# National CineMedia, Inc. (NCMI) Informational only - not investment advice. CIK: 0001377630 SIC: 7310 Services-Advertising SIC breadcrumb: [Services](/division/I/) > [Business Services](/major-group/73/) > [SIC 7310 Services-Advertising](/industry/7310/) Latest 10-K filed: 2026-02-26 SEC page: https://www.sec.gov/edgar/browse/?CIK=1377630 Filing source: https://www.sec.gov/Archives/edgar/data/1377630/000119312526076788/ncmi-20260101.htm ## Selected Fundamentals | Metric | Value | Unit | FY | Filed | | --- | ---: | --- | ---: | --- | | Revenue | 243200000 | USD | 2026 | 2026-02-26 | | Net income | -10600000 | USD | 2026 | 2026-02-26 | | Assets | 490600000 | USD | 2026 | 2026-02-26 | ## Financials Annual standardized facts from SEC companyfacts as of latest extracted filing date 2026-02-26. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0001377630.json. Derived margins, ratios, and free cash flow are computed from the extracted annual SEC facts. | Metric | 2009 | 2010 | 2011 | 2012 | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | 2026 | | --- | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | | Revenue | | | | | 447,600,000 | 426,100,000 | 441,400,000 | 444,800,000 | 90,400,000 | 114,600,000 | 249,200,000 | | 240,800,000 | 243,200,000 | | Net income | | | | | 32,900,000 | 58,300,000 | 29,800,000 | 36,100,000 | -65,400,000 | -48,700,000 | -28,700,000 | 705,200,000 | -22,300,000 | -10,600,000 | | Operating income | | | | | 173,000,000 | 153,900,000 | 154,300,000 | 161,300,000 | -61,000,000 | -68,600,000 | 6,900,000 | -27,300,000 | -19,500,000 | -13,900,000 | | Diluted EPS | | | | | 0.54 | 0.48 | 0.37 | 0.46 | -0.84 | -0.61 | -3.50 | 14.34 | -0.23 | -0.11 | | Operating cash flow | 138,300,000 | 143,700,000 | 161,800,000 | 81,600,000 | | | | | | | | -6,700,000 | 60,300,000 | 8,400,000 | | Capital expenditures | | | | | 12,900,000 | 11,600,000 | 14,200,000 | 14,000,000 | 8,000,000 | 5,700,000 | 2,900,000 | 3,300,000 | 5,800,000 | 5,600,000 | | Dividends paid | | | | | 54,600,000 | 58,700,000 | 54,400,000 | 53,600,000 | 32,000,000 | 16,900,000 | 9,500,000 | 500,000 | 300,000 | 11,400,000 | | Share buybacks | | | | | | | | | | | | 0.00 | 13,100,000 | 22,000,000 | | Assets | | | | | 1,142,500,000 | 1,173,100,000 | 1,141,800,000 | 1,130,000,000 | 886,200,000 | 817,400,000 | 792,400,000 | 567,700,000 | 568,600,000 | 490,600,000 | | Liabilities | | | | | 1,259,200,000 | 1,247,900,000 | 1,231,000,000 | 1,251,200,000 | 1,154,800,000 | 1,200,900,000 | 1,256,400,000 | 133,200,000 | 157,400,000 | 115,200,000 | | Stockholders' equity | | | | | -358,200,000 | -362,500,000 | -368,000,000 | -379,500,000 | -473,100,000 | -526,700,000 | -515,300,000 | 434,500,000 | 411,200,000 | 375,400,000 | | Cash and cash equivalents | | | | | 23,000,000 | 30,200,000 | 41,400,000 | 55,900,000 | 180,300,000 | 101,200,000 | 61,700,000 | 34,600,000 | 75,100,000 | 34,600,000 | | Free cash flow | | | | | | | | | | | | -10,000,000 | 54,500,000 | 2,800,000 | ### Ratios ROE and ROA use period-end equity/assets. Liabilities / equity uses total liabilities divided by stockholders' equity. Current ratio uses current assets divided by current liabilities when both are reported. | Metric | 2009 | 2010 | 2011 | 2012 | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | 2026 | | --- | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | | Net margin | | | | | 7.35% | 13.68% | 6.75% | 8.12% | -72.35% | -42.50% | -11.52% | | -9.26% | -4.36% | | Operating margin | | | | | 38.65% | 36.12% | 34.96% | 36.26% | -67.48% | -59.86% | 2.77% | | -8.10% | -5.72% | | Return on equity | | | | | | | | | | | | 162.30% | -5.42% | -2.82% | | Return on assets | | | | | 2.88% | 4.97% | 2.61% | 3.19% | -7.38% | -5.96% | -3.62% | 124.22% | -3.92% | -2.16% | | Liabilities / equity | | | | | | | | | | | | 0.31 | 0.38 | 0.31 | | Current ratio | | | | | 1.83 | 1.94 | 2.09 | 2.13 | 4.00 | 2.27 | 0.14 | 2.46 | 2.42 | 2.22 | ## Quarterly Quarterly standardized facts from SEC companyfacts as of latest extracted filing date 2026-05-12. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0001377630.json. Flow metrics use discrete quarter-length periods from 10-Q/10-Q/A filings. Q4 revenue and net income are derived only when annual FY and nine-month YTD facts exist for the same fiscal year; derived Q4 values are labeled. EPS Q4 is not derived. | Quarter | End date | Revenue | Net income | Diluted EPS | Method | | --- | --- | ---: | ---: | ---: | --- | | 2022-Q1 | 2022-06-30 | | | -0.01 | reported discrete quarter | | 2022-Q3 | 2022-09-29 | | | -0.11 | reported discrete quarter | | 2023-Q1 | 2023-03-30 | | | -0.31 | reported discrete quarter | | 2023-Q2 | 2023-06-29 | 14,800,000 | 545,300,000 | 3.13 | reported discrete quarter | | 2023-Q3 | 2023-09-28 | 24,700,000 | 181,800,000 | 2.89 | reported discrete quarter | | 2023-Q4 | 2023-12-28 | 90,800,000 | 23,700,000 | | derived Q4 = FY annual - nine-month YTD | | 2024-Q1 | 2024-03-28 | 37,400,000 | -34,700,000 | -0.36 | reported discrete quarter | | 2024-Q2 | 2024-06-27 | 54,700,000 | -8,700,000 | -0.09 | reported discrete quarter | | 2024-Q3 | 2024-09-26 | 62,400,000 | -3,600,000 | -0.04 | reported discrete quarter | | 2024-Q4 | 2024-12-26 | 86,300,000 | 24,700,000 | | derived Q4 = FY annual - nine-month YTD | | 2025-Q1 | 2025-03-27 | 34,900,000 | -30,700,000 | -0.32 | reported discrete quarter | | 2025-Q2 | 2025-06-26 | 51,800,000 | -10,700,000 | -0.11 | reported discrete quarter | | 2025-Q3 | 2025-09-25 | 63,400,000 | 1,600,000 | 0.02 | reported discrete quarter | | 2025-Q4 | 2026-01-01 | 93,200,000 | 29,300,000 | | derived Q4 = FY annual - nine-month YTD | | 2026-Q1 | 2026-04-02 | 34,000,000 | -28,600,000 | -0.31 | reported discrete quarter | ## Macro Cross-References - [CPIAUCSL](/indicator/CPIAUCSL/): Consumer Price Index for All Urban Consumers: All Items in U.S. City Average - [UNRATE](/indicator/UNRATE/): Unemployment Rate - [FEDFUNDS](/indicator/FEDFUNDS/): Federal Funds Effective Rate - [CES0500000003](/indicator/CES0500000003/): Average Hourly Earnings of All Employees, Total Private - [DFEDTARU](/indicator/DFEDTARU/): Federal Funds Target Range - Upper Limit - [DFEDTARL](/indicator/DFEDTARL/): Federal Funds Target Range - Lower Limit - [DGS3MO](/indicator/DGS3MO/): Market Yield on U.S. Treasury Securities at 3-Month Constant Maturity - [DGS2](/indicator/DGS2/): Market Yield on U.S. Treasury Securities at 2-Year Constant Maturity - [DGS10](/indicator/DGS10/): Market Yield on U.S. Treasury Securities at 10-Year Constant Maturity - [DGS30](/indicator/DGS30/): Market Yield on U.S. Treasury Securities at 30-Year Constant Maturity - [T10Y2Y](/indicator/T10Y2Y/): 10-Year Treasury Constant Maturity Minus 2-Year Treasury Constant Maturity - [CPILFESL](/indicator/CPILFESL/): Consumer Price Index for All Urban Consumers: All Items Less Food and Energy - [CPIUFDSL](/indicator/CPIUFDSL/): Consumer Price Index for All Urban Consumers: Food - [CPIENGSL](/indicator/CPIENGSL/): Consumer Price Index for All Urban Consumers: Energy - [CUSR0000SAH1](/indicator/CUSR0000SAH1/): Consumer Price Index for All Urban Consumers: Shelter - [PCEPI](/indicator/PCEPI/): Personal Consumption Expenditures: Chain-type Price Index - [PCEPILFE](/indicator/PCEPILFE/): Personal Consumption Expenditures Excluding Food and Energy: Chain-type Price Index - [PPIACO](/indicator/PPIACO/): Producer Price Index by Commodity: All Commodities - [T10YIE](/indicator/T10YIE/): 10-Year Breakeven Inflation Rate - [U6RATE](/indicator/U6RATE/): Total Unemployed, Plus All Marginally Attached Workers Plus Total Employed Part Time for Economic Reasons - [PAYEMS](/indicator/PAYEMS/): All Employees, Total Nonfarm - [CIVPART](/indicator/CIVPART/): Labor Force Participation Rate - [EMRATIO](/indicator/EMRATIO/): Employment-Population Ratio - [UNEMPLOY](/indicator/UNEMPLOY/): Unemployed - [CE16OV](/indicator/CE16OV/): Employment Level - [ICSA](/indicator/ICSA/): Initial Claims - [JTSJOL](/indicator/JTSJOL/): Job Openings: Total Nonfarm - [JTSQUR](/indicator/JTSQUR/): Quits: Total Nonfarm - [GDPC1](/indicator/GDPC1/): Real Gross Domestic Product - [A191RL1Q225SBEA](/indicator/A191RL1Q225SBEA/): Real Gross Domestic Product: Percent Change from Preceding Period - [INDPRO](/indicator/INDPRO/): Industrial Production: Total Index - [TCU](/indicator/TCU/): Capacity Utilization: Total Index - [HOUST](/indicator/HOUST/): New Privately-Owned Housing Units Started: Total Units - [PERMIT](/indicator/PERMIT/): New Privately-Owned Housing Units Authorized in Permit-Issuing Places: Total Units - [RSAFS](/indicator/RSAFS/): Advance Retail Sales: Retail Trade - [PCE](/indicator/PCE/): Personal Consumption Expenditures - [DSPIC96](/indicator/DSPIC96/): Real Disposable Personal Income - [PSAVERT](/indicator/PSAVERT/): Personal Saving Rate - [M2SL](/indicator/M2SL/): M2 - [BOPGSTB](/indicator/BOPGSTB/): U.S. International Trade in Goods and Services: Balance - [MSPUS](/indicator/MSPUS/): Median Sales Price of Houses Sold for the United States - [HSN1F](/indicator/HSN1F/): New One Family Houses Sold: United States - [RHORUSQ156N](/indicator/RHORUSQ156N/): Homeownership Rate in the United States - [TTLCONS](/indicator/TTLCONS/): Total Construction Spending: Total Construction in the United States - [RRVRUSQ156N](/indicator/RRVRUSQ156N/): Rental Vacancy Rate in the United States - [TOTALSL](/indicator/TOTALSL/): Total Consumer Credit Owned and Securitized - [REVOLSL](/indicator/REVOLSL/): Revolving Consumer Credit Owned and Securitized - [DRCCLACBS](/indicator/DRCCLACBS/): Delinquency Rate on Credit Card Loans, All Commercial Banks - [GDP](/indicator/GDP/): Gross Domestic Product - [GPDI](/indicator/GPDI/): Gross Private Domestic Investment - [GCE](/indicator/GCE/): Government Consumption Expenditures and Gross Investment - [PCEC](/indicator/PCEC/): Personal Consumption Expenditures - [NETEXP](/indicator/NETEXP/): Net Exports of Goods and Services - [GFDEBTN](/indicator/GFDEBTN/): Federal Debt: Total Public Debt - [GFDEGDQ188S](/indicator/GFDEGDQ188S/): Federal Debt: Total Public Debt as Percent of Gross Domestic Product - [FYFSD](/indicator/FYFSD/): Federal Surplus or Deficit - [FGRECPT](/indicator/FGRECPT/): Federal Government Current Receipts - [FGEXPND](/indicator/FGEXPND/): Federal Government: Current Expenditures - [MANEMP](/indicator/MANEMP/): All Employees, Manufacturing - [USCONS](/indicator/USCONS/): All Employees, Construction - [USTRADE](/indicator/USTRADE/): All Employees, Retail Trade - [USFIRE](/indicator/USFIRE/): All Employees, Financial Activities - [USGOVT](/indicator/USGOVT/): All Employees, Government - [AWHAETP](/indicator/AWHAETP/): Average Weekly Hours of All Employees, Total Private - [DGORDER](/indicator/DGORDER/): Manufacturers' New Orders: Durable Goods - [NEWORDER](/indicator/NEWORDER/): Manufacturers' New Orders: Nondefense Capital Goods Excluding Aircraft - [BUSINV](/indicator/BUSINV/): Total Business Inventories - [EXPGS](/indicator/EXPGS/): Exports of Goods and Services - [IMPGS](/indicator/IMPGS/): Imports of Goods and Services - [IR](/indicator/IR/): Import Price Index (End Use): All Commodities - [PPIFIS](/indicator/PPIFIS/): Producer Price Index by Commodity: Final Demand ## Latest quarter (10-Q) Latest 10-Q source: https://www.sec.gov/Archives/edgar/data/1377630/000119312526219502/ncmi-20260402.htm Extracted structurally from real Item 2 body heading to real Item 3/4 boundary. Confidence: high Filing date: 2026-05-12 Report date: 2026-04-02 Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations Some of the information in this Quarterly Report on Form 10-Q includes “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934 (the “Exchange Act”), as amended. All statements other than statements