Document And Entity Information
Document And Entity Information - shares | 3 Months Ended | |
Mar. 29, 2018 | May 03, 2018 | |
Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Mar. 29, 2018 | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q1 | |
Entity Registrant Name | National CineMedia, LLC | |
Entity Central Index Key | 1,527,190 | |
Entity Filer Category | Non-accelerated Filer | |
Current Fiscal Year End Date | --12-27 | |
Entity Common Stock, Shares Outstanding | 157,564,977 |
CONDENSED BALANCE SHEETS (UNAUD
CONDENSED BALANCE SHEETS (UNAUDITED) - USD ($) $ in Millions | Mar. 29, 2018 | Dec. 28, 2017 | |
CURRENT ASSETS: | |||
Cash and cash equivalents | $ 3.1 | $ 4.6 | |
Receivables, net of allowance of $5.7 and $6.0, respectively | 115 | 160.6 | |
Prepaid expenses | 4.2 | 4.2 | |
Prepaid administrative fees to managing member | [1] | 0.8 | 0.8 |
Current portion of notes receivable - founding members | [2] | 4.2 | 4.2 |
Other current assets | 0.2 | ||
Total current assets | 127.5 | 174.4 | |
NON-CURRENT ASSETS: | |||
Property and equipment, net of accumulated depreciation of $72.9 and $70.4, respectively | 31.5 | 30.7 | |
Intangible assets, net of accumulated amortization of $152.1 and $145.4, respectively | 724.2 | 717.2 | |
Long-term notes receivable, net of current portion - founding members | [2] | 4.1 | 4.1 |
Other investments | 3.1 | 3.5 | |
Debt issuance costs, net | 1.1 | 1.3 | |
Other assets | 1.4 | 1.5 | |
Total non-current assets | 765.4 | 758.3 | |
TOTAL ASSETS | 892.9 | 932.7 | |
CURRENT LIABILITIES: | |||
Accrued expenses | 16.7 | 19.5 | |
Accrued payroll and related expenses | 7.8 | 9.5 | |
Accounts payable | 15.3 | 16.2 | |
Deferred revenue | 6.1 | 7.1 | |
Total current liabilities | 64.5 | 123.3 | |
NON-CURRENT LIABILITIES: | |||
Long-term debt, net of debt issuance costs of $8.2 and $8.7, respectively | 944.8 | 923.3 | |
Other liabilities | 3.3 | 2.1 | |
Total non-current liabilities | 948.1 | 925.4 | |
Total liabilities | 1,012.6 | 1,048.7 | |
COMMITMENTS AND CONTINGENCIES (NOTE 5) | |||
MEMBERS’ EQUITY/(DEFICIT) | (119.7) | (116) | |
TOTAL LIABILITIES AND EQUITY/(DEFICIT) | $ 892.9 | $ 932.7 | |
[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 | Mar. 29, 2018 | Dec. 28, 2017 |
Statement Of Financial Position [Abstract] | ||
Allowance for doubtful accounts receivable | $ 5.7 | $ 6 |
Accumulated depreciation, property and equipment | 72.9 | 70.4 |
Accumulated amortization, intangible assets | 152.1 | 145.4 |
Debt issuance costs, long-term | $ 8.2 | $ 8.7 |
CONDENSED STATEMENTS OF INCOME
CONDENSED STATEMENTS OF INCOME (UNAUDITED) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 29, 2018 | Mar. 30, 2017 | ||
Income Statement [Abstract] | |||
REVENUE (including revenue from founding members of $8.0 and $8.4, respectively) | $ 80.2 | $ 71.9 | |
OPERATING EXPENSES: | |||
Advertising operating costs | 7 | 5 | |
Network costs | 3.5 | 4.2 | |
Theater access fees—founding members | [1] | 20.6 | 20.6 |
Selling and marketing costs | 16 | 18.1 | |
Administrative and other costs | 8.8 | 5.9 | |
Administrative fee—managing member | [2] | 3.8 | 3.4 |
Depreciation and amortization | 9.5 | 9.6 | |
Total | 69.2 | 66.8 | |
OPERATING INCOME | 11 | 5.1 | |
NON-OPERATING EXPENSES: | |||
Interest on borrowings | 13.8 | 13.2 | |
Interest income | (0.1) | (0.2) | |
Other non-operating income | (0.1) | ||
Total | 13.7 | 12.9 | |
LOSS BEFORE INCOME TAXES | (2.7) | (7.8) | |
Income tax expense | 0.3 | 0.1 | |
NET LOSS | $ (3) | $ (7.9) | |
[1] | Comprised of payments per theater attendee and payments per digital screen with respect to the founding member theaters included in the Company’s network, including payments for access to higher quality digital cinema equipment. | ||
[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 Chief Executive Officer, President, Chief Financial Officer, Executive Vice President, Chief Revenue Officer and Senior Vice President, General Counsel. In exchange for these services, NCM LLC reimburses NCM, Inc. for compensation paid to the officers (including share based compensation) and other expenses of the officers and for certain out-of-pocket costs. |
CONDENSED STATEMENTS OF INCOME5
CONDENSED STATEMENTS OF INCOME (PARENTHETICAL) (UNAUDITED) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 29, 2018 | Mar. 30, 2017 | |
Income Statement [Abstract] | ||
Revenue from founding members | $ 8 | $ 8.4 |
CONDENSED STATEMENTS OF CASH FL
CONDENSED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 29, 2018 | Mar. 30, 2017 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net loss | $ (3) | $ (7.9) |
Adjustments to reconcile net loss to net cash provided by operating activities: | ||
Depreciation and amortization | 9.5 | 9.6 |
Non-cash share-based compensation | 1.8 | 2 |
Impairment on investment | 0.4 | 1.4 |
Amortization of debt issuance costs | 0.7 | 0.7 |
Other | (0.1) | |
Changes in operating assets and liabilities: | ||
Receivables, net | 45.5 | 67.9 |
Accounts payable and accrued expenses | (5.5) | (10.5) |
Amounts due to founding members and managing member | (1.6) | (7.4) |
Deferred revenue | (1) | (3) |
Other, net | 1 | (0.7) |
Net cash provided by operating activities | 47.8 | 52 |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Purchases of property and equipment | (3.5) | (2.9) |
Purchases of intangible assets from network affiliates | (0.2) | |
Proceeds from notes receivable - founding members | 1.4 | |
Net cash used in investing activities | (3.5) | (1.7) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Proceeds from borrowings | 58 | 50 |
Repayments of borrowings | (37) | (35) |
Founding member integration payments and other encumbered theater payments | 9.4 | 1 |
Distributions to founding members and managing member | (74.5) | (70.8) |
Unit settlement for share-based compensation | (1.7) | 0.6 |
Net cash used in financing activities | (45.8) | (54.2) |
Cash, cash equivalents and restricted cash at beginning of period | 4.6 | 11 |
Cash, cash equivalents and restricted cash at end of period | 3.1 | 7.1 |
Supplemental disclosure of non-cash financing and investing activity: | ||
Purchase of an intangible asset with NCM LLC equity | 15.9 | 201.8 |
Accrued distributions to founding members and managing member | 16.5 | 8.2 |
Accrued integration and other encumbered theater payments due from founding members | 1.9 | |
Supplemental disclosure of cash flow information: | ||
Cash paid for interest | $ 11.6 | 9.8 |
Cash paid for income taxes, net of refunds | $ 0.3 |
The Company
The Company | 3 Months Ended |
Mar. 29, 2018 | |
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., wholly owned subsidiaries of AMC Entertainment, Inc. (“AMC”), Regal Cinemas, Inc. and Regal CineMedia Holdings, LLC, wholly owned subsidiaries of Cineworld Group plc and 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-theater network in North America, allowing NCM LLC to sell advertising under long-term exhibitor services agreements (“ESAs”) with the founding members (approximately 19 years remaining as of March 29, 2018) and certain third-party theater circuits, referred to in this document as “network affiliates” under long-term network affiliate agreements, which have terms from one to twenty years. As of March 29, 2018, NCM LLC had 157,564,977 common membership units outstanding, of which 76,904,155 (48.8%) were owned by NCM, Inc., 30,403,438 (19.3%) were owned by Regal, 28,779,904 (18.3%) were owned by Cinemark and 21,477,480 (13.6%) were owned by AMC. The membership units held by the founding members are exchangeable into NCM, Inc. common stock on a one-for-one basis. Basis of Presentation The Company has prepared the unaudited Condensed Financial Statements and related notes of NCM LLC in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and the rules and regulations of the Securities and Exchange Commission (“SEC”). Accordingly, certain information and footnote disclosures typically included in an annual report have been condensed or omitted for this quarterly report. The balance sheet as of December 28, 2017 is derived from the audited financial statements of NCM LLC. Therefore, the unaudited Condensed Financial Statements should be read in conjunction with the NCM LLC audited Financial Statements and notes thereto included in the Company’s annual report on Form 10-K filed for the fiscal year ended December 28, 2017. In the opinion of management, all adjustments necessary to present fairly in all material respects the financial position, results of operations and cash flows for all periods presented have been made. The Company’s business is seasonal and for this and other reasons operating results for interim periods may not be indicative of the Company’s full year results or future performance. As a result of the various related party agreements discussed in Note 4— Related Party Transactions Estimates —The preparation of the financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Significant estimates include those related to the reserve for uncollectible accounts receivable and share-based compensation. Actual results could differ from those estimates. Significant Accounting Policies The Company’s annual financial statements included in its Form 10-K filed for the fiscal year ended December 28, 2017 contain a complete discussion of the Company’s significant accounting policies. Following is additional information related to the Company’s accounting policies. Revenue Recognition —The Company derives revenue principally from the advertising business, which includes on-screen and lobby network (LEN) advertising and lobby promotions and advertising on entertainment websites and mobile applications owned by the Company and other companies. Revenue is recognized over time as the customer receives the benefits provided by the Company’s advertising services and the Company has the right to payment for performance to date. The Company considers the terms of each arrangement to determine the appropriate accounting treatment as more fully discussed in Note 2— Revenue from Contracts with Customers . Concentration of Credit Risk and Significant Customers —Bad debts are provided for using the allowance for doubtful accounts method based on historical experience and management’s evaluation of outstanding receivables at the