National CineMedia, Inc. Annual Report 2022

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FY2022 Annual Report · National CineMedia, Inc.

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DEAR FELLOW STOCKHOLDERS:

This past year demonstrated the amazing resiliency of cinema, our advertising partners, our moviegoing

audiences and NCM. In 2022, we set out to prove that NCM delivers traditionally ‘unreachable’ audiences at

scale; provides impactful, incremental reach to traditional linear and CTV; and generates more effective ad

impressions with measurable results – all with the best content on the biggest screens for a premier opt-

in experience. In the end, NCM successfully marketed our value proposition to our advertisers, retaining

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exclusive extended theatrical release windows, strengthening our comeback story.

With one of the most coveted audiences in the media landscape – young, diverse, highly engaged Americans

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across more than 1,500 theaters and over 20,000 screens, including all of the top 25 theaters and 90 out of

the top 100 as of December 29, 2022.

NCMx, our powerful data analytics tool, is allowing NCM to lead the cinema advertising industry with data-

driven solutions and effectively enable us to increase existing and new client investments. We now offer

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plans and generate a better return on their advertising investment. We have case studies across multiple

categories proving business outcomes and KPIs, as well as third-party research studies that prove that NCM

knows more about the behaviors and spending habits of moviegoers than any other company in the industry.

Total revenue for the year ended December 29, 2022, increased 117.5% to $249.2 million from $114.6 million

for the year ended December 30, 2021. Adjusted OIBDA, a non-GAAP measure, increased 332.0% to $57.3

million for the year ended December 29, 2022, from negative $24.7 million for the year ended December

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In April 2023 we made the voluntary decision to enter into Chapter 11 in order to restructure our balance

sheet. I am proud to say we achieved our goal of a plan of reorganization that positions NCM for growth

and momentum. We concluded our restructuring in only four months and eliminated over $1 billion of debt,

substantially strengthening our capital structure. We have emerged without permanent capital structure debt

and with a $55 million asset backed loan facility to manage working capital. Following these changes, we

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new ownership group, comprised of our prepetition secured lenders and a Board of Directors consisting of

highly experienced media, entertainment and technology executives.

Looking forward, the 2022 Upfront performance helped us close out 2022 on a positive note and set us up for

an even better 2023, despite the projected slow-down in ad spending. We’d like to thank our stockholders,

advertising clients and exhibitor partners for their continued support, and our management team and staff for

their hard work over the past year. We look forward to working together with all our stakeholders to pave the

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into the future.

Thomas F. Lesinski

CHIEF EXECUTIVE OFFICER (CEO)

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
__________________________________________________________

FORM 10-K

__________________________________________________________

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934

For the fiscal year ended December 29, 2022

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF

1934

For the transition period from __________________ to __________________

Commission file number: 001-33296
__________________________________________________________

NATIONAL CINEMEDIA, INC.

(Exact name of registrant as specified in its charter)
__________________________________________________________

Delaware
(State or other jurisdiction of
incorporation or organization)

6300 S. Syracuse Way, Suite 300
(Address of principal executive offices)

Centennial Colorado

20-5665602
(I.R.S. Employer
Identification No.)

80111
(Zip Code)

Registrant’s telephone number, including area code: (303) 792-3600

Securities registered pursuant to Section 12(b) of the Act:

Title of each class
Common Stock, par value $0.01 per share

Trading symbol
NCMI

Name of each exchange on which registered
The Nasdaq Stock Market LLC

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐ No ☒
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ¨ No ☒
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days. Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to
Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was
required to submit such files). Yes ☒ No ¨
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting
company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company”
and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer
Non-accelerated filer

Accelerated filer

Smaller reporting company

Emerging growth company

☒
¨

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition method for complying
with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its
internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public
accounting firm that prepared or issued its audit report. ¨
If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant
included in the filing reflect the correction of an error to previously issued financial statements. ¨

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based
compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ¨
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ¨ No ☒
Based on the closing sales price on June 30, 2022, the aggregate market value of the voting and non-voting common stock held by non-
affiliates of the registrant was $57,859,231.

As of April 10, 2023, 174,056,268 shares of the registrant’s common stock (including unvested restricted stock), par value of $0.01 per share,
were outstanding.

TABLE OF CONTENTS

PART I

Item 1.

Business ..........................................................................................................................................................

Item 1A.

Risk Factors .....................................................................................................................................................

Item 1B.

Unresolved Staff Comments ...........................................................................................................................

Item 2.

Properties ........................................................................................................................................................

Item 3.

Legal Proceedings ...........................................................................................................................................

Item 4.

Mine Safety Disclosures .................................................................................................................................

PART II

Item 5.

Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity
Securities .........................................................................................................................................................

Item 6.

[Reserved] .......................................................................................................................................................

Item 7.

Management’s Discussion and Analysis of Financial Condition and Results of Operations .........................

Item 7A.

Quantitative and Qualitative Disclosures about Market Risk .........................................................................

Item 8.

Financial Statements and Supplementary Data ...............................................................................................

Item 9.

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure .........................

Item 9A.

Controls and Procedures .................................................................................................................................

Item 9B.

Other Information ............................................................................................................................................

Page

Item 9C.

Disclosure Regarding Foreign Jurisdictions that Prevent Inspections ............................................................

102

PART III

Item 10.

Directors, Executive Officers and Corporate Governance ..............................................................................

102

Item 11.

Executive Compensation .................................................................................................................................

107

Item 12.

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters .......

115

Item 13.

Certain Relationships and Related Transactions, and Director Independence ................................................

116

Item 14.

Principal Accounting Fees and Services .........................................................................................................

123

PART IV

Item 15.

Exhibits, Financial Statement Schedules ........................................................................................................

124

Item 16.

Form 10-K Summary ......................................................................................................................................

130

Signatures

. ........................................................................................................................................................................

131

In this document, unless the context otherwise requires:

Certain Definitions

•

“NCM, Inc.,” “NCM,” “the Company,” “we,” “us” or “our” refer to National CineMedia, Inc., a Delaware
corporation, and its consolidated subsidiary National CineMedia, LLC.

“NCM LLC” refers to National CineMedia, LLC, a Delaware limited liability company, the current operating
company for our business, which NCM, Inc. acquired an interest in, and became a member and the sole manager
of, upon completion of our initial public offering, or “IPO,” which closed on February 13, 2007.

“ESAs” refers to the amended and restated exhibitor services agreements entered into by NCM LLC with each of
NCM LLC’s founding members upon completion of the IPO, which were further amended and restated on
December 26, 2013 in connection with the sale of the Fathom Events business and, in the case of the ESAs with
Cinemark and Regal, were further amended on September 17, 2019 (the “2019 ESA Amendments”) to extend the
terms of the ESAs and modify the program distributed by NCM LLC through its DCN for exhibition in Cinemark
and Regal theaters.

“AMC” refers to AMC Entertainment Holdings, Inc. and its subsidiaries, National Cinema Network, Inc., which
contributed assets used in the operations of NCM LLC and formed NCM LLC in March 2005, AMC ShowPlace
Theatres, Inc., AMC Starplex, LLC and American Multi-Cinema, Inc., which is a party to an ESA with NCM
LLC.

“Cinemark” refers to Cinemark Holdings, Inc. and its subsidiaries, Cinemark Media, Inc., which joined NCM
LLC in July 2005, and Cinemark USA, Inc., which is a party to an ESA with NCM LLC.

“Regal” refers to Cineworld Group plc, Regal Entertainment Group and its subsidiaries, Regal CineMedia
Corporation, which contributed assets used in the operations of NCM LLC, Regal CineMedia Holdings, LLC,
which formed NCM LLC in March 2005, and Regal Cinemas, Inc., which is a party to an ESA with NCM LLC.

“Founding members” refers to AMC, Cinemark and Regal.

“Network affiliates” refers to certain third-party theater circuits with which NCM LLC has long-term network
affiliate agreements.

“Adjusted OIBDA” refers to a non-GAAP financial measure, which management defines as operating income
before depreciation and amortization expense adjusted to also exclude amortization of intangibles recorded for
network theater screen leases, non-cash share-based payment costs, executive transition costs, advisor fees related
to abandoned financing transactions, impairment of long-lived assets, sales force reorganization costs and advisor
fees related to the Cineworld Proceeding (as defined herein).

“Adjusted OIBDA margin” is a non-GAAP financial measure calculated by dividing Adjusted OIBDA by total
revenue.

“LEN” refers to NCM LLC’s Lobby Entertainment Network.

“CPM” is a basis for which advertising is sold by the cost per thousand viewers.

“DCN” refers to NCM LLC’s Digital Content Network.

“TRA” refers to the tax receivable agreement entered into by NCM, Inc. and the founding members.

Market Information

Information regarding market share, market position and industry data pertaining to our business contained in this

report consists of estimates based on data and reports compiled by industry professional organizations (including, but not
limited to, the Motion Picture Association of America, and the National Association of Theatre Owners) and analysts and our
knowledge of our revenues and markets. Designated Market Area® is a registered trademark of Nielsen Media Research, Inc.
(“Nielsen”). We take responsibility for compiling and extracting, but have not independently verified, market and industry data
provided by third parties, or by industry or general publications, and take no further responsibility for such data. Similarly,
while we believe our internal data is reliable, our data has not been verified by any independent sources, and we cannot assure
you as to their accuracy.

Cautionary Statement Regarding Forward-Looking Statements

In addition to historical information, some of the information in this Form 10-K includes “forward-looking
statements.” All statements other than statements of historical facts included in this Form 10-K, including, without limitation,
certain statements under “Business,” “Risk Factors” and “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,” “will,” “can,” “should,” “expects,” “forecasts,”
“projects,” “intends,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” “potential” or “continue” or the negative of
those words and other comparable words. These forward-looking statements involve known and unknown risks and
uncertainties, assumptions and other factors, including, but not limited to, the following:

•

Risk and uncertainties relating to NCM LLC’s Chapter 11 Case;

Risk and uncertainties relating to our significant indebtedness and investments, including (i) the availability and
adequacy of cash flows to meet our debt service requirements and any other indebtedness that we may incur in the
in the future, (ii) our ability to repay or refinance our indebtedness upon maturity, including a significant amount
of indebtedness that matures on June 20, 2023, and (iii) our ability to comply with the financial covenants
included in the agreements governing our indebtedness;

The petition for reorganization filed under Chapter 11 of title 11 of the United States Bankruptcy Code by
Cineworld Group plc, the parent company of Regal, and certain of its subsidiaries, including Regal (the
“Cineworld Proceeding”), and the indebtedness of the founding members and the effect of a potential bankruptcy
of a founding member on our business;

Changes to the ESAs, including the potential rejection of the ESA with Regal in the Cineworld Proceeding, and
the relationships with NCM LLC’s founding members and NCM LLC’s ability to enforce the provisions
contained in the ESAs, including changes due to the Cineworld Proceeding;

Pandemics, epidemics or disease outbreaks, such as the COVID-19 pandemic, can disrupt our business and the
business of our founding members and network affiliates;

Continued declines in theater attendance;
Changes in theater patron behavior could result in declines in viewership of the Noovie® show;

•
•
• We may not realize the anticipated benefits of the 2019 ESA Amendments;
• We may not be successful in increasing the number of theaters in which NCM LLC has the right to display Post-

Showtime Inventory;

• Our plans for developing additional digital revenue opportunities may not be implemented and may not be

achieved;

•

Changes in regulation and potential liability arising out of the gathering and use of user information collected
through online or mobile services;

Competition within the overall advertising industry;

Failure to continue to upgrade our technology and that of our advertising network;

•
•
•
• We may not be able to grow our advertising revenue in line with the growth of our contractual costs;
•

Changes in economic conditions;

The potential loss of any major content partner or advertising client, including due to the uncertainty or perception
of uncertainty in the industry;

•
•
•
•

Potential inability to retain or replace our senior management;

The effects of government regulation on founding member and network affiliate growth;

Failure to effectively manage change to our strategy or continue our growth;

Potential failures or disruptions in our technology systems or the failure to adequately protect our systems, data or
property from threats;

Failure to protect or enforce our intellectual property rights;

Possible infringement of our technology on intellectual property rights owned by others;

•
•
• We are a holding company with no operations of our own, and we depend on distributions and payments under the
NCM LLC operating and management services agreements from NCM LLC to meet our ongoing obligations and
to pay cash dividends on our common stock;

• NCM LLC’s other members, their affiliates or our largest stockholder may have interests that differ from those of
us or our public stockholders and they may be able to influence our affairs, compete with us or benefit from
corporate opportunities that might otherwise be available to us;

•

Potential competing interests of the founding members and the ability for NCM LLC’s members to benefit from
corporate opportunities available to NCM LLC;

Future issuance of membership units or preferred stock could dilute the interest of our common stockholders;

• Our certificate of incorporation contains anti-takeover protections that may discourage a strategic transaction;
•
• Determination that NCM, Inc. or any of NCM LLC’s founding members is an investment company;
• Determination that any amount of our tax benefits under the TRA should not have been available;
•
The effect on our stock price from the substantial number of our shares eligible for sale; and
• Other factors described under “Risk Factors” or elsewhere in this Annual Report on Form 10-K.

This list of factors that may affect future performance and the accuracy of forward-looking statements are illustrative

and not exhaustive. Our actual results, performance or achievements could differ materially from those indicated in these
statements as a result of additional factors as more fully discussed in the section titled “Risk Factors,” and elsewhere in this
Annual Report on Form 10-K. Given these uncertainties, readers are cautioned not to place undue reliance on our forward-
looking statements.

All subsequent written and oral forward-looking statements attributable to us or to persons acting on our behalf are
expressly qualified in their entirety by these cautionary statements. We disclaim any intention or obligation to update publicly
any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required
under applicable securities laws.

Risk Factors Summary

Ownership of the common stock and other securities of the Company involves certain risks. In addition to the
summary below, you should carefully review the “Risk Factors” section of this Annual Report on Form 10-K and other
information in this document, including our historical financial statements and related notes included herein. The material risks
and uncertainties described in this document are not the only ones facing us. If any of the risks and uncertainties described in
this document actually occur, our business, financial condition and results of operations could be adversely affected in a
material way. This could cause the trading price of our common stock to decline, perhaps significantly, and you may lose part
or all of your investment. Some of the more significant risks relating to our business include:

Risks Related to NCM LLC’s Chapter 11 Case

The following risks relate to NCM LLC’s Chapter 11 Case described below in Item 1:

The risks and uncertainties inherent with the bankruptcy process;

•
• Material delays in or other negative events during the pendency of the Chapter 11 Case increase the risk of us being

unable to reorganize NCM LLC and successfully emerge from bankruptcy and also increase our costs associated with
the bankruptcy process;

•

The value of our outstanding common stock prior to the Chapter 11 proceedings is expected to be substantially
impaired as a result of the Chapter 11 proceedings and trading during the pendency of the Chapter 11 proceedings will
be highly speculative;

• Our relationship with NCM LLC could be adversely impacted;
• Our management may not have sufficient flexibility to manage our business during the Chapter 11 Case;
• A long-term Chapter 11 proceeding could have a material adverse effect on our business;
• NCM LLC may not be able to obtain confirmation of a Chapter 11 plan of reorganization;
• A plan of reorganization may not satisfy the requirements for non-consensual confirmation of a chapter 11 plan under

the Bankruptcy Code.

• NCM LLC may seek to amend, waive, modify, or withdraw a plan of reorganization at any time before confirmation.

• NCM LLC cannot make any assurances that the conditions precedent to a plan of reorganization’s effectiveness will

occur or be waived by the effective date.

The Restructuring Support Agreement may be terminated, which could adversely affect the Chapter 11 Case;

•
•
• Our long-term liquidity and capital resources and post-NCM LLC’s Chapter proceeding capital structure cannot be

The Restructuring is subject to conditions and milestones that we may be unable to satisfy;

predicted at this time;

• Our financial results may be volatile;
• NCM LLC may have claims that will not be discharged in the Chapter 11 Case;
• We may experience increased levels of employee attrition as a result of the Chapter 11 Case;
• Any changes to our capital structure post-bankruptcy may have a material adverse effect on existing debt and security

holders, including holders of our common stock;

The Chapter 11 proceeding may be converted to a proceeding under Chapter 7;and

•
• Our common stock may be delisted from Nasdaq.

Risks Related to Our Business and Industry

• NCM LLC’s ability to repay or refinance its indebtedness upon maturity, including a significant amount of

indebtedness that matures on June 20, 2023, and NCM LLC’s ability to comply with the financial covenants included
in the agreement governing our indebtedness;

•

The petition for reorganization filed under Chapter 11 of the United States Bankruptcy Code by Cineworld Group plc,
the parent company of Regal, and certain of its subsidiaries, including Regal, and the indebtedness of the founding
members and the effect of a potential bankruptcy of a founding member on our business;

Changes to the ESAs, including the potential rejection of the ESA with Regal in the Cineworld Proceeding, and the
relationships with NCM LLC’s founding members and NCM LLC’s ability to enforce the provisions contained in the
ESAs, including changes due to the Cineworld Proceeding;

The outbreak of the COVID-19 Pandemic, which has had an adverse impact on our business, and continues to
materially affect our operations, liquidity and results of operations;

Failure to realize the anticipated benefits of the 2019 ESA Amendments;

Changes in theater patron behavior, including advance ticket purchases for reserved seating;

Continued declines in theater attendance and its impact on how advertisers view cinema advertising;

•
•
•
•
•
• Any liability arising out of our in-theater, online or mobile services and the user information that we gather through

Failure to increase the number of theaters that display our Post-Showtime Inventory and other Noovie® products;

Failure to successfully continue to develop our digital and digital out-of-home revenue opportunities;

•
•
•
•

our online and mobile services;

Changes in regulation to the Internet or other areas of our online or mobile services;

The high level of competition within the market for advertising;

Failure to continue to upgrade our technology and that of our founding members and network affiliates;

Economic uncertainty or deterioration may lead to a decrease in consumer spending, reduced demand for our products
or a delay in payments by our advertising clients;

Potential loss of revenues or failure to increase revenue to keep in line with growth in contractual costs;

•
•
• Whether our founding members engage in activities that might compete with elements of our business, as permitted

The loss of any major content partner could significantly reduce our revenue;

under the ESAs;

• Our reliance on senior management personnel for the success of our business;
•

The effects of government regulation on our founding members and network affiliates;

• Our inability to effectively manage changes to our business strategy to continue the growth of our advertising

inventory and network;

Failure of our technological systems or the failure to adequately protect our systems, data or property from threats;

•
• Volatility in our stock price; and
• We may be liable for infringing the intellectual property rights of others.

Risks Related to Our Corporate Structure

• NCM LLC’s substantial debt obligations could impair our financial condition;

• Our status as a holding company with no operations of our own and our dependence on distributions from NCM LLC;

• Any additional debt incurred by us or NCM LLC;

• Our largest stockholder and NCM LLC’s members or their affiliates may have interests that differ from those of our

stockholders;

• Any potential competing interests of our founding members;
•

The ability of NCM LLC’s members to potentially benefit from corporate opportunities that would otherwise be
available to us;

• Differences in the terms of the agreements in place with the founding members and unaffiliated third parties;
•

The anti-takeover provisions in our certificate of incorporation and bylaws, which could discourage potentially
beneficial strategic transactions;

•

The dilutive effect on the voting power of our common stock as a result of the future issuance of our preferred stock or
future issuances or redemptions of membership units by NCM LLC;

• Any determination that we, or our founding members, qualify as an investment company under the U.S. securities

laws;

The impact of our TRA with the founding members and NCM LLC on our cash flows; and

•
• Any effect from the substantial number of shares that we have eligible for sale on the market price of our common

stock.

PART I

Item 1.

Business

The Company

NCM, Inc., a Delaware corporation, was organized on October 5, 2006 and began operations on February 13, 2007 upon

completion of its IPO. NCM, Inc. is a holding company that manages its consolidated subsidiary, NCM LLC. NCM, Inc. has
no business operations or material assets other than its cash and ownership interest of approximately 74.6% of the common
membership units in NCM LLC as of December 29, 2022. NCM LLC’s other member is Cinemark, one of the largest motion
picture exhibition companies in the U.S., which held the remaining 25.4% of NCM LLC’s common membership units as of
December 29, 2022. In December 2022, AMC and Regal each redeemed all of their outstanding membership units, 5,954,646
and 40,683,797, respectively, in exchange for shares of NCM, Inc. common stock, reducing AMC’s and Regal’s ownership to
0.0% as of December 29, 2022. In February and March of 2023, Cinemark redeemed 43,690,797 of its outstanding membership
units in exchange for shares of NCM, Inc. common stock, reducing Cinemark’s ownership to 0.0% as of March 23, 2023.
NCM, Inc.’s primary source of cash flow from operations is distributions from NCM LLC pursuant to the NCM LLC Operating
Agreement. NCM, Inc. also receives management fees pursuant to a management services agreement with NCM LLC in
exchange for providing specified management services to NCM LLC.

Chapter 11 Proceedings

On April 11, 2023, NCM LLC filed a voluntary petition for reorganization (“Chapter 11 Case”) with a prearranged

Chapter 11 plan under Chapter 11 of title 11 of the United States Code (the “Bankruptcy Code”) in the U.S. Bankruptcy Court
for the Southern District of Texas (the “Bankruptcy Court”). The Chapter 11 Case is being administered under the caption In
re: National CineMedia, LLC, Case No. 23-90291.

On April 11, 2023, NCM, Inc. entered into a restructuring support agreement (the “Restructuring Support Agreement”).
with NCM LLC and certain of NCM LLC’s (a) prepetition lenders under (i) the Term Loan Credit Agreement, dated as of June
18, 2018 among NCM LLC as Borrower, JPMorgan Chase Bank, N.A. (“JPM”) in its capacity as administrative agent, and the
lenders party thereto (as amended, supplemented or otherwise modified from time to time, the “Credit Agreement”); (ii) the
Revolving Credit Agreement, dated as of June 20, 2018 among NCM LLC as Borrower, JPM in its capacity as administrative
agent, and the lenders party thereto (as amended, supplemented or otherwise modified from time to time, the “Revolving Credit
Agreement 2018”); (iii) the Revolving Credit Agreement dated as of January 5, 2022 among NCM LLC as Borrower, JPM in
its capacity as administrative agent, and the lenders party thereto (as amended, supplemented or otherwise modified from time
to time, the “Revolving Credit Agreement 2022”); and (b) prepetition noteholders under (i) the Secured Notes Indenture dated
as of October 8, 2019 and Computershare Trust Company, National Association (“Computershare”) in its capacity as indenture
trustee (as amended, supplemented or otherwise modified from time to time, the “Secured Notes Indenture” and together with
the Term Loan Credit Agreement, Revolving Credit Facility 2018, and Revolving Credit Agreement 2022, the “Prepetition
Secured Debt Documents”) and (ii) the Unsecured Notes Indenture dated as of August 19, 2016 with Computershare in its
capacity as indenture trustee (as amended, supplemented or otherwise modified from time to time, the “Unsecured Notes
Indenture”). The parties to the Restructuring Support Agreement hold, in the aggregate, more than two-thirds of all claims
arising under the Prepetition Secured Debt Documents.

The Restructuring Support Agreement provides for, among other things (i) the “Up-C” structure pursuant to which

shares of NCM, Inc. are sold to the public and the limited liability company common membership units of NCM (“common
membership units”) may be redeemed for NCM, Inc.’s public shares shall remain in place to enable NCM LLC and NCM, Inc.
to continue to comply with the ESAs (as defined herein) and other joint venture agreements, meaning (a) that certain Third
Amended and Restated Limited Liability Operating Agreement; (b) that certain Common Unit Adjustment Agreement; (c) that
certain Tax Receivable Agreement; (d) that certain Management Services Agreement; (e) that certain Software License
Agreement; and (f) those certain ESAs (as defined herein)(“Joint Venture Agreements”); (ii) the Joint Venture Agreements
shall be assumed as of the plan effective date through a plan of reorganization; (iii) NCM, Inc. shall affirm its obligations under
the Joint Venture Agreements and to take the necessary corporate action to maintain the “Up-C” structure; (iv) outstanding
claims under the Prepetition Secured Debt Documents, existing equity interests in NCM LLC, and notes, instruments,
certificates and other documents evidencing claims or interests, including credit agreements and indentures, shall be cancelled,
and (A) holders of Prepetition Secured Debt Documents and NCM, Inc. will receive 100.0% of the common membership units
of the reorganized NCM LLC (the “new common membership units”) a portion of which will be reallocated to NCM, Inc.
pursuant to the NCMI 9019 Settlement (as defined within the Restructuring Support Agreement), subject to dilution, and (B) if
no unsecured creditors committee is appointed in the Chapter 11 Case, then the holders of Unsecured Funded Debt Claims (as
defined in the Restructuring Support Agreement) shall receive warrants, exercisable at a total equity value of $1.04 billion, for
five percent of the new common membership units, subject to dilution; (v) NCM, Inc. shall make a capital contribution of
approximately $15.0 million of cash on hand in exchange for new common membership units (the “NCMI 9019 Capital

Contribution”); (vi) holders of Prepetition Secured Debt Documents will be issued preferred stock of NCM, Inc. entitling the
holders to voting rights equal to the economic interests held by such holders in NCM LLC; and (vii) NCM LLC shall emerge
without any debt, but if additional exit financing is needed, NCM LLC will first seek to obtain a revolving credit facility from a
third party lending institution, but if, despite best efforts, NCM LLC is unable to obtain a revolving credit facility acceptable to
NCM LLC’s secured lenders, then certain of NCM LLC’s secured lenders shall provide such financing in the form of a first lien
term loan facility on such arm’s-length terms and conditions as to be agreed upon. Following the transactions contemplated by
the Restructuring Support Agreement, NCM, Inc. is projected to have an aggregate ownership interest of approximately 13.8%
of NCM LLC on account of the NCMI 9019 Settlement, NCM, Inc.’s ownership of Secured Notes and the NCMI 9019 Capital
Contribution.

NCM, Inc. expects to continue to manage NCM LLC, the “debtor in possession”, under the jurisdiction of the

Bankruptcy Court and in accordance with the applicable provisions of the Bankruptcy Code and orders of the Bankruptcy
Court. Prior to filing the Chapter 11 Case, because of potential conflicts that may arise between NCM LLC and NCM, Inc.,
NCM LLC appointed Carol Flaton of Hamlin Partners LLC as an independent manager at NCM, LLC to address these limited
conflict matters in March 2023 (the “Independent Manager”). This appointment of the Independent Manager does not otherwise
change NCM, Inc’s position as manager of NCM LLC.

In general, as debtor in possession under the Bankruptcy Code, NCM LLC is authorized to continue to operate as an

ongoing business, but may not engage in transactions outside the ordinary course of business without the prior approval of the
Bankruptcy Court. Pursuant to “first day” motions filed with the Bankruptcy Court, the Bankruptcy Court authorized NCM
LLC to conduct its business activities in the ordinary course and, among other things and subject to the terms and conditions of
such orders, authorized employees at NCM, Inc. to continue providing day-to-day management services to NCM LLC, and
NCM LLC to pay employee wages and benefits and vendors and suppliers in the ordinary course for all goods and services
going forward. NCM LLC will continue to pursue approval of a proposed plan of reorganization, which will incorporate the
terms of the Restructuring Support Agreement.

In addition, as part of its “first day” relief, NCM LLC received authority to use its encumbered cash collateral with the
consent of certain of its prepetition secured lenders to administer the Chapter 11 Case and continue its business operations (the
“Cash Collateral Order”). Consistent with the Cash Collateral Order, NCM LLC’s normal operating cash flows are providing
liquidity for NCM LLC to operate as usual and fulfill ongoing commitments to stakeholders. We are unable to predict when
NCM LLC will emerge from this Chapter 11 process.

For more information about the Chapter 11 Case refer to Part II, Item 7, Management’s Discussion and Analysis of

Financial Condition and Results of Operations and Note 16—Subsequent Events of the audited Consolidated Financial
Statements.

As of December 29, 2022, we faced multiple liquidity challenges due to NCM LLC’s over-levered capital structure. On

February 15, 2023, NCM LLC elected to delay an interest payment in the amount of $6.6 million under the Senior Notes due
2026 and utilize the 30-day grace period. Further, NCM LLC has borrowings under two Revolving Credit Facilities with $217.0
million outstanding as of December 29, 2022, that mature on June 20, 2023 (Refer to Note 10—Borrowings). NCM LLC does
not have available liquidity to repay the full outstanding balance on the date of maturity. On March 15, 2023, with the consent
of the noteholders under the Unsecured Indenture (the “Unsecured Noteholders”), NCM LLC entered into a supplemental
indenture that extended the grace period for an event of default involving an upcoming interest payment to April 3, 2023 (the
“Grace Period”). In addition, on March 31, 2023, NCM LLC entered into a second supplemental indenture with the Unsecured
Noteholders to further extend the Grace Period to April 13, 2023. On March 31, 2023, NCM LLC entered into an amendment to
the Term Loan Credit Agreement, pursuant to which the payment of the outstanding principal due under the agreement was
extended to April 13, 2023, among other modifications. Additionally, based upon current projections, NCM LLC will not meet
certain financial covenants for the period ending March 30, 2023.

We have concluded that NCM LLC’s financial condition and projected operating results, the defaults under NCM LLC’s

debt agreements subsequent to December 29, 2022 and the risks and uncertainties surrounding the Chapter 11 Case raise
substantial doubt as to our ability to continue as a going concern. Accordingly, the audit report issued by our independent
registered public accounting firm contains an explanatory paragraph expressing substantial doubt about our ability to continue
as a going concern.

Our Business

We are America’s Movie Network. As the largest cinema advertising network in North America, we are a media

company dedicated to uniting brands with young, diverse audiences through the power of movies and pop culture. NCM’s
Noovie® show is presented exclusively in 47 leading national and regional theater circuits including AMC, Cinemark, Regal
and 44 network affiliate theaters as of December 29, 2022. NCM’s cinema advertising network offers broad reach and
unparalleled audience engagement with over 20,000 screens in over 1,500 theaters in 195 Designated Market Areas®

(“DMA®”) (including all of the top 50). NCM digital and Digital-Out-Of-Home (“DOOH”) go beyond the big screen,
extending in-theater campaigns into online, mobile and place-based marketing programs to reach entertainment audiences.

We currently derive revenue principally from the sale of advertising to national, regional and local businesses through

Noovie On-Screen, our cinema advertising and entertainment show seen on movie screens across the U.S., on our LEN, a series
of strategically-placed screens located in movie theater lobbies, as well as other forms of advertising and promotions in theater
lobbies. We also sell digital online and mobile advertising through Noovie Audience Accelerator, across our suite of Noovie
digital properties such as our Noovie Trivia, on third-party internet sites, as well as a variety of complementary out of home
venues, including restaurants, convenience stores and college campuses, in order to reach entertainment audiences beyond the
theater. In 2022, NCM launched NCMx™, our new data, insights and analytics platform that taps the Company’s
comprehensive knowledge and extensive data about moviegoer behavior to connect brands with custom audiences in theaters as
well as on digital screens before and after attending movies. The broad reach and digital delivery of our network provides an
effective platform for national, regional and local advertisers to reach a large, young, engaged and affluent audience on a
targeted and measurable basis.

NCM LLC has long-term ESAs with the founding members and multi-year agreements with our network affiliates,

which grant NCM LLC exclusive rights in the founding member and network affiliate theaters to sell advertising, subject to
limited exceptions. In September 2019, NCM LLC entered into the 2019 ESA Amendments with Cinemark and Regal. The
2019 ESA Amendments extended the contract life of the ESAs with Cinemark and Regal by four years, resulting in a weighted
average remaining term of the ESAs with the founding members of approximately 16.8 years as of December 29, 2022. The
network affiliate agreements expire at various dates between May 29, 2023 and December 2037. The weighted average
remaining term of the ESAs and the network affiliate agreements together is 14.0 years as of December 29, 2022.

Cineworld Proceeding— On September 7, 2022, Cineworld Group plc, the parent company of Regal, and certain of its

subsidiaries, including Regal, Regal Cinemas, Inc., a party to the ESA with NCM LLC, and Regal CineMedia Holdings, LLC, 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 (the “Cineworld Proceeding”). 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 the Company. NCM LLC has 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 with a hearing
scheduled during the second quarter of 2023. The timing of the hearing could be impacted by the Chapter 11 Case. Although
there can be no assurances that NCM LLC’s proceeding for declaratory relief will be successful, the Company believes these
exclusivity rights will survive any attempted rejection of the ESA by Regal in the bankruptcy proceeding. As of the filing date,
the Company continues to negotiate with Regal regarding the ESA and NCM LLC’s provision of advertising services. In the
event that NCM LLC’s or NCM, Inc.’s agreements with Regal and its affiliates are rejected, it could have a materially negative
impact on the Company’s operations or financial condition.

COVID-19 Impact and Outlook—The COVID-19 Pandemic has had a significant impact on the world and our business
beginning in March 2020 and continuing into 2023. In 2021, theaters in key markets fully reopened, and by the end of the third
quarter of 2021, all of the theaters within the Company’s network were open and multiple, successful major motion pictures
were released resulting in the return of meaningful attendance. The movie slate for the year ended December 29, 2022 improved
from prior years but continued to be limited due to post-production delays and major motion picture release schedule changes.
Attendance levels increased from the year ended December 30, 2021 but were not consistent throughout the year due to timing
of major motion picture releases and number of releases. In-theater advertising revenue for the year ended December 29, 2022
remained below historical levels due in part to a lag between the recovery of attendees and advertisers, as well as current
macroeconomic factors, such as rising interest rates, inflationary pressures and any potential recession, and the respective
impacts on advertisers. These and subsequent developments are referred to throughout this Annual Report as the “COVID-19
Pandemic.”

Noovie® On-Screen Advertising

Noovie On-Screen—Our on-screen Noovie show provides an entertaining pre-movie experience for theater patrons
while serving as an incremental revenue source for our theater circuits. The Noovie show gives movie audiences a reason to
arrive at the theater early to discover what's next, with exclusive entertainment content and engaging advertising from national,
regional and local brands, as well as long-form entertainment and advertising content provided to us under exclusive multi-year
arrangements with leading media, entertainment, technology and other companies (“content partners”).

We present two different formats of our Noovie® show depending on the theater circuit in which it runs. In Cinemark,

Regal and certain network affiliate theaters, after the Noovie show ends at the advertising showtime, NCM offers additional
post-show advertising inventory consisting of (1) a lights down segment that runs for five minutes after the advertised showtime

with trailer lighting and (2) a 30- or 60-second Platinum Spot, as further described below (“Post-Showtime Inventory”). As of
December 29, 2022, theaters presenting the updated Noovie format with Post-Showtime Inventory made up 59.3% of our
network. All other NCM network theater circuits, which make up the remaining 40.7% of our network, present the Classic
Noovie show, which ends approximately at the advertised movie showtime when the movie trailers begin, which are not part of
our Noovie show.

Because the Noovie show is customized by theater circuit, theater location/market, film rating, film genre and film title,

we produce and distribute many different versions of Noovie each month. This programming flexibility provides advertisers
with the ability to target specific audience demographics and geographic locations and ensure that the content and advertising
are age-appropriate for the movie audience.

We have also launched several specialty networks to cater to specific audiences, including the Elevate Cinema Network,

a strategic sales partnership with Spotlight Cinema Networks which combines nearly 1,500 of our premier screens with
Spotlight’s existing premier network of over 1,200 screens. This combined network provides reach and recall to brands
targeting the upscale, educated, adult demographic with disposable income. Additional specialty networks include the NCM
Black Cinema Network and the NCM Hispanic Cinema Network, reaching those audiences where they over index in top
DMAs.

All versions of the Noovie show are produced by our internal creative team, which is cost-effective and gives us
significant flexibility while offering advertisers opportunities for sponsorship and integration into our movie and pop culture
content series. We also offer pre- and post-production advertising creative services to our clients (primarily local clients who
may not have their own creative agency), as well as branded content creation for national brands for a fee.

Noovie Show Structure Including Post-Showtime Inventory—The Noovie show with Post-Showtime Inventory format

is comprised of substantially the same segments included within the Classic Noovie show, each approximately four to ten
minutes in length, as well as two additional advertising segments after the advertised showtime as described below. The total
length of the Noovie show plus our Post-Showtime Inventory is the same as the Classic Noovie show as the amount of time
displayed prior to the advertised showtime is reduced by the sum of five minutes plus the aggregate length of time of the
Platinum Spot, if any. The following graphic is for illustrative purposes and is not to exact scale.

•

Segment four and Segment three are the first sections of the Noovie show which contain the entertaining
content that is a core element of Noovie programming. NCM programs exclusive Noovie content at the
beginning of the show that gives audiences a look at what’s happening in the movie and pop culture arenas
and features long-form entertainment from our content partners. We launched several new Noovie editorial
series in 2022 featuring celebrities, creators and journalists to appeal to both our moviegoing audience and
to advertisers for sponsorship and integration opportunities. These include The Noovie Trivia Show, where
our Emmy-award winning host Maria Menounos quizzes celebrities about their career through the lens of
movie trivia; Noovieverse, which stars popular social media influencers who analyze upcoming superhero
blockbuster movies; and Perri’s Picks, starring movie expert Perri Nemiroff, who shares her insider
reviews on what movies to watch and why.

Segment two features primarily local and regional advertisements, which generally range between 15 to 90
seconds, as well as a long-form entertainment content segment from one of our content partners. This
segment also typically includes a spot for Noovie programming, such as Noovie Trivia, Noovie Cultural

Celebrations (e.g. original content around Black History Month or Hispanic Heritage Month, which can
also be sponsored by advertisers), and shorter segments from the editorial series mentioned above.

•

Segment one runs closest to the advertised showtime and features primarily national advertisements, which
are generally 30 or 60 seconds, as well as a long-form entertainment content segment from one of our
content partners. Segment one also includes an advertisement for the founding members’ beverage supplier
and a courtesy public service announcement (“courtesy PSA”) (e.g. Silence Your Cell Phones).

The Showcase Segment features a post-showtime lights down segment with trailer lighting beginning at the
advertised showtime with approximately 5 minutes of national advertisements which generally range
between 30 or 60 seconds, followed by a courtesy PSA and a 30 second or a 60 second advertisement for
the founding members' beverage supplier; and

The Platinum position features an additional single advertising unit that is either 30 or 60 seconds deeply
embedded within the movie trailers at trailer level lighting and at similar volume levels, directly prior to the
last one or two trailers preceding the feature film, which we refer to as the “Platinum Spot”.

Classic Noovie Show Structure—The Classic Noovie® show is comprised of up to four segments, each approximately

four to ten minutes in length running prior to the advertised showtime. The Company revised the structure beginning November
1, 2019, and the structure below incorporates the changes made. The following graphic is for illustrative purposes and is not to
exact scale.

References to the Noovie show relate to both the Classic Noovie show and the Noovie show including Post-Showtime

Inventory formats, unless specified otherwise.

National, Regional and Local Advertising—Our cinema advertising business has a diverse customer base, consisting of
national, regional and local advertisers. National and regional on-screen advertising in the Noovie show is sold on a CPM basis
to national and regional clients. We generally sell our national advertising units across our national network by film rating or
groups of ratings, or by individual film or film genre grouping. This ability to target various groups of films offers national
advertisers a way to target specific audience demographics at various price points and overall cost levels, which we believe
expands the number of potential clients. Local advertising is typically sold on a per-theater, per-week basis.

As with other premium video mediums like TV, we sell our Noovie show inventory in both the upfront and scatter
markets. Upfront is a term that describes the practice of buying advertising time “up front” on an annual basis for the upcoming
year, purchasing inventory in advance and locking in the advertising rates (CPMs). Consistent with the television industry's
upfront booking practices, a portion of our upfront commitments have cancellation options or options to reduce the amount that
advertisers may purchase up until their commitment begins airing. These options could reduce what is ultimately spent by
clients that have made upfront commitments. Scatter refers to the buying of advertising on a shorter-term basis closer to when
the advertisements will run, which often results in a pricing premium compared to upfront rates. The mix between the upfront
and scatter markets is based upon a number of advertising market factors, such as pricing, demand for advertising time and
economic conditions. The demand in the scatter market impacts the pricing achieved for our remaining advertising inventory
not sold upfront and can vary throughout the year.

During the years ended December 29, 2022 and December 30, 2021, we derived 75.1% and 73.5% of our advertising

revenue from national clients (including advertising agencies that represent our clients) and 17.5% and 16.8% of our advertising
revenue from regional and local advertisers across the country (including advertising agencies that represent these clients).

Beverage Advertising. Each of the founding members has a relationship with a beverage concessionaire supplier under

which it is obligated to provide on-screen advertising time as part of its agreement to purchase branded beverages sold in its
theaters. We have a long-term agreement to exhibit the advertising of the founding members’ beverage concessionaires. Under
the ESAs, up to 90 seconds of the Noovie® program can be sold to the founding members to satisfy their on-screen advertising
commitments under their beverage concessionaire agreements. Beginning in 2020 and in accordance with the 2019 ESA
Amendments, the price for the time sold to Cinemark and Regal beverage suppliers increases 2% each year. The time sold to
AMC’s beverage supplier is priced equal to the greater of (1) the advertising CPM charged by NCM LLC in the previous year
for the time sold to AMC’s beverage supplier and (2) the advertising CPM for the previous year charged by NCM LLC to
unaffiliated third parties during segment one (closest to showtime) of the Noovie show in AMC’s theaters, limited to the highest
advertising CPM being then-charged by NCM LLC pursuant to the ESAs.

During 2022, we sold 60 seconds to two of the founding members and 30 seconds to one of the founding members to
provide on-screen advertising for their beverage concessionaires. During 2022, the beverage concessionaire revenue from the
founding members’ beverage agreements was approximately 7.5% of our total revenue. In the instance of certain theaters that
are acquired by the founding members but are not incorporated into our network because of an existing on-screen advertising
agreement with an alternative provider, we remain entitled to these encumbered theater beverage payments under the terms of
the ESA which are treated as a reduction to the intangible asset and not classified as revenue.

Content. Beyond the Noovie-branded content during the Noovie show, the majority of our entertainment and advertising

content segments are provided to us by content partners. Under the terms of the contracts, our content partners create original
long-form entertainment content segments and make commitments to buy a portion of our advertising inventory at a specified
CPM over a one- or two-year period with options to renew, exercisable at the content partner’s option. The original content
produced by these content partners typically features upcoming media programming or technology products. In 2022, the
content partner segments were between 90 and 120 seconds in length.

Courtesy PSA. In 2022, we had one agreement throughout the year and one additional agreement for the fourth quarter

to exhibit a 40-second “silence your cell phone” courtesy PSA reminding moviegoers to silence their cell phones and refrain
from texting during feature films. The agreement in place throughout 2022 was renewed for 2023.

Theater Circuit Messaging. The Noovie show also includes time slots for the founding members and network affiliates

to advertise various activities associated with the operations of the theaters, including concessions, online ticketing partners, gift
card and loyalty programs, special events presented by the theater operator and vendors of services provided to theaters, so long
as such promotion is incidental to the vendor’s service or products sold in the theater. This time is provided to the theater
operator at no charge.

