Document And Entity Information
Document And Entity Information - shares | 9 Months Ended | |
Oct. 01, 2015 | Nov. 06, 2015 | |
Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Oct. 1, 2015 | |
Document Fiscal Year Focus | 2,015 | |
Document Fiscal Period Focus | Q3 | |
Entity Registrant Name | National CineMedia, LLC | |
Entity Central Index Key | 1,527,190 | |
Entity Filer Category | Non-accelerated Filer | |
Current Fiscal Year End Date | --12-31 | |
Entity Common Stock, Shares Outstanding | 130,723,361 |
CONDENSED BALANCE SHEETS (UNAUD
CONDENSED BALANCE SHEETS (UNAUDITED) - USD ($) $ in Millions | Oct. 01, 2015 | Jan. 01, 2015 | |
CURRENT ASSETS: | |||
Cash and cash equivalents | $ 7 | $ 10.2 | |
Receivables, net of allowance of $5.1 and $4.3, respectively | 124 | 116.5 | |
Prepaid expenses | 2.5 | 3.3 | |
Prepaid administrative fees to managing member | [1] | 0.6 | 0.7 |
Current portion of notes receivable - founding members | [2] | 4.2 | 4.2 |
Other current assets | 0.7 | ||
Total current assets | 139 | 134.9 | |
NON-CURRENT ASSETS: | |||
Property and equipment, net of accumulated depreciation of $71.1 and $72.9, respectively | 22.9 | 22.4 | |
Intangible assets, net of accumulated amortization of $86.0 and $69.3, respectively | 503.4 | 488.6 | |
Debt issuance costs, net of accumulated amortization of $19.7 and $17.8, respectively | 13.6 | 15.5 | |
Long-term notes receivable, net of current portion - founding members | [2] | 16.6 | 16.6 |
Other investments | 4.3 | 2.5 | |
Other assets | 0.5 | 0.6 | |
Total non-current assets | 561.3 | 546.2 | |
TOTAL ASSETS | 700.3 | 681.1 | |
CURRENT LIABILITIES: | |||
Amounts due to founding members | 27.3 | 34.9 | |
Amounts due to managing member | 15.5 | 23.6 | |
Accrued expenses | 22 | 19 | |
Accrued payroll and related expenses | 10.7 | 9 | |
Accounts payable | 10 | 11.5 | |
Deferred revenue | 8.7 | 8.5 | |
Total current liabilities | 94.2 | 106.5 | |
NON-CURRENT LIABILITIES: | |||
Long-term debt | 936 | 892 | |
Total non-current liabilities | 936 | 892 | |
Total liabilities | $ 1,030.2 | $ 998.5 | |
COMMITMENTS AND CONTINGENCIES (NOTE 5) | |||
MEMBERS’ EQUITY/DEFICIT (including accumulated other comprehensive loss of $0.0 and $1.6, respectively) | $ (329.9) | $ (317.4) | |
TOTAL LIABILITIES AND EQUITY/DEFICIT | $ 700.3 | $ 681.1 | |
[1] | 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. | ||
[2] | Refer to the discussion of notes receivable from the founding members above. |
CONDENSED BALANCE SHEETS (UNAU3
CONDENSED BALANCE SHEETS (UNAUDITED) (PARENTHETICAL) - USD ($) $ in Millions | Oct. 01, 2015 | Jan. 01, 2015 |
Statement Of Financial Position [Abstract] | ||
Allowance for doubtful accounts receivable | $ 5.1 | $ 4.3 |
Accumulated depreciation, property and equipment | 71.1 | 72.9 |
Accumulated amortization, intangible assets | 86 | 69.3 |
Accumulated amortization, debt issuance costs | 19.7 | 17.8 |
Accumulated other comprehensive loss | $ 0 | $ 1.6 |
CONDENSED STATEMENTS OF INCOME
CONDENSED STATEMENTS OF INCOME (UNAUDITED) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Oct. 01, 2015 | Sep. 25, 2014 | Oct. 01, 2015 | Sep. 25, 2014 | ||
Income Statement [Abstract] | |||||
REVENUE (including revenue from founding members of $6.5, $9.1, $23.2 and $28.4, respectively) | $ 111.7 | $ 100.8 | $ 310.1 | $ 270.9 | |
OPERATING EXPENSES: | |||||
Advertising operating costs | 7.8 | 6.5 | 21.9 | 18.1 | |
Network costs | 4.3 | 4.4 | 13 | 13.4 | |
Theatre access fees—founding members | [1] | 17.6 | 17 | 54 | 52.3 |
Selling and marketing costs | 16.9 | 14.7 | 49.9 | 43.8 | |
Merger termination fee and related merger costs | 41.8 | ||||
Administrative and other costs | 5.4 | 4.8 | 15.6 | 13.7 | |
Administrative fee—managing member | [2] | 3.9 | 2.1 | 10.7 | 7.9 |
Depreciation and amortization | 8 | 8.6 | 24.2 | 24.2 | |
Total | 63.9 | 58.1 | 231.1 | 173.4 | |
OPERATING INCOME | 47.8 | 42.7 | 79 | 97.5 | |
NON-OPERATING EXPENSES: | |||||
Interest on borrowings | 13 | 12.7 | 39.2 | 38.8 | |
Interest income | (0.3) | (0.3) | (0.8) | (0.9) | |
Amortization of terminated derivatives | 2.6 | 1.6 | 7.6 | ||
Other non-operating expense | 0.1 | 0.7 | 0.2 | 0.9 | |
Total | 12.8 | 15.7 | 40.2 | 46.4 | |
INCOME BEFORE INCOME TAXES | 35 | 27 | 38.8 | 51.1 | |
Income tax expense | 0.2 | 0 | 0.3 | 0.5 | |
NET INCOME | $ 34.8 | $ 27 | $ 38.5 | $ 50.6 | |
[1] | Comprised of payments per theatre attendee and payments per digital screen with respect to the founding member theatres included in the Company’s network, including payments for access to higher quality digital cinema equipment. | ||||
[2] | 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 President and Chief Executive Officer, President of Sales and Marketing, Interim Co-Chief Financial Officers, Executive Vice President and Chief Operations Officer and Chief Technology Officer and Executive Vice President and 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. |
CONDENSED STATEMENTS OF INCOME5
CONDENSED STATEMENTS OF INCOME (PARENTHETICAL) (UNAUDITED) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Oct. 01, 2015 | Sep. 25, 2014 | Oct. 01, 2015 | Sep. 25, 2014 | |
Income Statement [Abstract] | ||||
Revenue from founding members | $ 6.5 | $ 9.1 | $ 23.2 | $ 28.4 |
CONDENSED STATEMENTS OF COMPREH
CONDENSED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Oct. 01, 2015 | Sep. 25, 2014 | Oct. 01, 2015 | Sep. 25, 2014 | |
Statement Of Income And Comprehensive Income [Abstract] | ||||
NET INCOME, NET OF TAX OF $0.2, $0.0, $0.3 AND $0.5, RESPECTIVELY | $ 34.8 | $ 27 | $ 38.5 | $ 50.6 |
OTHER COMPREHENSIVE INCOME: | ||||
Amortization of terminated derivatives | 2.6 | 1.6 | 7.6 | |
COMPREHENSIVE INCOME | $ 34.8 | $ 29.6 | $ 40.1 | $ 58.2 |
CONDENSED STATEMENTS OF COMPRE7
CONDENSED STATEMENTS OF COMPREHENSIVE INCOME (PARENTHETICAL) (UNAUDITED) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Oct. 01, 2015 | Sep. 25, 2014 | Oct. 01, 2015 | Sep. 25, 2014 | |
Statement Of Income And Comprehensive Income [Abstract] | ||||
Income tax expense | $ 0.2 | $ 0 | $ 0.3 | $ 0.5 |
CONDENSED STATEMENTS OF CASH FL
CONDENSED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) $ in Millions | 9 Months Ended | |
Oct. 01, 2015 | Sep. 25, 2014 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net income | $ 38.5 | $ 50.6 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 24.2 | 24.2 |
Non-cash share-based compensation | 5.5 | 3 |
Amortization of terminated derivatives | 1.6 | 7.6 |
Amortization of debt issuance costs | 1.9 | 2.1 |
Other | 0.4 | |
Changes in operating assets and liabilities: | ||
Receivables, net | (9.2) | 23.2 |
Accounts payable and accrued expenses | 3.2 | (5.1) |
Amounts due to founding members and managing member | (0.3) | (0.2) |
Deferred revenue | 0.2 | 1.6 |
Other, net | 0.1 | (1) |
Net cash provided by operating activities | 66.1 | 106 |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Purchases of property and equipment | (8) | (6.9) |
Purchases of intangible assets from network affiliates | (2) | (3) |
Net cash used in investing activities | (10) | (9.9) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Proceeds from borrowings | 166 | 92 |
Repayments of borrowings | (122) | (87) |
Payment of debt issuance costs | (0.7) | |
Founding member integration payments | 1.9 | 1.5 |
Distributions to founding members and managing member | (106.4) | (103) |
Unit settlement for share-based compensation | 1.2 | 0.8 |
Net cash used in financing activities | (59.3) | (96.4) |
CHANGE IN CASH AND CASH EQUIVALENTS | (3.2) | (0.3) |
CASH AND CASH EQUIVALENTS: | ||
Beginning of period | 10.2 | 13.3 |
End of period | 7 | 13 |
Supplemental disclosure of non-cash financing and investing activity: | ||
Purchase of an intangible asset with NCM LLC equity | 31.4 | 16.4 |
Accrued distributions to founding members and managing member | 45.1 | 40.3 |
Write-off of property and equipment included in accrued expenses | (0.3) | (0.4) |
Increase in cost and equity method investments | 1.7 | |
Supplemental disclosure of cash flow information: | ||
Cash paid for interest | 35.2 | 34.6 |
Cash paid for income taxes, net of refunds | $ 0.1 | $ 0.2 |
The Company
The Company | 9 Months Ended |
Oct. 01, 2015 | |
Accounting Policies [Abstract] | |
The Company | 1. 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”), American Multi-Cinema, Inc. and AMC ShowPlace Theatres, Inc. (“AMC”), wholly owned subsidiaries of AMC Entertainment, Inc., Regal Cinemas, Inc. and Regal CineMedia Holdings, LLC, wholly owned subsidiaries of Regal Entertainment Group (“Regal”) and Cinemark Media, Inc. and Cinemark USA, Inc., wholly owned subsidiaries of Cinemark Holdings, Inc. (“Cinemark”). AMC, Regal and Cinemark and their affiliates are referred to in this document as “founding members”. NCM LLC operates the largest digital in-theatre network in North America, allowing NCM LLC to sell advertising (the “Services”) under long-term exhibitor services agreements (“ESAs”) with the founding members (approximately 21 years remaining as of October 1, 2015) and certain third-party theatre circuits (known as “network affiliates”) under long-term network affiliate agreements, which have terms from three to twenty years. As of October 1, 2015, NCM LLC had 130,723,361 common membership units outstanding, of which 59,018,867 (45.2%) were owned by NCM, Inc., 26,409,784 (20.2%) were owned by Regal, 25,631,046 (19.6%) were owned by Cinemark and 19,663,664 (15.0%) were owned by AMC. The membership units held by the founding members are exchangeable into NCM, Inc. common stock on a one-for-one basis. Recent Transactions On May 5, 2014, NCM, Inc. entered into an Agreement and Plan of Merger (the “Merger Agreement”) to merge with Screenvision, LLC (“Screenvision”). On November 3, 2014, the Department of Justice filed a lawsuit seeking to enjoin the merger. On March 16, 2015, NCM, Inc. announced the termination of the Merger Agreement and the lawsuit was dismissed. After the Merger Agreement was terminated, NCM LLC reimbursed NCM, Inc. for certain expenses pursuant to an indemnification agreement among NCM LLC, NCM, Inc. and the founding members. On March 17, 2015, the Company paid Screenvision an approximate $26.8 million termination payment on behalf of NCM, Inc. This payment was $2 million lower than the reverse termination fee contemplated by the Merger Agreement. During the nine months ended October 1, 2015, the Company also either paid directly or reimbursed NCM, Inc. for the legal and other merger-related costs of approximately $15.0 million ($7.5 million incurred by NCM, Inc. during the year ended January 1, 2015 and approximately $7.5 million incurred by NCM LLC during the nine months ended October 1, 2015). NCM, Inc. and the founding members each bore a pro rata portion of the merger termination fee and the related merger expenses based on their aggregate ownership percentages in NCM LLC. 