end of the period. Receivables are written off when management determines amounts are uncollectible. Trade accounts receivable are uncollateralized and represent a large number of geographically dispersed debtors. The collectability risk with respect to national and regional advertising is reduced by transacting with founding members or large, national advertising agencies who 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 March 29, 2018 and December 28, 2017, 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 months ended March 29, 2018 and March 30, 2017, the Company had no customers that accounted for more than 10% of revenue. Share-Based Compensation —The management services agreement between NCM LLC and NCM, Inc. provides that NCM LLC may participate in the NCM, Inc. Equity Incentive Plan. NCM, Inc. has issued stock options and restricted stock to certain employees and restricted stock units to its independent directors under the NCM, Inc. Equity Incentive Plan. The Company has not granted stock options since 2012. In 2017 and 2018, 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 March 29, 2018 and March 30, 2017, NCM, Inc. acquired 661,933 and 720,989 units, respectively, due to the vesting of restricted stock and restricted stock units and exercise of stock options and contributed $0.0 million and $0.6 million to NCM LLC for stock option exercises for the three months ended March 29, 2018 and March 30, 2017, respectively. Recently Adopted Accounting Pronouncements During the first quarter of 2018, the Company adopted Accounting Standards Update 2014-09, Revenue from Contracts with Customers (Topic 606) Revenue from Contracts with Customers During the first quarter of 2018, the Company adopted Accounting Standards Update 2016-01, Recognition and Measurement of Financial Assets and Financial Liabilities Technical Corrections and Improvements to Financial Instruments – Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities During the first quarter of 2018, the Company adopted Accounting Standards Update 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments During the first quarter of 2018, the Company adopted Accounting Standards Update 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash Recently Issued Accounting Pronouncements In February 2016, the FASB issued Accounting Standards Update 2016-02, Leases Topic 842 In June 2016, the FASB issued Accounting Standards Update 2016-13, Financial Instruments – Credit Losses (Topic 326), Measurement of Credit Losses on Financial Statements (“ In March 2018, the FASB issued Accounting Standards Update 2018-04, Investments – Debt Securities (Topic 320) and Regulated Operations (Topic 980): Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 117 and SEC Release No. 33-9273 The Company has considered all other recently issued accounting pronouncements and does not believe the adoption of such pronouncements will have a material impact on its unaudited Condensed Financial Statements or notes thereto. |
Revenue from Contracts with Cus
Revenue from Contracts with Customers | 3 Months Ended |
Mar. 29, 2018 | |
Revenue From Contract With Customer [Abstract] | |
Revenue from Contracts with Customers | 2. REVENUE FROM CONTRACTS WITH CUSTOMERS On December 29, 2017, the Company adopted ASU 2014-09. The following disclosures have been added in accordance with ASU 2014-09. Revenue Recognition The Company derives revenue principally from the sale of advertising to national, regional and local businesses in Noovie Cinema Accelerator National advertising, including advertising under the beverage concessionaire and PSA agreements, is sold on a cost per thousand “CPM” basis. The Company recognizes national advertising over time as impressions (or theater attendees) are delivered. National advertising is also sold to content partners. The content partners provide the Company with original entertainment content segments, typically 90 seconds in length, that are entertaining, informative, or educational in nature in the Noovie Customer contracts often include multiple advertising services to reach the movie goer at multiple points during a theater experience. The Company considers each of these advertising services to represent distinct performance obligations of the contract and allocates a portion of the transaction price to each service based upon the standalone selling price of the service, when available. When standalone selling prices are not available or not applicable given the nature of the customer, the Company allocates the transaction price based upon all information that is reasonably available and maximizes the use of observable inputs. Methods utilized include the adjusted market and expected cost-plus margin approaches. The Company enters into barter transactions that exchange advertising program time for products and services used principally for selling and marketing activities. The Company records barter transactions at the estimated fair value of the products and services received. Revenues for advertising barter transactions are recognized when advertising is provided, and products and services received are charged to expense when used. The Company makes contractual guarantees to deliver a specified number of impressions to view the customers’ advertising. If those contracted number of impressions are not delivered, the Company will run additional advertising to deliver the contracted impressions at a later date. The deferred portion of the revenue associated with undelivered impressions is referred to as a make-good provision. In rare cases, the Company will make a cash refund of the portion of the contract related to the undelivered impressions. Given the limited history of cash settlements of the make-good provision, the Company recognizes revenue on the guaranteed contracts as the impressions are delivered and no reserve for variable consideration is recorded. The Company defers the revenue associated with the make-good until the advertising airs to the theater attendance specified in the advertising contract. The make-good provision is recorded within accrued expenses in the Condensed Balance Sheets. As of March 29, 2018 and December 28, 2017, the Company had a make-good provision of $1.9 million and $5.5 million, respectively. The Company recognizes revenue as the performance obligation for the advertising services is satisfied. Invoices are generated following the processing of each revenue contract and payment is due from the customer within 30 days of the invoice date. Customers select to pay the invoice in full at the start of a contract or through equal monthly installments over the course of the contract. The Company records deferred revenue when cash payments are received, or invoices are issued, in advance of revenue being earned. Deferred revenue is classified as a current liability as it is expected to be earned within the next twelve months. The Company has certain contracts, with two-year terms that are noncancelable following a specified date within the contract period. The estimated revenue expected to be recognized in the future related to these contracted performance obligations that are unsatisfied (or partially unsatisfied) as of March 29, 2018, was $13.2 million, $5.5 million of which is expected to be recognized in 2018 and $7.7 million is expected to be recognized in 2019. Agreements with a duration less than one year are not included within this disclosure as the Company elected to use the practical expedient in ASC 606-10-50-14 for those contracts. In addition, other of the Company’s contracts longer than one year that are cancelable are not included within this disclosure. Disaggregation of Revenue The Company disaggregates revenue based upon the type of customer: national; local and regional; and beverage concessionaire. This method of disaggregation is in alignment with how revenue is reviewed by management and discussed with and historically disclosed to investors. The following table summarizes revenue from contracts with customers for the three-month periods ended March 29, 2018 and March 30, 2017: Three months ended March 29, 2018 March 30, 2017 National advertising revenue $ 54.8 $ 44.4 Local and regional advertising revenue 17.4 19.1 Founding member advertising revenue from beverage concessionaire agreements 8.0 8.4 Total revenue $ 80.2 $ 71.9 Deferred Revenue and Unbilled Accounts Receivable The changes in deferred revenue for the three months ended March 29, 2018 were as follows (in millions): Three months ended March 29, 2018 Balance at beginning of period $ (7.1 ) Performance obligations satisfied 6.6 New contract liabilities (5.6 ) Balance at end of period $ (6.1 ) Unbilled accounts receivable is classified as a current asset as it is expected to be billed within the next twelve months. As of March 29, 2018 and December 28, 2017, the Company had $5.9 million and $10.6 million in unbilled accounts receivable, respectively. Practical Expedients and Exemptions The Company expenses sales commissions when incurred as the amortization period would have been one year or less. These costs are recorded within sales and marketing expenses in the Condensed Statement of Income. The Company does not disclose the value of unsatisfied performance obligations for contracts with an original expected length of one year or less. |
Intangible Assets
Intangible Assets | 3 Months Ended |
