 0 | 1,400,000 |
Accrued integration and other encumbered theater payments, related parties | 0 | 5,300,000 |
Founding Members | ||
Integration and other encumbered payments, related parties - operating activities | 0.1 | 0.6 |
Proceeds from related parties | 0 | 1.4 |
Accrued Distributions Made to LLC | 0 | 15,400,000 |
Accrued integration and other encumbered theater payments, related parties | $ 0 | $ 0.2 |
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. 27, 2018 | $ (89.2) | $ 0.8 | $ (215.2) | $ (153.6) | $ 278.8 |
Balance (in shares) at Dec. 27, 2018 | 76,976,398 | ||||
Distributions to founding members | (21.5) | ||||
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) | (1.3) | 0.7 | ||
Comprehensive income, net of tax | 18.4 | 7.8 | 10.6 | ||
Share-based compensation issued | (1.3) | (1.3) | |||
Share-based compensation issued (in shares) | 373,230 | ||||
Share-based compensation expense/capitalized | 2.9 | 2.2 | 0.7 | ||
Cash dividends declared | (26.8) | (26.8) | |||
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 | ||||
Balance at Mar. 28, 2019 | (104.7) | $ 0.8 | (213.6) | (168) | 276.1 |
Balance (in shares) at Mar. 28, 2019 | 77,318,971 | ||||
Distributions to founding members | (15.4) | 15.4 | |||
Income tax and other impacts of NCM LLC ownership changes | 0.1 | 0.1 | |||
Comprehensive income, net of tax | 21 | 8.9 | 12.1 | ||
Share-based compensation issued | (0.1) | (0.1) | |||
Share-based compensation issued (in shares) | 30,657 | ||||
Share-based compensation expense/capitalized | 2.1 | 1.7 | 0.4 | ||
Cash dividends declared | (13.5) | 13.5 | |||
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 | ||||
Balance at Dec. 26, 2019 | $ (121.2) | $ 0.8 | (209.2) | (171.1) | 258.3 |
Balance (in shares) at Dec. 26, 2019 | 77,568,986 | 77,568,986 | |||
Distributions to founding members | $ (4.4) | (4.4) | |||
Cumulative Effect of New Accounting Principle in Period of Adoption (Deprecated 2020-01-31) | 2.9 | 1.2 | 1.7 | ||
NCM LLC equity issued for purchase of intangible asset | 10.5 | 5 | 5.5 | ||
Income tax and other impacts of NCM LLC ownership changes | (0.5) | (3.9) | 3.4 | ||
Comprehensive income, net of tax | (41.6) | (17.5) | (24.1) | ||
Share-based compensation issued | (1) | (1) | |||
Share-based compensation issued (in shares) | 431,352 | ||||
Share-based compensation expense/capitalized | 0.3 | 0.3 | |||
Cash dividends declared | (20) | (20) | |||
Balance at Jun. 25, 2020 | $ (175) | $ 0.8 | (209.1) | (207.4) | 240.7 |
Balance (in shares) at Jun. 25, 2020 | 78,000,338 | 78,000,338 | |||
Balance at Mar. 26, 2020 | $ (136.3) | $ 0.8 | (209.1) | (188.3) | 260.3 |
Balance (in shares) at Mar. 26, 2020 | 77,973,648 | ||||
Distributions to founding members | (21.5) | ||||
Income tax and other impacts of NCM LLC ownership changes | 0 | 0.1 | (0.1) | ||
Comprehensive income, net of tax | (33.4) | (13.8) | (19.6) | ||
Share-based compensation issued | (0.1) | (0.1) | |||
Share-based compensation issued (in shares) | 26,690 | ||||
Share-based compensation expense/capitalized | 0.1 | 0 | 0.1 | ||
Cash dividends declared | (5.3) | (5.3) | |||
Balance at Jun. 25, 2020 | $ (175) | $ 0.8 | $ (209.1) | $ (207.4) | $ 240.7 |
Balance (in shares) at Jun. 25, 2020 | 78,000,338 | 78,000,338 |
CONDENSED CONSOLIDATED STATEM_4
CONDENSED CONSOLIDATED STATEMENTS OF EQUITY/(DEFICIT) (PARENTHETICAL) (UNAUDITED) - $ / shares | 3 Months Ended | 6 Months Ended | |
Jun. 27, 2019 | Jun. 25, 2020 | Jun. 27, 2019 | |
Statement of Stockholders' Equity [Abstract] | |||
Dividends per share (in usd per share) | $ 0.17 | $ 0.26 | $ 0.34 |
The Company
The Company | 3 Months Ended |
Jun. 25, 2020 | |
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”. The Company operates the largest cinema advertising network reaching movie audiences in the U.S., 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. Beginning in mid-March 2020, each of our founding members and all of our network affiliates announced that their theaters would be temporarily closed to address the COVID-19 Pandemic. As of June 25, 2020, almost all of the theaters within our network remained closed. The Company was unable to advertise in the theaters, and thus did not generate any in-theater revenue, during the three months ended June 25, 2020 and are not able to advertise in theaters for the duration of time that the theaters remain closed. 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 19.3 years as of June 25, 2020 . The network affiliate agreements expire at various dates between September 2020 and July 2031. The weighted average remaining term (based on 2019 attendance) of the ESAs and the network affiliate agreements together is 16.8 years as of June 25, 2020 . As of June 25, 2020 , NCM LLC had 162,531,666 common membership units outstanding, of which 78,000,338 ( 48.0% ) were owned by NCM, Inc., 42,290,694 ( 26.0% ) were owned by Regal, 40,850,068 ( 25.1% ) were owned by Cinemark and 1,390,566 ( 0.9% ) 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 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 26, 2019 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 26, 2019 . 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. Historically, the Company’s business has been seasonal and for this and other reasons operating results for interim periods have not been indicative of the Company’s full year results or future performance. Given the temporary closure of the theaters within the Company's network, management expects the Company's 2020 quarterly results to vary from historical trends. 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 26, 2019 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 —The risk of credit loss related to the Company's trade receivables and unbilled receivables balances is accounted for through the allowance for doubtful accounts, a contra asset account which reduces the net receivables balance. The allowance for doubtful accounts balance is determined by pooling the Company's receivables with similar risk characteristics, specifically by type of customer (national or local/ regional) and then age of receivable, and applying historical write off percentages to these pools in order to determine the amount of expected credit losses as of the balance sheet date. National receivables are with large advertising agencies with strong reputations in the advertising industry and clients with stable financial positions and good credit ratings, represent larger receivables balances per customer and have significantly lower historical and expected credit loss patterns. Local and regional receivables are with smaller companies sometimes with less credit history, represent smaller receivable balances per customer and higher historical and expected credit loss patterns. The Company has smaller contracts with thousands of local clients that are not individually significant. The Company also considers current economic conditions and trends to determine whether adjustments to historical loss rates are necessary. The Company increased the expected rate of default related to local and regional customers within the calculation of the allowance for doubtful accounts as of June 25, 2020 given the adverse impact of the COVID-19 Pandemic on certain businesses, in particular, categories of small businesses (i.e. restaurants, travel, etc.) which the Company expects could lead to an increased rate of default. The Company also reserves for specific receivable balances that it expects to write off based on known concerns regarding the financial health of the customer. Receivables are written off when management determines amounts are uncollectible. As of June 25, 2020 and December 26, 2019 , there were no advertising agency groups or individual customers through which the Company sources advertising revenue representing more than 10% of the Company’s outstanding gross receivable balance. During the three months ended June 25, 2020 , the Company had one customer that accounted for approximately 18% of the Company's revenue. During the six months ended June 25, 2020 and the three and six months ended June 27, 2019 , the Company had no customers that accounted for more than 10% of revenue. Long-lived Assets —The Company assesses impairment of long-lived assets pursuant to ASC 360 – Property, Plant and Equipment . This includes determining whether certain triggering events have occurred that could affect the value of an asset. The Company recorded losses of $1.7 million, $0.0 million, $1.7 million and $0.0 million related to the write-off of certain internally developed software during the three months ended June 25, 2020 and June 27, 2019 and the six months ended June 25, 2020 and June 27, 2019, respectively. Share-Based Compensation —The Company has issued stock options and restricted stock to certain employees and restricted stock units to its independent directors. 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 June 25, 2020 and June 27, 2019 and the six months ended June 25, 2020 and June 27, 2019 , 33,378 , 37,699 , 557,681 and 549,695 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 Six Months Ended June 25, June 27, June 25, 2020 June 27, Net (loss) income attributable to NCM, Inc. $ (13.8 ) $ 8.9 $ (17.5 ) $ 7.8 NCM LLC equity issued for purchase of intangible asset — — 5.0 3.7 Income tax and other impacts of subsidiary ownership changes 0.1 0.1 (3.9 ) (1.3 ) Change from net (loss) income attributable to NCM, Inc. and transfers from noncontrolling interests $ (13.7 ) $ 9.0 $ (16.4 ) $ 10.2 Recently Adopted Accounting Pronouncements During the first quarter of 2020, the Company adopted 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. Upon the adoption of ASU 2016-13 on December 27, 2019, the Company recorded a $3.2 million cumulative-effect adjustment to retained earnings related to the change in methodology surrounding the historical losses utilized in the calculation of the allowance for credit losses related to trade and unbilled accounts receivable reducing the allowance to $3.0 million as of the adoption date. The Company also recorded a corresponding $0.4 million reduction to the corresponding deferred tax asset with the offset also recorded to retained earnings. The other impacts upon adoption were immaterial to the unaudited Condensed Consolidated Financial Statements. The Company has incorporated additional disclosures in Note 1— The Company, Note 2— Revenue from Contracts with Customers and Accounts Receivable and Note 9— Fair Value Measurements to its Condensed Consolidated Financial Statements to comply with ASU 2016-13. The Company has also designed and implemented changes to certain processes and internal controls related to its adoption of ASU 2016-13. During the first quarter of 2020, the Company adopted 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. The Company adoption of ASU 2018-13 did not have a material impact on the unaudited Condensed Consolidated Financial Statements or notes thereto. Recently Issued Accounting Pronouncements In December 2019, the FASB issued Accounting Standards Update 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes (“ASU 2019-12”), which removes the following exceptions for the Company to analyze in a given period: the exception to the incremental approach for intraperiod tax allocation; the exception to accounting for basis differences when there are ownership changes in foreign investments; and the exception in interim periods income tax accounting for year-to-date losses that exceed anticipated losses. ASU 2019-12 is effective for fiscal years beginning after December 15, 2020, including interim periods within those fiscal years, with early adoption permitted. The Company does not expect the adoption of this guidance to have a material impact on the unaudited Condensed Consolidated Financial Statements or notes thereto. In March 2020, the FASB issued Accounting Standards Update No. 2020-04, Reference Rate Reform (“ASU 2020-04”), which provides temporary optional guidance to companies impacted by the transition away from the London Interbank Offered Rate (“LIBOR”). The guidance provides certain expedients and exceptions to applying GAAP in order to lessen the potential accounting burden when contracts, hedging relationships, and other transactions that reference LIBOR as a benchmark rate are modified. This guidance is effective upon issuance and expires on December 31, 2022. The Company is currently assessing the impact of the LIBOR transition and ASU 2020-04 on the Company’s unaudited Condensed Consolidated Financial Statements. The Company has considered all other recently issued accounting pronouncements and does not believe the adoption of such pronouncements will have a material impact on its unaudited Condensed Consolidated Financial Statements or notes thereto. |