of historical facts included in this Form 10-Q, including, without limitation, certain statements under “Management’s Discussion and Analysis of Financial Condition and Results of Operations” may constitute forward-looking statements. In some cases, you can identify these “forward-looking statements” by the specific words, including but not limited to “may,” “should,” “expects,” “plans,” “anticipates,” “believes,” “estimates,” “forecasts,” “predicts,” “potential” or “continue” or the negative of those words and other comparable words. These forward-looking statements involve risks and uncertainties. Our actual results could differ materially from those indicated in these statements as a result of certain factors as more fully discussed under the heading “Risk Factors” in our Quarterly Report on Form 10-Q for the three months ended April 2, 2026 and in our Annual Report on Form 10-K for the Company’s fiscal year ended January 1, 2026. Investors are cautioned not to place undue reliance on any such forward-looking statements, which speak to the information only as of the date they are made. We undertake no obligation to update any forward-looking statement, whether as a result of new information, future events or otherwise, except as required by law. The following discussion and analysis is a supplement to and should be read in conjunction with the unaudited Condensed Consolidated Financial Statements and notes thereto included herein and the audited financial statements and other disclosure included in our Annual Report on Form 10-K for the Company’s fiscal year ended January 1, 2026. In the following discussion and analysis, the term net income refers to net income attributable to the Company. Overview National CineMedia is the largest cinema advertising platform in the U.S. With unparalleled reach and scale, NCM connects brands to sought-after young, diverse audiences through the power of movies and pop culture. A premium video, full-funnel marketing solution for advertisers, NCM enhances marketers’ ability to measure and drive results. We currently derive revenue principally from the sale of advertising to national, regional and local businesses in The Noovie® Show, our cinema advertising and entertainment show seen on movie screens across the U.S. within the NCM Network, and the Cinelife® Show within the Spotlight Cinema Network. We present multiple formats of The Noovie® Show and Cinelife® Show depending on the theater circuit in which it runs, with almost all theater circuits including Post-Showtime advertising inventory after the advertised showtime. The movie trailers presented by the theater circuits that run before the feature film are not part of our preshows. We also sell advertising on our lobby network (“LEN”), a series of strategically placed screens located in movie theater lobbies, as well as other forms of advertising and promotions in theater lobbies. In addition, we sell data and digital advertising through the NCMx™ suite of products and through our Noovie digital properties. We also sell advertising across a variety of complementary out of home venues. In combination, our multimedia advertising connects brands with audiences across all screens, both in theaters and beyond, before, during and after their moviegoing experience. We have long-term ESAs (approximately 15.4 weighted average years remaining) and multi-year agreements with our network affiliates, which expire at various dates between June 1, 2026 and July 13, 2033, with our largest affiliate agreement expiring on July 13, 2033. The weighted average remaining term of the ESAs and the network affiliate agreements is 11.6 years as of April 2, 2026. The ESAs and network affiliate agreements grant NCM LLC exclusive rights in their theaters to sell advertising, subject to limited exceptions. Our Noovie Show and LEN programming are distributed predominantly via satellite through our proprietary digital content network (“DCN”) and Media Director. Management focuses on several measurements that we believe provide us with the necessary ratios and key performance indicators to manage our business, determine how we are performing versus our internal goals and targets, and against the performance of our competitors and other benchmarks in the marketplace in which we operate. We focus on many operating metrics including revenue, Adjusted OIBDA and Adjusted OIBDA margin, as some of our primary measurement metrics. In addition, we monitor our monthly advertising performance measurements, including advertising inventory utilization, advertising pricing (“CPM”), local advertising rate per theater per week, advertising revenue per attendee, as well as significant operating expenses and related trends. We also monitor free cash flow, cash balances, the fixed charge coverage ratio and revolving credit facility availability to ensure financial debt covenant compliance and that there is adequate cash availability to fund our working capital needs, debt obligations and any future dividends declared by our Board of Directors. Our operating results may be affected by a variety of internal and external factors and trends described more fully in the section entitled “Risk Factors” in our Annual Report on Form 10-K, filed with the SEC on February 26, 2026, for our fiscal year ended January 1, 2026 and in this Quarterly Report on Form 10-Q. Recent Developments On March 31, 2026, the Company introduced a transformation initiative to increase operational efficiencies and allow for the ultimate automation of certain functions (“2026 Transformation Initiative”). The Company eliminated the positions of 9.3% of its workforce and is in the process of transitioning the positions of an additional portion of its workforce to an outsourced service provider. The 2026 Transformation Initiative is expected to be completed in the third quarter of 2026. For the quarter ended April 2, 2026, the Company recognized severance expense of $1.0 million related to the eliminated positions and will recognize additional severance and transition costs in the second and third quarter of 2026 related to the transitioning employees. In conjunction with this initiative, the Company reviewed all vendor relationships and is in the process of terminating its relationship with certain vendors 19 resulting in an accrual of estimated termination fees of $2.6 million as of April 2, 2026. The Company also engaged the services of a third-party consultant to assist with the 2026 Transformation Initiative and recorded a charge of $1.1 million in the quarter ended April 2, 2026 related to these services. On November 14, 2025, NCM LLC entered into a Membership Interest Purchase Agreement (“MIPA”) with Spotlight Cinema Networks (“Spotlight”), a niche cinema advertising company, whereby the Company acquired 100.0% of Spotlight. The acquisition of Spotlight added high-scale luxury screens and exhibitors that offer unique and engaging customer experiences to the Company’s platform, unlocking new advertising and preshow entertainment inventory. Spotlight’s exhibitor partners, including Cinépolis Luxury Cinema, Landmark Theatres, Flix Brewhouse and LOOK Dine-In Cinemas, complement NCM’s national theater network and extend NCM’s reach among culturally engaged premium audiences. The addition of Spotlight’s footprint increases NCM’s national market share by more than 6.0% and expands its theater presence by approximately 30.0% in the critical New York and Los Angeles markets. Spotlight was consolidated within the Company's financial statements as of November 15, 2025. Refer to Note 4—Business Combinations for more information regarding the acquisition and consolidation of Spotlight. On April 17, 2025, the Company and AMC, entered into the Second Amended and Restated Exhibitor Services Agreement (the “2025 AMC Agreement”) and a separate termination agreement (the “AMC Termination Agreement”) by and among NCM LLC, NCM, Inc. and AMC. The 2025 AMC Agreement extends the term of the ESA by five years and more closely aligns the program distributed by NCM LLC in AMC theaters to the predominant pre-feature program show structure in the rest of NCM LLC's advertising network and adjusts the consideration paid by NCM LLC. The AMC Termination Agreement waives AMC’s rights under certain agreements entered into at the time of the IPO. The agreements were accounted for in accordance with the lease modification guidance within ASC 842—Leases as the amended ESA contains a short-term operating lease of AMC’s screens. The agreements were considered combined as they were entered into contemporaneously by the same parties. As a result of the agreements, in the year ended January 1, 2026, NCM LLC released $24.8 million of the 'Payable under the TRA' and reversed the receivable of $10.6 million from AMC, related to unpaid integration payments and the receivable under the Common Unit Adjustment Agreement within 'Prepaid expenses and other assets' on the Company's unaudited Condensed Consolidated Balance Sheet. NCM will no longer have an obligation to make TRA payments to AMC, provide common units as a part of the Common Unit Adjustment Agreement or distribute NCM LLC's available cash to AMC and the Company received the benefits of the revised ESA, including enhancements related to the pre-feature show structure and NCM's exclusive right to advertise in AMC's theaters. The net impact of these reversals was recorded to the 'Intangible Assets, net of amortization' as AMC's forfeiture of this net payable was considered akin to a lease incentive. The reduction in the intangible asset for the ESAs and the extension of the term of the ESA will result in reduced amortization expense, as it is considered akin to lease expense, for the remainder of the contract term. Refer to Note 5—Intangible Assets, Note 8—Income Taxes, and Note 9—Commitments and Contingencies and the Company’s Form 8-K filed with the SEC on April 23, 2025 for additional detail surrounding these agreements. On January 24, 2025, NCM LLC, as borrower, entered into a Loan and Security Agreement with U.S. Bank National Association, as lender (the “2025 Credit Facility”). The agreement provides for a $45.0 million senior secured revolving credit facility that matures on January 24, 2028. In connection with entering into the 2025 Credit Facility, NCM LLC repaid in full the $10.0 million balance outstanding and terminated all commitments under its Revolving Credit Facility 2023, and in connection with this termination, paid a prepayment fee equal to 1% of the total commitment. The 2025 Credit Facility has reduced the Company's overall interest expense, extends the maturity date to 2028 and is a cash flow-based revolving loan compared to the asset-based revolving loan of the Revolving Credit Facility 2023. As of April 2, 2026, NCM LLC has an outstanding balance of $12.0 million under the 2025 Credit Facility. Borrowings under the 2025 Credit Facility may be used for, among other things, working capital and other general corporate purposes of the Company and bear interest at a floating rate equal to term SOFR (subject to a floor of zero) plus an applicable margin of 2.00%, which is subject to increase by an additional 2.00% upon the occurrence of an event of default. On March 18, 2024, the Board of Directors of the Company approved a stock repurchase program under which the Company is authorized to use assets of the Company to repurchase up to $100.0 million of shares of the Company’s Common Stock, exclusive of any fees, commissions or other [Excerpt truncated for page length; source filing is linked above.] ## Latest 10-K MD&A Extracted from Item 7 to the first post-MD&A boundary after HTML sanitization. Confidence: high Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations As discussed in the forepart of this report, some of the information in this Annual Report on Form 10-K includes “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). All statements other than statements of historical facts included in this Form 10-K, including, without limitation, certain statements under “Management’s Discussion and Analysis of Financial Condition and Results of Operations” may constitute forward-looking statements. In some cases, you can identify these “forward-looking statements” by the specific words, including but not limited to “may,” “should,” “expects,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” “potential” or “continue” or the negative of those words and other comparable words. These forward-looking statements involve risks and uncertainties. The following discussion and analysis should be read in conjunction with our historical financial statements and the related notes thereto included elsewhere in this document. In the following discussion and analysis, the term net income refers to net income attributable to NCM, Inc. This following section of this Form 10-K generally discusses fiscal 2025 and fiscal 2024 items and year-to-year comparisons between fiscal 2025 and fiscal 2024. Discussions of fiscal 2023 items and year-to-year comparisons between fiscal 2024 and fiscal 2023 that are not included in this Form 10-K can be found in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of the Company’s Annual Report on Form 10-K for the fiscal year ended December 26, 2024. 