Mar. 29, 2018 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Intangible Assets | 3. INTANGIBLE ASSETS Intangible assets consist of contractual rights to provide the Company’s services within the theaters of the founding members and network affiliates and are stated at cost, net of accumulated amortization. The Company’s intangible assets with its founding members are recorded at the fair market value of NCM, Inc.’s publicly traded stock as of the date on which the common membership units were issued. The common membership units are fully convertible into NCM, Inc.’s common stock. In addition, the Company records intangible assets for up-front fees paid to network affiliates upon commencement of a network affiliate agreement. The Company’s intangible assets have a finite useful life and the Company amortizes the assets over the remaining useful life corresponding with the ESAs or the term of the network affiliate agreement. Common Unit Adjustments — In accordance with the Common Unit Adjustment Agreement with the founding members, on an annual basis the Company determines the amount of common membership units to be issued to or returned by the founding members based on theater additions or dispositions during the previous year. In addition, the Common Unit Adjustment Agreement requires that a Common Unit Adjustment occur for a specific founding member if its acquisition or disposition of theaters, in a single transaction or cumulatively since the most recent Common Unit Adjustment, results in an attendance increase or decrease in excess of two percent of the annual total attendance at the prior adjustment date. During the first quarter of 2018, the Company issued 2,821,710 (3,736,860 issued, net of 915,150 returned) common membership units to the founding members for the rights to exclusive access to the theater screens and attendees added, net of dispositions by the founding members to the Company’s network during the 2017 fiscal year and NCM LLC recorded a net intangible asset of $15.9 million during the first quarter of 2018 as a result of the Common Unit Adjustment. During the first quarter of 2017, the Company issued 2,351,029 common membership units to the founding members for the rights to exclusive access to the theater screens and attendees added, net of dispositions by the founding members to the Company’s network during the 2016 fiscal year. Also during the first quarter of 2017, NCM, Inc. and NCM LLC entered into a binding Memorandum of Understanding (“MOU”) with AMC to effectuate aspects of a final judgment (the “Final Judgment”) entered into by the Department of Justice (the “DOJ”) in connection with AMC’s acquisition of Carmike Cinemas, Inc. (“Carmike”). Pursuant to the MOU, the Company issued 18,425,423 common membership units to AMC in respect of the annual attendance at such Carmike theaters in accordance with the Common Unit Adjustment Agreement during the first quarter of 2017. AMC’s acquisition of Carmike meets the criteria for a Common Unit Adjustment because it resulted in an extraordinary attendance increase of approximately 9.5%. Further, the Final Judgment required AMC to transfer advertising rights to 17 theaters from NCM LLC to another advertising provider. Pursuant to the MOU, AMC surrendered 4,657,673 common membership units in respect of such theaters. The 4,657,673 common membership units were comprised of (i) 2,850,453 common membership units pursuant to the adjustment for divested theaters in the Common Unit Adjustment Agreement and (ii) an additional 1,807,220 common membership units valued at $25.0 million to compensate for NCM LLC’s lost operating income for these theaters during the 10-year term of the Final Judgment. To facilitate the theater transfers, during the first quarter of 2017, AMC and Regal entered into an amendment of its ESA with the Company and Cinemark entered into a waiver of certain rights under its ESA. The Company recorded a net intangible asset of $201.8 million during the first quarter of 2017 related to these transactions. Integration Payments and Other Encumbered Theater Payments —If an existing on-screen advertising agreement with an alternative provider is in place with respect to any acquired theaters, the founding members may elect to receive common membership units related to those encumbered theaters in connection with the Common Unit Adjustment. If the founding members make this election, then they are required to make payments on a quarterly basis in arrears in accordance with certain run-out provisions pursuant to the ESAs (“integration payments”). Because the Carmike theaters are subject to an existing on-screen advertising agreement with an alternative provider, AMC will make integration payments to NCM LLC. The integration payments will continue until the earlier of (i) the date the theaters are transferred to the Company’s network or (ii) the expiration of the ESA. Integration payments are calculated based upon the advertising cash flow that the Company would have generated if it had exclusive access to sell advertising in the theaters with pre-existing advertising agreements. The ESA additionally entitles the Company to payments related to the founding members’ on-screen advertising commitments under their beverage concessionaire agreements for encumbered theaters. These payments are also accounted for as a reduction to the intangible asset. During the three months ended March 29, 2018 and March 30, 2017, the Company recorded a reduction to net intangible assets of $2.2 million and $0.4 million, respectively, related to integration and other encumbered theater payments. These payments received from AMC related to their acquisitions of theaters from Carmike and Rave Cinemas and from Cinemark related to their acquisition of theaters from Rave Cinemas. During the three months ended March 29, 2018 and March 30, 2017, AMC and Cinemark paid a total of $9.4 million and $1.0 million, respectively, in integration and other encumbered theater payments (as payments are made one quarter and one month in arrears, respectively). If common membership units are issued to a founding member for newly acquired theaters that are subject to an existing on-screen advertising agreement with an alternative provider, the amortization of the intangible asset commences after the existing agreement expires and NCM LLC can utilize the theaters for all of its services. |
Related Party Transactions
Related Party Transactions | 3 Months Ended |
Mar. 29, 2018 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | 4. 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’ theaters (subject to pre-existing contractual obligations and other limited exceptions for the benefit of the founding members). The advertising services include the use of the digital content network (“DCN”) equipment required to deliver the on-screen advertising and other content included in the Noovie pre-show, use of the lobby entertainment network (“LEN”) and rights to sell and display certain lobby promotions. Further, 30 to 60 seconds of advertising included in the Noovie pre-show is sold to the founding members to satisfy the founding members’ on-screen advertising commitments under their beverage concessionaire agreements. In consideration for access to the founding members’ theaters, theater patrons, the network equipment required to display on-screen and LEN video advertising and the use of theaters for lobby promotions, the founding members receive a monthly theater access fee. • Common Unit Adjustment Agreement. The Common Unit Adjustment Agreement provides a mechanism for increasing or decreasing the membership units held by the founding members based on the acquisition or construction of new theaters or sale or closure of theaters that are operated by each founding member and included in the Company’s network. • Software License Agreement. At the date of NCM, Inc.’s IPO, NCM LLC was granted a perpetual, royalty-free license from the founding members to use certain proprietary software that existed at the time for the delivery of digital advertising and other content through the DCN to screens in the U.S. NCM LLC has made improvements to this software since NCM, Inc.’s IPO date and the Company owns those improvements, except for improvements that were developed jointly by NCM LLC and the founding members, if any. The following tables provide summaries of the transactions between the Company and the founding members (in millions): Three Months Ended Included in the Condensed Statements of Income: March 29, 2018 March 30, 2017 Revenue: Beverage concessionaire revenue (included in advertising revenue) (1) $ 8.0 $ 8.4 Operating expenses: Theater access fee (2) 20.6 20.6 Purchase of movie tickets and concession products and rental of theatre space (included in selling and marketing costs) (3) 0.4 0.5 Administrative fee - managing member (4) 3.8 3.4 Non-operating expenses: Interest income from notes receivable (included in interest income) (5) 0.1 0.2 (1) For the three months ended March 29, 2018 and March 30, 2017, 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. (2) Comprised of payments per theater attendee and payments per digital screen with respect to the founding member theaters included in the Company’s network, including payments for access to higher quality digital cinema equipment. (3) Used primarily for marketing to NCM LLC’s advertising clients. (4) 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 Chief Executive Officer, President, Chief Financial Officer, Executive Vice President, Chief Revenue Officer and Senior Vice President, General Counsel. In exchange for these services, NCM LLC reimburses NCM, Inc. for compensation paid to the officers (including share based compensation) and other expenses of the officers and for certain out-of-pocket costs. (5) On December 26, 2013, the Company sold its Fathom Events business to a newly formed limited liability company (AC JV, LLC) owned 32% by each of the founding members and 4% by NCM LLC. In consideration for the sale, the Company received a total of $25.0 million in promissory notes from its founding members (one-third or approximately $8.3 million from each founding member). The notes bear interest at a fixed rate of 5.0% per annum, compounded annually. Interest and principal payments are due annually in six equal installments commencing on the first anniversary of the closing. As of Included in the Condensed Balance Sheets: March 29, 2018 December 28, 2017 Purchase of movie tickets and concession products (included in prepaid expenses) 0.2 — Current portion of notes receivable - founding members (1) 4.2 4.2 Long-term portion of notes receivable - founding members (1) 4.1 4.1 Interest receivable on notes receivable (included in other current assets) (1) 0.1 — Prepaid administrative fees to managing member (2) 0.8 0.8 Common unit adjustments, net of amortization and integration payments (included in intangible assets) (3) 694.9 687.1 (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 3— for further information on common unit adjustments and integration payments. 