Revenue from Contracts with Cus
Revenue from Contracts with Customers | 3 Months Ended |
Jun. 25, 2020 | |
Revenue from Contract with Customer [Abstract] | |
Revenue from Contracts with Customers | REVENUE FROM CONTRACTS WITH CUSTOMERS AND ACCOUNTS RECEIVABLE 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, Name That Movie, Noovie Shuffle and Fantasy Movie League, 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 unaudited Condensed Consolidated Balance Sheet. As of June 25, 2020 and December 26, 2019 , the Company had a make-good provision of $6.3 million and $8.7 million , respectively. The Company does not have any contracts with customers with terms in excess of one year that are noncancelable as of June 25, 2020 . 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 months ended June 25, 2020 and June 27, 2019 and six months ended June 25, 2020 and June 27, 2019 (in millions): Three Months Ended Six Months Ended June 25, June 27, June 25, June 27, National and regional advertising revenue $ 1.7 $ 84.3 $ 51.5 $ 141.7 Local advertising revenue 2.3 17.7 11.7 30.5 Founding member advertising revenue from beverage concessionaire agreements — 8.2 5.5 14.9 Total revenue $ 4.0 $ 110.2 $ 68.7 $ 187.1 Deferred Revenue and Unbilled Accounts Receivable The changes in deferred revenue for the six months ended June 25, 2020 were as follows (in millions): Six Months Ended June 25, Balance at beginning of period $ (7.6 ) Performance obligations satisfied 5.4 New contract liabilities (5.5 ) Balance at end of period $ (7.7 ) As of June 25, 2020 and December 26, 2019 , the Company had $2.2 million and $8.0 million in unbilled accounts receivable, respectively. Allowance for Doubtful Accounts The allowance for doubtful accounts balance is determined separately for each pool of the Company's receivables with similar risk characteristics. The Company has determined that two pools, national customers and local/ regional customers, is appropriate. The changes within the allowance for doubtful accounts balances for the six months ended June 25, 2020 were as follows (in millions): Six Months Ended June 25, Allowance for National Customer Receivables Allowance for Local/ Regional Customer Receivables Balance at beginning of period $ 1.1 $ 1.9 Provision for bad debt (0.6 ) 1.3 Write-offs, net (0.1 ) (0.4 ) Balance at end of period $ 0.4 $ 2.8 |
Loss Per Share
Loss Per Share | 3 Months Ended |
Jun. 25, 2020 | |
Earnings Per Share [Abstract] | |
Loss Per Share | PER SHARE Basic loss per share is computed on the basis of the weighted average number of common shares outstanding. Diluted loss per share is computed on the basis of the weighted average number of common shares outstanding plus the effect of potentially dilutive common stock options, restricted stock and restricted stock units using the treasury stock method. The components of basic and diluted loss per NCM, Inc. share are as follows: Three Months Ended Six Months Ended June 25, June 27, June 25, June 27, Net (loss) income attributable to NCM, Inc. (in millions) $ (13.8 ) $ 8.9 $ (17.5 ) $ 7.8 Weighted average shares outstanding: Basic 77,995,951 77,343,093 77,879,959 77,261,435 Add: Dilutive effect of stock options, restricted stock and exchangeable membership units — 293,003 — 313,646 Diluted 77,995,951 77,636,096 77,879,959 77,575,081 (Loss) earnings per NCM, Inc. share: Basic $ (0.18 ) $ 0.11 $ (0.22 ) $ 0.10 Diluted $ (0.18 ) $ 0.11 $ (0.22 ) $ 0.10 The effect of 84,531,328 , 81,705,487 , 83,252,384 and 81,263,513 weighted average exchangeable NCM LLC common units held by the founding members for the three months ended June 25, 2020 and June 27, 2019 and six months ended June 25, 2020 and June 27, 2019 , respectively, have been excluded from the calculation of diluted weighted average shares and loss per NCM, Inc. share as they were anti-dilutive. NCM LLC common units do not participate in dividends paid on NCM, Inc.’s common stock. In addition, there were 3,777,240 , 1,969,086 , 3,777,240 and 2,125,728 stock options and non-vested (restricted) shares for the three months ended June 25, 2020 and June 27, 2019 and six months ended June 25, 2020 and June 27, 2019 , 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 | 3 Months Ended |
Jun. 25, 2020 | |
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 determined that recent adverse changes in macroeconomic trends, reduced cash flows as a consequence of the temporary closure of the theaters within the Company's network in response to the outbreak of the COVID-19 Pandemic, a decline in the fair value of NCM LLC’s debt and the further sustained decline in the market price of NCM, Inc.'s common stock as of June 25, 2020 constituted a triggering event for certain of its intangible assets under Accounting Standards Certification No. 360, Impairment and Disposal of Long-Lived Assets. Management considered possible scenarios in a probability-weighted estimated future undiscounted cash flow analysis, including the potential extension of or a later recurrence of the temporary theater closures due to the COVID-19 Pandemic and potential adverse impacts to NCM LLC's founding members' and affiliates' financial liquidity related to the COVID-19 Pandemic theater closures. The estimated future cash flows from the affiliate agreements and ESAs calculated within the probability-weighted analyses were in excess of the net book value of these intangible assets and thus, no impairment charges were recorded for the three and six months ended June 25, 2020. Such analysis required management to make estimates and assumptions based on historical data and consideration of future market conditions. Given the uncertainty inherent in any projection, heightened by the possibility of unforeseen additional effects of the COVID-19 Pandemic, including potential adverse impacts to NCM LLC's founding members' and affiliates' financial liquidity, actual results may differ from the estimates and assumptions used, or conditions may change, which could result in impairment charges in the future. Common Unit Adjustments —In accordance with NCM LLC’s Common Unit Adjustment Agreement with its founding members, on an annual basis NCM LLC determines the amount of common membership units to be issued to or returned by the founding members based on theater additions or dispositions during the previous year. In addition, NCM LLC’s Common Unit Adjustment Agreement requires that a Common Unit Adjustment occur for a specific founding member if its acquisition or disposition of theaters, in a single transaction or cumulatively since the most recent Common Unit Adjustment, results in an attendance increase or decrease in excess of two percent of the annual total attendance at the prior adjustment date. During the first quarter of 2020 , NCM LLC issued 3,022,959 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 2019 fiscal year and NCM LLC recorded a net intangible asset of $10.5 million during the first quarter of 2020 as a result of the Common Unit Adjustment. 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. 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. In 2019, AMC and Cinemark also made integration payments to NCM LLC related to their respective acquisitions of theaters from Rave Cinemas. The advertising agreements with an alternative provider for these theaters ended during 2019 and the theaters were transferred to our network. Integration payments are no longer due related to these theaters. 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 June 25, 2020 and June 27, 2019 and six months ended June 25, 2020 and June 27, 2019 , the Company recorded a reduction to net intangible assets of $0.0 million , $5.7 million , $1.4 million and $8.1 million , respectively, related to integration and other encumbered theater payments. Because the encumbered theaters were temporarily closed during the three months ended June 25, 2020, no advertising cash flows could have been generated from the encumbered theaters during the period if the theaters were within NCM LLC's network and thus no integration payments were earned during the three months ended June 25, 2020. During the three months ended June 25, 2020 and June 27, 2019 and six months ended June 25, 2020 and June 27, 2019 , AMC and Cinemark paid a total of $1.2 million , $2.5 million , $9.7 million and $10.6 million respectively, in integration and other encumbered theater payments (as payments are made one quarter and one month in arrears, respectively). The payments received during the three and six months ended June 25, 2020 primarily relate to AMC's acquisition of theaters from Carmike. The payments received during the three and six months ended June 27, 2019 relate to AMC's acquisitions of theaters from Carmike and Rave Cinemas and from Cinemark related primarily to its acquisition of theaters from Rave Cinemas. 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 | 3 Months Ended |