Noovie® Digital Products

Noovie digital products is an integrated suite of products designed to innovate the moviegoing experience in ways that

help brands tap into the excitement, emotion and magic of the movies. Noovie digital products take the Noovie experience
beyond the big screen with our Noovie Trivia and robust audience data and digital advertising capabilities to create the perfect
immersive marketing solution for brands.

Noovie Trivia—Noovie Trivia is an app that launched in 2020 which unites all of our popular movie trivia games into
one place. Noovie Trivia lets fans level up their movie obsession and test their movie knowledge in multiple ways with games
to play, including Name That Movie and Noovie Shuffle. New challenges are added on a regular basis. Fans can also make their
voice heard on fun movie topics through Noovie Motion Picks.

Name That Movie started in 2017 as a trivia segment for our Noovie® show, social media channels and digital properties

in order to further entertain and engage moviegoers and is now included within our Noovie Trivia app. We also offer the
opportunity for our advertising clients to sponsor the Name That Movie segments and incorporate advertising into the game.

Data & Digital Advertising

In 2022, we launched NCMx™, our new data, insights, and analytics platform that taps the Company’s comprehensive

knowledge and extensive data about moviegoer behavior to connect brands with custom audiences in theaters, as well as on
digital screens before and after attending movies. NCM clients are able to leverage NCMx to execute advanced audience-
matching against key geographic, behavioral and contextual targets on the big screen, as well as use the NCMx capabilities to
retarget moviegoers with digital ads and mobile offers. NCM provides marketers access to one of the largest collections of
deterministic moviegoer data in the industry. With over 374.4 million unique data records as of December 29, 2022, NCMx
makes 26.2 million unique data records available over a 90-day look back period, delivering marketers a 360-degree view of
recent consumer behavior with performance metrics to refine campaign plans and generate a better return on their advertising
investment. Neustar, iSpot, Catalina, Affinity Solutions, PlaceIQ, Crossix, Kochava and ElementalTV are all partners on the

new platform. NCM is leading the cinema advertising industry as it transforms into a data-first media company that reaches
audiences at scale with the most engaging content.

NCM’s consumer-facing digital products all feature advertising opportunities that allow brands to continue to reach

movie audiences across multiple platforms, including sponsorships, digital ad inventory such as leaderboards, banner ads, half-
and full-page ads and a variety of digital video ad inventory. Our Noovie® digital products are designed to not only provide
digital advertising inventory to further enhance the marketability of our cinema advertising product offerings, but also to
capture exclusive first-party data, which is funneled into NCMx™. As of December 29, 2022, approximately 7.3 million
movie-goers have downloaded our mobile apps. These downloads and the acquisition of second- and third- party data,
including deterministic ticket transaction data from exhibitors and geo-location and micro-event data for moviegoers that enter
theaters in our network, all contribute to NCMx data records.

Noovie Audience Accelerator – In addition to our ad-supported consumer-facing digital products, our Noovie Audience

Accelerator digital product, formerly known as Cinema Accelerator, expands cinema advertising campaigns beyond the big
screen to reach movie audiences wherever they seek out movie content online and on mobile devices. Noovie Audience
Accelerator identifies moviegoers through our first-, second- and third-party unique data records. We can target specific
demographics, genres or layer on other data to provide our clients with a match against their target audience. Digital ads are
then distributed through multiple channels, including online and mobile banners, online and mobile pre-roll video and social
media newsfeeds through our owned and operated ad inventory as well as third-party ad inventory across multiple platforms
including the Internet, mobile devices and over-the-top (OTT) devices/connected televisions (CTV) to reach moviegoers
wherever they may be seeking entertainment information and content.

We sell NCM’s data platform and digital products through a digital sales group that is embedded as part of our national
and local sales organizations to enable collaborative, integrated selling. We believe that our new and upcoming digital products
can be sold in combination with in-theater advertisements as integrated marketing packages as discussed in “Business—Our
Strategy”. We plan to continue to invest in our digital platform in 2023 and beyond.

Lobby Advertising

Lobby Entertainment Network—Our LEN is a network of video screens strategically located throughout the lobbies of
all digitally equipped founding members’ theaters, as well as the majority of our network affiliates’ theaters. The LEN screens
are placed in high-traffic locations such as concession stands, box offices and other waiting areas. Programming on our LEN
consists of an approximately 30-minute loop of branded entertainment content segments created specifically for the lobby with
advertisements running between each segment. We have the scheduling flexibility to send different LEN programming to each
theater through our DCN, and the same program is displayed simultaneously on all LEN screens within a given theater, which
we believe provides the maximum impact for our advertisers. We sell national and local advertising on the LEN individually or
bundled with on-screen or other lobby promotions.

The LEN programming includes up to two minutes for founding members’ advertisements to promote activities
associated with the operation of the theaters, including concessions, online ticketing partners, gift card and loyalty programs,
special events presented by the theater operator and vendors of services provided to theaters, so long as such promotion is
incidental to the vendor’s service or products sold in the theater. Additionally, subject to certain limitations, the LEN
programming includes up to two minutes (one minute of which we provide to the founding members at no cost and one minute
of which the founding members may purchase) to promote certain non-exclusive cross-marketing relationships entered into by
the theater operators for the purpose of increasing theater attendance, which we call “strategic programs.”

Under the terms of the ESAs, the founding members also have the right to install a second network of additional screens

in their theater lobbies which would not display our LEN programming, but would be used to promote strategic programs or
products sold in their theater concessions, bars and dining operations, online ticketing partner promotions, gift card and loyalty
programs and special events presented by the founding member and vendors of services provided to theaters, so long as such
promotion is incidental to the vendor’s service.

In May 2022, the Company’s Lobby Entertainment Network launched a programmatic offering through partnership with

Place Exchange, a leading supply-side platform (SSP) for programmatic out-of-home media. This new automated offering
allows advertisers to access and purchase available LEN programming through partner demand-side platform (DSP) websites.
The new partnership now enables advertisers to reach the largest network of lobby screens in movie theaters across the country
programmatically for the first time.

Lobby Promotions—We also sell a wide variety of advertising and promotional products in theater lobbies across our
founding members and network affiliates. These products can be sold individually or bundled with on-screen, LEN or digital
advertising. Lobby promotions typically include:

•

advertising on concession items such as beverage cups, popcorn bags and kids’ trays;

•

•
•
•

coupons and promotional materials, which are customizable by film and are distributed to ticket buyers at the box
office or as they exit the theater;
tabling displays, product demonstrations and sampling;
touch-screen display units and kiosks; and
signage throughout the lobbies, including posters, banners, counter cards, danglers, floor mats, standees and
window clings.

Under the terms of the ESAs, the founding members may conduct a limited number of lobby promotions at no charge in
connection with strategic programs that promote motion pictures; however, such activities will not reduce the lobby promotions
inventory available to us.

Our ability to provide in-lobby marketing and promotional placements in conjunction with our cinema advertising

products allows us to offer integrated marketing solutions to advertisers that provide multiple touchpoints with theater patrons
throughout the movie-going experience, which we believe is a competitive advantage over other national media platforms.

Digital Out-of-Home Products

NCM’s Digital Out-of-Home (“DOOH”) group is embedded as part of our national and local sales organizations and

was created in October 2020 to further unite brands with the power of movies by extending movie-centric Noovie®
entertainment content, trivia and advertising beyond movie theaters to a variety of complementary venues, including
restaurants, convenience stores and college campuses. In 2022, NCM sold DOOH media inventory on a national, regional, local
and programmatic level in relationships with digital place-based properties including ATM.TV, Trooh and Ziosk.

Our Network

Noovie® On-Screen is distributed across NCM LLC’s national theater network — the largest digital in-theater network
in North America — through the use of our proprietary DCN and Digital Content Software (“DCS”). With the DCN and DCS,
we are able to schedule, deliver, play and reconcile advertising and entertainment content for the Noovie show and the LEN on
a national, regional, local, theater and auditorium level.

The DCN is the combination of a satellite distribution network and a terrestrial management network. We also employ a

variety of technologies that aid in distribution where satellite delivery is not available to provide service to our network of
theaters. The DCN is integrated with NCM’s cinema advertising management system to seamlessly schedule and distribute
advertising content. NCM's integrated system dynamically controls the quality, placement, timing of playback and
completeness of content within specific auditoriums, and it also allows us to monitor and initiate repairs to the equipment in our
digital network of theaters.

Advertising and entertainment content for our Noovie show and LEN is uploaded to our cinema advertising management

system and is delivered via multicast technology to the theaters in our network and received by our Alternative Content
Engine. The Alternative Content Engine holds the content until displayed in specified theater auditoriums and lobbies
according to contract terms. Each theater auditorium and lobby has hardware and/or software architecture that controls the
content to be shown. After playback of content, confirmation of playback is returned to NCM and is included in “post” reports
provided to our advertising clients.

In 2022, more than 394 million moviegoers attended theaters that are currently under contract to present the Noovie

show. A summary of the screens and theaters in our advertising network is set forth in the table below:

Our Network

(As of December 29, 2022)

As of December 29, 2022, our Noovie show was displayed on network movie screens using digital projectors. Almost all

screens within our network receive content through our DCN and are equipped with more powerful digital cinema projectors,
with the remainder comprised of LCD projectors.

Human Capital Resources

We had 297 full-time employees as of December 29, 2022. Our employees are located in our Centennial, Colorado

headquarters, in our advertising sales offices in New York, Los Angeles and Chicago and our digital development offices in
Los Angeles and New York. We also have many local advertising account executives and field maintenance technicians that
work primarily from their homes throughout the U.S. None of our employees are covered by collective bargaining agreements.
We believe that we have a good relationship with our employees.

Diversity, Equity and Inclusion (DEI)—We are committed to diversity, equity and inclusion in the workplace. We are
focused on building diverse talent at all levels of the organization by recruiting high quality diverse talent and have taken steps
to align our policies with recommendations promulgated by national organizations to ensure that our business practices are
aligned with other top employers. We have also established a DEI Committee which is made up of a diverse set of employees
and is focused on identifying and helping to implement initiatives intended to improve areas such as recruitment, retention,
brand awareness and community outreach.

Organizational Development—Our Human Resources team is focused on broad management development as well as
supporting targeted training to individual teams based on business needs. Managers and supervisors participate in specialized
training to develop management skills, encourage employee development and retention and assist the Company with succession
planning by identifying top talent to be developed into future leaders. Our Human Resources department also regularly provides
employees with mandatory compliance training regarding workplace diversity, our code of conduct, IT and cyber security and
other personnel related courses to help them with their daily responsibilities. Compliance with mandatory training requirements
is tracked by our Human Resources department and management is notified when the requirements are not met.

The Human Resources department also focuses on defining and embedding the NCM culture into all people-related
practices and policies to help us recruit, develop and retain a world-class team to grow the business. The Company has also
implemented a number of targeted initiatives to increase employee engagement and satisfaction, including surveys, career and
succession planning and analysis of our total rewards program.

Total Rewards—We invest in our employees by providing comprehensive benefits and compensation packages. Our

benefits packages include comprehensive health insurance with a wellness program for all eligible employees, parental leave for
all new parents for the birth or adoption of a child or placement of foster care, 401k plan with a comprehensive financial
wellness component and voluntary benefits employees can tailor to their specific needs ranging from additional life insurance to
pet insurance.

Seasonality

Our revenue and operating results are seasonal in nature, coinciding with the timing of marketing expenditures by our

advertising clients and to a lesser extent the attendance patterns within the film exhibition industry. Historically, both
advertising expenditures and theater attendance tend to be higher during the second, third, and fourth fiscal quarters.
Advertising revenue is primarily correlated with new product releases, advertising client marketing priorities and economic
cycles and to a lesser extent theater attendance levels. Seasonal demand during the summer is driven by the absence of
alternative attractive advertising mediums and during the winter holiday season due to high client demand across all advertising
mediums. The actual quarterly results for each quarter could differ materially depending on these factors or other risks and
uncertainties. Based on our historical experience, our first quarter typically has less revenue than the other quarters of a given
year due primarily to lower advertising client demand and increased inventory availability in competitive advertising
mediums. Given the temporary closure of our theaters in 2020 and disruptions in the release of motion pictures and regular
theater attendance patterns due to the COVID-19 Pandemic, our 2020 and 2021 quarterly results varied from the historical
trend. There can be no assurances that seasonal variations will not materially affect our results of operations in the future.

The following table reflects the quarterly percentage of total revenue for the fiscal years ended 2020, 2021 and 2022 and
a historic average for FY 2016-2019 for comparison given the impacts of COVID-19 on the film release schedule and audience
behaviors:

FY 2020..........................................................................................
FY 2021..........................................................................................
FY 2022..........................................................................................
FY 2016-2019 Average...................................................................

71.6 %
4.7 %
14.4 %
17.3 %

4.4 %
12.2 %
26.9 %
24.8 %

6.6 %
27.7 %
21.9 %
25.6 %

17.4 %
55.4 %
36.8 %
32.3 %

First
Quarter

Second
Quarter

Third
Quarter

Fourth
Quarter

Government Regulations

Currently, we are not subject to regulations specific to the sale and distribution of cinema advertising. We are subject to

federal, state and local laws that govern businesses generally such as wage and hour, worker compensation and health and
safety laws as well as privacy, information security and consumer protection-related laws and regulations. We have been and
are currently in compliance with all government mandated and environmental regulations.

Competition

Our advertising business competes in the estimated $287 billion U.S. advertising industry with many other forms of

marketing media, including television, radio, print, internet, mobile and outdoor display advertising. While cinema advertising
represents a small portion of the overall advertising industry today, we believe it is well-positioned to capitalize on the
continuing shift of advertising spending away from traditional media, in particular linear television where consumers can skip
advertisements through DVRs and other technology, to newer and more targeted forms of media.

Our advertising business also competes with many other providers of cinema advertising, which vary substantially in

size. As the largest cinema advertising network in the U.S., we believe that we are able to generate economies of scale,
operating efficiencies and enhanced opportunities for our clients to reach an engaged movie audience on both a national and
local level to allow us to better compete for premium video dollars in the larger advertising marketplace.

Competitive Strengths

We believe that several strengths position us well to compete in an increasingly fragmented media landscape. We

believe that our cinema advertising network is an attractive option for advertisers on a national, regional and local level and
delivers measurable results for our clients that are comparable, and preferred, to the television, online and mobile or other video
advertising options that we compete against in the marketplace.

Extensive national market coverage—Our contractual agreements with our founding members and network affiliates

provide long-term exclusive access (subject to limited exceptions) to sell cinema advertising across the largest network of
digitally-equipped theaters in the U.S. This allows us to offer advertisers the broad reach and national scale that they need to
effectively reach their target audiences.

•

Our advertising network consisted of 20,095 screens (16,062 operated by the founding members) located in 1,598
theaters (1,182 operated by the founding members) in 47 states and the District of Columbia, including each of the
top 25, 50 and 100 DMAs®, and 195 DMAs® in total, as of December 29, 2022;

Over 394 million people attended theaters in our network in 2022 represented 72.2%, 68.4% and 65.2% of the
total theater attendance in theaters that present cinema advertising in the top 10, 25 and 50 U.S. DMAs®,
respectively, and 61.3% of all DMAs® nationally, providing an attractive platform for national advertisers who
want exposure in larger markets or on a national basis;

The average screens per theater in our network during 2022 was 12.6 screens; and

The aggregate annual attendance per screen of theaters included in our network during 2022 was 19,647.

Scalable, state-of-the-art digital content distribution technology—Our use of the combination of satellite and terrestrial

DCN network technology, combined with the design and functionality of our DCS and Customer Experience Center
infrastructure, makes our network efficient and scalable and also allows us to target specific audiences and provide advertising
scheduling flexibility and reporting. National, local and regional advertisers are generally able to run their ads in the Noovie®
show less than 72 hours following the close of the proposal which is comparable to the lead time of television advertising,
giving businesses that rely on time-sensitive promotional advertising strategies the opportunity to take advantage of the power
of cinema. The Company plans to further decrease this lead time following additional upgrades of our cinema advertising
management system, as further discussed below.

This scalability of our distribution technology allows us to expand our cinema advertising network with minimal
additional capital expenditures or personnel, and we expect to benefit from this scalability in the future as we add new theaters
from the founding members, our existing network affiliate relationships and the addition of new network affiliates.

Access to a highly attractive, engaged audience—We offer advertisers the ability to reach highly-coveted target
demographics, including young, affluent and educated “Millennial” and “Gen Z” moviegoers. According to Epicenter for 2022,
62.0% of the NCM LLC audience were between the ages of 12-34, compared to 53.0% in 2019, with a median age of 29 in
2022. Further, 44.0% of our moviegoers have a household income greater than $100,000 (versus 37.0% of the general
population), with a median moviegoer household income of $91,000, and 38.0% have received a bachelor’s degree or higher
(versus 33.0% of the general population) according to the 2021 Doublebase GfK MRI Study.

Because of the impact of cinema’s state-of-the-art immersive video and audio presentation, we also believe that movie

audiences are highly engaged with the Noovie show advertising and entertainment content that they view in our theater
environment. In a recent study performed by Lumen, a leader in attention measurement, moviegoers viewed advertisements in
theaters for twice as long compared to advertisements on television and up to 10 times longer than advertisements on social
media platforms. Additionally, moviegoers paid four to seven times greater attention to the advertisements shown in theaters
than the advertisements shown on television or social media platforms. Further, based upon an average of 5 years of research
studies including 262 advertisers across various categories, advertising on the big screen has generated brand lift for the critical
key performance indicators of awareness (increase of 64.0%) and consideration (increase of 24.0%). Additionally, according to
an intercept study conducted by eWorks, a market research company, a Platinum Spot advertiser experienced 88.0% brand
recall, with significant lifts in unaided awareness (increase of 100.0%), favorable opinion (increase of 21.0%) and future
consideration (increase of 19.0%) after advertising with the Company in 2022.

World-class entertainment and innovative, branded pre-feature content—The film content created by Hollywood

studios is considered some of the finest entertainment content in the world, which creates a highly-desirable advertising
environment for brands. We believe that our Noovie show program provides a high-quality entertainment experience for theater
audiences and an effective marketing platform for advertisers. By partnering with leading media, entertainment, technology and
other companies, we are able to provide better original content for our audience and more impact for the advertiser. Because we
offer local and national “pods” within our Noovie show (that is, groupings of ads interspersed among video content), our format
is consistent with the grouping of ads on television networks, which allows advertisers to more easily integrate our Noovie®
show into traditional sight-sound-and-motion media buys.

Prime movie audience data, measurability and targeting—As with many other advertising mediums, we are measured
by third-party research companies. Epicenter Experience LLC measures our audience, including the total attendance that are in
their seats during our Noovie show. Additionally, unlike some other advertising mediums, we also receive attendance
information by film, by rating and by screen at least monthly for all of the founding member theaters, and by location for the
theaters operated by our network affiliates at least monthly, which allows us to report the actual audience size for each showing
of a film where our Noovie show played. We believe that the ability to provide detailed information to our clients gives us a
distinct competitive advantage over traditional media platforms whose measurement is based only on extrapolations of a very
small sample of the total audience.

In 2022, we continued to invest in the development of our cloud-based Data Management Platform (DMP) which we

believe will allow us to provide even more robust audience insights and analytics to our clients. To further enhance the
connection between brands and movie audiences, we accumulate audience data from several sources within our DMP. This
audience data is then leveraged for the targeting of ad campaigns and can also deliver closed-loop attribution reporting. We
expect to continue to enhance the capabilities of the platform in 2023 by continuing to gather first-party data through our
Noovie digital products, as well as additional second- and third-party data sources and segments.

Integrated marketing and digital products—Our ability to bundle our on-screen advertising opportunities with
integrated lobby, digital marketing and digital out-of-home products allows us to offer advertisers multiple touchpoints to reach
movie audiences anytime and anywhere to execute true 360-degree marketing programs. We believe these multiple marketing
impressions throughout the entire entertainment experience allow our advertisers to extend the exposure for their brands and
products and create a more engaging relationship with movie audiences in every stage of their movie journey. Additionally, our
new NCMx™ data platform makes cinema advertising more measurable, targetable and attributable than ever before. Our
exclusive first and second party data, including the valuable data derived from our owned and operated digital products, help us
power our Noovie Audience Accelerator product to better reach advertising clients’ target audiences with higher degrees of
accuracy and measure a variety of business outcomes more accurately.

Contractual theater circuit and advertiser relationships—Our exclusive multi-year contractual relationships with our

founding members and network affiliates allow us to offer advertisers a national network with the scale, flexibility and targeting
to meet their marketing needs. Our exclusive contractual relationships with our content partners and courtesy PSA sponsors, as
well as our agreements to satisfy the founding members’ on-screen marketing obligations to their beverage concessionaires,
provide us with a significant upfront revenue commitment, accounting for approximately 25.6% and 29.1% of our total revenue
for the years ended December 29, 2022 and December 30, 2021, respectively. In addition, our participation in the annual
advertising upfront marketplace has allowed us to secure significant annual upfront commitments from national advertisers
looking to secure premium cinema inventory. These upfront commitments accounted for approximately 30.4% and 23.9% of
our total revenue for the years ended December 29, 2022 and December 30, 2021, respectively. Due to the COVID-19
Pandemic, the Company was not able to participate in the 2021 upfront market, and thus, outside of content partner and
courtesy PSA agreements, the majority of 2021 deals were sold in the scatter market.

Strong operating margins with limited capital requirements—Our annual operating income and Adjusted OIBDA
margins from our IPO through the year ended December 26, 2019 were consistently strong, ranging from approximately 33.1%
to 38.7% and 46.5% to 51.5%, respectively, over the previous five years. Our annual operating income and Adjusted OIBDA

margins were 2.8% and 23.0%, and (59.9)% and (21.6)%, for the years ended December 29, 2022 and December 30, 2021,
respectively, due to the impact of the COVID-19 Pandemic on our operations. Refer to “Item 7. Management’s Discussion and
Analysis of Financial Condition and Results of Operations” for a discussion of the calculation of Adjusted OIBDA margin,
which is a non-GAAP financial measure, and a reconciliation of Adjusted OIBDA margin to operating income.

Our capital expenditures have ranged from approximately 2.9% to 3.5% of revenues over the five years through

December 26, 2019. Our capital expenditures were 1.7% and 5.6% of revenue for the years ended December 29, 2022 and
December 30, 2021, due to the impact of the COVID-19 Pandemic on our operations. For the year ended December 29, 2022,
our capital expenditures and other investments were $4.2 million, of which $1.9 million were associated with digital product
development; $0.9 million were associated with upgrades to our existing systems related to the planned upgrade of our cinema
advertising management system; $0.4 million were associated with network affiliate additions; and $0.1 million were for certain
implementation and prepaid costs associated with Cloud Computing arrangements. Given the impact of the COVID-19
Pandemic on our operations, our current focus is on cash containment and non-essential capital expenditures were reduced in
recent years accordingly. Due to the network equipment investments made in recent years by our founding members and
network affiliates in new and acquired theaters, ESA provisions requiring founding members to make future investments for
equipment replacements, and the scalable nature of our Customer Experience Center and other infrastructure, we do not expect
any necessary major capital investments to grow our operations as our network of theaters continues to expand. As we continue
to move our technology to cloud based Software as a Service (“SaaS”) platforms, we will continue to reduce our annual capital
expenditure spending. However, operating expenses associated with the SaaS licenses will continue to increase. Certain
implementation costs of our SaaS platforms were capitalized during the implementation period and are recognized within
operating income over the term of the SaaS contract once the systems are fully implemented.

Our Strategy

We are continuing to pursue a growth strategy that we believe will create significant value following the normalization

of our operations. Our strategy includes the following three key components:

Increase the Value of Cinema Media

We intend to drive an increase in value through innovation and optimization of our current product offering. Achieving

one of our key initiatives in this strategy, we introduced new inventory following our Noovie® show after the advertised
showtime within Cinemark and Regal theaters following the 2019 ESA Amendments. This Post-Showtime Inventory consists
of a total of five minutes between the lights down segment beginning just after the advertised movie showtime and including
trailer lighting and the 30- or 60-second Platinum Spot deeply embedded within the movie trailers with trailer lighting and full
trailer volume. We believe this inventory constitutes prized and impactful ad spots and expect these improvements to increase
the value of the inventory that we can offer to our national clients. We believe our local and regional clients will also benefit
from better inventory as their placement will now be closer to the advertised showtime. We introduced this new inventory at
select network affiliate theaters beginning in early 2020, expanding throughout 2021 and 2022, and plan to continue to work
toward expanding the portion of our network including this new inventory. We believe this higher value inventory, combined
with an entertaining and engaging show program that is integrated with our Noovie digital ecosystem, provides a unique cross-
platform premium video product that will stand out in the media marketplace. We also believe it will help mitigate the potential
future impact of reserved seating on our business.

It is the Company’s intention to increase the number of affiliate theaters in our network showing the improved Noovie

show format followed by the premium Post-Showtime Inventory. While adoption across our affiliate network is expected to
take some time, 55.6% of our network affiliates are running our Post-Showtime Inventory as of December 29, 2022, which
including Regal and Cinemark, accounted for 59.3% of our total network attendance based on 2022 levels.

Our relationships with our exhibitors are a key focus of our business. Our Affiliate Partnerships team is dedicated to

serving the needs of our founding member theater circuits and our 44 network affiliates nationwide as of December 29, 2022.
We plan to continue to expand our affiliate network by strategically targeting priority exhibitors who are not currently part of
our network and whose cinema advertising contracts we expect will be coming up for renewal in the next several years in order
to add key affiliates and screens in select markets. This will allow us to increase our revenue by increasing the number of
impressions we have available to sell to advertisers, extending our reach to additional markets to further improve our national
footprint for brands looking to reach those audiences and strengthening our reach in markets we are already in for greater
saturation in those DMAs. In January 2021, we entered into an exhibitor agreement with Harkins Theaters, the fifth largest
exhibitor in the U.S., increasing our network by over 501 screens and 33 theaters beginning in May 2021 through December
2037. In September 2022, we entered into an exhibitor agreement with VIP Cinemas, a family-owned and operated circuit of
seventeen theaters across eight states.

Under the terms of the ESAs and common unit adjustment agreement with the founding members and our network

affiliate agreements, all new theaters built or acquired (subject to existing advertising sales agreements) by the founding
members or network affiliates will become part of our network. Including our founding members and network affiliates, our net

screens have increased in eight out of the last ten fiscal years. We believe this expansion continues to improve our geographic
coverage and enhances our ability to compete with other national advertising mediums, which allows our exhibitor clients to
maximize the advertising value of their audiences.

In 2022, we launched several specialty networks to cater to specific audiences, including the Elevate Cinema Network, a

strategic sales partnership with Spotlight Cinema Networks which combines nearly 1,500 of our premier screens with
Spotlight’s existing premier network of over 1,200 screens. This combined network provides reach and recall to brands
targeting the upscale, educated, adult demographic with disposable income. We also created NCM Black Cinema Network and
NCM Hispanic Cinema Network in connection with NuTime Media, a Black-owned media sales representation company, to
better serve marketers looking to reach African-American and Hispanic audiences.

Also in 2022, we launched NCMx™, our new data, insights, and analytics platform that taps the Company’s

comprehensive knowledge and extensive data about moviegoer behavior to connect brands with custom audiences in theaters as
well as on digital screens before and after attending movies. Our valuable unique data records consist of both our own NCM
first-party data from our owned-and-operated digital products, as well as a variety of key second- and third-party data
addressable consumer records, including location-based data that allows us to track when our audiences go to the movie theater
to see our Noovie show and where they go in the days and weeks afterwards. NCMx has proven to be a highly successful tool in
attracting existing and new advertisers for NCM.

Diversify our Revenue Model

We are also reimagining the Noovie® show as we strive to increase revenue and grow our advertiser base by developing

branded content, sponsorships and integration opportunities which also drive moviegoer engagement. We have developed and
launched various segments in 2022 including The Noovie Trivia Show, Noovieverse, Perri’s Picks, Noovie Unwind and Noovie
Cultural Celebrations. Our Noovie Studios in-house creative team develops and produces original storytelling content for
advertisers for a fee, with content tied to these new Noovie show segments or fully customized based on brand needs.

We intend to build and monetize digital and data driving solutions. We continue to invest in the creation of compelling

digital entertainment products and expand our Noovie digital ecosystem and user base of movie fans with NCM owned-and-
operated products like Noovie Trivia (including Noovie Shuffle and Name That Movie). These products create new ways for
brands to engage with movie audiences beyond the big screen, reaching them anytime (before and after the movie) and
anywhere with new higher-margin digital ad inventory and creating valuable addressable first-party customer data. We expect
to then monetize this data through advertising sales and sponsorships, as well as by leveraging our Noovie Audience
Accelerator product. We also expect to launch a Noovie Rewards program across all of our digital products to further
incentivize movie-goers to download and play the apps and increase consumer engagement and retention of existing users.

Along with growing our digital products, we plan to expand upon NCMx™, our data-platform that allows us to meet the

needs of today’s modern video advertising marketplace. It is important that we accelerate the growth, scale, targeting and
measurability of our theater audience data to maintain a critical mass to be able to effectively use that audience data to deliver
value to our clients. It is that scale that we believe will make our NCM digital and data capabilities increasingly attractive to
advertisers, especially to national brands who buy both our national and regional inventory.

We also intend to enter into synergistic business opportunities. NCM's DOOH group serves to further unite brands with

the power of movies by extending movie-centric entertainment content, trivia and advertising beyond theaters to a variety of
complementary Digital Out-Of-Home platforms. NCM is now able to combine the strengths and effectiveness of Cinema,
Digital and Place-Based media together to create innovative, integrated campaigns that engage movie fans anytime and
anywhere through our partnerships with Ziosk, ATM.TV and Trooh.

Optimize Operation Effectiveness and Efficiency

We intend to ensure our technology infrastructure is built to support sustained revenue growth. Our first initiative in this

process is to further enhance our cinema advertising management system implemented in January of 2021 to allow for self-
serve programmatic purchasing for certain of our product offerings beginning with LEN. We finalized the functionality for
LEN in 2022, and expect to follow this with local and national onscreen programmatic in 2023.

Intellectual Property Rights

We have been granted a perpetual, royalty-free license from the founding members to use certain proprietary software

for the delivery of digital advertising and other content through our DCN to screens in the U.S. We have made improvements to
this software since our IPO and we own those improvements exclusively, except for improvements that were developed jointly
by us and the founding members.

We have secured U.S. trademark registrations for NCM®, National CineMedia®, Noovie® and NCMx™. It is our
practice to defend our trademarks and other intellectual property rights, including the associated goodwill, from infringement by
others. We are aware that other persons or entities may use names and marks containing variations of our registered trademarks

and other marks and trade names. Potentially, claims alleging infringement of intellectual property rights, such as trademark
infringement, could be brought against us by the users of those other names and marks. If any such infringement claim were to
prove successful in preventing us from either using or prohibiting a competitor’s use of our registered trademarks or other
marks or trade names, our ability to build brand identity could be negatively impacted.

Available Information

We maintain a website at www.ncm.com, on which we will post free of charge our annual reports on Form 10-K,
quarterly reports on Form 10-Q, current reports on Form 8-K and any amendments to these reports under the heading “Investor
Relations” located at the bottom of the home page after we electronically file such material with, or furnish it to, the Securities
and Exchange Commission (the “SEC”). We also regularly post information about the Company on the Investor Relations
page. We do not incorporate the information on our website into this document and you should not consider any information on,
or that can be accessed through, our website as part of this document. The SEC also maintains a website that contains our
reports and other information at www.sec.gov.

Item 1A.

Risk Factors

Ownership of the common stock and other securities of the Company involves certain risks. Holders of the Company’s

securities and prospective investors should consider carefully the following material risks and other information in this
document, including our historical financial statements and related notes included herein. The material risks and uncertainties
described in this document are not the only ones facing us. If any of the risks and uncertainties described in this document
actually occur, our business, financial condition and results of operations could be adversely affected in a material way. This
could cause the trading price of our common stock to decline, perhaps significantly, and you may lose part or all of your
investment.

We are subject to the risks and uncertainties associated with NCM LLC’s Chapter 11 Case.

Risks Related to NCM LLC’s Chapter 11 Proceeding

During NCM LLC’s Chapter 11 case, our operations and our ability to develop and execute our business plan, as well as our
continuation as a going concern, are subject to the risks and uncertainties associated with bankruptcy. These risks include the
following:

• NCM LLC’s ability to obtain and/or maintain court approval with respect to motions filed in Chapter 11 case from

time to time and to operate within the restrictions imposed by the Bankruptcy Court;

• Our and NCM LLC’s ability to develop, confirm and consummate a Chapter 11 plan or alternative restructuring

transaction in the timeframe contemplated by the Restructuring Support Agreement or as otherwise ordered by the
Bankruptcy Court;

• The ability of third parties to seek and obtain court approval to terminate contracts and other agreements with us;

• NCM LLC’s ability to maintain our relationships with our suppliers, vendors, customers, employees and other third

parties;

• Our and NCM LLC’s potential need to address liquidity and capital resources during or after the conclusion of the

Chapter 11 Case;

• NCM LLC’s ability to maintain contracts that are critical to our operations;

• Our and NCM LLC’s ability to execute on our business plan;

• The high costs of bankruptcy and related fees;

• The actions and decisions of our creditors and other third parties who have interests in our Chapter 11 Case that may

be inconsistent with our plans;

• The ability of third parties to appoint a Chapter 11 trustee, or to convert the Chapter 11 Case to a Chapter 7

proceeding;

• The value of our outstanding common stock prior to the Chapter 11 Case could be substantially impaired as a result of

the Chapter 11 Case and trading during the pendency of the Chapter 11 Case will be highly speculative; and

• Uncertainties and continuing risks associated with our ability to achieve our stated goals and continue as a going

concern.

Delays in NCM LLC’s Chapter 11 Case increase the risks of NCM LLC being unable to reorganize NCM LLC’s
business and emerge from bankruptcy and increase NCM LLC’s costs associated with the bankruptcy process. These risks and

uncertainties could affect our business and operations in various ways. For example, the Chapter 11 Case could impact our
ownership in NCM LLC or our role as manager and negative events associated with the Chapter 11 Case could adversely affect
NCM LLC’s relationships with suppliers, vendors, customers, employees, and other third parties, which in turn could adversely
affect our operations and financial condition. Also, we need the prior approval of the Bankruptcy Court for transactions outside
the ordinary course of business at NCM LLC, which may limit our ability to respond timely to certain events or take advantage
of certain opportunities. Because of the risks and uncertainties associated with NCM LLC’s Chapter 11 Case, we cannot
accurately predict or quantify the ultimate impact of events that will occur during the Chapter 11 Case that may be inconsistent
with our plans.

The Chapter 11 Case could impact the relationship between us and NCM LLC.

NCM LLC’s Operating Agreement provides that we will be the manager of NCM LLC and may not be removed without
our consent. Our Board of Directors determined that NCM LLC’s bankruptcy may lead to conflicts between us and NCM LLC
due the nature of our relationship, and to ensure appropriate decisions are made, our Board of Directors delegated some of its
authority to the Independent Manager of NCM LLC to resolve these conflicts. The Independent Manager may take action that
could be adverse to NCM, Inc. in connection with these conflict matters.

While we believe that the vast majority of decisions related to NCM LLC’s Chapter 11 Case will not raise any conflicts

and the appointment of the Independent Manager will resolve any conflicts, it is possible that NCM LLC’s creditors could
petition the Bankruptcy Court to appoint a trustee to manage the business. In this event, our ability to continue to pursue our
business plan would be significantly impacted and NCM LLC’s could suffer without the benefit of our management and
expertise.

NCM LLC’s Chapter 11 Case limits the flexibility of our management team in running our business.

While we expect to continue to manage NCM LLC’s businesses while it is the debtor in possession under supervision by

the Bankruptcy Court, we are required to obtain the approval of the Bankruptcy Court and, in some cases, certain lenders prior
to engaging in activities or transactions outside the ordinary course of business. Bankruptcy Court approval of non-ordinary
course activities entails preparation and filing of appropriate motions with the Bankruptcy Court, negotiation with creditors’
committees and other parties-in-interest and one or more hearings. The creditors’ committees and other parties-in interest may
be heard at any Bankruptcy Court hearing and may raise objections with respect to these motions. This process may delay
major transactions and limit our ability to respond quickly to opportunities and events in the marketplace. Furthermore, in the
event the Bankruptcy Court does not approve a proposed activity or transaction, we would be prevented from engaging in
activities and transactions that we believe are beneficial to us.

Operating under Bankruptcy Court protection for a long period of time may harm our business.

Operating our business under Bankruptcy Court protection could have a material adverse effect on our business,

financial condition, results of operations and liquidity and the significance of the impact may increase the longer we operate
under Bankruptcy Court protection. During the pendency of the Chapter 11 Case, our senior management may be required to
spend a significant amount of time and effort dealing with the reorganization instead of focusing exclusively on our business
operations. A prolonged period of operating under Bankruptcy Court protection also may make it more difficult to retain
management and other key personnel necessary to the success and growth of our business. In addition, as the length of the
Chapter 11 Case increases, the risk that customers and suppliers will lose confidence in our ability to reorganize our business
successfully may also increase, and such customers and suppliers may seek to establish alternative commercial relationships.
Additionally, so long as the Chapter 11 Case continues, we will be required to incur costs for professional fees and other
expenses associated with the administration of the Chapter 11 Case.

Furthermore, we cannot predict the ultimate amount of all settlement terms for the liabilities that will be subject to a plan

of reorganization. Even once a plan of reorganization is approved and implemented, our operating results may be adversely
affected by the possible reluctance of prospective lenders and other counterparties to do business with a company that was
involved in a bankruptcy and subsidiary recently emerged from Chapter 11.

We may not be able to obtain confirmation of a Chapter 11 plan of reorganization for NCM LLC.

To emerge successfully from Bankruptcy Court protection as a viable entity, NCM LLC must meet certain statutory

requirements with respect to adequacy of disclosure with respect to the plan of reorganization, and solicit and obtain the
requisite acceptances of such a plan and fulfill other statutory conditions for confirmation of such a plan, which have not
occurred to date. The confirmation process is subject to numerous, unanticipated potential delays, including a delay in the
Bankruptcy Court’s commencement of the confirmation hearing regarding NCM LLC’s plan of reorganization.

Though we have entered into the Restructuring Support Agreement with certain of our creditors, including in the
aggregate, more than two-thirds of all claims arising under the Prepetition Secured Debt Documents, to support our proposed
plan of reorganization, we may not receive the requisite acceptances of constituencies in the Chapter 11 Case to confirm the

proposed plan. Even if the requisite acceptances of the plan are received, the Bankruptcy Court may not confirm the Plan. Even
if all voting classes vote in favor of the plan or the Bankruptcy Code requirements for "cramdown" are met with respect to any
class that voted to reject or was deemed to reject the Plan, the Bankruptcy Court, which may exercise its substantial discretion
as a court of equity, may choose not to confirm the Plan. The precise requirements and evidentiary showing for confirming a
plan, notwithstanding its rejection by one or more impaired classes of claims or equity interests, depends upon a number of
factors including, without limitation, the status and seniority of the claims or equity interests in the rejecting class (i.e., secured
claims or unsecured claims or subordinated or senior claims). If a proposed Chapter 11 plan of reorganization is not confirmed
by the Bankruptcy Court, it is unclear whether we would be able to reorganize NCM LLC’s business and what, if anything,
holders of claims against us would ultimately receive with respect to their claims under a subsequent plan of reorganization (or
liquidation).

Even if the proposed plan of reorganization is confirmed by the Bankruptcy Court, it may not become effective because

it is subject to the satisfaction of certain conditions precedent (some of which are beyond our control). There can be no
assurance that such conditions will be satisfied and, therefore, that a plan of reorganization will become effective and that NCM
LLC will emerge from the Chapter 11 Case as contemplated by a plan of reorganization. If emergence is delayed, we and NCM
LLC may not have sufficient cash available to operate our businesses. In that case, NCM LLC may need new or additional post-
petition financing,

There can be no assurance as to whether NCM LLC will successfully reorganize and emerge from the Chapter 11 Case
or, if NCM LLC does successfully reorganize, as to when NCM LLC would emerge from the Chapter 11 Case. If NCM LLC is
unable to successfully reorganize, we may not be able to continue our operations.

A plan of reorganization may not satisfy the requirements for non-consensual confirmation of a chapter 11 plan under the
Bankruptcy Code.

In the event that any impaired class of claims does not accept or is deemed not to accept a proposed plan of
reorganization, the Bankruptcy Court may nevertheless confirm the plan at the NCM LLC’s request if at least one impaired
class has accepted the plan (with such acceptance being determined without including the vote of any “insider” in such class),
and as to each impaired class that has not accepted the plan, the Bankruptcy Court determines that the plan “does not
discriminate unfairly” and is “fair and equitable” with respect to the dissenting impaired classes. While we may believe that a
plan of reorganization satisfies the requirements for non-consensual confirmation, there can be no assurance that the
Bankruptcy Court will reach the same conclusion. If the Bankruptcy Court does not find that the proposed plan of
reorganization satisfies the requirements for non-consensual confirmation, the Bankruptcy Court may not confirm the plan.

NCM LLC may seek to amend, waive, modify, or withdraw the Plan at any time before confirmation.

Subject to and in accordance with the terms of the Restructuring Support Agreement, NCM LLC reserves the right, in

accordance with the Bankruptcy Code, to amend or modify a plan before the entry of the confirmation order or waive any
conditions thereto if and to the extent such amendments or waivers are necessary or desirable to consummate the plan. The
potential impact of any such amendment or waiver on the holders of claims and interests cannot presently be foreseen but may
include a change in the economic impact of the plan on some or all of the proposed classes or a change in the relative rights of
such classes. All holders of claims and interests will receive notice of such amendments or waivers required by applicable law
and the Bankruptcy Court. If we seek to modify the plan after receiving sufficient acceptances but before the Bankruptcy
Court’s entry of an order confirming the plan, the previously solicited acceptances will be valid only if (i) all classes of
adversely affected holders accept the modification in writing or (ii) the Bankruptcy Court determines, after notice to designated
parties, that such modification was de minimis or purely technical or otherwise did not adversely change the treatment of
holders of accepting claims or interests, or is otherwise permitted by the Bankruptcy Code.

We cannot make any assurances that the conditions precedent to the Plan’s effectiveness will occur or be waived by the
confirmation date.

Even if a plan is confirmed by the Bankruptcy Court, there can be no assurance as to the timing of the effective date of
the plan. If the conditions precedent to the effective date set forth in the plan do not occur or are not waived as set forth in the
plan, then any order entered by the Bankruptcy Court confirming the plan may be vacated, in which event no distributions
would be made under the plan, NCM LLC, and all holders of claims and interests would be restored to the status quo ante as of
the day immediately preceding the confirmation date, and NCM LLC’s obligations with respect to claims and interests would
remain unchanged.

The Restructuring Support Agreement may be terminated, which could adversely affect the Chapter 11 Case.