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 months ended March 29, 2018 and March 30, 2017 were as follows (in millions): Three Months Ended March 29, 2018 March 30, 2017 AMC $ 2.2 $ 2.0 Cinemark 3.0 1.5 Regal 3.2 1.5 Total founding members 8.4 5.0 NCM, Inc. 8.1 3.2 Total $ 16.5 $ 8.2 The mandatory distributions of available cash by the Company to its founding members for the three months ended March 29, 2018 of $8.4 million is included in amounts due to founding members, net on the unaudited Condensed Balance Sheets as of March 29, 2018 and will be made in the second quarter of 2018. The mandatory distributions of available cash by the Company to its managing member for the three months ended March 29, 2018 of $8.1 million is included in amounts due to managing member, net on the unaudited Condensed Balance Sheets as of March 29, 2018 and will be made in the second quarter of 2018. Amounts due to founding members, net as of March 29, 2018 were comprised of the following (in millions): AMC Cinemark Regal Total Theatre access fees, net of beverage revenues and other encumbered theater payments $ 1.5 $ 1.0 $ 1.6 $ 4.1 Distributions payable to founding members 2.2 3.0 3.2 8.4 Integration payments due from founding members (1.6 ) (0.1 ) — (1.7 ) Cost and other reimbursement — 0.1 (0.1 ) — Total amounts due to founding members, net $ 2.1 $ 4.0 $ 4.7 $ 10.8 Amounts due to founding members, net as of December 28, 2017 were comprised of the following (in millions): AMC Cinemark Regal Total Theatre access fees, net of beverage revenues and other encumbered theater payments $ 1.5 $ 1.0 $ 1.5 $ 4.0 Distributions payable to founding members 10.8 13.5 13.3 37.6 Integration payments due from founding members (8.5 ) (0.4 ) — (8.9 ) Total amounts due to founding members, net $ 3.8 $ 14.1 $ 14.8 $ 32.7 Amounts due to/from managing member, net were comprised of the following (in millions): As of March 29, 2018 December 28, 2017 Distributions payable to managing member $ 8.1 $ 36.9 Cost and other reimbursement (0.3 ) 1.4 Total amounts due to managing member, net $ 7.8 $ 38.3 As of March 29, 2018, AMC owned 1.0 million shares of NCM, Inc. common stock and during the three months ended March 29, 2018 and March 30, 2017, AMC received cash dividends of approximately $0.2 million and $0.0 million, respectively, on its shares of NCM, Inc. common stock. AC JV, LLC Transactions —In December 2013, the Company sold its Fathom Events business to a newly formed limited liability company, AC JV, LLC, owned 32% by each of the founding members and 4% by NCM LLC. The Company accounts for its investment in AC JV, LLC under the equity method of accounting in accordance with ASC 323-30, Investments—Equity Method and Joint Ventures (“ASC 323-30”) because AC JV, LLC is a limited liability company with the characteristics of a limited partnership and ASC 323-30 requires the use of equity method accounting unless the Company’s interest is so minor that it would have virtually no influence over partnership operating and financial policies. Although NCM LLC does not have a representative on AC JV, LLC’s Board of Directors or any voting, consent or blocking rights with respect to the governance or operations of AC JV, LLC, the Company concluded that its interest was more than minor under the accounting guidance. The Company’s investment in AC JV, LLC was $1.0 million and $1.0 million as of March 29, 2018 and December 28, 2017, respectively. Equity in earnings from AC JV, LLC for the three months ended March 29, 2018 and March 30, 2017, were $0.0 million and $0.1 million, respectively, and is included in non-operating expenses in the unaudited Condensed Statements of Income. |
Borrowings
Borrowings | 3 Months Ended |
Mar. 29, 2018 | |
Debt Disclosure [Abstract] | |
Borrowings | 5. BORROWINGS The following table summarizes the Company’s total outstanding debt as of March 29, 2018 and December 28, 2017 and the significant terms of its borrowing arrangements (in millions): Outstanding Borrowings March 29, 2018 December 28, 2017 Maturity Date Interest Rate Revolving credit facility $ 33.0 $ 12.0 November (1) Term loans 270.0 270.0 November (1) Senior secured notes due 2022 400.0 400.0 April 6.000% Senior unsecured notes due 2026 250.0 250.0 August 15, 2026 5.750% Total borrowings $ 953.0 $ 932.0 Less: debt issuance costs related to term loans and senior notes (8.2 ) (8.7 ) Carrying value of long-term debt $ 944.8 $ 923.3 (1) The interest rates on the revolving credit facility and term loans are described below. Senior Secured Credit Facility —As of March 29, 2018, the Company’s senior secured credit facility consisted of a $175.0 million revolving credit facility and a $270.0 million term loan. The obligations under the senior secured credit facility are secured by a lien on substantially all of the assets of NCM LLC. Revolving Credit Facility— The revolving credit facility portion of the Company’s total borrowings is available, subject to certain conditions, for general corporate purposes of the Company in the ordinary course of business and for other transactions permitted under the senior secured credit facility, and a portion is available for letters of credit. As of March 29, 2018, the Company’s total availability under the $175.0 million revolving credit facility was $137.2 million, net of $33.0 million outstanding and $4.8 million in letters of credit. 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). 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 March 29, 2018 was 4.4%. 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 March 29, 2018, 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 financial debt covenants. As of March 29, 2018, the Company’s consolidated net senior secured leverage ratio was 3.1 times (versus the covenant of 6.5 times). Senior Secured Notes due 2022 —On April 27, 2012, the Company completed a private placement of $400.0 million in aggregate principal amount of 6.000% Senior Secured Notes (the “Notes due 2022”) for which the registered exchange offering was completed on November 26, 2012. The Notes due 2022 pay interest semi-annually in arrears on April 15 and October 15 of each year, which commenced on October 15, 2012. The Notes due 2022 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. Senior Unsecured Notes due 2026 —On August 19, 2016, the Company completed a private placement of $250.0 million in aggregate principal amount of 5.750% Senior Unsecured Notes (the “Notes due 2026”). The Notes due 2026 pay interest semi-annually in arrears on February 15 and August 15 of each year, which commenced on February 15, 2017. The Notes due 2026 were issued at 100% of the face amount thereof and are the senior unsecured obligations of the Company and will be effectively subordinated to all existing and future secured debt, including the Notes due 2022, its senior secured credit facility and any future asset backed loan facility. The Notes due 2026 rank equally in right of payment with all of the Company’s existing and future senior indebtedness, including the Notes due 2022, the Company’s existing senior secured credit facility, any future asset backed loan facility, in each case, without giving effect to collateral arrangements. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 29, 2018 | |
Commitments And Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 6. COMMITMENTS AND CONTINGENCIES Legal Actions —The Company is subject to claims and legal actions in the ordinary course of business. The Company believes such claims will not have a material effect individually and in the aggregate on its financial position, results of operations or cash flows. 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 theater chains, the Company has agreed to certain minimum revenue guarantees on a per attendee basis. If a network affiliate achieves the attendance set forth in their respective agreement, the Company has guaranteed minimum revenue for the network affiliate per attendee if such amount paid under the revenue share arrangement is less than its guaranteed amount. As of March 29, 2018, the maximum potential amount of future payments the Company could be required to make pursuant to the minimum revenue guarantees is $77.8 million over the remaining terms of the network affiliate agreements. These minimum guarantees relate to various affiliate agreements ranging in term from one to twenty years, prior to any renewal periods of which some are at the option of the Company. During the three months ended March 29, 2018 and March 30, 2017, the Company made no payments related to these minimum guarantees. For these periods, there are no other affiliate agreements with guaranteed minimums in excess of the revenue share arrangement. Theater Access Fee Guarantees —In consideration for NCM LLC’s access to the founding members’ theater attendees for on-screen advertising and use of lobbies and other space within the founding members’ theaters for the LEN and lobby promotions, the founding members receive a monthly theater access fee under the ESAs. The theater access fee is composed of a fixed payment per patron, a fixed payment per digital screen (connected to the DCN) and a fee for access to higher quality digital cinema equipment. The payment per theater patron increases by 8% every five years, with this increase last occurring in fiscal year 2017, and the payment per digital screen and for digital cinema equipment increasing annually by 5%. The theater access fee paid in the aggregate to all founding members cannot be less than 12% of NCM LLC’s aggregate advertising revenue (as defined in the ESA), or it will be adjusted upward to reach this minimum payment. As of March 29, 2018 and December 28, 2017, the Company had no liabilities recorded for the minimum payment, as the theater access fee was in excess of the minimum. |
Fair Value Measurements
Fair Value Measurements | 3 Months Ended |