34 Overview National CineMedia is the largest cinema advertising platform in the U.S. With unparalleled reach and scale, NCM connects brands to sought-after young, diverse audiences through the power of movies and pop culture. A premium video, full-funnel marketing solution for advertisers, NCM enhances marketers’ ability to measure and drive results. We currently derive revenue principally from the sale of advertising to national, regional and local businesses in The Noovie® Show, our cinema advertising and entertainment show seen on movie screens across the U.S. within the NCM Network, and the Cinelife® Show within the Spotlight Cinema Network. We present multiple formats of The Noovie® Show and Cinelife® Show depending on the theater circuit in which it runs, with almost all theater circuits including Post-Showtime advertising inventory after the advertised showtime. The movie trailers presented by the theater circuits that run before the feature film are not part of our preshows. We also sell advertising on our LEN, a series of strategically-placed screens located in movie theater lobbies, as well as other forms of advertising, promotions and experiences in theater lobbies. In addition, we sell digital advertising through the NCMx™ suite of products and through our Noovie digital properties. We also sell advertising across a variety of complementary out of home venues. In combination, our multimedia advertising connects brands with audiences across all screens, both in theaters and beyond, before, during and after their moviegoing experience. We have long-term ESAs (approximately 15.6 weighted average years) with the ESA Parties and multi-year agreements with network affiliates, which expire at various dates between March 31, 2026 and July 13, 2033, with our largest affiliate agreement expiring on July 13, 2033. The weighted average remaining term of the ESAs and the network affiliate agreements is 11.8 years as of January 1, 2026. The ESAs and network affiliate agreements grant NCM LLC exclusive rights in their theaters to sell advertising, subject to limited exceptions. Our advertising preshows and LEN programming are distributed predominantly through our proprietary DCN and Media Director. Management focuses on several measurements that we believe provide us with the necessary ratios and key performance indicators to manage our business, determine how we are performing versus our internal goals and targets, and against the performance of our competitors and other benchmarks in the marketplace in which we operate. We focus on many operating metrics including revenue, Adjusted OIBDA and Adjusted OIBDA margin, as some of our primary measurement metrics. In addition, we monitor our monthly advertising performance measurements, including advertising inventory utilization, advertising pricing (CPM), local advertising rate per theater per week, advertising revenue per attendee, as well as significant operating expenses and related trends. We also monitor free cash flow, cash balances, the fixed charge coverage ratio and revolving credit facility availability to ensure financial debt covenant compliance and that there is adequate cash availability to fund our working capital needs, debt obligations and any future dividends declared by our Board of Directors. Recent Developments Spotlight—On November 14, 2025, NCM LLC entered into a Membership Interest Purchase Agreement (“MIPA”) with Spotlight Cinema Networks (“Spotlight”), a niche cinema advertising company, whereby the Company acquired 100.0% of Spotlight. The acquisition of Spotlight adds high-scale luxury screens and exhibitors that offer unique and engaging customer experiences to the Company’s platform, unlocking new advertising and preshow entertainment inventory. Spotlight’s exhibitor partners, including Cinépolis Luxury Cinema, Landmark Theatres, Flix Brewhouse and LOOK Dine-In Cinemas, complement NCM’s national theater network and extend NCM’s reach among culturally engaged premium audiences. The addition of Spotlight’s footprint increases NCM’s national market share by more than 6.0% and expands its theater presence by approximately 30.0% in the critical New York and Los Angeles markets. Spotlight was consolidated within the Company's financial statements for the period of November 15, 2025 through January 1, 2026. Refer to Note 5—Business Combinations for more information regarding the acquisition and consolidation of Spotlight. AMC—On April 17, 2025, the Company and AMC, entered into the Second Amended and Restated Exhibitor Services Agreement (the “2025 AMC Agreement”) and a separate termination agreement (the “AMC Termination Agreement”) by and among NCM LLC, NCM, Inc. and AMC. The 2025 AMC Agreement extends the term of the ESA by five years, more closely aligns the program distributed by NCM LLC in AMC theaters to the predominant pre-feature program show structure in the rest of NCM LLC's advertising network and adjusts the consideration paid by NCM LLC. The AMC Termination Agreement waives AMC’s rights under certain agreements entered into at the time of the IPO. The agreements were accounted for in accordance with the lease modification guidance within ASC 842—Leases as the amended ESA contains a short-term operating lease of AMC’s screens. The agreements were considered combined as they were entered into contemporaneously by the same parties. As a result of the agreements, in the year ended January 1, 2026, NCM LLC released $24.8 million of the 'Payable under the TRA' and reversed the receivable of $10.6 million from AMC, related to unpaid integration payments, and the receivable under the Common Unit Adjustment Agreement within 'Prepaid expenses and other assets' on the Company's audited Condensed Consolidated Balance Sheet. NCM will no longer have an obligation to make TRA payments to AMC, provide common units as a part of the Common Unit Adjustment Agreement or distribute NCM LLC's available cash to AMC and the Company received the benefits of the revised ESA, including enhancements related to the pre-feature show structure and the exclusive right to advertise in AMC's theaters. The net impact of these 35 reversals was recorded to the 'Intangible Assets, net of amortization' as AMC's forfeiture of this net payable was considered akin to a lease incentive. The reduction in the intangible asset for the ESAs and the extension of the term of the ESA will result in reduced amortization expense, as it is considered akin to lease expense, for the remainder of the contract term. Refer to Note 6—Intangible Assets, Note 7 —Income Taxes, and Note 13—Commitments and Contingencies and the Company’s Form 8-K filed with the SEC on April 23, 2025 for additional detail surrounding these agreements. Debt Agreement—On January 24, 2025, NCM LLC, entered into a Loan and Security Agreement with U.S. Bank National Association, as lender. The agreement provides for a $45.0 million senior secured revolving credit facility (the “2025 Credit Facility”) that matures on January 24, 2028. In connection with entering into the 2025 Credit Facility, NCM LLC repaid in full the $10.0 million balance outstanding as of December 26, 2024 and terminated all commitments under its 2023 Revolving Credit Facility, and paid a prepayment fee equal to 1% of the total commitment. The 2025 Credit Facility is expected to result in a meaningful reduction of the Company’s overall interest expense, extends the maturity date to 2028 and is a cash flow-based revolving loan compared to the asset-based revolving loan of the 2023 Revolving Credit Facility. As of January 1, 2026, NCM LLC has an outstanding balance of $12.0 million under the 2025 Credit Facility. Borrowings under the 2025 Credit Facility may be used for, among other things, working capital and other general corporate purposes of the Company and bear interest at a floating rate equal to term SOFR (subject to a floor of zero) plus an applicable margin of 2.00%, which is subject to increase by an additional 2.00% upon the occurrence of an event of default. Share Repurchase Program—On March 18, 2024, the Board of Directors of the Company approved a stock repurchase program under which the Company is authorized to use assets of the Company to repurchase up to $100.0 million of shares of the Company’s Common Stock, exclusive of any fees, commissions or other expenses related to such repurchases, from time to time over a period of three years. Shares may be repurchased under the program through open market purchases, block trades, or accelerated or other structured share repurchase programs. During the year ended January 1, 2026 and December 26, 2024, 4.1 million and 2.5 million shares were repurchased on the open market, respectively. In accordance with ASC 505 —Equity, the Company elected to retire the shares. Upon the retirement of these shares, the excess over par value paid, inclusive of direct costs, of $22.3 million and $13.4 million was recorded as a reduction to retained earnings for the year ended January 1, 2026 and December 26, 2024, respectively. Reverse Stock Split—On August 3, 2023, the Company effected a one-for-ten (1:10) reverse stock split of its common stock, par value $0.01 per share. The reverse stock split reduced the number of outstanding shares of the Company’s common stock from 174,112,385 shares as of August 3, 2023, to 17,411,323 shares outstanding post-split. After the cancellation of Regal’s shares on August 7, 2023, there were 13,343,065 shares outstanding. The primary purpose of the reverse stock split was to comply with the Company’s obligations under the NCMI 9019 Settlement, as well as, to increase the per share market price of the Company’s common stock in an effort to maintain compliance with applicable Nasdaq continued listing standards. Bankruptcy Filing, Deconsolidation and Reconsolidation of NCM LLC—On April 11, 2023, NCM LLC filed a voluntary petition for reorganization with a prearranged Chapter 11 plan under Chapter 11 of Title 11 of the United States Code in the Bankruptcy Code in the Bankruptcy Court. During the Chapter 11 Case, the Company was deemed to no