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”). 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 January 1, 2015 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 January 1, 2015. In the opinion of management, all adjustments (which include only normal recurring 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 3— Related Party Transactions 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 January 1, 2015 contain a complete discussion of the Company’s significant accounting policies. Following is additional information related to the Company’s accounting policies. 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 the fact that the majority of accounts receivable are with 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 October 1, 2015 and January 1, 2015, there were no advertising agency groups or individual customers through which the Company sources national advertising revenue representing more than 10% of the Company’s outstanding gross receivable balance. During the three and nine months ended October 1, 2015 and the three months ended September 25, 2014, there were no customers that accounted for more than 10% of revenue. During the nine months ended September 25, 2014, revenue related to advertisements of NCM LLC’s founding members’ beverage supplier accounted for 10.4% of total 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. In 2015 and 2014, NCM, Inc. did not grant stock options. In 2015 and 2014, the restricted stock grants for Company officers vest upon the achievement of NCM, Inc. performance measures and/or service conditions, while non-officer 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 October 1, 2015 and September 25, 2014 and the nine months ended October 1, 2015 and September 25, 2014, NCM, Inc. acquired 6,829, 4,799, 267,941 and 227,851 units, respectively, due to the vesting of restricted stock and restricted stock units and exercise of stock options and contributed $0.1 million, $0.0 million, $1.2 million and $0.8 million to NCM LLC for the three months ended October 1, 2015 and September 25, 2014 and the nine months ended October 1, 2015 and September 25, 2014, respectively. In connection with NCM, Inc.’s March 2014 special cash dividend of $0.50 per share and pursuant to the antidilution adjustment terms of NCM, Inc.’s Equity Incentive Plan, the exercise price and the number of shares of common stock subject to options held by option holders were adjusted to prevent dilution and restore their economic value that existed immediately before the special dividend. The antidilution adjustments made with respect to such options resulted in a decrease in the range of exercise prices from $5.35 - $24.68 per share to $5.18 - $23.90 per share and an increase in the aggregate number of shares issuable upon exercise of such options by 98,589 shares, or 3.3%, of previously outstanding options. The number of shares authorized under the Equity Incentive Plan increased by an equivalent number of shares. There were no accounting consequences for the changes made to reduce the exercise prices and increase the number of underlying options as a result of the special cash dividend because the aggregate fair values of the awards immediately before and after the modifications were the same. Recent Accounting Pronouncements In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update 2014-09, Revenue from Contracts with Customers (Topic 606) In January 2015, the FASB issued Accounting Standards Update 2015-01, Income Statement Extraordinary and Unusual Items (Subtopic 225-20): Simplifying Income Statement Presentation by Eliminating the Concept of Extraordinary Items In February 2015, the FASB issued Accounting Standards Update 2015-02, Consolidation (Topic 810): Amendments to the Consolidation Analysis In April 2015, the FASB issued Accounting Standards Update 2015-03, Interest - Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs In addition, in August 2015, Accounting Standards Update 2015-15, Interest — Imputation of Interest, was released which added SEC paragraphs pursuant to the SEC Staff Announcement at the June 18, 2015 Emerging Issues Task Force (EITF) meeting about the presentation and subsequent measurement of debt issuance costs associated with line-of-credit arrangements. Given the absence of authoritative guidance within ASU 2015-03 for debt issuance costs related to line-of-credit arrangements, ASU 2015-15 states the SEC staff would not object to an entity deferring and presenting debt issuance costs as an asset and subsequently amortizing the deferred debt issuance costs ratably over the term of the line-of-credit arrangement, regardless of whether there are any outstanding borrowings on the line-of-credit arrangement. The impact of ASU 2015-03 and ASU 2015-15 on the Company’s Financial Statements includes a reclassification of net deferred financing costs related to the Company’s Term Loans, Senior Secured Notes and Senior Unsecured Notes to be presented in the Balance Sheets as a direct deduction from the carrying amount of those borrowings, while net deferred financing costs related to the Company’s Revolving Credit Facility will remain an asset. As of October 1, 2015, the Company deferred financing costs related to its Term Loans, Senior Secured Notes and Senior Unsecured Notes. In April 2015, the FASB issued Accounting Standards Update Intangibles-Goodwill and Other – Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Fees Paid in a Cloud Computing Arrangement” (“ASU 2015-05”) If a cloud computing arrangement includes a software license, then the customer should account for the software license element of the arrangement consistent with the acquisition of other software licenses. If a cloud computing arrangement does not include a software license, the customer should account for the arrangement as a service contract. adoption permitted. The Company does not expect the application of ASU 2015-05 to have a material impact in the unaudited Condensed Financial Statements or notes thereto. |
Intangible Assets
Intangible Assets | 9 Months Ended |
Oct. 01, 2015 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Intangible Assets | 2. INTANGIBLE ASSETS In accordance with NCM LLC’s Common Unit Adjustment Agreement with our 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 theatre additions or dispositions during the previous year. During the first quarter of 2015 and 2014, the Company issued 2,160,915 and 1,087,911 common membership units to our founding members, respectively, for the rights to exclusive access to the theatre screens and attendees added, net of dispositions by the founding members to NCM LLC’s network during the previous year. The Company recorded a net intangible asset of $31.4 million and $16.4 million during the three months ended April 2, 2015 and March 27, 2014, respectively, as a result of the Common Unit Adjustments. In addition, NCM LLC’s Common Unit Adjustment Agreement requires that a Common Unit Adjustment occur for a specific founding member if its acquisition or disposition of theatres, 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. If an existing on-screen advertising agreement with an alternative provider is in place with respect to any acquired theatres, the founding members may elect to receive common membership units related to those encumbered theatres 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”). During the three months ended October 1, 2015 and September 25, 2014 and the nine months ended October 1, 2015 and September 25, 2014, the Company recorded a reduction to net intangible assets of $0.7 million, $0.6 million, $1.8 million and $1.4 million, respectively, related to integration payments due from AMC and Cinemark related to their acquisitions of theatres from Rave Cinemas that are encumbered by an existing on-screen advertising agreement with an alternative provider. During the three months ended October 1, 2015 and September 25, 2014 and the nine months ended October 1, 2015 and September 25, 2014, AMC and Cinemark paid a total of $0.8 million, $0.6 million, $1.9 million and $1.5 million, respectively, in integration payments. The Company’s intangible assets with its founding members are recorded at the fair market value of NCM, Inc.’s publicly traded stock as of the date on which the common membership units were issued. The NCM LLC common membership units are fully convertible into NCM, Inc.’s common stock. 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. If common membership units are issued to a founding member for newly acquired theatres 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 theatres for all of its services. 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 theatres with pre-existing advertising agreements. |