Mar. 29, 2018 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | 7. FAIR VALUE MEASUREMENTS Fair value is the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Fair value is estimated by applying the following hierarchy, which prioritizes the inputs used to measure fair value into three levels and bases the categorization within the hierarchy upon the lowest level of input that is available and significant to the fair value measurement: Level 1 —Quoted prices in active markets for identical assets or liabilities. Level 2 —Observable inputs other than quoted prices in active markets for identical assets and liabilities, quoted prices for identical or similar assets or liabilities in inactive markets, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Level 3 —Inputs that are generally unobservable and typically reflect management’s estimate of assumptions that market participants would use in pricing the asset or liability. Non-Recurring Measurements — Certain assets are measured at fair value on a non-recurring basis. These assets are not measured at fair value on an ongoing basis but are subject to fair value adjustments in certain circumstances. These assets include long-lived assets, intangible assets, other investments, notes receivable and borrowings. Long-Lived Assets, Intangible Assets, Other Investments and Notes Receivable —The Company regularly reviews long-lived assets (primarily property, plant and equipment), intangible assets, investments accounted for under the cost or equity method and notes receivable for impairment whenever, certain qualitative factors, events or changes in circumstances indicate that the carrying amounts of the assets may not be fully recoverable. When the estimated fair value is determined to be lower than the carrying value of the asset, an impairment charge is recorded to write the asset down to its estimated fair value. Other investments consisted of the following (in millions): As of March 29, 2018 December 28, 2017 Investment in AC JV, LLC (1) $ 1.0 $ 1.0 Other investments (2) 2.1 2.5 Total $ 3.1 $ 3.5 (1) Refer to Note 4— . This investment is accounted for utilizing the equity method. (2) The Company received equity securities in privately held companies as consideration for a portion of advertising contracts. The equity securities are accounted for at adjusted cost in accordance with the practicability exception under ASU 2016-01 and represent an ownership of less than 20%. The Company does not exert significant influence on these companies’ operating or financial activities. During the three months ended March 29, 2018 and March 30, 2017, the Company recorded impairment charges of $0.4 million and $1.4 million, respectively, on certain of its investments due to a significant deterioration in the business prospects of the investee or new information regarding the fair value of the investee, which brought the impaired investments to a remaining value of $0.0 million, in the three months ended March 29, 2018 and March 30, 2017. As of March 29, 2018, no other observable price changes or impairments have been recorded as a result of the Company’s qualitative assessment of identified events or changes in the circumstances of the remaining investments. The investment in AC JV, LLC was initially valued using comparative market multiples. The other investments were recorded based upon the fair value of the services provided in exchange for the investment. As the inputs to the determination of fair value are based upon non-identical assets and use significant unobservable inputs, they have been classified as Level 3 in the fair value hierarchy. As of March 29, 2018 and December 28, 2017, the Company had notes receivable totaling $8.3 million and $8.3 million, respectively, from its founding members related to the sale of Fathom Events, as described in Note 4— 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 March 29, 2018 As of December 28, 2017 Carrying Value Fair Value (1) Carrying Value Fair Value (1) Term loans $ 270.0 $ 270.7 $ 270.0 $ 270.8 Notes due 2022 400.0 405.3 400.0 407.3 Notes due 2026 250.0 226.6 250.0 235.0 (1) If the Company were to measure the borrowings in the above table at fair value on the balance sheet they would be classified as Level 2 based upon the inputs utilized. |
The Company (Policies)
The Company (Policies) | 3 Months Ended |
Mar. 29, 2018 | |
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 December 28, 2017 is derived from the audited financial statements of NCM LLC. Therefore, the unaudited Condensed Financial Statements should be read in conjunction with the NCM LLC audited Financial Statements and notes thereto included in the Company’s annual report on Form 10-K filed for the fiscal year ended December 28, 2017. In the opinion of management, all adjustments necessary to present fairly in all material respects the financial position, results of operations and cash flows for all periods presented have been made. The Company’s business is seasonal and for this and other reasons operating results for interim periods may not be indicative of the Company’s full year results or future performance. As a result of the various related party agreements discussed in Note 4— Related Party Transactions |
Estimates | Estimates —The preparation of the financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Significant estimates include those related to the reserve for uncollectible accounts receivable and share-based compensation. Actual results could differ from those estimates. |
Significant Accounting Policies | Significant Accounting Policies The Company’s annual financial statements included in its Form 10-K filed for the fiscal year ended December 28, 2017 contain a complete discussion of the Company’s significant accounting policies. Following is additional information related to the Company’s accounting policies. |
Revenue Recognition | Revenue Recognition —The Company derives revenue principally from the advertising business, which includes on-screen and lobby network (LEN) advertising and lobby promotions and advertising on entertainment websites and mobile applications owned by the Company and other companies. Revenue is recognized over time as the customer receives the benefits provided by the Company’s advertising services and the Company has the right to payment for performance to date. The Company considers the terms of each arrangement to determine the appropriate accounting treatment as more fully discussed in Note 2— Revenue from Contracts with Customers . |
Concentration of Credit Risk and Significant Customers | Concentration of Credit Risk and Significant Customers — Bad debts are provided for using the allowance for doubtful accounts method based on historical experience and management’s evaluation of outstanding receivables at the end of the period. Receivables are written off when management determines amounts are uncollectible. Trade accounts receivable are uncollateralized and represent a large number of geographically dispersed debtors. The collectability risk with respect to national and regional advertising is reduced by transacting with founding members or large, national advertising agencies who 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 March 29, 2018 and December 28, 2017, 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 months ended March 29, 2018 and March 30, 2017, the Company had no customers that accounted for more than 10% of revenue. |
Share-Based Compensation | Share-Based Compensation —The management services agreement between NCM LLC and NCM, Inc. provides that NCM LLC may participate in the NCM, Inc. Equity Incentive Plan. NCM, Inc. has issued stock options and restricted stock to certain employees and restricted stock units to its independent directors under the NCM, Inc. Equity Incentive Plan. The Company has not granted stock options since 2012. In 2017 and 2018, 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 March 29, 2018 and March 30, 2017, NCM, Inc. acquired 661,933 and 720,989 units, respectively, due to the vesting of restricted stock and restricted stock units and exercise of stock options and contributed $0.0 million and $0.6 million to NCM LLC for stock option exercises for the three months ended March 29, 2018 and March 30, 2017, respectively. |
Recently Adopted Accounting Pronouncements | Recently Adopted Accounting Pronouncements During the first quarter of 2018, the Company adopted Accounting Standards Update 2014-09, Revenue from Contracts with Customers (Topic 606) Revenue from Contracts with Customers During the first quarter of 2018, the Company adopted Accounting Standards Update 2016-01, Recognition and Measurement of Financial Assets and Financial Liabilities Technical Corrections and Improvements to Financial Instruments – Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities During the first quarter of 2018, the Company adopted Accounting Standards Update 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments During the first quarter of 2018, the Company adopted Accounting Standards Update 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash |
Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements In February 2016, the FASB issued Accounting Standards Update 2016-02, Leases Topic 842 In June 2016, the FASB issued Accounting Standards Update 2016-13, Financial Instruments – Credit Losses (Topic 326), Measurement of Credit Losses on Financial Statements (“ In March 2018, the FASB issued Accounting Standards Update 2018-04, Investments – Debt Securities (Topic 320) and Regulated Operations (Topic 980): Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 117 and SEC Release No. 33-9273 The Company has considered all other recently issued accounting pronouncements and does not believe the adoption of such pronouncements will have a material impact on its unaudited Condensed Financial Statements or notes thereto. |
Revenue from Contracts with C15
Revenue from Contracts with Customers (Tables) | 3 Months Ended |
Mar. 29, 2018 | |
Revenue From Contract With Customer [Abstract] | |
Summary of Revenue from Contracts with Customers | The following table summarizes revenue from contracts with customers for the three-month periods ended March 29, 2018 and March 30, 2017: Three months ended March 29, 2018 March 30, 2017 National advertising revenue $ 54.8 $ 44.4 Local and regional advertising revenue 17.4 19.1 Founding member advertising revenue from beverage concessionaire agreements 8.0 8.4 Total revenue $ 80.2 $ 71.9 |
Summary of Changes in Deferred Revenue | The changes in deferred revenue for the three months ended March 29, 2018 were as follows (in millions): Three months ended March 29, 2018 Balance at beginning of period $ (7.1 ) Performance obligations satisfied 6.6 New contract liabilities (5.6 ) Balance at end of period $ (6.1 ) |