Jun. 25, 2020 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | RELATED PARTY TRANSACTIONS Founding Member Transactions —In connection with NCM, Inc.’s initial public offering (“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 June 25, 2020 , 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. 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 seconds 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 Six Months Ended Included in the unaudited Condensed Consolidated Statements of Income: June 25, 2020 June 27, June 25, 2020 June 27, Revenue: Beverage concessionaire revenue (included in advertising revenue) (1) $ — $ 6.5 $ 4.3 $ 11.8 Operating expenses: Theater access fee and revenue share to founding members (2) $ — $ 14.5 $ 12.5 $ 27.4 Purchase of movie tickets and concession products and rental of theater space (included in selling and marketing costs) (3) $ — $ 0.1 $ 0.1 $ 0.2 Non-operating expenses: Interest income from notes receivable (included in interest income) (4) $ — $ — $ — $ 0.1 ________________________________________ (1) For the three and six months ended June 25, 2020 and June 27, 2019 , Cinemark and Regal purchased 60 seconds of on-screen advertising time from NCM LLC to satisfy their obligations under their beverage concessionaire agreements at a 30 seconds equivalent CPM rate specified by the ESA. There was no beverage revenue for the three months ended June 25, 2020 due to the temporary closure of all the founding member theaters within NCM LLC's network in response to the COVID-19 Pandemic and thus there not being any attendees upon which beverage revenue is based. (2) Comprised of payments per theater attendee, payments per digital screen with respect to the founding member theaters included in the Company’s network and payments for access to higher quality digital cinema equipment. Following the 2019 ESA Amendments in September of 2019 this also includes payments to Cinemark and Regal for their share of the revenue from the sale of 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”). There was no theater access fee or revenue share expense for the three months ended June 25, 2020 due to the temporary closure of all the founding member theaters within NCM LLC's network. (3) Used primarily for marketing to NCM LLC’s advertising clients. (4) 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 were due annually in six equal installments commencing on the first anniversary of the closing and ended on December 26, 2019. As of Included in the unaudited Condensed Consolidated Balance Sheets: June 25, 2020 December 26, Common unit adjustments and ESA extension costs, net of amortization and integration payments (included in intangible assets) (1) $ 619.0 $ 620.5 Current payable to founding members under tax receivable agreement (2) $ 10.0 $ 10.3 Long-term payable to founding members under tax receivable agreement (2) $ 134.7 $ 133.5 _________________________________ (1) 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. (2) The Company paid Cinemark and Regal $ 3.7 million and $ 6.7 million, respectively, in payments pursuant to the TRA during 2019 which was for the 2018 tax year. On March 21, 2020, a Treasury Department Notice postponed the original due date for the Company's U.S. federal income tax return to July 15, 2020 from April 15, 2020. The Company made the TRA payments to Cinemark and Regal on July 15, 2020 of $ 3.2 million and $ 5.8 million, respectively. 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 six months ended June 25, 2020 and June 27, 2019 were as follows (in millions): Three Months Ended Six Months Ended June 25, 2020 June 27, June 25, June 27, Cinemark $ — $ 7.5 $ 2.1 $ 10.5 Regal — 7.9 2.2 11.0 Total distributions to related parties — 15.4 4.3 21.5 NCM, Inc. — 14.6 4.1 20.4 Total $ — $ 30.0 $ 8.4 $ 41.9 Due to the temporary closure of the theaters within NCM LLC's network during the three months ended June 25, 2020, the mandatory distributions of available cash by NCM LLC to its related party founding members and NCM, Inc. for the three months ended June 25, 2020 were calculated as negative $29.8 million (including $7.6 million for Cinemark, $7.8 million for Regal and $14.4 million for NCM, Inc.). Therefore, there will be no payment made for the second quarter of 2020. Under the terms of the NCM LLC Operating Agreement, this negative amount will be netted against the available cash distributions for the second quarter of 2021, which will be paid in the third quarter of 2021, contingent upon the Company's compliance with the covenants outlined within the Credit Agreement Amendment defined within Note 6— Borrowings and the Company's generation of future positive available cash to which the above negative amounts above can be applied. Amounts due to related party founding members, net as of December 26, 2019 were comprised of the following (in millions): Cinemark Regal Total Theater access fees and revenue share, net of beverage revenues and other encumbered theater payments $ 2.0 $ 2.5 $ 4.5 Distributions payable to founding members 15.8 16.6 32.4 Integration payments due from founding members (0.1 ) — (0.1 ) Total amounts due to founding members, net $ 17.7 $ 19.1 $ 36.8 Network Affiliate Transactions —NCM LLC paid a network affiliate owned by a family member of a director on the Company's Board of Directors $0.1 million , $0.1 million , $0.3 million and $0.2 million , in circuit share payments during the three months ended June 25, 2020 and June 27, 2019 and six months ended June 25, 2020 and June 27, 2019 , respectively. 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 $0.9 million and $0.9 million as of June 25, 2020 and December 26, 2019 , respectively. Equity in (losses) earnings from AC JV, LLC of $(0.1) million , $0.1 million , $0.0 million and $0.3 million for the three months ended June 25, 2020 and June 27, 2019 and six months ended June 25, 2020 and June 27, 2019 |
Borrowings
Borrowings | 3 Months Ended |
Jun. 25, 2020 | |
Debt Disclosure [Abstract] | |
Borrowings | BORROWINGS The following table summarizes NCM LLC’s total outstanding debt as of June 25, 2020 and December 26, 2019 and the significant terms of its borrowing arrangements (in millions): Outstanding Balance as of Borrowings June 25, 2020 December 26, Maturity Interest Revolving credit facility $ 167.0 $ 39.0 June 20, 2023 (1) Term loans 265.3 266.6 June 20, 2025 (1) Senior unsecured notes due 2026 230.0 230.0 August 15, 2026 5.750% Senior secured notes due 2028 400.0 400.0 April 15, 2028 5.875% Total borrowings 1,062.3 935.6 Less: debt issuance costs related to term loans and senior notes (8.7 ) (9.0 ) Total borrowings, net 1,053.6 926.6 Less: current portion of debt (2.7 ) (2.7 ) Carrying value of long-term debt $ 1,050.9 $ 923.9 ___________________________________________________ (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 (the “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 Credit Agreement consists of a term loan facility and a revolving credit facility. As of June 25, 2020 , NCM LLC’s senior secured credit facility consisted of a $175.0 million revolving credit facility and a $265.3 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. On April 30, 2020, NCM LLC amended the Credit Agreement (the “Credit Agreement Amendment”) to allow for the automatic waiver of any non-compliance with its Consolidated Net Senior Secured Leverage Ratio and Consolidated Total Leverage Ratio financial covenants occurring from the quarter ending June 25, 2020 until and including the quarter ending July 1, 2021 (the “Covenant Holiday Period”). The Credit Agreement Amendment requires that, until the fiscal quarter ending July 1, 2021, NCM LLC must not permit the sum of unrestricted cash on hand at NCM LLC and availability under its Revolving Credit Facility to be less than $55.0 million . Further, NCM LLC can make available cash distributions to its members (AMC, Cinemark, Regal and NCM, Inc.) during the Covenant Holiday Period only if trailing 12-month Consolidated EBITDA (as defined in the Credit Agreement) equals or exceeds $277.0 million and outstanding loans under the Revolving Credit Facility are equal to or less than $39.0 million . NCM LLC can make available cash distributions to its members outside of the Covenant Holiday Period so long as NCM LLC’s Consolidated Net Senior Secured Leverage Ratio is equal to or less than 5.00 to 1.00 and no default or event of default under the Credit Agreement has occurred and is continuing. 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. During March 2020, NCM LLC drew down an additional $110.0 million on the revolving credit facility to fund operations during the period of expected disrupted cash flows due to the temporary closure of the theaters within NCM LLC's network to address the COVID-19 Pandemic. As of June 25, 2020 , NCM LLC’s total availability under the $175.0 million revolving credit facility was $4.4 million, net of $167.0 million outstanding and $3.6 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 June 25, 2020 was 3.00% . Term Loans —The interest rate on the term loans 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 loans as of June 25, 2020 was 4.00% . The term loans amortize at a rate equal to 1.00% annually, to be paid in equal quarterly installments. As of June 25, 2020 , NCM LLC has paid principal of $ 4.7 million, reducing the outstanding balance to $265.3 million. The term loans 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 June 25, 2020 , NCM LLC’s consolidated net senior secured leverage ratio was 4.58 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 6.01 times (versus the covenant of 6.25 times). As of June 25, 2020 , NCM LLC was in compliance with the requirements of the Credit Agreement Amendment described above and thus the noncompliance with the financial covenants was automatically waived. 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 June 25, 2020 . 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 $0.0 million , $0.0 million , $0.0 million and $0.3 million during the three months and six months ended June 25, 2020 and June 27, 2019 , respectively. Senior Secured Notes due 2028 —On October 8, 2019, NCM LLC completed a private offering of $400.0 million aggregate principal amount of 5.875% Senior Secured Notes due 2028 (the “Notes due 2028”) to eligible purchasers. 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. The Notes due 2028 were issued at 100% of the face amount thereof and share in the same collateral that secures NCM LLC's obligations under the senior secured credit facility. |
Income Taxes
Income Taxes | 3 Months Ended |
Jun. 25, 2020 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | INCOME TAXES Changes in the Company’s Effective Tax Rate —The Company recorded an income tax benefit of $4.6 million for the six months ended June 25, 2020 compared to income tax expense of $1.7 million for the six months ended June 27, 2019 resulting in an effective tax rate of 20.8% for the six months ended June 25, 2020 as compared to 17.9% for the six months ended June 27, 2019 . The increase in the effective tax rate was primarily due to the relative impact of the tax benefit recorded on pretax book losses attributable to NCM Inc. of $22.0 million for the six months ended June 25, 2020 compared to tax expense recorded on pretax book income of $9.4 million for the six months ended June 27, 2019. This increase in income tax benefit was partially offset by the 2019 impact of deferred state tax recorded during the six months ended June 27, 2019 that did not recur during the same period in 2020. The tax provision through June 25, 2020 was computed using the annual effective tax rate. The Company's current blended state and federal rate (net of federal benefit) was 24.4% as of June 25, 2020 and 24.5% as of June 27, 2019 |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Jun. 25, 2020 | |