longer control NCM LLC for accounting purposes and NCM LLC was deconsolidated from the Company’s financial statements prospectively as of April 11, 2023. We continued to operate as the manager of the debtor-in-possession pursuant to the authority granted under Chapter 11 of the Bankruptcy Code throughout the Chapter 11 Case. On June 27, 2023, the Bankruptcy Court entered the Confirmation Order approving the Disclosure Statement on a final basis and confirming the Company’s Plan. Following confirmation of the Plan on August 7, 2023, all the conditions to effectiveness of the Plan were satisfied or waived, the Restructuring Transactions were substantially consummated and NCM LLC emerged from bankruptcy. Among other things, on the Effective Date, in accordance with the Plan, all common units under the NCM LLC Operating Agreement were canceled and extinguished, NCM, Inc. received NCM LLC common units and transferred the NCM Capital Contribution of approximately $15.5 million to NCM LLC, NCM LLC assumed certain unexpired Executory Contracts and Unexpired Leases, including AMC’s and Cinemark’s ESAs, NCM LLC transferred $8.8 million of cash to a professional fees escrow account and $15.0 million to an unsecured creditor settlements escrow account for the General Unsecured Claim Pool. NCM LLC commenced distributions to creditors, including the issuance of shares of NCM, Inc. common stock to holders of Secured Debt Claims and NCM LLC entered into an Exit Facility to support operations upon emergence. As a result of the Plan, all historical debt of NCM LLC was discharged and NCM LLC recorded a gain on bankruptcy of $916.4 million for the year ended December 28, 2023. Additionally, upon emergence from bankruptcy, NCM, Inc., regained control and retained 100.0% ownership of NCM LLC, after taking into account elections by the holders of Secured Debt Claims to receive NCM, Inc. common stock in lieu of NCM LLC common units and was therefore reconsolidated into the Company’s financial statements prospectively as of August 7, 2023 akin to an acquisition under ASC 805 – Business Combinations. In accordance with ASC 805 – Business Combinations, the assets and liabilities of NCM LLC were adjusted to their estimated fair value as of the Effective Date. 36 As of January 1, 2026, the Company has not completed all agreed upon payments to the General Unsecured Claim Pool, due to the existence of one pre-petition litigation matter that is ongoing in the Bankruptcy Court, which could impact the payments to other unsecured creditors from the General Unsecured Claims Pool. As a result, the Company held a total of $3.0 million within the escrow accounts and accruals, presented within ‘Restricted cash’ and ‘Accounts Payable’ on the audited Consolidated Balance Sheets as of January 1, 2026 and December 26, 2024, respectively. Regal Advertising Agreement—On September 7, 2022, Cineworld Group plc, the parent company of Regal, and certain of its subsidiaries, including Regal, Regal Cinemas, Inc., formerly a party to an ESA with NCM LLC, and Regal CineMedia Holdings, LLC, formerly a party to other agreements with NCM LLC and NCM, Inc., filed petitions for reorganization under Chapter 11 of the United States Bankruptcy Code in the Southern District of Texas. On October 21, 2022, Regal filed a motion to reject the ESA without specifying an effective date for the rejection and indicated that Regal planned on negotiating with NCM LLC. NCM LLC also filed an adversary proceeding against Regal seeking declaratory relief and an injunction prohibiting Regal from breaching certain exclusivity, non-compete, non-negotiate and confidentiality provisions in the ESA by entering into a new agreement with a third-party or bringing any of the services performed by NCM LLC in-house. On February 1, 2023, Cineworld filed a motion for summary judgment on NCM LLC’s adversary proceeding. On May 5, 2023, NCM LLC and Regal agreed to stay the ongoing litigation while the parties worked towards the terms of a new arrangement for NCM LLC to provide advertising services to Regal. In lieu of litigating Regal’s potential rejection of the ESA and NCM LLC’s adversary proceeding against Regal, the parties negotiated a Regal Advertising Agreement and Regal Termination Agreement. The Regal Advertising Agreement was effective on July 14, 2023 and provides that NCM LLC acquired the exclusive right to provide on-screen advertisements at Regal’s theaters for a term of ten years in exchange for payments based on the attendance at Regal’s theaters and the revenue generated by NCM LLC through advertising displayed in Regal’s theaters. Pursuant to the Regal Advertising Agreement, NCM LLC has the right to display advertising in Regal’s theaters with a program of inventory that provides for (i) up to five minutes in length for exhibition on-screen immediately prior to showtime of a feature film or digital programming event, (ii) up to ten minutes immediately after the showtime of a feature film, extending the time available to NCM LLC by five minutes, and (iii) the Platinum Spot that may be exhibited on-screen prior to the last two trailers, which may be either thirty or sixty seconds in length, and subject to Regal’s approval, NCM LLC may display two thirty-second spots in the Platinum Spot and a Gold Spot, a thirty second spot displayed immediately prior to the fourth trailer preceding a feature film or digital programming event. Pursuant to the Regal Termination Agreement, effective on July 14, 2023, Regal rejected and terminated the ESA. Additionally Regal and Regal’s affiliates’ waived all rights and interests as to the Tax Receivable Agreement, the Common Unit Adjustment Agreement, the Software License Agreement, the Director Designation Agreement, the Registration Rights Agreement and all the other joint venture agreements described in NCM LLC’s Company Operating Agreement and Regal and Regal’s affiliates waived and released claims against other parties thereto. In connection with the Regal Advertising Agreement, NCM LLC and Regal also agreed to dismiss with prejudice the ongoing litigation between the parties related to NCM LLC’s request to enforce certain provisions of the ESA, including the exclusivity provision. Following the effective date of the Regal Termination Agreement of July 14, 2023, Regal is no longer an ESA Party or related party and is included within the network affiliate metrics. Summary Operating Data The results of operations data for the years ended January 1, 2026, December 26, 2024 and December 27, 2023 and the balance sheet data as of January 1, 2026 and December 26, 2024 are derived from the audited Consolidated Financial Statements of NCM, Inc. included elsewhere in this document (dollars in millions, except share and margin data): 37 Years Ended % Change ($ in millions) Jan. 1, 2026 Dec. 26, 2024 2024 to 2025 Revenue $ 243.2 $ 240.8 1.0 % Operating expenses: Network operating costs 13.0 13.7 (5.1 )% Theater exhibition fees 118.5 111.9 5.9 % Selling and marketing costs 41.6 41.6 0.0 % Administrative and other costs 46.1 50.7 (9.1 )% Depreciation expense 4.6 4.6 0.0 % Amortization expense 33.3 37.8 (11.9 )% Total operating expenses 257.1 260.3 (1.2 )% Operating loss (13.9 ) (19.5 ) (28.7 )% Non-operating expense (3.3 ) 2.6 (226.9 )% Income tax expense — 0.2 100.0 % Net loss attributable to noncontrolling interests — — 0.0 % Net loss attributable to NCM, Inc. $ (10.6 ) $ (22.3 ) (52.5 )% Net loss per NCM, Inc. basic share $ (0.11 ) $ (0.23 ) (52.2 )% Net loss per NCM, Inc. diluted share $ (0.11 ) $ (0.23 ) (52.2 )% Basis of Presentation Prior to the completion of our IPO, NCM LLC was wholly-owned by its ESA Parties. In connection with the offering, NCM, Inc. purchased newly issued common membership units from NCM LLC and common membership units from NCM LLC’s ESA Parties and became a member of and the sole manager of NCM LLC. We entered into several agreements to effect the reorganization and the financing transaction and certain amendments were made to the existing ESAs to govern the relationships among NCM LLC and NCM LLC’s ESA Parties after the completion of these transactions. The results of operations data discussed herein were derived from the audited Consolidated Financial Statements and accounting records of NCM, Inc. and should be read in conjunction with the notes thereto. We have a 52-week or 53-week fiscal year ending on the first Thursday after December 25. Fiscal year 2025 contained 53 weeks and fiscal year 2024 contained 52 weeks. Our 2026 fiscal year will contain 52 weeks. Throughout this document, we refer to our fiscal years as set forth below: Reference in Fiscal Year Ended this Document January 1, 2026 2025 December 26, 2024 2024 Results of Operations Fiscal Years 2025 and 2024 Revenue. Total revenue increased $2.4 million, or 1.0%, from $240.8 million for 2024 to $243.2 million for 2025. The following is a summary of revenue by category (in millions): Fiscal Year $ Change % Change 2025 2024 2024 to 2025 2024 to 2025 National advertising revenue $ 194.5 $ 188.0 $ 6.5 3.5 % Local and regional advertising revenue 34.6 39.1 (4.5 ) (11.5 )% ESA Party advertising revenue from beverage    concessionaire agreements 14.1 13.7 0.4 2.9 % Total revenue $ 243.2 $ 240.8 $ 2.4 1.0 % The following table shows data on theater attendance and revenue per attendee for the year ended January 1, 2026 and December 26, 2024: 38 Fiscal Year % Change 2025 2024 2024 to 2025 National advertising revenue per attendee $ 0.482 $ 0.481 0.1 % Local and regional advertising revenue per attendee $ 0.086 $ 0.100 (14.4 )% Total advertising revenue (excluding ESA Party beverage    revenue) per attendee $ 0.567 $ 0.581 (2.4 )% Total revenue per attendee $ 0.602 $ 0.616 (2.3 )% Total theater attendance (in millions) (1) 403.8 390.7 3.4 % (1) Represents the total attendance within the NCM Network, excluding screens and attendance associated with certain AMC Carmike theaters that were part of another cinema advertising network during the periods presented, as well as, estimated attendance for the Spotlight Cinema Network for the period included within the Company's consolidated results (November 14, 2025 to January 1, 2026). National advertising revenue. National advertising revenue increased by $6.5 million, or 3.5%, from $188.0 million in 2024 to $194.5 million in 2025. The increase in national advertising revenue was due to an increase in impressions at our existing exhibitors, as well as through the Spotlight acquisition. The majority of the increase was driven by a 22.1% increase in national advertising utilization, as well as a 2.0% increase in NCM Network attendance due in part to the extra week in our fiscal year 2025, as compared to 2024. In order to increase utilization and better monetize attendance, the Company strategically decreased national advertising CPMs by 18.1% in 2025, as compared to 2024. Local and regional advertising revenue. Local and regional advertising revenue decreased by $4.5 million, or 11.5%, from $39.1 million in 2024 to $34.6 million in 2025. The decrease in local and regional advertising revenue was primarily due to a decrease in contract activity and size within the pharmaceutical, travel, government and automotive categories in 2025, as compared to 2024. These decreases were partially offset by an increase in contract activity and size within the gaming, technology, beverages, retail and apparel and healthcare categories in 2025, as compared to 2024. ESA Party beverage revenue. ESA Party beverage revenue increased $0.4 million, or 2.9%, from $13.7 million in 2024 to $14.1 million in 2025. The increase in ESA Party beverage revenue was primarily due to a 3.7% increase in ESA Party