Related Party Transactions (Tab
Related Party Transactions (Tables) | 3 Months Ended |
Mar. 29, 2018 | |
Schedule of Mandatory Distributions to Members | Mandatory distributions of available cash for the three months ended March 29, 2018 and March 30, 2017 were as follows (in millions): Three Months Ended March 29, 2018 March 30, 2017 AMC $ 2.2 $ 2.0 Cinemark 3.0 1.5 Regal 3.2 1.5 Total founding members 8.4 5.0 NCM, Inc. 8.1 3.2 Total $ 16.5 $ 8.2 |
Schedule of Amounts Due to Founding Members, Net | Amounts due to founding members, net as of March 29, 2018 were comprised of the following (in millions): AMC Cinemark Regal Total Theatre access fees, net of beverage revenues and other encumbered theater payments $ 1.5 $ 1.0 $ 1.6 $ 4.1 Distributions payable to founding members 2.2 3.0 3.2 8.4 Integration payments due from founding members (1.6 ) (0.1 ) — (1.7 ) Cost and other reimbursement — 0.1 (0.1 ) — Total amounts due to founding members, net $ 2.1 $ 4.0 $ 4.7 $ 10.8 Amounts due to founding members, net as of December 28, 2017 were comprised of the following (in millions): AMC Cinemark Regal Total Theatre access fees, net of beverage revenues and other encumbered theater payments $ 1.5 $ 1.0 $ 1.5 $ 4.0 Distributions payable to founding members 10.8 13.5 13.3 37.6 Integration payments due from founding members (8.5 ) (0.4 ) — (8.9 ) Total amounts due to founding members, net $ 3.8 $ 14.1 $ 14.8 $ 32.7 |
Schedule of Amounts Due to/from Managing Member | Amounts due to/from managing member, net were comprised of the following (in millions): As of March 29, 2018 December 28, 2017 Distributions payable to managing member $ 8.1 $ 36.9 Cost and other reimbursement (0.3 ) 1.4 Total amounts due to managing member, net $ 7.8 $ 38.3 |
Founding Members [Member] | |
Schedule of Related Party Transactions | The following tables provide summaries of the transactions between the Company and the founding members (in millions): Three Months Ended Included in the Condensed Statements of Income: March 29, 2018 March 30, 2017 Revenue: Beverage concessionaire revenue (included in advertising revenue) (1) $ 8.0 $ 8.4 Operating expenses: Theater access fee (2) 20.6 20.6 Purchase of movie tickets and concession products and rental of theatre space (included in selling and marketing costs) (3) 0.4 0.5 Administrative fee - managing member (4) 3.8 3.4 Non-operating expenses: Interest income from notes receivable (included in interest income) (5) 0.1 0.2 (1) For the three months ended March 29, 2018 and March 30, 2017, 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. (2) Comprised of payments per theater attendee and payments per digital screen with respect to the founding member theaters included in the Company’s network, including payments for access to higher quality digital cinema equipment. (3) Used primarily for marketing to NCM LLC’s advertising clients. (4) 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 Chief Executive Officer, President, Chief Financial Officer, Executive Vice President, Chief Revenue Officer and Senior Vice President, General Counsel. In exchange for these services, NCM LLC reimburses NCM, Inc. for compensation paid to the officers (including share based compensation) and other expenses of the officers and for certain out-of-pocket costs. (5) On December 26, 2013, the Company sold its Fathom Events business to a newly formed limited liability company (AC JV, LLC) owned 32% by each of the founding members and 4% by NCM LLC. In consideration for the sale, the Company received a total of $25.0 million in promissory notes from its founding members (one-third or approximately $8.3 million from each founding member). The notes bear interest at a fixed rate of 5.0% per annum, compounded annually. Interest and principal payments are due annually in six equal installments commencing on the first anniversary of the closing. As of Included in the Condensed Balance Sheets: March 29, 2018 December 28, 2017 Purchase of movie tickets and concession products (included in prepaid expenses) 0.2 — Current portion of notes receivable - founding members (1) 4.2 4.2 Long-term portion of notes receivable - founding members (1) 4.1 4.1 Interest receivable on notes receivable (included in other current assets) (1) 0.1 — Prepaid administrative fees to managing member (2) 0.8 0.8 Common unit adjustments, net of amortization and integration payments (included in intangible assets) (3) 694.9 687.1 (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 3— for further information on common unit adjustments and integration payments. |
Borrowings (Tables)
Borrowings (Tables) | 3 Months Ended |
Mar. 29, 2018 | |
Debt Disclosure [Abstract] | |
Schedule of Outstanding Debt | The following table summarizes the Company’s total outstanding debt as of March 29, 2018 and December 28, 2017 and the significant terms of its borrowing arrangements (in millions): Outstanding Borrowings March 29, 2018 December 28, 2017 Maturity Date Interest Rate Revolving credit facility $ 33.0 $ 12.0 November (1) Term loans 270.0 270.0 November (1) Senior secured notes due 2022 400.0 400.0 April 6.000% Senior unsecured notes due 2026 250.0 250.0 August 15, 2026 5.750% Total borrowings $ 953.0 $ 932.0 Less: debt issuance costs related to term loans and senior notes (8.2 ) (8.7 ) Carrying value of long-term debt $ 944.8 $ 923.3 (1) The interest rates on the revolving credit facility and term loans are described below. |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 3 Months Ended |
Mar. 29, 2018 | |
Fair Value Disclosures [Abstract] | |
Schedule of Other Investments | Other investments consisted of the following (in millions): As of March 29, 2018 December 28, 2017 Investment in AC JV, LLC (1) $ 1.0 $ 1.0 Other investments (2) 2.1 2.5 Total $ 3.1 $ 3.5 (1) Refer to Note 4— . This investment is accounted for utilizing the equity method. (2) The Company received equity securities in privately held companies as consideration for a portion of advertising contracts. The equity securities are accounted for at adjusted cost in accordance with the practicability exception under ASU 2016-01 and represent an ownership of less than 20%. The Company does not exert significant influence on these companies’ operating or financial activities. |
Estimated Fair Values of Company's Financial Instruments | The estimated fair values of the Company’s financial instruments where carrying values do not approximate fair value were as follows (in millions): As of March 29, 2018 As of December 28, 2017 Carrying Value Fair Value (1) Carrying Value Fair Value (1) Term loans $ 270.0 $ 270.7 $ 270.0 $ 270.8 Notes due 2022 400.0 405.3 400.0 407.3 Notes due 2026 250.0 226.6 250.0 235.0 (1) If the Company were to measure the borrowings in the above table at fair value on the balance sheet they would be classified as Level 2 based upon the inputs utilized. |
The Company (Narrative) (Detail
The Company (Narrative) (Details) $ in Millions | 3 Months Ended | |||
Mar. 29, 2018USD ($)Segmentitemcustomershares | Mar. 30, 2017USD ($)customershares | Dec. 29, 2017USD ($) | Dec. 28, 2017item | |
General Company Information [Line Items] | ||||
Range of terms, in years | 19 years | |||
Common membership units outstanding | 157,564,977 | |||
Membership units exchangeable into common stock ratio | 100.00% | |||
Number of reportable segment | Segment | 1 | |||
Number of shares acquired due to vesting and exercise of options | 661,933 | 720,989 | ||
Stock option exercises | $ | $ 0 | $ 0.6 | ||
ASU 2014-09 [Member] | ||||
General Company Information [Line Items] | ||||
Cumulative-effect adjustment related to change in accounting for barter transactions on contracts that are not completed | $ | $ 0.2 | |||
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 | ||
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 | ||
NCM Inc. [Member] | ||||
General Company Information [Line Items] | ||||
Common membership units outstanding | 76,904,155 | |||
Percentage of common membership units outstanding | 48.80% | |||
Regal [Member] | ||||
General Company Information [Line Items] | ||||
Common membership units outstanding | 30,403,438 | |||
Percentage of common membership units outstanding | 19.30% | |||
Cinemark [Member] | ||||
General Company Information [Line Items] | ||||
Common membership units outstanding | 28,779,904 | |||
Percentage of common membership units outstanding | 18.30% | |||
AMC [Member] | ||||
General Company Information [Line Items] | ||||
Common membership units outstanding | 21,477,480 | |||
Percentage of common membership units outstanding | 13.60% | |||
Minimum [Member] | ||||
General Company Information [Line Items] | ||||
Range of terms, in years | 1 year | |||
Maximum [Member] | ||||
General Company Information [Line Items] | ||||
Range of terms, in years | 20 years |
Revenue from Contracts with C20
Revenue from Contracts with Customers (Narrative) (Details) - USD ($) $ in Millions | 3 Months Ended | |||
Mar. 29, 2018 | Dec. 26, 2019 | Dec. 27, 2018 | Dec. 28, 2017 | |
Disaggregation of Revenue [Line Items] | ||||
Make-good provision | $ 1.9 | $ 5.5 | ||
Noncancelable contracts terms | 2 years | |||
Estimated revenue expected to be recognized related to performance obligations that are unsatisfied (or partially unsatisfied) | $ 13.2 | |||
Current Asset [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Unbilled accounts receivable | $ 5.9 | $ 10.6 | ||
Scenario Forecast [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Estimated revenue expected to be recognized related to performance obligations that are unsatisfied (or partially unsatisfied) | $ 7.7 | $ 5.5 | ||
Maximum [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from contract, payment due period from the customer | 30 days | |||
Maximum [Member] | Current Asset [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Unbilled accounts receivable, expected to be billed | 12 months |
Revenue from Contracts with C21
Revenue from Contracts with Customers (Summary of Revenue from Contracts with Customers) (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 29, 2018 | Mar. 30, 2017 | |
Disaggregation of Revenue [Line Items] | ||
Total revenue | $ 80.2 | $ 71.9 |