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 $21.4 million and short-term and long-term lease liabilities of $1.7 million and $23.7 million , respectively, on the balance sheet as of June 25, 2020 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. As of June 25, 2020 , the Company had a weighted average remaining lease term of 9.6 years on these leases. 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 June 25, 2020 , the Company’s weighted average annual discount rate used to establish the ROU assets and lease liabilities was 7.33% . During the three and six months ended June 25, 2020 and June 27, 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 Six Months Ended June 25, June 27, June 25, June 27, Operating lease cost $ 0.9 $ 0.8 $ 1.8 $ 1.6 Short-term lease cost — — — 0.1 Variable lease cost 0.2 0.2 0.3 0.3 Total lease cost $ 1.1 $ 1.0 $ 2.1 $ 2.0 The Company made total lease payments of $0.9 million , $0.8 million , $1.8 million and $1.6 million during the three months ended June 25, 2020 and June 27, 2019 and six months ended June 25, 2020 and June 27, 2019 , respectively. These payments are included within cash flows from operating activities within the unaudited Condensed Consolidated Statement of Cash Flows. 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 is presented within “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 June 25, 2020 and December 26, 2019 , the Company had no liabilities recorded for the minimum payment, as the theater access fee was in excess of the minimum. Following the 2019 ESA Amendments, Cinemark and Regal receive an additional monthly theater access fee that began on 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 is entitled to display the Platinum Spot, 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 “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 or more trailers. In consideration for the utilization of the theaters for the Platinum Spots, Cinemark and Regal are entitled to receive 25% of all revenue generated for the actual display of Platinum Spots in their applicable theaters, subject to a specified minimum. If NCM LLC runs advertising in more than one concurrent advertisers’ Platinum Spot for any portion of the network over a period of time, then NCM LLC will be required to satisfy a minimum average CPM for that period of time. The Company does not owe the founding members any theater access fees or any Platinum Spot revenue share when the theaters are not displaying the Company's pre-show or when the Company does not have access to the theaters. As such, the Company did not owe these fees for the three months ended June 25, 2020 and will not owe these fees while the founding members' theaters are closed in connection with the COVID-19 Pandemic. The digital screen fee is calculated based upon average screens in use during each month. No digital screen fees were incurred for the three months ended June 25, 2020 and no fees will be incurred for months where no screens are in use and fees will be reduced for months where screens are in use for only part of the month. 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 June 25, 2020 , the maximum potential amount of future payments the Company could be required to make pursuant to the minimum revenue guarantees is $71.2 million over the remaining terms of the network affiliate agreements. These minimum guarantees relate to various affiliate agreements ranging in term from three years to twenty years , prior to any renewal periods of which some are at the option of the Company. The Company accrued $0.4 million and $0.5 million related to affiliate agreements with guaranteed minimums in excess of the revenue share agreement as of June 25, 2020 and December 26, 2019 , respectively. As the guaranteed minimums are based upon agreed upon minimum attendance or affiliate revenue levels, the Company did not incur minimum revenue share fees during the three months ended June 25, 2020 and will not for the remaining duration an affiliate's theaters are closed or during a period where theater attendance or affiliate revenue levels are low as the minimum levels must first be met by the affiliate. |
Fair Value Measurements
Fair Value Measurements | 3 Months Ended |
Jun. 25, 2020 | |
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 and Other Investments —The Company regularly reviews long-lived assets (primarily property, plant and equipment), intangible assets and investments accounted for under the cost or equity method 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 June 25, December 26, Investment in AC JV, LLC (1) $ 0.9 $ 0.9 Other investments 0.1 0.1 Total $ 1.0 $ 1.0 _______________________________________ (1) Refer to Note 5— Related Party Transactions . This investment is accounted for utilizing the equity method. As of June 25, 2020 , no 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. 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 June 25, As of December 26, Carrying Value Fair Value (1) Carrying Value Fair Value (1) Term loans $ 265.3 $ 220.2 $ 266.6 $ 266.9 Notes due 2026 230.0 162.3 230.0 226.2 Notes due 2028 400.0 329.4 400.0 426.7 ____________________________________________ (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 June 25, Quoted Prices in Active Markets for Identical Assets Significant Other Significant Unobservable Inputs ASSETS: Cash equivalents (1) $ 49.8 $ 49.8 $ — $ — Short-term marketable securities (2) 1.5 — 1.5 — Long-term marketable securities (2) 3.0 — 3.0 — Total assets $ 54.3 $ 49.8 $ 4.5 $ — Fair Value Measurements at Reporting Date Using Fair Value as of December 26, Quoted Prices in Active Markets for Identical Assets Significant Other Significant Unobservable Inputs ASSETS: Cash equivalents (1) $ 28.8 $ 16.8 $ 12.0 $ — Short-term marketable securities (2) 17.5 — 17.5 — Long-term marketable securities (2) 7.5 — 7.5 — Total assets $ 53.8 $ 16.8 $ 37.0 $ — ___________________________________________ (1) Cash Equivalents —The Company’s cash equivalents are carried at estimated fair value following the Company's election of the fair value option. 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. As of June 25, 2020 , there was $2.0 million of Available-for-sale debt securities in unrealized loss positions without an allowance for credit losses. The Company has not recorded an allowance for credit losses for the marketable securities balance as of June 25, 2020 given the immaterial difference between the amortized cost basis and the aggregate fair value of the Company's securities. For the three and six months ended June 25, 2020 and June 27, 2019 , 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 June 25, 2020 and December 26, 2019 , there was $0.0 million and an inconsequential amount, respectively, of gross unrealized losses related to individual securities of $0.0 million and $6.5 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 June 25, 2020 and December 26, 2019 were as follows: As of June 25, 2020 Amortized Cost Aggregate Fair Maturities (1) MARKETABLE SECURITIES: Short-term municipal bonds $ 0.3 $ 0.3 0.1 Short-term certificates of deposit 1.2 1.2 0.4 Total short-term marketable securities 1.5 1.5 Long-term U.S. government agency bonds 1.0 1.0 3.7 Long-term certificates of deposit 2.0 2.0 3.3 Total long-term marketable securities 3.0 3.0 Total marketable securities $ 4.5 $ 4.5 As of December 26, 2019 Amortized Cost Aggregate Fair Maturities (1) MARKETABLE SECURITIES: Short-term U.S. government agency bonds $ 3.5 $ 3.5 0.4 Short-term certificates of deposit 0.9 0.9 0.8 Short-term municipal bonds 1.2 1.2 0.5 Short-term commercial paper: Financial 8.0 7.9 0.3 Industrial 4.0 4.0 0.2 Total short-term marketable securities 17.6 17.5 Long-term U.S. government agency bonds 4.5 4.5 2.2 Long-term certificates of deposit 3.0 3.0 3.6 Total long-term marketable securities 7.5 7.5 Total marketable securities $ 25.1 $ 25.0 ___________________________________ (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 | 3 Months Ended |
Jun. 25, 2020 | |
Subsequent Events [Abstract] | |
Subsequent Event | SUBSEQUENT EVENT On August 3, 2020 , the Company declared a cash dividend of $0.07 per share (approximately $5.5 million |
The Company (Policies)
The Company (Policies) | 3 Months Ended |
Jun. 25, 2020 | |
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 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 26, 2019 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 26, 2019 . 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. Historically, the Company’s business has been seasonal and for this and other reasons operating results for interim periods have not been indicative of the Company’s full year results or future performance. Given the temporary closure of the theaters within the Company's network, management expects the Company's 2020 quarterly results to vary from historical trends. 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 —The risk of credit loss related to the Company's trade receivables and unbilled receivables balances is accounted for through the allowance for doubtful accounts, a contra asset account which reduces the net receivables balance. The allowance for doubtful accounts balance is determined by pooling the Company's receivables with similar risk characteristics, specifically by type of customer (national or local/ regional) and then age of receivable, and applying historical write off percentages to these pools in order to determine the amount of expected credit losses as of the balance sheet date. National receivables are with large advertising agencies with strong reputations in the advertising industry and clients with stable financial positions and good credit ratings, represent larger receivables balances per customer and have significantly lower historical and expected credit loss patterns. Local and regional receivables are with smaller companies sometimes with less credit history, represent smaller receivable balances per customer and higher historical and expected credit loss patterns. The Company has smaller contracts with thousands of local clients that are not individually significant. The Company also considers current economic conditions and trends to determine whether adjustments to historical loss rates are necessary. The Company increased the expected rate of default related to local and regional customers within the calculation of the allowance for doubtful accounts as of June 25, 2020 given the adverse impact of the COVID-19 Pandemic on certain businesses, in particular, categories of small businesses (i.e. restaurants, travel, etc.) which the Company expects could lead to an increased rate of default. The Company also reserves for specific receivable balances that it expects to write off based on known concerns regarding the financial health of the customer. Receivables are written off when management determines amounts are uncollectible. As of June 25, 2020 and December 26, 2019 , there were no advertising agency groups or individual customers through which the Company sources advertising revenue representing more than 10% of the Company’s outstanding gross receivable balance. During the three months ended June 25, 2020 , the Company had one customer that accounted for approximately 18% of the Company's revenue. During the six months ended June 25, 2020 and the three and six months ended June 27, 2019 , the Company had no customers that accounted for more than 10% of revenue. |
