Document And Entity Information
Document And Entity Information - shares | 6 Months Ended | |
Jun. 27, 2019 | Aug. 03, 2019 | |
Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Jun. 27, 2019 | |
Document Fiscal Year Focus | 2019 | |
Document Fiscal Period Focus | Q2 | |
Entity Registrant Name | National CineMedia, LLC | |
Entity Central Index Key | 0001527190 | |
Entity Filer Category | Non-accelerated Filer | |
Entity Emerging Growth Company | false | |
Entity Small Business | false | |
Entity Current Reporting Status | Yes | |
Current Fiscal Year End Date | --12-26 | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 159,024,458 |
CONDENSED BALANCE SHEETS
CONDENSED BALANCE SHEETS - USD ($) $ in Millions | Jun. 27, 2019 | Dec. 27, 2018 |
CURRENT ASSETS: | ||
Cash and cash equivalents | $ 4.5 | $ 7.2 |
Receivables, net of allowance of $6.0 and $6.0, respectively | 124.9 | 149.9 |
Prepaid administrative fees to managing member | 0.5 | 0.6 |
Amounts due from founding members, net | 3.1 | 5.8 |
Current portion of notes receivable - founding members (including receivables from related parties of $2.8 and $4.2, respectively) | 4.2 | 5.6 |
Prepaid expenses and other current assets | 3.9 | 3.6 |
Total current assets | 141.1 | 172.7 |
NON-CURRENT ASSETS: | ||
Property and equipment, net of accumulated depreciation of $66.7 and $62.5, respectively | 32.4 | 33.6 |
Intangible assets, net of accumulated amortization of $186.2 and $172.7, respectively | 669.6 | 684.5 |
Other investments | 3.2 | 3 |
Debt issuance costs, net | 4.5 | 5 |
Other assets | 23.2 | 0.7 |
Total non-current assets | 732.9 | 726.8 |
TOTAL ASSETS | 874 | 899.5 |
CURRENT LIABILITIES: | ||
Accrued expenses | 17.6 | 21.3 |
Accrued payroll and related expenses | 8.5 | 10 |
Accounts payable | 14.2 | 16.2 |
Deferred revenue | 10.7 | 7.3 |
Short-term debt | 2.7 | 2.7 |
Other current liabilities | 1.3 | 0 |
Total current liabilities | 88.4 | 115.2 |
NON-CURRENT LIABILITIES: | ||
Long-term debt, net of debt issuance costs of $6.9 and $7.8, respectively | 915.4 | 920.9 |
Other liabilities | 23.9 | 4 |
Total non-current liabilities | 939.3 | 924.9 |
Total liabilities | 1,027.7 | 1,040.1 |
MEMBERS’ EQUITY/(DEFICIT) | (153.7) | (140.6) |
TOTAL LIABILITIES AND EQUITY/(DEFICIT) | 874 | 899.5 |
Founding Members | ||
CURRENT ASSETS: | ||
Prepaid administrative fees to managing member | 0.5 | 0.6 |
Current portion of notes receivable - founding members (including receivables from related parties of $2.8 and $4.2, respectively) | 2.8 | 4.2 |
NON-CURRENT ASSETS: | ||
Intangible assets, net of accumulated amortization of $186.2 and $172.7, respectively | 644.8 | 657.6 |
CURRENT LIABILITIES: | ||
Amounts due to founding members, net | 17.9 | 30 |
Managing Member | ||
CURRENT LIABILITIES: | ||
Amounts due to founding members, net | $ 15.5 | $ 27.7 |
CONDENSED BALANCE SHEETS (PAREN
CONDENSED BALANCE SHEETS (PARENTHETICAL) - USD ($) $ in Millions | Jun. 27, 2019 | Dec. 27, 2018 |
Allowance for doubtful accounts receivable | $ 6 | $ 6 |
Receivables from related parties, current | 4.2 | 5.6 |
Accumulated depreciation, property and equipment | 66.7 | 62.5 |
Accumulated amortization, intangible assets | 186.2 | 172.7 |
Debt issuance costs, long-term | 6.9 | 7.8 |
Founding Members | ||
Receivables from related parties, current | $ 2.8 | $ 4.2 |
CONDENSED STATEMENTS OF INCOME
CONDENSED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 27, 2019 | Jun. 28, 2018 | Jun. 27, 2019 | Jun. 28, 2018 | |
Income Statement [Abstract] | ||||
REVENUE (including revenue from related parties of $6.5, $8.6, $11.8 and $16.6 respectively) | $ 110.2 | $ 113.7 | $ 187.1 | $ 193.9 |
OPERATING EXPENSES: | ||||
Advertising operating costs | 9.9 | 9.2 | 17.2 | 16.2 |
Network costs | 3.4 | 3.3 | 6.9 | 6.8 |
Theater access fees—founding members (including fees to related parties of $14.5, $21.5, $27.4 and $42.1, respectively) | 21.6 | 21.5 | 40.7 | 42.1 |
Selling and marketing costs | 16.2 | 16.7 | 31.4 | 32.7 |
Administrative and other costs | 7.7 | 8 | 15.2 | 16.8 |
Administrative fee—managing member | 3.4 | 4.8 | 6.6 | 8.6 |
Depreciation expense | 3.3 | 3 | 6.6 | 5.9 |
Amortization expense | 0 | 7 | 0 | 13.6 |
Amortization of intangibles recorded for network theater screen leases | 7 | 0 | 13.9 | 0 |
Total | 72.5 | 73.5 | 138.5 | 142.7 |
OPERATING INCOME | 37.7 | 40.2 | 48.6 | 51.2 |
NON-OPERATING EXPENSES: | ||||
Interest on borrowings | 14.2 | 14.1 | 28.6 | 27.9 |
Interest income | 0 | (0.1) | (0.1) | (0.2) |
Loss (gain) on early retirement of debt, net | 0 | 1.2 | (0.3) | 1.2 |
Other non-operating income | (0.1) | 0 | (0.3) | 0 |
Total | 14.1 | 15.2 | 27.9 | 28.9 |
INCOME BEFORE INCOME TAXES | 23.6 | 25 | 20.7 | 22.3 |
Income tax expense | 0.1 | 0 | 0.1 | 0.3 |
NET INCOME | 23.5 | 25 | 20.6 | 22 |
COMPREHENSIVE INCOME | $ 23.5 | $ 25 | $ 20.6 | $ 22 |
CONDENSED STATEMENTS OF INCOM_2
CONDENSED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME (PARENTHETICAL) (UNAUDITED) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 27, 2019 | Jun. 28, 2018 | Jun. 27, 2019 | Jun. 28, 2018 | |
Revenue | $ 110.2 | $ 113.7 | $ 187.1 | $ 193.9 |
Theater access fee | 21.6 | 21.5 | 40.7 | 42.1 |
Founding Members | ||||
Revenue | 6.5 | 8.6 | 11.8 | 16.6 |
Theater access fee | $ 14.5 | $ 21.5 | $ 27.4 | $ 42.1 |
CONDENSED STATEMENTS OF CASH FL
CONDENSED STATEMENTS OF CASH FLOWS - USD ($) $ in Millions | 6 Months Ended | |
Jun. 27, 2019 | Jun. 28, 2018 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net income | $ 20.6 | $ 22 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation expense | 6.6 | 5.9 |
Amortization expense | 0 | 13.6 |
Amortization of intangibles recorded for network theater screen leases | 13.9 | 0 |
Non-cash share-based compensation | 1.4 | 2.8 |
Impairment on investment | 0 | 0.4 |
Amortization of debt issuance costs | 1.3 | 1.3 |
Gain on early retirement of debt, net | (0.3) | 0 |
Write-off of debt issuance costs | 0 | 0.8 |
Other | (0.2) | 0.2 |
Proceeds from disposition of intangible assets by network affiliates | 0.5 | 0 |
Founding member integration and other encumbered theater payments (including payments from related parties of $0.6 in 2019) | 10.6 | 0 |
Changes in operating assets and liabilities: | ||
Receivables, net | 25 | 34.9 |
Accounts payable and accrued expenses | (4.8) | (6) |
Amounts due to/from founding members and managing member, net | 0.5 | (0.4) |
Deferred revenue | 3.4 | 3.1 |
Other, net | (2.5) | 1.5 |
Net cash provided by operating activities | 76 | 80.1 |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Purchases of property and equipment | (6.8) | (7.2) |
Proceeds from notes receivable - founding members | 1.4 | 0 |
Net cash used in investing activities | (5.4) | (7.2) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Proceeds from revolving credit facility | 71 | 106.2 |
Repayments of revolving credit facility | (71) | (88) |
Repayments of Notes due 2026 | (4.6) | 270 |
Repayment of term loan facility | (1.4) | (270) |
Payment of debt issuance costs | 0 | (6.3) |
Founding member integration and other encumbered theater payments (including payments from related parties of $11.5 in 2018) | 0 | 11.5 |
Distributions to founding members and managing member | (66.5) | (91) |
Repurchase of stock for restricted stock tax withholding | (0.8) | (1.6) |
Net cash used in financing activities | (73.3) | (69.2) |
CHANGE IN CASH AND CASH EQUIVALENTS: | (2.7) | 3.7 |
Cash and cash equivalents at beginning of period | 7.2 | 4.6 |
Cash and cash equivalents at end of period | 4.5 | 8.3 |
Supplemental disclosure of non-cash financing and investing activity: | ||
Purchase of an intangible asset with NCM LLC equity | 7.6 | 15.9 |
Accrued distributions to founding members and managing member | 30 | 33.1 |
Accrued integration and other encumbered theater payments due from founding members (including accrued payments due from related parties of $0.2 and $5.3, respectively) | 5.3 | 5.3 |
Supplemental disclosure of cash flow information: | ||
Cash paid for interest | 27.3 | 27 |
Cash paid for income taxes, net of refunds | $ 0.2 | $ 0 |
CONDENSED STATEMENTS OF CASH _2
CONDENSED STATEMENTS OF CASH FLOWS CONDENSED STATEMENT OF CASH FLOWS (PARENTHETICAL) - USD ($) $ in Millions | 3 Months Ended | |
Jun. 27, 2019 | Jun. 28, 2018 | |
Founding Members | ||
Integration and other encumbered payments, related parties - operating activities | $ 0.6 | $ 0 |
Integration and other encumbered payments, related parties - financing activities | 0 | 11.5 |
Accrued integration and other encumbered theater payments, related parties | $ 0.2 | $ 5.3 |
CONDENSED STATEMENTS OF MEMBERS
CONDENSED STATEMENTS OF MEMBERS' EQUITY/ (DEFICIT) - USD ($) $ in Millions | Total | Managing Members | Founding Members |
Beginning balance (in shares) at Dec. 28, 2017 | 154,081,334 | ||
Beginning balance at Dec. 28, 2017 | $ (116) | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||
Distributions to related parties | $ (24.3) | $ (25.3) | |
Units issued for purchase of intangible asset (in shares) | 2,821,710 | ||
Units issued for purchase of intangible asset | $ 15.9 | ||
Comprehensive income (loss) | $ 22 | ||
Unit settlement for share-based compensation (in shares) | 673,310 | ||
Unit settlement for share-based compensation | $ (1.7) | ||
Share-based compensation expense/capitalized | $ 2.9 | ||
Ending balance (in shares) at Jun. 28, 2018 | 157,576,354 | ||
Ending balance at Jun. 28, 2018 | $ (126.7) | ||
Beginning balance (in shares) at Mar. 29, 2018 | 157,564,977 | ||
Beginning balance at Mar. 29, 2018 | $ (119.7) | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||
Distributions to related parties | (16.2) | (16.9) | |
Comprehensive income (loss) | $ 25 | ||
Unit settlement for share-based compensation (in shares) | 11,377 | ||
Unit settlement for share-based compensation | $ 0 | ||
Share-based compensation expense/capitalized | $ 1.1 | ||
Ending balance (in shares) at Jun. 28, 2018 | 157,576,354 | ||
Ending balance at Jun. 28, 2018 | $ (126.7) | ||
Beginning balance (in shares) at Dec. 27, 2018 | 157,637,220 | ||
Beginning balance at Dec. 27, 2018 | $ (140.6) | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||
Distributions to related parties | (20.4) | (21.5) | |
Units issued for purchase of intangible asset (in shares) | 1,044,665 | ||
Units issued for purchase of intangible asset | $ 7.6 | ||
Comprehensive income (loss) | $ 20.6 | ||
Unit settlement for share-based compensation (in shares) | 373,230 | ||
Unit settlement for share-based compensation | $ (0.8) | ||
Share-based compensation expense/capitalized | $ 1.4 | ||
Ending balance (in shares) at Jun. 27, 2019 | 159,055,115 | ||
Ending balance at Jun. 27, 2019 | $ (153.7) | ||
Beginning balance (in shares) at Mar. 28, 2019 | 159,024,458 | ||
Beginning balance at Mar. 28, 2019 | $ (148.2) | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||
Distributions to related parties | $ (14.6) | $ (15.4) | |
Comprehensive income (loss) | $ 23.5 | ||
Unit settlement for share-based compensation (in shares) | 30,657 | ||
Unit settlement for share-based compensation | $ 0.1 | ||
Share-based compensation expense/capitalized | $ 0.9 | ||
Ending balance (in shares) at Jun. 27, 2019 | 159,055,115 | ||
Ending balance at Jun. 27, 2019 | $ (153.7) |
Revenue from Contracts with Cus
Revenue from Contracts with Customers | 6 Months Ended |
Jun. 27, 2019 | |
Revenue from Contract with Customer [Abstract] | |