National Advertising Revenue [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 54.8 | 44.4 |
Local and Regional Advertising Revenue [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 17.4 | 19.1 |
Founding Member Advertising Revenue from Beverage Concessionaire Agreements [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | $ 8 | $ 8.4 |
Revenue from Contracts with C22
Revenue from Contracts with Customers (Summary of Changes in Deferred Revenue) (Details) $ in Millions | 3 Months Ended |
Mar. 29, 2018USD ($) | |
Revenue From Contract With Customer [Abstract] | |
Balance at beginning of period | $ (7.1) |
Performance obligations satisfied | 6.6 |
New contract liabilities | (5.6) |
Balance at end of period | $ (6.1) |
Intangible Assets (Narrative) (
Intangible Assets (Narrative) (Details) $ in Millions | 3 Months Ended | |
Mar. 29, 2018USD ($)shares | Mar. 30, 2017USD ($)Theatershares | |
Finite-Lived Intangible Assets [Line Items] | ||
Common membership units issued, net of returned | 2,821,710 | 2,351,029 |
Common membership units issued | 3,736,860 | |
Common membership units returned | 915,150 | |
Increase (decrease) in intangible assets, net | $ | $ 15.9 | $ 201.8 |
AMC [Member] | NCM, Inc. and NCM LLC, MOU with AMC to Effectuate Aspects of Final Judgment [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Percentage increase (decrease) in theater attendance for Common Unit adjustment to occur | 9.50% | |
Number of theaters required to transfer advertising rights to another advertising provider | Theater | 17 | |
Common membership units surrendered | 4,657,673 | |
Common membership units surrendered under adjustment for divested theaters | 2,850,453 | |
Common membership units surrendered under compensate for lost operating income for divested theaters | 1,807,220 | |
Common membership units surrendered, value, under compensate for lost operating income for divested theaters | $ | $ 25 | |
Compensate for lost operating income for divested theaters, term | 10 years | |
AMC;s Acquisition of Carmike Cinemas, Inc [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Common membership units issued, net of returned | 18,425,423 | |
AMC and Cinemark [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Increase (decrease) in intangible assets, net | $ | (2.2) | $ (0.4) |
Integration and other encumbered theater payments received from founding members | $ | $ 9.4 | $ 1 |
Minimum [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Percentage increase (decrease) in theater attendance for Common Unit adjustment to occur | (2.00%) | |
Maximum [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Percentage increase (decrease) in theater attendance for Common Unit adjustment to occur | 2.00% |
Related Party Transactions (Nar
Related Party Transactions (Narrative) (Details) - USD ($) shares in Millions, $ in Millions | 3 Months Ended | ||||
Mar. 29, 2018 | Mar. 30, 2017 | Dec. 28, 2017 | Dec. 26, 2013 | ||
Related Party Transaction [Line Items] | |||||
On-screen advertising time to satisfy agreement obligations, in seconds | 30 seconds | 30 seconds | |||
Cash payment due to founding members/managing member | $ 8.4 | $ 37.6 | |||
AC JV, LLC [Member] | |||||
Related Party Transaction [Line Items] | |||||
Ownership percentage | 4.00% | ||||
Investment in AC JV, LLC | [1] | 1 | 1 | ||
Equity in earnings of non-consolidated entities | 0 | $ 0.1 | |||
Founding Members [Member] | |||||
Related Party Transaction [Line Items] | |||||
Cash payment due to founding members/managing member | 8.4 | ||||
Managing Member [Member] | |||||
Related Party Transaction [Line Items] | |||||
Cash payment due to founding members/managing member | 8.1 | 36.9 | |||
AMC [Member] | |||||
Related Party Transaction [Line Items] | |||||
Cash payment due to founding members/managing member | $ 2.2 | 10.8 | |||
Common stock shares of NCM Inc | 1 | ||||
Cash dividends on shares of NMC Inc | $ 0.2 | $ 0 | |||
AMC [Member] | AC JV, LLC [Member] | |||||
Related Party Transaction [Line Items] | |||||
Ownership percentage | 32.00% | ||||
Cinemark [Member] | |||||
Related Party Transaction [Line Items] | |||||
Cash payment due to founding members/managing member | 3 | 13.5 | |||
Cinemark [Member] | AC JV, LLC [Member] | |||||
Related Party Transaction [Line Items] | |||||
Ownership percentage | 32.00% | ||||
Regal [Member] | |||||
Related Party Transaction [Line Items] | |||||
Cash payment due to founding members/managing member | $ 3.2 | $ 13.3 | |||
Regal [Member] | AC JV, LLC [Member] | |||||
Related Party Transaction [Line Items] | |||||
Ownership percentage | 32.00% | ||||
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 4—Related Party Transactions. This investment is accounted for utilizing the equity method. |
Related Party Transactions (Sum
Related Party Transactions (Summary of Transactions Between the Company and the Founding Members Included in Statements of Income) (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 29, 2018 | Mar. 30, 2017 | ||
Related Party Transaction [Line Items] | |||
Advertising revenue | $ 80.2 | $ 71.9 | |
Theater access fee | [1] | 20.6 | 20.6 |
Selling and marketing costs | 16 | 18.1 | |
Administrative fee—managing member | [2] | 3.8 | 3.4 |
Interest income from notes receivable (included in interest income) | [3] | 0.1 | 0.2 |
Beverage Concessionaire [Member] | |||
Related Party Transaction [Line Items] | |||
Advertising revenue | [4] | 8 | 8.4 |
Purchase Of Movie Tickets And Concession Products And Rental Of Theater Space [Member] | |||
Related Party Transaction [Line Items] | |||
Selling and marketing costs | [5] | $ 0.4 | $ 0.5 |
[1] | Comprised of payments per theater attendee and payments per digital screen with respect to the founding member theaters included in the Company’s network, including payments for access to higher quality digital cinema equipment. | ||
[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 Chief Executive Officer, President, Chief Financial Officer, Executive Vice President, Chief Revenue Officer and Senior Vice President, General Counsel. In exchange for these services, NCM LLC reimburses NCM, Inc. for compensation paid to the officers (including share based compensation) and other expenses of the officers and for certain out-of-pocket costs. | ||
[3] | On December 26, 2013, the Company sold its Fathom Events business to a newly formed limited liability company (AC JV, LLC) owned 32% by each of the founding members and 4% by NCM LLC. In consideration for the sale, the Company received a total of $25.0 million in promissory notes from its founding members (one-third or approximately $8.3 million from each founding member). The notes bear interest at a fixed rate of 5.0% per annum, compounded annually. Interest and principal payments are due annually in six equal installments commencing on the first anniversary of the closing. | ||
[4] | For the three months ended March 29, 2018 and March 30, 2017, two of the founding members purchased 60 seconds of on-screen advertising time and one founding member purchased 30 seconds (with all three founding members having a right to purchase up to 90 seconds) from NCM LLC to satisfy their obligations under their beverage concessionaire agreements at a 30 second equivalent cost per thousand (“CPM”) rate specified by the ESA. | ||
[5] | Used primarily for marketing to NCM LLC’s advertising clients. |
Related Party Transactions (S26
Related Party Transactions (Summary of Transactions between the Company and the Founding Members Included in Statements of Income) (Parenthetical) (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | ||
Mar. 29, 2018 | Mar. 30, 2017 | Dec. 26, 2013 | Dec. 28, 2017 | |
Related Party Transaction [Line Items] | ||||
On-screen advertising time to satisfy agreement obligations, in seconds | 30 seconds | 30 seconds | ||
AC JV, LLC [Member] | ||||
Related Party Transaction [Line Items] | ||||
Ownership percentage | 4.00% | |||
Maximum [Member] | ||||
Related Party Transaction [Line Items] | ||||
On-screen advertising time which founding members have right to purchase, in seconds | 90 seconds | 90 seconds | ||
On-screen advertising time to satisfy agreement obligations, in seconds | 60 seconds | |||
Minimum [Member] | ||||
Related Party Transaction [Line Items] | ||||
On-screen advertising time to satisfy agreement obligations, in seconds | 30 seconds | |||
One Founding Members [Member] | ||||
Related Party Transaction [Line Items] | ||||
On-screen advertising time purchased, in seconds | 30 seconds | 30 seconds | ||
Two Founding Members [Member] | ||||
Related Party Transaction [Line Items] | ||||
On-screen advertising time purchased, in seconds | 60 seconds | 60 seconds | ||
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 | |||
Founding Members [Member] | ||||
Related Party Transaction [Line Items] | ||||
Promissory notes receivable from founding members | $ 8.3 | $ 8.3 | ||
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% | |||
Founding Members [Member] | Promissory Notes | AC JV, LLC [Member] | ||||
Related Party Transaction [Line Items] | ||||
Notes receivable payment term | Interest and principal payments are due annually in six equal installments commencing on the first anniversary of the closing. |
Related Party Transactions (S27
Related Party Transactions (Summary of Transactions between the Company and the Founding Members Included in Balance Sheets) (Details) - USD ($) $ in Millions | Mar. 29, 2018 | Dec. 28, 2017 | |
Related Party Transaction [Line Items] | |||
Prepaid expenses | $ 4.2 | $ 4.2 | |
Current portion of notes receivable - founding members | [1] | 4.2 | 4.2 |
Long-term notes receivable, net of current portion - founding members | [1] | 4.1 | 4.1 |
Interest receivable on notes receivable (included in other current assets) | [1] | 0.1 | |
Prepaid administrative fees to managing member | [2] | 0.8 | 0.8 |
Intangible assets, net of accumulated amortization | 724.2 | 717.2 | |
Common Unit Adjustments Net of Amortization And Integration Payments [Member] | |||
Related Party Transaction [Line Items] | |||
Intangible assets, net of accumulated amortization | [3] | 694.9 | $ 687.1 |
Purchase Of Movie Tickets And Concession Products [Member] | |||
Related Party Transaction [Line Items] | |||