attendance in 2025, as compared to 2024. Operating expenses. Total operating expenses decreased $3.2 million, or 1.2%, from $260.3 million for 2024 to $257.1 million for 2025. The following table shows the changes in operating expense for 2025 and 2024 (in millions): Fiscal Year $ Change % Change 2025 2024 2024 to 2025 2024 to 2025 Network operating costs $ 13.0 $ 13.7 $ (0.7 ) (5.1 )% Theater exhibition fees 118.5 111.9 6.6 5.9 % Selling and marketing costs 41.6 41.6 0.0 0.0 % Administrative and other costs 46.1 50.7 (4.6 ) (9.1 )% Depreciation expense 4.6 4.6 — 0.0 % Amortization expense 33.3 37.8 (4.5 ) (11.9 )% Total operating expenses $ 257.1 $ 260.3 $ (3.2 ) (1.2 )% Network operating costs. Network operating costs decreased $0.7 million, or 5.1%, from $13.7 million in 2024 to $13.0 million in 2025. The decrease in network operating costs was primarily due to a $0.5 million decrease in satellite related expenses due to the completion of the satellite transition in 2024, and a $0.3 million decrease in expenses related to our digital product offerings in 2025, as compared to 2024. These decreases were partially offset by a $0.1 million increase in personnel related costs in 2025, as compared to 2024. Theater exhibition fees. Theater exhibition fees increased $6.6 million, or 5.9%, from $111.9 million in 2024 to $118.5 million in 2025. The increase in theater exhibition fees was primarily due to a $5.1 million increase in existing exhibitor related fees driven by the 2.0% increase in network attendance due to the extra week in our fiscal year 2025, as compared to 2024, contractual rate increases within our exhibitor agreements in 2025, as compared to 2024, and the rate increases within the 2025 AMC Agreement entered into in April of 2025. The theater exhibition fees also increased $1.5 million due to the consolidation of Spotlight for the period of November 14, 2025 through January 1, 2026. 39 Selling and marketing costs. Selling and marketing costs remained at $41.6 million in 2025, consistent with $41.6 million in 2024. This was primarily due to a $1.6 million increase in selling related expenses partly driven by the timing of our periodic company-wide sales meeting, a $1.0 million increase in variable costs associated with certain sales partnerships and platforms and a $0.4 million increase in marketing research expenses due to an increase in research studies sold during 2025, as compared to 2024. These increases were offset by a $3.0 million decrease in personnel-related expenses primarily due to a decrease in performance-based compensation expense, a decrease in severance expenses due to the workforce reorganization in the first quarter of 2024 and a decrease in stock-based compensation due to the grant of the one time management equity incentive plan in the first quarter of 2024, compared to normalized grant activity in 2025. Administrative and other costs. Administrative and other costs decreased $4.6 million, or 9.1%, from $50.7 million in 2024 to $46.1 million in 2025. The decrease is primarily due to a $4.8 million decrease in personnel related costs primarily due to retention related expenses in 2024 related to the Chapter 11 Case, as well as a decrease in the Company's performance as compared to compensation targets in 2025 and a $3.8 million decrease in legal and professional fees related to the Chapter 11 Case and Cineworld Proceeding in 2025, as compared to 2024. These decreases were partially offset by a $1.4 million increase in cloud computing expenses due to improvements made to our programmatic offerings, a $1.3 million increase in system optimization costs, a $0.4 million increase in investor and public relation costs, primarily related to the Company's investor day in March of 2025, a $0.3 million increase in legal and professional fees related to the Spotlight acquisition, a $0.3 million increase in board of director fees and a $0.2 million increase in facility related expenses in 2025, as compared to 2024. Depreciation expense. Depreciation expense remained at $4.6 million in 2025, consistent with $4.6 million in 2024. Amortization expense. Amortization expense decreased $4.5 million, or 11.6%, from $37.8 million in 2024 to $33.3 million in 2025. The decrease in amortization expense was primarily due to the reduction and extension of the useful life of the intangible asset related to the ESA Parties following the 2025 AMC Agreement in the second quarter of 2025 as further discussed in Note 6—Intangible Assets and Note 7—Income Taxes. Non-operating (income) expense. Total non-operating expense decreased $5.9 million, or 226.9%, from non-operating expense of $2.6 million in 2024 to non-operating income of $3.3 million in 2025. The following table shows the changes in non-operating expense for 2025 and 2024 (in millions): Fiscal Year $ Change 2025 2024 2024 to 2025 Interest on borrowings $ 0.6 $ 1.7 $ (1.1 ) Interest income (1.4 ) (2.4 ) 1.0 (Gain) loss on re-measurement of the payable under the    tax receivable agreement (3.7 ) 4.6 (8.3 ) Loss on debt extinguishment 1.8 — 1.8 Other non-operating income (0.6 ) (1.3 ) 0.7 Total non-operating (income) expense $ (3.3 ) $ 2.6 $ (5.9 ) The decrease in non-operating expense was primarily due to an $8.3 million decrease in loss on re-measurement of the payable under the tax receivable agreement largely due to the addition of two years of estimates in management's forecast for future years in 2024 following increased insight into the respective movie slates and market demand as compared to the addition of one new forecasted year in 2025 to replace the completed prior year within the calculation and the subsequent decrease in the forecast during 2025, as compared to the original forecast. The decrease in non-operating expense is also due to a $1.1 million decrease in interest expense due to the termination of the Company's outstanding debt in the first quarter of 2025. These decreases were partially offset by a $1.8 million increase in loss on debt extinguishment in the first quarter of 2025 following the Company's termination of its Revolving Credit Facility 2023, a $1.0 million decrease in interest income and a $0.7 million decrease in non-operating income related to the Company's equity method investment in ACJV, LLC in 2025, compared to 2024. Non-GAAP Financial Measures Adjusted OIBDA and Adjusted OIBDA margin are not financial measures calculated in accordance with GAAP in the United States. Adjusted OIBDA represents operating income before depreciation and amortization expense adjusted to also exclude non-cash share-based payment costs, impairment of long-lived assets, workforce reorganization costs, termination of the Regal ESA, system optimization costs, satellite transitions costs, Spotlight acquisition and transition related costs and advisor fees related to involvement in the Cineworld Proceeding and Chapter 11 Case. Our management uses this non-GAAP financial measure to evaluate operating performance, to forecast future results and as a basis for compensation. The Company 40 believes this is an important supplemental measure of operating performance because it eliminates items that have less bearing on its operating performance and highlights trends in its core business that may not otherwise be apparent when relying solely on GAAP financial measures. The Company believes the presentation of this measure is relevant and useful for investors because it enables them to view performance in a manner similar to the method used by the Company’s management, helps improve their ability to understand the Company’s operating performance and makes it easier to compare the Company’s results with other companies that may have different depreciation and amortization policies, non-cash share-based payment costs, impairment of long-lived assets, workforce reorganization costs, termination of the Regal ESA, system optimization costs, satellite transition costs, acquisition related costs and advisor fees related to involvement in the Cineworld Proceeding and Chapter 11 Case, interest rates, debt levels or income tax rates. Adjusted OIBDA margin is calculated by dividing Adjusted OIBDA by total revenue. Our management uses this non-GAAP financial measure to evaluate operating performance, to forecast future results and as a basis for compensation. The Company believes this is an important supplemental measure of operating performance because it eliminates items that have less bearing on its operating performance and highlight trends in its core business that may not otherwise be apparent when relying solely on GAAP financial measures. The Company believes the presentation of this measure is relevant and useful for investors because it enables them to view performance in a manner similar to the method used by the Company’s management, helps improve their ability to understand the Company’s operating performance and makes it easier to compare the Company’s results with other companies that may have different depreciation and amortization policies, non-cash share-based payment costs, impairment of long-lived assets, workforce reorganization costs, termination of the Regal ESA, system optimization costs, satellite transitions costs, acquisition related costs, advisor fees related to involvement in the Cineworld Proceeding and Chapter 11 Case, interest rates, debt levels or income tax rates. A limitation of both of these measures, however, is that they exclude depreciation and amortization, which represent a proxy for the periodic costs of certain capitalized tangible and intangible assets used in generating revenues in NCM LLC’s business. In addition, Adjusted OIBDA and Adjusted OIBDA margin have the limitation of not reflecting the effect of the non-cash share-based payment costs, impairment of long-lived assets, workforce reorganization costs, termination of the Regal ESA, system optimization costs, satellite transitions costs, acquisition related costs and advisor fees related to involvement in the Cineworld Proceeding and Chapter 11 Case. Adjusted OIBDA should not be regarded as an alternative to operating income, net income or as indicators of operating performance, nor should it be considered in isolation of, or as substitutes for financial measures prepared in accordance with GAAP. The Company believes that operating income is the most directly comparable GAAP financial measure to Adjusted OIBDA, and operating margin is the most directly comparable GAAP financial measure to Adjusted OIBDA margin. Because not all companies use identical calculations, these non-GAAP presentations may not be comparable to other similarly titled measures of other companies, or calculations in NCM LLC’s 2025 Credit Facility. The following table reconciles operating income to Adjusted OIBDA for the periods presented (dollars in millions): Years Ended January 1, 2026 December 26, 2024 December 28, 2023 Operating loss $ (13.9 ) $ (19.5 ) $ (180.9 ) Depreciation expense 4.6 4.6 4.6 Amortization expense 33.3 37.8 29.8 Share-based compensation costs (1) 9.3 12.2 5.5 Impairment of long-lived assets (2) — — 8.9 Workforce reorganization costs (3) 2.0 2.9 — Loss on termination of Regal ESA, net (4) — — 125.6 System optimization costs (5) 1.9 0.8 — Satellite transition costs (6) — 0.4 — Spotlight acquisition and integration costs (7) 0.4 — — Advisor fees related to the Chapter 11 Case (8) 1.5 6.5 59.2 Adjusted OIBDA $ 39.1 $ 45.7 $ 52.7 Total revenue $ 243.2 $ 240.8 $ 259.8 Operating margin (5.7 %) (8.1 %) (69.6 %) Adjusted OIBDA margin 16.1 % 19.0 % 20.3 % (1) Share-based compensation costs are included in 'network operating costs', 'selling and marketing costs' and 'administrative and other costs' in the Company's