The Restructuring Support Agreement contains provisions that gives the Company, NCM LLC, and the Required

Consenting Creditors (as defined in the Restructuring Support Agreement) the ability to terminate the Restructuring Support
Agreement if certain conditions are not satisfied or waived, including the failure to achieve certain milestones. Termination of
the Restructuring Support Agreement could result in a protracted Chapter 11 Case, which could significantly and detrimentally

impact NCM LLC and our relationships with vendors, employees, and major customers, or potentially the conversion of the
Chapter 11 Case into a case under Chapter 7 of the Bankruptcy Code.

The Restructuring is subject to conditions and milestones that we may not be able to satisfy.

There are certain material conditions NCM LLC must satisfy under the Restructuring Support Agreement, including the

timely satisfaction of milestones in the Chapter 11 Case, which include the confirmation of the Plan and the consummation of
the restructuring transactions thereunder. The satisfaction of such conditions is subject to risks and uncertainties, many of which
are beyond our control.

Our long-term liquidity requirements and the adequacy of our capital resources are difficult to predict at this time.

While we believe that we have sufficient liquidity and capital resources to complete the Chapter 11 proceedings, we face
uncertainty regarding the adequacy of our liquidity and capital resources. In addition to the cash requirements necessary to fund
ongoing operations, NCM LLC has and will continue to incur significant professional fees and other costs in connection with
preparation the Chapter 11 Case. In the event that additional liquidity or capital is needed, it may be costly and contain
restrictions on our ability to operate without approval. NCM LLC’s liquidity, including our ability to meet our ongoing
operational obligations, is dependent upon, among other things: (i) NCM LLC’s ability to comply with the terms and conditions
of any cash collateral order that may be entered by the Bankruptcy Court in connection with the Chapter 11 proceedings, (ii)
NCM LLC and our ability to maintain adequate cash on hand, (iii) NCM LLC’s ability to generate cash flow from operations,
(iv) NCM LLC’s ability to develop, confirm and consummate a Chapter 11 plan or other alternative restructuring transaction,
and (v) the cost, duration and outcome of the Chapter 11 Case.

Our post-NCM LLC’s Chapter 11 proceeding capital structure is yet to be determined, and any changes to our capital
structure may have a material adverse effect on holders of our common stock and NCM LLC’s debt and security holders.
There is significant risk that the holders of our common stock would receive no recovery under the Chapter 11 Case and
that our common stock will be worthless.

We entered into a Restructuring Support Agreement with certain of NCM LLC’s lenders prior to the commencement of

the Chapter 11 Case, which provides for a proposed post-bankruptcy capital structure that includes us maintaining an equity
ownership in NCM LLC. However, the post-bankruptcy capital structure has yet to be finally determined and will be set
pursuant to a plan that requires Bankruptcy Court approval. The reorganization of our capital structure may include exchanges
of new debt or equity securities for NCM LLC’s existing debt, equity securities, and claims against NCM LLC. Such new debt
may be issued at different interest rates, payment schedules and maturities than NCM LLC’s existing debt securities. NCM
LLC’s existing equity securities are subject to a high risk of being cancelled. While this cancellation would not directly cancel
our common stock, the cancellation of our ownership interest in NCM LLC would have a significant impact on our ability to
continue as a going concern and the potential value available to holders of our common stock. If existing debt or equity holders
are adversely affected by a reorganization, it may adversely affect our ability to issue new debt or equity in the future. Although
we cannot predict how the claims and interests of stakeholders in the Chapter 11 Case, including holders of NCM LLC’s
outstanding security holders, we expect that NCM LLC’s recovery will likely be limited. Consequently, there is a significant
risk that the holders of our Class A common stock would receive no recovery under the Chapter 11 Case and that our Class A
common stock will be worthless.

As a result of the Chapter 11 Case, our financial results may be volatile and may not reflect historical trends.

During the Chapter 11 proceedings, we expect our financial results to be volatile as restructuring activities and expenses,

contract terminations and rejections, and claims assessments significantly impact on our consolidated financial statements.
Additionally, we may no longer be able to consolidate NCM LLC’s operations with our financial statements if NCM, Inc. no
longer controls NCM LLC for accounting purposes. As a result, our historical financial performance is likely not indicative of
our financial performance after the date of the bankruptcy filing. In addition, if NCM LLC emerges from Chapter 11, the
amounts reported in subsequent consolidated financial statements may materially change relative to historical consolidated
financial statements, including as a result of revisions to our operating plans pursuant to a plan of reorganization. We and NCM
LLC also may be required to adopt fresh start accounting, in which case our assets and liabilities will be recorded at fair value
as of the fresh start reporting date, which may differ materially from the recorded values of assets and liabilities on our
consolidated balance sheets. Our financial results after the application of fresh start accounting also may be different from
historical trends.

NCM LLC may be subject to claims that will not be discharged in the Chapter 11 Case, which could have a material adverse
effect on our financial conditions and results of operations.

The Bankruptcy Code provides that the confirmation of a plan of reorganization discharges a debtor from substantially

all debts arising prior to confirmation. With few exceptions, all claims that arose prior to April 11, 2023, or before confirmation
of the plan of reorganization (i) would be subject to compromise and/or treatment under the plan of reorganization and/or (ii)
would be discharged in accordance with the terms of the plan of reorganization. Any claims not ultimately discharged through

the plan of reorganization could be asserted against the reorganized entities and may have an adverse effect on our financial
condition and results of operations on a post-reorganization basis.

We may experience increased levels of employee attrition as a result of the Chapter 11 Case and difficulty recruiting
replacements

As a result of the Chapter 11 Case, we and NCM LLC may experience increased levels of employee attrition, and our
employees likely will face considerable distraction and uncertainty. A loss of key personnel or material erosion of employee
morale could adversely affect our business and results of operations. Our ability to engage, motivate and retain key employees
or take other measures intended to motivate and incentivize key employees to remain with us through the pendency of the
Chapter 11 Case may be limited by restrictions on implementation of incentive programs under the Bankruptcy Code. In order
to prevent the loss of services of senior management and other employees necessary for NCM LLC’s Chapter 11 Case, we or
NCM LLC entered into retention agreements. There can be no assurance that we have identified each employee necessary to the
business or that we have adequately compensated these employees to ensure they continue to provide services. The uncertainty
caused by the Chapter 11 Case could also cause NCM LLC to be a less desirable employer and make it more difficult to
identify and recruit replacement employees as needed. This could impair our ability to execute our strategy and implement
operational initiatives, which would be likely to have a material adverse effect on our business, financial condition and results
of operations.

In certain instances, a Chapter 11 proceeding may be converted to a proceeding under Chapter 7.

There can be no assurance as to whether NCM LLC will successfully reorganize under the Chapter 11 Case. If the

Bankruptcy Court finds that it would be in the best interest of creditors and/or NCM LLC, the Bankruptcy Court may convert
the Chapter 11 Case to proceedings under Chapter 7. In such event, a Chapter 7 trustee would be appointed or elected to
liquidate NCM LLC’s assets for distribution in accordance with the priorities established by the Bankruptcy Code. NCM LLC
believe that liquidation under Chapter 7 would result in significantly smaller distributions being made to the NCM LLC’s
creditors than those provided for in a Chapter 11 plan of reorganization because of (i) the limited value of NCM LLC’s primary
assets in a liquidation scenario, (ii) the likelihood that the assets would have to be sold or otherwise disposed of in a disorderly
fashion over a short period of time rather than reorganizing or selling in a controlled manner NCM LLC’s businesses as a going
concern, (iii) additional administrative expenses involved in the appointment of a Chapter 7 trustee, and (iv) additional expenses
and claims, some of which would be entitled to priority, that would be generated during the liquidation and from the rejection
of leases and other executory contracts in connection with a cessation of operations.

NCM LLC’s Chapter 11 Case may cause our common stock to decrease in value materially or may render our common
stock worthless.

NCM LLC has a substantial amount of indebtedness that is senior to the Company’s interest in NCM LLC and our
shares of common stock in in our capital structure. Recoveries in the Chapter 11 Case for our equity and for holders of our
common stock, if any, will depend upon our ability to negotiate and confirm a plan, the terms of such plan, the performance of
our business, the value of NCM LLC’s assets, the value of NCM LLC’s secured notes, a portion of which we hold, and other
factors. Although we cannot predict how our equity interest will be treated under a plan at this time, our equity interest may not
receive a material, or any, recovery, which will impact the value of our common stock. Consequently, there is a significant risk
that the holders of our common stock will ultimately receive little or no recovery under the Chapter 11 Case based on our
ownership of NCM LLC’s equity interest and that our common stock will decrease in value materially or become worthless.

Trading in shares of our common stock during the pendency of NCM LLC’s Chapter 11 Case is highly speculative and you
could lose all or part of your investment.

The price of our common stock has been volatile following the commencement of the Chapter 11 Case and may

decrease in value. Accordingly, any trading in our common stock during the pendency of NCM LLC’s Chapter 11 Case is
highly speculative and poses substantial risks to purchasers of our common stock. Accordingly, we cannot assure you of the
liquidity of an active trading market, your ability to sell your shares of our common stock when desired, or the prices that you
may obtain for your shares of our common stock. In the past, following periods of extreme volatility in the market price of a
company’s securities, securities class-action litigation has often been instituted against that company. Securities litigation
against us could result in substantial costs and a diversion of our management’s attention and resources.

We may be delisted by Nasdaq, which could adversely affect the value and liquidity of our common stock and our ability to
raise capital.

Nasdaq Rule 5110 provides that Nasdaq may use its discretionary authority to suspend or terminate the listing of a

Company that has filed for protection under any provision of the federal bankruptcy laws. While we have not filed for
bankruptcy, it is possible that Nasdaq may still exercise its discretion based on NCM LLC's Chapter 11 Case. We will appeal
this decision if it is made, but there is no assurance that we will be able to maintain our continued listing with Nasdaq. The
Company does not know the timing of any delisting event if the outcome of the appeal is adverse. Delisting our common stock

may adversely impact its liquidity, impair our stockholders’ ability to buy and sell our common stock, impair our ability to raise
capital, and the market price of our common stock could decrease. Delisting our common stock could also adversely impact the
perception of our financial condition and have additional negative ramifications, including loss of confidence by our employees,
the loss of institutional investor interest and fewer business opportunities.

Risks Related to Our Business and Industry

We may be unsuccessful in extending the maturity dates of NCM LLC’s Revolving Credit Facilities, amending its Senior
Secured Credit Facility to extend a waiver of these financial covenants or obtaining additional debt financing from third
parties. The failure to obtain such an extension, waiver or obtain additional debt financing could lead to our failure to pay
outstanding debt when due and an event of default, which gives rise to substantial doubt about our ability to continue as a
going concern.

The Company has borrowings under two Revolving Credit Facilities with $217.0 million outstanding as of December

29, 2022, that mature on June 20, 2023. The Company does not have available liquidity to repay the full outstanding balance on
the date of maturity. Under the Credit Agreement, failure to repay borrowings under the Revolving Credit Facilities at maturity
would result in an event of default for the term loans, which would allow a majority of the lenders under the Credit Agreement
to accelerate the maturity of the principal amounts of outstanding term loans to become due and payable. It would also result in
an event of default for each tranche of the senior notes, which would allow the indenture trustee or senior note holders of each
tranche of senior notes to accelerate the maturity to become due and payable. The Company does not have available liquidity to
repay any accelerated principal of term loans or tranches of the outstanding senior notes upon an event of default within one
year after the date that the financial statements are issued. Additionally, based on current projections, the Company does not
expect to meet certain financial covenants for the period ending March 30, 2023. Further, if the Company’s independent
registered public accounting firm includes a “going concern” or like qualification or exception, other than for debt maturing
within one year, in its report on the Company’s financial statements for the year ending December 29, 2022, this would be an
event of default under the Company’s Credit Agreement at the time the Company’s financial statements for the year ending
December 29, 2022 are filed. Under the Credit Agreement, failure to remain in compliance with these covenants or inability to
repay borrowings under the Revolving Credit Facilities at maturity would result in an event of default for the term loans, which
would allow a majority of the lenders under the Credit Agreement to accelerate the maturity of the principal amounts of
outstanding term loans to become due and payable. It would also result in an event of default for the senior notes, which would
allow the indenture trustee or senior note holders of each tranche of senior notes to accelerate the maturity to become due and
payable. Should the Company’s borrowings become due and payable, the Company would not be able to repay the Company’s
total outstanding debt balance. These conditions and events raise substantial doubt about the Company’s ability to continue as a
going concern. Management believes it will be able to amend NCM LLC’s Revolving Credit Facilities to extend the maturity
dates, amend its Senior Secured Credit Facility to extend a waiver of these financial covenants or obtain additional debt
financing through a loan from third parties, and/or NCM, Inc., but there is no assurance that the Company will be successful in
completing any of these options in a timely manner, or on acceptable terms, if at all.

Management believes that based on the Company’s current financial position and liquidity sources, including current

cash balances, and forecasted future cash flows, the Company can meet its operating obligations as they become due.

However, the failure to amend the Revolving Credit Facilities to extend the maturity dates, amend its Senior Secured
Credit Facility to extend a waiver of these financial covenants or obtain additional debt financing through a loan from third
parties and any associated events of default under the Credit Agreement or NCM LLC’s senior notes would have a material
adverse effect on our financial condition, which gives rise to substantial doubt about our ability to continue as a going concern.
If we are unable to continue as a going concern, we may have to file for Chapter 11, liquidate our assets and may receive less
than the value at which those assets are carried on our financial statements, and it is likely that investors will lose all or a part of
their investment.

The ESA with a founding member that has declared bankruptcy may be rejected, renegotiated or deemed unenforceable.

On September 7, 2022, Cineworld Group plc, the parent company of Regal, and certain of its subsidiaries, including

Regal, Regal Cinemas, Inc., a party to the ESA, and Regal CineMedia Holdings, LLC, 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 (the “Cineworld Proceeding”). In addition, each of the other founding members currently has a significant
amount of indebtedness. As a result of the COVID-19 Pandemic, each of the founding members temporarily closed all of their
theaters in the United States and furloughed the majority of their employees for a portion of 2020 and chose to seek additional
financing through various methods. As a result of the Cineworld Proceeding, or if a bankruptcy case were commenced by or
against another founding member, it is possible that all or part of the ESA with the applicable founding member could be
rejected by a trustee in the bankruptcy case pursuant to Section 365 or Section 1123 of the United States Bankruptcy Code, or
by the founding member, and thus not be enforceable. On October 21, 2022, Regal filed a motion to reject the ESA without
specifying an effective date for the rejection and indicated that Regal currently plans on negotiating with the Company

regarding the ESA. NCM LLC has also filed a complaint 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. Although there can
be no assurances that NCM LLC’s request for declaratory relief will be successful, the Company believes these rights will
survive any attempted rejection in the bankruptcy court by Regal. While the Cineworld Proceeding is currently ongoing and the
potential impact of the Cineworld Proceeding on NCM LLC’s operations is unknown, in the event that NCM LLC’s agreements
with Regal and its affiliates is rejected or renegotiated, it could have a materially negative impact on the Company’s operations
or financial condition. In addition, as a part of the Cineworld Proceeding, Regal has announced plans to optimize the number of
theaters it operates and has announced the closures of certain theaters. Should Regal or another founding member liquidate or
dispose of theaters or remove theaters from our network through bankruptcy or for other business reasons, if the acquirer did
not agree to continue to allow us to sell advertising in the acquired theaters the number of theaters in our advertising networks
would be reduced which in turn would reduce the number of advertising impressions available to us and thus could reduce our
advertising revenue.

Pandemics, epidemics or disease outbreaks, such as the novel coronavirus (COVID-19 virus), have disrupted and are
continuing to disrupt our business and the business of our founding members and network affiliates, which has and could
continue to materially affect our operations, liquidity and results of operations.

Pandemics or disease outbreaks such as the novel coronavirus (COVID-19 virus), including variants, have and are

continuing to disrupt our business and the business of our founding members’ and network affiliates’ theaters. Our founding
members and network affiliates’ theaters continue to remain open and are not currently subject to government regulations that
are as restrictive as the early stages of the COVID-19 Pandemic. There can be no assurance that the COVID-19 Pandemic and
associated impacts will not return in the future, or a future pandemic will not lead to public safety restrictions or consumer
behavior that will negatively impact our business, advertiser sentiment, or audience attendance.

In-theater advertising revenue remained below historical levels in 2021 and 2022. Overall theatrical attendance remained

below historical attendance prior to the COVID-19 Pandemic even though certain released films achieved attendance that was
comparable to levels prior to the COVID-19 Pandemic. However, many of the films expected to be released were released
simultaneously in theaters and through other distribution methods, including streaming or premium video-on-demand, released
directly to streaming or delayed as a revenue strategy or because of production delays, which impacted attendance. The
uncertainty created by the COVID-19 pandemic limited our ability to participate in the 2021 advertising upfront impacting our
typical mix of upfront and scatter revenue throughout 2021 and 2022.

We believe that the exhibition industry has historically fared well during periods of economic stress, and we remain

optimistic, though cannot guarantee, that the theatrical business and attendance figures will continue to rebound. However, the
ultimate significance of the COVID-19 Pandemic or other future pandemics, on our business is still unknown. We are
monitoring the rapidly evolving situation and its potential impacts on our financial position, results of operations, liquidity and
cash flows.

Due to the impacts to our operations, we were required to take drastic measures to ensure our business survived the

COVID-19 Pandemic, including incurring additional debt financing, furloughing and terminating employees, extending
payment terms on accounts payable, and reducing or delaying planned operating and capital expenditures. The ultimate impact
of these actions on our operations in the future remains to be seen, including increased difficulties in accessing lending or
capital markets or other sources of liquidity, increased employee turnover or litigation, actual or potential impairment charges,
and advertisers perception and willingness to invest with us. Additionally, many of our founding members and network
affiliates were also required to take significant actions during the COVID-19 Pandemic and these actions may lead to decreased
attendance in the future and may cause financial distress. Even the perception that our business or the business of founding
members and network affiliates may be impacted, could lead to decreased advertising expenditures and other significant
disruption to our business. Future pandemics could require us to implement measures similar to those implemented in response
to the COVID-19 Pandemic.

Significant declines in theater attendance could reduce the attractiveness of cinema advertising and could reduce our
revenue.

Our business is affected by the level of attendance at the theaters in our advertising network that operate in a highly
competitive industry and whose attendance is reliant on the presence of motion pictures that attract audiences. Over the 10 years
prior to 2020, theater attendance has fluctuated from year to year but on average has remained relatively flat. The value of our
advertising business could be adversely affected by a decline in theater attendance or even the perception by media buyers that
our network is no longer relevant to their marketing plan due to the decreases in attendance and geographic coverage.

The COVID-19 Pandemic led to several changes impacting patron attendance at theaters including studios electing to

shorten or eliminate the “release window” between the release of major motion pictures to alternative delivery methods or

released motion pictures directly to alternative delivery methods bypassing the theater entirely. Certain patrons avoided crowds
and other public indoor spaces and governments restrictions impacted the ability of theaters to operate at normal capacity.
Following some successful theatrical releases in 2021 and many successful theatrical releases in 2022, it is unclear whether
consumers and studios will revert to their pre-COVID-19 Pandemic behavior or if these changes are long-term trends.
Additional factors that could reduce attendance at our network theaters include the following:

•

if NCM LLC’s network theater circuits cannot compete with other entertainment due to an increase in the use of
alternative film delivery methods (and the shortening or elimination of the “release window” of major motion pictures
bypassing the theater entirely), including network and online video streaming and downloads;

theater circuits in NCM LLC’s network are expected to continue to renovate auditoriums in certain of their theaters to
install new larger, more comfortable seating or adjust seating arrangements, reducing the number of seats and the
audience size in a theater auditorium. These renovations have been viewed favorably by patrons and many theater
circuits have noted an intent to continue such renovations;

changes in theater operating policies, including the number and length of trailers for films that are played prior to the
start of the feature film, which may result in most or all of the Noovie® show starting further out from the actual start
of the feature film;

any reduction in consumer confidence or disposable income in general that reduces the demand for motion pictures or
adversely affects the motion picture production or exhibition industries;

the success of first-run motion pictures, which depends upon the number of films produced for theater exhibition and
the production and marketing efforts of the major studios and the attractiveness and value proposition of the movies to
consumers compared to other forms of entertainment;

if political events, such as terrorist attacks, or health-related epidemics, such as flu outbreaks and pandemics, such as
the COVID-19 Pandemic, cause consumers to avoid movie theaters or other places where large crowds are in
attendance;

government regulations or theater operating policies that require higher levels of social distancing, restriction of
capacity or prohibition of operations, including those put in place as a response to the COVID-19 Pandemic;

if the theaters in our network fail to maintain and clean their theaters and provide amenities that consumers prefer;

if future theater attendance declines significantly over an extended time period, including as a result of the COVID-19
Pandemic, one or more of the founding members or network affiliates may face financial difficulties and could be
forced to sell or close theaters or reduce the number of screens it builds or upgrades or increase ticket prices; and

NCM LLC’s network theater circuits also may not successfully compete for licenses to exhibit quality films and are
not assured a consistent supply of motion pictures.

Any of these circumstances could reduce our revenue because our national and regional advertising revenue, and local

advertising to a lesser extent, depends on the number of theater patrons who attend movies. Additionally, if attendance
underperforms against expectations or declines significantly, the Company will be required to provide additional advertising
time (makegoods) to national advertisers to reach agreed-on audience delivery thresholds. Certain of these circumstances can
also lead to volatility within our utilization, which typically varies more than 10% on an annual basis and we experience even
more substantial volatility quarter-to-quarter.

Changes in theater patron behavior could result in declines in the viewership of our Noovie® show which could reduce the
attractiveness of cinema advertising and our revenues.

The value of our national and regional on-screen advertising and to a lesser extent our local advertising is based on the

number of theater patrons that are in their seats and thus have the opportunity to view the Noovie show. Trends in patron
behavior that could reduce viewership of our Noovie show include the following:

•

theater patrons are increasingly purchasing tickets ahead of time via online ticketing mediums and when available
reserving a seat in the theater (offered in a significant percentage of our network), which could affect how early
patrons arrive to the theater and reduce the number of patrons that are in a theater seat to view most or all of the
Noovie show;

during the COVID-19 Pandemic, certain consumers changed their behavior in order to avoid large groups and other
public indoor activities, and these behavior changes could become a long-term trend;

•

certain theater chains have increased the number of trailers and time devoted to other programming prior to the display
of the feature film, and in combination with our Post-Showtime Inventory, may cause patrons to arrive later to theaters
and reduce the number of patrons that are in a theater seat to view most or all of the Noovie show; and

changes in theater patron amenities, including bars and entertainment within exhibitor lobbies causing increased dwell
time of patrons.

National advertising sales and rates are dependent on the methodology used to measure audience impressions. If a

change is made to this methodology that reflects fewer audience impressions available during the show, this could adversely
affect the Company’s revenue and results of operations.

If the non-competition provisions of the ESAs are deemed unenforceable, the founding members could compete

against us and our business could be adversely affected.

With certain limited exceptions, each of the ESAs prohibits the applicable founding member from engaging in any of the

business activities that we provide in the founding member’s theaters under the amended ESAs, and from owning interests in
other entities that compete with us. These provisions are intended to prevent the founding members from harming our business
by providing cinema advertising services directly to their theaters or by entering into agreements with other third-party cinema
advertising providers. However, under state and federal law, a court may determine that a non-competition covenant is
unenforceable, in whole or in part, for reasons including, but not limited to, the court’s determination that the covenant:

•

is not necessary to protect a legitimate business interest of the party seeking enforcement;

unreasonably restrains the party against whom enforcement is sought; or

is contrary to the public interest.

Enforceability of a non-competition covenant is determined by a court based on all of the facts and circumstances of the
specific case at the time enforcement is sought, including the type of court hearing the matter. For this reason, it is not possible
for us to predict whether, or to what extent, a court would enforce the non-competition provisions contained in the ESAs. If a
court were to determine that the non-competition provisions are unenforceable, the founding members could compete directly
against us or enter into an agreement with another cinema advertising provider that competes against us. Any inability to
enforce the non-competition provisions, in whole or in part, could cause our revenue to decline and could have a material
negative impact on our business. In connection with the Cineworld Proceeding, NCM LLC has also filed an adversary
proceeding against Regal Cinemas, Inc. seeking declaratory relief and an injunction prohibiting Regal Cinemas, Inc. from
breaching certain exclusivity, non-compete, non-negotiate and confidentiality provisions in the ESA. The bankruptcy court may
be a less favorable venue for adjudicating the implicated provisions.

We may not realize the anticipated benefits of the 2019 ESA Amendments.

On September 17, 2019, NCM LLC entered into the 2019 ESA Amendments with affiliates of Cinemark and Regal.

Among other things, the 2019 ESA Amendments provide that, beginning November 1, 2019, NCM LLC is entitled to display
up to five minutes of the Noovie® show after the scheduled showtime of a feature film and a Platinum Spot that is either 30 or
60 seconds of the Noovie show in the trailer position directly prior to the “attached” trailers preceding the feature film. The
COVID-19 Pandemic occurred shortly after NCM LLC was entitled to this inventory, disrupting our ability to utilize it.

We expect the 2019 ESA Amendments to ultimately result in an increase in average CPM, revenues and Adjusted

OIBDA, however we may not realize any or all such benefits. Potential difficulties and uncertainties that may impair the full
realization of the anticipated benefits include, among others:

•

the behavior of theater patrons may change in response to the display of a portion of the Noovie show after the
advertised showtime, or in response to the combination of advertising and trailers before the start of the feature film,
resulting in a reduction to the number of patrons that are in a theater seat to view most or all of the Noovie show;

potential advertisers may not view the Post-Showtime Inventory as attractive due to inability to run across our entire
network or view it as a premium advertising opportunity and the average CPMs for the Noovie show may not increase
as much as anticipated, or at all;

NCM LLC may not satisfy the minimum average CPM or the other restrictions which are required by the 2019 ESA
Amendments for it to have the right to display the Platinum Spot for more than one concurrent advertiser;

the extended length of time between the advertised showtime and the beginning of the feature film may decrease the
average CPM for that portion of the Noovie show appearing before the advertised showtime, which may partially or
fully offset any increase in average CPM for the Post-Showtime Inventory; and

•

the increased theater access fees payable to Cinemark and Regal in connection with the Post-Showtime Inventory and
revenue share applicable to the Platinum Spot may exceed the increase, if any, in revenue resulting from the 2019 ESA
Amendments.

The anticipated benefits we expect to receive as a result of the 2019 ESA Amendments are subject to factors that we do
not and cannot control. Failure to realize the anticipated benefits could result in decreases in revenue and Adjusted OIBDA and
diversion of management’s time and energy, and could adversely affect our business, financial condition and operating results.

We may not be successful in increasing the number of theaters in which NCM LLC has the right to display Post-Showtime
Inventory.

As a result of the 2019 ESA Amendments, NCM LLC is entitled to display up to five minutes of the Noovie® show after

the scheduled showtime of a feature film and a Platinum Spot that is either 30 or 60 seconds of the Noovie show in the trailer
position directly prior to the “attached” trailers preceding the feature film. We also entered into agreements to obtain similar
access to similar inventory with certain of our other current network affiliates. At this time NCM LLC is displaying Post-
Showtime Inventory in theaters that constitute approximately 59% of the attendance in our network as of December 29, 2022.

There can be no assurance that our efforts with current and potential network affiliates will be successful in increasing

either the number of theaters in which NCM LLC has the right to display advertising, including Post-Showtime Inventory.
Certain of our theater partners have previously indicated that they have no plans to introduce our Post-Showtime Inventory in
their theaters. In addition, any agreements with other network affiliates or new network affiliates may be on terms less favorable
to us than the current network affiliate agreements and the 2019 ESA Amendments. If we are unable to expand the number of
theaters displaying our advertising, including the Post-Showtime Inventory, we will be limited to only experiencing the benefit
of our advertising in our current theaters and our Post-Showtime Inventory, if any, in Cinemark, Regal and participating
affiliate theaters.

Changes in the ESAs with, or lack of support by, the founding members could adversely affect our revenue, growth and
profitability.

The ESAs with the founding members are critical to our business. The ESA with AMC has an initial term of 30 years
and the ESAs with Cinemark and Regal (as amended by the 2019 ESA Amendments) have a term of 34 years, each such term
beginning February 13, 2007. Each ESA provides NCM LLC with a five-year right of first refusal for the services that it
provides to the founding members, which begins one year prior to the end of the term of each respective ESA. The founding
members’ theaters represent approximately 79.9% of the screens and approximately 81.0% of the attendance in our network as
of December 29, 2022. If any one of the ESAs was terminated, not renewed at its expiration or found to be unenforceable, it
could have a material negative impact on our revenue, profitability and financial condition.

The ESAs require the continuing cooperation, investment and support of the founding members, the absence of which
could adversely affect us. Pursuant to the ESAs, the founding members must make investments to replace network equipment
within their theaters and equip newly constructed theaters with digital network equipment. If the founding members do not have
adequate financial resources or operational strength, and if they do not replace equipment or equip new theaters to maintain the
level of operating functionality that we have today, or if such equipment becomes obsolete, we may have to make additional
capital expenditures or our advertising revenue and operating margins may decline. In addition, the ESAs give the founding
members the right to object to certain content in our Noovie® show, including content that competes with us or the applicable
founding member. If the founding members do not agree with our decisions on what content, strategic program or partnerships
are permitted under the ESAs, we may lose advertising clients and the resulting revenue, which would harm our business. Regal
and its affiliates are currently in bankruptcy and it is unknown if Regal will continue to cooperate, invest and support the
business during the pendency of the bankruptcy process. While founding members are eligible to be issued additional shares
pursuant to the terms of the common unit adjustment agreement, two of our founding members currently have zero membership
units following the redemption of their common membership units. We are uncertain how these founding members’ lack of
ownership interest in NCM LLC may affect its cooperation with us under its ESA or otherwise going forward.

Our plans for developing additional digital or digital out-of-home revenue opportunities may not be implemented and may
not be achieved.

We have invested significant resources in pursuing potential opportunities for revenue growth, which we describe in this

annual report on Form 10-K under “Business—Our Strategy.” We had 273.7 million and 374.4 million unique data records as
of December 30, 2021 and December 29, 2022, respectively. These valuable unique data records consist of both our own NCM
first-party data from our owned-and-operated digital products, and a variety of key second- and third-party data addressable
consumer records, including location-based data that allows us to track when our audiences go to the movie theater to see our
Noovie show and where they go in the days and weeks afterwards. Our ability to increase our unique data records requires us to
invest in third-party relationships, to comply with evolving privacy and data security laws, rules and regulations and to develop

innovative digital properties that will increase the number of users of our online and mobile entertainment and advertising
network and mobile apps. Our ability to collect and leverage movie audience data is under increasing competitive and
regulatory pressure and may be negatively impacted by changes to advertising technology, platform operator policies and
privacy laws and regulation and may not deliver the future benefits that we are expecting. It is important that we maintain a
critical mass of audience data to make our digital offering more attractive to advertisers, including national brands who buy
both our national and regional advertising inventory.

Our digital out-of-home business remains at an early stage and is under significant competitive pressure with the
proliferation of available alternatives in the digital out-of-home space and may not deliver the future benefits that we are
expecting. If we are unable to develop relationships and advertising that is relevant to the marketplace that can be integrated
with our core on-screen advertising products, and if these offerings are not attractive to our advertisers, then the digital out-of-
home business may not provide significant revenue or a method to help expand our cinema advertising business as it matures.
Additionally, the COVID-19 Pandemic has impacted the consumer traffic and available impressions at a number of locations
we have the right to display digital out-of-home advertising, and the traffic may not recover to historic levels. As such, there
can be no assurance that we will recoup our investments made pursuing this business.

If we are unable to execute on products relevant to the marketplace or integrate these digital and digital out-of-home

marketing products with our core on-screen and theater lobby products, or if these offerings or other data sources do not
continue or are unable to provide relevant data or to grow in importance to advertising clients and agencies, they may not
provide a way to help expand our advertising business as it matures and begins to compete with new or improved advertising
platforms including online and mobile video services. As such, there can be no assurance that we will recoup our investments
made pursuing additional revenue opportunities.

The personal information we collect and maintain through our online and mobile services, as well as from third-party
sources, may expose us to liability or cause us to incur greater operating expenses.

We collect personal information from users of our websites or apps, including those users who establish accounts, or

users who view certain advertising displayed through our online and mobile services. We receive certain personal information
regarding consumers who enter the theaters in our network, including places visited before entering the theater and after leaving
the theater, from third parties to supplement or enhance the information we collect and maintain about users of our online and
mobile services or individuals who view advertising or enter theaters. We also collect personal information relating to
individuals who are job applicants, employees, stockholders, directors, officers and independent contractors of NCM, as well as
emergency contact information they provide. In addition, we collect personal information relating to employees, owners,
directors, officers and independent contractors of other organizations within the context of conducting due diligence regarding
or providing or receiving a product or service to or from such organization. The collection and use of this information is
governed by applicable privacy, information security and consumer protection laws and regulations that continue to evolve and
may be inconsistent from one jurisdiction to another. Compliance with all such laws and regulations may increase our operating
costs and adversely impact our ability to offer our clients advertising targeted to moviegoer demographics or to interact with
users of our online and mobile services, and could result in legal liability. For example, the failure, or perceived failure, to
comply with applicable privacy information security or consumer protection-related laws or regulations or our posted privacy
policies could result in actions against us by governmental entities or others. If an actual or perceived breach of our data occurs,
we could incur significant costs notifying affected individuals and providing them with credit monitoring services. The market
perception of the effectiveness of our security measures could also be harmed, and we could lose users of these services and the
associated benefits from gathering such user data.

Changes in laws, regulations or rules relating to privacy, data security, the Internet or other areas of our online or mobile
services may result in the need to alter our business practices or incur greater operating expenses.

A number of statutes, regulations and rules may impact our business as a result of our online or mobile services and our

use of personal information we receive from third parties. For example, privacy laws that have passed or are being
contemplated give, or will give, individuals additional rights with regards to the collection, use, access to, correction, deletion,
selling, sharing and protection of their personal information and sensitive personal information. The costs of compliance with
privacy laws, regulations and rules and other regulations relating to our online and mobile services or other areas of our
business, may be significant. The manner in which these and other regulations may be interpreted or enforced may subject us to
potential liability, which in turn could have an adverse effect on our business, results of operations, or financial condition.
Changes to these and other regulations may impose additional burdens on us or otherwise adversely affect our business and
financial results because of, for example, increased costs relating to legal compliance, defense against claims, adverse rulings or
damages, the reduction or elimination of features, functionality or content from our online or mobile services, or our inability to
use unique data records effectively. Likewise, any failure on our part to comply with these and other regulations may subject us
to additional liabilities.

The markets for advertising are competitive and we may be unable to compete successfully.

The market for advertising is very competitive. Cinema advertising is a small component of video advertising in the U.S.

and thus, we must compete with established, larger and better known national and local media platforms such as cable,
broadcast and satellite television networks, ad supported video-on-demand and other video media platforms. In addition to these
video advertising platforms, we compete for advertising directly with additional media platforms, including digital advertising
providers, online, digital out-of-home and mobile, radio, various local print media and billboards, and other cinema advertising
companies. We expect all of these competitors to devote significant effort to maintaining and growing their business, which
may be at our expense. We also expect existing competitors and new entrants to the advertising business, most notably the
online, digital out-of-home and mobile advertising companies and ad supported video-on-demand platforms, to constantly
revise and improve their business models to meet expectations of advertising clients. In addition, the pricing and volume of
advertising may be affected by shifts in spending toward digital platforms from more traditional media, or toward new ways of
purchasing advertising, such as through automated purchasing, dynamic advertising insertion, third parties selling local
advertising posts and advertising exchanges, some or all of which may not be as advantageous to the Company as current
advertising methods. Expenditures by advertisers tend to be cyclical, reflecting overall economic conditions, as well as
budgeting and buying patterns. A decline in the economic prospects of advertisers, industries, such as retail or consumer
products, or the economy in general could alter current or prospective advertisers’ spending priorities, including changes in
prospects caused by inflationary pressures, pandemics or other events. If we cannot respond effectively to media marketplace
changes, advertising market changes, new entrants or advances by our existing competitors, our business may be adversely
affected.

Additionally, the number of films and mix of film ratings of the available motion pictures, such as the proportion of G
and PG rated films or a shift in the types and numbers of films being shown in theaters, could cause advertisers to reduce their
spending with us as the theater patrons for the available films may not represent those advertisers’ target markets.

Advertising demand also impacts the price (CPM) we are able to charge our clients. Due to increased competition,

combined with seasonal marketplace supply and demand characteristics, we have experienced volatility in our pricing (CPMs)
over the years, with annual national CPM increases (decreases) ranging from (4.2%) to 23.6% from 2015 to 2022 (excluding
2020).

If we do not continue to upgrade our technology, our business could fail to grow and revenue and operating margins could
decline.

In early 2021, we implemented a new cinema advertising management system which was developed by a third-party

vendor. This system replaced many of our internally developed systems and provide delivery optimization, inventory
management and monetization, intelligent dynamic scheduling, increased flexibility, and workflow automation. The system also
interfaces with our accounting system thus driving client invoicing and revenue recognition. Given the pervasive impact of this
new system on the Company's processes, problems with the systems and software could cause operational difficulties, lead to
errors within our financial reporting and slow or prevent the growth of our business in the future. As we continue to move our
technology to cloud based SaaS platforms, our operating results may be impacted as operating expenses associated with the
SaaS licenses may increase as our annual capital expenditure spending may decrease and this shift in costs may exceed our
current estimates.

If our cinema advertising management system does not successfully provide all of the services we expect, if we are
unable to continue to successfully and cost-effectively implement further upgrades to the system, including a programmatic
advertising sales option, or if we lose access to the system through termination of the agreement or otherwise, our ability to
offer our clients innovative, unique, integrated and targeted marketing products may be impacted, which could limit our future
revenue growth. The failure to upgrade and maintain our technology allowing our advertising to reach a broader audience and
allow for more targeted marketing products similar to other products in the inventory could hurt our ability to compete. Under
the ESAs, the founding members are required to provide technology that is consistent with that in place at the signing of the
ESA. We may request that the founding members upgrade the equipment or software installed in their theaters, but we must
negotiate with the founding members as to the terms of such upgrade, including cost sharing terms, if any. If we are not able to
come to an agreement on a future upgrade request, we may elect to pay for the upgrades requested which could result in our
incurring significant capital expenditures that could adversely affect our profitability.

Economic uncertainty or deterioration in economic conditions may adversely impact our business, operating results or
financial condition.

The financial markets have experienced extreme disruption and volatility at times. A decline in consumer spending in

the U.S. may lead to decreased demand for our services or delay in payments by our advertising clients. As a result, our results
of operations and financial condition could be adversely affected. These challenging economic conditions also may result in:

•

increased competition for fewer advertising and entertainment programming dollars;

•

pricing pressure that may adversely affect revenue and gross margin;

declining attendance and thus a decline in the impressions available for our show;

reduced credit availability and/or access to capital markets;

difficulty forecasting, budgeting and planning due to limited visibility into the spending plans of current or prospective
clients;

client financial difficulty and increased risk of uncollectible accounts; or

financial difficulty for our founding members or network affiliates.

Our Adjusted OIBDA is derived from high margin advertising revenue. Our contractual costs will grow over time, and the
reduction in spending by or loss of a national advertiser or group of local advertisers or failure to grow our advertising
revenue in line with these costs could have a meaningful adverse effect on our business.

The ESAs and certain of our network affiliate agreements include automatic annual cost or fee increases. The theater

access fees under the ESAs are composed of a fixed payment per patron, increasing by 8% every five years, and a fixed
payment per digital screen connected to the DCN, increases annually by 5%. The digital screen fees may exceed the traditional
theater access fees in the future because of the higher rate of growth of the digital screen fees. In addition, pursuant to the 2019
ESA Amendments, we have agreed to pay a fixed payment per patron in consideration for NCM LLC’s access to certain on-
screen advertising inventory after the advertised showtime of a feature film, which amounts increased by fixed amounts until
November 1, 2022 and then now increase by 8% every five years beginning November 1, 2027. If NCM LLC further amends
the ESAs or network affiliate agreements in response to market conditions or in connection with the bankruptcy of a
counterparty, the costs could increase. If we are unable to grow our high margin advertising revenue at a rate at least equal to
that of our contractual obligations, our margins and results would be negatively affected.

We generate all of our operating income and Adjusted OIBDA from our high margin advertising business. Advertisers

will not continue to do business with us if they believe our advertising medium is ineffective, unpredictable or overly expensive
or lacks sufficient scale. In addition, large advertisers generally have set advertising budgets, of which cinema advertising may
only be a small portion. Reductions in the size of advertisers’ budgets due to local or national economic trends, epidemics,
pandemics, other natural disasters or similar events, a shift in spending to other advertising mediums, perception of uncertainty
in advertising mediums, or other factors could result in lower spending on our advertising inventory. Advertisers are spending
in the scatter market closer to the start date of their advertising campaign. A substantial portion of our advertising revenue
relates to contracts with terms of a month or less, and clients have many video media choices and can adjust where ads are
placed up until their airdates without the risk of securing desired impressions. We have previously been successful in securing
favorable upfront advertising agreements, but as advertising spending shifts in the scatter market closer to the start date of
advertising campaigns, our ability to maintain high CPMs in the upfront markets may decrease. If we are unable to remain
competitive and provide value to our advertising clients, they may reduce their advertising purchases or stop placing
advertisements with us. Even the loss of a small number of clients on large contracts that we are not able to replace would
negatively affect our results.

The loss of any major content partner or advertising client could significantly reduce our revenue.

We derive a significant portion of our revenue from our contracts with our content partners, courtesy PSAs and NCM

LLC’s founding members’ agreements to purchase on-screen advertising for their beverage concessionaires. We are not direct
parties to the agreements between the founding members’ and their beverage concessionaires but expect that each founding
member will have an agreement with a beverage concessionaire to provide advertising for the foreseeable future. There was one
company that individually accounted for over 10% of our total revenue during the year ended December 29, 2022. The
agreements with the content partners, courtesy PSAs and beverage advertising with the founding members in aggregate
accounted for approximately 25.6% of our total revenue during the year ended December 29, 2022. During the year ended
December 29, 2022, one content partner accounted for 12.9% of our total revenue. Because we derive a significant percentage
of our total revenue from a relatively small number of large companies, the loss of one or more as a customer could decrease
our revenue and adversely affect current and future operating results.

The ESAs allow the founding members to engage in activities that might compete with certain elements of our business,
which could reduce our revenue and growth potential.

The ESAs contain certain limited exceptions to our exclusive right to use the founding members’ theaters for our

advertising business. The founding members have the right to enter into a limited number of strategic cross-marketing
relationships with third-party, unaffiliated businesses for the purpose of generating increased attendance or revenue (other than
revenue from the sale of advertising). These strategic marketing relationships can include the use of one minute on the LEN per
30-minute cycle and certain types of lobby promotions and can be provided at no cost, but only for the purpose of promoting
the products or services of those businesses while at the same time promoting the theater circuit or the movie-going experience.