Share-Based Compensation | Share-Based Compensation |
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 Six Months Ended June 25, June 27, June 25, 2020 June 27, Net (loss) income attributable to NCM, Inc. $ (13.8 ) $ 8.9 $ (17.5 ) $ 7.8 NCM LLC equity issued for purchase of intangible asset — — 5.0 3.7 Income tax and other impacts of subsidiary ownership changes 0.1 0.1 (3.9 ) (1.3 ) Change from net (loss) income attributable to NCM, Inc. and transfers from noncontrolling interests $ (13.7 ) $ 9.0 $ (16.4 ) $ 10.2 |
Recently Adopted Accounting Pronouncements | Recently Adopted Accounting Pronouncements During the first quarter of 2020, the Company adopted 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. Upon the adoption of ASU 2016-13 on December 27, 2019, the Company recorded a $3.2 million cumulative-effect adjustment to retained earnings related to the change in methodology surrounding the historical losses utilized in the calculation of the allowance for credit losses related to trade and unbilled accounts receivable reducing the allowance to $3.0 million as of the adoption date. The Company also recorded a corresponding $0.4 million reduction to the corresponding deferred tax asset with the offset also recorded to retained earnings. The other impacts upon adoption were immaterial to the unaudited Condensed Consolidated Financial Statements. The Company has incorporated additional disclosures in Note 1— The Company, Note 2— Revenue from Contracts with Customers and Accounts Receivable and Note 9— Fair Value Measurements to its Condensed Consolidated Financial Statements to comply with ASU 2016-13. The Company has also designed and implemented changes to certain processes and internal controls related to its adoption of ASU 2016-13. |
Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements In December 2019, the FASB issued Accounting Standards Update 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes (“ASU 2019-12”), which removes the following exceptions for the Company to analyze in a given period: the exception to the incremental approach for intraperiod tax allocation; the exception to accounting for basis differences when there are ownership changes in foreign investments; and the exception in interim periods income tax accounting for year-to-date losses that exceed anticipated losses. ASU 2019-12 is effective for fiscal years beginning after December 15, 2020, including interim periods within those fiscal years, with early adoption permitted. The Company does not expect the adoption of this guidance to have a material impact on the unaudited Condensed Consolidated Financial Statements or notes thereto. In March 2020, the FASB issued Accounting Standards Update No. 2020-04, Reference Rate Reform (“ASU 2020-04”), which provides temporary optional guidance to companies impacted by the transition away from the London Interbank Offered Rate (“LIBOR”). The guidance provides certain expedients and exceptions to applying GAAP in order to lessen the potential accounting burden when contracts, hedging relationships, and other transactions that reference LIBOR as a benchmark rate are modified. This guidance is effective upon issuance and expires on December 31, 2022. The Company is currently assessing the impact of the LIBOR transition and ASU 2020-04 on the Company’s unaudited Condensed Consolidated Financial Statements. The Company has considered all other recently issued accounting pronouncements and does not believe the adoption of such pronouncements will have a material impact on its unaudited Condensed Consolidated Financial Statements or notes thereto. |
The Company (Tables)
The Company (Tables) | 3 Months Ended |
Jun. 25, 2020 | |
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 Six Months Ended June 25, June 27, June 25, 2020 June 27, Net (loss) income attributable to NCM, Inc. $ (13.8 ) $ 8.9 $ (17.5 ) $ 7.8 NCM LLC equity issued for purchase of intangible asset — — 5.0 3.7 Income tax and other impacts of subsidiary ownership changes 0.1 0.1 (3.9 ) (1.3 ) Change from net (loss) income attributable to NCM, Inc. and transfers from noncontrolling interests $ (13.7 ) $ 9.0 $ (16.4 ) $ 10.2 |
Revenue from Contracts with C_2
Revenue from Contracts with Customers (Tables) | 3 Months Ended |
Jun. 25, 2020 | |
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 months ended June 25, 2020 and June 27, 2019 and six months ended June 25, 2020 and June 27, 2019 (in millions): Three Months Ended Six Months Ended June 25, June 27, June 25, June 27, National and regional advertising revenue $ 1.7 $ 84.3 $ 51.5 $ 141.7 Local advertising revenue 2.3 17.7 11.7 30.5 Founding member advertising revenue from beverage concessionaire agreements — 8.2 5.5 14.9 Total revenue $ 4.0 $ 110.2 $ 68.7 $ 187.1 |
Summary of Changes in Deferred Revenue | The changes in deferred revenue for the six months ended June 25, 2020 were as follows (in millions): Six Months Ended June 25, Balance at beginning of period $ (7.6 ) Performance obligations satisfied 5.4 New contract liabilities (5.5 ) Balance at end of period $ (7.7 ) |
Schedule of Allowance for Doubtful Accounts | The changes within the allowance for doubtful accounts balances for the six months ended June 25, 2020 were as follows (in millions): Six Months Ended June 25, Allowance for National Customer Receivables Allowance for Local/ Regional Customer Receivables Balance at beginning of period $ 1.1 $ 1.9 Provision for bad debt (0.6 ) 1.3 Write-offs, net (0.1 ) (0.4 ) Balance at end of period $ 0.4 $ 2.8 |
Loss Per Share (Tables)
Loss Per Share (Tables) | 3 Months Ended |
Jun. 25, 2020 | |
Earnings Per Share [Abstract] | |
Schedule of Loss Per Share, Basic and Diluted | The components of basic and diluted loss per NCM, Inc. share are as follows: Three Months Ended Six Months Ended June 25, June 27, June 25, June 27, Net (loss) income attributable to NCM, Inc. (in millions) $ (13.8 ) $ 8.9 $ (17.5 ) $ 7.8 Weighted average shares outstanding: Basic 77,995,951 77,343,093 77,879,959 77,261,435 Add: Dilutive effect of stock options, restricted stock and exchangeable membership units — 293,003 — 313,646 Diluted 77,995,951 77,636,096 77,879,959 77,575,081 (Loss) earnings per NCM, Inc. share: Basic $ (0.18 ) $ 0.11 $ (0.22 ) $ 0.10 Diluted $ (0.18 ) $ 0.11 $ (0.22 ) $ 0.10 |
Related Party Transactions (Tab
Related Party Transactions (Tables) | 3 Months Ended |
Jun. 25, 2020 | |
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 Six Months Ended Included in the unaudited Condensed Consolidated Statements of Income: June 25, 2020 June 27, June 25, 2020 June 27, Revenue: Beverage concessionaire revenue (included in advertising revenue) (1) $ — $ 6.5 $ 4.3 $ 11.8 Operating expenses: Theater access fee and revenue share to founding members (2) $ — $ 14.5 $ 12.5 $ 27.4 Purchase of movie tickets and concession products and rental of theater space (included in selling and marketing costs) (3) $ — $ 0.1 $ 0.1 $ 0.2 Non-operating expenses: Interest income from notes receivable (included in interest income) (4) $ — $ — $ — $ 0.1 ________________________________________ (1) For the three and six months ended June 25, 2020 and June 27, 2019 , Cinemark and Regal purchased 60 seconds of on-screen advertising time from NCM LLC to satisfy their obligations under their beverage concessionaire agreements at a 30 seconds equivalent CPM rate specified by the ESA. There was no beverage revenue for the three months ended June 25, 2020 due to the temporary closure of all the founding member theaters within NCM LLC's network in response to the COVID-19 Pandemic and thus there not being any attendees upon which beverage revenue is based. (2) Comprised of payments per theater attendee, payments per digital screen with respect to the founding member theaters included in the Company’s network and payments for access to higher quality digital cinema equipment. Following the 2019 ESA Amendments in September of 2019 this also includes payments to Cinemark and Regal for their share of the revenue from the sale of 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”). There was no theater access fee or revenue share expense for the three months ended June 25, 2020 due to the temporary closure of all the founding member theaters within NCM LLC's network. (3) Used primarily for marketing to NCM LLC’s advertising clients. (4) 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 were due annually in six equal installments commencing on the first anniversary of the closing and ended on December 26, 2019. As of Included in the unaudited Condensed Consolidated Balance Sheets: June 25, 2020 December 26, Common unit adjustments and ESA extension costs, net of amortization and integration payments (included in intangible assets) (1) $ 619.0 $ 620.5 Current payable to founding members under tax receivable agreement (2) $ 10.0 $ 10.3 Long-term payable to founding members under tax receivable agreement (2) $ 134.7 $ 133.5 _________________________________ (1) 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. (2) The Company paid Cinemark and Regal $ 3.7 million and $ 6.7 |
Schedule of Mandatory Distributions to Members | Mandatory distributions of available cash for the three and six months ended June 25, 2020 and June 27, 2019 were as follows (in millions): Three Months Ended Six Months Ended June 25, 2020 June 27, June 25, June 27, Cinemark $ — $ 7.5 $ 2.1 $ 10.5 Regal — 7.9 2.2 11.0 Total distributions to related parties — 15.4 4.3 21.5 NCM, Inc. — 14.6 4.1 20.4 Total $ — $ 30.0 $ 8.4 $ 41.9 |
Schedule of Amounts Due to Founding Members, Net | Amounts due to related party founding members, net as of December 26, 2019 were comprised of the following (in millions): Cinemark Regal Total Theater access fees and revenue share, net of beverage revenues and other encumbered theater payments $ 2.0 $ 2.5 $ 4.5 Distributions payable to founding members 15.8 16.6 32.4 Integration payments due from founding members (0.1 ) — (0.1 ) Total amounts due to founding members, net $ 17.7 $ 19.1 $ 36.8 |
Borrowings (Tables)
Borrowings (Tables) | 3 Months Ended |
Jun. 25, 2020 | |
NCM, LLC. | |
Schedule of Outstanding Debt | The following table summarizes NCM LLC’s total outstanding debt as of June 25, 2020 and December 26, 2019 and the significant terms of its borrowing arrangements (in millions): Outstanding Balance as of Borrowings June 25, 2020 December 26, Maturity Interest Revolving credit facility $ 167.0 $ 39.0 June 20, 2023 (1) Term loans 265.3 266.6 June 20, 2025 (1) Senior unsecured notes due 2026 230.0 230.0 August 15, 2026 5.750% Senior secured notes due 2028 400.0 400.0 April 15, 2028 5.875% Total borrowings 1,062.3 935.6 Less: debt issuance costs related to term loans and senior notes (8.7 ) (9.0 ) Total borrowings, net 1,053.6 926.6 Less: current portion of debt (2.7 ) (2.7 ) Carrying value of long-term debt $ 1,050.9 $ 923.9 ___________________________________________________ (1) The interest rates on the revolving credit facility and term loan are described below. |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 3 Months Ended |