Related-Party Transactions
Related-Party Transactions | 9 Months Ended |
Oct. 01, 2015 | |
Related Party Transactions [Abstract] | |
Related-Party Transactions | 3. 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. They include the following: · ESAs . Under the ESAs, NCM LLC is the exclusive provider within the United States of advertising services in the founding members’ theatres (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 FirstLook pre-show, use of the lobby entertainment network (“LEN”) and rights to sell and display certain lobby promotions. Further, 30 to 60 seconds of advertising included in the FirstLook 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’ theatres, theatre patrons, the network equipment required to display on-screen and LEN video advertising and the use of theatres for lobby promotions, the founding members receive a monthly theatre access fee. · 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 theatres or sale of theatres 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 Nine Months Ended Included in the Condensed Statements of Income: October 1, 2015 September 25, 2014 October 1, 2015 September 25, Revenue: Beverage concessionaire revenue (included in advertising revenue) (1) $ 6.4 $ 9.0 $ 23.0 $ 28.2 Advertising inventory revenue (included in advertising revenue) (2) 0.1 0.1 0.2 0.2 Operating expenses: Theatre access fee (3) 17.6 17.0 54.0 52.3 Purchase of movie tickets and concession products and rental of theatre space (included in selling and marketing costs) (4) 0.4 0.2 0.9 0.7 Purchase of movie tickets and concession products and rental of theatre space (included in other administrative and other costs) — — 0.1 0.1 Administrative fee - managing member (5) 3.9 2.1 10.7 7.9 Non-operating expenses: Interest income from notes receivable (included in interest income) (6) 0.2 0.3 0.7 0.9 (1) For the three months ended October 1, 2015, 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 second equivalent cost per thousand (“CPM”) rate specified by the ESA. For the first six months of 2015 and for the three and nine months ended September 25, 2014, the founding members purchased 60 seconds of on-screen advertising time. (2) The value of such purchases is calculated by reference to NCM LLC’s advertising rate card. (3) Comprised of payments per theatre attendee and payments per digital screen with respect to the founding member theatres 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 President and Chief Executive Officer, President of Sales and Marketing, Interim Co-Chief Financial Officers, Executive Vice President and Chief Operations Officer and Chief Technology Officer and Executive Vice President and 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, NCM LLC sold its Fathom Events business to a newly formed limited liability company (AC JV, LLC) owned 32% by each of the founding members and 4% by NCM LLC. In consideration for the sale, NCM LLC received a total of $25.0 million in promissory notes from its founding members (one-third or approximately $8.3 million from each founding member). The notes bear interest at a fixed rate of 5.0% per annum, compounded annually. Interest and principal payments are due annually in six equal installments commencing on the first anniversary of the closing. As of Included in the Condensed Balance Sheets: October 1, 2015 January 1, 2015 Purchase of movie tickets and concession products (included in Prepaid expenses) (1) $ 0.2 $ — Current portion of notes receivable - founding members (2) 4.2 4.2 Long-term portion of notes receivable - founding members (2) 16.6 16.6 Interest receivable on notes receivable (included in other current assets) (2) 0.7 — Prepaid administrative fees to managing member (3) 0.6 0.7 Common unit adjustments and integration payments, net of amortization (included in intangible assets) (4) 472.7 458.3 (1) Used primarily for marketing to NCM LLC’s advertising clients. (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 2— for further information on common unit adjustments and integration payments. On March 16, 2015, NCM, Inc. announced the termination of the Merger Agreement with Screenvision. After the Merger Agreement was terminated, NCM LLC reimbursed NCM, Inc. for certain expenses pursuant to an indemnification agreement among NCM LLC, NCM, Inc. and the founding members. On March 17, 2015, the Company paid Screenvision an approximate $26.8 million termination payment on behalf of NCM, Inc. This payment was $2 million lower than the reverse termination fee contemplated by the Merger Agreement. During the nine months ended October 1, 2015, the Company also either paid directly or reimbursed NCM, Inc. for the legal and other merger-related costs of approximately $15.0 million ($7.5 million incurred by NCM, Inc. during the year ended January 1, 2015 and approximately $7.5 million incurred by NCM LLC during the nine months ended October 1, 2015). NCM, Inc. and the founding members each bore a pro rata portion of the termination fee and the related merger expenses based on their aggregate ownership percentages in NCM LLC. 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 nine months ended October 1, 2015 and September 25, 2014 were as follows (in millions): Three Months Ended Nine Months Ended October 1, 2015 September 25, 2014 October 1, 2015 September 25, 2014 AMC $ 6.8 $ 6.0 $ 13.7 $ 12.8 Cinemark 8.8 7.7 17.8 16.4 Regal 9.1 8.1 18.3 17.2 Total founding members 24.7 21.8 49.8 46.4 NCM, Inc. 20.4 18.5 41.1 39.4 Total $ 45.1 $ 40.3 $ 90.9 $ 85.8 Due to the merger termination fee and related merger expenses, the mandatory distributions of available cash by the Company to its founding members and NCM, Inc. for the three months ended April 2, 2015 was calculated as negative $25.5 million ($14.0 million for the founding members and $11.5 million for NCM, Inc.). Therefore, there was no payment made in the second quarter of 2015. Under the terms of the NCM LLC Operating Agreement, this negative amount will be netted against the available cash distributions for the second quarter of 2016, which will be paid in the third quarter of 2016. Until the settlement in the third quarter of 2016, the remaining merger-related costs will be funded through borrowings on the NCM LLC revolving credit facility. The mandatory distributions of available cash by the Company to its founding members for the three months ended October 1, 2015 of $24.7 million is included in amounts due to founding members on the unaudited Condensed Balance Sheets as of October 1, 2015 and will be made in the fourth quarter of 2015. The mandatory distributions of available cash by NCM LLC to its managing member for the three months ended October 1, 2015 of $20.4 million is included in amounts due to managing member on the unaudited Condensed Balance Sheets as of October 1, 2015 and will be made in the fourth quarter of 2015. Amounts due to founding members as of October 1, 2015 were comprised of the following (in millions): AMC Cinemark Regal Total Theatre access fees, net of beverage revenues $ 1.2 $ 0.9 $ 1.2 $ 3.3 Cost and other reimbursement (0.5 ) (0.3 ) 0.1 (0.7 ) Distributions payable to founding members 6.8 8.8 9.1 24.7 Total amounts due to founding members $ 7.5 $ 9.4 $ 10.4 $ 27.3 Amounts due to founding members as of January 1, 2015 were comprised of the following (in millions): AMC Cinemark Regal Total Theatre access fees, net of beverage revenues $ 0.8 0.8 1.2 $ 2.8 Cost and other reimbursement (0.6 ) (0.2 ) — (0.8 ) Distributions payable to founding members 9.1 11.6 12.2 32.9 Total amounts due to founding members $ 9.3 $ 12.2 $ 13.4 $ 34.9 Amounts due to/from managing member were comprised of the following (in millions): As of October 1, 2015 January 1, 2015 Distributions payable to managing member $ 20.4 $ 27.7 Cost and other reimbursement (4.9 ) (4.1 ) Total amounts due to managing member $ 15.5 $ 23.6 AC JV, LLC Transactions —In December 2013, NCM LLC sold its Fathom Events business to a newly formed limited liability company, AC JV, LLC, owned 32% by each of the founding members and 4% by NCM LLC. The Company accounts for its investment in AC JV, LLC under the equity method of accounting in accordance with ASC 323-30, Investments—Equity Method and Joint Ventures (“ASC 323-30”) because AC JV, LLC is a limited liability company with the characteristics of a limited partnership and ASC 323-30 requires the use of equity method accounting unless the Company’s interest is so minor that it would have virtually no influence over partnership operating and financial policies. Although NCM LLC does not have a representative on AC JV, LLC’s Board of Directors or any voting, consent or blocking rights with respect to the governance or operations of AC JV, LLC, the Company concluded that its interest was more than minor under the accounting guidance. The Company’s investment in AC JV, LLC was $1.4 million and $1.3 million as of October 1, 2015 and January 1, 2015, respectively. Equity in earnings from AC JV, LLC was $0.0 million, $0.0 million, $0.1 million and $0.1 million for the three months ended October 1, 2015 and September 25, 2014 and the nine months ended October 1, 2015 and September 25, 2014, respectively and is included in non-operating expenses in the unaudited Condensed Statements of Income. Related Party Affiliates —NCM LLC enters into network affiliate agreements with network affiliates for NCM LLC to provide in-theatre advertising at theatre locations that are owned by companies that are affiliates of certain of the founding members or directors of NCM, Inc. Related party affiliate agreements are entered into at terms that are similar to those of the Company’s other network affiliates. The Company has an agreement with LA Live, an affiliate of The Anschutz Corporation. The Anschutz Corporation