The use of LEN or lobby promotions by the founding members for these advertisements and programs could result in the
founding members creating relationships with advertisers that could adversely affect our current LEN and lobby promotions
advertising revenue and profitability, as well as the potential we have to grow that advertising revenue in the future. The LEN
and lobby promotions represented approximately 0.8% and 0.7% of our total advertising revenue for the year ended December
29, 2022 and December 30, 2021, respectively. The founding members do not have the right to use their movie screens
(including the Noovie® show or otherwise) for promoting these cross-marketing relationships, and thus we will have the
exclusive rights to advertise on the movie screens, except for limited advertising related to theater operations.

The founding members also have the right to install a second network of video monitors in the theater lobbies in excess
of those required to be installed for the LEN, and the founding members have exercised this right to install a significant number
of video monitors in their theater lobbies. The presence of this additional lobby video network, which we refer to as the
founding members’ lobby network, could reduce the effectiveness of our LEN, thereby reducing our current LEN advertising
revenue and profitability and adversely affecting future revenue potential associated with that marketing platform.

We depend upon our senior management and our business may be adversely affected if we cannot retain or replace them.

Our success depends in part upon the retention of our experienced senior management with specialized industry, sales

and technical knowledge or industry relationships. Following the resignations of certain members of our senior management in
2021 and 2020, in 2021 we appointed a new President of Sales, Marketing and Partnerships, Chief Financial Officer, and
General Counsel. If we are not able to find qualified internal or external replacements for critical members of our senior
management team, the loss of these key employees could have a material negative impact on our ability to effectively pursue
our business strategy and our relationships with advertisers, exhibitors, media and content partners. During the COVID-19
Pandemic, we had an increase in voluntary turnover and implemented a temporary pay reduction for all employees of up to
50% and each of our named executive officers agreed to a 20% reduction of their base salary and other employee benefit cuts.
These temporary pay reductions were removed for all employees at the beginning of 2022. Additionally, while the Company
was able to find experienced replacements for senior management during the uncertainty caused by the COVID-19 Pandemic,
there is no guarantee that the Company will continue to be able to recruit experienced replacements. We do not have key-man
life insurance covering any of our employees.

The founding members and our network affiliates are subject to substantial government regulation, which could limit their
current business, slow their future growth of locations and screens and in turn impact our business and slow our growth
prospects.

The founding members and our network affiliates are subject to various federal, state and local laws, regulations and

administrative practices affecting their movie theater business, including provisions regulating antitrust, health, safety and
sanitation standards (including in connection with the COVID-19 Pandemic), access for those with disabilities, environmental,
and licensing. Some of these laws and regulations also apply directly to us and NCM LLC. Changes in existing laws or
implementation of new laws, regulations and practices could have a significant impact on the founding members’, our network
affiliates’ and our respective businesses. For example, during a portion of the COVID-19 Pandemic, health and safety laws
restricted the ability of the founding members and network affiliates from opening their theaters and operating at full capacity,
which significantly impacted their and our businesses.

We may be unable to effectively manage changes to our business strategy to continue the growth of our advertising
inventory and network.

If we do not effectively implement our strategy, we may not be able to continue our historical growth. To effectively

execute on our strategy to expand our digital offerings and continue to grow our inventory, we will need to develop additional
products or obtain access to third-party digital inventory. These enhancements and improvements could require an additional
allocation of financial and management resources and acquisition of talent. High turnover, loss of specialized talent or
insufficient capital could also place significant demands on management, the success of the organization, and our strategic
outlook. Our ability to invest in our existing digital business and our new digital out-of-home business have been and will
continue to be negatively impacted by the COVID-19 Pandemic, which may decrease the growth of these businesses.

The amount of in-theater inventory we have to sell is limited by the length of the Noovie show. In order to maintain in-

theater growth we will need to expand the number of theaters and screens in our network. If we lose a significant number of
theaters or are unable to expand our network, our revenue and operating results could be adversely impacted.

Our business relies heavily on technology systems, and any failures or disruptions may materially and adversely affect our
operations.

In order to conduct our business, we rely on information technology networks and systems, including those managed
and owned by third parties, to process, transmit and store electronic information and manage and support business processes
and activities. The temporary or permanent loss of our computer equipment, networks, data or software systems through
ransomware, data exfiltration, and other cyberattacks and other security threats, termination of a material technology license or

contract, operating malfunction, software virus, human error, natural disaster, power loss, terrorist attacks or other catastrophic
events could disrupt our operations and cause a material negative impact and the steps that we have taken to mitigate these risks
may prove to be ineffective. Although the Company maintains robust procedures, internal policies and technological security
measures to safeguard its systems, including disaster recovery systems separate from our operations, robust network security
and other measures to help protect our network from unauthorized access and misuse, and a cyber-security insurance policy, the
Company’s information technology systems or systems of our founding members, network affiliates or third-party service
providers could be penetrated by internal or external parties intent on extracting information, corrupting information, stealing
intellectual property or trade secrets, or disrupting business processes. For example, SolarWinds previously announced that its
system was infected with malicious software during 2020, which might have impacted customers, including NCM. While NCM
took prompt action to address the potential vulnerability and does not believe that there were any adverse consequences, there is
no guarantee that future hacks and attacks on our network, including those through third parties, will be unsuccessful or
resolved without damage to us or our customers. Techniques used by cyber criminals to obtain unauthorized access, disable or
degrade services, or sabotage systems evolve frequently and may not immediately be detected, and we may be unable to
implement adequate preventative measures. Depending on the nature and scope of a future disruption, if any technology
network or systems were to fail and we were unable to recover in a timely manner, we would be unable to fulfill critical
business functions, which could lead to a loss of clients and revenue, harm our reputation or interfere with our ability to comply
with financial reporting and other regulatory requirements.

Our revenue and Adjusted OIBDA fluctuate from quarter to quarter and may be unpredictable, which could increase the
volatility of our stock price.

A weak advertising market, the shift in spending of a major client from one quarter to another, the performance of films

released in a given quarter, a disruption in the release schedule of films or changes in the television scatter market could
significantly affect quarter-to-quarter results or even affect annual results. Our revenue and operating results are seasonal in
nature, coinciding with the timing of marketing expenditures by our advertising clients and, to a lesser extent, the attendance
patterns within the film exhibition industry, which have historically been higher during the second, third, and fourth fiscal
quarters. Because our results may vary from quarter to quarter and may be unpredictable, our financial results for one quarter
cannot necessarily be compared to another quarter or the same quarter in prior years and may not be indicative of our financial
performance in subsequent quarters. Additionally, the bankruptcy of our founding members, or negative news regarding the
theater industry, cinema advertising generally or us could lead to increased volatility in revenue from quarter to quarter. These
variations in our financial results could contribute to volatility in our stock price.

Our business, services, or technology may infringe on intellectual property rights owned by others, which may interfere with
our ability to provide services or expose us to increased liability or expense, or otherwise may be affected by our efforts to
protect our intellectual property or restrictions or obligations in third-party licenses.

Our business uses a variety of intellectual property rights, including copyrights, trademarks, trade secrets, domain names

and patents or patentable ideas in the provision of our advertising services, the websites we operate at ncm.com and
Noovie.com, our digital gaming products including Noovie Trivia and the features and functionality, content and software we
make available through those websites and apps. We rely on our own intellectual property rights, as well as intellectual
property rights obtained from third parties (including through open-source licenses), to conduct our business and provide our in-
theater, online, mobile and creative services. We may incur expenses, some of which may be significant, in developing,
protecting, maintaining, and defending our intellectual property rights or licensing intellectual property from third parties.

In some instances, we may not be able to or may choose not to protect, maintain, or defend our intellectual property

rights or the laws of certain foreign countries may not protect our intellectual property rights to the same extent as do the laws
of the U.S.

We may discover that our business or the technology or methods we use to operate our business infringes patent,
trademark, copyright, publicity rights, or other intellectual property rights owned by others or is otherwise negatively impacted
by restrictions imposed by or obligations under third-party intellectual property licenses. In addition, our competitors or others
may claim rights in patents, trademarks, copyrights, publicity rights, or other intellectual property rights that will prevent, limit
or interfere with our ability to provide our in-theater, online, or mobile services either in the U.S. or in international markets.
We may incur significant costs in protecting our own intellectual property rights or defending or settling intellectual property
infringement claims and may face significant damage awards (including the potential for awards of attorneys’ fees) if we are
found to be infringing third-party intellectual property rights.

Our in-theater, online and mobile services facilitate the distribution of content, and we create content for others. This

content includes advertising-related content, as well as movie, television, music, gaming and other media content, much of
which is obtained from third parties. Our apps, websites, and social media channels also include features enabling users to
upload or add their own content and modify certain content. As a distributor of content, we face potential liability for
negligence, copyright, patent, trademark, or publicity infringement, or other claims based on the content that we distribute or

create for others. We or entities that we license or receive content from or distribute content through may not be adequately
insured or indemnified to cover claims of these types or liability that may be imposed on us.

If we fail to regain compliance with the requirements for continued listing on Nasdaq, our common stock could be delisted
from trading, which would adversely affect the liquidity of our common stock and our ability to raise additional capital.

On October 28, 2022, we received written notice from The Nasdaq Stock Market LLC (“Nasdaq”) indicating that we are

not in compliance with the $1.00 minimum bid price requirement for continued listing on The Nasdaq Global Market, as set
forth in Listing Rule 5450(a)(1) (the “Bid Price Rule”). In accordance with Listing Rule 5810(c)(3)(A), we have a period of 180
calendar days, or until April 26, 2023, to regain compliance with the Bid Price Rule. To regain compliance, the closing bid
price of our common stock must meet or exceed $1.00 per share for a minimum of ten consecutive business days during this
180-day period. If at any time before April 26, 2023, the bid price of our common stock closes at $1.00 per share or more for a
minimum of ten consecutive business days, Nasdaq will provide us with a written confirmation of compliance with the Bid
Price Rule. If we do not regain compliance with the Bid Price Rule by April 26, 2023, we may be eligible for an additional 180-
day compliance period. To qualify, we would be required to meet the continued listing requirement for market value of publicly
held shares and all other initial listing standards for the Nasdaq Capital Market, with the exception of the Bid Price Rule, and
would need to provide written notice of its intention to cure the bid price deficiency during the second compliance period.

This notice from Nasdaq has no immediate effect on the listing of our common stock and our common stock will
continue to be listed under the symbol “NCMI”. We are currently evaluating available options for regaining compliance,
including but not limited to, implementing a reverse stock split in connection with a special meeting of the stockholders or our
2023 annual meeting of the stockholders to regain compliance with the Bid Price Rule. There can be no assurance that the
Company will regain compliance with the Bid Price Rule or maintain compliance with any of the other Nasdaq continued
listing requirements. If we fail to regain compliance with the Bid Price Rule, our common stock could be delisted from Nasdaq.
If this occurs, trading of our common stock would most likely take place in an over-the-counter market for unlisted securities.
This will likely decrease the liquidity, trading volume, and price of our securities, causing the value of an investment in us to
decrease and having an adverse effect on our business, financial conditions and results of operations, including our ability to
attract and retain qualified employees, raise capital, and execute on strategic alternatives.

Risks Related to Our Corporate Structure

We are a holding company with no operations of our own, and we depend on distributions and payments under the NCM
LLC operating and management services agreements from NCM LLC to meet our ongoing obligations and to pay cash
dividends on our common stock.

We are a holding company with no operations of our own and have no independent ability to generate cash flow other
than interest income on cash balances or other securities owned. Consequently, our ability to obtain operating funds primarily
depends upon distributions and payments under the NCM LLC operating and management services agreement from NCM LLC.
The distribution of cash flows and other transfers of funds by NCM LLC to us are subject to statutory and contractual
restrictions based upon NCM LLC’s financial performance, including NCM LLC’s compliance with the covenants in its Senior
Secured Credit Facility, Revolving Credit Facility and indentures, and the NCM LLC Operating Agreement. The NCM LLC
Senior Secured Credit Facility, Revolving Credit Facility and indentures limit NCM LLC’s ability to distribute cash to its
members, including us, based upon certain leverage tests, with exceptions for, among other things, payment of our income taxes
and a management fee to NCM, Inc. pursuant to the terms of the management services agreement (incorporated in the ESA).
Refer to the information provided under Note 10 to the audited Consolidated Financial Statements included elsewhere in this
document for leverage discussion. The declaration of future dividends on our common stock will be at the discretion of our
Board of Directors and will depend upon many factors, including NCM LLC’s results of operations, financial condition,
earnings, capital requirements, limitations in NCM LLC’s debt agreements and legal requirements. NCM LLC’s Senior Secured
Credit Facility and Revolving Credit Facility also restricts NCM LLC’s ability to distribute cash to its members, including us,
until after the delivery of a compliance certificate following the fourth quarter of 2023. In the event NCM LLC fails to comply
with these covenants and is unable to distribute cash to us quarterly, once NCM, Inc. cash balances and investments are
extinguished, we will be unable to pay dividends to our stockholders or pay other expenses outside the ordinary course of
business.

Pursuant to the management services agreement between us and NCM LLC, NCM LLC makes payments to us to fund

our day-to-day operating expenses, such as payroll. However, if NCM LLC has insufficient cash flow to make the payments
pursuant to the management services agreement, we may be unable to cover these expenses.

As a member of NCM LLC, we incur income taxes on our proportionate share of any net taxable income of NCM LLC.
We have structured the NCM LLC Senior Secured Credit Facility, Revolving Credit Facility and indentures to allow NCM LLC
to distribute cash to its members (including us and NCM LLC’s other members) in amounts sufficient to cover their tax
liabilities and management fees, if any. To the extent that NCM LLC has insufficient cash flow to make such payments, it could
have a negative impact on our business, financial condition, results of operations or prospects.

NCM LLC’s substantial debt obligations could impair our financial condition or prevent us from achieving our business
goals.

NCM LLC is party to substantial debt obligations. The Senior Secured Credit Facility and indentures contain restrictive

covenants that limit NCM LLC’s ability to take specified actions and in some instances prescribe minimum financial
maintenance requirements that NCM LLC must meet, which, in some cases, were made more restrictive following the second
amendment to NCM LLC’s Senior Secured Credit Facility. Because NCM LLC is our only operating subsidiary, complying
with these restrictions may prevent NCM LLC from taking actions that we believe would help us to grow our business. For
example, NCM LLC may be unable to make acquisitions, investments or capital expenditures as a result of such covenants.
Moreover, if NCM LLC violates those restrictive covenants or fails to meet the minimum financial requirements, it would be in
default, which could, in turn, result in defaults under other obligations of NCM LLC. Any such defaults could materially impair
our financial condition and liquidity. For further information, refer to Note 10 to the audited Consolidated Financial Statements
included elsewhere in this document.

If NCM LLC is unable to meet its debt service obligations, it could be forced to restructure or refinance the obligations,

seek additional equity financing or sell assets. NCM LLC may be unable to restructure or refinance these obligations, obtain
additional equity financing, sell assets on satisfactory terms or at all or make cash distributions. In addition, NCM LLC’s
indebtedness could have other negative consequences for us, including without limitation:

•

limiting NCM LLC’s ability to obtain financing in the future;

requiring much of NCM LLC's cash flow to be dedicated to interest obligations and making it unavailable for other
purposes, including payments to its members (including NCM, Inc.);

limiting NCM LLC’s liquidity and operational flexibility in changing economic, business and competitive conditions
which could require NCM LLC to consider deferring planned capital expenditures, reducing discretionary spending,
selling assets, restructuring existing debt or deferring acquisitions or other strategic opportunities; and

• making NCM LLC more vulnerable to an increase in interest rates, a downturn in operating performance or decline in

general economic conditions.

Despite NCM LLC’s current levels of debt, it, or NCM, Inc. may still incur substantially more debt, including secured debt,
which would increase the risks associated with NCM LLC’s level of debt.

The agreements relating to NCM LLC’s debt, including the Notes due 2026 and Notes due 2028, the Senior Secured

Credit Facility, the Revolving Credit Facility 2018 and the Revolving Credit Facility 2022 limit but do not prohibit NCM
LLC’s ability to incur additional debt, and do not place any restrictions on NCM, Inc.’s ability to incur debt. Accordingly,
NCM, Inc. or NCM LLC could incur additional debt in the future, including additional senior or senior subordinated notes and
additional secured debt. If new debt is added to current debt levels, the related risks that we now face, including those described
above under “NCM LLC’s substantial debt obligations could impair our financial condition or prevent us from achieving our
business goals,” could intensify.

NCM LLC’s other equityholders or their affiliates, as well as our largest stockholders, may have interests that differ from
those of our public stockholders and they may be able to influence our affairs.

So long as either Cinemark or Regal owns at least 5% of NCM LLC’s issued and outstanding common membership

units, which is calculated to include shares of common stock received upon redemption of NCM LLC membership units, but
excluding shares of our common stock otherwise acquired subject to limited exceptions, if the two directors appointed by
Cinemark or the two directors appointed by Regal to our Board of Directors (except that if either Cinemark or Regal has only
appointed one director, and such director qualifies as an “independent director” under the applicable rules of the Nasdaq Stock
Market LLC, then such director) vote against any of the corporate actions listed below, we and NCM LLC will be prohibited
from taking any such actions:

•

assign, transfer, sell or pledge all or a portion of the membership units of NCM LLC beneficially owned by NCM,
Inc.;

acquire, dispose, lease or license assets with an aggregate value exceeding 20% of the fair market value of the business
of NCM LLC operating as a going concern;

• merge, reorganize, recapitalize, reclassify, consolidate, dissolve, liquidate or enter into a similar transaction;

•

incur any funded indebtedness or repay, before due, any funded indebtedness with a fixed term in an aggregate amount
in excess of $15.0 million per year;

•

issue, grant or sell shares of NCM, Inc. common stock, preferred stock or rights with respect to common or preferred
stock, or NCM LLC membership units or rights with respect to membership units, except under specified
circumstances;

amend, modify, restate or repeal any provision of NCM, Inc.’s certificate of incorporation or bylaws or the NCM LLC
Operating Agreement;

enter into, modify or terminate certain material contracts not in the ordinary course of business as defined under
applicable securities laws;

except as specifically set forth in the NCM LLC Operating Agreement, declare, set aside or pay any redemption of, or
dividends with respect to membership interests;

amend any material terms or provisions (as defined in the Nasdaq rules) of NCM, Inc.’s equity incentive plan or enter
into any new equity incentive compensation plan;

• make any change in the current business purpose of NCM, Inc. to serve solely as the manager of NCM LLC or any

change in the current business purpose of NCM LLC to provide the services as set forth in the ESAs; and

•

approve any actions relating to NCM LLC that could reasonably be expected to have a material adverse tax effect on
NCM LLC’s founding members.

Pursuant to a director designation agreement, so long as Cinemark or Regal owns at least 5% of NCM LLC’s issued and
outstanding common membership units, which is calculated in a similar manner as under our Certificate of Incorporation, such
NCM LLC founding member will have the right to designate a total of two nominees to our Board of Directors who will be
voted upon by our stockholders. One such designee by Cinemark and Regal must meet the independence requirements of the
stock exchange on which our common stock is listed. If, at any time, Cinemark or Regal owns less than 5% of NCM LLC’s
then issued and outstanding common membership units, then such NCM LLC founding member shall cease to have any rights
of designation. AMC no longer has seats on our Board of Directors or the right to nominate any person to serve on our Board of
Directors.

If any director designee to our Board of Directors designated by Cinemark is not appointed to our Board of Directors,

nominated by us or elected by our stockholders, as applicable, then Cinemark (so long as they each continue to own at least 5%
of NCM LLC’s issued and outstanding common membership units) will be entitled to approve specified actions of NCM LLC.

Under these circumstances, our corporate governance documents allow NCM LLC’s other members and their affiliates

to exercise a greater degree of influence in the operation of our business and that of NCM LLC and the management of our
affairs and those of NCM LLC than is typically available to stockholders of a publicly-traded company. Even if NCM LLC’s
other members or their affiliates own a minority economic interest (but not less than 5%) in NCM LLC or our common stock in
certain situations, they may be able to continue exerting such degree of influence over us and NCM LLC.

Further, Standard General L.P. (“Standard General”), our largest stockholder after Regal and Cinemark, beneficially

owns 12,932,382 shares of our common stock, and as of December 29, 2022, Regal beneficially owns 40,683,797 shares of our
common stock, and Cinemark held NCM LLC membership interests that are convertible into another 43,690,797 shares of our
common stock. As a result, Cinemark, Regal and Standard General are in a position to influence or control to some degree the
outcome of matters requiring stockholder approval, including the adoption of amendments to our certificate of incorporation or
bylaws and the approval of mergers and other significant corporate transactions. Their influence or control of our Company and
NCM LLC may have the effect of delaying or promoting a change of control of our Company and may adversely affect the
voting and other rights of other stockholders.

It is possible that the interests of Cinemark, Regal and Standard General may in some circumstances conflict with our

interests and the interests of our other stockholders. For example, Cinemark and Regal may have different tax positions from us,
especially in light of the TRA we entered into with founding members that provides for the payment by us to the founding
members of 90% of the amount of any tax benefits that we actually realize, or in some cases are deemed to realize. This could
influence their decisions regarding whether and when we should dispose of assets, and whether and when we or NCM LLC
should incur indebtedness. As another example, Standard General is in the business of making investments in companies and
may hold, and may from time to time in the future acquire, interests in or provide advice to businesses that directly or indirectly
compete with us.

Different interests among the remaining founding members or between the remaining founding members and us could
prevent us from achieving our business goals.

As long as Cinemark and Regal maintain their rights to designate directors under our Directors Designation Agreement,
our Board of Directors may include directors and certain executive officers of Cinemark and Regal and other directors who may
have commercial or other relationships with Cinemark and Regal. Cinemark and Regal compete with each other in the

operation of their respective businesses and could have individual business interests that may conflict. Their differing interests
could make it difficult for us to pursue strategic initiatives that require approval from the Board of Directors or require
equityholder approval.

In addition, the structural relationship we have with NCM LLC’s founding members could create conflicts of interest
among NCM LLC’s founding members, or between NCM LLC’s founding members and us, in a number of areas relating to
our past and ongoing relationships. These conflicts of interests could also increase upon the sale of NCM LLC membership
units by a founding member, as is the case for AMC and Regal, because the founding member may have less incentive to agree
to changes that may result in higher revenue for NCM LLC or a higher price for our common stock. There is not any formal
dispute resolution procedure in place to resolve conflicts between us and an NCM LLC founding member or between NCM
LLC founding members. We may not be able to resolve any potential conflicts between us and an NCM LLC founding member
and, even if we do, the resolution may be less favorable to us than if we were negotiating with another third-party.

The corporate opportunity provisions in our certificate of incorporation could enable NCM LLC’s members to benefit from
corporate opportunities that might otherwise be available to us.

Our certificate of incorporation contains provisions related to corporate opportunities that may be of interest to NCM

LLC’s other members and us. It provides that if a corporate opportunity is offered to us, NCM LLC or one or more of the
officers, directors or stockholders (both direct and indirect) of NCM, Inc. or a member of NCM LLC that relates to the
provision of services to motion picture theaters, use of theaters for any purpose, sale of advertising and promotional services in
and around theaters and any other business related to the motion picture theater business (except services as provided in the
ESAs as from time to time amended and except as may be offered to one of our officers in his capacity as an officer), no such
person shall be liable to us or any of our stockholders (or any affiliate thereof) for breach of any fiduciary or other duty by
reason of the fact that such person pursues or acquires such business opportunity, directs such business opportunity to another
person or fails to present such business opportunity, or information regarding such business opportunity, to us. This provision
may apply even if the business opportunity is one that we might reasonably be deemed to have pursued or had the ability or
desire to pursue if granted the opportunity to do so.

In addition, our certificate of incorporation and the NCM LLC Operating Agreement expressly provide that NCM LLC’s
founding members may have other business interests and may engage in any other businesses not specifically prohibited by the
terms of the certificate of incorporation, including the exclusivity provisions of the ESAs. The parent companies of NCM
LLC’s founding members could develop new media platforms that could compete for advertising dollars with our services.
Further, we may also compete with NCM LLC’s founding members or their affiliates in the area of employee recruiting and
retention. These potential conflicts of interest could have a material negative impact on our business, financial condition, results
of operations or prospects if attractive corporate opportunities are allocated by NCM LLC’s founding members to themselves or
their other affiliates or we lose key personnel to them.

The agreements between us and NCM LLC’s founding members were made in the context of an affiliated relationship and
may contain different terms than comparable agreements with unaffiliated third parties.

The ESAs and the other contractual agreements that we have with NCM LLC’s founding members were originally
negotiated in the context of an affiliated relationship in which representatives of NCM LLC’s founding members and their
affiliates comprised our entire Board of Directors. As a result, the financial provisions and the other terms of these agreements,
such as covenants, contractual obligations on our part and on the part of NCM LLC’s founding members and termination and
default provisions may be less favorable to us than terms that we might have obtained in negotiations with unaffiliated third
parties in similar circumstances.

Our certificate of incorporation and bylaws contain anti-takeover protections that may discourage or prevent strategic
transactions, including a takeover of our Company, even if such a transaction would be beneficial to our stockholders.

Provisions contained in our certificate of incorporation and bylaws, the NCM LLC Operating Agreement, and provisions

of the Delaware General Corporation Law (“DGCL”), could delay or prevent a third-party from entering into a strategic
transaction with us, even if such a transaction would benefit our stockholders. For example, our certificate of incorporation and
bylaws:

•

provide veto rights to the directors designated by Cinemark and Regal over certain actions specified in our certificate
of incorporation;

authorize the issuance of “blank check” preferred stock that could be issued by our Board of Directors to increase the
number of outstanding shares, making a takeover more difficult and expensive;

prohibit stockholder action by written consent; and

•

do not permit cumulative voting in the election of directors, which would otherwise allow less than a majority of
stockholders to elect director candidates.

NCM LLC’s Operating Agreement also provides that NCM LLC’s other members will be able to exercise a greater

degree of influence over the operations of NCM LLC if any director nominee designated by NCM LLC’s other members is not
elected by our stockholders, which may discourage other nominations to our Board of Directors.

These restrictions could keep us from pursuing relationships with strategic partners and from raising additional capital,

which could impede our ability to expand our business and strengthen our competitive position. These restrictions could also
limit stockholder value by impeding a sale of us or NCM LLC. Further, these restrictions could restrict or limit certain investors
from owning our stock.

Any future issuance of membership units by NCM LLC and subsequent redemption of such units for common stock could
dilute the voting power of our existing common stockholders and adversely affect the market value of our common stock.

The common unit adjustment agreement and the ESAs provide that NCM LLC will issue common membership units to
account for changes in attendance associated with the theaters NCM LLC’s founding members operate and which are made part
of our advertising network. Historically, each of NCM LLC’s founding members has increased the attendance associated with
the theaters it operates in most years. If this trend continues, NCM LLC may issue additional common membership units to
NCM LLC’s founding members to reflect their increases in attendance associated with theaters. Each common membership unit
may be redeemed in exchange for, at our option, shares of our common stock on a one-for-one basis or a cash payment equal to
the market price of one share of our common stock. On December 28, 2022, Regal was issued 40,683,797 shares of our
common stock in connection with the redemption of all of Regal’s common membership units in NCM LLC. This increased the
number of shares of common stock outstanding from 81,764,193 to 128,402,636 and Regal’s ownership is equal to 31.7% of
our issued and outstanding common stock as of December, 29, 2022. This redemption and other future redemptions, if we
elected to issue common stock rather than cash upon redemption, may dilute the voting power of our common stockholders.
Other than the maximum number of authorized shares of common stock in our certificate of incorporation, there is no limit on
the number of shares of our common stock that we may issue upon redemption of an NCM LLC founding member’s common
membership units in NCM LLC. For further information, refer to Note 5 to the audited Consolidated Financial Statements
included elsewhere in this document.

Our future issuance of preferred stock could dilute the voting power of our common stockholders and adversely affect the
market value of our common stock.

The future issuance of shares of preferred stock with voting rights may adversely affect the voting power of the holders
of our other classes of voting stock, either by diluting the voting power of our other classes of voting stock if they vote together
as a single class, or by giving the holders of any such preferred stock the right to block an action on which they have a separate
class vote even if the action were approved by the holders of our other classes of voting stock.

The future issuance of shares of preferred stock with dividend or conversion rights, liquidation preferences or other

economic terms favorable to the holders of preferred stock could adversely affect the market price for our common stock by
making an investment in the common stock less attractive. For example, investors in the common stock may not wish to
purchase common stock at a price above the conversion price of a series of convertible preferred stock because the holders of
the preferred stock would effectively be entitled to purchase common stock at the lower conversion price causing economic
dilution to the holders of common stock.

If we or NCM LLC’s founding members are determined to be an investment company, we would become subject to
burdensome regulatory requirements and our business activities could be restricted.

We do not believe that we are an “investment company” under the Investment Company Act of 1940, as amended. As

sole manager of NCM LLC, we control NCM LLC, and our interest in NCM LLC is not an “investment security” as that term is
used in the Investment Company Act of 1940. If we were to stop participating in the management of NCM LLC, our interest in
NCM LLC could be deemed an “investment security” for purposes of the Investment Company Act of 1940. Generally, a
company is an “investment company” if it owns investment securities having a value exceeding 40% of the value of its total
assets (excluding U.S. government securities and cash items). Our sole material asset is our equity interest in NCM LLC, and
we and NCM LLC intend to conduct our operations so that we are not deemed an investment company under the Investment
Company Act of 1940. However, a determination that we are an investment company, would cause us to become subject to
registration and other burdensome requirements of the Investment Company Act, which could restrict our business activities,
including our ability to issue securities, limitations on our capital structure and our ability to enter into transactions with our
affiliates. This may make it impractical for us to continue our business as currently conducted and could have a material
negative impact on our financial performance and operations

We also rely on representations of NCM LLC’s founding members that they are not investment companies under the
Investment Company Act. If any NCM LLC founding member were deemed an investment company, the restrictions placed
upon that NCM LLC founding member might inhibit its ability to fulfill its obligations under its ESA or restrict NCM LLC’s
ability to borrow funds.

Our TRA with NCM LLC’s founding members is expected to reduce the amount of overall cash flow that would otherwise be
available to us and will increase our potential exposure to the financial condition of NCM LLC’s founding members.

Our initial public offering and related transactions have the effect of reducing the amounts NCM, Inc. would otherwise

pay in the future to various tax authorities as a result of an increase in its proportionate share of tax basis in NCM LLC’s
tangible and intangible assets. We have agreed in our TRA with NCM LLC’s founding members to pay to NCM LLC’s
founding members 90% of the amount by which NCM, Inc.’s tax payments to various tax authorities are reduced as a result of
the increase in tax basis. After paying these reduced amounts to tax authorities, if it is determined as a result of an income tax
audit or examination that any amount of NCM, Inc.’s claimed tax benefits should not have been available, NCM, Inc. may be
required to pay additional taxes and possibly penalties and interest to one or more tax authorities. If this were to occur and if
one or more of NCM LLC’s founding members was insolvent or bankrupt or otherwise unable to make payment under its
indemnification obligation under the TRA, then NCM, Inc.’s financial condition could be negatively impacted.

The substantial number of shares that are eligible for sale could cause the market price for our common stock to decline or
make it difficult for us to sell equity securities in the future.

We cannot predict the effect, if any, that market sales of shares of common stock by Regal, Cinemark, AMC, Standard
General or any of our significant stockholders will have on the market price of our common stock from time to time. Sales of
substantial amounts of shares of our common stock in the public market, or the perception that those sales will occur, could
cause the market price of our common stock to decline or make future offerings of our equity securities more difficult. If we are
unable to sell equity securities at times and prices that we deem appropriate, we may be unable to fund growth. Cinemark,
Regal and AMC may receive up to 43,690,797 shares of common stock as of December 29, 2022 upon redemption of their
outstanding common membership units of NCM LLC. The resale of these shares of common stock has been registered as
required by the terms of the registration rights agreement between NCM, Inc. and the founding members. Standard General also
owns 12,932,382 shares that it may sell at any time. Additionally, once equity awards held by our employees become vested
and/or exercisable, as applicable, to the extent that they are not held by one of our affiliates, the shares acquired upon vesting or
exercise are freely tradable. Refer to Note 11 to the audited Consolidated Financial Statements included in our annual report on
Form 10-K.

Item 1B.

Unresolved Staff Comments

None.

Item 2.

Properties

The Company's headquarters are located in Centennial, Colorado. As of December 29, 2022, the Company also leases

advertising sales offices in New York, Los Angeles and Chicago and digital development offices in Los Angeles and New
York. We own no material real property. We believe that all of our present facilities are adequate for our current needs and that
additional space is available for future expansion on acceptable terms.

Item 3.

Legal Proceedings

On September 7, 2022, Cineworld Group plc and certain of its subsidiaries, including Regal, Regal Cinemas, Inc., a
party to the ESA, and Regal CineMedia Holdings, LLC, 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 Cinemas, Inc. filed a motion to reject the ESA without specifying an effective date for the rejection
and indicated that Regal Cinemas, Inc. planned on negotiating with NCM LLC. NCM LLC has also filed an adversary
proceeding against Regal Cinemas, Inc. seeking declaratory relief and an injunction prohibiting Regal Cinemas, Inc. 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 with a hearing scheduled during the
second quarter of 2023.

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 U.S. Bankruptcy Court for the Southern District of Texas. The Chapter
11 Case is being administered under the caption In re: National CineMedia, LLC, Case No. 23-90291. The Company will
continue to act as the manager of NCM LLC, the “debtor in possession” under the jurisdiction of the Bankruptcy Court, and in

accordance with the applicable provisions of the Bankruptcy Code and orders of the Bankruptcy Court. In general, as debtor in
possession under the Bankruptcy Code, NCM LLC is authorized to continue to operate as an ongoing business but may not
engage in transactions outside the ordinary course of business without the prior approval of the Bankruptcy Court. Pursuant to
“first day” motions filed with the Bankruptcy Court, the Bankruptcy Court authorized NCM LLC to conduct NCM LLC’s
business activities in the ordinary course, including, among other things and subject to the terms and conditions of such orders,
authorizing NCM LLC to consensually use cash collateral, pay employee wages and benefits and pay vendors and suppliers in
the ordinary course for all go forward goods and services. NCM LLC will continue to pursue approval of a proposed plan of
reorganization, which will incorporate the terms of the Restructuring Support Agreement.

We are sometimes involved in legal proceedings arising in the ordinary course of business. We are not aware of any

other litigation currently pending that would have a material adverse effect on our operating results or financial condition.

Item 4.

Mine Safety Disclosures

Not applicable.

Information about our Executive Officers

Shown below are the names, ages as of the filing date of this Form 10-K, and current positions of our executive officers.

There are no family relationships between any of the persons listed below, or between any of such persons and any of the
directors of the Company or any persons nominated or chosen by the Company to become a director or executive officer of the
Company.

Name
Thomas F. Lesinski ......................
Ronnie Y. Ng ...............................
Scott D. Felenstein .......................
Maria V. Woods ...........................

Age
63
43
54
54

Position
Chief Executive Officer
Chief Financial Officer
President of Sales, Marketing & Partnerships
Executive Vice President, General Counsel and Secretary

Thomas F. Lesinski. Mr. Lesinski was appointed Chief Executive Officer of NCM, Inc. in August 2019. Prior to his
current position, Mr. Lesinski served as the Non-Employee Chairman of the Board of Directors of NCM, Inc. since August
2018 and as a member of the Board of Directors of NCM, Inc. since 2014. In addition to his roles on the Board of Directors of
NCM, Inc., Mr. Lesinski also served as the Chief Executive Officer of Sonar Entertainment, an independent entertainment
studio, from January 2016 to August 2019. Mr. Lesinski served as the founder and CEO of Energi Entertainment, a multi-media
content production company, from August 2014 until December 2015. From 2013 to 2014, Mr. Lesinski was President of
Digital Content and Distribution at Legendary Entertainment, a leading media company dedicated to owning, producing and
delivering content to mainstream audiences with a targeted focus on the powerful fandom demographic. Prior to that role, from
2006 to 2013, Mr. Lesinski served as President, Digital Entertainment at Paramount Pictures, a global producer and distributor
of filmed entertainment. Mr. Lesinski also served as President of Worldwide Home Entertainment at Paramount Pictures for
three years, prior to which, he spent ten years as an Executive Vice President and General Manager at Warner Bros.
Entertainment and was a Managing Director for an advertising agency.

Ronnie Y. Ng. Mr. Ng was appointed Chief Financial Officer in September 2021. Mr. Ng previously served as the Chief
Financial Officer and Head of Corporate Development of Allen Media Group from October 2018 until September 2021 where
he led the company's finance organization and oversaw multiple large scale acquisitions and the refinancing of the company's
capital structure. Before joining Allen Media Group, Mr. Ng served as Vice President in the Fixed Income Group for TCW
Group from 2013 to 2018 where he invested in investment grade corporate bonds, high-yield bonds and leveraged loans. Prior
to joining TCW Group, Mr. Ng was an investment banker for approximately 10 years. From 2006 to 2012 he was an Executive
Director at UBS Investment Bank’s Global Media Group where he managed, advised, and structured various financings and
mergers and acquisition transactions. Previously, Mr. Ng held similar investment banking positions from 2003 to 2006 at
Deutsche Bank and Houlihan Lokey. Prior to Mr. Ng’s investment banking career, he provided financial and accounting due
diligence services for merger and acquisition and financing transactions at Arthur Andersen. Mr. Ng holds a Bachelor of
Science degree in finance from the University of Illinois at Urbana-Champaign and was a licensed general securities
representative (Series 7) and Uniform Securities Agent (Series 63).

Scott D. Felenstein. Mr. Felenstein was appointed as President of Sales, Marketing & Partnerships in July 2021. Prior to

this appointment, Mr. Felenstein served as Executive Vice President and Chief Revenue Officer since April 2017. Prior to
joining NCM, Inc., Mr. Felenstein served as Executive Vice President, National Advertising Sales for Discovery
Communications, Inc. since 2013 and Senior Vice President, National Advertising Sales for Discovery Communications, Inc.
since 2000. Prior to working at Discovery Communications, Inc., Mr. Felenstein served on the digital ad sales team at
Excite@Home and worked as an account executive at CBS Sports.

Maria V. Woods. Ms. Woods was appointed Executive Vice President and General Counsel in September 2021. Ms.
Woods previously served in several key leadership roles on NCM’s legal team from 2010 through 2015, rising to the role of
National CineMedia, LLC’s EVP and General Counsel. Ms. Woods previously served as General Counsel for Lucky’s Market
from June of 2015 to June of 2020, including during their bankruptcy proceedings in January of 2020. In between her role at
Lucky’s Market and returning to NCM in September 2021, Ms. Woods served as General Counsel and Secretary at JumpCloud,
Inc., providing strategic legal counsel for all legal aspects of the company’s SaaS identity management business, including,
corporate governance, merger and acquisition activity, financing and stock repurchases and commercial contracting and served
as General Counsel & Secretary at ONE Group Hospitality, Inc. Earlier in her career, she was Associate General Counsel at
Einstein Noah Restaurant Group, Inc. and Assistant General Counsel at Sun Microsystems, Inc. She began her career at Holme
Roberts & Owen (now Bryan Cave) in Denver. She holds a Bachelor of Arts in Communications Studies from the University of
Iowa and a Juris Doctorate from the University of Denver Sturm College of Law.

PART II

Item 5.

Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of
Equity Securities

Market Information

Our common stock, $0.01 par value, is traded on The Nasdaq Global Select Market under the symbol “NCMI”. There

were 221 stockholders of record as of April 10, 2023 (does not include beneficial holders of shares held in “street name”).

Dividend Policy

We intend to distribute substantially all of our free cash flow (distributions from NCM LLC less income taxes and

payments under the tax receivable agreement with the founding members) in the form of dividends to our stockholders. The
declaration, payment, timing and amount of any dividends payable will be at the sole discretion of our Board of Directors who
will take into account general economic and advertising market business conditions, our financial condition, our available cash,
our current and anticipated cash needs, including opportunities to reinvest in our business and any other factors that the Board
of Directors considers relevant which includes short-term and long-term impacts to the Company related to the COVID-19
Pandemic and restrictions under the NCM LLC Credit Agreement and the Revolving Credit Agreement 2022 (as defined
herein), entered into on January 5, 2022. The Company intends to pay a regular dividend for the foreseeable future at the
discretion of the Board of Directors consistent with the Company’s intention to distribute substantially all its free cash flow to
stockholders through a dividend. Under Delaware law, dividends may be payable only out of surplus, which is our total assets
minus total liabilities less the par value of our common stock, or, if we have no surplus, out of our net profits for the fiscal year
in which the dividend is declared and/or the preceding fiscal year. For tax purposes, our dividends paid in 2021 and 2022 were
treated as non-dividend distributions to stockholders.

Issuer Purchases of Equity Securities

The table below provides information about shares delivered to the Company from restricted stock held by Company

employees upon vesting for the purpose of funding the recipient’s tax withholding obligations.

Period

(d)
Maximum
Number (or
Approximate
Dollar Value)
of Shares that
may yet be
Purchased under
the Plans or
Programs

(a)
Total Number
of Shares
Purchased

(b)
Average Price
Paid Per Share

September 30, 2022 through October 27, 2022 .................

October 28, 2022 through December 1, 2022 ....................

December 2, 2022 through December 29, 2022 .................

— $

—

N/A

Item 6.

[RESERVED]

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” and statements related to the impact of the current COVID-19 Pandemic on
our business and results, 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 section of this Form 10-K generally discusses fiscal 2022 and fiscal 2021 items and year-to-year comparisons

between fiscal 2022 and fiscal 2021. Discussions of fiscal 2020 items and year-to-year comparisons between fiscal
2021 and fiscal 2020 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 30, 2021.

Bankruptcy Filing and Going Concern

As a result of the commencement of the Chapter 11 Case on April 11, 2023 discussed further within Item 1, we are
operating as the manager of the debtor-in-possession pursuant to the authority granted under Chapter 11 of the Bankruptcy
Code. Pursuant to the Chapter 11 Case, we intend to de-lever NCM LLC’s balance sheet and reduce overall indebtedness.
Additionally, as a debtor in possession, certain of NCM LLC’s activities are subject to review and approval by the Bankruptcy
Court, including, among other things, the incurrence of secured indebtedness, material asset dispositions, and other transactions
outside the ordinary course of business. There can be no guarantee NCM LLC will successfully agree upon a viable plan of
reorganization with the various stakeholders, or that any such agreement will be reached in the time frame that is acceptable to
the Bankruptcy Court.

We have concluded that NCM LLC’s financial condition and projected operating results, the defaults under NCM LLC’s

debt agreements subsequent to December 29, 2022, and the risks and uncertainties surrounding NCM LLC’s Chapter 11 Case
raise substantial doubt as to our ability to continue as a going concern. See Note 16—Subsequent Events for further discussion.