Jun. 25, 2020 | |
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 Six Months Ended June 25, June 27, June 25, June 27, Operating lease cost $ 0.9 $ 0.8 $ 1.8 $ 1.6 Short-term lease cost — — — 0.1 Variable lease cost 0.2 0.2 0.3 0.3 Total lease cost $ 1.1 $ 1.0 $ 2.1 $ 2.0 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 3 Months Ended |
Jun. 25, 2020 | |
Fair Value Disclosures [Abstract] | |
Schedule of Other Assets | Other investments consisted of the following (in millions): As of June 25, December 26, Investment in AC JV, LLC (1) $ 0.9 $ 0.9 Other investments 0.1 0.1 Total $ 1.0 $ 1.0 _______________________________________ (1) Refer to Note 5— Related Party Transactions . This investment is accounted for utilizing the equity method. |
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 June 25, As of December 26, Carrying Value Fair Value (1) Carrying Value Fair Value (1) Term loans $ 265.3 $ 220.2 $ 266.6 $ 266.9 Notes due 2026 230.0 162.3 230.0 226.2 Notes due 2028 400.0 329.4 400.0 426.7 ____________________________________________ (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 June 25, Quoted Prices in Active Markets for Identical Assets Significant Other Significant Unobservable Inputs ASSETS: Cash equivalents (1) $ 49.8 $ 49.8 $ — $ — Short-term marketable securities (2) 1.5 — 1.5 — Long-term marketable securities (2) 3.0 — 3.0 — Total assets $ 54.3 $ 49.8 $ 4.5 $ — Fair Value Measurements at Reporting Date Using Fair Value as of December 26, Quoted Prices in Active Markets for Identical Assets Significant Other Significant Unobservable Inputs ASSETS: Cash equivalents (1) $ 28.8 $ 16.8 $ 12.0 $ — Short-term marketable securities (2) 17.5 — 17.5 — Long-term marketable securities (2) 7.5 — 7.5 — Total assets $ 53.8 $ 16.8 $ 37.0 $ — ___________________________________________ (1) Cash Equivalents —The Company’s cash equivalents are carried at estimated fair value following the Company's election of the fair value option. 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. As of June 25, 2020 , there was $2.0 million of Available-for-sale debt securities in unrealized loss positions without an allowance for credit losses. The Company has not recorded an allowance for credit losses for the marketable securities balance as of June 25, 2020 given the immaterial difference between the amortized cost basis and the aggregate fair value of the Company's securities. For the three and six months ended June 25, 2020 and June 27, 2019 , 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 June 25, 2020 and December 26, 2019 , there was $0.0 million and an inconsequential amount, respectively, of gross unrealized losses related to individual securities of $0.0 million and $6.5 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 June 25, 2020 and December 26, 2019 were as follows: As of June 25, 2020 Amortized Cost Aggregate Fair Maturities (1) MARKETABLE SECURITIES: Short-term municipal bonds $ 0.3 $ 0.3 0.1 Short-term certificates of deposit 1.2 1.2 0.4 Total short-term marketable securities 1.5 1.5 Long-term U.S. government agency bonds 1.0 1.0 3.7 Long-term certificates of deposit 2.0 2.0 3.3 Total long-term marketable securities 3.0 3.0 Total marketable securities $ 4.5 $ 4.5 As of December 26, 2019 Amortized Cost Aggregate Fair Maturities (1) MARKETABLE SECURITIES: Short-term U.S. government agency bonds $ 3.5 $ 3.5 0.4 Short-term certificates of deposit 0.9 0.9 0.8 Short-term municipal bonds 1.2 1.2 0.5 Short-term commercial paper: Financial 8.0 7.9 0.3 Industrial 4.0 4.0 0.2 Total short-term marketable securities 17.6 17.5 Long-term U.S. government agency bonds 4.5 4.5 2.2 Long-term certificates of deposit 3.0 3.0 3.6 Total long-term marketable securities 7.5 7.5 Total marketable securities $ 25.1 $ 25.0 ___________________________________ (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) | Dec. 27, 2019USD ($) | Jun. 25, 2020USD ($)Segmentshares | Jun. 27, 2019shares | Jun. 25, 2020USD ($)shares | Jun. 27, 2019shares | Feb. 07, 2041 |
General Company Information [Line Items] | ||||||
Cumulative-effect adjustment for adoption of ASU 2014-09 | $ 2,900,000 | |||||
2019 ESA Amendment Extension Period | 4 years | |||||
Remaining term (in years) | 19 years 3 months 18 days | |||||
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 | 33,378 | 37,699 | 557,681 | 549,695 | ||
Operating lease, right-of-use asset | $ 21,400,000 | $ 21,400,000 | ||||
Short-term lease liability | 1,700,000 | 1,700,000 | ||||
Long-term lease liability | $ 23,700,000 | $ 23,700,000 | ||||
Document Period End Date | Jun. 25, 2020 | |||||
customer ten percent of revenue | $ 1 | |||||
Accounting Standards Update 2016-13 [Member] | ||||||
General Company Information [Line Items] | ||||||
Allowance for credit losses | $ 3,000,000 | |||||
Deferred tax assets reduction | $ 400,000 | |||||
NCM, LLC. | ||||||
General Company Information [Line Items] | ||||||
Weighted average term, esa and affiliate (in years) | 16 years 9 months 18 days | |||||
Common membership units outstanding | shares | 162,531,666 | 162,531,666 | ||||
National Cine Media Inc [Member] | ||||||
General Company Information [Line Items] | ||||||
Common membership units outstanding | shares | 78,000,338 | 78,000,338 | ||||
American Multi Cinema Inc [Member] | ||||||
General Company Information [Line Items] | ||||||
Common membership units outstanding | shares | 1,390,566 | 1,390,566 | ||||
Cinemark | ||||||
General Company Information [Line Items] | ||||||
Common membership units outstanding | shares | 40,850,068 | 40,850,068 | ||||
Regal Entertainment Group [Member] | ||||||
General Company Information [Line Items] | ||||||
Common membership units outstanding | shares | 42,290,694 | 42,290,694 | ||||
Retained Earnings | ||||||
General Company Information [Line Items] | ||||||
Cumulative-effect adjustment for adoption of ASU 2014-09 | $ 1,200,000 | |||||
Retained Earnings | Accounting Standards Update 2016-13 [Member] | ||||||
General Company Information [Line Items] | ||||||
Cumulative-effect adjustment for adoption of ASU 2014-09 | $ 3,200,000 | |||||
Cinemark | ||||||
General Company Information [Line Items] | ||||||
Percentage of common membership units outstanding | 25.10% | |||||
Regal Entertainment Group [Member] | ||||||
General Company Information [Line Items] | ||||||
Percentage of common membership units outstanding | 26.00% | |||||
National Cine Media Inc [Member] | ||||||
General Company Information [Line Items] | ||||||
Percentage of common membership units outstanding | 48.00% | |||||
American Multi Cinema Inc [Member] | ||||||
General Company Information [Line Items] | ||||||
Percentage of common membership units outstanding | 0.90% | |||||
Revenue from Rights Concentration Risk [Member] | ||||||
General Company Information [Line Items] | ||||||
customer ten percent of revenue | $ 0.18 |
The Company (Changes In Equity)
The Company (Changes In Equity) (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 25, 2020 | Jun. 27, 2019 | Jun. 25, 2020 | Jun. 27, 2019 | |
Accounting Policies [Abstract] | ||||
Document Period End Date | Jun. 25, 2020 | |||
Net (loss) income attributable to NCM, Inc. | $ (13.8) | $ 8.9 | $ (17.5) | $ 7.8 |
NCM LLC equity issued for purchase of intangible asset | 0 | 0 | 5 | 3.7 |
Income tax and other impacts of subsidiary ownership changes | 0.1 | 0.1 | (3.9) | (1.3) |
Change from net (loss) income attributable to NCM, Inc. and transfers from noncontrolling interests | $ (13.7) | $ 9 | $ (16.4) | $ 10.2 |
Revenue from Contracts with C_3
Revenue from Contracts with Customers (Narrative) (Details) - USD ($) | 6 Months Ended | |
Jun. 25, 2020 | Dec. 26, 2019 | |
Revenue from Contract with Customer [Abstract] | ||
Noncancelable Long Term Contracts | $ 0 | |
Make-good provision | 6,300,000 | $ 8,700,000 |
Unbilled accounts receivable | $ 2,200,000 | $ 8,000,000 |
Revenue from Contracts with C_4
Revenue from Contracts with Customers (Remaining Performance Obligations) (Details) | Jun. 25, 2020 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2020-03-27 | |
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 | 6 Months Ended | ||
Jun. 25, 2020 | Jun. 27, 2019 | Jun. 25, 2020 | Jun. 27, 2019 | |
Disaggregation of Revenue [Line Items] | ||||
Revenue | $ 4 | $ 110.2 | $ 68.7 | $ 187.1 |
National and Regional Advertising Revenue [Member] [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 1.7 | 84.3 | 51.5 | 141.7 |
Local advertising revenue | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 2.3 | 17.7 | 11.7 | 30.5 |
Founding member advertising revenue from beverage concessionaire agreements | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | $ 0 | $ 8.2 | $ 5.5 | $ 14.9 |
Revenue from Contracts with C_6
Revenue from Contracts with Customers (Summary of Changes in Deferred Revenue) (Details) $ in Millions | 6 Months Ended |
Jun. 25, 2020USD ($) | |
Contract Liabilities | |
Balance at beginning of period | $ (7.6) |
Performance obligations satisfied | 5.4 |
New contract liabilities | (5.5) |
Balance at end of period | (7.7) |
National and regional advertising revenue | |
Balance at beginning of period | 1.1 |
Provision for bad debt | (0.6) |
Write-offs, net | (0.1) |
Balance at end of period | 0.4 |
Local And Regional Advertising Revenue [Member] | |
Balance at beginning of period | 1.9 |
Provision for bad debt | 1.3 |
Write-offs, net | (0.4) |
Balance at end of period | $ 2.8 |
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 | 6 Months Ended | ||
Jun. 25, 2020 | Jun. 27, 2019 | Jun. 25, 2020 | Jun. 27, 2019 | |
Earnings Per Share [Abstract] | ||||
Net (loss) income attributable to NCM, Inc. (in millions) | $ (13.8) | $ 8.9 | $ (17.5) | $ 7.8 |
Weighted average shares outstanding: | ||||
Basic (in shares) | 77,995,951 | 77,343,093 | 77,879,959 | 77,261,435 |
Add: Dilutive effect of stock options and restricted stock (in shares) | 0 | 293,003 | 0 | 313,646 |
Diluted (in shares) | 77,995,951 | 77,636,096 | 77,879,959 | 77,575,081 |
(Loss) earnings per NCM, Inc. share: | ||||
Basic (in usd per share) | $ (0.18) | $ 0.11 | $ (0.22) | $ 0.10 |
Diluted (in usd per share) | $ (0.18) | $ 0.11 | $ (0.22) | $ 0.10 |
Loss Per Share (Narrative) (Det
Loss Per Share (Narrative) (Details) - shares | 3 Months Ended | 6 Months Ended | ||
Jun. 25, 2020 | Jun. 27, 2019 | Jun. 25, 2020 | Jun. 27, 2019 | |
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 | 3,777,240 | 1,969,086 | 3,777,240 | 2,125,728 |
Common Units | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Shares excluded from the calculation of diluted weighted average shares | 84,531,328 | 81,705,487 | 83,252,384 | 81,263,513 |
Intangible Assets (Narrative) (
Intangible Assets (Narrative) (Details) - NCM, LLC. - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||||
Jun. 25, 2020 | Mar. 26, 2020 | Jun. 27, 2019 | Mar. 28, 2019 | Jun. 25, 2020 | Jun. 27, 2019 | |