Revenue from Contracts with Customers | REVENUE FROM CONTRACTS WITH CUSTOMERS Revenue Recognition The Company derives revenue principally from the sale of advertising to national, regional and local businesses in Noovie , the Company’s cinema advertising and entertainment pre-show. The Company also sells advertising through the LEN, a series of strategically-placed screens located in movie theater lobbies, as well as other forms of advertising and promotions in theater lobbies. In addition, the Company sells online and mobile advertising through Cinema Accelerator and NCM's digital gaming products including Noovie ARcade, Fantasy Movie League and Noovie Shuffle, which can be played on the mobile apps or at Noovie.com . The Company also has a long-term agreement to exhibit the advertising of the founding members’ beverage suppliers. The Company makes contractual guarantees to deliver a specified number of impressions to view the customers’ advertising. If the contracted number of impressions are not delivered, the Company will run additional advertising to deliver the contracted impressions at a later date. The deferred portion of the revenue associated with undelivered impressions is referred to as a make-good provision. The Company defers the revenue associated with the make-good until the advertising airs to the theater attendance specified in the advertising contract. The make-good provision is recorded within accrued expenses in the Condensed Balance Sheet. As of June 27, 2019 and December 27, 2018 , the Company had a make-good provision of $ 5.7 million and $ 8.0 million, respectively. The Company has certain contracts with two -year terms that are noncancelable following a specified date within the contract period. The estimated revenue expected to be recognized in the future related to these contracted performance obligations that are unsatisfied (or partially unsatisfied) as of June 27, 2019 , was $ 47.7 million, which is expected to be recognized in 2019 . Agreements with a duration less than one year are not included within this disclosure as the Company elected to use the practical expedient in ASC 606-10-50-14 for those contracts. In addition, other of the Company’s contracts longer than one year that are cancelable are not included within this disclosure. Disaggregation of Revenue The Company disaggregates revenue based upon the type of customer: national; local and regional; and beverage concessionaire. This method of disaggregation is in alignment with how revenue is reviewed by management and discussed with and historically disclosed to investors. The following table summarizes revenue from contracts with customers for the three and six months ended June 27, 2019 and June 28, 2018 : Three Months Ended Six Months Ended June 27, 2019 June 28, 2018 June 27, 2019 June 28, 2018 National advertising revenue $ 77.6 $ 78.8 $ 131.6 $ 133.6 Local advertising revenue 17.7 18.1 30.5 31.6 Regional advertising revenue 6.7 8.2 10.1 12.1 Founding member advertising revenue from beverage concessionaire agreements 8.2 8.6 14.9 16.6 Total revenue $ 110.2 $ 113.7 $ 187.1 $ 193.9 Deferred Revenue and Unbilled Accounts Receivable The changes in deferred revenue for the six months ended June 27, 2019 were as follows (in millions): Six Months Ended June 27, 2019 Balance at beginning of period $ (7.3 ) Performance obligations satisfied 7.3 New contract liabilities (10.7 ) Balance at end of period $ (10.7 ) As of June 27, 2019 and December 27, 2018 , the Company had $14.1 million and $6.0 million in unbilled accounts receivable, respectively. |
The Company
The Company | 6 Months Ended |
Jun. 27, 2019 | |
Accounting Policies [Abstract] | |
The Company | THE COMPANY Description of Business National CineMedia, LLC (“NCM LLC”, “the Company” or “we”) commenced operations on April 1, 2005 and is owned by National CineMedia, Inc. (“NCM, Inc.”, “manager” or “managing member”), 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 subsidiaries of AMC Entertainment, Inc. (“AMC”). AMC, Regal, Cinemark and their affiliates are referred to in this document as “founding members”. NCM LLC operates the largest cinema advertising network reaching movie audiences in North America, allowing NCM LLC to sell advertising under long-term exhibitor services agreements (“ESAs”) with the founding members (approximately 18 years remaining as of June 27, 2019 ) and certain third-party theater circuits, referred to in this document as “network affiliates” under long-term network affiliate agreements, which expire at various dates between September 2019 and July 2031. The weighted average remaining term (based on attendance) of the ESAs and the network affiliate agreements is 15.5 years as of June 27, 2019 . As of June 27, 2019 , NCM LLC had 159,055,115 common membership units outstanding, of which 77,349,628 ( 48.6% ) were owned by NCM, Inc., 41,770,669 ( 26.3% ) were owned by Regal, 39,737,700 ( 25.0% ) were owned by Cinemark and 197,118 ( 0.1% ) were owned by AMC. The membership units held by the founding members are exchangeable into NCM, Inc. common stock on a one -for-one basis. Basis of Presentation The Company has prepared the unaudited Condensed Financial Statements and related notes of NCM LLC in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and the rules and regulations of the Securities and Exchange Commission (“SEC”). Certain reclassifications have been made to the prior year's financial statements to conform to the current presentation (refer to the Condensed Statements of Income and Condensed Statement of Cash Flows whereby the Company presented depreciation expense and amortization expense as two separate lines and refer to the Condensed Statements of Income, whereby the Company presented loss (gain) on retirement of debt, net as a separate line). Accordingly, certain information and footnote disclosures typically included in an annual report have been condensed or omitted for this quarterly report. The balance sheet as of December 27, 2018 is derived from the audited financial statements of NCM LLC. Therefore, the unaudited Condensed Financial Statements should be read in conjunction with the NCM LLC audited Financial Statements and notes thereto included in the Company’s annual report on Form 10-K filed for the fiscal year ended December 27, 2018. In the opinion of management, all adjustments necessary to present fairly in all material respects the financial position, results of operations and cash flows for all periods presented have been made. The Company’s business is seasonal and for this and other reasons operating results for interim periods may not be indicative of the Company’s full year results or future performance. As a result of the various related party agreements discussed in Note 4— 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 and share-based compensation. Actual results could differ from those estimates. Significant Accounting Policies The Company’s annual financial statements included in its Form 10-K filed for the fiscal year ended December 27, 2018 contain a complete discussion of the Company’s significant accounting policies. Following is additional information related to the Company’s accounting policies. Revenue Recognition —The Company derives revenue principally from the advertising business, which includes on-screen and lobby network (LEN) advertising and lobby promotions and advertising on websites and mobile applications owned by the Company and other companies. Revenue is recognized over time as the customer receives the benefits provided by the Company’s advertising services and the Company has the right to payment for performance to date. The Company considers the terms of each arrangement to determine the appropriate accounting treatment. Concentration of Credit Risk and Significant Customers —Bad debts are provided for using the allowance for doubtful accounts method based on historical experience and management’s evaluation of outstanding receivables at the end of the period. Receivables are written off when management determines amounts are uncollectible. Trade accounts receivable are uncollateralized and represent a large number of geographically dispersed debtors. The collectability risk with respect to national and regional advertising is reduced by transacting with founding members or large, national advertising agencies that have strong reputations in the advertising industry and clients with stable financial positions. The Company has smaller contracts with thousands of local clients that are not individually significant. As of June 27, 2019 and December 27, 2018 , there were no advertising agency groups or individual customers through which the Company sources national advertising revenue representing more than 10% of the Company’s outstanding gross receivable balance. During the three and six months ended June 27, 2019 and June 28, 2018 , the Company had no customers that accounted for more than 10% of revenue. Share-Based Compensation —The management services agreement between NCM LLC and NCM, Inc. provides that NCM LLC may participate in the NCM, Inc. Equity Incentive Plan. NCM, Inc. has issued stock options and restricted stock to certain employees and restricted stock units to its independent directors under the NCM, Inc. Equity Incentive Plan. The Company has not granted stock options since 2012. In 2018 and 2019, the restricted stock grants for Company management vest upon the achievement of NCM, Inc. 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 NCM, Inc. 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. The recognized expense, including equity based compensation costs of NCM, Inc. employees, is included in the operating results of NCM LLC. Upon the exercise of options or the vesting of restricted stock, NCM, Inc. has the right to acquire from NCM LLC a number of common units equal to the number of NCM, Inc. shares being issued. In consideration for such units, NCM, Inc. contributes to NCM LLC the consideration received for the exercise of options or vesting of shares of restricted stock. During the three months ended June 27, 2019 and June 28, 2018 and six months ended June 27, 2019 and June 28, 2018 , NCM, Inc. acquired 30,657 , 11,377 , 373,230 and 673,310 units, respectively, due to the vesting of restricted stock and restricted stock units. Recently Adopted Accounting Pronouncements During the first quarter of 2019, the Company adopted Accounting Standards Update 2016-2 and subsequent amendments, Leases (Topic 842) (together “ASC 842”) utilizing the Comparatives Under 840 option where only the current period financial statements and related disclosures are presented in accordance with the new standard. As of the adoption date of December 28, 2018 the Company recognized the following on the unaudited Condensed Balance Sheets: a right-of-use (“ROU”) asset of $21.7 million within 'Other assets', a short-term lease liability of $1.4 million within 'Other current liabilities', a long-term lease liability of $24.5 million within 'Other liabilities' and reversed the related deferred rent liability balance of $ 4.2 million for all leases with terms longer than twelve months related to its building operating leases. The Company elected to utilize the following practical expedients: (i) not being required to separate lease and non-lease components when accounting for the lease for all asset classes; and (ii) not accounting for short-term leases under the new standard. The Company also determined that the ESA and affiliate agreements are considered leases under ASC 842. However, the identification of the asset and determination of the period of control is dependent upon the scheduling of the showtimes by the exhibitors. As the schedules are typically not determined until one week in advance of the showtime, on average, the leases are considered short term in nature, specifically less than one month. As such, no ROU assets or lease liabilities were recognized for these agreements. The issuance of NCM LLC membership units to the founding members in accordance with NCM LLC’s Common Unit Adjustment Agreement and upfront cash payments to affiliates for the contractual rights to provide services within their theaters will continue to be classified as intangible assets. However, the amortization of these intangible assets is now considered lease expense and has been reclassified within the current period from 'Depreciation and amortization expense' to 'Amortization of intangibles recorded for network theater screen leases' on the unaudited Condensed Statement of Income. Additionally, these upfront cash payments to affiliates and receipt of integration payments from the founding members, as defined within Note 3 - Intangible Assets, will be considered cash flows from operating activities on the unaudited Condensed Statement of Cash Flows when incurred as they are related to operating leases and will be reclassified from cash flows from investing and financing activities, respectively. The Company has also incorporated additional disclosures in Note 6 - Commitments and Contingencies to comply with ASC 842. During the first quarter of 2019, the Company adopted Accounting Standards Update 2018-7, Compensation – Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting (“ASU 2018-7”), which amends Topic 718 to include share-based payment transactions for acquiring goods and services from nonemployees. The adoption of ASU 2018-7 had no impact on the unaudited Condensed Financial statements or notes thereto. During the first quarter of 2019, the Company adopted a final rule issued by the SEC in March 2019 simplifying certain Regulation S-K requirements. The rule eliminated the following requirements in certain circumstances: (1) to disclose discussion of the earliest year of three years of audited financial statements presented within Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations section of the Form 10-K, (2) to request permission from the SEC to redact confidential information from exhibits in the event the information is not material to the agreement and would cause competitive harm, (3) to disclose immaterial physical property and (4) to