Overview

We are America’s Movie Network. As the largest cinema advertising network in North America, we are a media
company dedicated to uniting brands with young, diverse audiences through the power of movies and pop culture. We currently
derive revenue principally from the sale of advertising to national, regional and local businesses in our Noovie® show, our
cinema advertising and entertainment show seen on movie screens across the U.S.

We present two different formats of our Noovie® show depending on the theater circuit in which it runs. In Regal and

Cinemark and a portion of our network affiliates’ theaters, the Noovie show now includes Post-Showtime advertising inventory
after the advertised showtime consisting of (1) the lights down segment that runs for five minutes after the advertised showtime
with trailer lighting and (2) the 30- or 60-second Platinum Spot. As of December 29, 2022, theaters presenting the new Noovie
show format with Post-Showtime Inventory made up approximately 59.3% of our network. All other NCM network theater
circuits, which make up the remaining 40.7% of our network, present the Classic Noovie show, which ends approximately at the
advertised movie showtime when the movie trailers begin. The movie trailers that run before the feature film are not part of our
Noovie show.

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 and promotions in theater lobbies. In addition, we sell digital online and mobile advertising through
our Noovie Audience Accelerator, across our suite of Noovie digital properties, including Noovie Shuffle and Name That Movie
on third-party’s internet sites, as well as a variety of complementary out of home venues, including restaurants, convenience
stores and college campuses, in order to reach entertainment audiences beyond the theater. As of December 29, 2022,
approximately 7.3 million moviegoers have downloaded our mobile apps. These downloads and the acquisition of second- and
third-party data have resulted in unique data records of approximately 374.4 million as of December 29, 2022. We have long-
term ESAs (approximately 16.8 weighted average years) with the founding members and multi-year agreements with network
affiliates, which expire at various dates between May 29, 2023 and December 31, 2037. The weighted average remaining term
of the ESAs and the network affiliate agreements is 14.0 years as of December 29, 2022. 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 DCN.

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 changes in 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, national and regional advertising pricing (CPM), local advertising rate per theater per week, national, local, regional
and total advertising revenue per attendee. We also monitor free cash flow, the dividend coverage ratio, financial leverage ratio
(net debt divided by Adjusted OIBDA plus integration payments and other encumbered theater payments), cash balances and
revolving credit facility availability to ensure financial debt covenant compliance and that there is adequate cash availability to
fund our working capital needs and debt obligations and any future dividends declared by our Board of Directors.

Recent Developments

Cineworld Proceeding—On September 7, 2022, Cineworld Group plc, the parent company of Regal, and certain of its

subsidiaries, including Regal, Regal Cinemas, Inc., a party to the ESA with NCM LLC, and Regal CineMedia Holdings, LLC, 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 currently plans on negotiating with the Company. NCM
LLC has 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. Although there can be no
assurances that NCM LLC’s proceeding for declaratory relief will be successful, the Company believes these exclusivity rights
will survive any attempted rejection of the ESA by Regal in the bankruptcy proceeding. As of the filing date, the Company
continues to negotiate with Regal regarding the ESA and NCM LLC's provision of advertising services. In the event that NCM
LLC’s or NCM, Inc.’s agreements with Regal and its affiliates are rejected, it could have a materially negative impact on the
Company’s operations or financial condition.

COVID-19 Impact and Other Macroeconomic Factors—The impacts from the COVID-19 Pandemic have had and

continue to have an effect on the world and our business. The movie slate for 2022 improved from prior years but continued to
be limited by post-production delays and major motion picture release schedule changes. Attendance levels increased from the
prior year, but have not met historical levels and has not been consistent throughout the year due to timing of major motion
picture releases. In-theater advertising revenue for the year ended December 30, 2021 and the year ended December 29, 2022
also remained below historical levels due in part to a lag between the recovery of attendees and advertisers, as well as current
macroeconomic factors, such as rising interest rates, inflationary pressures and any potential recession, and the respective
impacts on advertisers.

To ensure sufficient liquidity to endure the impacts of the COVID-19 Pandemic and other macroeconomic factors, we

continued to manage our liquidity position through various cost control methods discussed further within the “Financial
Condition and Liquidity” section below. Since the beginning of the COVID-19 Pandemic, the Company has significantly
reduced payroll related costs through a combination of temporary furloughs and salary reductions and permanent layoffs. These
changes have resulted in a headcount reduction of 39% as of December 29, 2022, as compared to headcount levels prior to the
COVID-19 Pandemic. Our theater access fees, network affiliate payments and Platinum Spot revenue share payments are
driven by attendance, active screens and/or in-theater advertising revenue, and therefore, were not incurred for the duration of
time that the theaters were closed and attendance-based fees will continue to be reduced for the period of time that attendance is
lower than historical levels. We are still required to pay these screen-based fees when theaters are open.

We believe that the exhibition industry has historically fared well during periods of economic stress, and we remain

optimistic that attendance figures will continue to benefit from increased major motion picture activity. There can be no
assurance that studios will not reschedule movie releases; that post-production delays will not negatively impact network
attendance, advertiser sentiment, and our business in general; social distancing, capacity restrictions, and other public safety
measures will not be reintroduced; when or if theaters within our network will return to historic attendance levels; and that the
theaters which have reopened will remain open; or if any of the changes in consumer behavior or changes to the theatrical
window in response to the COVID-19 Pandemic will become permanent.

Financing—On January 5, 2022, NCM LLC entered into the third amendment (the “Credit Agreement Third
Amendment”) to its Credit Agreement, dated as of June 20, 2018, among NCM LLC, the several banks and other financial
institutions or entities from time to time parties thereto, and JPMorgan Chase Bank, N.A., as administrative agent, as previously
amended (the “Credit Agreement”). Among other things, the Credit Agreement Third Amendment provides for: (i) certain
modifications to and extensions to modifications of the affirmative and negative covenants therein, including maintaining a total

balance of $55.0 million of a combination of unrestricted cash on hand and availability under NCM LLC’s revolving credit
facility through the fourth quarter of 2023; (ii) the suspension of the consolidated net total leverage and consolidated net senior
secured leverage financial covenants through the fiscal quarter ending December 29, 2022 (the “Extended Covenant Waiver
Holiday”) and (iii) the consolidated net total leverage ratio and consolidated net senior secured leverage ratio financial
covenants to be set to 9.25 to 1.00 and 7.25 to 1.00, respectively, for the fiscal quarter ending on or about March 30, 2023, 8.50
to 1.00 and 6.50 to 1.00, respectively, for the fiscal quarter ending on or about June 29, 2023, 8.00 to 1.00 and 6.00 to 1.00,
respectively, for the fiscal quarter ending on or about September 28, 2023, and 6.25 to 1.00 and 4.50 to 1.00, respectively, for
the fiscal quarter ending on or about December 28, 2023 and each fiscal quarter thereafter.

Also on January 5, 2022, NCM LLC entered into a Revolving Credit Agreement (the “Revolving Credit Agreement

2022”) among NCM LLC, the lenders party thereto and Wilmington Savings Fund Society, FSB, as administrative agent and
collateral agent. The Revolving Credit Agreement 2022 provides for revolving loan commitments of $50.0 million of secured
revolving loans, the entire amount of which was funded on January 5, 2022. The Revolving Credit Agreement 2022 provides
for (i) a cash interest rate of term Secured Overnight Financing Rate (“SOFR”) plus 8.0%, with a 1.0% floor, (ii) a maturity date
of June 20, 2023 and (iii) a termination premium if NCM LLC terminates the commitments under the Revolving Credit
Agreement 2022 at any time before maturity. The Revolving Credit Agreement 2022 also contains covenants, representations
and warranties and events of default that are substantially similar to the Credit Agreement.

Selected Historical and Operating Data

The following table sets forth our historical selected financial and operating data for the periods indicated. The selected

financial and operating data should be read in conjunction with the other information contained in this document, including
“Item 1. Business,” the audited historical Consolidated Financial Statements and the notes thereto included elsewhere in this
document, and historical audited Consolidated Financial Statements, which have not been included in this document.

The results of operations data for the years ended December 29, 2022 and December 30, 2021 and the balance sheet data
as of December 29, 2022 and December 30, 2021 are derived from the audited Consolidated Financial Statements of NCM, Inc.
included elsewhere in this document. The results of operations data for the years ended December 31, 2020, December 26, 2019
and December 27, 2018 and the balance sheet data as of December 31, 2020, December 26, 2019 and December 27, 2018 are
derived from the audited Consolidated Financial Statements of NCM, Inc. that are not included in this document.

Results of Operations Data

($ in millions, except per share data)

Years Ended

Dec. 29,
2022

Dec. 30,
2021

Dec. 31,
2020

Dec. 26,
2019

Dec. 27,
2018

Revenue.................................................................................. $

249.2 $

114.6 $

90.4 $

444.8 $

441.4

OPERATING EXPENSES:

Advertising operating costs...............................................

Network costs....................................................................
Theater access fees and revenue share to founding
members..........................................................................

Selling and marketing costs...............................................

Administrative and other costs..........................................

Impairment of long-lived assets.........................................

Depreciation expense.........................................................

Amortization expense........................................................
Amortization of intangibles recorded for network theater
screen leases....................................................................

Total.............................................................................

OPERATING INCOME (LOSS)...........................................

NON-OPERATING EXPENSE (INCOME).........................

27.2

8.4

82.3

42.8

44.3

5.8

6.5

—

25.0

242.3

6.9

73.1

18.4

7.4

51.1

34.7

36.0

—

10.9

—

24.7

183.2

(68.6)

49.8

(LOSS) INCOME BEFORE INCOME TAXES..............

(66.2)

(118.4)

Provision for income taxes...............................................

—

10.3

8.6

24.6

37.6

30.9

1.7

13.1

—

24.6

151.4

(61.0)

(96.9)

35.9

162.2

CONSOLIDATED NET (LOSS) INCOME.....................

(66.2)

(118.4)

(126.3)

38.3

13.5

82.7

64.9

43.8

—

13.6

—

26.7

283.5

161.3

62.2

99.1

12.4

86.7

37.4

13.3

81.7

66.5

48.3

—

12.6

27.3

—

287.1

154.3

50.6

103.7

23.5

80.2

Less: Net (loss) income attributable to noncontrolling
interests...............................................................................
NET (LOSS) INCOME ATTRIBUTABLE TO NCM, Inc... $
(LOSS) EARNINGS PER NCM, INC. COMMON
SHARE:

(37.5)
(28.7) $

(69.7)
(48.7) $

(60.9)
(65.4) $

50.6
36.1 $

50.4
29.8

Basic....................................................................................... $

(0.35) $

(0.61) $

(0.84) $

Diluted.................................................................................... $

(0.35) $

(0.61) $

(0.84) $

0.47 $

0.46 $

0.39

0.37

Other Financial and Operating Data

Years Ended

(in millions, except cash dividend declared per common share and
screen data)

Dec. 29,
2022

Dec. 30,
2021

Dec. 31,
2020

Dec. 26,
2019

Dec. 27,
2018

Adjusted OIBDA (1)........................................................... $

57.3

(24.7)

(19.4)

$ 207.5

$ 205.4

Adjusted OIBDA margin (1)...............................................

23.0 %

(21.6) %

(21.5) %

46.7 %

46.5 %

Capital expenditures............................................................ $

4.2

Cash dividend declared per common share......................... $

0.11

6.5

0.20

11.2

0.40

15.3

0.68

15.4

0.68

Founding member screens at period end (2) (5)..................

16,062

16,436

16,515

16,880

16,768

Total screens at period end (3) (5).......................................

20,095

20,740

20,450

21,208

21,172

Total attendance for period (4) (5)......................................

394.8

250.7

138.2

651.4

705.1

Notes to the Selected Historical Financial and Operating Data

(1) 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 amortization of intangibles recorded for network theater screen leases, non-cash share-
based compensation costs, executive officer transition costs, legal fees related to abandoned financing
transactions, costs related to the reorganization of the sales force, advisor fees related to involvement in the
Cineworld Proceeding and impairments of long-lived assets. Adjusted OIBDA margin is calculated by dividing
Adjusted OIBDA by total revenue. Our management uses these non-GAAP financial measures to evaluate
operating performance, to forecast future results and as a basis for compensation. The Company believes these are
important supplemental measures of operating performance because they eliminate 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 these measures 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, amounts of amortization of intangibles recorded for network theater screen leases, non-cash
share-based compensation programs, executive officer turnover, legal fees related to abandoned financing
transactions, costs related to the reorganization of the sales force, advisor fees related to involvement in the
Cineworld Proceeding, impairments of long-lived assets, interest rates, debt levels or income tax rates. A
limitation 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 the
Company’s business. In addition, Adjusted OIBDA has the limitation of not reflecting the effect of the Company’s
amortization of intangibles recorded for network theater screen leases, share-based payment costs, costs associated
with the resignation and hiring of the Company’s executive officers, legal fees related to abandoned financing
transactions, costs related to the reorganization of the sales force, advisor fees related to involvement in the
Cineworld Proceeding or impairments of long-lived assets. 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. 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 the Company’s debt agreement.
Adjusted OIBDA does not reflect integration and other encumbered theater payments as they are recorded as a
reduction to intangible assets. Integration payments and other encumbered theater payments received are added to
Adjusted OIBDA to determine our compliance with financial covenants under our senior secured credit facility
and included in available cash distributions to NCM LLC’s founding members. During the years ended December
29, 2022, December 30, 2021, December 31, 2020, December 26, 2019 and December 27, 2018, the Company
recorded integration and other encumbered theater payments of $5.4 million, $1.6 million, $1.4 million, $22.3
million, and $21.4 million, respectively, from NCM LLC’s founding members.

(2) Represents the total number of screens within NCM LLC’s advertising network operated by NCM LLC’s

founding members.

(3) Represents the total screens within NCM LLC’s advertising network.

(4) Represents the total attendance within NCM LLC’s advertising network as provided by our founding members

and affiliate partners.

(5) Excludes screens and attendance associated with certain AMC Carmike Cinemas, Inc. (“Carmike”) theaters for

certain periods presented. Refer to Note 5 to the audited Consolidated Financial Statements included elsewhere in
this document.

The following table reconciles operating income to Adjusted OIBDA for the periods presented (dollars in millions):

Dec. 29,
2022

Dec. 30,
2021

Years Ended

Dec. 31,
2020

Dec. 26,
2019

Dec. 27,
2018

Operating income (loss)............................................... $

Depreciation expense...................................................

Amortization expense (1).............................................
Amortization of intangibles recorded for network
theater screen leases.....................................................

Share-based compensation costs (2).............................
Advisor fees related to abandoned financing
transactions (3).............................................................

Executive transition costs (4).......................................

Impairment of long-lived assets (5)..............................

Sales force reorganization costs (6)..............................

Advisor fees related to the Cineworld Proceeding (7).

6.9

6.5

—

25.0

7.1

0.5

—

5.8

0.4

5.1

(68.6)

(61.0)

$ 161.3

$ 154.3

10.9

—

24.7

8.1

0.1

—

13.1

—

24.6

2.2

—

1.7

—

13.6

—

26.7

5.5

—

0.4

—

12.6

27.3

—

7.8

—

3.4

—

Adjusted OIBDA..................................................... $

57.3

(24.7)

Total revenue................................................................ $ 249.2

$ 114.6

(19.4)

$ 207.5

$ 205.4

90.4

$ 444.8

$ 441.4

Adjusted OIBDA margin.........................................

23.0 %

(21.6) %

(21.5) %

46.7 %

46.5 %

(1) Following the adoption of ASC 842, as discussed within Note 13 to the audited Consolidated Financial Statements
included elsewhere in this document, amortization of the ESA and affiliate intangible balances is considered a
form of lease expense and has been reclassified to this account as of the adoption date, December 28, 2018. The
Company adopted ASC 842 prospectively and thus, prior period balances remain within amortization expense.

(2) Share-based compensation costs are included in network operations, selling and marketing and administrative

expense in the accompanying Consolidated Financial Statements.

(3) These fees relate to advisor and legal costs incurred for advice pertaining to an alternative debt transaction that

was abandoned in the fourth quarter of 2021 and an alternative equity transaction that was abandoned in the fourth
quarter of 2022.

(4) Executive transition costs represent costs associated with the search for the Company’s new CFO during the third

quarter of 2021, the search for the company’s CEO in 2019, and CEO transitions costs incurred in 2018.

(5) The impairment of long-lived assets primarily relates to the write down of certain internally developed software

no longer in use.

(6) Sales force reorganization costs represents redundancy costs associated with changes to the Company’s sales force

implemented during the first quarter of 2022.

(7) Advisor and legal fees incurred in connection with the Company’s involvement in the Cineworld Proceeding

during the third and fourth quarter of 2022.

Summary Operating Data

Our Operating Data—The following table presents operating data and Adjusted OIBDA (dollars in millions, except

share and margin data).

($ in millions)

Years Ended

% Change

Dec. 29,
2022

Dec. 30,
2021

2022 to 2021

Revenue........................................................................................................... $

249.2

114.6

117.5 %

Operating expenses:

Advertising operating costs.........................................................................

Network costs..............................................................................................

Theater access fees and revenue share to founding members.....................

Selling and marketing costs.........................................................................

Administrative and other costs....................................................................

Impairment of long-lived assets..................................................................

Depreciation expense..................................................................................

Amortization of intangibles recorded for network theater screen leases....

Total operating expenses.......................................................................

Operating income (loss)...................................................................................

Non-operating expense....................................................................................

Income tax expense..........................................................................................

27.2

8.4

82.3

42.8

44.3

5.8

6.5

25.0

242.3

6.9

73.1

—

Net loss attributable to noncontrolling interests..............................................

(37.5)

Net loss attributable to NCM, Inc............................................................... $

(28.7)

Net loss per NCM, Inc. basic share................................................................. $

Net loss per NCM, Inc. diluted share.............................................................. $

Adjusted OIBDA............................................................................................. $

Adjusted OIBDA margin.................................................................................

(0.35)

57.3

23.0 %

Total theater attendance (in millions) (1)........................................................

394.8

18.4

7.4

51.1

34.7

36.0

0.0

10.9

24.7

183.2

(68.6)

49.8

—

(69.7)

(48.7)

(0.61)

(24.7)

(21.6) %

250.7

47.8 %

13.5 %

61.1 %

23.3 %

23.1 %

100.0 %

(40.4) %

1.2 %

32.3 %

(110.1) %

46.8 %

— %

(46.2) %

(41.1) %

(42.6) %

(332.0) %

44.6 %

57.5 %

(1) Represents the total attendance within NCM LLC’s advertising network, excluding screens and attendance

associated with AMC Carmike theaters that are currently part of another cinema advertising network for each of
the periods presented. Refer to Note 5 to the audited Consolidated Financial Statements included elsewhere in this
document.

Our Network—The net screens added to our network by the founding members and network affiliates during 2022 were

as follows.

Number of screens

Founding
Members

Network
Affiliates

Total

Balance as of December 30, 2021...................................................................

Lost affiliates, net of new affiliates (1)......................................................

16,436

—

Closures, net of openings (2)......................................................................

(374)

Balance as of December 29, 2022...................................................................

16,062

4,304

(291)

4,033

20,740

(291)

(354)

20,095

(1) Represents the loss of four of our affiliates, partially offset by the gain of one affiliate during 2022 resulting in a

net reduction of 291 affiliate screens to our network as of December 29, 2022.

(2) Represents the closure of 354 screens, net of new screens added, across our founding members and network

affiliates.

Our founding member and network affiliate agreements allow us to sell cinema advertising across the largest network of
digitally equipped theaters in the U.S. We believe that our market coverage strengthens our selling proposition and competitive
positioning against other national, regional and local video advertising platforms, including television, online and mobile video
platforms and other out of home video advertising platforms by allowing advertisers the broad reach and national scale that they
need to effectively reach their target audiences.

Basis of Presentation

Prior to the completion of our IPO, NCM LLC was wholly-owned by its founding members. In connection with the

offering, NCM, Inc. purchased newly issued common membership units from NCM LLC and common membership units from
NCM LLC’s founding members 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 founding members 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 2022 contained
52 weeks and fiscal year 2021 contained 52 weeks. Our 2023 fiscal year will contain 52 weeks. Throughout this document, we
refer to our fiscal years as set forth below:

Fiscal Year Ended

December 29, 2022................................................................................................................................

December 30, 2021................................................................................................................................

Reference in

this Document

2022

2021

Results of Operations

Fiscal Years 2022 and 2021

Revenue. Total revenue increased $134.6 million, or 117.5%, from $114.6 million for 2021 to $249.2 million for 2022.

The following is a summary of revenue by category (in millions):

Fiscal Year

$ Change

% Change

2022

2021

2021 to 2022

National advertising revenue....................................................... $

187.1 $

84.2 $

Local and regional advertising revenue.......................................
Founding member advertising revenue from beverage
concessionaire agreements........................................................

43.5

18.6

19.3

11.1

Total revenue...................................................................... $

249.2 $

114.6 $

102.9

24.2

7.5

134.6

122.2 %

125.4 %

67.6 %

117.5 %

The following table shows data on revenue per attendee for 2022 and 2021:

Fiscal Year

2022

2021

% Change
2021 to 2022

National advertising revenue per attendee.................................................... $

0.474 $

Local and regional advertising revenue per attendee.................................... $
Total advertising revenue (excluding founding member
beverage revenue) per attendee................................................................. $

0.110 $

0.584 $

Total advertising revenue per attendee......................................................... $

0.631 $

Total theater attendance (in millions) (1).....................................................

394.8

0.336

0.077

0.413

0.457

250.7

41.1 %

43.1 %

41.5 %

38.1 %

57.5 %

(1) Represents the total attendance within NCM LLC’s advertising network, excluding screens and attendance

associated with AMC Carmike theaters for each period presented. Refer to Note 5 to the audited Consolidated
Financial Statements included elsewhere in this document.

National advertising revenue. National advertising revenue increased by $102.9 million, or 122.2%, from $84.2 million
in 2021 to $187.1 million in 2022. The increase was due to a significant increase in impressions sold and a 15.4%
increase in national advertising CPMs during 2022, compared to 2021. The increase in impressions sold was primarily
due to a 57.5% increase in network attendance and a 42.5% increase in national advertising utilization due in part to the

Company’s ability to participate in the 2022 upfront marketplace, as compared to 2021 when the theaters were closed,
and the return of advertisers to the network for the full year of 2022.

Local and regional advertising revenue. Local and regional advertising revenue increased by $24.2 million, or 125.4%,
from $19.3 million in 2021 to $43.5 million in 2022. The increase in local and regional advertising revenue was due
primarily to the closure of approximately 40% of our network for three of months in 2021 due to the COVID-19
Pandemic. The increase was also driven by an increase in advertiser demand in 2022, compared to 2021, following a
significant increase in network attendance primarily due to an improved movie slate.

Founding member beverage revenue. National advertising revenue from the founding members’ beverage
concessionaire agreement increased $7.5 million, or $67.6%, from $11.1 million for 2021 to $18.6 million for 2022.
The increase was due to a 59.4% increase in founding member attendance in 2022, compared to 2021. The increase was
also due to contractual increases in the beverage revenue CPMs in 2022, compared to 2021.

Operating expenses. Total operating expenses increased $59.1 million, or 32.3%, from $183.2 million for 2021 to

$242.3 million for 2022. The following table shows the changes in operating expense for 2021 and 2022 (in millions):

Fiscal Year

$ Change

% Change

2022

2021

2021 to 2022

Advertising operating costs.......................................................... $

27.2 $

18.4 $

Network costs...............................................................................

Theater access fees and revenue share—founding members.......

Selling and marketing costs.........................................................

Administrative and other costs.....................................................

Impairment of long-lived assets...................................................

Depreciation expense...................................................................
Amortization of intangibles recorded for network theater screen
leases.........................................................................................

8.4

82.3

42.8

44.3

5.8

6.5

25.0

7.4

51.1

34.7

36.0

—

10.9

24.7

Total operating expenses........................................................... $

242.3 $

183.2 $

8.8

1.0

31.2

8.1

8.3

5.8

(4.4)

0.3

59.1

47.8 %

13.5 %

61.1 %

23.3 %

23.1 %

100.0 %

(40.4) %

1.2 %

32.3 %

Advertising operating costs. Advertising operating costs increased $8.8 million, or 47.8%, from $18.4 million in 2021
to $27.2 million in 2022. The increase was due primarily to an $8.9 million increase in advertising affiliate and partner
expense in 2022, as compared to 2021, and a $0.4 million increase in personnel related costs due to the reinstatement of
full salaries to all employees in the first quarter of 2022, as compared to 2021 when temporary salary and wage
reductions were in place for the full year.

Network costs. Network costs increased $1.0 million, or 13.5%, from $7.4 million in 2021 to $8.4 million in 2022. The
increase was primarily related to a $1.0 million increase in personnel related costs primarily due to the reinstatement of
full salaries to all employees in the first quarter of 2022, as compared to 2021 when temporary salary and wage
reductions were in place for the full year.

Theater access fees and revenue share—founding members. Theater access fees and revenue share increased $31.2
million, or 61.1%, from $51.1 million in 2021 to $82.3 million in 2022. This increase consisted of a $16.9 million
increase due to the 59.4% increase in founding member theater attendance in 2022, as compared to 2021, and a $11.3
million increase due to the 25.8% increase in average active screens in 2022, as compared to 2021. This increase was
also due to a $1.7 million increase in Platinum Spot revenue share for 2022, as compared to 2021.

Selling and marketing costs. Selling and marketing costs increased $8.1 million, or 23.3%, from $34.7 million in 2021
to $42.8 million in 2022. This increase was primarily related to a $4.9 million increase in personnel related costs due
primarily to an increase in performance based compensation expense due to higher revenue in 2022, as compared to
2021, and an increase due to the reinstatement of full salaries to all employees in the first quarter of 2022, as compared
to 2021 when temporary salary and wage reductions were in place for the full year. The increase was also due to a $2.2
million increase in selling related expenses driven by increased marketing activity, a $1.1 million increase in bad debt
expense driven by the increase in revenue and a $0.5 increase in software costs. These increases were partially offset by
a $0.7 million decrease in non-cash barter expense in 2022, as compared to 2021.

Administrative and other costs. Administrative and other costs increased $8.3 million, or 23.1%, from $36.0 million in
2021 to $44.3 million in 2022. This increase was primarily due to a $5.1 million increase in legal and professional fees
incurred related to the Cineworld Proceeding in 2022. Administrative and other costs also increased $1.3 million due to
a decrease in capitalized labor due to the nature of the work performed by our technology department in 2022, as
compared to 2021, and the reinstatement of full salaries to all employees in the first quarter of 2022, as compared to
2021 when temporary salary and wage reductions were in place for the full year. The increase was also due to a $0.8
million increase in corporate expenses, a $0.4 million increase in cloud computing expense related to our cinema
advertising management system, a $0.4 million increase in other business taxes due to changes in state tax laws in 2022,
as compared to 2021, and a $0.3 million increase in legal and professional fees due to an abandoned equity transaction
in 2022.

Impairment of long-lived assets. Impairment of long-lived assets increased $5.8 million, or 100.0%, from $0.0 million
in 2021 to $5.8 million in 2022. This increase in impairment expense consisted of the write-off of certain long-lived
assets during the first quarter of 2022.

Depreciation expense. Depreciation expense decreased $4.4 million, or 40.4%, from $10.9 million in 2021 to $6.5
million in 2022, primarily due to the write-off of internally developed software in the first quarter of 2022.

Amortization of intangibles recorded for network theater screen leases. Amortization of intangibles recorded for
network theater screen leases increased $0.3 million, or 1.2%, from $24.7 million in 2021, to $25.0 million in 2022.

Non-operating expense. Total non-operating expense increased $23.3 million, or 46.8%, from non-operating expense of

$49.8 million in 2021 to non-operating expense of $73.1 million in 2022. The following table shows the changes in non-
operating expense for 2022 and 2021 (in millions):

Interest on borrowings........................................................... $

(Gain) Loss on modification and retirement of debt, net......
Loss (Gain) on re-measurement of the payable to
founding members under the tax receivable
agreement...........................................................................
Gain on sale of asset..............................................................
Other non-operating income..................................................

Total non-operating expense............................................. $

Fiscal Year

$ Change

% Change

2022

2021

2021 to 2022

79.7 $

(5.9)

64.8 $

1.2

14.9

(7.1)

23.0 %

(591.7) %

2.2
(2.2)
(0.7)
73.1 $

(16.1)
—
(0.1)
49.8 $

18.3
(2.2)
(0.6)
23.3

(113.7) %
100.0 %
600.0 %
46.8 %

The increase in non-operating expense was primarily due to a $14.9 million increase in interest on borrowings primarily
related to the increase in the weighted average interest rate from 5.6% in 2021 to 7.3% in 2022. It is also due to the issuance of
the Revolving Credit Agreement 2022 in January of 2022 and a $16.1 million gain compared to a $2.2 million loss for the re-
measurement of the payable to founding members under the tax receivable agreement for 2021 and 2022, respectively. These
increases were partially offset by a $7.1 million increase in the gain on the modification and retirement debt driven by NCM,
Inc.’s purchase of $25.8 million of the Notes due 2028 on the open market in the second quarter of 2022, a $2.2 million
increase in the gain on sale of assets and a $0.6 increase in other non-operating income in 2022, as compared to 2021.

Known Trends and Uncertainties

COVID-19 and Other Macroeconomic Factors—As discussed within the ‘Recent Developments’ section, due to the
COVID-19 Pandemic certain theaters within the Company’s network were temporarily closed during a portion of 2021. The
Company's ability to advertise within theaters once opened in 2021 was limited due to reduced movie schedules and patron
capacities at many network theaters and the timing and frequency of new major motion picture releases as compared to prior
years due to the COVID-19 Pandemic. In 2022, attendance levels increased but remained below historical levels due to post-
production delays and changes in major motion picture release schedules. Our theater access fees, network affiliate payments
and Platinum Spot revenue share payments are driven by attendance, active screens and/or revenue, and therefore, were not
incurred when theaters were closed and attendance-based fees were reduced for the period of time that attendance was lower
than historical levels.

We are currently unable to fully determine the extent of the impact of the COVID-19 Pandemic and other current
macroeconomic factors on our business in future periods due to the lingering impacts on our business environment and related
market volatility. However, we continue to monitor the situation and its potential impacts on our financial position, results of
operations, liquidity and cash flows.

Cineworld Proceeding—As discussed within the ‘Recent Developments’ section, on September 7, 2022, Cineworld
Group plc, the parent company of Regal, and certain of its subsidiaries, including Regal, Regal Cinemas, Inc., a party to the
ESA, and Regal CineMedia Holdings, LLC, 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 the Company. NCM LLC has 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 with a
hearing scheduled during the second quarter of 2023. The timing of the hearing could be impacted by the Chapter 11 Case.
Although there can be no assurances that NCM LLC’s proceeding for declaratory relief will be successful, the Company
believes these exclusivity rights will survive any attempted rejection of the ESA by Regal in the bankruptcy proceeding. As of
the filing date, the Company continues to negotiate with Regal regarding the ESA and NCM LLC's provision of advertising
services. In the event that NCM LLC’s or NCM, Inc.’s agreements with Regal and its affiliates are rejected, it could have a
materially negative impact on the Company’s operations or financial condition.

Beverage Revenue—Under the ESAs, up to 90 seconds of the Noovie® show program can be sold to the founding

members to satisfy their on-screen advertising commitments under their beverage concessionaire agreements. For 2022 and
2021, two of the founding members purchased 60 seconds of on-screen advertising time and one founding member purchased
30 seconds to satisfy their obligations under their beverage concessionaire agreements. The founding members’ current long-
term contracts with their beverage suppliers require the 30 or 60 seconds of beverage advertising, although such commitments
could change in the future. Per the ESA with AMC, the time sold to the founding member beverage supplier is priced equal to
the greater of (1) the advertising CPM charged by NCM LLC in the previous year for the time sold to the founding member
beverage supplier and (2) the advertising CPM for the previous year charged by NCM LLC to unaffiliated third parties during
segment one (closest to showtime) of the Noovie show in the founding member’s theaters, limited to the highest advertising
CPM being then-charged by NCM LLC. Beginning in 2020 and in accordance with the 2019 ESA Amendments, the price for
the time sold to Cinemark and Regal’s beverage suppliers now increases at a fixed rate of 2.0% each year.

Theater Access Fees—In consideration for NCM LLC’s access to the founding members’ theater attendees for on-
screen advertising and use of lobbies and other space within the founding members’ theaters for the LEN and lobby promotions,
the founding members receive a monthly theater access fee under the ESAs. The theater access fee is composed of a fixed
payment per patron and a fixed payment per digital screen (connected to the DCN). The payment per theater patron increased
by 4% on November 1, 2022 and will increase by 8% every five years, with the next increase occurring in 2027. Pursuant to the
ESAs, the payment per digital screen increases annually by 5%. Pursuant to the 2019 ESA Amendments, Cinemark and Regal
each receive an additional monthly theater access fee beginning November 1, 2019 in consideration for NCM LLC's access to
certain on-screen advertising inventory after the advertised showtime of a feature film. These fees are also based upon a fixed
payment per patron: (i) $0.0375 per patron beginning on November 1, 2020, (ii) $0.05 per patron beginning on November 1,
2021, (iii) $0.052 per patron beginning on November 1, 2022 and (iv) increasing 8% every five years beginning November 1,
2027.

Platinum Spot—In consideration for the utilization of the theaters post-showtime for Platinum Spots, Cinemark and

Regal receive a percentage of all revenue generated for the actual display of Platinum Spots in their applicable theaters, subject
to a specified minimum. If NCM LLC runs advertising in more than one concurrent advertisers’ Platinum Spot for any portion
of the network over a period of time, then NCM LLC will be required to satisfy a minimum average CPM for that period of
time.

Financial Condition and Liquidity

Liquidity and Capital Resources

As a result of the commencement of the Chapter 11 Case on April 11, 2023, we are operating as the manager of a debtor
in possession pursuant to the authority granted under Chapter 11 of the Bankruptcy Code. Pursuant to the Chapter 11 filings, we
intend to de-lever NCM LLC’s balance sheet and reduce overall indebtedness upon completion of that process. Additionally, as
a debtor-in-possession, certain of NCM LLC’s and NCM, Inc.’s activity, as its manager, are subject to review and approval by
the Bankruptcy Court, including, among other things, the incurrence of secured indebtedness, material asset dispositions, and
other transactions outside the ordinary course of business. There can be no guarantee NCM LLC will successfully agree upon a
viable plan of reorganization with various stakeholders or reach any such agreement in the time frame that is acceptable to the
Bankruptcy Court. See Note 16—Subsequent Events for additional information.

Our normal operating cash flows are providing liquidity for the Company to operate as usual and fulfill ongoing

commitments to stakeholders.

We have concluded that our financial condition and projected operating results, the defaults under NCM LLC’s debt

agreements subsequent to December 29, 2022, and the risks and uncertainties surrounding NCM LLC’s Chapter 11 Case raise
substantial doubt as to the Company’s ability to continue as a going concern. As a result of the substantial doubt about the
Company’s ability to continue as a going concern for the next twelve months, and the associated steps that have been
undertaken to restructure NCM LLC’s balance sheet, NCM LLC’s expected cash outflows related to interest payments on NCM
LLC’s debt in 2023 are difficult to predict at this time. NCM LLC does not expect to make interest payments on any of its debt.
NCM LLC plans to fund its ongoing operations through cash generated from operations.

We are unable to predict when NCM LLC will emerge from Chapter 11 because it is contingent upon numerous factors,
many of which are out of the Company’s control. Major factors include obtaining the Bankruptcy Court’s approval of a Chapter
11 plan of reorganization, which will enable NCM LLC to transition from Chapter 11 into ordinary course operations outside of
bankruptcy. NCM LLC also may need to obtain a new credit facility, or “exit financing.” NCM LLC’s ability to obtain such
approval and financing will depend on, among other things, the timing and outcome of various ongoing matters related to the
Chapter 11 Case as well as the general global macroeconomic factors. The plan of reorganization will determine the rights and
satisfaction of claims of various creditors and security holders and is subject to the ultimate outcome of negotiations and
Bankruptcy Court decisions ongoing through the date on which such plan is confirmed.

NCM LLC is a highly leveraged company. NCM, Inc.’s current primary source of liquidity is cash flow generated from

the Management Services Agreement of NCM, LLC. Payments under the Management Service Agreement are expected to
continue throughout the bankruptcy process. NCM, LLC’s primary source of liquidity are cash flows generated from
operations. Subsequent to and during pendency of the Chapter 11 Case, we expect that NCM LLC’s primary liquidity
requirements will be sufficient to fund operations.

Based on current financial projections, we expect to be able to continue to generate cash flows from operations in
amounts sufficient to fund our operations and pay administrative expenses including professional fees while under Chapter 11.
However, should the Chapter 11 Case take longer than anticipated or should our financial results be materially and negatively
impacted by general global macroeconomic factors, we may be required to seek additional sources of liquidity. There can be no
assurance that we will be able to obtain such liquidity on terms favorable to us, if at all.

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 available cash payments (as defined in the NCM LLC
operating agreement) to Cinemark, interest or principal payments on our term loans and the Notes due 2026 and Notes due
2028, income tax payments, TRA payments to the founding members and amount of dividends to NCM, Inc.’s common
stockholders.

As discussed within the ‘Recent Developments’ section, due to the COVID-19 Pandemic and other macroeconomic
factors, the Company’s ability to advertise within the reopened theaters in 2021 and 2022 was limited, driven by lower than
historical levels of attendance due in part to the timing and frequency of major motion picture releases as compared to prior
years due to post-production delays related to the COVID-19 Pandemic. The Company’s attendance levels have continued to
improve but still remain below historic levels, which continues to impact cash receipts and advertising revenue. Further, there is
a lag between when revenue is generated and when the Company ultimately collects the associated accounts receivable balance.
The Company also had reduced cash payments during the period when theaters within the Company’s network were closed or
attendance levels were low as expenses related to theater attendance (i.e., theater access fees, Platinum Spot revenue share and
network affiliate revenue share payments) were either not incurred or incurred at lower levels. As all of the theaters within our
network were open during 2022, the screen-based portion of these expenses returned to historical levels and the attendance-
based portion of these expenses is expected to continue to increase as attendance returns to historical levels. The Company also
implemented the following cost-saving measures in order to preserve cash at the start of the COVID-19 Pandemic, and those
measures remain in place as of the filing date:

•

Offered the option for members of the Company’s Board of Directors to receive the cash retainers beginning with the
first quarter of 2021 in equivalent value of the Company’s common stock in lieu of cash;

Curtailed certain non-essential operating expenditures, including marketing, research and consulting services;

Temporarily suspended the 401K employee match program;

Terminated or deferred certain non-essential capital expenditures;

Strategically worked with our vendors, and other business partners to manage, defer, and/or abate certain costs during
the disruptions caused by the COVID-19 Pandemic;

Decreased our quarterly dividend beginning in the second quarter of 2020 through the second quarter of 2022 and
suspended our quarterly dividend in the third and fourth quarter of 2022, which results in cash savings of $24.4 million

in the fourth quarter of 2022 and cash savings of $124.3 million for NCM, Inc. since the beginning of the COVID-19
Pandemic; and

•

Introduced an active cash management process, which, among other things, requires CEO or CFO approval of all
outgoing payments.

In March 2020, we drew down an additional $110.0 million on our revolving credit facility, in March 2021, we received

$43.0 million in net proceeds under incremental term loans that mature on December 20, 2024, and in January 2022 we
received $43.3 million in net proceeds under an incremental revolving credit facility that matures on June 20, 2023. The $59.4
million of cash at NCM LLC as of December 29, 2022 will be used to fund operations during the period of expected reduced
cash flows. Cash at NCM, Inc. is held for future payment of dividends to NCM, Inc. stockholders, income tax payments,
income tax receivable payments to NCM LLC’s founding members and other obligations.

On January 5, 2022, NCM LLC entered into the Credit Agreement Third Amendment. Among other things, the Credit
Agreement Third Amendment provides for: (i) certain modifications to and extensions to modifications of the affirmative and
negative covenants therein; (ii) the suspension of the consolidated net total leverage and consolidated net senior secured
leverage financial covenants through the fiscal quarter ending December 29, 2022 and (iii) the consolidated net total leverage
ratio and consolidated net senior secured leverage ratio financial covenants to be set to 9.25 to 1.00 and 7.25 to 1.00,
respectively, for the fiscal quarter ending on or about March 30, 2023, 8.50 to 1.00 and 6.50 to 1.00, respectively, for the fiscal
quarter ending on or about June 29, 2023, 8.00 to 1.00 and 6.00 to 1.00, respectively, for the fiscal quarter ending on or about
September 28, 2023, and 6.25 to 1.00 and 4.50 to 1.00, respectively, for the fiscal quarter ending on or about December 28,
2023 and each fiscal quarter thereafter.

Also on January 5, 2022, NCM LLC also entered into the Revolving Credit Agreement 2022 among NCM LLC, the

lenders party thereto and Wilmington Savings Fund Society, FSB, as administrative agent and collateral agent. The Revolving
Credit Agreement 2022 provides for revolving loan commitments of $50.0 million of secured revolving loans, the entire
amount of which was funded on January 5, 2022. The Revolving Credit Agreement 2022 provides for (i) a cash interest rate of
term SOFR plus 8.00%, with a 1.00% floor, (ii) a maturity date of June 20, 2023 and (iii) a termination premium if NCM LLC
terminates the commitments under the Revolving Credit Agreement 2022 at any time before maturity. The Revolving Credit
Agreement 2022 also contains covenants, representations and warranties and events of default that are substantially similar to
the Credit Agreement. In accordance with the Revolving Credit Agreement 2022 and the Credit Agreement Third Amendment,
for the period beginning in the second quarter of 2020 through the date that NCM LLC delivers a compliance certificate for the
fourth quarter of 2023, NCM LLC must maintain a minimum liquidity balance of $55.0 million consisting of a combination of
unrestricted cash on hand and availability under NCM LLC's revolving credit facility (the “Minimum Liquidity Requirement”).
As of December 29, 2022, NCM LLC was in compliance with the requirements of the Credit Agreement, as amended, and the
Revolving Credit Agreement 2022.

A summary of our financial liquidity is as follows (in millions):

Cash, cash equivalents and marketable securities (1).......... $

Revolver availability (2)......................................................

Total liquidity.................................................................. $

62.7 $

7.2
69.9 $

102.5 $

6.8
109.3 $

(39.8)

0.4
(39.4)

Years Ended

December 29, 2022

December 30, 2021

$ Change

2021 to
2022

(1) Included in cash and cash equivalents as of December 29, 2022 and December 30, 2021 there was $59.4 million

and $58.6 million, respectively, of cash held by NCM LLC which is not available to satisfy NCM, Inc.'s dividend
payments and other NCM, Inc. obligations.

(2) The revolving credit facility portion of NCM LLC’s total borrowings is available, subject to certain conditions, for
general corporate purposes of NCM LLC in the ordinary course of business and for other transactions permitted
under the Senior Secured Credit Facility and a portion is available for letters of credit. NCM LLC’s total capacity
under the revolving credit facility was $175.0 million as of December 29, 2022 and December 30, 2021. As of
December 29, 2022 and December 30, 2021, the amount available under the NCM LLC revolving credit facility in
the table above, was net of the amount outstanding under the revolving credit facility of $167.0 million and $167.0
million, respectively, and net letters of credit of $0.8 million and $1.2 million, respectively.