Finite-Lived Intangible Assets [Line Items] | ||||||
Common membership units issued, net of returned | 3,022,959 | 1,044,665 | ||||
Increase (decrease) in intangible assets, net | $ 10.5 | $ 7.6 | ||||
AMC and Cinemark | ||||||
Finite-Lived Intangible Assets [Line Items] | ||||||
Increase (decrease) in intangible assets, net | $ 0 | $ 5.7 | $ 1.4 | $ 8.1 | ||
Integration and other encumbered payments, related parties - financing activities | $ 1.2 | $ 2.5 | $ 9.7 | $ 10.6 | ||
Minimum | ||||||
Finite-Lived Intangible Assets [Line Items] | ||||||
Percentage increase (decrease) in theater attendance for Common Unit adjustment to occur | (2.00%) | |||||
Maximum | ||||||
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 | 6 Months Ended | ||||
Jun. 25, 2020 | Jun. 27, 2019 | Jun. 25, 2020 | Jun. 27, 2019 | Dec. 26, 2019 | Dec. 26, 2013 | |
Related Party Transaction [Line Items] | ||||||
Document Period End Date | Jun. 25, 2020 | |||||
Payments of Distributions to Affiliates | $ 36.8 | $ 34 | ||||
Percentage of cash savings related to taxes | 90.00% | |||||
Cash payment due to founding members/managing member | $ 32.4 | |||||
Cash dividends on shares of NMC Inc | $ 5.3 | $ 13.5 | 20 | 26.8 | ||
Negative Distribution Made to Limited Liability Company Member, Cash Distributions Deferred | 29.8 | |||||
AC JV, LLC | ||||||
Related Party Transaction [Line Items] | ||||||
Investment in AC JV, LLC | 0.9 | 0.9 | 0.9 | |||
Equity in earnings of non-consolidated entities | $ (0.1) | 0.1 | 0 | 0.3 | ||
NCM, LLC. | AC JV, LLC | ||||||
Related Party Transaction [Line Items] | ||||||
Document Period End Date | Jun. 25, 2020 | |||||
Ownership percentage | 4.00% | |||||
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 | 15.8 | |||||
Negative Distribution Made to Limited Liability Company Member, Cash Distributions Deferred | $ 7.6 | |||||
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 | $ 16.6 | |||||
Negative Distribution Made to Limited Liability Company Member, Cash Distributions Deferred | 7.8 | |||||
Regal | AC JV, LLC | ||||||
Related Party Transaction [Line Items] | ||||||
Ownership percentage | 32.00% | |||||
National Cine Media Inc [Member] | ||||||
Related Party Transaction [Line Items] | ||||||
Negative Distribution Made to Limited Liability Company Member, Cash Distributions Deferred | 14.4 | |||||
AffiliateCircuitSharePayment [Member] | ||||||
Related Party Transaction [Line Items] | ||||||
Payments of Distributions to Affiliates | $ 0.1 | $ 0.1 | $ 0.3 | $ 0.2 |
Related Party Transactions (Sum
Related Party Transactions (Summary of Transactions Between the Company and the Founding Members Included in Statements of Income) (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 25, 2020 | Jun. 27, 2019 | Jun. 25, 2020 | Jun. 27, 2019 | |
Related Party Transaction [Line Items] | ||||
Document Period End Date | Jun. 25, 2020 | |||
Revenue | $ 4 | $ 110.2 | $ 68.7 | $ 187.1 |
Selling and marketing costs | 6.7 | 16.2 | 20.6 | 31.4 |
Founding Members | ||||
Related Party Transaction [Line Items] | ||||
Revenue | 0 | 6.5 | 4.3 | 11.8 |
Theater access fee | 0 | 14.5 | 12.5 | 27.4 |
Selling and marketing costs | 0 | 0.1 | 0.1 | 0.2 |
Interest income from notes receivable (included in interest income) | $ 0 | $ 0 | $ 0 | $ 0.1 |
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 ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 25, 2020 | Jun. 25, 2020 | Jun. 27, 2019 | Dec. 26, 2013 | |
Related Party Transaction [Line Items] | ||||
Payments to affiliates for tax sharing agreement | $ 0 | $ 9.8 | ||
NCM, LLC. | AC JV, LLC | ||||
Related Party Transaction [Line Items] | ||||
Ownership percentage | 4.00% | |||
Promissory notes receivable from founding members | $ 25,000,000 | |||
AMC | AC JV, LLC | ||||
Related Party Transaction [Line Items] | ||||
Ownership percentage | 32.00% | |||
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 | $ 8,300,000 | |||
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 | $ 8,300,000 | |||
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 | $ 8,300,000 | |||
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. |
Related Party Transactions (S_3
Related Party Transactions (Summary of Transactions Between the Company and the Founding Members Included in Balance Sheets) (Details) - USD ($) | 3 Months Ended | 6 Months Ended | |||
Sep. 24, 2020 | Jun. 25, 2020 | Jun. 25, 2020 | Jun. 27, 2019 | Dec. 26, 2019 | |
Related Party Transaction [Line Items] | |||||
Payment To Founding Members Under Tax Sharing Arrangement | $ 0 | $ 9.8 | |||
Document Period End Date | Jun. 25, 2020 | ||||
Common unit adjustments, net of amortization and integration payments (included in intangible assets) | $ 640,500,000 | 640,500,000 | $ 643,700,000 | ||
Current payable to founding members under tax receivable agreement | 14,200,000 | 14,200,000 | 14,200,000 | ||
Long-term payable to founding members under tax receivable agreement | 185,100,000 | 185,100,000 | 183,800,000 | ||
Founding Members | |||||
Related Party Transaction [Line Items] | |||||
Common unit adjustments, net of amortization and integration payments (included in intangible assets) | 619,000,000 | 619,000,000 | 620,500,000 | ||
Current payable to founding members under tax receivable agreement | 10,000,000 | 10,000,000 | 10,300,000 | ||
Long-term payable to founding members under tax receivable agreement | $ 134,700,000 | $ 134,700,000 | $ 133,500,000 | ||
Tax Year 2019 [Member] | Cinemark Holdings Inc [Member] | |||||
Related Party Transaction [Line Items] | |||||
Payment To Founding Members Under Tax Sharing Arrangement | $ 3,200,000 | ||||
Tax Year 2019 [Member] | Regal Entertainment Group [Member] | |||||
Related Party Transaction [Line Items] | |||||
Payment To Founding Members Under Tax Sharing Arrangement | $ 5,800,000 |
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 ($) | 6 Months Ended | 12 Months Ended | |
Jun. 25, 2020 | Jun. 27, 2019 | Dec. 26, 2019 | |
Related Party Transaction [Line Items] | |||
Payments to affiliates for tax sharing agreement | $ 0 | $ 9.8 | |
Cinemark | Tax Year 2018 [Member] | |||
Related Party Transaction [Line Items] | |||
Payments to affiliates for tax sharing agreement | $ 3,700,000 | ||
Regal | Tax Year 2018 [Member] | |||
Related Party Transaction [Line Items] | |||
Payments to affiliates for tax sharing agreement | $ 6,700,000 |
Related Party Transactions (Sch
Related Party Transactions (Schedule of Mandatory Distributions to Members) (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 25, 2020 | Jun. 27, 2019 | Jun. 25, 2020 | Jun. 27, 2019 | |
Related Party Transaction [Line Items] | ||||
Document Period End Date | Jun. 25, 2020 | |||
Cash distributions declared to members | $ 0 | $ 30 | $ 8.4 | $ 41.9 |
Cinemark | ||||
Related Party Transaction [Line Items] | ||||
Cash distributions declared to members | 0 | 7.5 | 2.1 | 10.5 |
Regal | ||||
Related Party Transaction [Line Items] | ||||
Cash distributions declared to members | 0 | 7.9 | 2.2 | 11 |
Founding Members | ||||
Related Party Transaction [Line Items] | ||||
Cash distributions declared to members | 0 | 15.4 | 4.3 | 21.5 |
NCM Inc. | ||||
Related Party Transaction [Line Items] | ||||
Cash distributions declared to members | 0 | 14.6 | 4.1 | 20.4 |
A C J V L L C [Member] | ||||
Related Party Transaction [Line Items] | ||||
Income (Loss) from Equity Method Investments | $ (0.1) | $ 0.1 | $ 0 | $ 0.3 |
Related Party Transactions (S_5
Related Party Transactions (Schedule of Amounts Due to Founding Members, Net) (Details) $ in Millions | Dec. 26, 2019USD ($) |
Related Party Transaction [Line Items] | |
Theater access fees and revenue share, net of beverage revenues and other encumbered theater payments | $ 4.5 |
Distributions payable to founding members | 32.4 |
Integration payments due from founding members | (0.1) |
Total amounts due to founding members, net | 36.8 |
Cinemark | |
Related Party Transaction [Line Items] | |
Theater access fees and revenue share, net of beverage revenues and other encumbered theater payments | 2 |
Distributions payable to founding members | 15.8 |
Integration payments due from founding members | (0.1) |
Total amounts due to founding members, net | 17.7 |
Regal | |
Related Party Transaction [Line Items] | |
Theater access fees and revenue share, net of beverage revenues and other encumbered theater payments | 2.5 |
Distributions payable to founding members | 16.6 |
Integration payments due from founding members | 0 |
Total amounts due to founding members, net | $ 19.1 |
Borrowings (Schedule of Outstan
Borrowings (Schedule of Outstanding Debt) (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Jun. 25, 2020 | Dec. 26, 2019 | Aug. 19, 2016 | |
Debt Instrument [Line Items] | |||
Document Period End Date | Jun. 25, 2020 | ||
Debt issuance costs, long-term | $ (8.7) | $ (9) | |
Carrying value of long-term debt | 1,050.9 | 923.9 | |
NCM, LLC. | |||
Debt Instrument [Line Items] | |||
Outstanding borrowings | 1,062.3 | 935.6 | |
Debt issuance costs, long-term | (8.7) | (9) | |
Long-term Debt | 1,053.6 | 926.6 | |
Carrying value of long-term debt | 1,050.9 | 923.9 | |
Less: current portion of debt | (2.7) | (2.7) | |
NCM, LLC. | Senior unsecured notes due 2026 | |||
Debt Instrument [Line Items] | |||
Outstanding borrowings | $ 230 | ||
Interest Rate | 5.75% | 5.75% | |
NCM, LLC. | Senior secured notes due 2028 | |||
Debt Instrument [Line Items] | |||
Outstanding borrowings | $ 400 | ||
Interest Rate | 5.875% | ||
NCM, LLC. | Term loans | |||
Debt Instrument [Line Items] | |||
Outstanding borrowings | $ 265.3 | 266.6 | |
Interest Rate | 4.00% | ||
NCM, LLC. | Revolving credit facility | |||
Debt Instrument [Line Items] | |||
Outstanding borrowings | $ 167 | $ 39 |
Borrowings (Narrative) (Details
Borrowings (Narrative) (Details) - USD ($) | 1 Months Ended | 3 Months Ended | 6 Months Ended | ||||||
Mar. 31, 2020 | Jun. 25, 2020 | Jun. 27, 2019 | Jun. 25, 2020 | Jun. 27, 2019 | Dec. 26, 2019 | Oct. 08, 2019 | Dec. 27, 2018 | Aug. 19, 2016 | |
Debt Instrument [Line Items] | |||||||||
Document Period End Date | Jun. 25, 2020 | ||||||||
Line of Credit Facility, Asset Restrictions | $ 55,000,000 | ||||||||
Debt Instrument, Restrictive Covenants | 277,000,000 | ||||||||
Line of Credit, Covenant, Maximum Senior Secured Leverage Ratio | $ 39,000,000 | ||||||||
Repayment of term loan facility | 0 | 4,600,000 | |||||||
Senior secured notes due 2028 | |||||||||
Debt Instrument [Line Items] | |||||||||
Debt instrument face amount | $ 400,000,000 | ||||||||
Stated interest rate | 5.875% | ||||||||
Debt instrument issued percentage of face value | 100.00% | ||||||||
NCM, LLC. | |||||||||
Debt Instrument [Line Items] | |||||||||
Debt Instrument, carrying value | $ 1,062,300,000 | $ 1,062,300,000 | $ 935,600,000 | ||||||
Cash and cash equivalents used in determining senior secured leverage ratio | $ 100,000,000 | ||||||||
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 | 458.00% | 458.00% | |||||||
Net total leverage ratio | 6.01 | 6.01 | |||||||
NCM, LLC. | Senior secured notes due 2022 | |||||||||
Debt Instrument [Line Items] | |||||||||
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 | |||||||