disclose schedules and attachments to exhibits which do not contain material information. The applicable amended disclosure requirements have been incorporated within this Quarterly Report on Form 10-Q. During the fourth quarter of 2018, the Company adopted a final rule issued by the SEC amending certain disclosure requirements deemed by the SEC to be redundant, duplicative, overlapping, outdated or superseded. The rule also added requirements to disclose (1) the changes in each caption of stockholders’ equity and non-controlling interests for the current and comparative year-to-date periods, with subtotals for each interim period and (2) the amount of dividends per share for each class of shares. The Company's adoption of the guidance resulted in changes to the presentation of the unaudited Statement of Equity as a quarter to date equity rollforward is now also required for the current and comparable period. The Company has implemented the amended disclosure requirements. Recently Issued Accounting Pronouncements In June 2016, the FASB issued Accounting Standards Update 2016-13, Financial Instruments – Credit Losses (Topic 326), Measurement of Credit Losses on Financial Statements (“ ASU 2016-13”), which requires a financial asset (or group of financial assets) measured at amortized cost basis to be presented at the net amount expected to be collected. The allowance for credit losses is a valuation account that is deducted from the amortized cost basis of the financial asset(s) to present the net carrying value at the amount expected to be collected on the financial asset. ASU 2016-13 is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years, with early adoption permitted and is to be adopted on a modified retrospective basis. The Company is currently evaluating the impact that adopting this guidance will have on the unaudited Condensed Financial Statements or notes thereto. In August 2018, the FASB issued Accounting Standards Update 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement (“ASU 2018-13”), which modifies the disclosure requirements on fair value measurements. ASU 2018-13 is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years, with partial early adoption permitted for eliminated disclosures. The method of adoption varies by the disclosure. The Company is currently evaluating the impact that adopting this guidance will have on the unaudited Condensed Financial Statements or notes thereto. The Company has considered all other recently issued accounting pronouncements and does not believe the adoption of such pronouncements will have a material impact on its unaudited Condensed Financial Statements or notes thereto. |
Intangible Assets
Intangible Assets | 6 Months Ended |
Jun. 27, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Assets | INTANGIBLE ASSETS Intangible assets consist of contractual rights to provide the Company’s services within the theaters of the founding members and network affiliates and are stated at cost, net of accumulated amortization. The Company’s intangible assets with its founding members are recorded at fair market value of NCM, Inc.’s publicly traded stock as of the date on which the common membership units were issued. The 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. Common Unit Adjustments — In accordance with the Common Unit Adjustment Agreement with the founding members, on an annual basis the Company 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, the Common Unit Adjustment Agreement requires that a Common Unit Adjustment occur for a specific founding member if its acquisition or disposition of theaters, in a single transaction or cumulatively since the most recent Common Unit Adjustment, results in an attendance increase or decrease in excess of two percent of the annual total attendance at the prior adjustment date. During the first quarter of 2019, the Company issued 1,044,665 common membership units to the founding members for the rights to exclusive access to the theater screens and attendees added, net of dispositions by the founding members to the Company’s network during the 2018 fiscal year and NCM LLC recorded a net intangible asset of $7.6 million during the first quarter of 2019 as a result of the Common Unit Adjustment. During the first quarter of 2018, the Company issued 2,821,710 ( 3,736,860 issued, net of 915,150 returned) common membership units to the founding members for the rights to exclusive access to the theater screens and attendees added, net of dispositions by the founding members to the Company’s network during the 2017 fiscal year and NCM LLC recorded a net intangible asset of $15.9 million during the first quarter of 2018 as a result of the Common Unit Adjustment. Integration Payments and Other Encumbered Theater Payments —If an existing on-screen advertising agreement with an alternative provider is in place with respect to any acquired theaters ("encumbered theaters"), the founding members may elect to receive common membership units related to those encumbered theaters in connection with the Common Unit Adjustment. If the founding members make this election, then they are required to make payments on a quarterly basis in arrears in accordance with certain run-out provisions pursuant to the ESAs (“integration payments”). Because the Carmike Cinemas, Inc. (“Carmike”) theaters acquired by AMC are subject to an existing on-screen advertising agreement with an alternative provider, AMC will make integration payments to NCM LLC. The integration payments will continue until the earlier of (i) the date the theaters are transferred to the Company’s network or (ii) the expiration of the ESA. Integration payments are calculated based upon the advertising cash flow that the Company would have generated if it had exclusive access to sell advertising in the theaters with pre-existing advertising agreements. The ESA additionally entitles the Company 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 27, 2019 and June 28, 2018 and the six months ended June 27, 2019 and June 28, 2018, the Company recorded a reduction to net intangible assets of $5.7 million , $5.6 million , $8.1 million and $7.8 million respectively, related to integration and other encumbered theater payments. These payments received from AMC related to its acquisitions of theaters from Carmike and Rave Cinemas and from Cinemark related primarily to its acquisition of theaters from Rave Cinemas. During the three months ended June 27, 2019 and June 28, 2018 and the six months ended June 27, 2019 and June 28, 2018, AMC and Cinemark paid a total of $2.5 million , $2.2 million , $10.6 million and $11.5 million respectively, in integration and other encumbered theater payments (as payments are made one quarter and one month in arrears, respectively). If common membership units are issued to a founding member for newly acquired theaters that are subject to an existing on-screen advertising agreement with an alternative provider, the amortization of the intangible asset commences after the existing agreement expires and NCM LLC can utilize the theaters for all of its services. |
Related Party Transactions
Related Party Transactions | 6 Months Ended |
Jun. 27, 2019 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | RELATED PARTY TRANSACTIONS Founding Member and Managing 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 LLC, NCM, Inc. and the founding members which are outlined below. As AMC owns less than 5% of NCM LLC as of June 27, 2019, AMC is no longer a related party. AMC remains a party to the ESA, Common Unit Adjustment Agreement and certain other original agreements and is a member under the terms of the NCM LLC Operating Agreement, subject to fulfilling the requirements of Section 3.1 of the NCM LLC Operating Agreement. AMC will continue to participate in the annual Common Unit Adjustment and receive available cash distributions or allocation of earnings and losses in NCM LLC (as long as its ownership is greater than zero) TRA payments and theater access fees. Further, AMC will continue to pay beverage revenue, among other things. AMC's ownership percentage does not impact future integration payments and other encumbered theater payments owed to NCM LLC by AMC. AMC is considered a related party through the date its ownership fell below the 5% threshold (July 5, 2018) and related party transactions with AMC through this period are included within the disclosures below (specifically the first quarter and first six months of 2018). The agreements with the founding members are as follows: • ESAs . Under the ESAs, NCM LLC is the exclusive provider within the United States of advertising services in the founding members’ theaters (subject to pre-existing contractual obligations and other limited exceptions for the benefit of the founding members). The advertising services include the use of the digital content network (“DCN”) equipment required to deliver the on-screen advertising and other content included in the Noovie pre-show, use of the LEN and rights to sell and display certain lobby promotions. Further, 30 to 60 seconds of advertising included in the Noovie pre-show is sold to the founding members to satisfy the founding members’ on-screen advertising commitments under their beverage concessionaire agreements. In consideration for access to the founding members’ theaters, theater patrons, the network equipment required to display on-screen and LEN video advertising and the use of theaters for lobby promotions, the founding members receive a monthly theater access fee. These agreements 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 the Company’s network. • Software License Agreement. At the date of NCM, Inc.’s IPO, NCM LLC was granted a perpetual, royalty-free license from the founding members to use certain proprietary software that existed at the time for the delivery of digital advertising and other content through the DCN to screens in the U.S. NCM LLC has made improvements to this software since NCM, Inc.’s IPO date and the Company owns those improvements, except for improvements that were developed jointly by NCM LLC and the 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 Statements of Income: (1) June 27, 2019 June 28, 2018 June 27, 2019 June 28, 2018 Revenue: Beverage concessionaire revenue (included in advertising revenue) (2) $ 6.5 $ 8.6 $ 11.8 $ 16.6 Operating expenses: Theater access fee (3) 14.5 21.5 27.4 42.1 Purchase of movie tickets and concession products and rental of theater space (included in selling and marketing costs) (4) 0.1 0.3 0.2 0.7 Administrative fee - managing member (5) 3.4 4.8 6.6 8.6 Non-operating expenses: Interest income from notes receivable (included in interest income) (6) — 0.1 0.1 0.2 (1) AMC is no longer considered a related party as of July 5, 2018, as described further above. As such, the figures within the table above only include related party activity with AMC for the three and six months ended June 28, 2018. (2) For the three and six months ended June 27, 2019 and June 28, 2018 , two of the founding members purchased 60 seconds of on-screen advertising time and one founding member purchased 30 seconds (with all three founding members having a right to purchase up to 90 seconds ) from NCM LLC to satisfy their obligations under their beverage concessionaire agreements at a 30 seconds equivalent CPM rate specified by the ESA. (3) Comprised of payments per theater attendee and payments per digital screen with respect to the founding member theaters included in the Company’s network, including payments for access to higher quality digital cinema equipment. (4) Used primarily for marketing to NCM LLC’s advertising clients. (5) Pursuant to the Management Services Agreement between NCM, Inc. and NCM LLC, NCM, Inc. provides certain specific management services to NCM LLC, including the services of the Interim Chief Executive Officer - President, Chief Financial Officer, Executive Vice President, Chief Revenue Officer and Senior Vice President - General Counsel. In exchange for these services, NCM LLC reimburses NCM, Inc. for compensation paid to the officers (including share based compensation) and other expenses of the officers and for certain out-of-pocket costs. (6) On December 26, 2013, the Company 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, the Company received a total of $25.0 million in promissory notes from its founding members (one-third or approximately $8.3 million from each founding member). The notes bear interest at a fixed rate of 5.0% per annum, compounded annually. Interest and principal payments are due annually in six equal installments commencing on the first anniversary of the closing. As of Included in the unaudited Condensed Balance Sheets: June 27, 2019 December 27, 2018 