Subsequent to year-end, on January 17, 2023, NCM LLC entered into (i) Amendment No. 4 (the “Credit Agreement

Fourth Amendment”) to its Credit Agreement, dated as of June 20, 2018, among NCM LLC, the several banks and other
financial institutions or entities from time to time parties thereto, and JPMorgan Chase Bank, N.A., as administrative agent, as
previously amended and (ii) Amendment No. 1 to its Revolving Credit Agreement dated as of January 5, 2022, among NCM

LLC, lender parties thereto and Wilmington Savings Fund Society, FSB, as administrative agent (the “Revolving Credit
Agreement Amendment”). The Credit Agreement Fourth Amendment and Revolving Credit Agreement Amendment provide
for the addback of specified professional fees paid by NCM LLC during the period of January 6, 2023 through the date NCM
LLC delivers a compliance certificate for the quarter ending on or about December 28, 2023, when calculating the sum of
unrestricted cash on hand at the NCM LLC and revolving credit facility availability under the Credit Agreement and Revolving
Credit Agreement required to be maintained under each respective agreement.

We have generated and used cash as follows (in millions):

Operating cash flow................................................................................................... $

Investing cash flow.................................................................................................... $

Financing cash flow................................................................................................... $

(47.3) $

(0.4) $

10.3 $

(95.2)

(5.4)

21.5

Years Ended

2022

2021

Cash Flows – Fiscal Years 2022 and 2021

Operating Activities. The $47.9 million decrease in cash used in operating activities in 2022, as compared to 2021 was

primarily due to 1) a $52.3 million decrease in consolidated net loss, 2) an $18.2 million decrease in non-cash gain on re-
measurement of the payable founding members under the TRA, 3) an $11.9 million decrease in payments for accounts payable
and accrued expenses due in part to the cash preservation and expense management actions taken by the Company to mitigate
the impact of the COVID-19 Pandemic and 4) a $7.1 million increase in gain on early retirement of debt, net. The decrease in
cash used was partially offset by 1) a $12.3 million decrease in deferred revenue due to timing of payments in 2022, as
compared to 2021, 2) a $9.9 million decrease in amounts due to founding members, net, 3) a $9.3 million decrease in amounts
received from founding members related to common membership unit adjustments 4) a $5.8 million increase in the impairment
of long-lived assets related to the write down in the first quarter of 2022 of certain internally developed software no longer in
use and 5) a $4.8 million increase in the amortization of debt issuance costs in 2022, as compared to 2021.

Investing Activities. The $5.0 million decrease in cash used by investing activities in 2022, compared to 2021 was
primarily due to a $2.8 million decrease in purchases of property and equipment and $2.2 million in proceeds from sale of
assets in 2022, as compared to 2021.

Financing Activities. The $11.2 million decrease in cash provided by financing activities in 2022, compared to 2021 was

primarily due to a $19.8 million increase in the purchase of Notes due 2028 and a $0.9 million increase in the repayment of
term loan facilities in 2022, as compared to 2021. These increases were partially offset by a $7.4 million decrease in dividends
paid related to the decrease in the dividends declared from $0.20 per share to $0.11 per share in 2022, as compared to 2021, a
$1.8 million decrease in purchases of stock for restricted stock tax withholding and a $0.3 million decrease in debt issuance
costs paid in 2022, as compared to 2021.

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 balances and marketable securities, which as of December 29, 2022 were $62.7 million
(including $59.4 million of cash held by NCM LLC). NCM LLC’s primary sources of liquidity and capital resources are its
cash provided by operating activities, availability under its revolving credit facility and cash on hand. NCM LLC drew down an
additional $110.0 million of its revolving credit facility in March 2020 in order to supplement the decrease in cash provided by
operating activities during the period our network theaters were closed. On January 5, 2022, the company entered in the
Revolving Credit Agreement 2022 and drew down upon the revolving credit facility of $50.0 million. Cash at NCM, Inc. is
used to fund income taxes, payments associated with the TRA with the founding members, payments of NCM, Inc. specific
expenses, purchases of low risk investments and for future payment of dividends to NCM, Inc. stockholders. Refer to Note 10
to the audited Consolidated Financial Statements included elsewhere in this document and “Financings” below for a detailed
discussion of the debt transactions in 2021 and 2022 and the debt outstanding as of December 29, 2022.

During the next fiscal year, the Company intends to have cash outflows of interest payments of $85.0 million and
amortization payments of $4.0 million payable throughout the fiscal year as required by the Credit Agreement, Revolving
Credit Agreement 2022, Senior Secured Notes due 2028 and Senior Notes due 2026, capital expenditures between $7.0 million
and $8.0 million, prepayments to affiliates of $3.9 million and lease payments of $3.8 million. The Company expects to
continue to make capital expenditures and other contractually obligated prepayments and upfront payments that may vary from
our historical practice. For other long-term anticipated cash outflows, refer to Note 10 - Borrowings and Note 13 -
Commitments and Contingencies for discussion of future anticipated payments.

Cash flows generated by NCM LLC’s distributions to NCM, Inc. and the founding members have been impacted by the

COVID-19 Pandemic and may be deferred through at least the quarter ending December 28, 2023 or longer due to the
limitations instituted by the Credit Agreement Amendment, Credit Agreement Second Amendment (as defined herein) and
Credit Agreement Third Amendment. NCM LLC is required pursuant to the terms of the NCM LLC Operating Agreement to
distribute its available cash, as defined in the operating agreement, unless prohibited by NCM LLC's Credit Agreement,
quarterly to its members (Cinemark and NCM, Inc.). The available cash distribution to the members of NCM LLC for the
combined three months ended March 31, 2022, three months ended June 30, 2022, three months ended September 29, 2022 and
three months ended December 29, 2022 was calculated as approximately negative $20.5 million, of which NCM, Inc.'s share is
approximately negative $5.2 million. Pursuant to the NCM LLC Operating Agreement and the Credit Agreement Amendment,
there were no available cash distributions made for the fourth quarter of 2022. As such, the positive available cash distribution
for the fourth quarter of 2022 has been accrued for within “Amounts due to founding members, net” on the audited
Consolidated Balance Sheet of December 29, 2022. The net negative available cash distributions for 2020, 2021 and 2022 can
be used to offset a positive available cash distribution in the second quarter of 2023 in accordance with the NCM LLC
Operating Agreement after the Extended Covenant Waiver Holiday.

NCM, Inc. expects to use its cash balances and cash received from future available cash distributions to fund payments
associated with the TRA with the founding members and future dividends as declared by the Board of Directors or make other
strategic investments as approved by the Board of Directors. The Company will owe a TRA payment for the 2022 tax year. The
Company will also consider opportunistically using cash received for partial repayments of NCM LLC's outstanding debt
balance, while ensuring the Company's financial flexibility is maintained. Distributions from NCM LLC and NCM, Inc. cash
balances should be sufficient to fund payments associated with the TRA with the founding members, income taxes and any
declared dividends for the foreseeable future at the discretion of the Board of Directors. The Company intends to pay a regular
dividend at the discretion of the Board of Directors consistent with the Company’s intention to distribute substantially all its
free cash flow to stockholders through its quarterly dividend. The declaration, payment, timing and amount of any 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, which includes short-term and long-term impacts to the Company related
to the COVID-19 Pandemic and restrictions under the NCM LLC Credit Agreement.

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 Customer Experience Center and
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 2022 were $4.2 million (including $1.9 million associated with digital
product development; $0.9 million associated with upgrades to our existing systems related to the continued upgrades of our
cinema advertising management system; $0.4 million associated with network affiliate additions and $0.1 million associated
with certain implementation and prepaid costs associated with Cloud Computing arrangements) compared to $6.5 million for
the 2021 period (including $1.7 million associated with digital product development; $1.6 million associated with upgrades to
our existing systems related to the upgrade of our cinema advertising management system; $1.5 million associated with certain
implementation and prepaid costs associated with Cloud Computing arrangements; and $0.6 million associated with network
affiliate additions). The capital expenditures have typically been satisfied through cash flow from operations. All capital
expenditures related to the DCN within the founding members’ theaters have been made by the founding members under the
ESAs. We expect they will continue to be made by the founding members in accordance with the ESAs.

We expect to make approximately $7.0 million to $8.0 million of capital expenditures in fiscal 2023, including
approximately $2.4 million for digital product development. We expect these digital products to allow us to capture exclusive
first party data on our movie audiences and build our own foundational capabilities for digital ad buying, selling and serving.
We also expect approximately $1.0 million of capital expenditures related to upgrades to our Digital Content Software
distribution and content management software and our other internal management systems, including our cinema advertising
management system, reporting systems, network equipment related to currently contracted network affiliate theaters, server and
storage upgrades and software licensing. Our capital expenditures may increase as we add additional network affiliates. We
expect that additional expenditures, if any, would be funded in part by additional cash flows associated with those new network
affiliates.

Financings

leverage financial covenants through the fiscal quarter ending December 29, 2022 and (iii) the consolidated net total leverage
ratio and consolidated net senior secured leverage ratio financial covenants to be set to 9.25 to 1.00 and 7.25 to 1.00,
respectively, for the fiscal quarter ending on or about March 30, 2023, 8.50 to 1.00 and 6.50 to 1.00, respectively, for the fiscal
quarter ending on or about June 29, 2023, 8.00 to 1.00 and 6.00 to 1.00, respectively, for the fiscal quarter ending on or about
September 28, 2023, and 6.25 to 1.00 and 4.50 to 1.00, respectively, for the fiscal quarter ending on or about December 28,
2023 and each fiscal quarter thereafter.

Also on January 5, 2022, NCM LLC entered into the Revolving Credit Agreement 2022. The Revolving Credit
Agreement 2022 provides for revolving loan commitments of $50.0 million of secured revolving loans, the entire amount of
which was funded on January 5, 2022. The Revolving Credit Agreement 2022 provides for (i) a cash interest rate of term SOFR
plus 8.0%, with a 1.0% floor, (ii) a maturity date of June 20, 2023 and (iii) a termination premium if NCM LLC terminates the
commitments under the Revolving Credit Agreement 2022 at any time before maturity. The Revolving Credit Agreement 2022
also contains covenants, representations and warranties and events of default that are substantially similar to the Credit
Agreement. As of December 29, 2022, NCM LLC was in compliance with the requirements of the Credit Agreement Third
Amendment and the Revolving Credit Agreement 2022.

On March 8, 2021, NCM LLC entered into a second amendment to its Credit Agreement (“the Credit Agreement
Second Amendment”), dated as of June 20, 2018. Among other things, the Credit Agreement Second Amendment provides for:
(i) certain modifications to the negative covenants;(ii) a waiver of non-compliance with the consolidated net total leverage and
consolidated net senior secured leverage financial covenants through the quarter ended June 30, 2022; (iii) the consolidated net
total leverage ratio and consolidated net senior secured leverage ratio financial covenants to be set to 6.75 to 1.00 and 5.50 to
1.00, respectively, for the quarter ending on or about September 29, 2022, and (iv) with respect to NCM LLC’s audited
financial statements for the fiscal year ended December 30, 2021, a waiver of the requirement to deliver such financial
statements without a “going concern” or like qualification or exception. The Credit Agreement Second Amendment also: (i)
grants security interests in certain assets of NCM LLC and other potential loan parties that are not currently pledged to the
lenders and (ii) increases the applicable margin of the existing term loans and revolving loans issued under the Credit
Agreement in an amount equal to 1.00%. Additionally, pursuant to the terms of the Credit Agreement Second Amendment,
NCM LLC is restricted from making available cash distributions until after NCM LLC delivers a compliance certificate for the
quarter ending on or about December 29, 2022, and, thereafter, NCM LLC may only make available cash distributions if: (i) no
default or event of default under the Credit Agreement has occurred and is continuing; (ii) the senior secured financial covenant
leverage ratio is equal to or less than 4.00 to 1.00; and (iii) the aggregate principal amount of all outstanding revolving loans
under the Credit Agreement is $39.0 million or less.

In addition, pursuant to the Credit Agreement Second Amendment, NCM LLC incurred new incremental term loans in

an aggregate principal amount of $50.0 million, the proceeds of which will be used for general corporate purposes. The New
Incremental Loans will have substantially similar terms to the existing term loans (after giving effect the Credit Agreement
Amendment), except that the New Incremental Loans will: (i) have a cash interest rate of LIBOR plus 8.00%, (ii) have a
maturity of December 20, 2024, and (iii) be subject to prepayment premiums if NCM LLC prepays the New Incremental Loans
before maturity.

In connection with the grant of the Additional Collateral to the lenders under the Credit Agreement, NCM LLC
concurrently entered into an amendment to the Security Agreement, dated as of October 8, 2019 made by NCM LLC, as issuer,
in favor of JPMorgan Chase Bank, N.A., as collateral agent, relating to that certain Indenture, dated as of October 8, 2019,
between NCM LLC, as issuer and Wells Fargo Bank, National Association, as trustee, relating to NCM LLC’s Senior Secured
Notes due 2028. This amendment grants a security interest in the Additional Collateral for the benefit of the holders of the
Secured Notes.

On April 30, 2020, NCM LLC entered into the first amendment to the Credit Agreement (the “Credit Agreement
Amendment”) to allow for the automatic waiver of any non-compliance with its consolidated net senior secured leverage ratio
and consolidated total leverage ratio financial covenants occurring from the quarter ending June 25, 2020 until and including
the quarter ending July 1, 2021 (the “Covenant Holiday Period”). The Credit Agreement Amendment requires that, until the
fiscal quarter ending July 1, 2021, NCM LLC must not permit the sum of unrestricted cash on hand at NCM LLC and
availability under its revolving credit facility to be less than $55.0 million. Further, NCM LLC can make available cash
distributions to its members (Cinemark and NCM, Inc.) during the Covenant Holiday Period only if trailing 12-month
Consolidated EBITDA (as defined in the Credit Agreement) equals or exceeds $277.0 million and outstanding loans under the
revolving credit facility are equal to or less than $39.0 million. NCM LLC can make available cash distributions to its members
outside of the Covenant Holiday Period so long as NCM LLC’s Consolidated Net Senior Secured Leverage Ratio is equal to or
less than 5.00 to 1.00 and no default or event of default under the Credit Agreement has occurred and is continuing.

On October 8, 2019, NCM LLC completed a private offering of $400.0 million aggregate principal amount of 5.875%
senior secured notes due 2028. The 2028 Notes will mature on April 15, 2028. Interest on the 2028 Notes accrues at a rate of
5.875% per annum and is payable semi-annually in arrears on April 15 and October 15 of each year, commencing on April 15,

2020. NCM LLC will pay interest to those persons who were holders of record at the close of business on the April 1 and
October 1 immediately preceding the interest payment date. At any time prior to April 15, 2023, NCM LLC may redeem all or
any portion of the 2028 Notes at a redemption price equal to 100% of the principal amount plus a make-whole premium, plus
accrued and unpaid interest, if any, to the redemption date. On or after April 15, 2023, NCM LLC may redeem all or any
portion of the 2028 Notes at specified redemption prices, plus accrued and unpaid interest, if any, to the redemption date. In
addition, at any time prior to April 15, 2023, NCM LLC may on any one or more occasions redeem up to 35% of the original
aggregate principal amount of the 2028 Notes from the net proceeds of certain equity offerings at a redemption price equal to
105.875% of the principal amount of the 2028 Notes redeemed, plus accrued and unpaid interest, if any, to the redemption date,
provided that at least 65% of the original aggregate principal amount of the 2028 Notes remains outstanding after each such
redemption and the redemption occurs within 90 days after the closing of such applicable equity offering.

In June 2018, we entered into the Credit Agreement to replace NCM LLC's previous senior secured credit facility.
Consistent with the structure of the previous facility, the Credit Agreement consists of a term loan facility and a revolving credit
facility for $270.0 million and $175.0 million, respectively. The Credit Agreement extended the maturity dates by 5.5 years to
June 20, 2025 for the term loan facility and 3.5 years to June 20, 2023 for the revolving credit facility. The interest rate under
the term loan facility is either the LIBOR index plus 4.00% or the base rate plus 3.00% and the rate under the revolving credit
facility is either the LIBOR index plus an applicable margin ranging from 3.00%-3.50% or the base rate plus an applicable
margin ranging from 2.00%-2.50%. The applicable margin for the revolving credit facility is determined quarterly and is
subject to adjustment based upon a consolidated net senior secured leverage ratio for NCM LLC. As of December 29, 2022,
NCM LLC’s senior secured credit facility consisted of a $175.0 million revolving credit facility, a $258.5 million term loan
(first tranche) and a $49.3 million term loan (second tranche).

As of December 29, 2022, the weighted average remaining maturity was 3.2 years. As of December 29, 2022,
approximately 54% of our total borrowings bear interest at fixed rates. The remaining 46% 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.

Critical Accounting Estimates

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.

Allowance for Doubtful Accounts

Nature of Estimates Required. The allowance for doubtful accounts represents management’s estimate of probable

credit losses inherent in its trade receivables, which represent a significant asset on the balance sheet. Estimating the amount of
the allowance for doubtful accounts requires significant judgment and the use of estimates related to the amount and timing of
estimated losses based on historical loss experience, consideration of current economic trends and conditions and debtor-
specific factors, all of which may be susceptible to significant change. Amounts deemed uncollectible within the account
receivable balance are charged against the allowance, while recoveries of amounts previously charged are credited to the
allowance. A provision for bad debt is charged to operations based on management’s periodic evaluation of the factors
previously mentioned, as well as other pertinent factors. To the extent actual outcomes differ from management estimates,
additional provision for bad debt could be required that could adversely affect earnings or financial position in future periods.

Sensitivity Analysis. As of December 29, 2022, our allowance for doubtful accounts was $1.7 million, or 1.8% of the
gross accounts receivable balance. A 10% difference in the allowance for doubtful accounts as of December 29, 2022 would
have affected net loss attributable to NCM, Inc. by approximately $0.2 million.

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 develop 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.

Share-Based Compensation

Nature of Estimates Required. NCM, Inc.’s 2020 Omnibus Equity Incentive Plan, 2016 Equity Incentive Plan and its

2007 Equity Incentive Plan, as amended (the “Equity Incentive Plans”) are treated as equity plans under the provisions of ASC
718 – Compensation – Stock Compensation, and the determination of fair value of options, restricted stock and restricted stock
units for accounting purposes requires that management make estimates and judgments. Stock options are granted using the
Black-Scholes option pricing model to estimate the fair value of stock option grants, which was affected by our stock price and
a number of assumptions, including expected term, expected volatility, risk-free interest rate and expected dividends.

The fair value of restricted stock and restricted stock units are based on the closing market price of our common stock on

the date of grant. Restricted stock and restricted stock units granted to employees vest upon the achievement of Company two
or three-year performance measures and service conditions consisting of individual year performance measures or only service
conditions whereby they vest ratably over two or three years. Restricted stock units granted to non-employee directors usually
vest after the completion of a service period of thirteen months. Compensation expense equal to the fair value of each restricted
stock award or restricted stock unit is recognized ratably over this requisite service period once the performance-based metric
has been determined, if applicable. For the restricted stock awards including performance vesting conditions, compensation
expense is based on management’s projections and the probability of achievement of those targets, which requires considerable
judgment. We record a cumulative adjustment to share-based compensation expense in periods that we change our estimate of
the number of shares expected to vest. Additionally, we ultimately adjust the expense recognized to reflect the actual vested
shares following the resolution of the performance conditions. Further, we estimate a forfeiture rate to reflect the potential
separation of employees.

Assumptions and Approach Used. In determining the value of stock options, we estimated an expected term based upon
historical actuals and company peer actuals and adjusted it by the cost of equity in order to incorporate the impact of the market
condition and the expected dividend yield based upon our expectation of the dividend that would be paid out on the underlying
shares during the expected term of the option. Expected volatility is based on our historical stock prices using a mathematical
formula to measure the standard deviation of the change in the natural logarithm of our underlying stock price over a period of
time commensurate with the expected term. The risk-free interest rate is derived from the zero coupon rate on U.S. Treasury
instruments with a term commensurate with the award’s expected term.

For restricted stock with vesting contingent on the achievement of Company performance conditions, the amount of

compensation expense is estimated based on the expected achievement of the performance condition. This requires us to make
estimates of the likelihood of the achievement of Company performance conditions, which is highly judgmental. We base our
judgments as to the expected achievement of Company performance conditions based on the financial projections of the
Company that are used by management for business purposes, which represent our best estimate of expected Company
performance. We evaluate the assumptions used to value stock-based awards on a quarterly basis. If factors change and we
employ different assumptions, stock-based compensation expense may differ significantly from what we have recorded in the
past. If there are any modifications or cancellations of stock-based awards, we may be required to accelerate, increase or
decrease any remaining, unrecognized stock-based compensation expense. To the extent that we grant additional stock-based
awards, compensation expense will increase in relation to the fair value of the additional grants. Compensation expense may be
significantly impacted in the future to the extent our estimates differ from actual results. Further, we estimate a forfeiture rate of
restricted stock based upon historical forfeitures. If future forfeitures differ significantly from our past experience our
compensation expense may be significantly impacted.

Income Taxes

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 2022, we have a valuation
allowance in the amount of $245.5 million against the deferred tax asset as of December 29, 2022. As we do expect to generate
pre-tax book income following the complete recovery from the lingering impacts of the COVID-19 Pandemic, we have not

recorded any impact of the Net Business Interest Expense Limitation IRC § 163(j) on our payable to founding members under
the TRA.

In addition, due to the basis differences resulting from our IPO-related transactions (including the TRA with the
founding members) and subsequent adjustments pursuant to the common unit adjustment agreement, we are required to make
cash payments under the TRA to the founding members 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 founding members
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 founding
members under the tax receivable agreement which would increase to reflect future payments to the founding members 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 founding members. 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.

For fiscal 2022, 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.

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.

Item 7A.

Quantitative and Qualitative Disclosures About Market Risk

The primary market risk to which we are exposed is interest rate risk. The Notes due 2026 and the Notes due 2028 bear

interest at fixed rates, and therefore are not subject to market risk. As of December 29, 2022, the interest rate risk that we are
exposed to is related to our $225.0 million revolving credit facility, our $258.5 million term loan (first tranche) and our $49.3
million term loan (second tranche). A 100 basis point fluctuation in market interest rates underlying our term loan and revolving
credit facility would have the effect of increasing or decreasing our interest expense by approximately $5.2 million for an
annual period on the $217.0 million, $258.5 million and $49.3 million outstanding as of December 29, 2022 on our revolving
credit facility and term loans, respectively.

Item 8.

Financial Statements and Supplementary Data

INDEX TO FINANCIAL STATEMENTS

National CineMedia, Inc. and Subsidiary

Report of Deloitte & Touche LLP, Independent Registered Public Accounting Firm (PCAOB ID: 34).........................

Consolidated Balance Sheets as of December 29, 2022 and December 30, 2021.............................................................

Consolidated Statements of Operations for the years ended December 29, 2022 and December 30, 2021......................

Consolidated Statements of Equity/(Deficit) for the years ended December 29, 2022 and December 30, 2021..............

Consolidated Statements of Cash Flows for the years ended December 29, 2022 and December 30, 2021....................

Notes to Consolidated Financial Statements.....................................................................................................................

Page

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the stockholders and the Board of Directors of
National CineMedia, Inc.

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of National CineMedia, Inc. and subsidiary (the "Company") as
of December 29, 2022 and December 30, 2021, the related consolidated statements of operations, equity/(deficit), and cash
flows, for each of the two years in the period ended December 29, 2022, and the related notes (collectively referred to as the
"financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of
the Company as of December 29, 2022 and December 30, 2021, and the results of its operations and its cash flows for each of
the two years in the period ended December 29, 2022, in conformity with accounting principles generally accepted in the
United States of America.

Going Concern

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As
discussed in Note 1 to the financial statements, National CineMedia LLC, the consolidated subsidiary of the Company, filed a
petition for reorganization under Chapter 11 of the United States Bankruptcy Code on April 11th, 2023 which made its
outstanding debt balances immediately due and payable. The Company does not have sufficient available liquidity to repay its
outstanding debt balances which raises substantial doubt about its ability to continue as a going concern. Management's plans in
regard to these matters are also described in Note 1—Basis of Presentation. The financial statements do not include any
adjustments that might result from the outcome of this uncertainty.

Bankruptcy Proceedings

As discussed in Note 1—Basis of Presentation to the financial statements, National CineMedia LLC, the consolidated
subsidiary of the Company, has filed for reorganization under Chapter 11 of the U.S. Bankruptcy Code. The accompanying
financial statements do not purport to reflect or provide for the consequences of the bankruptcy proceedings. In particular, such
financial statements do not purport to show (1) as to assets, their realizable value on a liquidation basis or their availability to
satisfy liabilities; (2) as to prepetition liabilities, the settlement amounts for allowed claims, or the status and priority thereof;
(3) as to shareholder accounts, the effect of any changes that may be made in the capitalization of the Company; or (4) as to
operations, the effect of any changes that may be made in its business.

Basis for Opinion

These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on
the Company's financial statements based on our audits. We are a public accounting firm registered with the Public Company
Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in
accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange
Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the
audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to
error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over
financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting
but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting.
Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due
to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis,
evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting
principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial
statements. We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current-period audit of the financial statements that
was communicated or required to be communicated to the audit committee and that (1) relates to accounts or disclosures that
are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The
communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and
we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the
accounts or disclosures to which it relates.

Income Taxes – Tax Receivable Agreements — Refer to Notes 7 and 9 to the Consolidated Financial Statements

Critical Audit Matter Description

The Company and the founding members entered into the Tax Receivable Agreement (“TRA”) at the time of the Company’s
initial public offering. Under the terms of this agreement, the Company will make cash payments to the founding members in
amounts equal to 90% of the Company’s actual tax benefit realized primarily from the tax amortization of the intangible assets
described below, which is recorded as a deferred tax asset. For purposes of the TRA, cash savings in income and franchise tax
will be computed by comparing the Company’s actual income and franchise tax liability to the amount of such taxes that the
Company would have been required to pay had there been no increase in the Company’s proportionate share of tax basis in
National CineMedia, LLC’s tangible and intangible assets had the Company not entered into the TRA. The TRA applies to the
Company’s taxable years up to and including the 30th anniversary of the IPO. During the fiscal year ended December 29,
2022, the Company paid the founding members $0.0 million for the 2021 tax year. In addition, changes in the deferred tax rate
and in the Company’s realization assessment of its deferred tax assets, and therefore changes to future amounts probable to be
paid under the TRA led to a re-measurement of the payable, resulting in an increase of $19.2 million during the fiscal year. At
December 29, 2022, the Company’s payable to founding members under the TRA liability (“PFML”) was $35.6 million; of
which $0.3 million is presented as a component of current liabilities and $35.3 million is presented as a component of non-
current liabilities.

We identified the computation of adjustments to the PFML as a critical audit matter because of the complex calculations
required to arrive at the correct tax basis upon which to calculate the corresponding PFML and deferred tax asset adjustments.
This involved complexity in applying the tax law, and calculations of (a) incremental amortizable step-up in tax basis, (b) the
iterative impact of the computation of adjustments to the PFML to owners and (c) the overall PFML. The amount of the PFML,
as well as the timing of such payments, is dependent upon a number of complex items including: (i) the tax basis in the units of
NCM LLC being issued as part of a common unit adjustment or exchanged for common stock of the Company, (ii) the
allocation of the tax basis step up to the applicable assets, (iii) the amount and timing of taxable income the Company generates
in future periods until the PFML is settled, (iv) the portion of the Company’s payments under the TRA that constitute imputed
interest or give rise to depreciable or amortizable tax basis and (v) the amount and timing of tax attribute utilization on a with
and without basis in accordance with the TRA.

How the Critical Audit Matter Was Addressed in the Audit

With the assistance of our income tax specialists, our audit procedures related to the computation of adjustments to the PFML
included the following procedures, among others:

• We tested the effectiveness of controls over the computation of adjustments to the PFML and deferred tax asset.

• We read the individual TRA and Exhibitor Services Agreement to compare the terms in each agreement for

consistency with the mathematical model used by management to calculate the adjustments to the PFML and deferred
tax asset.

• We evaluated management’s computation of adjustments to the year-end balance of the PFML amount by

recalculating the PFML at the end of the year, taking into account the various unit exchanges occurring during the year
as well as the additions in the PFML for each Common Unit Adjustment.

• We analyzed the impact of any taxable income limitations on the PFML.

• We prepared our own model to independently recompute the PFML and compare to the recorded balance.

• We reconciled realization of tax payments and deductions to the PFML.

/s/ Deloitte & Touche LLP

Denver, Colorado

April 13, 2023

We have served as the Company's auditor since 2006.

NATIONAL CINEMEDIA, INC. AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
(In millions, except share and per share data)

December 29, 2022

December 30, 2021

ASSETS

CURRENT ASSETS:

Cash and cash equivalents................................................................................................................................ $

61.7 $

Restricted cash..................................................................................................................................................

Short-term marketable securities......................................................................................................................

Receivables, net of allowance of $1.7 and $1.7, respectively..........................................................................

Prepaid expenses and other current assets........................................................................................................

Total current assets....................................................................................................................................

NON-CURRENT ASSETS:

Property and equipment, net of accumulated depreciation of $54.8 and $59.9, respectively..........................

Intangible assets, net of accumulated amortization of $270.2 and $245.6, respectively..................................

Other investments.............................................................................................................................................

Long-term marketable securities......................................................................................................................

Debt issuance costs, net....................................................................................................................................

Other assets.......................................................................................................................................................

Total non-current assets.............................................................................................................................

2.1

0.7

92.0

7.9

164.4

13.0

586.7

0.9

0.3

3.3

23.8

628.0

TOTAL ASSETS................................................................................................................................................... $

792.4 $

LIABILITIES AND EQUITY/(DEFICIT)

CURRENT LIABILITIES:

Amounts due to founding members, net (related party payables of $15.2 and $11.4, respectively)............... $

18.2 $

Payable to founding members under the TRA (related party payables of $0.2 and $0.0, respectively)..........

Accrued expenses.............................................................................................................................................

Accrued payroll and related expenses..............................................................................................................

Accounts payable..............................................................................................................................................

Deferred revenue..............................................................................................................................................

Short-term debt, net of debt issuance costs of $7.9 and $0.0, respectively......................................................

Other current liabilities.....................................................................................................................................

Total current liabilities...............................................................................................................................

NON-CURRENT LIABILITIES:

Long-term debt, net of debt issuance costs of $0.0 and $10.5, respectively....................................................

Payable to founding members under the TRA (related party payables of $25.5 and $11.9, respectively)......

Other liabilities.................................................................................................................................................

Total non-current liabilities.......................................................................................................................
Total
liabilities....................................................................................................................................................

COMMITMENTS AND CONTINGENCIES (NOTE 13)

EQUITY/(DEFICIT):

NCM, Inc. Stockholders’ Equity/(Deficit):

Preferred stock, $0.01 par value; 10,000,000 shares authorized, none issued and outstanding, respectively..

Common stock, $0.01 par value; 260,000,000 and 175,000,000 shares authorized, 128,402,636 and
80,626,889 issued and outstanding, respectively...........................................................................................

Additional paid in capital (deficit)...................................................................................................................

Retained earnings (distributions in excess of earnings)...................................................................................

Total NCM, Inc. stockholders’ equity/(deficit).........................................................................................

Noncontrolling interests...................................................................................................................................

Total equity/(deficit)..................................................................................................................................

0.3

17.8

8.3

25.0

10.2

1,121.1

2.2

1,203.1

—

35.3

18.0

53.3

1,256.4

—

1.3

(146.2)

(370.4)

(515.3)

51.3

(464.0)

TOTAL LIABILITIES AND EQUITY/DEFICIT................................................................................................. $

792.4 $

Refer to accompanying notes to Consolidated Financial Statements.

101.2

—

0.3

53.0

3.9

158.4

21.3

606.3

0.8

1.0

4.5

25.1

659.0

817.4

11.8

—

13.4

7.9

16.3

15.0

3.2

2.2

69.8

1,094.3

16.4

20.4

1,131.1

1,200.9

—

0.8

(195.5)

(332.0)

(526.7)

143.2

(383.5)

817.4

NATIONAL CINEMEDIA, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF OPERATIONS
(In millions, except share and per share data)

Years Ended

December 29,
2022

December 30,
2021

Revenue (including revenue from related parties of $14.4 and $8.8, respectively).................... $

249.2 $

114.6

OPERATING EXPENSES:

Advertising operating costs....................................................................................................

Network costs.........................................................................................................................
Theater access fees and revenue share to founding members (including fees to related
parties of $59.4 and $34.3, respectively).............................................................................

Selling and marketing costs....................................................................................................

Administrative and other costs...............................................................................................

Impairment of long-lived assets..............................................................................................

Depreciation expense..............................................................................................................

Amortization of intangibles recorded for network theater screen leases................................

Total...................................................................................................................................

OPERATING INCOME (LOSS)......................................................................................

NON-OPERATING EXPENSES:

Interest on borrowings............................................................................................................

(Gain) loss on early retirement of debt, net............................................................................
Loss (gain) on re-measurement of the payable to founding members under the TRA...........

Gain on sale of asset...............................................................................................................

Other non-operating income, net............................................................................................

Total...................................................................................................................................

27.2

8.4

82.3

42.8

44.3

5.8

6.5

25.0

242.3

6.9

79.7

(5.9)
2.2

(2.2)

(0.7)

73.1

18.4

7.4

51.1

34.7

36.0

—

10.9

24.7

183.2

(68.6)

64.8

1.2
(16.1)

—

(0.1)

49.8

LOSS BEFORE INCOME TAXES............................................................................................

(66.2)

(118.4)

Income tax expense.................................................................................................................

CONSOLIDATED NET LOSS..................................................................................................

Less: Net loss attributable to noncontrolling interests...........................................................

NET LOSS ATTRIBUTABLE TO NCM, INC..........................................................................
COMPREHENSIVE LOSS ATTRIBUTABLE TO NCM, INC................................................ $

—

(66.2)

(37.5)

(28.7)
(28.7) $

—

(118.4)

(69.7)

(48.7)
(48.7)

NET LOSS PER NCM, INC. COMMON SHARE:

Basic........................................................................................................................................ $

Diluted.................................................................................................................................... $

(0.35) $

(0.61)

WEIGHTED AVERAGE SHARES OUTSTANDING:

Basic........................................................................................................................................

81,968,007

79,867,332

Diluted....................................................................................................................................

81,968,007

79,867,332

Refer to accompanying notes to Consolidated Financial Statements.

NATIONAL CINEMEDIA, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF EQUITY/ (DEFICIT)
(In millions, except share and per share data)

NCM, Inc.

Common Stock

Consolidated

Amount

Additional
Paid in
Capital
(Deficit)

Retained
Earnings
(Distributions
in Excess of
Earnings)

Noncontrolling
Interest

Balance—December 31, 2020............................................. $

(268.6)

78,040,818 $

0.8 $

(207.5) $

(266.4) $

204.5

NCM LLC equity issued for purchase of
intangible asset.................................................................

Income tax and other impacts of NCM LLC
ownership changes...........................................................

14.2

(0.3)

—

Issuance of shares to founding members.............................

6.6

1,390,567

NCM, Inc. investment in NCM LLC..................................

Comprehensive loss, net of tax...........................................

(6.6)

(118.4)

—

Share-based compensation issued, net of tax......................

(1.9)

1,195,504

Share-based compensation expense/capitalized..................

Cash dividends declared $0.20 per share............................

8.4

(16.9)

—

6.8

1.7

6.6

(6.6)

—

(1.9)

5.4

—

(48.7)

—

(16.9)

Balance—December 30, 2021............................................. $

(383.5)

80,626,889 $

0.8 $

(195.5) $

(332.0) $

Accrued Distributions to founding members......................

NCM LLC equity issued for purchase of
intangible asset.................................................................

Income tax and other impacts of NCM LLC
ownership changes...........................................................

(4.9)

10.4

(17.3)

—

Issuance of shares to founding members.............................

12.4

46,638,443

NCM, Inc. investment in NCM LLC..................................

Comprehensive loss, net of tax...........................................

(12.4)

(66.2)

—

Share-based compensation issued, net of tax......................

(0.1)

1,137,304

Share-based compensation expense/capitalized..................

Cash dividends declared $0.11 per share............................

7.3

(9.7)

—

0.4

—

0.1

—

4.9

39.8

12.0

(12.4)

—

(0.2)

5.2

—

(28.7)

—

(9.7)

Balance—December 29, 2022............................................. $

(464.0)

128,402,636 $

1.3 $

(146.2) $

(370.4) $

7.4

(2.0)

—

(69.7)

—

3.0

—

143.2

(4.9)

5.5

(57.1)

—

(37.5)

—

2.1

—

51.3

Refer to accompanying notes to Consolidated Financial Statements.

NATIONAL CINEMEDIA, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In millions)

CASH FLOWS FROM OPERATING ACTIVITIES:

Consolidated net loss............................................................................................................................................................. $

(66.2) $

(118.4)

Years Ended

December 29,
2022

December 30,
2021

Adjustments to reconcile consolidated net loss to net cash used in operating activities:

Depreciation expense......................................................................................................................................................

Amortization of intangibles recorded for network theater screens.................................................................................

Non-cash share-based compensation..............................................................................................................................

Impairment of long-lived assets......................................................................................................................................

Bad-debt expense............................................................................................................................................................

Amortization of debt issuance costs...............................................................................................................................

(Gain) loss on early retirement of debt, net....................................................................................................................

Non-cash loss (gain) on re-measurement of the payable to founding members under the TRA....................................

Gain on sale of asset.......................................................................................................................................................

Other...............................................................................................................................................................................

Founding member integration and encumbered theater payments (including
payments from related parties of $0.0 and $0.0, respectively)...........................................................................................

Payment to founding members under the TRA.....................................................................................................................

Common membership unit adjustment received...................................................................................................................

Other cash flows from operating activities, net.....................................................................................................................

Changes in operating assets and liabilities:

Receivables, net..............................................................................................................................................................

Accounts payable and accrued expenses........................................................................................................................

Amounts due to founding members, net.........................................................................................................................

Deferred revenue.............................................................................................................................................................

Other, net........................................................................................................................................................................

Net cash used in operating activities............................................................................................................................

CASH FLOWS FROM INVESTING ACTIVITIES:

Purchases of property and equipment....................................................................................................................................

Proceeds from sale and maturities of marketable securities..................................................................................................
Proceeds from sale of asset....................................................................................................................................................

Net cash used in investing activities.............................................................................................................................

CASH FLOWS FROM FINANCING ACTIVITIES:

Payment of dividends............................................................................................................................................................

Issuance of revolving credit facility......................................................................................................................................

Issuance of term loans...........................................................................................................................................................

Repayments of term loan facility..........................................................................................................................................

Repayment Notes due 2028...................................................................................................................................................

Payment of debt issuance costs.............................................................................................................................................

Repurchase of stock for restricted stock tax withholding......................................................................................................

Net cash provided by financing activities....................................................................................................................

CHANGE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH...........................................................................

Cash and cash equivalents at beginning of period.................................................................................................................

6.5

25.0

7.1

5.8

1.0

8.9

(5.9)

2.2

(2.2)

(0.4)

2.8

—

0.1

(40.0)

14.2

1.0

(4.8)

(2.4)

(47.3)

(2.9)

0.3
2.2
(0.4)

(9.5)

50.0

—

(3.2)

(19.8)

(7.0)

(0.2)

10.3

(37.4)

101.2

Cash, cash equivalents and restricted cash at end of period.................................................................................................. $

63.8 $

Refer to accompanying notes to Consolidated Financial Statements.

10.9

24.7

8.1

—

4.1

1.2

(16.1)

—

0.2

0.5

(0.9)

9.3

—

(36.8)

2.3

10.9

7.5

(2.7)

(95.2)

(5.7)

0.3
—
(5.4)

(16.9)

—

50.0

(2.3)

—

(7.3)

(2.0)

21.5

(79.1)

180.3

101.2

NATIONAL CINEMEDIA, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)
(In millions)

Years Ended

December 29,
2022

December 30,
2021

Supplemental disclosure of non-cash financing and investing activity:

Purchase of an intangible asset with NCM LLC equity......................................................... $
Accrued distributions to founding members (including accrued payments due to
related parties of $4.9 and $0.0, respectively)..................................................................... $

Purchase of subsidiary equity with NCM, Inc. equity............................................................ $

Accrued purchases of property and equipment....................................................................... $
Dividends declared not requiring cash in the period.............................................................. $

Supplemental disclosure of cash flow information:

Cash paid for interest.............................................................................................................. $

Cash payments (refunds) for income taxes............................................................................. $

10.4 $

14.1

4.9 $

12.4 $

0.8 $
0.7 $

66.5 $

0.1 $

—

—
0.9

58.6

(0.1)

Refer to accompanying notes to Consolidated Financial Statements.

NATIONAL CINEMEDIA, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

NCM, Inc. was incorporated in Delaware as a holding company formed with the purpose of becoming a member and

sole manager of NCM LLC, a limited liability company owned by NCM, Inc. and Cinemark. The terms “NCM”, “the
Company” or “we” shall, unless the context otherwise requires, be deemed to include the consolidated entity.

The Company operates the largest cinema advertising network reaching movie audiences in the U.S., allowing NCM

LLC to sell advertising under long-term ESAs with the founding members and certain third-party network affiliates, under
long-term network affiliate agreements. The impacts from the COVID-19 Pandemic have had and continue to have an effect on
the world and our business. All of the theaters within the Company’s network are open and the release of major motion pictures
resumed in the third quarter of 2021. The movie slate for 2022 improved from prior years but continued to be limited by post-
production delays and major motion picture release schedule changes. Attendance levels increased from the prior year, but have
not met historical levels and were not consistent throughout the year due to timing of major motion picture releases. In-theater
advertising revenue for the year ended December 30, 2021 and the year ended December 29, 2022 also remained below
historical levels due in part to a lag between the recovery of attendees and advertisers, as well as current macroeconomic
factors.

On September 17, 2019, NCM LLC entered into the 2019 ESA Amendments. The 2019 ESA Amendments extended the

contract life of the ESAs with Cinemark and Regal by four years resulting in a weighted average remaining term of the ESAs
with the founding members of approximately 16.8 years as of December 29, 2022. The network affiliate agreements expire at
various dates between May 29, 2023 and December 31, 2037. The weighted average remaining term (based on pre-COVID-19
attendance levels) of the ESAs and the network affiliate agreements together is 14.0 years as of December 29, 2022.

In December 2022, AMC and Regal each redeemed all of their outstanding membership units, 5,954,646 and

40,683,797, respectively, in exchange for shares of NCM, Inc. common stock, reducing AMC’s and Regal’s ownership to 0.0%
as of December 29, 2022. NCM, Inc.’s primary source of cash flow from operations is distributions from NCM LLC pursuant
to the NCM LLC Operating Agreement. NCM, Inc. also receives management fees pursuant to a management services
agreement with NCM LLC in exchange for providing specified management services to NCM LLC.