is a wholly-owned subsidiary of the Anschutz Company, which is the controlling stockholder of Regal. During the three months ended October 1, 2015 and September 25, 2014 and the nine months ended October 1, 2015 and September 25, 2014, there was approximately $0.1 million, $0.0 million $0.2 million and $0.1 million, respectively, included in advertising operating costs related to LA Live, and there was approximately $0.1 million and $0.1 million of accounts payable with this company as of October 1, 2015 and January 1, 2015, respectively. The Company has an agreement with Starplex Operating L.P. (“Starplex”), an affiliate of one of NCM, Inc.’s former directors, who was a member of NCM, Inc.’s board of directors from the IPO date until his resignation during 2014. During the three and nine months ended September 25, 2014, there was approximately $0.8 million and $1.3 million included in advertising operating costs related to Starplex, and there was approximately $0.9 million of accounts payable with Starplex as of January 1, 2015. Following the director’s resignation from NCM, Inc.’s board of directors in 2014, Starplex is no longer a related party. Other Transactions —The Company has an agreement with an interactive media company to sell some of its online inventory. One of NCM, Inc.’s directors is also a director of this media company. During the three months ended October 1, 2015 and September 25, 2014 and the nine months ended October 1, 2015 and September 25, 2014, this company generated approximately $0.0 million, $0.0 million, $0.0 million and $0.1 million, respectively, in revenue for NCM LLC and there was approximately $0.3 million and $0.3 million of accounts receivable due from this company as of October 1, 2015 and January 1, 2015, respectively. NCM LLC has an agreement with AEG Live, an affiliate of The Anschutz Corporation, for AEG Live to showcase musical artists in NCM LLC’s FirstLook |
Borrowings
Borrowings | 9 Months Ended |
Oct. 01, 2015 | |
Debt Disclosure [Abstract] | |
Borrowings | 4. BORROWINGS The following table summarizes the Company’s total outstanding debt as of October 1, 2015 and January 1, 2015 and the significant terms of its borrowing arrangements (in millions): Outstanding Balance as of Borrowings October 1, 2015 January 1, 2015 Maturity Date Interest Revolving Credit Facility $ 66.0 $ 22.0 November 26, 2019 (1) Term Loans 270.0 270.0 November 26, 2019 (1) Senior Unsecured Notes 200.0 200.0 July 15, 2021 7.875% Senior Secured Notes 400.0 400.0 April 15, 2022 6.000% Total $ 936.0 $ 892.0 (1) The interest rates on the revolving credit facility and term loan are described below. Senior Secured Credit Facility —As of October 1, 2015 and January 1, 2015, the Company’s senior secured credit facility consisted of a $135.0 million revolving credit facility and a $270.0 million term loan. 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 October 1, 2015, the Company’s total availability under the revolving credit facility was $69.0 million. The unused line fee is 0.50% per annum. Borrowings under the revolving credit facility bear interest at the Company’s option of either the LIBOR index plus an applicable margin or the base rate (Prime Rate or the Federal Funds Effective Rate, as defined in the senior secured credit facility) plus an applicable margin. 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, over a non-GAAP measure defined in the senior secured credit facility). The weighted-average interest rate on the outstanding balance on the revolving credit facility as of October 1, 2015 was 2.51%. Term Loans —The interest rate on the term loans is a rate chosen at the Company’s option of either the LIBOR index plus 2.75% or the base rate (Prime Rate or the Federal Funds Effective Rate, as defined in the senior secured credit facility) plus 1.75%. The weighted-average interest rate on the term loans as of October 1, 2015 was 2.95%. Interest on the term loans is currently paid monthly. The senior secured credit facility contains a number of covenants and financial ratio requirements, with which the Company was in compliance as of October 1, 2015, including maintaining a consolidated net senior secured leverage ratio of equal to or less than 6.5 times on a quarterly basis. In addition, there are no borrower distribution restrictions as long as the Company’s consolidated net senior secured leverage ratio is below 6.5 times and the Company is in compliance with its debt covenants. As of October 1, 2015, the Company’s consolidated net senior secured leverage ratio was 3.2 times (versus the covenant of 6.5 times). Senior Unsecured Notes due 2021 —On July 5, 2011, the Company completed a private placement of $200.0 million in aggregate principal amount of 7.875% Senior Unsecured Notes (“Senior Unsecured Notes”) for which the registered exchange offering was completed on September 22, 2011. The Senior Unsecured Notes pay interest semi-annually in arrears on January 15 and July 15 of each year, which commenced January 15, 2012. The notes are subordinated to all existing and future secured debt, including indebtedness under the Company’s existing senior secured credit facility and the Senior Secured Notes defined below. The Senior Unsecured Notes contain certain non-maintenance covenants with which the Company is in compliance as of October 1, 2015. Senior Secured Notes due 2022 —On July 27, 2012, the Company completed a private placement of $400.0 million in aggregate principal amount of 6.00% Senior Secured Notes (the “Senior Secured Notes”) for which the registered exchange offering was completed on November 26, 2012. The Senior Secured Notes pay interest semi-annually in arrears on April 15 and October 15 of each year, which commenced October 15, 2012. The Senior Secured Notes are senior secured obligations of the Company, rank the same as the Company’s senior secured credit facility, subject to certain exceptions, and share in the same collateral that secures the Company’s obligations under the senior secured credit facility. The Senior Secured Notes contain certain non-maintenance covenants with which the Company was in compliance as of October 1, 2015. |
Commitments And Contingencies
Commitments And Contingencies | 9 Months Ended |
Oct. 01, 2015 | |
Commitments And Contingencies Disclosure [Abstract] | |
Commitments And Contingencies | 5. 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 on its financial position, results of operations or cash flows. Minimum Revenue Guarantees ―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 theatre 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. The amount and term varies for each network affiliate, but terms range from three to twenty years, prior to any renewal periods of which some are at the option of the Company. As of October 1, 2015, the maximum potential amount of future payments the Company could be required to make pursuant to the minimum revenue guarantees is $37.5 million over the remaining terms of the network affiliate agreements, which calculation does not include any potential future extensions. As of October 1, 2015 and January 1, 2015, the Company had an inconsequential amount of liabilities recorded for these obligations. |
Fair Value Measurements
Fair Value Measurements | 9 Months Ended |
Oct. 01, 2015 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | 6. 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, cost and equity method 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 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 October 1, January 1, 2015 Investment in AC JV, LLC (1) $ 1.4 $ 1.3 Other investments (2) 2.9 1.2 Total $ 4.3 $ 2.5 (1) Refer to Note 3— . (2) During 2014 and 2015, the Company received equity securities in privately held companies as consideration for a portion of advertising contracts. The equity securities were accounted for under the cost method and represent an ownership of less than 20%. The Company does not exert significant influence on these companies’ operating or financial activities. The fair value of the investments has not been estimated as of October 1, 2015 and January 1, 2015 as there were no identified events or changes in the circumstances that had a significant adverse effect on the fair value of the investments and it is not practicable to do so because the equity securities are not in publicly traded companies. 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 October 1, 2015 and January 1, 2015, the Company had notes receivable totaling $20.8 million and $20.8 million, respectively from its founding members related to the sale of Fathom Events, as described in Note 3— Related Party Transactions 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 October 1, 2015 As of January 1, 2015 Carrying Fair Value (1) Carrying Value Fair Value (1) Term Loans $ 270.0 $ 268.9 $ 270.0 $ 257.9 Senior Unsecured Notes 200.0 207.5 200.0 210.8 Senior Secured Notes 400.0 405.3 400.0 400.8 (1) The Company has estimated the fair value on an average of at least two non-binding broker quotes and the Company’s analysis. 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. |
Derivative Instruments And Hedg
Derivative Instruments And Hedging Activities | 9 Months Ended |
Oct. 01, 2015 | |
Derivative Instruments And Hedging Activities Disclosure [Abstract] | |