Purchase of movie tickets and concession products (included in prepaid expenses) (1) $ 0.1 $ — Current portion of notes receivable - related parties (1) (2) 2.8 4.2 Interest receivable on notes receivable (included in other current assets) (1) (2) 0.1 0.1 Prepaid administrative fees to managing member (3) 0.5 0.6 Common unit adjustments, net of amortization and integration payments (included in intangible assets) (4) 644.8 657.6 (1) AMC is no longer considered a related party as of July 5, 2018, as described further above. As such, the figures as of June 27, 2019 and December 27, 2018 do not include AMC. (2) Refer to the discussion of notes receivable from the founding members above. (3) The payments to NCM, Inc. for estimated management services related to employment are made one month in advance. NCM LLC also provides administrative and support services to NCM, Inc. such as office facilities, equipment, supplies, payroll, accounting and financial reporting at no charge. Based on the limited activities of NCM, Inc. as a standalone entity, the Company does not believe such unreimbursed costs are significant. (4) Refer to Note 3— 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. Pursuant to the terms of the NCM LLC Operating Agreement in place since the completion of NCM, Inc.’s IPO, the Company 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 27, 2019 and June 28, 2018 were as follows (in millions): Three Months Ended Six Months Ended June 27, 2019 June 28, 2018 June 27, 2019 June 28, 2018 AMC $ — $ — $ — $ 2.2 Cinemark 7.5 8.3 10.5 11.3 Regal 7.9 8.6 11.0 11.8 Total founding members 15.4 16.9 21.5 25.3 NCM, Inc. 14.6 16.2 20.4 24.3 Total $ 30.0 $ 33.1 $ 41.9 $ 49.6 The mandatory distributions of available cash by the Company to Regal and Cinemark for the three months ended June 27, 2019 of $15.4 million is included in amounts due to founding members, net on the unaudited Condensed Balance Sheets as of June 27, 2019 and will be made in the third quarter of 2019. AMC’s distribution for the three months ended June 28, 2018 was split equally between Cinemark and Regal because NCM LLC used a record date of July 6, 2018 (following the sale of AMC's membership units to Cinemark and Regal) to accommodate an agreement between AMC and Cinemark and AMC and Regal. These agreements entitled AMC to half of the second quarter of 2018 available cash distribution, or approximately $2.2 million , of which Cinemark and Regal each independently paid AMC approximately $1.1 million . The mandatory distributions to NCM, Inc. are eliminated in consolidation. Amounts due to founding members, net as of June 27, 2019 were comprised of the following (in millions): Cinemark Regal Total Theater access fees, net of beverage revenues and other encumbered theater payments $ 1.2 $ 1.6 $ 2.8 Distributions payable to founding members 7.5 7.9 15.4 Integration payments due from founding members (0.2 ) — (0.2 ) Cost and other reimbursement (0.1 ) — (0.1 ) Total amounts due to founding members, net $ 8.4 $ 9.5 $ 17.9 Amounts due to founding members, net as of December 27, 2018 were comprised of the following (in millions): Cinemark Regal Total Theater access fees, net of beverage revenues and other encumbered theater payments $ 1.0 $ 1.5 $ 2.5 Distributions payable to founding members 13.7 14.2 27.9 Integration payments due from founding members (0.4 ) — (0.4 ) Total amounts due to founding members, net $ 14.3 $ 15.7 $ 30.0 Amounts due to/from managing member, net were comprised of the following (in millions): As of June 27, 2019 December 27, 2018 Distributions payable to managing member $ 14.6 $ 26.6 Cost and other reimbursement 0.9 1.1 Total amounts due to managing member, net $ 15.5 $ 27.7 The Amounts due from founding members, net balance as of June 27, 2019 and December 27, 2018 per the Condensed Balance Sheets relates to payments due from AMC to NCM LLC. Given that AMC ceased being a related party as of July 5, 2018, the detail of that balance has not been included within the tables above. As of June 28, 2018, AMC owned 1.0 million shares of NCM, Inc. common stock. During the three and six months ended June 28, 2018, AMC received cash dividends of approximately $0.1 million and $0.3 million , respectively on its shares of NCM, Inc. common stock held at that time. AC JV, LLC Transactions —In December 2013, the Company sold its Fathom Events business to a newly formed limited liability company, AC JV, LLC, owned 32% by each of the founding members and 4% by NCM LLC. The Company accounts for its investment in AC JV, LLC under the equity method of accounting in accordance with ASC 323-30, Investments—Equity Method and Joint Ventures (“ASC 323-30”) because AC JV, LLC is a limited liability company with the characteristics of a limited partnership and ASC 323-30 requires the use of equity method accounting unless the Company’s interest is so minor that it would have virtually no influence over partnership operating and financial policies. Although NCM LLC does not have a representative on AC JV, LLC’s Board of Directors or any voting, consent or blocking rights with respect to the governance or operations of AC JV, LLC, the Company concluded that its interest was more than minor under the accounting guidance. The Company’s investment in AC JV, LLC was $1.1 million and $0.9 million as of June 27, 2019 and December 27, 2018 , respectively. During the three months ended June 27, 2019 and June 28, 2018 and the six months ended June 27, 2019 and June 28, 2018, NCM LLC received cash distributions from AC JV, LLC of $0.1 million , $0.0 million , $0.1 million and $0.0 million respectively. Equity in earnings from AC JV, LLC for the three months ended June 27, 2019 and June 28, 2018 and the six months ended June 27, 2019 and June 28, 2018, were $0.1 million, $0.1 million , $0.3 million and $0.1 million, respectively, and is included in non-operating expenses in the unaudited Condensed Statements of Income. NCM LLC also received fees from AC JV, LLC of $0.0 million , $0.1 million , $0.0 million , and $0.1 million in the three months ended June 27, 2019 and June 28, 2018 and the six months ended June 27, 2019 and June 28, 2018, respectively, related to the transition services agreement with AC JV, LLC whereby the Company provides certain corporate overhead or creative services or use of facilities in exchange for a fee. These fees received by NCM LLC are included as an offset to network costs in the unaudited Condensed Consolidated Statements of Income. |
Borrowings
Borrowings | 6 Months Ended |
Jun. 27, 2019 | |
Debt Disclosure [Abstract] | |
Borrowings | BORROWINGS The following table summarizes the Company’s total outstanding debt as of June 27, 2019 and December 27, 2018 and the significant terms of its borrowing arrangements (in millions): Outstanding Balance as of Borrowings June 27, 2019 December 27, 2018 Maturity Interest Senior secured notes due 2022 $ 400.0 $ 400.0 April 15, 2022 6.000 % Revolving credit facility 27.0 27.0 June 20, 2023 (1 ) Term loan 268.0 269.4 June 20, 2025 (1 ) Senior unsecured notes due 2026 230.0 235.0 August 15, 2026 5.750 % Total borrowings 925.0 931.4 Less: debt issuance costs related to term loan and senior notes (6.9 ) (7.8 ) Total borrowings, net 918.1 923.6 Less: current portion of debt (2.7 ) (2.7 ) Carrying value of long-term debt $ 915.4 $ 920.9 ___________________________________________________ (1) The interest rates on the revolving credit facility and term loan are described below. Senior Secured Credit Facility — On June 20, 2018, the Company entered into a credit agreement to replace the Company's senior secured credit facility, dated as of February 13, 2007, as amended (the “previous facility”). Consistent with the structure of the previous facility, the agreement consists of a term loan facility and a revolving credit facility. As of June 27, 2019 , the Company’s senior secured credit facility consisted of a $175.0 million revolving credit facility and a $268.0 million term loan. The obligations under the senior secured credit facility are secured by a lien on substantially all of the assets of NCM LLC. Revolving Credit Facility— The revolving credit facility portion of the Company’s total borrowings is available, subject to certain conditions, for general corporate purposes of the Company in the ordinary course of business and for other transactions permitted under the senior secured credit facility, and a portion is available for letters of credit. As of June 27, 2019 , the Company’s total availability under the $175.0 million revolving credit facility was $143.2 million , net of $27.0 million outstanding and $4.8 million in letters of credit. The unused line fee is 0.50% per annum which is consistent with the previous facility. Borrowings under the revolving credit facility bear interest at the Company’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 the Company (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, which is contingent upon the refinancing of the Company's Notes due 2022 (defined below, see “Senior Secured Notes due 2022”) on or prior to October 30, 2021. If the Notes due 2022 are not refinanced on or prior to October 30, 2021, then the revolving credit facility will instead mature on December 30, 2021. The weighted-average interest rate on the revolving credit facility as of June 27, 2019 was 5.35% . Term Loan —The interest rate on the term loan is a rate chosen at the Company’s option of either the LIBOR index plus 3.00% or the base rate plus 2.00% . The interest rate on the term loan as of June 27, 2019 was 5.44% . The term loan amortizes at a rate equal to 1.00% annually, to be paid in equal quarterly installments. As of June 27, 2019, NCM LLC has paid principal of $2.0 million , reducing the outstanding balance to $ 268.0 million . The term loan will mature on June 20, 2025 contingent upon the refinancing of the Notes due 2022 on or prior to October 30, 2021. If the Notes due 2022 are not refinanced on or prior to October 30, 2021, then the term loan will instead mature on December 30, 2021. 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 27, 2019 , the Company’s consolidated net senior secured leverage ratio was 3.14 times (versus the dividend payment restriction of 5.50 times and the covenant of 4.50 times) the Company's consolidated net total leverage ratio was 4.24 times (versus the covenant of 6.25 times). Senior Secured Notes due 2022 —On April 27, 2012, the Company completed a private placement of $400.0 million in aggregate principal amount of 6.000% Senior Secured Notes (the “Notes due 2022”) for which the registered exchange offering was completed on November 26, 2012. The Notes due 2022 pay interest semi-annually in arrears on April 15 and October 15 of each year, which commenced on October 15, 2012 . The Notes due 2022 share in the same collateral that secures NCM LLC's obligations under the senior secured credit facility. Senior Unsecured Notes due 2026 —On August 19, 2016, the Company 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 the Company. 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 27, 2019 . These repurchases were treated as partial debt extinguishments and resulted in the realization of a non-operating gain, net of written off debt issuance costs, of $0.0 million , $0.0 million , $0.3 million and $0.0 million during the three months ended June 27, 2019 and June 28, 2018 and six months ended June 27, 2019 and June 28, 2018, respectively. |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Jun. 27, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | COMMITMENTS AND CONTINGENCIES Legal Actions —The Company is subject to claims and legal actions in the ordinary course of business. The Company believes such claims will not have a material effect individually and 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 a right-of-use (“ROU”) assets of $21.2 million and short-term and long-term lease liabilities of $1.3 million and $23.9 million , respectively, on the balance sheet as of June 27, 2019, for all material leases with terms longer than twelve months. These balances are included within 'Other assets', 'Other current liabilities' and 'Other liabilities', respectively, on the unaudited Condensed Balance Sheets. The Company has options on certain of these facilities to extend the lease or to terminate part or all of the leased space prior to the lease end date. Certain termination fees would be due upon exercise of the early termination options as outlined within the underlying agreements. None of these options were considered reasonably certain of exercise and thus have not been recognized as part of the ROU assets and lease liabilities. As of June 27, 2019, the Company had a weighted average remaining lease term of 10.8 years on these leases. The Company has also entered into certain short-term leases with a term of less than one year. These leases are not included within the Company’s ROU assets or lease liabilities due to the Company’s election of the practical expedient in ASC 842-20-25-2 for short-term leases. During the three and six months ended 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 Statements of Income depending upon the nature of the use of the facility. Three Months Ended Six Months Ended June 27, 2019 June 27, 2019 Operating lease cost $ 0.8 $ 1.6 Short-term lease cost — 0.1 Variable lease cost 0.2 0.3 Total lease cost $ 1.0 $ 2.0 The Company made total lease payments of $0.8 million and $1.6 million during the three and six months ended June 27, 2019. These payments are included within cash flows from operating activities within the unaudited Condensed Statement of Cash Flows. The minimum lease payments under noncancelable operating leases as of December 27, 2018 were as follows (in millions). Year Minimum Lease Payments 2019 $ 3.5 2020 3.3 2021 3.4 2022 3.4 2023 3.4 Thereafter 22.1 Total $ 39.1 The future lease payments under noncancelable operating leases as of June 27, 2019 were as follows (in millions). Year Future Lease Payments 2019 (June 28, 2019 - December 26, 2019) $ 1.7 2020 3.3 2021 3.3 2022 3.4 2023 3.4 2024 3.5 Thereafter 18.7 Total 37.3 Less: Imputed interest on future lease payments (12.1 ) Total lease liability as of June 27, 2019 per the Condensed Balance Sheet $ 25.2 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 27, 2019, the Company’s weighted average annual discount rate was 7.43% . 