audited Consolidated Financial Statements. (2) The impairment of long-lived assets primarily relates to the write down of certain intangible assets related to a purchased affiliate and internally developed software and leasehold improvements no longer in use. 41 (3) Workforce reorganization costs represent eliminated positions and redundancy costs associated with changes to the Company’s workforce, as well as related office relocations. (4) The net impact of Regal's termination of the ESA resulting from the disposal of the intangible asset partially offset by the surrender of Regal's ownership in the Company and the forgiveness of the prepetition claims. (5) System optimization costs represent costs incurred related to a one-time assessment of the technology surrounding the Company's programmatic offerings beginning in the third quarter of 2024 and an assessment of operating efficiencies beginning in the third quarter of 2025. (6) One-time costs of transitioning satellite providers during 2024. (7) Advisor and legal fees incurred in connection with the acquisition of Spotlight in the fourth quarter of 2025, as well as, temporary transition costs incurred during the integration of Spotlight into the Company's processes. (8) Advisor and legal fees and expenses incurred in connection with the Company’s involvement in the Cineworld Proceeding and Chapter 11 Case and related appeals, as well as insurance and retention related expenses. Known Trends and Uncertainties Beverage Revenue—Under the ESAs, up to 90 seconds of The Noovie® Show program can be sold to the ESA Parties to satisfy their on-screen advertising commitments under their beverage concessionaire agreements. In 2025, Cinemark purchased 60 seconds of on-screen advertising time and AMC purchased 30 seconds to satisfy their obligations under their beverage concessionaire agreements in effect in 2025. In 2026, such obligations are expected to decrease resulting in lower beverage revenue in 2026, as compared to 2025. The price for the time sold to Cinemark's beverage supplier and AMC's beverage supplier will increase at a fixed rate of 2.0% each year. Theater Exhibition Fees—In consideration for the Company's access to the ESA Parties’ and network affiliate theaters for on-screen and LEN advertising and lobby promotions, the ESA Parties and network affiliates receive access fees based either upon number of attendees, a revenue share or a combination, including a minimum revenue guarantee per attendee, or a fee per digital cinema screen. Many of these agreements contain annual increases to the respective fee structures or guaranteed minimums, either per patron, per theater and/or per digital screen. The payments under the ESA Parties' agreements and network affiliate agreements are recorded within ‘Theater exhibition fees’ in the audited Consolidated Statement of Operations. Financial Condition and Liquidity Liquidity and Capital Resources Our cash balances can fluctuate due to the seasonality of our business and related timing of collections of accounts receivable balances and operating expenditure payments, as well as interest or principal payments on our 2025 Credit Facility, income tax payments, TRA payments, available cash payments (as defined in the NCM LLC Operating Agreement) to Cinemark in the event Cinemark holds NCM LLC membership units and any amount of dividends to NCM, Inc.’s common stockholders. We have sufficient sources of liquidity to meet our material cash commitments for the next 12 months and the foreseeable future. On January 24, 2025, NCM LLC entered into a Loan and Security Agreement with U.S. Bank National Association, as lender. The agreement provides for a $45.0 million senior secured revolving credit facility, the 2025 Credit Facility, that matures on January 24, 2028. In connection with entering into the 2025 Credit Facility, NCM LLC repaid in full the $10.0 million balance outstanding as of December 26, 2024 and terminated all commitments under its 2023 Revolving Credit Facility, and in connection with this termination, paid a prepayment fee equal to 1% of the total commitment. As of January 1, 2026, NCM LLC has an outstanding balance of $12.0 million under the 2025 Credit Facility. Borrowings under the 2025 Credit Facility may be used for, among other things, working capital and other general corporate purposes of the Company and bear interest at a floating rate equal to term SOFR (subject to a floor of zero) plus an applicable margin of 2.00%, which is subject to increase by an additional 2.00% upon the occurrence of an event of default. On August 7, 2023, NCM LLC entered into the Revolving Credit Facility 2023 with CIT Northbridge Credit LLC as agent. The Revolving Credit Facility 2023 was an asset backed line facility where the capacity depended upon NCM LLC’s trade accounts receivable balance, as adjusted for aged balances and other considerations. The maximum availability NCM LLC had access to under the revolver was $55.0 million. The proceeds of the Revolving Credit Facility 2023 could have been used for, inter alia, working capital and capital expenditures. The Revolving Credit Facility 2023 would have matured on August 7, 2026. The interest rate under the Revolving Credit Facility 2023 was a base rate or SOFR benchmark plus (i) 3.75% if less than 50% of revolving commitments were utilized or (ii) 4.50% if 50% or more of revolving commitments were utilized (utilizing the average revolver usage for the prior calendar month as a benchmark for this determination). The Revolving Credit Facility 2023 also contained a financial maintenance covenant requiring that the fixed charge coverage ratio 42 ending on the last day of each fiscal month was at least 1.1 to 1.0 during a “Trigger Period.” A Trigger Period begins upon (i) an event of default or (ii) if availability is less than the greater of (a) $5.0 million and (b) 10% of aggregate revolving commitments. A Trigger Period ends only if (i) no event of default existed for the preceding 30 consecutive days and (ii) availability is greater than both (a) $5.0 million and (b) 10% of aggregate revolving commitments. Upon the effectiveness of the Revolving Credit Facility 2023, NCM LLC immediately drew $10.0 million from the facility, which represented the only amount outstanding under the Revolving Credit Facility 2023, as of December 26, 2024. This balance was subsequently repaid on January 24, 2025 upon the termination of the Revolving Credit Facility 2023, effective on January 24, 2025. A summary of our financial liquidity is as follows (in millions): Years Ended $ Change January 1, 2026 December 26, 2024 2024 to 2025 Cash, cash equivalents and marketable securities (1) $ 34.6 75.2 $ (40.6 ) 2025 Credit Facility availability (2) 32.4 — $ 32.4 Revolving Credit Facility 2023 availability (3) — 44.4 $ (44.4 ) Total liquidity $ 67.0 $ 119.6 $ (52.6 ) (1) Included in cash and cash equivalents as of January 1, 2026 and December 26, 2024, there was $23.8 million and $63.5 million, respectively, of cash held by NCM LLC which is not available to satisfy dividends declared by NCM, Inc., income tax, TRA payments and other NCM, Inc. obligations. (2) The 2025 Credit Facility portion of NCM LLC’s total borrowings that is available, subject to certain conditions, for general corporate purposes of NCM LLC in the ordinary course of business and for other transactions permitted under the 2025 Credit Facility, and a portion is available for letters of credit. NCM LLC’s total capacity under the 2025 Credit Facility is $45.0 million as of January 1, 2026. As of January 1, 2026, the amount available under the 2025 Credit Facility in the table above is net of letters of credit of $0.6 million and the amount outstanding under the 2025 Credit Facility of $12.0 million. (3) The Revolving Credit Facility 2023 portion of NCM LLC’s total borrowings that was available, subject to certain conditions, for general corporate purposes of NCM LLC in the ordinary course of business and for other transactions permitted under the senior secured credit facility, and a portion was available for letters of credit. NCM LLC’s total capacity under the Revolving Credit Facility 2023, which was subject to fluctuations in the underlying assets, was $55.0 million prior to its extinguishment. As of December 26, 2024, the amount available under the Revolving Credit Facility 2023 in the table above is net of letters of credit of $0.6 million and the amount outstanding under the Revolving Credit Facility 2023 of $10.0 million. We have generated and used cash as follows (in millions): Years Ended 2025 2024 Operating cash flow $ 8.4 $ 60.3 Investing cash flow $ (15.4 ) $ (5.7 ) Financing cash flow $ (33.5 ) $ (14.1 ) Cash Flows – Fiscal Years 2025 and 2024 Operating Activities. The $51.9 million decrease in cash provided by operating activities for 2025, as compared to 2024, was due to 1) a $27.8 million increase in the change in deferred revenue, 2) a $19.5 million decrease in account receivable collections, 3) a $4.4 million decrease in net loss adjusted for non-cash items and 4) a $3.2 million increase in payments of accounts payable and accrued expenses in 2025, as compared to 2024. These decreases in cash provided by operating activities were partially offset by a $5.4 million decrease in prepaid expenses in 2025, as compared to 2024. Investing Activities. The $9.7 million increase in cash used in investing activities for 2025, as compared to 2024, was primarily due to the $8.5 million increase in purchases of strategic investments and the acquisition of the Spotlight Cinema Network. Financing Activities. The $19.4 million increase in cash used in financing activities for 2025, as compared to 2024, was primarily due to a $11.1 million increase in the payment of dividends and an $8.9 million increase in payments made to repurchase shares of NCM, Inc.'s common stock in 2025, as compared to 2024. Sources of Capital and Capital Requirements NCM, Inc.’s primary source of liquidity and capital resources is the quarterly available cash distributions from NCM LLC as well as its existing cash and cash equivalents balances, which as of January 1, 2026 were $37.6 million (including 43 $23.8 million of cash and restricted cash held by NCM LLC). NCM LLC’s primary sources of liquidity and capital resources are (i) its cash provided by operating activities, (ii) cash on hand and (iii) availability under the 2025 Credit Facility. The $23.8 million of cash at NCM LLC will be used to fund operations. Cash at NCM, Inc. is used to fund income taxes, payments associated with the TRA, stock repurchases and for future payment of dividends to NCM, Inc. stockholders if and when declared by the Board of Directors. NCM LLC is required, pursuant to the terms of the NCM LLC Operating Agreement, to distribute its available cash, as defined in the NCM LLC Operating Agreement, quarterly to its members (only NCM, Inc. as of January 1, 2026). The members are only able to receive available cash when they hold units. The available cash distribution to the members of NCM LLC for the year ended January 1, 2026 was calculated as approximately $20.8 million, due entirely to NCM, Inc., as the only holder of NCM LLC units as of January 1, 2026. The $20.8 million is comprised of negative available cash generated by NCM LLC to NCM, Inc. for the first and second quarter of 2025 of $13.4 million and $3.7 million, respectively, and positive available cash generated by NCM LLC to NCM, Inc. for the third and fourth quarter of 2025 of $7.1 million and $30.8 million, respectively. The cumulative negative available cash balance as of January 1, 2026 is $238.6 million (including $182.3 million for NCM, Inc. and $56.3 