Derivative Instruments And Hedging Activities | 7. DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES During 2012, the Company terminated interest rate swap agreements that were used to hedge its interest rate risk associated with its term loan. Following the termination of the swap agreements, the variable interest rate on the Company’s $270.0 million term loan is unhedged and as of October 1, 2015 and January 1, 2015, the Company did not have any outstanding derivative assets or liabilities. A portion of the breakage fees paid to terminate the swap agreements was for swaps in which the underlying debt remained outstanding. The balance in AOCI related to these swaps was fixed and was amortized into earnings over the remaining period during which interest payments were hedged, or February 13, 2015. The Company considered the guidance in ASC 815, Derivatives and Hedging The changes in AOCI by component for the nine months ended October 1, 2015 and September 25, 2014 were as follows (in millions): Nine Months Ended October 1, 2015 September 25, 2014 Income Statement Location Balance at beginning of period $ (1.6 ) $ (11.6 ) Amounts reclassified from AOCI: Amortization on discontinued cash flow hedges 1.6 7.6 Amortization derivatives Total amounts reclassified from AOCI 1.6 7.6 Net other comprehensive income 1.6 7.6 Balance at end of period $ — $ (4.0 ) |
The Company (Policies)
The Company (Policies) | 9 Months Ended |
Oct. 01, 2015 | |
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”). 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 January 1, 2015 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 January 1, 2015. In the opinion of management, all adjustments (which include only normal recurring 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 3— Related Party Transactions |
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. |
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 the fact that the majority of accounts receivable are with 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 October 1, 2015 and January 1, 2015, there were no advertising agency groups or individual customers through which the Company sources national advertising revenue representing more than 10% of the Company’s outstanding gross receivable balance. During the three and nine months ended October 1, 2015 and the three months ended September 25, 2014, there were no customers that accounted for more than 10% of revenue. During the nine months ended September 25, 2014, revenue related to advertisements of NCM LLC’s founding members’ beverage supplier accounted for 10.4% of total 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. In 2015 and 2014, NCM, Inc. did not grant stock options. In 2015 and 2014, the restricted stock grants for Company officers vest upon the achievement of NCM, Inc. performance measures and/or service conditions, while non-officer 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 October 1, 2015 and September 25, 2014 and the nine months ended October 1, 2015 and September 25, 2014, NCM, Inc. acquired 6,829, 4,799, 267,941 and 227,851 units, respectively, due to the vesting of restricted stock and restricted stock units and exercise of stock options and contributed $0.1 million, $0.0 million, $1.2 million and $0.8 million to NCM LLC for the three months ended October 1, 2015 and September 25, 2014 and the nine months ended October 1, 2015 and September 25, 2014, respectively. In connection with NCM, Inc.’s March 2014 special cash dividend of $0.50 per share and pursuant to the antidilution adjustment terms of NCM, Inc.’s Equity Incentive Plan, the exercise price and the number of shares of common stock subject to options held by option holders were adjusted to prevent dilution and restore their economic value that existed immediately before the special dividend. The antidilution adjustments made with respect to such options resulted in a decrease in the range of exercise prices from $5.35 - $24.68 per share to $5.18 - $23.90 per share and an increase in the aggregate number of shares issuable upon exercise of such options by 98,589 shares, or 3.3%, of previously outstanding options. The number of shares authorized under the Equity Incentive Plan increased by an equivalent number of shares. There were no accounting consequences for the changes made to reduce the exercise prices and increase the number of underlying options as a result of the special cash dividend because the aggregate fair values of the awards immediately before and after the modifications were the same. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update 2014-09, Revenue from Contracts with Customers (Topic 606) In January 2015, the FASB issued Accounting Standards Update 2015-01, Income Statement Extraordinary and Unusual Items (Subtopic 225-20): Simplifying Income Statement Presentation by Eliminating the Concept of Extraordinary Items In February 2015, the FASB issued Accounting Standards Update 2015-02, Consolidation (Topic 810): Amendments to the Consolidation Analysis In April 2015, the FASB issued Accounting Standards Update 2015-03, Interest - Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs In addition, in August 2015, Accounting Standards Update 2015-15, Interest — Imputation of Interest, was released which added SEC paragraphs pursuant to the SEC Staff Announcement at the June 18, 2015 Emerging Issues Task Force (EITF) meeting about the presentation and subsequent measurement of debt issuance costs associated with line-of-credit arrangements. Given the absence of authoritative guidance within ASU 2015-03 for debt issuance costs related to line-of-credit arrangements, ASU 2015-15 states the SEC staff would not object to an entity deferring and presenting debt issuance costs as an asset and subsequently amortizing the deferred debt issuance costs ratably over the term of the line-of-credit arrangement, regardless of whether there are any outstanding borrowings on the line-of-credit arrangement. The impact of ASU 2015-03 and ASU 2015-15 on the Company’s Financial Statements includes a reclassification of net deferred financing costs related to the Company’s Term Loans, Senior Secured Notes and Senior Unsecured Notes to be presented in the Balance Sheets as a direct deduction from the carrying amount of those borrowings, while net deferred financing costs related to the Company’s Revolving Credit Facility will remain an asset. As of October 1, 2015, the Company deferred financing costs related to its Term Loans, Senior Secured Notes and Senior Unsecured Notes. In April 2015, the FASB issued Accounting Standards Update Intangibles-Goodwill and Other – Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Fees Paid in a Cloud Computing Arrangement” (“ASU 2015-05”) If a cloud computing arrangement includes a software license, then the customer should account for the software license element of the arrangement consistent with the acquisition of other software licenses. If a cloud computing arrangement does not include a software license, the customer should account for the arrangement as a service contract. adoption permitted. The Company does not expect the application of ASU 2015-05 to have a material impact in the unaudited Condensed Financial Statements or notes thereto. |
Related-Party Transactions (Tab
Related-Party Transactions (Tables) | 9 Months Ended |
Oct. 01, 2015 | |
Related Party Transactions [Abstract] | |
Schedule Of Related Party Transactions | Three Months Ended Nine Months Ended Included in the Condensed Statements of Income: October 1, 2015 September 25, 2014 October 1, 2015 September 25, Revenue: Beverage concessionaire revenue (included in advertising revenue) (1) $ 6.4 $ 9.0 $ 23.0 $ 28.2 Advertising inventory revenue (included in advertising revenue) (2) 0.1 0.1 0.2 0.2 Operating expenses: Theatre access fee (3) 17.6 17.0 54.0 52.3 Purchase of movie tickets and concession products and rental of theatre space (included in selling and marketing costs) (4) 0.4 0.2 0.9 0.7 Purchase of movie tickets and concession products and rental of theatre space (included in other administrative and other costs) — — 0.1 0.1 Administrative fee - managing member (5) 3.9 2.1 10.7 7.9 Non-operating expenses: Interest income from notes receivable (included in interest income) (6) 0.2 0.3 0.7 0.9 (1) For the three months ended October 1, 2015, 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 second equivalent cost per thousand (“CPM”) rate specified by the ESA. For the first six months of 2015 and for the three and nine months ended September 25, 2014, the founding members purchased 60 seconds of on-screen advertising time. (2) The value of such purchases is calculated by reference to NCM LLC’s advertising rate card. (3) Comprised of payments per theatre attendee and payments per digital screen with respect to the founding member theatres 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 President and Chief Executive Officer, President of Sales and Marketing, Interim Co-Chief Financial Officers, Executive Vice President and Chief Operations Officer and Chief Technology Officer and Executive Vice President and 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, NCM LLC sold its Fathom Events business to a newly formed limited liability company (AC JV, LLC) owned 32% by each of the founding members and 4% by NCM LLC. In consideration for the sale, NCM LLC received a total of $25.0 million in promissory notes from its founding members (one-third or approximately $8.3 million from each founding member). The notes bear interest at a fixed rate of 5.0% per annum, compounded annually. Interest and principal payments are due annually in six equal installments commencing on the first anniversary of the closing. As of Included in the Condensed Balance Sheets: October 1, 2015 January 1, 2015 Purchase of movie tickets and concession products (included in Prepaid expenses) (1) $ 0.2 $ — Current portion of notes receivable - founding members (2) 4.2 4.2 Long-term portion of notes receivable - founding members (2) 16.6 16.6 Interest receivable on notes receivable (included in other current assets) (2) 0.7 — Prepaid administrative fees to managing member (3) 0.6 0.7 Common unit adjustments and integration payments, net of amortization (included in intangible assets) (4) 472.7 458.3 (1) Used primarily for marketing to NCM LLC’s advertising clients. (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 2— for further information on common unit adjustments and integration payments. |