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 3 - Intangible Assets . These ESA and network affiliate agreements are considered leases under ASC 842 once the asset is identified and the period of control is determined upon the scheduling of the showtimes by the exhibitors, typically one week prior to the showtime. As such, the leases are considered short-term in nature, specifically less than one month. Within ASC 842, leases with terms of less than one month are exempt from the majority of the accounting and disclosure requirements, including disclosure of short-term lease expense. No ROU assets or lease liabilities were recognized for these agreements and no change to the balance sheet presentation of the intangible assets was necessary. However, the amortization of these intangible assets is considered lease expense and was therefore, reclassified in the current period from 'Depreciation and amortization expense' to 'Amortization of intangibles recorded for network theater screen leases' within the unaudited Condensed 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 27, 2019 and December 27, 2018 , the Company had no liabilities recorded for the minimum payment, as the theater access fee was in excess of the minimum. 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 27, 2019 , the maximum potential amount of future payments the Company could be required to make pursuant to the minimum revenue guarantees is $90.1 million over the remaining terms of the network affiliate agreements. These minimum guarantees relate to various affiliate agreements ranging in term from one to twenty years, prior to any renewal periods of which some are at the option of the Company. Additionally, the Company accrued $0.7 million and $0.1 million related to affiliate agreements with guaranteed minimums in excess of the revenue share agreement as of June 27, 2019 and December 27, 2018 , respectively. |
Fair Value Measurements
Fair Value Measurements | 6 Months Ended |
Jun. 27, 2019 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | FAIR VALUE MEASUREMENTS Fair value is the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Fair value is estimated by applying the following hierarchy, which prioritizes the inputs used to measure fair value into three levels and bases the categorization within the hierarchy upon the lowest level of input that is available and significant to the fair value measurement: Level 1 —Quoted prices in active markets for identical assets or liabilities. Level 2 —Observable inputs other than quoted prices in active markets for identical assets and liabilities, quoted prices for identical or similar assets or liabilities in inactive markets, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Level 3 —Inputs that are generally unobservable and typically reflect management’s estimate of assumptions that market participants would use in pricing the asset or liability. Non-Recurring Measurements — Certain assets are measured at fair value on a non-recurring basis. These assets are not measured at fair value on an ongoing basis but are subject to fair value adjustments in certain circumstances. These assets include long-lived assets, intangible assets, other investments, notes receivable and borrowings. Long-Lived Assets, Intangible Assets, Other Investments and Notes Receivable —The Company regularly reviews long-lived assets (primarily property, plant and equipment), intangible assets, investments accounted for under the cost or equity method and notes receivable for impairment whenever certain qualitative factors, events or changes in circumstances indicate that the carrying amounts of the assets may not be fully recoverable. When the estimated fair value is determined to be lower than the carrying value of the asset, an impairment charge is recorded to write the asset down to its estimated fair value. Other investments consisted of the following (in millions): As of June 27, 2019 December 27, 2018 Investment in AC JV, LLC (1) $ 1.1 $ 0.9 Other investments (2) 2.1 2.1 Total $ 3.2 $ 3.0 (1) Refer to Note 4—Related Party Transactions. This investment is accounted for utilizing the equity method. (2) The Company received equity securities in privately held companies as consideration for a portion of advertising contracts. The equity securities are accounted for at adjusted cost in accordance with the practicability exception under Accounting Standards Update 2016-1, Recognition and Measurement of Financial Assets and Financial Liabilities, and represent an ownership of less than 20%. The Company does not exert significant influence on these companies’ operating or financial activities. During the three months ended June 27, 2019 and June 28, 2018 and the six months ended June 27, 2019 and June 28, 2018 , the Company recorded impairment charges of $0.0 million , $0.0 million , $0.0 million and $0.4 million , respectively, on certain of its investments due to a significant deterioration in the business prospects of the investee or new information regarding the fair value of the investee, which brought the total remaining value of the respective impaired investments to $0.0 million as of June 27, 2019 and June 28, 2018 . As of June 27, 2019 , no other observable price changes or impairments have been recorded as a result of the Company’s qualitative assessment of identified events or changes in the circumstances of the remaining investments. The investment in AC JV, LLC was initially valued using comparative market multiples. The other investments were recorded based upon the fair value of the services provided in exchange for the investment. As the inputs to the determination of fair value are based upon non-identical assets and use significant unobservable inputs, they have been classified as Level 3 in the fair value hierarchy. As of June 27, 2019 and December 27, 2018 , the Company had notes receivable totaling $4.2 million and $5.6 million, respectively, from its founding members related to the sale of Fathom Events, as described in Note 4— Related Party Transactions . These notes were initially valued using comparative market multiples. There were no identified events or changes in circumstances that had a significant adverse effect on the fair value of the notes receivable. The notes are classified as Level 3 in the fair value hierarchy as the inputs to the determination of fair value are based upon non-identical assets and use significant unobservable inputs. Borrowings —The carrying amount of the revolving credit facility is considered a reasonable estimate of fair value due to its floating-rate terms. The estimated fair values of the Company’s financial instruments where carrying values do not approximate fair value were as follows (in millions): As of June 27, 2019 As of December 27, 2018 Carrying Value Fair Value (1) Carrying Value Fair Value (1) Term loan $ 268.0 $ 267.3 $ 269.4 $ 261.2 Notes due 2022 400.0 405.0 400.0 401.8 Notes due 2026 230.0 218.5 235.0 211.0 (1) If the Company were to measure the borrowings in the above table at fair value on the balance sheet they would be classified as Level 2 based upon the inputs utilized. |
The Company (Policies)
The Company (Policies) | 6 Months Ended |
Jun. 27, 2019 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The Company has prepared the unaudited Condensed Financial Statements and related notes of NCM LLC in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and the rules and regulations of the Securities and Exchange Commission (“SEC”). Certain reclassifications have been made to the prior year's financial statements to conform to the current presentation (refer to the Condensed Statements of Income and Condensed Statement of Cash Flows whereby the Company presented depreciation expense and amortization expense as two separate lines and refer to the Condensed Statements of Income, whereby the Company presented loss (gain) on retirement of debt, net as a separate line). Accordingly, certain information and footnote disclosures typically included in an annual report have been condensed or omitted for this quarterly report. The balance sheet as of December 27, 2018 is derived from the audited financial statements of NCM LLC. Therefore, the unaudited Condensed Financial Statements should be read in conjunction with the NCM LLC audited Financial Statements and notes thereto included in the Company’s annual report on Form 10-K filed for the fiscal year ended December 27, 2018. In the opinion of management, all adjustments necessary to present fairly in all material respects the financial position, results of operations and cash flows for all periods presented have been made. The Company’s business is seasonal and for this and other reasons operating results for interim periods may not be indicative of the Company’s full year results or future performance. As a result of the various related party agreements discussed in Note 4— 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 and share-based compensation. Actual results could differ from those estimates. |
Significant Accounting Policies | Significant Accounting Policies The Company’s annual financial statements included in its Form 10-K filed for the fiscal year ended December 27, 2018 contain a complete discussion of the Company’s significant accounting policies. Following is additional information related to the Company’s accounting policies. |
Revenue Recognition | 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 the Company and other companies. Revenue is recognized over time as the customer receives the benefits provided by the Company’s advertising services and the Company has the right to payment for performance to date. The Company considers the terms of each arrangement to determine the appropriate accounting treatment. |
Concentration of Credit Risk and Significant Customers | Concentration of Credit Risk and Significant Customers —Bad debts are provided for using the allowance for doubtful accounts method based on historical experience and management’s evaluation of outstanding receivables at the end of the period. Receivables are written off when management determines amounts are uncollectible. Trade accounts receivable are uncollateralized and represent a large number of geographically dispersed debtors. The collectability risk with respect to national and regional advertising is reduced by transacting with founding members or large, national advertising agencies that have strong reputations in the advertising industry and clients with stable financial positions. The Company has smaller contracts with thousands of local clients that are not individually significant. As of June 27, 2019 and December 27, 2018 , there were no advertising agency groups or individual customers through which the Company sources national advertising revenue representing more than 10% of the Company’s outstanding gross receivable balance. During the three and six months ended June 27, 2019 and June 28, 2018 , the Company had no customers that accounted for more than 10% of revenue. |