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 | $ 15,000,000 | |||||||
Write-off of debt issuance costs | $ 0 | $ 0 | $ 0 | $ 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 loans | |||||||||
Debt Instrument [Line Items] | |||||||||
Debt Instrument, carrying value | $ 265,300,000 | $ 265,300,000 | 266,600,000 | ||||||
Amortization rate | 1.00% | ||||||||
Repayment of term loan facility | $ 4,700,000 | ||||||||
Stated interest rate | 4.00% | 4.00% | |||||||
NCM, LLC. | Term loans | LIBOR | |||||||||
Debt Instrument [Line Items] | |||||||||
Basis spread on variable rate, percent | 3.00% | ||||||||
NCM, LLC. | Term loans | 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 | 167,000,000 | 167,000,000 | $ 39,000,000 | ||||||
Proceeds from Lines of Credit | $ 110,000,000 | ||||||||
Remaining borrowing capacity of credit facility | $ 4,400,000 | $ 4,400,000 | |||||||
Unused line fee, percent | 0.50% | ||||||||
Weighted-average interest rate | 3.00% | 3.00% | |||||||
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 | $ 3,600,000 | $ 3,600,000 | |||||||
NCM, LLC. | Covenant During Waiver Min [Member] | Senior Secured Credit Facility | |||||||||
Debt Instrument [Line Items] | |||||||||
Net senior secured leverage ratio | 5 | 5 | |||||||
NCM, LLC. | Covenant Waiver Max [Member] | Senior Secured Credit Facility | |||||||||
Debt Instrument [Line Items] | |||||||||
Net senior secured leverage ratio | 1 | 1 |
Income Taxes (Narrative) (Detai
Income Taxes (Narrative) (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 25, 2020 | Jun. 27, 2019 | Jun. 25, 2020 | Jun. 27, 2019 | |
Income Tax Contingency [Line Items] | ||||
Effective tax rate | 20.80% | 17.90% | ||
Pretax Book Income | $ 22 | $ 9.4 | ||
Income tax benefit | $ 4.2 | $ (2.3) | $ 4.6 | $ (1.7) |
Document Period End Date | Jun. 25, 2020 | |||
State and Federal | ||||
Income Tax Contingency [Line Items] | ||||
Effective tax rate | 24.40% |
Commitments and Contingencies_2
Commitments and Contingencies (Narrative) (Details) - USD ($) | 3 Months Ended | 6 Months Ended | 12 Months Ended | 60 Months Ended | 160 Months Ended | ||||||
Jun. 25, 2020 | Jun. 27, 2019 | Jun. 25, 2020 | Jun. 27, 2019 | Oct. 31, 2022 | Oct. 31, 2021 | Oct. 31, 2020 | Oct. 31, 2027 | Feb. 13, 2041 | Dec. 26, 2019 | Nov. 01, 2019 | |
Other Commitments [Line Items] | |||||||||||
Operating lease, right-of-use asset | $ 21,400,000 | $ 21,400,000 | |||||||||
Short-term lease liability | 1,700,000 | 1,700,000 | |||||||||
Long-term lease liability | $ 23,700,000 | $ 23,700,000 | |||||||||
Weighted average remaining lease term | 9 years 7 months 6 days | 9 years 7 months 6 days | |||||||||
Operating lease payments | $ 900,000 | $ 800,000 | $ 1,800,000 | $ 1,600,000 | |||||||
Weighted average discount rate | 7.33% | 7.33% | |||||||||
Maximum potential payment | $ 71,200,000 | $ 71,200,000 | |||||||||
Additional amount accrued related to minimum guarantees | 400,000 | 400,000 | $ 500,000 | ||||||||
Cinemark and Regal [Member] | |||||||||||
Other Commitments [Line Items] | |||||||||||
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 | 3 years | ||||||||||
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 | ||||||||||
Future patron payment | Cinemark and Regal [Member] | |||||||||||
Other Commitments [Line Items] | |||||||||||
Amount Increase In Payment Per Theater Patron | $ 0.05 | $ 0.0375 | $ 0.025 | $ 0.052 | $ 0.08 |
Commitments and Contingencies_3
Commitments and Contingencies (Operating Lease Cost) (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 25, 2020 | Jun. 27, 2019 | Jun. 25, 2020 | Jun. 27, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | ||||
Operating Lease, Cost | $ 0.9 | $ 0.8 | $ 1.8 | $ 1.6 |
Short-term Lease, Cost | 0 | 0 | 0 | 0.1 |
Variable Lease, Cost | 0.2 | 0.2 | 0.3 | 0.3 |
Lease, Cost | $ 1.1 | $ 1 | $ 2.1 | $ 2 |
Fair Value Measurements (Schedu
Fair Value Measurements (Schedule of Other Investments) (Details) - USD ($) $ in Millions | Jun. 25, 2020 | Dec. 26, 2019 |
Fair Value, Separate Account Investment [Line Items] | ||
Other investments | $ 0.1 | $ 0.1 |
Total other investments | 1 | 1 |
AC JV, LLC | ||
Fair Value, Separate Account Investment [Line Items] | ||
Investment in AC JV, LLC | $ 0.9 | $ 0.9 |
Fair Value Measurements (Sche_2
Fair Value Measurements (Schedule of Other Investments) (Additional Information) (Details) | 12 Months Ended |
Dec. 26, 2019 | |
Maximum | |
Fair Value, Separate Account Investment [Line Items] | |
Cost-method ownership percentage | 20.00% |
Fair Value Measurements (Narrat
Fair Value Measurements (Narrative) (Details) - USD ($) | 3 Months Ended | ||
Jun. 25, 2020 | Dec. 26, 2019 | Mar. 28, 2019 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Debt Securities, Available-for-sale, Realized Gain (Loss) | $ 2,000,000 | ||
Available-for-sale Securities, Gross Unrealized Loss | 0 | ||
Gross unrealized losses related to individual securities had been in continuous loss position for 12 months or longer | $ 0 | $ 6,500,000 | |
Impaired Investments | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Fair value of cost method investment | $ 0 |
Fair Value Measurements (Estima
Fair Value Measurements (Estimated Fair Values of Company's Financial Instruments) (Details) - USD ($) $ in Millions | Jun. 25, 2020 | Dec. 26, 2019 |
Term loans | Carrying Value | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Debt Instrument | $ 265.3 | $ 266.6 |
Term loans | Fair Value | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Debt Instrument | 220.2 | 266.9 |
Senior Notes Due Two Zero Two Six [Member] [Member] | Carrying Value | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Debt Instrument | 230 | 230 |
Senior Notes Due Two Zero Two Six [Member] [Member] | Fair Value | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Debt Instrument | 162.3 | 226.2 |
Senior secured notes due 2028 | Carrying Value | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Debt Instrument | 400 | 400 |
Senior secured notes due 2028 | Fair Value | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Debt Instrument | $ 329.4 | $ 426.7 |
Fair Value Measurements (Fair V
Fair Value Measurements (Fair Values of the Company's Assets and Liabilities) (Details) - USD ($) $ in Millions | Jun. 25, 2020 | Dec. 26, 2019 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Short-term marketable securities | $ 1.5 | $ 17.5 |
Long-term marketable securities | 3 | 7.5 |
Fair Value, Measurements, Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 49.8 | 28.8 |
Short-term marketable securities | 1.5 | 17.5 |
Long-term marketable securities | 3 | 7.5 |
Total assets | 54.3 | 53.8 |
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 | 49.8 | 16.8 |
Short-term marketable securities | 0 | 0 |
Long-term marketable securities | 0 | 0 |
Total assets | 49.8 | 16.8 |
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 | 0 | 12 |
Short-term marketable securities | 1.5 | 17.5 |
Long-term marketable securities | 3 | 7.5 |
Total assets | 4.5 | 37 |
Significant Unobservable Inputs (Level 3) | Fair Value, Measurements, Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 0 | 0 |
Short-term marketable securities | 0 | 0 |
Long-term marketable securities | 0 | 0 |
Total assets | $ 0 | $ 0 |
Fair Value Measurements (Fair_2
Fair Value Measurements (Fair Values of the Company's Assets and Liabilities) (Additional Information) (Details) - USD ($) $ in Millions | Jun. 25, 2020 | Dec. 26, 2019 |
Fair Value Disclosures [Abstract] | ||
Gross unrealized losses related to individual securities had been in continuous loss position for 12 months or longer | $ 0 | $ 6.5 |
Fair Value Measurements (Sche_3
Fair Value Measurements (Schedule of Marketable Securities) (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended |
Jun. 25, 2020 | Dec. 26, 2019 | |
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost Basis | $ 4.5 | $ 25.1 |
Aggregate Fair Value - Short term marketable securities | 1.5 | 17.5 |
Aggregate Fair Value - Long term marketable securities | 3 | 7.5 |
Aggregate Fair Value - Total marketable securities | 4.5 | 25 |
U.S. Government Agency Bonds | ||
Debt Securities, Available-for-sale [Line Items] | ||
Aggregate Fair Value - Short term marketable securities | 3.5 | |
U.S. Government Agency Bonds | Short Term Marketable Securities [Member] | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost Basis | $ 3.5 | |
Maturities | 12 days | |
U.S. Government Agency Bonds | Long Term Marketable Securities [Member] | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost Basis | $ 4.5 | |
Aggregate Fair Value - Long term marketable securities | $ 4.5 | |
Maturities | 2 years 2 months 12 days | |
Certificates of Deposit | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost Basis | 1.2 | |
Aggregate Fair Value - Short term marketable securities | $ 1.2 | $ 0.9 |
Aggregate Fair Value - Long term marketable securities | 3 | |
Maturities | 12 days | |
Certificates of Deposit | Short Term Marketable Securities [Member] | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost Basis | $ 0.9 | |
Maturities | 24 days | |
Certificates of Deposit | Long Term Marketable Securities [Member] | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost Basis | $ 3 | |
Maturities | 3 years 7 months 6 days | |
Short Term Marketable Securities [Member] | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost Basis | $ 1.5 | $ 17.6 |
Aggregate Fair Value - Short term marketable securities | 1.5 | 17.5 |
Municipal Bonds [Member] | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost Basis | 1.2 | |
Aggregate Fair Value - Short term marketable securities | $ 1.2 | |
Maturities | 15 days | |
Financial Commercial Paper | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost Basis | $ 8 | |
Aggregate Fair Value - Short term marketable securities | $ 7.9 | |
Maturities | 9 days | |
Industrial Commercial Paper | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost Basis | $ 4 | |
Aggregate Fair Value - Short term marketable securities | $ 4 | |
Maturities | 6 days | |
Municipal Notes [Member] | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost Basis | 0.3 | |
Aggregate Fair Value - Short term marketable securities | $ 0.3 | |
Maturities | 3 days | |
Financial Certificates Of Deposit | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost Basis | $ 2 | |
Aggregate Fair Value - Long term marketable securities | $ 2 | |
Maturities | 3 years 3 months 18 days | |
Long Term Marketable Securities [Member] | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost Basis | $ 3 | $ 7.5 |
Aggregate Fair Value - Long term marketable securities | 3 | $ 7.5 |
Long Term Marketable Securities [Member] | U.S. Government Agency Bonds | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost Basis | 1 | |
Aggregate Fair Value - Long term marketable securities | $ 1 | |
Maturities | 3 years 8 months 12 days |
Subsequent Event (Narrative) (D
Subsequent Event (Narrative) (Details) - Subsequent Event $ / shares in Units, $ in Millions | Aug. 03, 2020USD ($)$ / shares |
Subsequent Events [Line Items] | |
Cash dividends declared (in usd per share) | $ / shares | $ 0.07 |
Dividends payable | $ | $ 5.5 |