Schedule Of Mandatory Distributions To Members | Three Months Ended Nine Months Ended October 1, 2015 September 25, 2014 October 1, 2015 September 25, 2014 AMC $ 6.8 $ 6.0 $ 13.7 $ 12.8 Cinemark 8.8 7.7 17.8 16.4 Regal 9.1 8.1 18.3 17.2 Total founding members 24.7 21.8 49.8 46.4 NCM, Inc. 20.4 18.5 41.1 39.4 Total $ 45.1 $ 40.3 $ 90.9 $ 85.8 |
Schedule Of Amounts Due To Founding Members | AMC Cinemark Regal Total Theatre access fees, net of beverage revenues $ 1.2 $ 0.9 $ 1.2 $ 3.3 Cost and other reimbursement (0.5 ) (0.3 ) 0.1 (0.7 ) Distributions payable to founding members 6.8 8.8 9.1 24.7 Total amounts due to founding members $ 7.5 $ 9.4 $ 10.4 $ 27.3 Amounts due to founding members as of January 1, 2015 were comprised of the following (in millions): AMC Cinemark Regal Total Theatre access fees, net of beverage revenues $ 0.8 0.8 1.2 $ 2.8 Cost and other reimbursement (0.6 ) (0.2 ) — (0.8 ) Distributions payable to founding members 9.1 11.6 12.2 32.9 Total amounts due to founding members $ 9.3 $ 12.2 $ 13.4 $ 34.9 |
Schedule Of Amounts Due To/From Managing Member | As of October 1, 2015 January 1, 2015 Distributions payable to managing member $ 20.4 $ 27.7 Cost and other reimbursement (4.9 ) (4.1 ) Total amounts due to managing member $ 15.5 $ 23.6 |
Borrowings (Tables)
Borrowings (Tables) | 9 Months Ended |
Oct. 01, 2015 | |
Debt Disclosure [Abstract] | |
Schedule Of Outstanding Debt | The following table summarizes the Company’s total outstanding debt as of October 1, 2015 and January 1, 2015 and the significant terms of its borrowing arrangements (in millions): Outstanding Balance as of Borrowings October 1, 2015 January 1, 2015 Maturity Date Interest Revolving Credit Facility $ 66.0 $ 22.0 November 26, 2019 (1) Term Loans 270.0 270.0 November 26, 2019 (1) Senior Unsecured Notes 200.0 200.0 July 15, 2021 7.875% Senior Secured Notes 400.0 400.0 April 15, 2022 6.000% Total $ 936.0 $ 892.0 (1) The interest rates on the revolving credit facility and term loan are described below. |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 9 Months Ended |
Oct. 01, 2015 | |
Fair Value Disclosures [Abstract] | |
Schedule Of Other Investments | Other investments consisted of the following (in millions): As of October 1, January 1, 2015 Investment in AC JV, LLC (1) $ 1.4 $ 1.3 Other investments (2) 2.9 1.2 Total $ 4.3 $ 2.5 (1) Refer to Note 3— . (2) During 2014 and 2015, the Company received equity securities in privately held companies as consideration for a portion of advertising contracts. The equity securities were accounted for under the cost method and represent an ownership of less than 20%. The Company does not exert significant influence on these companies’ operating or financial activities. |
Estimated Fair Values Of Company's Financial Instruments | As of October 1, 2015 As of January 1, 2015 Carrying Fair Value (1) Carrying Value Fair Value (1) Term Loans $ 270.0 $ 268.9 $ 270.0 $ 257.9 Senior Unsecured Notes 200.0 207.5 200.0 210.8 Senior Secured Notes 400.0 405.3 400.0 400.8 (1) The Company has estimated the fair value on an average of at least two non-binding broker quotes and the Company’s analysis. 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. |
Derivative Instruments And He20
Derivative Instruments And Hedging Activities (Tables) | 9 Months Ended |
Oct. 01, 2015 | |
Derivative Instruments And Hedging Activities Disclosure [Abstract] | |
Schedule Of Changes In AOCI By Component | The changes in AOCI by component for the nine months ended October 1, 2015 and September 25, 2014 were as follows (in millions): Nine Months Ended October 1, 2015 September 25, 2014 Income Statement Location Balance at beginning of period $ (1.6 ) $ (11.6 ) Amounts reclassified from AOCI: Amortization on discontinued cash flow hedges 1.6 7.6 Amortization derivatives Total amounts reclassified from AOCI 1.6 7.6 Net other comprehensive income 1.6 7.6 Balance at end of period $ — $ (4.0 ) |
The Company (Narrative) (Detail
The Company (Narrative) (Details) $ / shares in Units, $ in Millions | Mar. 17, 2015USD ($) | Oct. 01, 2015USD ($)itemcustomer$ / sharesshares | Sep. 25, 2014USD ($)customershares | Mar. 27, 2014$ / sharesshares | Oct. 01, 2015USD ($)Segmentitemcustomer$ / sharesshares | Sep. 25, 2014USD ($)shares | Jan. 01, 2015USD ($)item |
General Company Information [Line Items] | |||||||
Long-term exhibitor services agreements remaining maturity | 21 years | ||||||
Common membership units outstanding | shares | 130,723,361 | 130,723,361 | |||||
Membership units exchangeable into common stock ratio | 100.00% | ||||||
Payments for merger-related costs | $ 15 | ||||||
Merger termination fee and related merger costs | $ 41.8 | ||||||
Number of reported segment | Segment | 1 | ||||||
Number of shares acquired due to vesting and exercise of options | shares | 6,829 | 4,799 | 267,941 | 227,851 | |||
Unit settlement for share-based compensation | $ 0.1 | $ 0 | $ 1.2 | $ 0.8 | |||
Net deferred financing costs | $ 11.2 | $ 11.2 | |||||
Special Dividend [Member] | |||||||
General Company Information [Line Items] | |||||||
Cash dividends declared, per share | $ / shares | $ 0.50 | $ 0.50 | |||||
Antidilution Adjustment [Member] | |||||||
General Company Information [Line Items] | |||||||
Increase in aggregate number of shares issuable upon exercise | shares | 98,589 | ||||||
Percentage of previously outstanding options | 3.30% | ||||||
Accounts Receivable [Member] | Credit Concentration Risk [Member] | |||||||
General Company Information [Line Items] | |||||||
Number of advertising agency groups contributing to more than 10% of outstanding gross receivable balance | item | 0 | 0 | 0 | ||||
Sales Revenue, Net [Member] | Customer Concentration Risk [Member] | |||||||
General Company Information [Line Items] | |||||||
Number of customers contributing to more than 10% of revenue | customer | 0 | 0 | 0 | ||||
Sales Revenue, Net [Member] | Customer Concentration Risk [Member] | Founding Members [Member] | |||||||
General Company Information [Line Items] | |||||||
Percentage of revenue | 10.40% | ||||||
Screenvision, LLC [Member] | |||||||
General Company Information [Line Items] | |||||||
Merger termination payment | $ 26.8 | ||||||
Reverse termination fee, amount of lower payment | $ 2 | ||||||
Merger termination fee and related merger costs | $ 7.5 | $ 7.5 | |||||
NCM Inc. [Member] | |||||||
General Company Information [Line Items] | |||||||
Common membership units outstanding | shares | 59,018,867 | 59,018,867 | |||||
Percentage of common membership units outstanding | 45.20% | ||||||
NCM Inc. [Member] | Screenvision, LLC [Member] | |||||||
General Company Information [Line Items] | |||||||
Merger termination fee and related merger costs | $ 7.5 | $ 7.5 | |||||
Regal [Member] | |||||||
General Company Information [Line Items] | |||||||
Common membership units outstanding | shares | 26,409,784 | 26,409,784 | |||||
Percentage of common membership units outstanding | 20.20% | ||||||
Cinemark [Member] | |||||||
General Company Information [Line Items] | |||||||
Common membership units outstanding | shares | 25,631,046 | 25,631,046 | |||||
Percentage of common membership units outstanding | 19.60% | ||||||
AMC [Member] | |||||||
General Company Information [Line Items] | |||||||
Common membership units outstanding | shares | 19,663,664 | 19,663,664 | |||||
Percentage of common membership units outstanding | 15.00% | ||||||
Minimum [Member] | |||||||
General Company Information [Line Items] | |||||||
Range of terms, in years | 3 years | ||||||
Weighted average exercise price | $ / shares | $ 5.35 | ||||||
Minimum [Member] | Antidilution Adjustment [Member] | |||||||
General Company Information [Line Items] | |||||||
Weighted average exercise price | $ / shares | 5.18 | ||||||
Maximum [Member] | |||||||
General Company Information [Line Items] | |||||||
Range of terms, in years | 20 years | ||||||
Weighted average exercise price | $ / shares | 24.68 | ||||||
Maximum [Member] | Antidilution Adjustment [Member] | |||||||
General Company Information [Line Items] | |||||||
Weighted average exercise price | $ / shares | $ 23.90 |
Intangible Assets (Narrative) (
Intangible Assets (Narrative) (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||||
Oct. 01, 2015 | Apr. 02, 2015 | Sep. 25, 2014 | Mar. 27, 2014 | Oct. 01, 2015 | Sep. 25, 2014 | |
Finite-Lived Intangible Assets [Line Items] | ||||||
Common membership units issued | 2,160,915 | 1,087,911 | ||||
Increase (decrease) in intangible assets, net | $ 31.4 | $ 16.4 | ||||
Minimum [Member] | ||||||
Finite-Lived Intangible Assets [Line Items] | ||||||
Percentage increase (decrease) in theatre attendance for Common Unit adjustment to occur | (2.00%) | |||||
Maximum [Member] | ||||||
Finite-Lived Intangible Assets [Line Items] | ||||||
Percentage increase (decrease) in theatre attendance for Common Unit adjustment to occur | 2.00% | |||||
AMC And Cinemark Integration Payments [Member] | ||||||
Finite-Lived Intangible Assets [Line Items] | ||||||
Increase (decrease) in intangible assets, net | $ (0.7) | $ (0.6) | $ (1.8) | $ (1.4) | ||
Founding Member Payment Election [Member] | ||||||
Finite-Lived Intangible Assets [Line Items] | ||||||
Increase (decrease) in intangible assets, net | $ (0.8) | $ (0.6) | $ (1.9) | $ (1.5) |
Related-Party Transactions (Nar
Related-Party Transactions (Narrative) (Details) - USD ($) | Mar. 17, 2015 | Oct. 01, 2015 | Jul. 02, 2015 | Apr. 02, 2015 | Sep. 25, 2014 | Oct. 01, 2015 | Sep. 25, 2014 | Jan. 01, 2015 | Dec. 26, 2013 | |
Related Party Transaction [Line Items] | ||||||||||
On-screen advertising time to satisfy agreement obligations, in seconds | 30 seconds | |||||||||