Share-Based Compensation | Share-Based Compensation —The management services agreement between NCM LLC and NCM, Inc. provides that NCM LLC may participate in the NCM, Inc. Equity Incentive Plan. NCM, Inc. has issued stock options and restricted stock to certain employees and restricted stock units to its independent directors under the NCM, Inc. Equity Incentive Plan. The Company has not granted stock options since 2012. In 2018 and 2019, the restricted stock grants for Company management vest upon the achievement of NCM, Inc. 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 NCM, Inc. 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. The recognized expense, including equity based compensation costs of NCM, Inc. employees, is included in the operating results of NCM LLC. Upon the exercise of options or the vesting of restricted stock, NCM, Inc. has the right to acquire from NCM LLC a number of common units equal to the number of NCM, Inc. shares being issued. In consideration for such units, NCM, Inc. contributes to NCM LLC the consideration received for the exercise of options or vesting of shares of restricted stock. |
Recently Adopted Accounting Pronouncements | Recently Adopted Accounting Pronouncements |
Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements In June 2016, the FASB issued Accounting Standards Update 2016-13, Financial Instruments – Credit Losses (Topic 326), Measurement of Credit Losses on Financial Statements (“ ASU 2016-13”), which requires a financial asset (or group of financial assets) measured at amortized cost basis to be presented at the net amount expected to be collected. The allowance for credit losses is a valuation account that is deducted from the amortized cost basis of the financial asset(s) to present the net carrying value at the amount expected to be collected on the financial asset. ASU 2016-13 is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years, with early adoption permitted and is to be adopted on a modified retrospective basis. The Company is currently evaluating the impact that adopting this guidance will have on the unaudited Condensed Financial Statements or notes thereto. In August 2018, the FASB issued Accounting Standards Update 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement (“ASU 2018-13”), which modifies the disclosure requirements on fair value measurements. ASU 2018-13 is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years, with partial early adoption permitted for eliminated disclosures. The method of adoption varies by the disclosure. The Company is currently evaluating the impact that adopting this guidance will have on the unaudited Condensed Financial Statements or notes thereto. The Company has considered all other recently issued accounting pronouncements and does not believe the adoption of such pronouncements will have a material impact on its unaudited Condensed Financial Statements or notes thereto. |
Revenue from Contracts with C_2
Revenue from Contracts with Customers (Tables) | 6 Months Ended |
Jun. 27, 2019 | |
Revenue from Contract with Customer [Abstract] | |
Summary of Revenue from Contracts with Customers | The following table summarizes revenue from contracts with customers for the three and six months ended June 27, 2019 and June 28, 2018 : Three Months Ended Six Months Ended June 27, 2019 June 28, 2018 June 27, 2019 June 28, 2018 National advertising revenue $ 77.6 $ 78.8 $ 131.6 $ 133.6 Local advertising revenue 17.7 18.1 30.5 31.6 Regional advertising revenue 6.7 8.2 10.1 12.1 Founding member advertising revenue from beverage concessionaire agreements 8.2 8.6 14.9 16.6 Total revenue $ 110.2 $ 113.7 $ 187.1 $ 193.9 |
Summary of Changes in Deferred Revenue | The changes in deferred revenue for the six months ended June 27, 2019 were as follows (in millions): Six Months Ended June 27, 2019 Balance at beginning of period $ (7.3 ) Performance obligations satisfied 7.3 New contract liabilities (10.7 ) Balance at end of period $ (10.7 ) |
Related Party Transactions (Tab
Related Party Transactions (Tables) | 6 Months Ended |
Jun. 27, 2019 | |
Related Party Transactions [Abstract] | |
Schedule of Related Party Transactions | The following tables provide summaries of the transactions between the Company and the founding members (in millions): Three Months Ended Six Months Ended Included in the unaudited Condensed Statements of Income: (1) June 27, 2019 June 28, 2018 June 27, 2019 June 28, 2018 Revenue: Beverage concessionaire revenue (included in advertising revenue) (2) $ 6.5 $ 8.6 $ 11.8 $ 16.6 Operating expenses: Theater access fee (3) 14.5 21.5 27.4 42.1 Purchase of movie tickets and concession products and rental of theater space (included in selling and marketing costs) (4) 0.1 0.3 0.2 0.7 Administrative fee - managing member (5) 3.4 4.8 6.6 8.6 Non-operating expenses: Interest income from notes receivable (included in interest income) (6) — 0.1 0.1 0.2 (1) AMC is no longer considered a related party as of July 5, 2018, as described further above. As such, the figures within the table above only include related party activity with AMC for the three and six months ended June 28, 2018. (2) For the three and six months ended June 27, 2019 and June 28, 2018 , two of the founding members purchased 60 seconds of on-screen advertising time and one founding member purchased 30 seconds (with all three founding members having a right to purchase up to 90 seconds ) from NCM LLC to satisfy their obligations under their beverage concessionaire agreements at a 30 seconds equivalent CPM rate specified by the ESA. (3) Comprised of payments per theater attendee and payments per digital screen with respect to the founding member theaters included in the Company’s network, including payments for access to higher quality digital cinema equipment. (4) Used primarily for marketing to NCM LLC’s advertising clients. (5) Pursuant to the Management Services Agreement between NCM, Inc. and NCM LLC, NCM, Inc. provides certain specific management services to NCM LLC, including the services of the Interim Chief Executive Officer - President, Chief Financial Officer, Executive Vice President, Chief Revenue Officer and Senior Vice President - General Counsel. In exchange for these services, NCM LLC reimburses NCM, Inc. for compensation paid to the officers (including share based compensation) and other expenses of the officers and for certain out-of-pocket costs. (6) On December 26, 2013, the Company 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, the Company received a total of $25.0 million in promissory notes from its founding members (one-third or approximately $8.3 million from each founding member). The notes bear interest at a fixed rate of 5.0% per annum, compounded annually. Interest and principal payments are due annually in six equal installments commencing on the first anniversary of the closing. As of Included in the unaudited Condensed Balance Sheets: June 27, 2019 December 27, 2018 Purchase of movie tickets and concession products (included in prepaid expenses) (1) $ 0.1 $ — Current portion of notes receivable - related parties (1) (2) 2.8 4.2 Interest receivable on notes receivable (included in other current assets) (1) (2) 0.1 0.1 Prepaid administrative fees to managing member (3) 0.5 0.6 Common unit adjustments, net of amortization and integration payments (included in intangible assets) (4) 644.8 657.6 (1) AMC is no longer considered a related party as of July 5, 2018, as described further above. As such, the figures as of June 27, 2019 and December 27, 2018 do not include AMC. (2) Refer to the discussion of notes receivable from the founding members above. (3) The payments to NCM, Inc. for estimated management services related to employment are made one month in advance. NCM LLC also provides administrative and support services to NCM, Inc. such as office facilities, equipment, supplies, payroll, accounting and financial reporting at no charge. Based on the limited activities of NCM, Inc. as a standalone entity, the Company does not believe such unreimbursed costs are significant. (4) Refer to Note 3— Intangible Assets for further information on common unit adjustments and integration payments. |
Schedule of Mandatory Distributions to Members | Mandatory distributions of available cash for the three and six months ended June 27, 2019 and June 28, 2018 were as follows (in millions): Three Months Ended Six Months Ended June 27, 2019 June 28, 2018 June 27, 2019 June 28, 2018 AMC $ — $ — $ — $ 2.2 Cinemark 7.5 8.3 10.5 11.3 Regal 7.9 8.6 11.0 11.8 Total founding members 15.4 16.9 21.5 25.3 NCM, Inc. 14.6 16.2 20.4 24.3 Total $ 30.0 $ 33.1 $ 41.9 $ 49.6 |
Schedule of Amounts Due to Founding Members, Net | Amounts due to founding members, net as of June 27, 2019 were comprised of the following (in millions): Cinemark Regal Total Theater access fees, net of beverage revenues and other encumbered theater payments $ 1.2 $ 1.6 $ 2.8 Distributions payable to founding members 7.5 7.9 15.4 Integration payments due from founding members (0.2 ) — (0.2 ) Cost and other reimbursement (0.1 ) — (0.1 ) Total amounts due to founding members, net $ 8.4 $ 9.5 $ 17.9 Amounts due to founding members, net as of December 27, 2018 were comprised of the following (in millions): Cinemark Regal Total Theater access fees, net of beverage revenues and other encumbered theater payments $ 1.0 $ 1.5 $ 2.5 Distributions payable to founding members 13.7 14.2 27.9 Integration payments due from founding members (0.4 ) — (0.4 ) Total amounts due to founding members, net $ 14.3 $ 15.7 $ 30.0 |
Schedule of Amounts Due to/from Managing Member | Amounts due to/from managing member, net were comprised of the following (in millions): As of June 27, 2019 December 27, 2018 Distributions payable to managing member $ 14.6 $ 26.6 Cost and other reimbursement 0.9 1.1 Total amounts due to managing member, net $ 15.5 $ 27.7 |
Borrowings (Tables)
Borrowings (Tables) | 6 Months Ended |
Jun. 27, 2019 | |
Debt Disclosure [Abstract] | |
Schedule of Outstanding Debt | The following table summarizes the Company’s total outstanding debt as of June 27, 2019 and December 27, 2018 and the significant terms of its borrowing arrangements (in millions): Outstanding Balance as of Borrowings June 27, 2019 December 27, 2018 Maturity Interest Senior secured notes due 2022 $ 400.0 $ 400.0 April 15, 2022 6.000 % Revolving credit facility 27.0 27.0 June 20, 2023 (1 ) Term loan 268.0 269.4 June 20, 2025 (1 ) Senior unsecured notes due 2026 230.0 235.0 August 15, 2026 5.750 % Total borrowings 925.0 931.4 Less: debt issuance costs related to term loan and senior notes (6.9 ) (7.8 ) Total borrowings, net 918.1 923.6 Less: current portion of debt (2.7 ) (2.7 ) Carrying value of long-term debt $ 915.4 $ 920.9 ___________________________________________________ (1) The interest rates on the revolving credit facility and term loan are described below. |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 6 Months Ended |
Jun. 27, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Lease Cost | These costs are presented within selling and marketing costs and administrative and other costs within the unaudited Condensed Statements of Income depending upon the nature of the use of the facility. Three Months Ended Six Months Ended June 27, 2019 June 27, 2019 Operating lease cost $ 0.8 $ 1.6 Short-term lease cost — 0.1 Variable lease cost 0.2 0.3 Total lease cost $ 1.0 $ 2.0 |
Future Minimum Lease Payments Under Topic 840 | The minimum lease payments under noncancelable operating leases as of December 27, 2018 were as follows (in millions). Year Minimum Lease Payments 2019 $ 3.5 2020 3.3 2021 3.4 2022 3.4 2023 3.4 Thereafter 22.1 Total $ 39.1 |
Future Minimum Lease Payments Under Topic 842 | The future lease payments under noncancelable operating leases as of June 27, 2019 were as follows (in millions). Year Future Lease Payments 2019 (June 28, 2019 - December 26, 2019) $ 1.7 2020 3.3 2021 3.3 2022 3.4 2023 3.4 2024 3.5 Thereafter 18.7 Total 37.3 Less: Imputed interest on future lease payments (12.1 ) Total lease liability as of June 27, 2019 per the Condensed Balance Sheet $ 25.2 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 6 Months Ended |
Jun. 27, 2019 | |
Fair Value Disclosures [Abstract] | |
Schedule of Other Investments | Other investments consisted of the following (in millions): As of June 27, 2019 December 27, 2018 Investment in AC JV, LLC (1) $ 1.1 $ 0.9 Other investments (2) 2.1 2.1 Total $ 3.2 $ 3.0 (1) Refer to Note 4—Related Party Transactions. This investment is accounted for utilizing the equity method. (2) The Company received equity securities in privately held companies as consideration for a portion of advertising contracts. The equity securities are accounted for at adjusted cost in accordance with the practicability exception under Accounting Standards Update 2016-1, Recognition and Measurement of Financial Assets and Financial Liabilities, and represent an ownership of less than 20%. The Company does not exert significant influence on these companies’ operating or financial activities. |