As of December 29, 2022, NCM LLC had 172,093,433 common membership units outstanding, of which 128,402,636

(74.6%) were owned by NCM, Inc., 43,690,797 (25.4%) were owned by Cinemark, 0 (0.0%) were owned by Regal and 0
(0.0%) were owned by AMC. The membership units held by the founding members are exchangeable into NCM, Inc. common
stock on a one-for-one basis, at the discretion of the holder.

Going Concern—The accompanying audited Consolidated Financial Statements are prepared in accordance with GAAP
applicable to a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course
of business.

NCM LLC filed a petition for reorganization under Chapter 11 of the United States Bankruptcy Code in the Southern

District of Texas on April 11, 2023. NCM, Inc. expects to continue to manage NCM LLC, the “debtor in possession”, under the
jurisdiction of the Bankruptcy Court and in accordance with the applicable provisions of the Bankruptcy Code and orders of the
Bankruptcy Court. In general, as debtor in possession under the Bankruptcy Code, NCM LLC is authorized to continue to
operate as an ongoing business but may not engage in transactions outside the ordinary course of business without the prior
approval of the Bankruptcy Court. As a result of the bankruptcy petition, the realization of NCM LLC’s assets and the
satisfaction of liabilities are subject to significant uncertainty. These conditions and events raise substantial doubt about the
Company’s ability to continue as a going concern. Given the Chapter 11 Case, NCM LLC’s outstanding debt became
immediately due and payable and was reclassified as current within the Company’s audited Consolidated Balance Sheet as of
December 29, 2022. Further, a Chapter 11 plan of reorganization for NCM LLC is likely to materially change the amounts and
classifications of assets and other liabilities reported in the Company’s audited Consolidated Balance Sheet as of December 29,
2022. As the progress of these plans and transactions is subject to approval of the Bankruptcy Court and therefore not within
our control, NCM LLC’s successful reorganization and emergence from bankruptcy cannot be considered probable. As a
result, the proceedings do not alleviate the substantial doubt about the Company’s ability to continue as a going concern.

The audited Consolidated Financial Statements do not include any adjustments relating to the recoverability and
classification of recorded asset amounts or the amounts and classification of liabilities that might result from the outcome of the
going concern uncertainty.

Basis of Presentation

The Company has prepared its Consolidated Financial Statements and related notes of NCM, Inc. in accordance with

accounting principles generally accepted in the United States of America (“GAAP”) and the rules and regulations of the
Securities and Exchange Commission (“SEC”).

NATIONAL CINEMEDIA, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

In the opinion of management, all adjustments necessary to present fairly in all material respects the financial position,

results of operations and cash flows for all periods presented have been made and all intercompany accounts have been
eliminated in consolidation. The Company’s business is seasonal and for this and other reasons operating results for interim
periods may not be indicative of the Company’s full year results or future performance. As a result of the various related-party
agreements discussed in Note 9—Related Party Transactions, the operating results as presented are not necessarily indicative
of the results that might have occurred if all agreements were with non-related third parties.

Advertising is the principal business activity of the Company and is the Company’s only operating and reportable

segment under the requirements of ASC 280—Segment Reporting.

Estimates—The preparation of the financial statements in conformity with GAAP requires management to make

estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and
liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.
Significant estimates include those related to the reserve for uncollectible accounts receivable, share-based compensation,
income taxes, intangible assets and forecasts utilized to evaluate the Company’s ability to continue as a going concern. Actual
results could differ from those estimates.

Significant Accounting Policies

Accounting Period—The Company has a 52-week or 53-week fiscal year ending on the first Thursday after December
25. Fiscal year 2021 contained 52 weeks and 2022 contained 52 weeks. Throughout this document, the fiscal years are referred
to as set forth below:

Fiscal Year Ended
December 29, 2022.....................................................................................................................................
December 30, 2021.....................................................................................................................................

Reference in
this Document
2022
2021

Revenue Recognition—The Company derives revenue principally from the sale of advertising to national, regional and
local businesses in Noovie®, our cinema advertising and entertainment show seen on movie screens across the U.S., as well as
on our LEN, a series of strategically-placed screens located in movie theater lobbies, as well as other forms of advertising and
promotions in theater lobbies. In addition, the Company sells online and mobile advertising, including through Noovie
Audience Accelerator, through NCM's digital gaming products including Noovie Trivia, Name That Movie and Noovie Shuffle,
which can be played on the mobile apps and through partnerships with certain internet platforms. Further the Company sells
advertising in a variety of complementary out of home venues, including restaurants, convenience stores and college campuses.
The Company also has a long-term agreement to exhibit the advertising of the founding members’ beverage suppliers. The
Company considers the terms of each arrangement to determine the appropriate accounting treatment as more fully discussed in
Note 2—Revenue from Contracts with Customers.

Operating Costs—The Company classifies its core operating expenses within the following categories on the audited

Consolidated Statements of Operations:

Advertising operating costs—This balance relates to advertising fulfillment-related operating costs primarily consisting
of personnel and other costs, revenue share and per patron based fees due to network affiliates and other sales partners, and to a
lesser extent, production costs of non-digital advertising.

Network costs—This balance consists of personnel, satellite bandwidth, repairs and other costs of maintaining and

operating the digital network as well as preparing advertising and other content for transmission across the digital network.

Theater access fees and revenue share to founding members—This balance consists of payments to the founding
members in return for the rights to advertise in their theaters comprised of a payment per theater attendee, a payment for post-
showtime advertising, a payment per digital screen and a payment per digital cinema projector equipped in the theaters, all of
which escalate over time, and revenue share for the Platinum Spot, when sold.

Selling and marketing costs—This balance consists primarily of sales personnel costs including sales commissions and
selling related expenses such as travel, barter and bad debt expense, marketing expenses including research subscriptions and
studies and production costs for internal segments shown within the Noovie® show, lease expense for the Company’s sales
offices and costs associated with digital inventory, including revenue shares paid to DOOH and other partners. This balance
also includes advertising-related costs incurred promoting the Company's digital products. The Company recognized
advertising costs of $0.0 million and $0.1 million for the years ended December 29, 2022 and December 30, 2021, respectively.
These costs are expensed when incurred.

Administrative and other costs—This balance consists of personnel costs for the Company’s executives as well as

administrative functions including legal, information technology and accounting, lease expense for the Company’s

NATIONAL CINEMEDIA, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

headquarters, legal and professional fees, cloud computing costs for the Company’s cinema advertising management system
and repairs and maintenance costs.

Cash and Cash Equivalents—All highly liquid debt instruments and investments purchased with an original maturity of

three months or less are classified as cash equivalents and are considered available-for-sale securities. There are cash balances
in a bank in excess of the federally insured limits or in the form of a money market demand account with a major financial
institution. The Company has elected the fair value option for valuing its cash equivalents. The cash equivalents are valued at
fair value at each balance sheet date and the change in value from the prior period is recognized within “Other non-operating
income, net” on the audited Consolidated Statements of Operations.

Restricted Cash— The Company’s restricted cash balance was $2.1 million and $0.0 million for the years ended
December 29, 2022 and December 30, 2021, respectively. The balance as of December 29, 2022 related to fees due to Regal in
accordance with the ESA which were held in escrow in conjunction with the Cineworld Proceeding.

Marketable Securities—The Company’s marketable securities are classified as available-for-sale and are reported at fair
value. The fair value of substantially all securities is determined by quoted market information and pricing models using inputs
based upon market information, including contractual terms, market prices and yield curves. The estimated fair value of
securities for which there are no quoted market prices is based on similar types of securities that are traded in the market. The
change in value from the prior period is recognized within “Other non-operating income, net” on the audited Consolidated
Statements of Operations.

Concentration of Credit Risk and Significant Customers—The risk of credit loss related to the Company's trade
receivables and unbilled receivables balances is accounted for through the allowance for doubtful accounts, a contra asset
account which reduces the net receivables balance. The allowance for doubtful accounts balance is determined by pooling the
Company's receivables with similar risk characteristics, specifically by type of customer (national or local/ regional) and then
age of receivable, and applying historical write off percentages to these pools in order to determine the amount of expected
credit losses as of the balance sheet date. National receivables are with large advertising agencies with strong reputations in the
advertising industry and clients with stable financial positions and good credit ratings, represent larger receivables balances per
customer and have significantly lower historical and expected credit loss patterns. Local and regional receivables are with
smaller companies sometimes with less credit history and represent smaller receivable balances per customer and higher
historical and expected credit loss patterns. The Company has smaller contracts with many local clients that are not individually
significant. The Company also considers current economic conditions and trends to determine whether adjustments to historical
loss rates are necessary. The Company decreased the expected rate of default related to local and regional customers within the
calculation of the allowance for doubtful accounts as of December 29, 2022, as compared to December 30, 2021, given the
recovery of the previously identified at-risk small businesses (e.g. restaurants, travel, etc.) from the adverse impact of the
COVID-19 Pandemic. The Company also reserves for specific receivable balances that it expects to write off based on known
concerns regarding the financial health of the customer. Receivables are written off when management determines amounts are
uncollectible. As of December 29, 2022 and December 30, 2021 there was one advertising agency group through which the
Company sources national advertising revenue that accounted for 13.0% and 15.7%, respectively, of the Company’s
outstanding gross receivable balance. During the years ended December 29, 2022 and December 30, 2021, the Company had
one customer that accounted for 12.9% and 11.8%, respectively, of the Company's revenue.

Receivables consisted of the following (in millions):

As of

Trade accounts.................................................................................................................... $
Other...................................................................................................................................
Less: Allowance for doubtful accounts...............................................................................

Total................................................................................................................................ $

December 29, 2022

December 30, 2021
53.7
1.0
(1.7)
53.0

93.1 $
0.6
(1.7)
92.0 $

Long-lived Assets—Property and equipment is stated at cost, net of accumulated depreciation or amortization.

Generally, the equipment associated with the digital network of the founding member theaters is owned by the founding
members, while the equipment associated with network affiliate theaters is owned by the Company. Major renewals and
improvements are capitalized, while replacements, maintenance, and repairs that do not improve or extend the lives of the
respective assets are expensed as incurred. The Company records depreciation using the straight-line method over the following
estimated useful lives:

Equipment.................................................................................. 4-10 years
Computer hardware and software.............................................. 3-5 years
Leasehold improvements........................................................... Lesser of lease term or asset life

NATIONAL CINEMEDIA, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Software and website development costs developed or obtained for internal use are accounted for in accordance with

ASC 350—Internal Use Software and ASC 350– Website Development Costs. The subtopics require the capitalization of
certain costs incurred in developing or obtaining software for internal use. Software costs related primarily to the Company’s
cinema advertising management system, digital products, digital network distribution system (DCS), enterprise resource
planning system and website development costs, which are included in equipment, and are depreciated over three to ten years.
As of December 29, 2022 and December 30, 2021, the Company had a net book value of $7.4 million and $13.7 million,
respectively, of capitalized software and website development costs. Depreciation expense related to software and website
development was approximately $3.8 million and $6.8 million for the years ended December 29, 2022 and December 30, 2021,
respectively. The subtopics also require the capitalization of certain implementation costs related to qualifying Cloud
Computing Arrangements (“CCAs”) upon adoption of ASU 2018-15— Intangibles - Goodwill and Other - Customer’s
Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract as of September
28, 2018. As of December 29, 2022 and December 30, 2021 the Company had a net book value of $3.7 million and $4.0
million of capitalized implementation costs for CCAs, respectively. These costs primarily relate to the Company's hosted
cinema advertising management system which was implemented in January 2021. Depreciation expense related to capitalized
implementation costs for CCAs was approximately $0.4 million and $0.4 million for the years ended December 29, 2022 and
December 30, 2021, respectively. These costs are amortized to “Administrative and other costs” within the audited
Consolidated Statements of Operations over the life of the hosting arrangement beginning at implementation. For the years
ended December 29, 2022 and December 30, 2021, the Company recorded $4.6 million and $1.7 million in research and
development expense, respectively.

The Company assesses impairment of long-lived assets pursuant with ASC 360 – Property, Plant and Equipment. This
includes determining if certain triggering events have occurred that could affect the value of an asset. The Company recorded
losses of $5.8 million and $0.0 million related to the write-off of certain internally developed software during the years ended
December 29, 2022 and December 30, 2021, respectively, which has been included within “Impairment of long-lived assets”
within the respective audited Consolidated Statements of Operations. The Company also recorded losses of $0.0 million and
$0.2 million related to the write-off of equipment during the years ended December 29, 2022 and December 30, 2021,
respectively, which has been included within “Depreciation expense” within the respective audited Consolidated Statements of
Operations given the immaterial nature of the balances.

Intangible Assets—Intangible assets consist of contractual rights to provide its services within the theaters of the
founding members and network affiliates and are stated at cost, net of accumulated amortization. The Company records
amortization using the straight-line method over the contractual life of the intangibles, corresponding to the term of the ESAs or
the term of the contract with the network affiliate. Intangible assets are tested for impairment whenever events or changes in
circumstances indicate the carrying value may not be fully recoverable. In its impairment testing, the Company estimates the
fair value of its ESAs or network affiliate agreements by determining the estimated future cash flows associated with the ESAs
or network affiliate agreements. If after determining that gross cash flows are insufficient to recover the asset, the estimated fair
value is less than the carrying value, the intangible asset is written down to its estimated fair value. Significant judgment is
involved in estimating long-term cash flow forecasts. Refer to Note 5—Intangible Assets to the audited Consolidated Financial
Statements for discussion of the Company's consideration of the impact of the Cineworld Proceeding within the impairment
testing performed over the Company's intangible assets during the year ended December 29, 2022. The Company recorded $0.0
million and $0.0 million, respectively, in impairment charges related to intangible assets during the years ended December 29,
2022 and December 30, 2021. The Company has elected to capitalize extension costs on its intangible assets and thus
capitalized the legal and professional costs incurred in conjunction with the 2019 ESA Amendments.

Amounts Due to/from Founding Members—Amounts due to/from founding members include amounts due for the

theater access fees and revenue share, offset by a receivable for advertising time purchased by the founding members on behalf
of their beverage concessionaire, plus any amounts outstanding under other contractually obligated payments. Payments to or
received from the founding members against outstanding balances are made monthly. Available cash distributions are made
quarterly contingent upon the Company's compliance with the covenants outlined within the Credit Agreement Second and
Third Amendments and in accordance with the NCM LLC Operating Agreement.

Income Taxes—Income taxes are accounted for under the asset and liability method, which requires recognition of
deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial
statements. Under this method, deferred tax assets and liabilities are determined based on the differences between the financial
statements and tax basis of assets and liabilities using enacted tax rates in effect for the year in which differences are expected
to be recovered or settled pursuant to the provisions of ASC 740 – Income Taxes. The effect of a change in tax rates on deferred
tax assets and liabilities is recognized in income in the period that includes the enactment date.

The Company records a valuation allowance if it is deemed more likely than not that all or a portion of its deferred

income tax assets will not be realized, which will be assessed on an on-going basis. Only the portion of deferred income tax
assets deemed more likely than not to be realized are considered within the calculation of the payable to the founding members

NATIONAL CINEMEDIA, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

under the TRA which is equal to 90% of the Company’s actual tax benefit realized from the tax amortization of the basis
difference for qualifying deferred income tax assets. Refer to Note 7—Income Taxes to the audited Consolidated Financial
Statements for discussion of changes within the Company's valuation allowance on its deferred tax assets during the years
ended December 29, 2022 and December 30, 2021.

In addition, income tax rules and regulations are subject to interpretation and the application of those rules and
regulations require judgment by the Company and may be challenged by the taxation authorities. The Company follows ASC
740-10-25, which requires the use of a two-step approach for recognizing and measuring tax benefits taken or expected to be
taken in a tax return and disclosures regarding uncertainties in income tax positions. Only tax positions that meet the more
likely than not recognition threshold are recognized. In addition, income tax rules and regulations are subject to interpretation
and the application of those rules and regulations require judgment by the Company and may be challenged by the taxation
authorities. The Company follows ASC 740-10-25, which requires the use of a two-step approach for recognizing and
measuring tax benefits taken or expected to be taken in a tax return and disclosures regarding uncertainties in income tax
positions. Only tax positions that meet the more likely than not recognition threshold are recognized.

The Company recognizes the tax benefits from uncertain tax positions only when it is more likely than not, based on the

technical merits of the position, the tax position will be sustained upon examination, including the resolution of any related
appeals or litigation. The tax benefits recognized in the 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. The Company
recognizes interest and penalties related to uncertain tax positions in income tax expense.

Debt Issuance Costs—In relation to the issuance of outstanding debt discussed in Note 10—Borrowings, there is a

balance of $11.2 million and $15.0 million in deferred financing costs as of December 29, 2022 and December 30, 2021,
respectively. The debt issuance costs are being amortized on a straight-line basis over the terms of the underlying obligations
and are included in interest on borrowings, which approximates the effective interest method. Debt issuance costs are written-
off in the event that the underlying debt is extinguished through partial or full repayment of the obligation.

The changes in debt issuance costs are as follows (in millions):

Years Ended

December 29,
2022

December 30,
2021

Beginning balance....................................................................................................................... $
Debt issuance costs.................................................................................................................
Amortization of debt issuance costs.......................................................................................
Ending balance............................................................................................................................ $

15.0 $
5.1
(8.9)
11.2 $

11.3
7.8
(4.1)
15.0

Share-Based Compensation—During 2022 and 2021, the Company issued stock options and restricted stock
units. Restricted stock units vest upon the achievement of Company two or three-year cumulative performance measures and
service conditions or only service conditions. The Company recognizes share-based compensation net of an estimated forfeiture
rate. Compensation expense of restricted stock units that vest upon the achievement of Company performance measures is
based on management’s financial projections and the probability of achieving the projections, which require considerable
judgment. A cumulative adjustment is recorded to share-based compensation expense in periods that management changes its
estimate of the number of shares expected to vest. Ultimately, the Company adjusts the expense recognized to reflect the actual
vested shares following the resolution of the performance conditions. Dividends are accrued when declared on unvested
restricted stock units that are expected to vest and are only paid with respect to shares that actually vest.

Compensation cost of stock options is based on the estimated grant date fair value using the Black-Scholes option
pricing model, which requires that the Company make estimates of various factors. Under the fair value recognition provisions
of ASC 718 Compensation – Stock Compensation, the Company recognizes share-based compensation net of an estimated
forfeiture rate, and therefore only recognizes compensation cost for those shares expected to vest over the requisite service
period of the award. Refer to Note 11—Share-Based Compensation for more information.

Fair Value Measurements—Fair value is the price that would be received from selling an asset or paid to transfer a

liability in an orderly transaction between market participants at the measurement date. Fair value is estimated by applying the
following hierarchy, which prioritizes the inputs used to measure fair value into three levels and bases the categorization within
the hierarchy upon the lowest level of input that is available and significant to the fair value measurement:

Level 1 – Quoted prices in active markets for identical assets or liabilities.

Level 2 – Observable inputs other than quoted prices in active markets for identical assets and liabilities, quoted
prices for identical or similar assets or liabilities in inactive markets, or other inputs that are observable or can be
corroborated by observable market data for substantially the full term of the assets or liabilities.

NATIONAL CINEMEDIA, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Level 3 – Inputs that are generally unobservable and typically reflect management’s estimate of assumptions that
market participants would use in pricing the asset or liability.

Consolidation—NCM, Inc. consolidates the accounts of NCM LLC under the provisions of ASC 810, Consolidation

(“ASC 810”). Under Accounting Standards Update 2015-2, Consolidation (Topic 810): Amendments to the Consolidation
Analysis (“ASU 2015-2”), a limited partnership is a variable interest entity unless a simple majority or lower threshold of all
limited partners unrelated to the general partner have kick-out or participating rights. The non-managing members of NCM
LLC do not have dissolution rights or removal rights. NCM, Inc. has evaluated the provisions of the NCM LLC membership
agreement and has concluded that the various rights of the non-managing members are not substantive participating rights
under ASC 810, as they do not limit NCM, Inc.’s ability to make decisions in the ordinary course of business. As such, the
Company concluded that NCM LLC is a variable interest entity and determined that NCM, Inc. should consolidate the accounts
of NCM LLC pursuant to ASU 2015-2 because 1) it has the power to direct the activities of NCM LLC in its role as managing
member and 2) NCM, Inc. has the obligation to absorb losses of, or the right to receive benefits from, NCM LLC that could
potentially be significant provided its 74.6% ownership in NCM LLC. Prior to the prospective adoption of ASU 2015-2 in the
first quarter of 2016, the Company reached the same conclusion under previous guidance in ASC 810 to consolidate NCM
LLC.

The following table presents the changes in NCM, Inc.’s equity resulting from net income attributable to NCM, Inc. and

transfers to or from noncontrolling interests (in millions):

Years Ended

December 29,
2022

December 30,
2021

Net loss attributable to NCM, Inc............................................................................................... $

(28.7) $

(48.7)

NCM LLC equity issued for purchase of intangible asset..........................................................
Income tax and other impacts of NCM LLC ownership changes...............................................

NCM, Inc. investment in NCM LLC..........................................................................................

Issuance of shares to founding members.....................................................................................
Change from net loss attributable to NCM, Inc. and transfers from
noncontrolling interests............................................................................................................ $

4.9
39.8

(12.4)

12.0

6.8
1.7

(6.6)

6.6

15.6 $

(40.2)

Recently Adopted Accounting Pronouncements

The Company did not adopt any new accounting pronouncements during the year ended December 29, 2022.

Recently Issued Accounting Pronouncements

In March 2020, the FASB issued Accounting Standards Update No. 2020-04, Reference Rate Reform (“ASU 2020-04”),
which provides temporary optional guidance to companies impacted by the transition away from the London Interbank Offered
Rate (“LIBOR”). The guidance provides certain expedients and exceptions to applying GAAP in order to lessen the potential
accounting burden when contracts, hedging relationships, and other transactions that reference LIBOR as a benchmark rate are
modified. This guidance is effective upon issuance and expires on December 31, 2024. The Company concluded the LIBOR
transition did not have a material impact on the Company’s Consolidated Financial Statements.

The Company has considered all other recently issued accounting pronouncements and does not believe the adoption of

such pronouncements will have a material impact on its Consolidated Financial Statements or notes thereto.

REVENUE FROM CONTRACTS WITH CUSTOMERS

Revenue Recognition

The Company derives revenue principally from the sale of advertising to national, regional and local businesses in
Noovie®, our cinema advertising and entertainment show seen on movie screens across the U.S., as well as on our LEN, a
series of strategically-placed screens located in movie theater lobbies, as well as other forms of advertising and promotions in
theater lobbies. In addition, the Company sells online and mobile advertising, including through Noovie Audience Accelerator,
through NCM's digital gaming products including Noovie Trivia, Name That Movie and Noovie Shuffle, which can be played on
the mobile app and through partnerships with certain internet platforms. Further the Company sells advertising in a variety of
complementary out of home venues, including restaurants, convenience stores and college campuses. The Company also has a
long-term agreement to exhibit the advertising of the founding members’ beverage suppliers.

National and regional advertising, including advertising under the beverage concessionaire and courtesy PSA
agreements, are sold on a CPM basis. The Company recognizes national and regional advertising over time as impressions (or
theater attendees) are delivered. National advertising is also sold to content partners. The content partners provide the Company

NATIONAL CINEMEDIA, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

with original entertainment content segments, typically 90 seconds in length, that are entertaining, informative, or educational
in nature in the Noovie show and they make commitments to buy a portion of the Company’s advertising inventory at a
specified CPM. The Company recognizes revenue for the content segments ratably over time as the content segments air. Local
advertising is sold on a per-screen, per-week basis and to a lesser extent on a CPM basis. The Company recognizes local on-
screen advertising revenue over the period in which the advertising airs as dictated by the underlying sales contracts. When sold
separately, LEN advertising and lobby promotions are sold based on length and breadth of the promotion. The Company
recognizes revenue derived from lobby network and promotions over time when the advertising is displayed in theater lobbies.
The Company sells online and mobile advertising on a CPM basis. The Company recognizes revenue from branded
entertainment websites and mobile applications over time as the online or mobile impressions are served.

Customer contracts often include multiple advertising services to reach the moviegoer at multiple points during a theater

experience. The Company considers each of these advertising services to represent distinct performance obligations of the
contract and allocates a portion of the transaction price to each service based upon the standalone selling price of the service,
when available. When standalone selling prices are not available or not applicable given the nature of the customer, the
Company allocates the transaction price based upon all information that is reasonably available and maximizes the use of
observable inputs. Methods utilized include the adjusted market and expected cost-plus margin approaches.

The Company enters into barter transactions that exchange advertising program time for products and services used

principally for selling and marketing activities. The Company records barter transactions at the estimated fair value of the
products and services received. Revenue for advertising barter transactions is recognized when advertising is provided, and
products and services received are charged to expense when used. Revenue from barter transactions for the years ended
December 29, 2022 and December 30, 2021 was $0.0 million and $0.4 million, respectively. Expense recorded from barter
transactions for the years ended December 29, 2022 and December 30, 2021 was $0.0 million and $0.7 million, respectively.
This expense is included within “Selling and marketing costs” on the audited Consolidated Statements of Operations.

The Company recognizes revenue as the performance obligation for the advertising services is satisfied. Invoices are

generated following the processing of each revenue contract and payment is due from the customer within 30 days of the
invoice date. Customers select to pay the invoice in full at the start of a contract or through equal monthly installments over the
course of the contract. The Company records deferred revenue when cash payments are received, or invoices are issued, in
advance of revenue being earned. Deferred revenue is classified as a current liability as it is expected to be earned within the
next twelve months.

The Company does not have any contracts with terms in excess of one year that are noncancellable as of December 29,
2022. Agreements with a duration less than one year are not included within this disclosure as the Company elected to use the
practical expedient in ASC 606-10-50-14 for those contracts. In addition, the Company’s contracts longer than one year that
are cancellable are not included within this disclosure.

Disaggregation of Revenue

The Company disaggregates revenue based upon the type of customer: national; local and regional; and beverage

concessionaire. This method of disaggregation is in alignment with how revenue is reviewed by management and discussed
with and historically disclosed to investors. The Company has changed the presentation of revenues in the table below,
retrospectively, to have Regional advertising revenue now be included with Local advertising revenue rather than with National
advertising revenue as of December 29, 2022. This presentation change did not affect total consolidated revenue.

The following table summarizes revenue from contracts with customers for the years ended December 29, 2022 and

December 30, 2021 (in millions):

Years ended

December 29, 2022

December 30, 2021

National advertising revenue........................................................................................... $
Local and Regional advertising revenue.........................................................................
Founding member advertising revenue from beverage concessionaire agreements.......
Total revenue................................................................................................................... $

187.1 $
43.5
18.6
249.2 $

84.2
19.3
11.1
114.6

Deferred Revenue and Unbilled Accounts Receivable

The Company has changed the classification of the make good provision, retrospectively, to now be included within
“Deferred Revenue” on the audited Consolidated Balance Sheet rather than “Accrued Expenses” as of December 29, 2022.
Revenue recognized in the year ended December 29, 2022 that was included within the Deferred Revenue balance as of
December 30, 2021 was $12.3 million.

NATIONAL CINEMEDIA, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Unbilled accounts receivable is classified as a current asset as it is expected to be billed within the next twelve months.

As of December 29, 2022 and December 30, 2021, the Company had $5.0 million and $4.4 million, respectively, in unbilled
accounts receivable, included within the accounts receivable balance.

Practical Expedients and Exemptions

The Company expenses sales commissions when incurred as the amortization period would have been one year or less.

These costs are recorded within “Selling and marketing costs” in the audited Consolidated Statements of Operations.

Allowance for Doubtful Accounts

The allowance for doubtful accounts balance is determined separately for each pool of the Company's receivables with
similar risk characteristics. The Company has determined that two pools, national customers and local/ regional customers, is
appropriate. The changes within the allowance for doubtful accounts balances for the years ended December 29, 2022 and
December 30, 2021 were as follows (in millions):

Years Ended

December 29, 2022

December 30, 2021

Allowance for
National Customer
Receivables

Allowance for Local/
Regional Customer
Receivables

Allowance for
National Customer
Receivables

Allowance for Local/
Regional Customer
Receivables

Balance at beginning of period................. $

Provision for bad debt..............................

Write-offs, net of recoveries.....................

Balance at end of period........................... $

LOSS PER SHARE

0.3 $

0.2

(0.2)

0.3 $

1.4 $

0.8

(0.8)

1.4 $

0.2 $

0.1

—

0.3 $

2.1

—

(0.7)

1.4

Basic loss per share is computed on the basis of the weighted average number of common shares outstanding. Diluted

loss per share is computed on the basis of the weighted average number of common shares outstanding plus the effect of
potentially dilutive common stock options, restricted stock and exchangeable NCM LLC common units using the treasury stock
method. The components of basic and diluted loss per NCM, Inc. share are as follows:

Years Ended

December 29, 2022

December 30, 2021

Net loss attributable to NCM, Inc. (in millions).................................................................. $
Weighted average shares outstanding:

(28.7) $

(48.7)

Basic................................................................................................................................
Add: Dilutive effect of stock options, restricted
stock, and exchangeable NCM LLC common
membership units..........................................................................................................
Diluted.............................................................................................................................

81,968,007

79,867,332

—
81,968,007

—
79,867,332

Loss per NCM, Inc. share:

Basic................................................................................................................................ $
Diluted............................................................................................................................. $

(0.35) $
(0.35) $

(0.61)
(0.61)

The effect of the 88,801,009 and 85,748,080 weighted average exchangeable NCM LLC common membership units
held by the founding members for the years ended December 29, 2022 and December 30, 2021, respectively, was excluded
from the calculation of diluted weighted average shares and earnings per NCM, Inc. share as it was antidilutive in these
periods. In addition, there were 7,273,378 and 4,646,960, stock options and non-vested (restricted) shares for the years ended
December 29, 2022 and December 30, 2021, respectively, excluded from the calculation as they were antidilutive. The
Company’s non-vested (restricted) shares do not meet the definition of a participating security as the dividends will not be paid
if the shares do not vest.

NATIONAL CINEMEDIA, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

PROPERTY AND EQUIPMENT

The following is a summary of property and equipment, at cost less accumulated depreciation (in millions):

Equipment, computer hardware and software.................................................................... $

Leasehold improvements....................................................................................................

Less: Accumulated depreciation.........................................................................................

Subtotal...........................................................................................................................

Construction in progress.....................................................................................................

63.8 $

2.9

(54.8)

11.9

1.1

Total property and equipment........................................................................................ $

13.0 $

76.9

2.9

(59.9)

19.9

1.4

21.3

As of

December 29, 2022

December 30, 2021

INTANGIBLE ASSETS

The Company’s intangible assets consist of contractual rights to provide its services within the theaters of the founding
members and network affiliates. The Company records amortization using the straight-line method over the contractual life of
the intangibles, corresponding to the term of the ESAs or the term of the contract with the network affiliate. The Company’s
intangible assets with the founding members are recorded at the fair market value of NCM, Inc.’s publicly traded stock as of the
date on which the common membership units were issued. The NCM LLC common membership units are fully convertible into
NCM, Inc.’s common stock. The Company also records intangible assets for upfront fees paid to network affiliates upon
commencement of a network affiliate agreement. Pursuant to ASC 350-10—Intangibles—Goodwill and Other, the Company’s
intangible assets have a finite useful life and the Company amortizes the assets over the remaining useful life corresponding
with the ESAs or the term of the contract with the network affiliate. The Company extended the useful life of the intangible
asset for Cinemark and Regal in 2019 following the extension of the ESA term in conjunction with the 2019 ESA Amendments.
There was no impact to the Payable to founding members under tax receivable agreement as the useful life of the intangible
assets were not deemed to be extended for tax purposes and there were no changes made to the tax receivable agreements.

During the third quarter of 2022, Cineworld Group plc, the parent company of Regal, and certain of its subsidiaries,

including Regal, Regal Cinemas, Inc., a party to the ESA, and Regal CineMedia Holdings, LLC, a party to other agreements
with NCM LLC and NCM, Inc., filed petitions of 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 currently plans on negotiating with the Company regarding the ESA. NCM LLC has also
filed a complaint 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 with a hearing scheduled during the second quarter of 2023. The
Company determined that this announced restructuring and subsequent developments constituted a triggering event for the
Company’s intangible asset group, including the amount related to Regal, under ASC No. 360, Impairment and Disposal of
Long-Lived Assets during the third and fourth quarter of 2022. Management considered possible scenarios in a probability-
weighted estimated future undiscounted cash flow analysis, including the potential of further permanent closure of the theaters
within the Company's network, renegotiation of the ESA terms and other potential adverse impacts to the Company’s intangible
asset group resulting from the Cineworld Proceeding. The estimated future cash flows calculated within the probability-
weighted analysis were in excess of the net book value of the Company’s intangible assets and no impairment charge was
recorded in the year ended December 29, 2022. Such analysis required management to make estimates and assumptions based
on historical data and consideration of future market conditions. While the Company believes that the rights will survive any
attempted rejection in the bankruptcy court by Regal, given the uncertainty inherent in any projection, heightened by the
possibility of unforeseen additional effects of the Cineworld Proceeding, actual results may differ from the estimates and
assumptions used, or conditions may change, which could result in impairment charges in the future.

Common Unit Adjustments—In accordance with NCM LLC’s Common Unit Adjustment Agreement with its founding
members, on an annual basis NCM LLC determines the amount of common membership units to be issued to or returned by the
founding members based on theater additions or dispositions during the previous year. In addition, NCM LLC’s Common Unit
Adjustment Agreement requires that a Common Unit Adjustment occur for a specific founding member if its acquisition or
disposition of theaters, in a single transaction or cumulatively since the most recent Common Unit Adjustment, results in an
attendance increase or decrease in excess of two percent of the annual total attendance at the prior adjustment date.

Integration Payments and Other Encumbered Theater Payments—If an existing on-screen advertising agreement with

an alternative provider is in place with respect to any acquired theaters, the founding members may elect to receive common

NATIONAL CINEMEDIA, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

membership units related to those encumbered theaters in connection with the Common Unit Adjustment. If the founding
members make this election, then they are required to make payments on a quarterly basis in arrears in accordance with certain
run-out provisions pursuant to the ESAs (“integration payments”). Because the Carmike Cinemas, Inc. (“Carmike”) theaters
acquired by AMC are subject to an existing on-screen advertising agreement with an alternative provider, AMC will make
integration payments to NCM LLC. The integration payments will continue until the earlier of (i) the date the theaters are
transferred to NCM LLC’s network or (ii) the expiration of the ESA. Integration payments are calculated based upon the
advertising cash flow that the Company would have generated if it had exclusive access to sell advertising in the theaters with
pre-existing advertising agreements. The ESA additionally entitles NCM LLC to payments related to the founding members’
on-screen advertising commitments under their beverage concessionaire agreements for encumbered theaters (“encumbered
theater payments”). These payments are also accounted for as a reduction to the intangible asset. If common membership units
are issued to a founding member for newly acquired theaters that are subject to an existing on-screen advertising agreement
with an alternative provider, the amortization of the intangible asset commences after the existing agreement expires and NCM
LLC can utilize the theaters for all of its services.

The following is a summary of the Company’s intangible asset’s activity (in millions) during December 29, 2022 and

December 30, 2021:

As of
December 30,
2021

Additions (1)

Disposals

Amortization

Integration
and other
encumbered
theater
payments (2)

As of
December 29,
2022

Gross carrying amount.............. $
Accumulated amortization........

Total intangible assets, net... $

851.9 $
(245.6)
606.3 $

10.8 $
—
10.8 $

(0.4) $
0.4
— $

— $

(25.0)
(25.0) $

(5.4) $
—
(5.4) $

856.9
(270.2)
586.7

As of
December 31,
2020

Additions (3)

Disposals

Amortization

Integration
and other
encumbered
theater
payments (2)

As of
December 30,
2021

Gross carrying amount............. $
Accumulated amortization.......

Total intangible assets, net... $

850.8 $
(223.0)
627.8 $

4.8 $
—
4.8 $

(2.1) $
2.1
— $

— $

(24.7)
(24.7) $

(1.6) $
—
(1.6) $

851.9
(245.6)
606.3

(1) During the first quarter of 2022, NCM LLC issued 4,140,896 common membership units, net of 2,342,997

returned common membership units, to its founding members for the rights to exclusive access to the theater
screens and attendees added, net of dispositions by the founding members to NCM LLC’s network during the
2021 fiscal year and NCM LLC recorded a net intangible asset of $10.4 million during the first quarter of 2022 as
a result of the Common Unit Adjustment. Additionally, there were $0.4 million of additions related to upfront
affiliate payments in 2022.

(2) Carmike theaters had pre-existing advertising agreements for some of the theaters it owned prior to their

acquisitions by AMC. As a result, AMC will make integration and other encumbered theater payments over the
remaining term of those agreements. During the years ended December 29, 2022 and December 30, 2021, NCM
LLC recorded a reduction to net intangible assets of $5.4 million and $1.6 million, respectively, related to
integration and other encumbered theater payments due from AMC. During the year ended December 29, 2022
and December 30, 2021, AMC paid a total of $2.8 million and $0.5 million, respectively, related to integration and
other encumbered theater payments.

(3) During the first quarter of 2021, the Company issued 3,047,582 common membership units to its founding

members for the rights to exclusive access to the theater screens and attendees added, net of dispositions by the
founding members to the Company’s network during the 2020 fiscal year and the Company recorded a net
intangible asset of $4.8 million during the first quarter of 2021 as a result of the Common Unit Adjustment.

As of December 29, 2022 and December 30, 2021, the Company’s intangible assets related to the founding members,
net of accumulated amortization, was $572.4 million and $589.6 million, respectively, with weighted average remaining lives
of 16.3 years and 17.4 years, respectively.

NATIONAL CINEMEDIA, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

As of December 29, 2022 and December 30, 2021, the Company’s intangible assets related to the network affiliates, net

of accumulated amortization, was $14.3 million and $16.7 million, respectively, with weighted average remaining lives of 6.1
years and 8.5 years, respectively.

The estimated aggregate amortization expense for each of the five succeeding years is as follows (in millions):

Year
2023............................................................................................................................................................
2024............................................................................................................................................................
2025............................................................................................................................................................
2026............................................................................................................................................................
2027............................................................................................................................................................

$
$
$
$
$

Amortization

24.8
24.7
24.7
24.7
24.6

ACCRUED EXPENSES

The following is a summary of the Company’s accrued expenses (in millions):

As of

December 29, 2022

December 30, 2021

Accrued interest.................................................................................................................. $

Other accrued expenses.......................................................................................................

Total accrued expenses................................................................................................... $

16.3 $

1.5

17.8 $

12.2

1.2

13.4

INCOME TAXES

The Company is subject to taxation in the U.S. and various states. The Company’s tax returns for the calendar years

2019 through 2021 remain open to examination by the IRS in their entirety. With respect to state taxing jurisdictions, the
Company’s tax returns for calendar years ended 2018 through 2021 are eligible for examination by various state revenue
services.

Tax Receivable Agreement—On the IPO date, NCM, Inc. and the founding members entered into a TRA. Under the

terms of this agreement, NCM, Inc. will make cash payments to the founding members in amounts equal to 90% of NCM,
Inc.’s actual tax benefit realized from the tax amortization of the intangible assets described below. For purposes of the TRA,
cash savings in income and franchise tax will be computed by comparing NCM, Inc.’s actual income and franchise tax liability
to the amount of such taxes that NCM, Inc. would have been required to pay had there been no increase in NCM, Inc.’s
proportionate share of tax basis in NCM LLC’s tangible and intangible assets and had the TRA not been entered into. The TRA
applies to NCM, Inc.’s taxable years up to and including the 30th anniversary date of the offering. For the 2021 tax year, the
Company paid the founding members $0.0 million in the year ended December 29, 2022. The Company paid the founding
members $0.9 million in the year ended December 30, 2021 for the 2019 tax year.

NCM, Inc. recorded a long-term payable to the founding members related to the TRA. The Company recorded an

increase of $19.2 million and reduction of $16.1 million to the “Payable to founding members under the tax receivable
agreement” during the years ended December 29, 2022 and December 30, 2021, respectively. The increase in the year ended
December 29, 2022 was primarily due to the increase in NCM, Inc.’s ownership percentage of NCM LLC during the year. The
reduction in the year ended December 30, 2021 was primarily related to the Company’s utilization of the Non-TRA net
operating losses as of December 30, 2021. The ownership related changes to the “Payable to founding members under the tax
receivable agreement” were recorded within “Additional paid in capital, deficit” on the Consolidated Balance Sheet and the
non-ownership related changes were recorded within “Non-operating income” within the Consolidated Statements of
Operations.

NATIONAL CINEMEDIA, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Provision for Income Taxes—A reconciliation of the provision for income taxes as reported and the amount computed
by multiplying income before taxes, less noncontrolling interest, by the U.S. federal statutory rate of 21.0% as of December 29,
2022 and December 30, 2021 was (in millions):

Years Ended

December 29,
2022

December 30,
2021

Provision calculated at federal statutory income tax rate:

Income before income taxes................................................................................................... $
Less: Noncontrolling interests................................................................................................
Income attributable to NCM, Inc.........................................................................................
Current year change to enacted federal and state rate ............................................................
State and local income taxes, net of federal benefit................................................................
Share-based compensation......................................................................................................
Change in the valuation allowance.........................................................................................
NCM LLC membership unit issuance to NCM, Inc...............................................................
Executive compensation ........................................................................................................
Change in effective ownership...............................................................................................

Total income tax provision................................................................................................ $

(13.9) $
7.9
(6.0)
1.1
(1.1)
0.6
3.6
0.1
0.5
1.2
— $

(24.9)
14.6
(10.3)
—
(1.8)
1.1
10.3
0.2
0.4
—
—

Deferred Tax Assets—Significant components of the Company’s deferred tax assets consisted of the following (in

millions):

Deferred tax assets:

Years Ended

December 29, 2022

December 30, 2021

Investment in consolidated subsidiary NCM LLC (1)................................................... $
Share-based compensation.............................................................................................
Net operating losses........................................................................................................
Accrued bonus................................................................................................................
Business interest expense limitation...............................................................................
Other...............................................................................................................................
Total gross deferred tax assets..................................................................................
Valuation allowance (1)................................................................................................

Total deferred tax assets, net of valuation allowance............................................... $

149.7 $
1.0
76.4
0.1
18.2
0.1
245.5
(245.5)
— $

138.5
1.1
74.2
0.2
8.3
1.5
223.8
(223.8)
—

(1) The Company recognized a deferred tax asset in the amount of $149.7 million and $138.5 million as of December
29, 2022 and December 30, 2021, respectively, associated with the basis difference in our investment in NCM
LLC. The Company evaluated its deferred tax assets as of December 29, 2022 and December 30, 2021 and
considered both positive and negative evidence in determining whether it is more likely than not that all or some
portion of its deferred tax assets will 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 2021 and
2020, the effect of which continued into 2022. 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 and the Company increased the valuation
allowance against certain deferred tax assets. 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 founding members under the tax receivable agreement
which would increase to reflect future payments to the founding members at that time. Once the valuation
allowance is reversed, the payable to founding members under the tax receivable agreement would be increased to
reflect expected future payments to the founding members at that time.