Payments for merger-related costs | $ 15,000,000 | |||||||||
Merger termination fee and related merger costs | 41,800,000 | |||||||||
Cash receivable declared | $ 25,500,000 | |||||||||
Cash payments to members | $ 0 | |||||||||
Cash distributions declared to members | $ 45,100,000 | $ 40,300,000 | 90,900,000 | $ 85,800,000 | ||||||
AC JV, LLC [Member] | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Ownership percentage | 4.00% | |||||||||
Investment in AC JV, LLC | [1] | 1,400,000 | 1,400,000 | $ 1,300,000 | ||||||
Equity in earnings of non-consolidated entities (included in other non-operating expense) | 0 | 0 | 100,000 | 100,000 | ||||||
Founding Members [Member] | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Cash receivable declared | 14,000,000 | |||||||||
Cash payment due to founding members/managing member | 24,700,000 | 24,700,000 | ||||||||
Cash distributions declared to members | 24,700,000 | 21,800,000 | 49,800,000 | 46,400,000 | ||||||
Managing Member [Member] | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Cash distributions declared to members | 20,400,000 | |||||||||
Regal [Member] | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Cash distributions declared to members | 9,100,000 | 8,100,000 | 18,300,000 | 17,200,000 | ||||||
Regal [Member] | AC JV, LLC [Member] | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Ownership percentage | 32.00% | |||||||||
Cinemark [Member] | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Cash distributions declared to members | 8,800,000 | 7,700,000 | 17,800,000 | 16,400,000 | ||||||
Cinemark [Member] | AC JV, LLC [Member] | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Ownership percentage | 32.00% | |||||||||
AMC [Member] | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Cash distributions declared to members | 6,800,000 | 6,000,000 | 13,700,000 | 12,800,000 | ||||||
AMC [Member] | AC JV, LLC [Member] | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Ownership percentage | 32.00% | |||||||||
Starplex [Member] | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Advertising operating costs, related party affiliates | 800,000 | 1,300,000 | ||||||||
Accounts payable, related party affiliates | 900,000 | |||||||||
LA Live [Member] | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Advertising operating costs, related party affiliates | 100,000 | 0 | 200,000 | 100,000 | ||||||
Accounts payable, related party affiliates | 100,000 | 100,000 | 100,000 | |||||||
Interactive Media Company [Member] | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Related party revenue | 0 | 0 | 0 | 100,000 | ||||||
Accounts receivable | 300,000 | 300,000 | 300,000 | |||||||
AEG Live [Member] | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Related party revenue | 300,000 | $ 200,000 | 1,200,000 | $ 200,000 | ||||||
Accounts receivable | $ 300,000 | 300,000 | 400,000 | |||||||
NCM Inc. [Member] | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Cash receivable declared | $ 11,500,000 | |||||||||
Screenvision, LLC [Member] | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Merger termination payment | $ 26,800,000 | |||||||||
Reverse termination fee, amount of lower payment | $ 2,000,000 | |||||||||
Merger termination fee and related merger costs | 7,500,000 | 7,500,000 | ||||||||
Screenvision, LLC [Member] | NCM Inc. [Member] | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Merger termination fee and related merger costs | $ 7,500,000 | $ 7,500,000 | ||||||||
Minimum [Member] | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
On-screen advertising time to satisfy agreement obligations, in seconds | 30 seconds | |||||||||
Maximum [Member] | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
On-screen advertising time to satisfy agreement obligations, in seconds | 60 seconds | |||||||||
[1] | Refer to Note 3—Related Party Transactions. |
Related-Party Transactions (Sum
Related-Party Transactions (Summary Of Transactions Between The Company And The Founding Members And Managing Member Included In Statements Of Income) (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | 9 Months Ended | 12 Months Ended | |||
Oct. 01, 2015 | Sep. 25, 2014 | Jul. 02, 2015 | Oct. 01, 2015 | Sep. 25, 2014 | Dec. 26, 2013 | ||
Related Party Transaction [Line Items] | |||||||
Advertising revenue | $ 111.7 | $ 100.8 | $ 310.1 | $ 270.9 | |||
Theatre access fee | [1] | 17.6 | 17 | 54 | 52.3 | ||
Selling and marketing costs | 16.9 | 14.7 | 49.9 | 43.8 | |||
Administrative and other costs | 5.4 | 4.8 | 15.6 | 13.7 | |||
Administrative fee—managing member | [2] | 3.9 | 2.1 | 10.7 | 7.9 | ||
Interest income from notes receivable (included in interest income) | [3] | $ 0.2 | $ 0.3 | $ 0.7 | $ 0.9 | ||
On-screen advertising time purchased, in seconds | 60 seconds | 60 seconds | 60 seconds | ||||
On-screen advertising time to satisfy agreement obligations, in seconds | 30 seconds | ||||||
AC JV, LLC [Member] | |||||||
Related Party Transaction [Line Items] | |||||||
Ownership percentage | 4.00% | ||||||
One Founding Member [Member] | |||||||
Related Party Transaction [Line Items] | |||||||
On-screen advertising time purchased, in seconds | 30 seconds | ||||||
Two Founding Members [Member] | |||||||
Related Party Transaction [Line Items] | |||||||
On-screen advertising time purchased, in seconds | 60 seconds | ||||||
Founding Members [Member] | AC JV, LLC [Member] | |||||||
Related Party Transaction [Line Items] | |||||||
Promissory notes receivable from founding members | $ 25 | ||||||
Interest rate on notes receivable | 5.00% | ||||||
Notes receivable payment term | Interest and principal payments are due annually in six equal installments commencing on the first anniversary of the closing. | ||||||
AMC [Member] | AC JV, LLC [Member] | |||||||
Related Party Transaction [Line Items] | |||||||
Ownership percentage | 32.00% | ||||||
Promissory notes receivable from founding members | $ 8.3 | ||||||
Cinemark [Member] | AC JV, LLC [Member] | |||||||
Related Party Transaction [Line Items] | |||||||
Ownership percentage | 32.00% | ||||||
Promissory notes receivable from founding members | $ 8.3 | ||||||
Regal [Member] | AC JV, LLC [Member] | |||||||
Related Party Transaction [Line Items] | |||||||
Ownership percentage | 32.00% | ||||||
Promissory notes receivable from founding members | $ 8.3 | ||||||
Maximum [Member] | |||||||
Related Party Transaction [Line Items] | |||||||
On-screen advertising time which founding members have right to purchase, in seconds | 90 seconds | ||||||
On-screen advertising time to satisfy agreement obligations, in seconds | 60 seconds | ||||||
Beverage Concessionaire [Member] | |||||||
Related Party Transaction [Line Items] | |||||||
Advertising revenue | [4] | $ 6.4 | $ 9 | $ 23 | $ 28.2 | ||
Advertising Inventory [Member] | |||||||
Related Party Transaction [Line Items] | |||||||
Advertising revenue | [5] | 0.1 | 0.1 | 0.2 | 0.2 | ||
Purchase Of Movie Tickets And Concession Products And Rental Of Theatre Space [Member] | |||||||
Related Party Transaction [Line Items] | |||||||
Selling and marketing costs | [6] | $ 0.4 | $ 0.2 | 0.9 | 0.7 | ||
Administrative and other costs | $ 0.1 | $ 0.1 | |||||
[1] | Comprised of payments per theatre attendee and payments per digital screen with respect to the founding member theatres included in the Company’s network, including payments for access to higher quality digital cinema equipment. | ||||||
[2] | 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 President and Chief Executive Officer, President of Sales and Marketing, Interim Co-Chief Financial Officers, Executive Vice President and Chief Operations Officer and Chief Technology Officer and Executive Vice President and 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. | ||||||
[3] | On December 26, 2013, NCM LLC sold its Fathom Events business to a newly formed limited liability company (AC JV, LLC) owned 32% by each of the founding members and 4% by NCM LLC. In consideration for the sale, NCM LLC received a total of $25.0 million in promissory notes from its founding members (one-third or approximately $8.3 million from each founding member). The notes bear interest at a fixed rate of 5.0% per annum, compounded annually. Interest and principal payments are due annually in six equal installments commencing on the first anniversary of the closing. | ||||||
[4] | For the three months ended October 1, 2015, two of the founding members purchased 60 seconds of on-screen advertising time and one founding member purchased 30 seconds (with all three founding members having a right to purchase up to 90 seconds) from NCM LLC to satisfy their obligations under their beverage concessionaire agreements at a 30 second equivalent cost per thousand (“CPM”) rate specified by the ESA. For the first six months of 2015 and for the three and nine months ended September 25, 2014, the founding members purchased 60 seconds of on-screen advertising time. | ||||||
[5] | The value of such purchases is calculated by reference to NCM LLC’s advertising rate card. | ||||||
[6] | Used primarily for marketing to NCM LLC’s advertising clients. |
Related-Party Transactions (S25
Related-Party Transactions (Summary Of Transactions Between The Company And The Founding Members And Managing Member Included In Balance Sheet) (Details) - USD ($) $ in Millions | Oct. 01, 2015 | Jan. 01, 2015 | |
Related Party Transaction [Line Items] | |||
Prepaid expenses | $ 2.5 | $ 3.3 | |
Current portion of notes receivable - founding members | [1] | 4.2 | 4.2 |
Long-term notes receivable, net of current portion - founding members | [1] | 16.6 | 16.6 |
Interest receivable on notes receivable | [1] | 0.7 | |
Prepaid administrative fees to managing member | [2] | 0.6 | 0.7 |