Prepaid expenses | $ 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 3—Intangible Assets for further information on common unit adjustments and integration payments. |
Related Party Transactions (Sch
Related Party Transactions (Schedule of Mandatory Distributions to Members) (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 29, 2018 | Mar. 30, 2017 | |
Related Party Transaction [Line Items] | ||
Cash distributions declared to members | $ 16.5 | $ 8.2 |
AMC [Member] | ||
Related Party Transaction [Line Items] | ||
Cash distributions declared to members | 2.2 | 2 |
Cinemark [Member] | ||
Related Party Transaction [Line Items] | ||
Cash distributions declared to members | 3 | 1.5 |
Regal [Member] | ||
Related Party Transaction [Line Items] | ||
Cash distributions declared to members | 3.2 | 1.5 |
Founding Members [Member] | ||
Related Party Transaction [Line Items] | ||
Cash distributions declared to members | 8.4 | 5 |
NCM Inc. [Member] | ||
Related Party Transaction [Line Items] | ||
Cash distributions declared to members | $ 8.1 | $ 3.2 |
Related Party Transactions (S29
Related Party Transactions (Schedule of Amounts Due to Founding Members, Net) (Details) - USD ($) $ in Millions | Mar. 29, 2018 | Dec. 28, 2017 |
Related Party Transaction [Line Items] | ||
Theatre access fees, net of beverage revenues and other encumbered theater payments | $ 4.1 | $ 4 |
Distributions payable to founding members | 8.4 | 37.6 |
Integration payments due from founding members | (1.7) | (8.9) |
Total amounts due to founding members, net | 10.8 | 32.7 |
AMC [Member] | ||
Related Party Transaction [Line Items] | ||
Theatre access fees, net of beverage revenues and other encumbered theater payments | 1.5 | 1.5 |
Distributions payable to founding members | 2.2 | 10.8 |
Integration payments due from founding members | (1.6) | (8.5) |
Total amounts due to founding members, net | 2.1 | 3.8 |
Cinemark [Member] | ||
Related Party Transaction [Line Items] | ||
Theatre access fees, net of beverage revenues and other encumbered theater payments | 1 | 1 |
Distributions payable to founding members | 3 | 13.5 |
Integration payments due from founding members | (0.1) | (0.4) |
Cost and other reimbursement | 0.1 | |
Total amounts due to founding members, net | 4 | 14.1 |
Regal [Member] | ||
Related Party Transaction [Line Items] | ||
Theatre access fees, net of beverage revenues and other encumbered theater payments | 1.6 | 1.5 |
Distributions payable to founding members | 3.2 | 13.3 |
Cost and other reimbursement | (0.1) | |
Total amounts due to founding members, net | $ 4.7 | $ 14.8 |
Related Party Transactions (S30
Related Party Transactions (Schedule of Amounts Due to/from Managing Member) (Details) - USD ($) $ in Millions | Mar. 29, 2018 | Dec. 28, 2017 |
Related Party Transaction [Line Items] | ||
Distributions payable to managing member | $ 8.4 | $ 37.6 |
Managing Member [Member] | ||
Related Party Transaction [Line Items] | ||
Distributions payable to managing member | 8.1 | 36.9 |
Cost and other reimbursement | $ (0.3) | $ 1.4 |
Borrowings (Schedule of Outstan
Borrowings (Schedule of Outstanding Debt) (Details) - USD ($) $ in Millions | 3 Months Ended | ||||
Mar. 29, 2018 | Dec. 28, 2017 | Aug. 19, 2016 | Apr. 27, 2012 | ||
Debt Instrument [Line Items] | |||||
Outstanding Balance | $ 953 | $ 932 | |||
Less: debt issuance costs related to term loans and senior notes | (8.2) | (8.7) | |||
Carrying value of long-term debt | 944.8 | 923.3 | |||
Revolving Credit Facility [Member] | |||||
Debt Instrument [Line Items] | |||||
Outstanding Balance | [1] | $ 33 | 12 | ||
Maturity Date | [1] | Nov. 26, 2019 | |||
Term Loans [Member] | |||||
Debt Instrument [Line Items] | |||||
Outstanding Balance | [1] | $ 270 | 270 | ||
Maturity Date | [1] | Nov. 26, 2019 | |||
Senior Secured Notes Due 2022 [Member] | |||||
Debt Instrument [Line Items] | |||||
Outstanding Balance | $ 400 | 400 | |||
Maturity Date | Apr. 15, 2022 | ||||
Interest Rate | 6.00% | 6.00% | |||
Senior Unsecured Notes Due 2026 [Member] | |||||
Debt Instrument [Line Items] | |||||
Outstanding Balance | $ 250 | $ 250 | |||
Maturity Date | Aug. 15, 2026 | ||||
Interest Rate | 5.75% | 5.75% | |||
[1] | The interest rates on the revolving credit facility and term loans are described below. |
Borrowings (Narrative) (Details
Borrowings (Narrative) (Details) - USD ($) | 3 Months Ended | ||||
Mar. 29, 2018 | Dec. 28, 2017 | Aug. 19, 2016 | Apr. 27, 2012 | ||
Debt Instrument [Line Items] | |||||
Debt Instrument, carrying value | $ 953,000,000 | $ 932,000,000 | |||
Senior Secured Notes Due 2022 [Member] | |||||
Debt Instrument [Line Items] | |||||
Debt Instrument, carrying value | $ 400,000,000 | 400,000,000 | |||
Debt instrument face amount | $ 400,000,000 | ||||
Stated interest rate | 6.00% | 6.00% | |||
Date of first required interest payment | Oct. 15, 2012 | ||||
Debt instrument, frequency of periodic payment | The Notes due 2022 pay interest semi-annually in arrears on April 15 and October 15 of each year, which commenced on October 15, 2012. | ||||
Senior Unsecured Notes Due 2026 [Member] | |||||
Debt Instrument [Line Items] | |||||
Debt Instrument, carrying value | $ 250,000,000 | 250,000,000 | |||
Debt instrument face amount | $ 250,000,000 | ||||
Stated interest rate | 5.75% | 5.75% | |||
Date of first required interest payment | Feb. 15, 2017 | ||||
Debt instrument, frequency of periodic payment | The Notes due 2026 pay interest semi-annually in arrears on February 15 and August 15 of each year, which commenced on February 15, 2017. | ||||
Debt instrument issued percentage of face value | 100.00% | ||||
Revolving Credit Facility [Member] | |||||
Debt Instrument [Line Items] | |||||
Borrowing amount of credit facility | $ 175,000,000 | ||||
Debt Instrument, carrying value | [1] | 33,000,000 | 12,000,000 | ||
Remaining borrowing capacity of credit facility | $ 137,200,000 | ||||
Unused line fee, percent | 0.50% | ||||
Revolving Credit Facility [Member] | Letters of Credit [Member] | |||||
Debt Instrument [Line Items] | |||||
Remaining borrowing capacity of credit facility | $ 4,800,000 | ||||
Term Loans [Member] | |||||
Debt Instrument [Line Items] | |||||
Debt Instrument, carrying value | [1] | $ 270,000,000 | $ 270,000,000 | ||
Weighted-average interest rate | 4.40% | ||||
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 | 310.00% | ||||
Senior Secured Credit Facility [Member] | Maximum [Member] | |||||
Debt Instrument [Line Items] | |||||
Senior secured leverage ratio | 650.00% | ||||
[1] | The interest rates on the revolving credit facility and term loans are described below. |
Commitments and Contingencies (
Commitments and Contingencies (Narrative) (Details) - USD ($) | 3 Months Ended | ||
Mar. 29, 2018 | Mar. 30, 2017 | Dec. 28, 2017 | |
Other Commitments [Line Items] | |||
Range of terms, in years | 19 years | ||
Maximum potential payment | $ 77,800,000 | ||
Guarantee obligations amount paid | $ 0 | $ 0 | |
Founding Members [Member] | |||
Other Commitments [Line Items] | |||
Percentage of increase in payment per theater patron | 8.00% | ||
Term of increase in payment percentage per theater patron | 5 years | ||
Percentage of increase in payment per digital screen and digital cinema equipment | 5.00% | ||
Liabilities recorded for related party obligations | $ 0 | $ 0 | |
Minimum [Member] | |||
Other Commitments [Line Items] | |||
Range of terms, in years | 1 year | ||
Minimum [Member] | Founding Members [Member] | |||
Other Commitments [Line Items] | |||
Aggregate percentage of theater access fee paid | 12.00% | ||
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 | Mar. 29, 2018 | Dec. 28, 2017 | |
Schedule Of Fair Value Of Separate Accounts By Major Category Of Investment [Line Items] | |||
Other investments | [1] | $ 2.1 | $ 2.5 |
Total other investments | 3.1 | 3.5 | |
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 | $ 1 |
[1] | The Company received equity securities in privately held companies as consideration for a portion of advertising contracts. The equity securities are accounted for at adjusted cost in accordance with the practicability exception under ASU 2016-01 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 4—Related Party Transactions. This investment is accounted for utilizing the equity method. |
Fair Value Measurements (Sche35
Fair Value Measurements (Schedule of Other Investments) (Parenthetical) (Details) | 3 Months Ended | 12 Months Ended |
Mar. 29, 2018 | Dec. 28, 2017 | |
Maximum [Member] | ||
Schedule Of Fair Value Of Separate Accounts By Major Category Of Investment [Line Items] | ||
Cost-method ownership percentage | 20.00% | 20.00% |
Fair Value Measurements (Narrat
Fair Value Measurements (Narrative) (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 29, 2018 | Mar. 30, 2017 | Dec. 28, 2017 | |
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | |||
Impairment of investment | $ 0.4 | $ 1.4 | |
Founding Members [Member] | |||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | |||
Promissory notes receivable from founding members | 8.3 | $ 8.3 | |
Impaired Investments [Member] | |||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | |||
Fair value of cost method investment | $ 0 | $ 0 |
Fair Value Measurements (Estima
Fair Value Measurements (Estimated Fair Values of Company's Financial Instruments) (Details) - USD ($) $ in Millions | Mar. 29, 2018 | Dec. 28, 2017 | |
Term Loans [Member] | Carrying Value [Member] | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Debt Instrument | $ 270 | $ 270 | |
Term Loans [Member] | Fair Value [Member] | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Debt Instrument | [1] | 270.7 | 270.8 |
Notes Due 2022 [Member] | Carrying Value [Member] | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Debt Instrument | 400 | 400 | |
Notes Due 2022 [Member] | Fair Value [Member] | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Debt Instrument | [1] | 405.3 | 407.3 |
Notes Due 2026 [Member] | Carrying Value [Member] | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Debt Instrument | 250 | 250 | |
Notes Due 2026 [Member] | Fair Value [Member] | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Debt Instrument | [1] | $ 226.6 | $ 235 |
[1] | If the Company were to measure the borrowings in the above table at fair value on the balance sheet they would be classified as Level 2 based upon the inputs utilized. |