million for Cinemark). These amounts can only be offset against positive available cash within the second quarter of future years. NCM, Inc. has the option to defer payment of any available cash distributions payable to NCM, Inc. at its discretion. As of January 1, 2026, NCM LLC owed NCM, Inc. $52.7 million in deferred available cash distributions. NCM, Inc. expects to use its cash balances and cash received from future available cash distributions (as allowed for under the 2025 Credit Facility) to fund payments associated with the Tax Receivable Agreement ("TRA"), stock repurchases, strategic initiatives and future dividends if and when declared by the Board of Directors. The Company made an estimated TRA payment in 2025 for the 2024 tax year and did not make a TRA payment in 2024 for the 2023 tax year. The Company also expects to make a TRA payment in 2026 for the 2025 tax year. Distributions from NCM LLC and NCM, Inc. cash balances should be sufficient to fund payments associated with the TRA, income taxes and any stock repurchases or declared dividends for the foreseeable future at the discretion of the Board of Directors. On March 18, 2024, the Board of Directors of the Company approved a stock repurchase program under which the Company is authorized to use assets of the Company to repurchase up to $100.0 million of shares of the Company’s Common Stock, exclusive of any fees, commissions or other expenses related to such repurchases, from time to time over a period of three years. As of January 1, 2026, the Company has $64.8 million remaining within the authorized program. At the discretion of the Board of Directors, the Company will consider returning a portion of its free cash flow to stockholders. The declaration, payment, timing and amount of any future stock repurchases or dividends payable will be at the sole discretion of the Board of Directors who will take into account general economic and advertising market business conditions, the Company’s financial condition, available cash, current and anticipated cash needs and any other factors that the Board of Directors considers relevant. Capital Expenditures Capital expenditures of NCM LLC include digital applications being developed primarily by our programmers and outside consultants, capitalized software development or upgrades for our Digital Content Software, audience targeting and data management systems, cinema advertising management system, equipment required for our content production and post-production facilities, office leasehold improvements, desktop equipment for use by our employees, and in certain cases, the costs necessary to install equipment at or digitize all or a portion of a network affiliate’s theaters when they are added to our network. Capital expenditures in 2025 were $8.3 million (including $2.9 million associated with network affiliate additions; $2.7 million associated with upgrades to our existing systems related to the continued upgrades of our cinema advertising management system and related reporting; $0.9 million associated with leasehold improvements; $0.7 million associated with digital product development and data; and $0.5 million associated with certain implementation and prepaid costs associated with Cloud Computing arrangements) compared to $5.6 million in 2024 (including $1.9 million associated with upgrades to our existing systems related to the continued upgrades of our cinema advertising management system; $1.7 million associated with leasehold improvements; $1.0 million associated with digital product development; $0.4 million associated with network affiliate additions and $0.4 million associated with certain implementation and prepaid costs associated with Cloud Computing arrangements). The capital expenditures have typically been satisfied through cash flow from operations. All capital expenditures related to the DCN within the ESA Parties’ theaters have been made by the ESA Parties under the ESAs. We expect they will continue to be made by the ESA Parties in accordance with the ESAs. We expect to make approximately $9.0 million to $10.0 million of capital expenditures in fiscal 2026. We expect approximately $4.0 million of capital expenditures related to upgrades to our Digital Content distribution and management software and our other internal management systems, including our cinema advertising management system, reporting systems, network equipment and software licensing, $4.0 million towards network affiliate additions and upgrades to currently contracted network affiliates, $1.0 million towards digital products and audience measurement tools and $1.0 million towards leasehold improvements. Our capital expenditures may increase as we add additional network affiliates. We 44 expect that additional expenditures, if any, would be funded in part by additional cash flows associated with those new network affiliates. Financings On January 24, 2025, NCM LLC entered into a Loan and Security Agreement with U.S. Bank National Association, as lender. The agreement provides for a $45.0 million senior secured revolving credit facility, the 2025 Credit Facility, that matures on January 24, 2028. In connection with entering into the 2025 Credit Facility, NCM LLC repaid in full the $10.0 million balance outstanding as of January 1, 2026 and terminated all commitments under its 2023 Revolving Credit Facility, and in connection with this termination, paid a prepayment fee equal to 1% of the total commitment. As of January 1, 2026, NCM LLC has an outstanding balance of $12.0 million under the 2025 Credit Facility. Borrowings under the 2025 Credit Facility may be used for, among other things, working capital and other general corporate purposes of the Company and bear interest at a floating rate equal to term SOFR (subject to a floor of zero) plus an applicable margin of 2.00%, which is subject to increase by an additional 2.00% upon the occurrence of an event of default. A commitment fee of 0.25% is payable quarterly in arrears based on the average daily amount of the undrawn portion of the commitments under the 2025 Credit Facility for the preceding quarter. The 2025 Credit Facility has a $5.0 million sublimit for the issuance of letters of credit. Fees are payable on outstanding letters of credit at a per annum rate equal to 2.00%, plus certain customary fees payable in connection with the issuance, amendment, renewal and extension of letters of credit and the processing of drawings thereunder. Certain of NCM LLC’s future subsidiaries, the Guarantors, are required to guarantee the repayment of NCM LLC’s obligations under the 2025 Credit Facility. The obligations of NCM LLC and any such Guarantors with respect to the 2025 Credit Facility are and will be secured by a pledge of substantially all assets of NCM LLC and each of the Guarantors, including, without limitation, accounts receivables, deposit accounts, intellectual property, investment property, inventory, equipment and equity interests in their respective subsidiaries. The 2025 Credit Facility contains affirmative and negative covenants customary for financings of this type, including limitations on NCM LLC’s and its subsidiaries' ability to incur additional debt, grant or permit additional liens, make investments and acquisitions, merge or consolidate with others, dispose of assets, pay dividends and distributions, make equity repurchases, pay subordinated indebtedness and enter into affiliate transactions. In addition, the 2025 Credit Facility contains financial covenants requiring NCM LLC to maintain a maximum leverage ratio of no greater than 2.25 to 1.00 and a minimum fixed charge coverage ratio of no less than 1.50 to 1.00, each measured on a quarterly basis. The 2025 Credit Facility also includes events of default customary for facilities of this type and upon the occurrence of such events of default, subject to customary cure rights, all outstanding loans under the 2025 Credit Facility may be accelerated and/or the Company’s commitments terminated. The 2025 Credit Facility also contains representations, warranties, and events of defaults customary for this type of facility. As of January 1, 2026, NCM LLC’s maximum availability under the $45.0 million 2025 Credit Facility was $32.4 million, net of $12.0 million outstanding and net letters of credit of $0.6 million. The weighted-average interest rate on the 2025 Credit Facility as of January 1, 2026 was 5.8%. NCM LLC was in compliance at January 1, 2026 with a fixed charge coverage ratio of 13.5 to 1.0 (versus the required ratio of 1.50 to 1.00) and a maximum leverage ratio of 0.4 to 1.0 (versus the required ratio of 2.25 to 1.0). As of January 1, 2026, the weighted average remaining maturity was 2.1 years. As of January 1, 2026, 100.0% of our borrowings bear interest at variable rates and as such, our net income and earnings per share could fluctuate with market interest rate fluctuations that could increase or decrease the interest paid on our borrowings. On August 7, 2023, NCM LLC entered into the Revolving Credit Facility 2023 with CIT Northbridge Credit LLC as agent and on January 24, 2025, it was terminated. The Revolving Credit Facility 2023 was an asset backed line facility where the capacity depends upon NCM LLC’s trade accounts receivable balance, as adjusted for aged balances and other considerations, and was secured by a lien on substantially all of assets of NCM LLC. The maximum availability NCM LLC had access to under the Revolving Credit Facility 2023 was $55.0 million. The proceeds of the Revolving Credit Facility 2023 could have been used for, inter alia, working capital and capital expenditures. The Revolving Credit Facility 2023 would have matured on August 7, 2026. The interest rate under the Revolving credit facility 2023 was a base rate or SOFR benchmark plus (i) 3.75% if less than 50% of revolving commitments were utilized or (ii) 4.50% if 50% or more of revolving commitments were utilized (utilizing the average revolver usage for the prior calendar month as a benchmark for this determination). The Revolving Credit Facility 2023 also contained a financial maintenance covenant requiring that the fixed charge coverage ratio ending on the last day of each fiscal month was at least 1.1 to 1.0 during a “Trigger Period.” A Trigger Period began upon (i) an event of default or (ii) if availability is less than the greater of (a) $5.0 million and (b) 10% of aggregate revolving commitments. A Trigger Period ended only if (i) no event of default existed for the preceding thirty (30) consecutive days and (ii) availability was greater than both (a) $5.0 million and (b) 10% of aggregate revolving commitments. Upon the effectiveness of the Revolving Credit Facility 2023, NCM LLC immediately drew $10.0 million from the facility, which represented the only amount outstanding under the Revolving Credit Facility 2023, as of December 45 26, 2024. The Revolving Credit Facility 2023 also contained customary representations, warranties, covenants, events of default, terms and conditions, including limitations on liens, incurrence of debt, mergers and significant asset dispositions. Upon execution of the Revolving Credit Facility 2023, NCM LLC recorded $2.4 million as debt issuance costs and received $9.1 million in proceeds. Critical Accounting Estimates and Policies The significant accounting policies of the Company are described in Note 1 to the audited Consolidated Financial Statements included elsewhere in this document. Certain accounting policies involve significant judgments, assumptions and estimates by management that have a material impact on the carrying value of certain assets and liabilities, which management considers