Estimated Fair Values of Company's Financial Instruments | The estimated fair values of the Company’s financial instruments where carrying values do not approximate fair value were as follows (in millions): As of June 27, 2019 As of December 27, 2018 Carrying Value Fair Value (1) Carrying Value Fair Value (1) Term loan $ 268.0 $ 267.3 $ 269.4 $ 261.2 Notes due 2022 400.0 405.0 400.0 401.8 Notes due 2026 230.0 218.5 235.0 211.0 (1) If the Company were to measure the borrowings in the above table at fair value on the balance sheet they would be classified as Level 2 based upon the inputs utilized. |
Revenue from Contracts with C_3
Revenue from Contracts with Customers (Narrative) (Details) - USD ($) | 6 Months Ended | |
Jun. 27, 2019 | Dec. 27, 2018 | |
Revenue from Contract with Customer [Abstract] | ||
Make-good provision | $ 5,700,000 | $ 8 |
Noncancelable contract terms | 2 years | |
Remaining performance obligation | $ 47,700,000 | |
Unbilled accounts receivable | $ 14,100,000 | $ 6,000,000 |
The Company (Narrative) (Detail
The Company (Narrative) (Details) $ in Millions | 3 Months Ended | 6 Months Ended | ||||
Jun. 27, 2019USD ($)shares | Jun. 28, 2018shares | Jun. 27, 2019USD ($)Segmentshares | Jun. 28, 2018shares | Dec. 28, 2018USD ($) | Dec. 29, 2017USD ($) | |
General Company Information [Line Items] | ||||||
Remaining agreement term with founding members, in years | 18 years | |||||
Common membership units outstanding | shares | 159,055,115 | 159,055,115 | ||||
Membership units exchangeable into common stock ratio | 100.00% | |||||
Number of reportable segment | Segment | 1 | |||||
Number of shares acquired due to vesting and exercise of options | shares | 30,657 | 11,377 | 373,230 | 673,310 | ||
Cumulative-effect adjustment due to adoption of ASU 2014-09 | $ (0.2) | |||||
Operating lease, right-of-use asset | $ 21.2 | $ 21.2 | ||||
Short-term lease liability | 1.3 | 1.3 | ||||
Long-term lease liability | $ 23.9 | $ 23.9 | ||||
ASU 2016-02 | ||||||
General Company Information [Line Items] | ||||||
Operating lease, right-of-use asset | $ 21.7 | |||||
Short-term lease liability | 1.4 | |||||
Long-term lease liability | 24.5 | |||||
Reversal of related deferred rent liability | $ (4.2) | |||||
National Cine Media L L C [Member] | ||||||
General Company Information [Line Items] | ||||||
Weighted Average Term, ESA and Affiliate | 15 years 6 months | |||||
NCM Inc. | ||||||
General Company Information [Line Items] | ||||||
Common membership units outstanding | shares | 77,349,628 | 77,349,628 | ||||
Percentage of common membership units outstanding | 48.60% | |||||
Regal | ||||||
General Company Information [Line Items] | ||||||
Common membership units outstanding | shares | 41,770,669 | 41,770,669 | ||||
Percentage of common membership units outstanding | 26.30% | |||||
Cinemark | ||||||
General Company Information [Line Items] | ||||||
Common membership units outstanding | shares | 39,737,700 | 39,737,700 | ||||
Percentage of common membership units outstanding | 25.00% | |||||
AMC | ||||||
General Company Information [Line Items] | ||||||
Common membership units outstanding | shares | 197,118 | 197,118 | ||||
Percentage of common membership units outstanding | 0.10% |
Revenue from Contracts with C_4
Revenue from Contracts with Customers (Remaining Performance Obligations) (Details) $ in Millions | Jun. 27, 2019USD ($) |
Revenue from Contract with Customer [Abstract] | |
Remaining performance obligation | $ 47.7 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2019-03-29 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue from contract, payment due period from the customer | 9 months |
Revenue from Contracts with C_5
Revenue from Contracts with Customers (Summary of Revenue from Contracts with Customers) (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 27, 2019 | Jun. 28, 2018 | Jun. 27, 2019 | Jun. 28, 2018 | |
Disaggregation of Revenue [Line Items] | ||||
Revenue | $ 110.2 | $ 113.7 | $ 187.1 | $ 193.9 |
National advertising revenue | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 77.6 | 78.8 | 131.6 | 133.6 |
Local advertising revenue | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 17.7 | 18.1 | 30.5 | 31.6 |
Regional advertising revenue | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 6.7 | 8.2 | 10.1 | 12.1 |
Founding member advertising revenue from beverage concessionaire agreements | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | $ 8.2 | $ 8.6 | $ 14.9 | $ 16.6 |
Revenue from Contracts with C_6
Revenue from Contracts with Customers (Summary of Changes in Deferred Revenue) (Details) $ in Millions | 6 Months Ended |
Jun. 27, 2019USD ($) | |
Contract Liabilities | |
Balance at beginning of period | $ (7.3) |
Performance obligations satisfied | 7.3 |
New contract liabilities | (10.7) |
Balance at end of period | $ (10.7) |
Intangible Assets (Narrative) (
Intangible Assets (Narrative) (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 27, 2019 | Jun. 28, 2018 | Jun. 27, 2019 | Jun. 28, 2018 | |
Finite-Lived Intangible Assets [Line Items] | ||||
Common membership units issued, net of returned | 1,044,665 | 2,821,710 | ||
Common membership units issued | 3,736,860 | |||
Common membership units returned | 915,150 | |||
Increase (decrease) in intangible assets, net | $ (7.6) | $ (15.9) | ||
Integration and other encumbered payments, related parties - financing activities | $ 0 | $ 11.5 | ||
AMC and Cinemark | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Increase (decrease) in intangible assets, net | (5.7) | (5.6) | (8.1) | (7.8) |
Integration and other encumbered payments, related parties - financing activities | $ 2.5 | $ 2.2 | $ 10.6 | $ 11.5 |
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 ($) shares in Millions | 3 Months Ended | 6 Months Ended | ||||
Jun. 27, 2019 | Jun. 28, 2018 | Jun. 27, 2019 | Jun. 28, 2018 | Dec. 27, 2018 | Dec. 26, 2013 | |
Related Party Transaction [Line Items] | ||||||
On-screen advertising time to satisfy agreement obligations, in seconds | 30 seconds | 30 seconds | ||||
Cash payment due to founding members/managing member | $ 15,400,000 | $ 15,400,000 | $ 27,900,000 | |||
Equity in earnings of non-consolidated entities | 100,000 | $ 0 | 100,000 | $ 0 | ||
AC JV, LLC | ||||||
Related Party Transaction [Line Items] | ||||||
Ownership percentage | 4.00% | |||||
Investment in AC JV, LLC | 1,100,000 | 1,100,000 | 900,000 | |||
Equity in earnings of non-consolidated entities | 100,000 | 100,000 | 300,000 | 100,000 | ||
Revenue from Related Parties | 0 | 100,000 | 0 | 0.1 | ||
Cinemark and Regal | ||||||
Related Party Transaction [Line Items] | ||||||
Cash payment due to founding members/managing member | 1,100,000 | 1,100,000 | ||||
Founding Members | ||||||
Related Party Transaction [Line Items] | ||||||
Cash payment due to founding members/managing member | 15,400,000 | 15,400,000 | ||||
Managing Member | ||||||
Related Party Transaction [Line Items] | ||||||
Cash payment due to founding members/managing member | 14,600,000 | 14,600,000 | 26,600,000 | |||
AMC | ||||||
Related Party Transaction [Line Items] | ||||||
Cash payment due to founding members/managing member | 2,200,000 | 2,200,000 | ||||
Cash dividends | $ 100,000 | $ 300,000 | ||||
Common stock owned (in shares) | 1 | |||||
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 | 7,500,000 | 7,500,000 | 13,700,000 | |||
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 | $ 7,900,000 | $ 7,900,000 | $ 14,200,000 | |||
Regal | AC JV, LLC | ||||||
Related Party Transaction [Line Items] | ||||||
Ownership percentage | 32.00% | |||||
Minimum | ||||||
Related Party Transaction [Line Items] | ||||||
On-screen advertising time to satisfy agreement obligations, in seconds | 30 seconds | |||||
Maximum | ||||||
Related Party Transaction [Line Items] | ||||||
On-screen advertising time to satisfy agreement obligations, in seconds | 60 seconds | |||||
NCM, LLC | AC JV, LLC | ||||||
Related Party Transaction [Line Items] | ||||||
Ownership percentage | 4.00% |
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. 27, 2019 | Jun. 28, 2018 | Jun. 27, 2019 | Jun. 28, 2018 | |
Related Party Transaction [Line Items] | ||||
Revenue | $ 110.2 | $ 113.7 | $ 187.1 | $ 193.9 |
Theater access fee | 21.6 | 21.5 | 40.7 | 42.1 |
Selling and marketing costs | 16.2 | 16.7 | 31.4 | 32.7 |
Administrative fee—managing member | 3.4 | 4.8 | 6.6 | 8.6 |
Founding Members | ||||
Related Party Transaction [Line Items] | ||||
Revenue | 6.5 | 8.6 | 11.8 | 16.6 |
Theater access fee | 14.5 | 21.5 | 27.4 | 42.1 |
Selling and marketing costs | 0.1 | 0.3 | 0.2 | 0.7 |
Interest income from notes receivable (included in interest income) | $ 0 | $ 0.1 | $ 0.1 | $ 0.2 |
Related Party Transactions (S_2
Related Party Transactions (Summary of Transactions between the Company and the Founding Members Included in Statements of Income) (Additional Information) (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |||
Jun. 27, 2019 | Jun. 27, 2019 | Jun. 28, 2018 | Dec. 27, 2018 | Dec. 26, 2013 | |
Related Party Transaction [Line Items] | |||||
On-screen advertising time to satisfy agreement obligations, in seconds | 30 seconds | 30 seconds | |||
AC JV, LLC | |||||
Related Party Transaction [Line Items] | |||||
Ownership percentage | 4.00% | ||||
Maximum | |||||
Related Party Transaction [Line Items] | |||||
On-screen advertising time which founding members have right to purchase, in seconds | 90 seconds | 90 seconds | |||
On-screen advertising time to satisfy agreement obligations, in seconds | 60 seconds | ||||
Minimum | |||||
Related Party Transaction [Line Items] | |||||
On-screen advertising time to satisfy agreement obligations, in seconds | 30 seconds | ||||
One Founding Member | |||||
Related Party Transaction [Line Items] | |||||
On-screen advertising time purchased, in seconds | 30 seconds | 30 seconds | |||
Two Founding Members | |||||
Related Party Transaction [Line Items] | |||||
On-screen advertising time purchased, in seconds | 60 seconds | 60 seconds | |||
AMC | AC JV, LLC | |||||
Related Party Transaction [Line Items] | |||||
Ownership percentage | 32.00% | ||||
Promissory notes receivable from founding members | $ 8.3 | ||||
Cinemark | AC JV, LLC | |||||
Related Party Transaction [Line Items] | |||||
Ownership percentage | 32.00% | ||||
Promissory notes receivable from founding members | $ 8.3 | ||||
Regal | AC JV, LLC | |||||
Related Party Transaction [Line Items] | |||||
Ownership percentage | 32.00% | ||||
Promissory notes receivable from founding members | $ 8.3 | ||||
Founding Members | |||||
Related Party Transaction [Line Items] | |||||
Promissory notes receivable from founding members | $ 4.2 | $ 4.2 | $ 5.6 | ||
Founding Members | Promissory Notes | AC JV, LLC | |||||
Related Party Transaction [Line Items] | |||||
Notes receivable payment term | Interest and principal payments are due annually in six equal installments commencing on the first anniversary of the closing. | ||||
NCM, LLC | AC JV, LLC | |||||
Related Party Transaction [Line Items] | |||||
Ownership percentage | 4.00% | ||||
NCM, LLC | Founding Members | AC JV, LLC | |||||
Related Party Transaction [Line Items] | |||||
Promissory notes receivable from founding members | $ 25 | ||||
Interest rate on notes receivable | 5.00% |
Related Party Transactions (S_3
Related Party Transactions (Summary of Transactions between the Company and the Founding Members Included in Balance Sheets) (Details) - USD ($) $ in Millions | Jun. 27, 2019 | Dec. 27, 2018 |
Related Party Transaction [Line Items] | ||
Receivables from related parties, current | $ 4.2 | $ 5.6 |
Prepaid administrative fees to managing member | 0.5 | 0.6 |
Common unit adjustments, net of amortization and integration payments (included in intangible assets) | 669.6 | 684.5 |
Founding Members | ||
Related Party Transaction [Line Items] | ||
Purchase of movie tickets and concession products (included in prepaid expenses) (1) | 0.1 | 0 |
Receivables from related parties, current | 2.8 | 4.2 |
Interest receivable on notes receivable (included in other current assets) | 0.1 | 0.1 |
Prepaid administrative fees to managing member | 0.5 | 0.6 |
Common unit adjustments, net of amortization and integration payments (included in intangible assets) | $ 644.8 | $ 657.6 |
Related Party Transactions (Sch
Related Party Transactions (Schedule of Mandatory Distributions to Members) (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 27, 2019 | Jun. 28, 2018 | Jun. 27, 2019 | Jun. 28, 2018 | |
Related Party Transaction [Line Items] | ||||
Cash distributions declared to members | $ 30 | $ 33.1 | $ 41.9 | $ 49.6 |