Common unit adjustments and integration payments, net of amortization (included in Intangible assets) | 503.4 | 488.6 | |
Common Unit Adjustments And Integration Payments [Member] | |||
Related Party Transaction [Line Items] | |||
Common unit adjustments and integration payments, net of amortization (included in Intangible assets) | [3] | 472.7 | $ 458.3 |
Purchase Of Movie Tickets And Concession Products [Member] | |||
Related Party Transaction [Line Items] | |||
Prepaid expenses | [4] | $ 0.2 | |
[1] | Refer to the discussion of notes receivable from the founding members above. | ||
[2] | 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. | ||
[3] | Refer to Note 2—Intangible Assets for further information on common unit adjustments and integration payments. | ||
[4] | Used primarily for marketing to NCM LLC’s advertising clients. |
Related-Party Transactions (Sch
Related-Party Transactions (Schedule Of Mandatory Distributions To Members) (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Oct. 01, 2015 | Sep. 25, 2014 | Oct. 01, 2015 | Sep. 25, 2014 | |
Related Party Transaction [Line Items] | ||||
Cash distributions declared to members | $ 45.1 | $ 40.3 | $ 90.9 | $ 85.8 |
AMC [Member] | ||||
Related Party Transaction [Line Items] | ||||
Cash distributions declared to members | 6.8 | 6 | 13.7 | 12.8 |
Cinemark [Member] | ||||
Related Party Transaction [Line Items] | ||||
Cash distributions declared to members | 8.8 | 7.7 | 17.8 | 16.4 |
Regal [Member] | ||||
Related Party Transaction [Line Items] | ||||
Cash distributions declared to members | 9.1 | 8.1 | 18.3 | 17.2 |
Founding Members [Member] | ||||
Related Party Transaction [Line Items] | ||||
Cash distributions declared to members | 24.7 | 21.8 | 49.8 | 46.4 |
NCM Inc. [Member] | ||||
Related Party Transaction [Line Items] | ||||
Cash distributions declared to members | $ 20.4 | $ 18.5 | $ 41.1 | $ 39.4 |
Related-Party Transactions (S27
Related-Party Transactions (Schedule Of Amounts Due To Founding Members) (Details) - USD ($) $ in Millions | Oct. 01, 2015 | Jan. 01, 2015 |
Related Party Transaction [Line Items] | ||
Theatre access fees, net of beverage revenues | $ 3.3 | $ 2.8 |
Cost and other reimbursement | (0.7) | (0.8) |
Distributions payable to founding members | 24.7 | 32.9 |
Total amounts due to founding members | 27.3 | 34.9 |
AMC [Member] | ||
Related Party Transaction [Line Items] | ||
Theatre access fees, net of beverage revenues | 1.2 | 0.8 |
Cost and other reimbursement | (0.5) | (0.6) |
Distributions payable to founding members | 6.8 | 9.1 |
Total amounts due to founding members | 7.5 | 9.3 |
Cinemark [Member] | ||
Related Party Transaction [Line Items] | ||
Theatre access fees, net of beverage revenues | 0.9 | 0.8 |
Cost and other reimbursement | (0.3) | (0.2) |
Distributions payable to founding members | 8.8 | 11.6 |
Total amounts due to founding members | 9.4 | 12.2 |
Regal [Member] | ||
Related Party Transaction [Line Items] | ||
Theatre access fees, net of beverage revenues | 1.2 | 1.2 |
Cost and other reimbursement | 0.1 | |
Distributions payable to founding members | 9.1 | 12.2 |
Total amounts due to founding members | $ 10.4 | $ 13.4 |
Related-Party Transactions (S28
Related-Party Transactions (Schedule Of Amounts Due To/From Managing Member) (Details) - USD ($) $ in Millions | Oct. 01, 2015 | Jan. 01, 2015 |
Related Party Transaction [Line Items] | ||
Distributions payable to managing member | $ 24.7 | $ 32.9 |
Cost and other reimbursement | (0.7) | (0.8) |
Total amounts due to managing member | 15.5 | 23.6 |
Managing Member [Member] | ||
Related Party Transaction [Line Items] | ||
Distributions payable to managing member | 20.4 | 27.7 |
Cost and other reimbursement | (4.9) | (4.1) |
Total amounts due to managing member | $ 15.5 | $ 23.6 |
Borrowings (Schedule Of Outstan
Borrowings (Schedule Of Outstanding Debt) (Details) - USD ($) $ in Millions | 9 Months Ended | ||
Oct. 01, 2015 | Jan. 01, 2015 | ||
Debt Instrument [Line Items] | |||
Outstanding Balance | $ 936 | $ 892 | |
Term Loans [Member] | |||
Debt Instrument [Line Items] | |||
Outstanding Balance | [1] | $ 270 | 270 |
Maturity Date | [1] | Nov. 26, 2019 | |
Senior Unsecured Notes [Member] | |||
Debt Instrument [Line Items] | |||
Outstanding Balance | $ 200 | 200 | |
Maturity Date | Jul. 15, 2021 | ||
Interest Rate | 7.875% | ||
Senior Secured Notes [Member] | |||
Debt Instrument [Line Items] | |||
Outstanding Balance | $ 400 | 400 | |
Maturity Date | Apr. 15, 2022 | ||
Interest Rate | 6.00% | ||
Revolving Credit Facility [Member] | |||
Debt Instrument [Line Items] | |||
Outstanding Balance | [1] | $ 66 | $ 22 |
Maturity Date | [1] | Nov. 26, 2019 | |
[1] | The interest rates on the revolving credit facility and term loan are described below. |
Borrowings (Narrative) (Details
Borrowings (Narrative) (Details) - USD ($) | 9 Months Ended | |
Oct. 01, 2015 | Jan. 01, 2015 | |
Senior Unsecured Notes Due 2021 [Member] | ||
Debt Instrument [Line Items] | ||
Debt instrument face amount | $ 200,000,000 | |
Stated interest rate | 7.875% | |
Date of first required interest payment | Jan. 15, 2012 | |
Senior Secured Notes Due 2022 [Member] | ||
Debt Instrument [Line Items] | ||
Debt instrument face amount | $ 400,000,000 | |
Stated interest rate | 6.00% | |
Date of first required interest payment | Oct. 15, 2012 | |
Term Loans [Member] | ||
Debt Instrument [Line Items] | ||
Debt instrument face amount | $ 270,000,000 | $ 270,000,000 |
Weighted-average interest rate | 2.95% | |
Term Loans [Member] | LIBOR [Member] | ||
Debt Instrument [Line Items] | ||
Basis spread on variable rate, percent | 2.75% | |
Term Loans [Member] | Base Rate [Member] | ||
Debt Instrument [Line Items] | ||
Basis spread on variable rate, percent | 1.75% | |
Senior Secured Credit Facility [Member] | ||
Debt Instrument [Line Items] | ||
Senior secured leverage ratio | 320.00% | |
Senior Secured Credit Facility [Member] | Maximum [Member] | ||
Debt Instrument [Line Items] | ||
Senior secured leverage ratio | 650.00% | |
Revolving Credit Facility [Member] | ||
Debt Instrument [Line Items] | ||
Borrowing amount of credit facility | $ 135,000,000 | $ 135,000,000 |
Remaining borrowing capacity on credit facility | $ 69,000,000 | |
Unused line fee, percent | 0.50% | |
Weighted-average interest rate | 2.51% |
Commitments And Contingencies (
Commitments And Contingencies (Narrative) (Details) | 9 Months Ended |
Oct. 01, 2015USD ($) | |
Other Commitments [Line Items] | |
Maximum potential payment | $ 37,500,000 |
Minimum [Member] | |
Other Commitments [Line Items] | |
Range of terms, in years | 3 years |
Maximum [Member] | |
Other Commitments [Line Items] | |
Range of terms, in years | 20 years |
Fair Value Measurements (Schedu
Fair Value Measurements (Schedule Of Other Investments) (Details) - USD ($) $ in Millions | 9 Months Ended | 12 Months Ended | |
Oct. 01, 2015 | Jan. 01, 2015 | ||
Schedule Of Fair Value Of Separate Accounts By Major Category Of Investment [Line Items] | |||
Other investments | [1] | $ 2.9 | $ 1.2 |
Total other investments | $ 4.3 | $ 2.5 | |
Cost-method ownership percentage | 20.00% | 20.00% | |
AC JV, LLC [Member] | |||
Schedule Of Fair Value Of Separate Accounts By Major Category Of Investment [Line Items] | |||
Investment in AC JV, LLC | [2] | $ 1.4 | $ 1.3 |
[1] | During 2014 and 2015, the Company received equity securities in privately held companies as consideration for a portion of advertising contracts. The equity securities were accounted for under the cost method and represent an ownership of less than 20%. The Company does not exert significant influence on these companies’ operating or financial activities. | ||
[2] | Refer to Note 3—Related Party Transactions. |
Fair Value Measurements (Narrat
Fair Value Measurements (Narrative) (Details) - USD ($) $ in Millions | Oct. 01, 2015 | Jan. 01, 2015 |
Founding Members [Member] | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Promissory notes receivable from founding members | $ 20.8 | $ 20.8 |
Fair Value Measurements (Estima
Fair Value Measurements (Estimated Fair Values Of Company's Financial Instruments) (Details) - USD ($) $ in Millions | Oct. 01, 2015 | Jan. 01, 2015 | |
Term Loans [Member] | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Debt Instrument, Carrying Value | $ 270 | $ 270 | |
Debt Instrument, Fair Value | [1] | 268.9 | 257.9 |
Senior Unsecured Notes [Member] | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Debt Instrument, Carrying Value | 200 | 200 | |
Debt Instrument, Fair Value | [1] | 207.5 | 210.8 |
Senior Secured Notes [Member] | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Debt Instrument, Carrying Value | 400 | 400 | |
Debt Instrument, Fair Value | [1] | $ 405.3 | $ 400.8 |
[1] | The Company has estimated the fair value on an average of at least two non-binding broker quotes and the Company’s analysis. 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. |
Derivative Instruments And He35
Derivative Instruments And Hedging Activities (Narrative) (Details) - USD ($) | Oct. 01, 2015 | Jan. 01, 2015 |
Derivative [Line Items] | ||
Derivative asset | $ 0 | $ 0 |
Derivative liability | 0 | 0 |
Amounts outstanding related to discontinued cash flow hedges | 0 | |
Term Loans [Member] | ||
Derivative [Line Items] | ||
Debt instrument face amount | $ 270,000,000 | $ 270,000,000 |
Derivative Instruments And He36
Derivative Instruments And Hedging Activities (Schedule Of Changes in AOCI By Component) (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |
Sep. 25, 2014 | Oct. 01, 2015 | Sep. 25, 2014 | |
Derivative Instruments And Hedging Activities Disclosure [Abstract] | |||
Balance at beginning of period | $ (1.6) | $ (11.6) | |
Amortization on discontinued cash flow hedges | $ 2.6 | 1.6 | 7.6 |
Total amounts reclassified from AOCI | 1.6 | 7.6 | |
Net other comprehensive income | 1.6 | 7.6 | |
Balance at end of period | $ (4) | $ 0 | $ (4) |