critical accounting policies. The judgments, assumptions and estimates used by management are based on historical experience, knowledge of the accounts and other factors, which are believed to be reasonable under the circumstances and are evaluated on an ongoing basis. Because of the nature of the judgments and assumptions made by management, actual results could differ from these judgments and estimates, which could have a material impact on the carrying values of assets and liabilities and the results of operations of the Company. Business Combinations The Company has accounted for all acquisitions, including the reconsolidation of NCM LLC, using the acquisition method of accounting. The acquisition method requires us to make significant estimates and assumptions, especially at the acquisition date as the purchase price is allocated to the estimated fair values of acquired tangible and intangible assets and the liabilities assumed. NCM LLC uses its best estimates to determine the useful lives of the tangible and definite-lived intangible assets, which impact the periods over which depreciation and amortization of those assets are recognized. These best estimates and assumptions are inherently uncertain as they pertain to forward-looking views of NCM LLC's business, exhibitor behavior and market conditions. In conjunction with the acquisition of Spotlight, NCM LLC recognized goodwill at the amount by which the purchase price paid exceeds the fair value of the net assets acquired. See Note 5—Business Combinations for more information on the Company's valuation methods and the results of applying the acquisition method of accounting, including the estimated fair values of the assets acquired and liabilities assumed, and, where relevant, the estimated remaining useful lives. Our ongoing accounting for goodwill and the tangible and intangible assets acquired requires significant estimates and assumptions as the Company exercises judgment to evaluate these assets for impairment. Our processes and accounting policies for evaluating impairments are further described in Note 1—Basis of Presentation and Summary of Significant Accounting Policies. Deconsolidation of NCM LLC NCM LLC does not have a readily determinable fair value. Upon the deconsolidation of NCM LLC, the original cost of the investment was valued based upon NCM, Inc.'s ownership of the secured debt of NCM LLC and the estimation of the enterprise value of NCM LLC utilizing a combination of a market approach and income approach. The market approach relied upon a comparison with guideline public companies and entails selecting relevant financial information of the subject company and capitalizing those amounts using valuation multiples that are based on empirical market observation. The income approach relied upon an analysis of NCM LLC’s projected economic earnings discounted to present value. Significant assumptions utilized within these analyses include the weighted average cost of capital and NCM LLC’s forecasted cash flows. Due to the inherent uncertainty of determining the fair value of securities that do not have a readily available fair value, the determination of the fair value required significant judgment or estimation and changes in the estimates and assumptions used in the valuation models could materially affect the determination. Valuation of Intangible Assets In accordance with ASC 360—Property, Plant and Equipment, we evaluate intangible assets and other long-lived assets for impairment whenever a triggering event occurs indicating that they may not be recoverable. Recoverability is assessed by comparing the carrying amount of an asset group to future undiscounted net cash flows expected to be generated. If the carrying amount of an asset group is not recoverable, an impairment loss is recognized equal to the difference between the carrying amount and the fair value of the asset group. We group assets for purposes of such review at the lowest level for which identifiable cash flows of the asset group are largely independent of the cash flows of the other groups of assets and liabilities. In order to calculate the future undiscounted net cash flows, we utilize estimates and assumptions based on historical data and consideration of future market conditions while incorporating management’s expectations as of the balance sheet date. Unforeseen events, changes in circumstances and market conditions and material differences in estimates of future cash flows could adversely affect the fair value of our assets and could result in impairment charges. Income Taxes 46 Nature of Estimates Required. We account for income taxes in accordance with ASC 740 – Income Taxes, which requires an asset and liability approach to financial accounting and reporting for income taxes. Accordingly, deferred tax assets and liabilities arise from the differences between the tax basis of an asset or liability and its reported amount in the audited Consolidated Financial Statements. Deferred tax amounts are determined using the tax rates expected to be in effect when the taxes will actually be paid or refunds received, as provided under currently enacted tax law. Valuation allowances are to be established when necessary to reduce deferred tax assets to the amount expected to be realized. The Company generated a three-year cumulative pre-tax book loss during 2021 driven by the impact of the COVID-19 Pandemic on the Company’s operations in 2020 and 2021. Given the associated weight assigned to this item as negative evidence within the Company’s analysis, the Company determined it is more-likely-than-not that the Company will not be able to realize certain of the Company’s deferred tax assets before they expire. Given the additional pre-tax book losses in 2024 and 2025, the Company continues to have a valuation allowance in the amount of $160.8 million against the deferred tax asset as of January 1, 2026. The Company had a valuation allowance in the amount of $169.1 million against the deferred tax asset as of December 26, 2024. As we do expect to generate pre-tax book income following the complete recovery from the lingering impacts of the COVID-19 Pandemic and Chapter 11 Case, we have recorded an impact from the Net Business Interest Expense Limitation IRC § 163(j) on our payable to ESA Parties under the TRA. In addition, due to the basis differences resulting from our IPO-related transactions (including the TRA with the ESA Parties) and subsequent adjustments pursuant to the Common Unit Adjustment Agreement, we are required to make cash payments under the TRA to the ESA Parties in amounts equal to 90% of our actual tax benefit realized from the tax amortization of the basis difference for certain deferred assets noted above. Following the increase in the valuation allowance as of December 31, 2020, the Company recorded a corresponding $151.9 million reduction to the “Payable to ESA Parties under the tax receivable agreement” equal to the portion of the payable related to 90% of the amortization of the expected benefits from the realization of the deferred tax assets deemed not more-likely-than-not to be realized as of December 31, 2020. Once the Company returns to a more normal operating level and emerges from a three-year cumulative pre-tax book loss position, part or all the valuation allowance is expected to reverse, resulting in an inverse impact to the payable to ESA Parties under the tax receivable agreement which would increase to reflect future payments to the ESA Parties at that time. The requirements of the TRA, as amended, are highly technical and complex and involve management’s judgment, including judgments to determine hypothetical tax outcomes exclusive of the IPO date transaction and agreements. Management performs thorough analysis of the estimate each quarter and upon new information or conditions will refine its estimate. If we were to fail to meet certain of the requirements of the TRA, we could be subject to additional payments to taxing authorities or to the ESA Parties. We recognize the tax benefit from an uncertain tax position only when it is more likely than not, based on the technical merits of the position, that the tax position will be sustained upon examination, including the resolution of any related appeals or litigation. The tax benefits recognized in the audited Consolidated Financial Statements from such a position are measured as the largest benefit that has a greater than fifty percent likelihood of being realized upon ultimate resolution. Our ability to use our net operating losses ("NOLs") to offset future taxable income may be subject to certain limitations. In general, under Section 382 of the Internal Revenue Code of 1986, as amended, a corporation that undergoes an ownership change is subject to limitations on its ability to utilize NOLs existing prior to the ownership change period to offset future taxable income subsequent to the ownership change. Management concluded that NCM Inc. had an ownership change upon emergence from the Chapter 11 Case and if there is a future change in our stock ownership (which may be outside of our control) the change could result in an additional ownership change further limiting our ability to utilize NOLs in accordance with Section 382 of the Code. As of January 1, 2026, the Company had gross federal net operating loss carryforwards subject to IRC 382 limitations of $61.6 million, gross state net operating loss carryforwards of $96.3 million subject to 382 limitations, $14.5 million of IRC 163(j) excess business interest expense carryforwards subject to IRC 382 limitations, and $1.5 million of federal Research & Development credits subject to 382 limitations. For fiscal 2025, our provision for income taxes was $0.0 million. Changes in management’s estimates and assumptions regarding the enacted tax rate applied to deferred tax assets and liabilities, the ability to realize the value of deferred tax assets, or the timing of the reversal of tax basis differences and judgments used to determine hypothetical tax outcomes exclusive of the IPO date transaction and agreements could impact the provision for income taxes and change the effective tax rate. Share-based Compensation During 2024, a portion of the restricted stock units issued by the Company vest subject to market-based metrics. We measured the fair value of these awards on the date of grant using a Monte Carlo simulation model. This model considers various subjective assumptions as inputs, and represent our best estimates, which involve inherent uncertainties and the application of our judgment as it relates to market volatilities, the historical volatility of our stock price, risk-free rates and expected life. The valuation model also incorporates exercise and forfeiture assumptions based on an analysis of historical data. Determining these assumptions is subjective and complex, and therefore, a change in the assumptions utilized could 47 impact the calculation of the fair value of our market-based share awards and the associated compensation expense. Refer to Note 11—Share Based Compensation in the notes to our consolidated financial statements for further information regarding our share-based compensation awards. Recent Accounting Pronouncements For a discussion of the recent accounting pronouncements relevant to our business operations, refer to the information provided under Note 1 to the audited Consolidated Financial Statements included elsewhere in this document. Related-Party Transactions For a discussion of the related-party transactions, refer to the information provided under Note 9 to the audited Consolidated Financial Statements included elsewhere in this document.