AMC | ||||
Related Party Transaction [Line Items] | ||||
Cash distributions declared to members | 0 | 0 | 0 | 2.2 |
Cinemark | ||||
Related Party Transaction [Line Items] | ||||
Cash distributions declared to members | 7.5 | 8.3 | 10.5 | 11.3 |
Regal | ||||
Related Party Transaction [Line Items] | ||||
Cash distributions declared to members | 7.9 | 8.6 | 11 | 11.8 |
Founding Members | ||||
Related Party Transaction [Line Items] | ||||
Cash distributions declared to members | 15.4 | 16.9 | 21.5 | 25.3 |
NCM Inc. | ||||
Related Party Transaction [Line Items] | ||||
Cash distributions declared to members | $ 14.6 | $ 16.2 | $ 20.4 | $ 24.3 |
Related Party Transactions (S_4
Related Party Transactions (Schedule of Amounts Due to Founding Members, Net) (Details) - USD ($) $ in Millions | Jun. 27, 2019 | Dec. 27, 2018 | Jun. 28, 2018 |
Related Party Transaction [Line Items] | |||
Theater access fees, net of beverage revenues and other encumbered theater payments | $ 2.8 | $ 2.5 | |
Distributions payable to founding members | 15.4 | 27.9 | |
Integration payments due from founding members | (0.2) | (0.4) | |
Cost and Other Reimbursement | 0.1 | ||
Total amounts due to (from) related party, net | 17.9 | 30 | |
AMC | |||
Related Party Transaction [Line Items] | |||
Distributions payable to founding members | $ 2.2 | ||
Cinemark | |||
Related Party Transaction [Line Items] | |||
Theater access fees, net of beverage revenues and other encumbered theater payments | 1.2 | 1 | |
Distributions payable to founding members | 7.5 | 13.7 | |
Integration payments due from founding members | (0.2) | (0.4) | |
Cost and Other Reimbursement | 0.1 | ||
Total amounts due to (from) related party, net | 8.4 | 14.3 | |
Regal | |||
Related Party Transaction [Line Items] | |||
Theater access fees, net of beverage revenues and other encumbered theater payments | 1.6 | 1.5 | |
Distributions payable to founding members | 7.9 | 14.2 | |
Integration payments due from founding members | 0 | 0 | |
Cost and Other Reimbursement | 0 | ||
Total amounts due to (from) related party, net | $ 9.5 | $ 15.7 |
Related Party Transactions (S_5
Related Party Transactions (Schedule of Amounts Due to/from Managing Member) (Details) - USD ($) $ in Millions | Jun. 27, 2019 | Dec. 27, 2018 | Jun. 28, 2018 |
Related Party Transaction [Line Items] | |||
Distributions payable to managing member | $ 15.4 | $ 27.9 | |
Managing Member | |||
Related Party Transaction [Line Items] | |||
Distributions payable to managing member | 14.6 | 26.6 | |
Cost and other reimbursement | (0.9) | (1.1) | |
Total amounts due to managing member, net | 15.5 | 27.7 | |
AMC | |||
Related Party Transaction [Line Items] | |||
Distributions payable to managing member | $ 2.2 | ||
Total amounts due to managing member, net | 15.5 | ||
Cinemark | |||
Related Party Transaction [Line Items] | |||
Distributions payable to managing member | $ 7.5 | 13.7 | |
Total amounts due to managing member, net | $ 27.7 |
Borrowings (Schedule of Outstan
Borrowings (Schedule of Outstanding Debt) (Details) - USD ($) $ in Millions | Jun. 27, 2019 | Dec. 27, 2018 | Aug. 19, 2016 |
Debt Instrument [Line Items] | |||
Outstanding Balance | $ 925 | $ 931.4 | |
Less: debt issuance costs related to term loan and senior notes | (6.9) | (7.8) | |
Long-term Debt | 918.1 | 923.6 | |
Total borrowings, net | 915.4 | 920.9 | |
Less: current portion of debt | (2.7) | (2.7) | |
Revolving credit facility | |||
Debt Instrument [Line Items] | |||
Outstanding Balance | 27 | 27 | |
Term loan | |||
Debt Instrument [Line Items] | |||
Outstanding Balance | 268 | 269.4 | |
Senior secured notes due 2022 | |||
Debt Instrument [Line Items] | |||
Outstanding Balance | $ 400 | 400 | |
Interest Rate | 6.00% | ||
Senior unsecured notes due 2026 | |||
Debt Instrument [Line Items] | |||
Outstanding Balance | $ 230 | $ 235 | |
Interest Rate | 5.75% | 5.75% | |
NCM, LLC | Senior unsecured notes due 2026 | |||
Debt Instrument [Line Items] | |||
Outstanding Balance | $ 230 |
Borrowings (Narrative) (Details
Borrowings (Narrative) (Details) | 3 Months Ended | 6 Months Ended | ||||
Jun. 27, 2019USD ($) | Jun. 27, 2019USD ($) | Jun. 28, 2018USD ($) | Dec. 27, 2018USD ($) | Aug. 19, 2016USD ($) | Apr. 27, 2012USD ($) | |
Debt Instrument [Line Items] | ||||||
Debt instrument, carrying value | $ 925,000,000 | $ 925,000,000 | $ 931,400,000 | |||
Cash and cash equivalents used in determining senior secured leverage ratio | 100,000,000 | |||||
Repayment of term loan facility | 1,400,000 | $ 270,000,000 | ||||
Write off of debt issuance costs | $ 0 | 800,000 | ||||
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 | ||||
Net total leverage ratio | 4.24 | 4.24 | ||||
Senior secured leverage ratio | 314.00% | 314.00% | ||||
Senior Secured Notes Due 2022 | ||||||
Debt Instrument [Line Items] | ||||||
Debt instrument face amount | $ 400,000,000 | |||||
Stated interest rate | 6.00% | |||||
Debt instrument, frequency of periodic payment | The Notes due 2022 pay interest semi-annually in arrears on April 15 and October 15 of each year, which commenced on October 15, 2012. | |||||
Senior secured notes due 2022 | ||||||
Debt Instrument [Line Items] | ||||||
Debt instrument, carrying value | $ 400,000,000 | $ 400,000,000 | 400,000,000 | |||
Stated interest rate | 6.00% | 6.00% | ||||
Debt Instrument, Date of First Required Payment | Oct. 15, 2012 | |||||
Senior unsecured notes due 2026 | ||||||
Debt Instrument [Line Items] | ||||||
Debt instrument, carrying value | $ 230,000,000 | $ 230,000,000 | 235,000,000 | |||
Debt instrument face amount | $ 250,000,000 | |||||
Stated interest rate | 5.75% | 5.75% | 5.75% | |||
Debt Instrument, Date of First Required Payment | Feb. 15, 2017 | |||||
Debt instrument, frequency of periodic payment | The Notes due 2026 pay interest semi-annually in arrears on February 15 and August 15 of each year, which commenced on February 15, 2017. | |||||
Debt instrument issued percentage of face value | 100.00% | |||||
Debt instrument, repurchase amount | $ 5,000,000 | $ 5,000,000 | 15,000,000 | |||
Write off of debt issuance costs | $ 300,000 | $ 0 | ||||
Maximum | Senior Secured Credit Facility | ||||||
Debt Instrument [Line Items] | ||||||
Net senior secured leverage ratio | 5.50 | 5.50 | ||||
Revolving credit facility | ||||||
Debt Instrument [Line Items] | ||||||
Borrowing amount of credit facility | $ 175,000,000 | $ 175,000,000 | ||||
Debt instrument, carrying value | 27,000,000 | 27,000,000 | 27,000,000 | |||
Remaining borrowing capacity of credit facility | $ 143,200,000 | $ 143,200,000 | ||||
Unused line fee, percent | 0.50% | |||||
Weighted-average interest rate | 5.35% | 5.35% | ||||
Revolving credit facility | LIBOR | Maximum | ||||||
Debt Instrument [Line Items] | ||||||
Basis spread on variable rate, percent | 2.25% | |||||
Revolving credit facility | LIBOR | Minimum | ||||||
Debt Instrument [Line Items] | ||||||
Basis spread on variable rate, percent | 1.75% | |||||
Revolving credit facility | Base Rate | Maximum | ||||||
Debt Instrument [Line Items] | ||||||
Basis spread on variable rate, percent | 1.25% | |||||
Revolving credit facility | Base Rate | Minimum | ||||||
Debt Instrument [Line Items] | ||||||
Basis spread on variable rate, percent | 0.75% | |||||
Revolving credit facility | Letters of Credit | ||||||
Debt Instrument [Line Items] | ||||||
Outstanding letters of credit | $ 4,800,000 | $ 4,800,000 | ||||
Term loan | ||||||
Debt Instrument [Line Items] | ||||||
Debt instrument, carrying value | $ 268,000,000 | $ 268,000,000 | $ 269,400,000 | |||
Weighted-average interest rate | 5.44% | 5.44% | ||||
Repayment of term loan facility | $ 2,000,000 | |||||
Amortization rate | 1.00% | |||||
Term loan | LIBOR | ||||||
Debt Instrument [Line Items] | ||||||
Basis spread on variable rate, percent | 3.00% | |||||
Term loan | Base Rate | ||||||
Debt Instrument [Line Items] | ||||||
Basis spread on variable rate, percent | 2.00% | |||||
NCM, LLC | Senior unsecured notes due 2026 | ||||||
Debt Instrument [Line Items] | ||||||
Debt instrument, carrying value | $ 230,000,000 | $ 230,000,000 |
Commitments and Contingencies_2
Commitments and Contingencies (Narrative) (Details) - USD ($) | 3 Months Ended | 6 Months Ended | |
Jun. 27, 2019 | Jun. 27, 2019 | Dec. 27, 2018 | |
Other Commitments [Line Items] | |||
Operating lease, right-of-use asset | $ 21,200,000 | $ 21,200,000 | |
Short-term lease liability | 1,300,000 | 1,300,000 | |
Long-term lease liability | $ 23,900,000 | $ 23,900,000 | |
Weighted average remaining lease term | 10 years 9 months | 10 years 9 months | |
Operating lease payments | $ 800,000 | ||
Weighted average discount rate | 7.43% | 7.43% | |
Maximum potential payment | $ 90,100,000 | $ 90,100,000 | |
Additional amount accrued related to minimum guarantees | 700,000 | 700,000 | $ 100,000 |
Founding Members | |||
Other Commitments [Line Items] | |||
Liabilities recorded for related party obligations | $ 0 | $ 0 | $ 0 |
Percentage of increase in payment per theatre patron | 8.00% | ||
Term of increase in payment percentage per theater patron | 5 years | ||
Percentage of increase in payment per digital screen and digital cinema equipment | 5.00% | ||
Minimum | |||
Other Commitments [Line Items] | |||
Range of terms, in years | 1 year | ||
Minimum | Founding Members | |||
Other Commitments [Line Items] | |||
Aggregate percentage of theater access fee paid | 12.00% | 12.00% | |
Maximum | |||
Other Commitments [Line Items] | |||
Range of terms, in years | 20 years |
Commitments and Contingencies_3
Commitments and Contingencies (Operating Lease Cost) (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended |
Jun. 27, 2019 | Jun. 27, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | ||
Operating Lease, Cost | $ 0.8 | $ 1.6 |
Short-term Lease, Cost | 0 | 0.1 |
Variable Lease, Cost | 0.2 | 0.3 |
Lease, Cost | $ 1 | $ 2 |
Commitments and Contingencies_4
Commitments and Contingencies (Future Minimum Lease Payments) (Details) $ in Millions | Jun. 27, 2019USD ($) |
Future Minimum Lease Payments Under Topic 840 | |
2019 | $ 3.5 |
2020 | 3.3 |
2021 | 3.4 |
2022 | 3.4 |
2023 | 3.4 |
Thereafter | 22.1 |
Total | 39.1 |
Future Minimum Lease Payments Under Topic 842 | |
2019 (March 29, 2019 - December 26, 2019) | 1.7 |
2020 | 3.3 |
2021 | 3.3 |
2022 | 3.4 |
2023 | 3.4 |
2024 | 3.5 |
Thereafter | 18.7 |
Total | 37.3 |
Less: Imputed interest on future lease payments | (12.1) |
Total lease liability as of March 28, 2019 per the Condensed Consolidated Balance Sheet | $ 25.2 |
Fair Value Measurements (Schedu
Fair Value Measurements (Schedule of Other Investments) (Details) - USD ($) $ in Millions | Jun. 27, 2019 | Dec. 27, 2018 |
Schedule of Fair Value of Separate Accounts by Major Category of Investment [Line Items] | ||
Other investments | $ 2.1 | $ 2.1 |
Total other investments | 3.2 | 3 |
AC JV, LLC | ||
Schedule of Fair Value of Separate Accounts by Major Category of Investment [Line Items] | ||
Investment in AC JV, LLC | $ 1.1 | $ 0.9 |
Fair Value Measurements (Sche_2
Fair Value Measurements (Schedule of Other Investments) (Additional Information) (Details) | 12 Months Ended |
Dec. 28, 2017 | |
Maximum | |
Schedule of Fair Value of Separate Accounts by Major Category of Investment [Line Items] | |
Cost-method ownership percentage | 20.00% |
Fair Value Measurements (Narrat
Fair Value Measurements (Narrative) (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |||
Jun. 27, 2019 | Jun. 28, 2018 | Jun. 27, 2019 | Jun. 28, 2018 | Dec. 27, 2018 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Impairment of investment | $ 0 | $ 0 | $ 0 | $ 0.4 | |
Founding Members | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Promissory notes receivable from founding members | 4.2 | 4.2 | $ 5.6 | ||
Impaired Investments | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Fair value of cost method investment | $ 0 | $ 0 | $ 0 | $ 0 |
Fair Value Measurements (Estima
Fair Value Measurements (Estimated Fair Values of Company's Financial Instruments) (Details) - USD ($) $ in Millions | Jun. 27, 2019 | Dec. 27, 2018 |
Term loan | Carrying Value | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Debt Instrument | $ 268 | $ 269.4 |
Term loan | Fair Value | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Debt Instrument | 267.3 | 261.2 |
Senior secured notes due 2022 | Carrying Value | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Debt Instrument | 400 | 400 |
Senior secured notes due 2022 | Fair Value | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Debt Instrument | 405 | 401.8 |
Senior unsecured notes due 2026 | Carrying Value | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Debt Instrument | 230 | 235 |
Senior unsecured notes due 2026 | Fair Value | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Debt Instrument | $ 218.5 | $ 211 |