NATIONAL CINEMEDIA, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Carryforwards—As of December 29, 2022, the Company had gross federal net operating loss carryforwards of

approximately $308.0 million, of which $47.0 million will expire between 2034 through 2037 and $260.8 million will be
carried forward indefinitely. As of December 29, 2022, the Company had gross state net operating loss carryforwards of
approximately $244.7 million, of which $167.7 million will expire between 2023 and 2042 and $76.9 million will be carried
forward indefinitely. As of December 29, 2022, the Company had gross capital loss carryforwards of approximately $0.0
million. As of December 29, 2022, the Company had gross federal and state research and experimentation tax credit
carryforwards of approximately $1.6 million, which expire at various dates between 2030 and 2038.

EQUITY

As of December 29, 2022, the Company has authorized capital stock of 260,000,000 shares of common stock, par value

of $0.01 per share, and 10,000,000 shares of preferred stock, par value of $0.01 per share. There were no shares of preferred
stock issued or outstanding as of December 29, 2022. There were 128,402,636 shares of common stock issued and outstanding
as of December 29, 2022.

The holders of NCM, Inc. common stock are entitled to one vote per share on all matters submitted for action by the

NCM, Inc. stockholders. Holders of common stock are entitled to share equally, share for share, in declared dividends.

The authorized but unissued shares of common stock and preferred stock are available for future issuance without

stockholder approval. These additional shares may be used for a variety of corporate purposes, including share-based
compensation, future public offerings to raise additional capital, corporate acquisitions and exchange on a one-for-one basis
under the founding members’ right to convert their NCM LLC membership units into Company common stock.

NCM LLC’s founding members received all proceeds from NCM, Inc.’s IPO and related issuances of debt, except for
amounts needed to pay out-of-pocket costs of the financings and other expenses. The ESAs with the founding members were
amended and restated in conjunction with the IPO under which NCM LLC became the exclusive provider of advertising
services to the founding members for a 30-year term. In conformity with accounting guidance of the SEC concerning monetary
consideration paid to promoters, such as the founding members, in exchange for property conveyed by the promoters, the
excess over predecessor cost was treated as a special distribution. Because the founding members had no cost basis in the ESAs,
nearly all payments to the founding members with the proceeds of the IPO and related debt, have been accounted for as
distributions. The distributions by NCM LLC to the founding members made at the date of the IPO resulted in a consolidated
stockholders’ deficit. As a noncontrolling interest cannot be shown as an asset, the founding members’ interest in NCM LLC’s
members equity is included in distributions in excess of paid in capital in the accompanying Consolidated Balance Sheets.

RELATED PARTY TRANSACTIONS

Founding Member Transactions—In connection with NCM, Inc.’s IPO, the Company entered into several agreements
to define and regulate the relationships among NCM, Inc., NCM LLC and the founding members which are outlined below. As
AMC owns less than 5% of NCM LLC, on an as converted basis, as of December 29, 2022, AMC is not a related party. AMC
was also not a related party as of December 30, 2021. AMC remains a party to the ESA, Common Unit Adjustment Agreement,
TRA and certain other original agreements, and AMC will continue to participate in the annual Common Unit Adjustment,
receive TRA payments, receive theater access fee payments, and make payments under the beverage concessionaire
agreements, among other things. Further, AMC’s ownership percentage does not impact future integration payments and other
encumbered theater payments owed to NCM LLC by AMC.

The material agreements with the founding members are as follows:

•

ESAs. Under the ESAs, NCM LLC is the exclusive provider within the United States of advertising services in the
founding members’ theaters (subject to pre-existing contractual obligations and other limited exceptions for the
benefit of the founding members). The advertising services include the use of the DCN equipment required to
deliver the on-screen advertising and other content included in the Noovie® show, use of the LEN and rights to
sell and display certain lobby promotions. Further, 30 to 60 seconds of advertising included in the Noovie show is
sold to the founding members to satisfy the founding members’ on-screen advertising commitments under their
beverage concessionaire agreements. In consideration for access to the founding members’ theaters, theater
patrons, the network equipment required to display on-screen and LEN video advertising and the use of theaters
for lobby promotions, the founding members receive a monthly theater access fee. In conjunction with the 2019
ESA Amendments, NCM LLC also pays Cinemark and Regal incremental monthly theater access fees and,
subject to NCM LLC's use of specified inventory, a revenue share in consideration for NCM LLC's access to
certain on-screen advertising inventory after the advertised showtime of a feature film beginning November 1,
2019 and the underlying term of the ESAs were extended until 2041. The ESAs and 2019 ESA Amendments are
considered leases with related parties under ASC 842.

NATIONAL CINEMEDIA, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

•

Common Unit Adjustment Agreement. The common unit adjustment agreement provides a mechanism for
increasing or decreasing the membership units held by the founding members based on the acquisition or
construction of new theaters or sale of theaters that are operated by each founding member and included in NCM
LLC’s network.

Tax Receivable Agreement. The TRA provides for the effective payment by NCM, Inc. to the founding members
of 90% of the amount of cash savings, if any, in U.S. federal, state and local income tax or franchise tax that is
actually realized as a result of certain increases in NCM, Inc.’s proportionate share of tax basis in NCM LLC’s
tangible and intangible assets resulting from the IPO and related transactions.

Software License Agreement. At the date of the Company’s IPO, NCM LLC was granted a perpetual, royalty-free
license from the founding members to use certain proprietary software that existed at the time for the delivery of
digital advertising and other content through the DCN to screens in the U.S. NCM LLC has made improvements
to this software since the IPO date and NCM LLC owns those improvements, except for improvements that were
developed jointly by NCM LLC and the founding members, if any.

Following is a summary of the related party transactions between the Company and the founding members (in millions):

Included in the Consolidated Statements of Operations:

Revenue:

Years Ended

December 29,
2022

December 30,
2021

Beverage concessionaire revenue (included in
advertising revenue) (1).................................................................................................... $

14.4 $

8.8

Operating expenses:

Theater access fee and revenue share to founding members (2).......................................... $
Selling and marketing costs (3)............................................................................................ $
Advertising operating costs (3)............................................................................................ $

59.4 $
0.1 $
— $

34.3
0.1
0.1

(1) For the full years ended December 29, 2022 and December 30, 2021, Regal and Cinemark purchased 60 seconds
of on-screen advertising time (all three founding members having a right to purchase up to 90 seconds) from
NCM LLC to satisfy their obligations under their beverage concessionaire agreements at a 30 second equivalent
CPM rate specified by the ESA.

(2) Comprised of payments per theater attendee, payments per digital screen with respect to the founding member

theaters included in the Company’s network, payments for access to higher quality digital cinema equipment and
payments to Cinemark and Regal for their portion of the Platinum Spot revenue for the utilization of the theaters
post-showtime in accordance with the 2019 ESA Amendments.

(3) Includes purchase of movie tickets, concession products, rental of theater space primarily for marketing to NCM
LLC’s advertising clients and other payments made to the founding members in the ordinary course of business.

Included in the Consolidated Balance Sheets:

As of

December 29,
2022

December 30,
2021

Common unit adjustments, net of amortization and integration payments (included in
intangible assets) (1)........................................................................................................... $

Current payable to founding members under the TRA (2).................................................... $

Long-term payable to founding members under the TRA (2)............................................... $

312.2 $

0.2 $

25.5 $

332.4

—

11.9

(1) Refer to Note 5—Intangible Assets for further information on common unit adjustments and integration payments.

This balance includes common unit adjustments issued to Cinemark and Regal.

(2) The Company paid Cinemark and Regal $0.2 million and $0.4 million, respectively, in payments pursuant to the

TRA during 2021 which was for the 2019 tax year.

At the date of the Company’s IPO, NCM LLC was granted a perpetual, royalty-free license from the founding members

to use certain proprietary software that existed at the time for the delivery of digital advertising and other content through the
DCN to screens in the U.S. NCM LLC has made improvements to this software since the IPO date and NCM LLC owns those
improvements, except for improvements that were developed jointly by NCM LLC and the founding members, if any.

NATIONAL CINEMEDIA, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Pursuant to the terms of the NCM LLC Operating Agreement in place since the completion of the IPO, NCM LLC is

required to make mandatory distributions on a proportionate basis to its members of available cash, as defined in the NCM LLC
Operating Agreement, on a quarterly basis in arrears, contingent upon the Company's compliance with the covenants outlined
within the Credit Agreement Amendment, as amended, defined within Note 10—Borrowings. The portion of positive available
cash due to founding members is accrued within the “Amounts due to founding members, net” on the audited Consolidated
Balance Sheet. The positive available cash from NCM LLC for the years ended December 29, 2022 and December 30, 2021
were as follows (in millions):

Years Ended

December 29,
2022

December 30,
2021

Cinemark..................................................................................................................................... $
NCM, Inc.....................................................................................................................................

Total................................................................................................................................... $

4.9 $
14.4
19.3 $

—
—
—

Due to the adverse impacts of the COVID-19 Pandemic on the Company’s operations, the Company generated negative

available cash by NCM LLC to its related party founding members and NCM, Inc. for the nine months ended September 29,
2022 of $39.4 million (including negative $10.5 million for Cinemark, negative $9.3 million for Regal and negative $19.6
million for NCM, Inc.) and $93.7 million (including negative $24.3 million for Cinemark, negative $24.2 million for Regal and
negative $45.2 million for NCM, Inc.) for the year ended December 30, 2021. Under the terms of the NCM LLC Operating
Agreement, these negative amounts and the positive amounts above will be netted against each other and future positive
available cash distributions after the Extended Covenant Waiver Holiday, contingent upon the Company's compliance with the
Credit Agreement Second Amendment and the Credit Agreement Third Amendment defined within Note 10—Borrowings.

Amounts due to founding members, net as of December 29, 2022 were comprised of the following (in millions):

Theater access fees and revenue share, net of beverage revenues
and other encumbered theater payments............................................................ $

Total amounts due to founding members, net................................................... $

11.1 $

4.1 $

15.2

Cinemark

Regal

Total

Amounts due to founding members, net as of December 30, 2021 were comprised of the following (in millions):

Theater access fees, net of beverage revenues
and other encumbered theater payments............................................................ $

Total amounts due to founding members, net................................................... $

5.1 $

6.3 $

11.4

Cinemark

Regal

Total

Common Unit Membership Redemption— The NCM LLC Operating Agreement provides a redemption right of the

founding members to exchange common membership units of NCM LLC for shares of the Company’s common stock on a one-
for-one basis, or at the Company’s option, a cash payment based on the three-day variable weighted average closing price of
NCM, Inc.’s common stock prior to the redemption date.

AC JV, LLC Transactions—In December 2013, NCM LLC sold its Fathom Events business to a newly formed limited
liability company, AC JV, LLC, owned 32% by each of the founding members and 4% by NCM LLC. The Company accounts
for its investment in AC JV, LLC under the equity method of accounting in accordance with ASC 323-30, Investments—Equity
Method and Joint Ventures (“ASC 323-30”) because AC JV, LLC is a limited liability company with the characteristics of a
limited partnership and ASC 323-30 requires the use of equity method accounting unless the Company’s interest is so minor
that it would have virtually no influence over partnership operating and financial policies. Although NCM LLC does not have a
representative on AC JV, LLC’s Board of Directors or any voting, consent or blocking rights with respect to the governance or
operations of AC JV, LLC, the Company concluded that its interest was more than minor under the accounting guidance. NCM
LLC’s investment in AC JV, LLC was $0.8 million and $0.7 million as of December 29, 2022 and December 30, 2021,
respectively. NCM LLC received cash distributions from AC JV, LLC of $0.4 million and $0.0 million, during the years ended
December 29, 2022 and December 30, 2021, respectively. NCM LLC recorded equity in earnings for AC JV, LLC of $0.4
million and $0.0 million during the years ended December 29, 2022 and December 30, 2021, respectively, which are included
in “Other non-operating income, net” in the audited Consolidated Statements of Operations.

NATIONAL CINEMEDIA, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

10.

BORROWINGS

The commencement of the Chapter 11 Case constituted an event of default and caused the automatic and immediate
acceleration of all debt outstanding under or in respect of, NCM LLC’s Credit Agreements and senior notes. However, any
efforts to enforce payment obligations under the debt agreements are automatically stayed as a result of the filing of the Chapter
11 Case, and the creditors’ rights of enforcement in respect of the debt agreements are subject to the applicable provisions of
the Bankruptcy Code. Given the Chapter 11 Case, NCM LLC’s outstanding debt became immediately due and payable and was
reclassified as current within the Company’s audited Consolidated Balance Sheet as of December 29, 2022.

The following table summarizes NCM LLC’s total outstanding debt as of December 29, 2022 and December 30, 2021

and the significant terms of its borrowing arrangements:

Borrowings ($ in millions)

Outstanding Balance as of

December 29,
2022

December 30,
2021

Maturity Date

Interest Rate

Revolving credit facility 2018........................................ $

167.0 $

167.0

June 20, 2023

Revolving credit facility 2022........................................

Term loans - first tranche...............................................

Term loans - second tranche..........................................

Senior secured notes due 2028.......................................

Senior unsecured notes due 2026...................................

Total borrowings..................................................
Less: Debt issuance costs and discounts related to term
loans and senior notes.................................................

50.0

258.5

49.3

374.2

230.0

—

June 20, 2023

261.2

June 20, 2025

49.8 December 20, 2024

400.0

230.0

April 15, 2028

August 15, 2026

1,129.0

1,108.0

(7.9)

(10.5)

(1)

5.875%

5.750%

Total borrowings, net...........................................

1,121.1

1,097.5

Less: current portion of debt......................................

(1,121.1)

(3.2)

Carrying value of long-term debt.........................

— $

1,094.3

(1) The interest rates on the revolving credit facility and term loan are described below.

Senior Secured Credit Facility—NCM LLC’s credit agreement, as amended, (the “Credit Agreement”) consists of a

term loan facility and a revolving credit facility. As of December 29, 2022, NCM LLC’s senior secured credit facility consisted
of a $175.0 million revolving credit facility, a $258.5 million term loan (first tranche) and a $49.3 million term loan (second
tranche). The obligations under the senior secured credit facility are secured by a lien on substantially all of the assets of NCM
LLC.

On March 8, 2021, NCM LLC entered into a second amendment to its Credit Agreement (“Credit Agreement Second

Amendment”). Among other things, the Credit Agreement Second Amendment provides for certain modifications to the
negative covenants, with respect to NCM LLC’s audited financial statements for the fiscal year ended December 31, 2020, a
waiver of the requirement to deliver such financial statements without a “going concern” or like qualification or exception,
additional waivers and term changes outlined below and grants security interests in certain assets of NCM LLC and other
potential loan parties that are not currently pledged to the lenders. In addition, pursuant to the Credit Agreement Second
Amendment, NCM LLC incurred a second tranche of the term loans in an aggregate principal amount of $50.0 million, the net
proceeds of $43.0 million to be used for general corporate purposes. Upon execution of the Credit Agreement Second
Amendment, the Company recorded $2.3 million as a discount, $3.9 million as debt issuance costs and $0.8 million within
“Loss on modification and retirement of debt, net”. Given the uncertainty of the resolution of the Chapter 11 Case, conditions
may change, which could result in impairment of any discounts or debt issuance costs in future periods.

On January 5, 2022, NCM LLC entered into the Credit Agreement Third Amendment to its Credit Agreement, dated as

of June 20, 2018, among NCM LLC, the several banks and other financial institutions or entities from time to time parties
thereto, and JPMorgan Chase Bank, N.A., as administrative agent, as previously amended. Among other things, the Credit
Agreement Third Amendment provides for: (i) certain modifications to and extensions to modifications of the affirmative and
negative covenants therein; (ii) the suspension of the consolidated net total leverage and consolidated net senior secured
leverage financial covenants through the fiscal quarter ending December 29, 2022 and (iii) the consolidated net total leverage
ratio and consolidated net senior secured leverage ratio financial covenants to be set to 9.25 to 1.00 and 7.25 to 1.00,
respectively, for the fiscal quarter ending on or about March 30, 2023, 8.50 to 1.00 and 6.50 to 1.00, respectively, for the fiscal
quarter ending on or about June 29, 2023, 8.00 to 1.00 and 6.00 to 1.00, respectively, for the fiscal quarter ending on or about

NATIONAL CINEMEDIA, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

September 28, 2023, and 6.25 to 1.00 and 4.50 to 1.00, respectively, for the fiscal quarter ending on or about December 28,
2023 and each fiscal quarter thereafter.

The senior secured credit facility contains a number of covenants and financial ratio requirements, including (i) a
consolidated net total leverage ratio covenant of 6.25 times for each for each quarterly period and (ii) with respect to the
revolving credit facility, maintaining a consolidated net senior secured leverage ratio of equal to or less than 4.50 times on a
quarterly basis for each quarterly period in which a balance is outstanding on the revolving credit facility, each of which has
been modified by the Credit Agreement Third Amendment. Pursuant to the terms of the Credit Agreement Third Amendment,
NCM LLC is restricted from making available cash distributions until after NCM LLC delivers a compliance certificate for the
quarter ending on or about December 28, 2023, and, thereafter, NCM LLC may only make available cash distributions if: (i) no
default or event of default under the Credit Agreement has occurred and is continuing; (ii) the consolidated net senior secured
leverage ratio is equal to or less than 4.00 to 1.00; and (iii) the aggregate principal amount of all outstanding revolving loans
under the Credit Agreement is $39.0 million or less. As of December 29, 2022, NCM LLC was in compliance with the financial
requirements of the Credit Agreement Third Amendment described above.

Term Loans—First Tranche—The interest rate on the initial tranche of term loans was originally a rate chosen at NCM

LLC’s option of either the LIBOR index plus 4.00% or the base rate plus 3.00%. The rate increased from LIBOR index plus
2.75% or the base rate plus 1.75%. The interest rate on the term loans as of December 29, 2022 was 8.44%. The term loans
amortize at a rate equal to 1.00% annually, to be paid in equal quarterly installments. As of December 29, 2022, NCM LLC has
paid principal of $12.2 million, reducing the outstanding balance to $258.5 million.

Term Loans—Second Tranche—The interest rate on the second tranche of term loans is the LIBOR index plus 8.00%.

The interest rate on the term loans as of December 29, 2022 was 12.44%. The term loans amortize at a rate equal to 1.00%
annually, to be paid in equal quarterly installments. As of December 29, 2022, NCM LLC has paid principal of $0.7 million,
reducing the outstanding balance to $49.3 million.

Revolving Credit Facility 2018—The revolving credit facility portion of NCM LLC’s total borrowings is available,
subject to certain conditions, for general corporate purposes of NCM LLC in the ordinary course of business and for other
transactions permitted under the senior secured credit facility, and a portion is available for letters of credit. As of December 29,
2022, NCM LLC’s total availability under the $175.0 million revolving credit facility was $7.2 million, net of $167.0 million
outstanding and $0.8 million letters of credit. The unused line fee is 0.50% per annum which is consistent with the previous
facility. Borrowings under the revolving credit facility bear interest at NCM LLC’s option of either the LIBOR index plus an
applicable margin ranging from 3.00% to 3.50% or the base rate plus an applicable margin ranging from 2.00% to 2.50%. The
margin changed to the aforementioned range from a fixed margin of LIBOR index plus 2.00% or the base rate plus 1.00%. The
applicable margin for the revolving credit facility is determined quarterly and is subject to adjustment based upon a
consolidated net senior secured leverage ratio for NCM LLC (the ratio of secured funded debt less unrestricted cash and cash
equivalents of up to $100.0 million, divided by Adjusted EBITDA for debt purposes, defined as NCM LLC's net income before
depreciation and amortization expense adjusted to also exclude non-cash share-based compensation costs for NCM LLC plus
integration payments received). The revolving credit facility will mature on June 20, 2023. The weighted-average interest rate
on the outstanding balance on the revolving credit facility as of December 29, 2022 was 8.03%.

Revolving Credit Facility 2022—On January 5, 2022, NCM LLC also entered into the Revolving Credit Agreement
2022 among NCM LLC, the lenders party thereto and Wilmington Savings Fund Society, FSB, as administrative agent and
collateral agent. The Revolving Credit Agreement 2022 provides for revolving loan commitments of $50.0 million of secured
revolving loans, the entire amount of which was funded on January 5, 2022. The Revolving Credit Agreement 2022 provides
for (i) a cash interest rate of term SOFR plus 8.00%, with a 1.00% floor, (ii) a maturity date of June 20, 2023 and (iii) a
termination premium if NCM LLC terminates the commitments under the Revolving Credit Agreement 2022 at any time before
maturity. The Revolving Credit Agreement 2022 also contains covenants, representations and warranties and events of default
that are substantially similar to the Credit Agreement. As of December 29, 2022, NCM LLC’s total availability under the $50.0
million revolving credit facility was $0.0 million. The weighted-average interest rate on the revolving credit facility as of
December 29, 2022 was 12.43% As of December 29, 2022, NCM LLC was in compliance with the financial requirements of
the Credit Agreement Third Amendment described above.

Senior Unsecured Notes due 2026—On August 19, 2016, NCM LLC completed a private placement of $250.0 million

in aggregate principal amount of 5.750% Senior Unsecured Notes due 2026 (the “Notes due 2026”) for which the registered
exchange offering was completed on November 8, 2016. The Notes due 2026 pay interest semi-annually in arrears on February
15 and August 15 of each year, which commenced on February 15, 2017. The Notes due 2026 were issued at 100% of the face
amount thereof and are the senior unsecured obligations of NCM LLC and will be effectively subordinated to all existing and
future secured debt, including the Notes due 2028, its senior secured credit facility and any future asset backed loan facility.
The Notes due 2026 will rank equally in right of payment with all of NCM LLC’s existing and future senior indebtedness,
including the Notes due 2028, NCM LLC’s existing senior secured credit facility, any future asset backed loan facility, in each
case, without giving effect to collateral arrangements. The Notes due 2026 will be effectively subordinated to all liabilities of

NATIONAL CINEMEDIA, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

any subsidiaries that NCM LLC may form or acquire in the future, unless those subsidiaries become guarantors of the Notes
due 2026. NCM LLC does not currently have any subsidiaries, and the Notes due 2026 will not be guaranteed by any
subsidiaries that NCM LLC may form or acquire in the future except in very limited circumstances.

NCM LLC may redeem all or any portion of the Notes due 2026, at once or over time, on or after August 15, 2021 at
specified redemption prices, plus accrued and unpaid interest, if any, to the redemption date. In addition, at any time prior to
August 15, 2019, NCM LLC may on any one or more occasions redeem up to 35% of the original aggregate principal amount
of Notes due 2026 from the net proceeds of certain equity offerings at a redemption price equal to 105.750% of the principal
amount of the Notes due 2026 redeemed, plus accrued and unpaid interest, if any to the redemption date. Upon the occurrence
of a Change of Control (as defined in the indenture), NCM LLC will be required to make an offer to each holder of the Notes
due 2026 to repurchase all of such holder’s Notes due 2026 for a cash payment equal to 101.000% of the aggregate principal
amount of the Notes due 2026 repurchased, plus accrued and unpaid interest, if any, to the date of repurchase.

The indenture contains covenants that, among other things, restrict NCM LLC’s ability and the ability of its restricted

subsidiaries, if any, to: (1) incur additional debt; (2) make distributions or make certain other restricted payments; (3) make
investments; (4) incur liens; (5) sell assets or merge with or into other companies; and (6) enter into transactions with affiliates.
All of these restrictive covenants are subject to a number of important exceptions and qualifications. In particular, NCM LLC
has the ability to distribute all of its quarterly available cash as a restricted payment or as an investment, if it meets a minimum
net senior secured leverage ratio. NCM LLC was in compliance with the financial requirements of the Notes due 2026 as of
December 29, 2022.

Senior Secured Notes due 2028—On October 8, 2019, NCM LLC completed a private offering of $400.0 million
aggregate principal amount of 5.875% Senior Secured Notes due 2028 (the “Notes due 2028”) to eligible purchasers. The Notes
due 2028 will mature on April 15, 2028. Interest on the Notes due 2028 accrues at a rate of 5.875% per annum and is payable
semi-annually in arrears on April 15 and October 15 of each year, commencing on April 15, 2020. In the year ended December
29, 2022, NCM, Inc. purchased $25.8 million of the Notes due 2028 on the open market, reducing the principal amount owed
by NCM LLC to third parties to $374.2 million as of December 29, 2022 and resulting in a $0.0 million gain on extinguishment
of debt in the year ended December 29, 2022.

NCM LLC may redeem all or any portion of the Notes due 2028 prior to April 15, 2023, at a redemption price equal to

100% of the principal amount plus the applicable premium, plus accrued and unpaid interest, if any, to the redemption date.
NCM LLC may redeem all or any portion of the Notes due 2028, on or after April 15, 2023, at specified redemption prices, plus
accrued and unpaid interest, if any, to the redemption date. In addition, at any time prior to April 15, 2023, NCM LLC may on
any one or more occasions redeem up to 35% of the original aggregate principal amount of the Notes due 2028 from the net
proceeds of certain equity offerings at a redemption price equal to 105.875% of the principal amount of the Notes due 2028
redeemed, plus accrued and unpaid interest, if any, to the redemption date, provided that at least 65% of the original aggregate
principal amount of the Notes due 2028 remains outstanding after each such redemption and the redemption occurs within 90
days after the closing of such applicable equity offering.

The Indenture contains covenants that, among other things, restrict NCM LLC’s ability and the ability of its restricted

subsidiaries, if any, to: (1) incur additional debt; (2) make distributions or make certain other restricted payments; (3) make
certain investments; (4) incur certain liens; (5) sell assets or merge with or into other companies; and (6) enter into transactions
with affiliates. All of these restrictive covenants are subject to a number of important exceptions and qualifications. In
particular, NCM LLC may distribute all of its quarterly available cash as a restricted payment or as an investment, provided that
NCM LLC satisfies a minimum net senior secured leverage ratio. As of December 29, 2022, NCM LLC was in compliance
with the financial requirements of the Notes due 2028, as described above.

Future Maturities of Borrowings – The scheduled annual maturities on the Senior Secured Credit Facility, Notes due

2026 and Notes due 2028 as of December 29, 2022 are as follows (in millions):

Amount

1,129.0
—
1,129.0

11.

SHARE-BASED COMPENSATION

The NCM, Inc. 2020 Omnibus Equity Incentive Plan (the “2020 Plan”) was approved by NCM, Inc.'s stockholders on
April 28, 2020 and approved 7,500,000 shares of common stock available for issuance or delivery under the 2020 Plan and an
additional 7,500,000 shares of common stock available for issuance or delivery approved on May 4, 2022. The Company began
issuing shares under the 2020 Plan in the second quarter of 2020. The 2020 Plan replaced NCM, Inc.’s 2016 Equity Incentive
Plan (the “2016 Plan”), which replaced the 2007 Equity Incentive Plan (the “2007 Plan”). The 2020 Plan also includes

NATIONAL CINEMEDIA, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

2,388,302 shares related to the number of shares reserved for issuance under the 2016 Plan that remained available for grant as
of the effective date of the 2020 Plan and the number of shares subject to awards granted under the 2007 Plan as of the effective
date of the 2020 Plan, which can become available for grant again upon expiration, termination, cancellation or forfeiture of the
original award. As of December 29, 2022, 8,868,249 shares remain available for future grants (assuming 100% achievement of
targets on performance-based restricted stock). The types of awards that may be granted under the 2020 Plan include stock
options, stock appreciation rights, restricted stock, restricted stock units or other stock based awards. Certain option and share
awards provide for accelerated vesting if there is a change in control, as defined in the 2016 Plan and 2020 Plan. Upon vesting
of the restricted stock awards or exercise of options, NCM LLC will issue common membership units to the Company equal to
the number of shares of the Company’s common stock represented by such awards.

Compensation Cost—The Company recognized $7.1 million and $8.1 million for the years ended December 29, 2022
and December 30, 2021, respectively, of share-based compensation expense within “Network costs”, “Selling and marketing
costs” and “Administrative and other costs” in the Consolidated Statements of Operations as shown in the table below (in
millions):

Years Ended

December 29, 2022

December 30, 2021

Share-based compensation costs included in network costs............................................ $
Share-based compensation costs included in selling and marketing costs......................
Share-based compensation costs included in administrative and other costs..................

Total share-based compensation costs...................................................................... $

0.7 $
1.7
4.7

7.1 $

0.6
1.8
5.7

8.1

During the years ended December 29, 2022 and December 30, 2021, $0.2 million and $0.3 million was capitalized,
respectively, in a corresponding manner to the capitalization of employee’s salaries for capitalized labor. The income tax
benefit recognized in the statements of operations for share-based compensation was approximately $0.0 million and $0.0
million for the years ended December 29, 2022 and December 30, 2021, respectively. As of December 29, 2022, there was $0.8
million unrecognized compensation cost related to unvested options, which will be recognized over a remaining period of 2.2
years. As of December 29, 2022, unrecognized compensation cost related to restricted stock and restricted stock units was
approximately $5.7 million, which will be recognized over a weighted average remaining period of 1.2 years.

Stock Options—The Company granted stock options during 2021 and 2022. Stock options granted in 2021 and a portion

of the stock options awarded in 2022 were granted with an exercise price equal to the closing market price of NCM, Inc.
common stock on the date the Company’s Board of Directors approved the grant. The remaining portion of stock options
awarded in 2022 contained a market condition as the options were granted with an exercise price in excess of the closing market
price of NCM, Inc. common stock on the date the Company’s Board of Directors approved the grant. All options have either
10-year or 15-year contractual terms. The fair value of each option award is estimated on the date of grant using the Black-
Scholes option pricing valuation model that uses the assumptions noted in the table below. Expected volatilities are based on
implied volatilities from traded options on the Company’s stock, historical volatility of the Company’s stock, and other factors.
The Company uses historical data to estimate option exercise and employee termination within the valuation model. The
expected term of options granted was developed based on historical and peer company data and represents the period of time
that options granted are expected to be outstanding. The expected term of the options granted during 2022 were adjusted to
include the Company's cost of equity in order to incorporate the impact of the option's market condition and simulate a lattice
model. The risk-free rate for periods within the contractual life of the option is based on the U.S. Treasury yield curve in effect
at the time of grant. The following assumptions were used in the valuation of the options for the year ended December 29, 2022
and December 30, 2021:

Years Ended

December 29, 2022

December 30, 2021

Expected term (in years)....

Risk free interest rate.........

Expected volatility.............

Dividend yield...................

6.0

2.6 %

68.1 %

4.8 %

6.0

0.9 %

62.9 %

5.1 %

NATIONAL CINEMEDIA, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

A summary of option award activity as of December 29, 2022, and changes during the year then ended are presented

below:

Weighted
Average
Exercise
Price

Weighted
Average
Remaining
Contractual
Life (in years)

Aggregate
Intrinsic
Value
(in millions)

Options

Outstanding as of December 30, 2021..................................

1,645,855 $

Granted..............................................................................

620,930 $

Forfeited............................................................................

(1,403) $

Expired..............................................................................

(167,564) $

Outstanding as of December 29, 2022..................................

2,097,818 $

Exercisable as of December 29, 2022...................................

1,092,629 $

Vested and expected to vest as of December 29, 2022.........

2,072,433 $

5.96

2.35

13.65

12.80

4.34

5.92

4.36

7.5 $

— $

8.0 $

7.1 $

8.0 $

—

Restricted Stock and Restricted Stock Units—Under the non-vested stock program, common stock of the Company

may be granted at no cost to officers, independent directors and employees, subject to requisite service and/or financial
performance targets. As such restrictions lapse, the award vests in that proportion. The participants are entitled to dividend
equivalents and to vote their respective shares (in the case of restricted stock), although the sale and transfer of such shares is
prohibited and the shares are subject to forfeiture during the restricted period. Additionally, the accrued dividend equivalents
are subject to forfeiture during the restricted period should the underlying shares not vest. As of December 29, 2022 and
December 30, 2021, accrued dividend equivalents totaled $0.8 million and $0.7 million, respectively and during the years ended
December 29, 2022 and December 30, 2021, the Company paid $0.5 million and $1.0 million, respectively, for dividend
equivalents upon vesting of the restricted stock and restricted stock units. The Company has issued time-based restricted stock
and restricted stock units to its employees which generally vest over a two or three-year period with one-half or one-third,
respectively, vesting on each anniversary of the date of grant and performance-based restricted stock and restricted stock units
which vest following a two or three-year measurement period to the extent that the Company achieves specified non-GAAP
targets at the end of the measurement period. Certain other vesting periods have also been used. The Company also grants
restricted stock units to its non-employee directors that vest after approximately one year. The grant date fair value of restricted
stock and restricted stock units is based on the closing market price of NCM, Inc. common stock on the date of grant. An annual
forfeiture rate of 2-6% was estimated to reflect the potential separation of employees. The weighted average grant date fair
value of non-vested stock was $2.12 and $3.82 for the years ended December 29, 2022 and December 30, 2021,
respectively. The total fair value of awards that vested during the years ended December 29, 2022 and December 30, 2021 was
$5.9 million and $7.1 million, respectively.

A summary of restricted stock award and restricted stock unit activity as of December 29, 2022, and changes during the

year then ended are presented below:

Non-vested balance as of December 30, 2021................................................
Granted.......................................................................................................
Vested (2)...................................................................................................
Forfeited.....................................................................................................
Non-vested balance as of December 29, 2022...............................................

Number of Restricted
Shares and Restricted
Stock Units (1)

Weighted Average
Grant-Date
Fair Value

3,001,105 $
3,659,156 $
(1,218,349) $
(266,352) $
5,175,560 $

4.64
2.12
4.80
4.97
2.80

(1) Includes 729,817 shares of performance-based restricted stock and restricted stock units as of December 29, 2022,

including 427,231 shares granted during the year and 11,750 shares forfeited during the year.

(2) Includes 96,241 vested shares that were withheld to cover tax obligations and were subsequently canceled.

The above table reflects performance-based restricted stock granted at 100% achievement of performance conditions
and as such does not reflect the maximum or minimum number of shares of performance-based restricted stock contingently
issuable. As of December 29, 2022, the total number of restricted stock and restricted stock units that are ultimately expected to
vest, after consideration of expected forfeitures and current projections of estimated vesting of performance-based restricted
stock is 328,418 shares.

NATIONAL CINEMEDIA, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

12.

EMPLOYEE BENEFIT PLANS

The Company sponsors the NCM 401(k) Profit Sharing Plan (the “Plan”) under Section 401(k) of the Internal Revenue

Code of 1986, as amended, for the benefit of substantially all full-time employees. The Plan provides that participants may
contribute up to 20% of their compensation, subject to Internal Revenue Service limitations. Employee contributions are
invested in various investment funds based upon election made by the employee. In response to the COVID-19 Pandemic, the
Company temporarily suspended its match of a portion of employees 401(k) contributions effective April 2020 through
December 29, 2022.

13.

COMMITMENTS AND CONTINGENCIES

Legal Actions—As discussed more fully in Note 16—Subsequent Events, on April 11, 2023, NCM, LLC filed a

voluntary petition for reorganization with a prearranged Chapter 11 plan under Chapter 11 of the Bankruptcy Code in the
Bankruptcy Court. The Chapter 11 Case is being administered under the caption In re: National CineMedia, LLC, Case No.
23-90291.

The Company will continue to act as the manager of NCM LLC, the “debtor in possession” under the jurisdiction of the

Bankruptcy Court, and in accordance with the applicable provisions of the Bankruptcy Code and orders of the Bankruptcy
Court. In general, as debtor in possession under the Bankruptcy Code, NCM LLC is authorized to continue to operate as an
ongoing business but may not engage in transactions outside the ordinary course of business without the prior approval of the
Bankruptcy Court. Pursuant to “first day” motions filed with the Bankruptcy Court, the Bankruptcy Court authorized NCM
LLC to conduct NCM LLC’s business activities in the ordinary course, including, among other things and subject to the terms
and conditions of such orders, authorizing NCM LLC to consensually use cash collateral, pay employee wages and benefits,
and pay vendors and suppliers in the ordinary course for all go forward goods and services. NCM LLC will continue to pursue
approval of a proposed plan of reorganization, which will incorporate the terms of the Restructuring Support Agreement.

NCM LLC’s normal operating cash flows are providing liquidity for the Company to operate as usual and fulfill
ongoing commitments to stakeholders. The Company is unable to predict when NCM LLC will emerge from this Chapter 11
process.

The Company is subject to claims and legal actions in the ordinary course of business. The Company believes such
claims will not have a material effect, individually and in aggregate, on its financial position, results of operations or cash
flows.

Operating Commitments-Facilities—The Company has entered into operating lease agreements for its corporate

headquarters and other regional offices. The Company has right-of-use (“ROU”) assets of $16.9 million and short-term and
long-term lease liabilities of $2.2 million and $18.0 million, respectively, on the balance sheet as of December 29, 2022 for all
material leases with terms longer than twelve months. As of December 30, 2021 the Company had ROU assets of $18.8 million
and short-term and long-term lease liabilities of $2.1 million and $20.4 million, respectively, for all material leases with terms
longer than twelve months. These balances are included within “Other assets”, “Other current liabilities” and “Other liabilities”,
respectively, on the audited Consolidated Balance Sheets. The Company has options on certain of these facilities to extend the
lease or to terminate part or all of the leased space prior to the lease end date. Certain termination fees would be due upon
exercise of the early termination options as outlined within the underlying agreements. None of these options were considered
reasonably certain of exercise and thus have not been recognized as part of the ROU assets and lease liabilities. As of December
29, 2022, the Company had a weighted average remaining lease term of 6.7 years on these leases. Given the uncertainty of the
resolution of the Chapter 11 Case, conditions may change, which could result in impairment of the Company’s ROU assets in
future periods.

The Company has also entered into certain short-term leases with a term of less than one year. These leases are not
included within the Company’s ROU assets or lease liabilities due to the Company’s election of the practical expedient in ASC
842-20-25-2 for short-term leases.

During the twelve months ended December 29, 2022 and December 30, 2021, the Company recognized the following

components of total lease cost (in millions). These costs are presented within “Selling and marketing costs” and
“Administrative and other costs” within the audited Consolidated Statements of Operations depending upon the nature of the
use of the facility.

NATIONAL CINEMEDIA, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Years ended

December 29, 2022

December 30, 2021

Operating lease cost.......................................................................................... $

Variable lease cost.............................................................................................

Total lease cost.................................................................................................. $

3.4 $

0.5

3.9 $

3.6

0.5

4.1

The Company made lease payments for the year ended December 29, 2022 and December 30, 2021 of $3.8 million and

$3.7 million, respectively. These payments are included within cash flows from operating activities within the audited
Consolidated Statement of Cash Flows. The minimum lease payments under noncancellable operating leases as of December
29, 2022 were as follows (in millions):

Year

Minimum Lease
Payments

2023............................................................................................................................................................

2024............................................................................................................................................................

2025............................................................................................................................................................

2026............................................................................................................................................................

2027............................................................................................................................................................

Thereafter....................................................................................................................................................

Total........................................................................................................................................................

Less: Imputed interest on future lease payments........................................................................................

Total lease liability as of December 29, 2022 per the Consolidated Balance Sheet................................... $

3.8

3.7

3.6

3.7

7.9

26.5

(6.3)

20.2

When measuring the ROU assets and lease liabilities recorded, the Company utilized its incremental borrowing rate in
order to determine the present value of the lease payments as the leases do not provide an implicit rate. The Company used the
rate of interest that it would have paid to borrow on a collateralized basis over a similar term for an amount equal to the lease
payments in a similar economic environment. As of December 29, 2022, the Company’s weighted average annual discount rate
used to establish the ROU assets and lease liabilities was 7.4%.

Operating Commitments - ESAs and Affiliate Agreements—The Company has entered into long-term ESAs with the

founding members and multi-year agreements with certain network affiliates, or third-party theater circuits. The ESAs and
network affiliate agreements grant NCM LLC exclusive rights in their theaters to sell advertising, subject to limited exceptions.
The Company recognizes intangible assets upon issuance of membership units to the founding members in accordance with
NCM LLC’s Common Unit Adjustment Agreement and upfront cash payments to the affiliates for the contractual rights to
provide the Company’s services within their theaters as further discussed within Note 5—Intangible Assets. These ESAs and
network affiliate agreements are considered leases under ASC 842 once the asset is identified and the period of control is
determined upon the scheduling of the showtimes by the exhibitors, typically one week prior to the showtime. As such, the
leases are considered short-term in nature, specifically less than one month. Within ASC 842, leases with terms of less than one
month are exempt from the majority of the accounting and disclosure requirements, including disclosure of short-term lease
expense. No ROU assets or lease liabilities were recognized for these agreements and no change to the balance sheet
presentation of the intangible assets was necessary.

In consideration for NCM LLC’s access to the founding members’ theater attendees for on-screen advertising and use of

lobbies and other space within the founding members’ theaters for the LEN and lobby promotions, the founding members
receive a monthly theater access fee under the ESAs. The theater access fee is composed of a fixed payment per patron, a fixed
payment per digital screen (connected to the DCN) and a fee for access to higher quality digital cinema equipment. The
payment per theater patron increased by 4% on November 1, 2022 and will increase by 8% every five years with the next
occurrence in 2027. The payment per digital screen and for digital cinema equipment increases annually by 5%. The theater
access fee paid in the aggregate to all founding members cannot be less than 12% of NCM LLC’s aggregate advertising revenue
(as defined in the ESA), or it will be adjusted upward to reach this minimum payment. As of December 29, 2022 and December
30, 2021, the Company had no liabilities recorded for the minimum payment, as the theater access fee was in excess of the
minimum.

Following the 2019 ESA Amendments, Cinemark and Regal receive an additional monthly theater access fee beginning

November 1, 2019 in consideration for NCM LLC’s access to certain on-screen advertising inventory after the advertised
showtime of a feature film. These fees are also based upon a fixed payment per patron of (i) $0.0375 per patron beginning on
November 1, 2020, (ii) $0.05 per patron beginning on November 1, 2021, (iii) $0.052 per patron beginning on November 1,
2022 and (iv) increase 8% every five years beginning November 1, 2027. Additionally, following the 2019 ESA Amendments,

NATIONAL CINEMEDIA, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

beginning on November 1, 2019, NCM LLC is entitled to display the Platinum Spot, an additional single unit that is either 30 or
60 seconds of the Noovie® show in the trailer position directly prior to the one or two trailers preceding the feature film. In
consideration for the utilization of the theaters for the Platinum Spots, Cinemark and Regal are entitled to receive 25% of all
revenue generated for the actual display of Platinum Spots in their applicable theaters, subject to a specified minimum. If NCM
LLC runs advertising in more than one concurrent advertisers’ Platinum Spot for any portion of the network over a period of
time, then NCM LLC will be required to satisfy a minimum average CPM for that period of time. The Company does not owe
the founding members any theater access fees or any Platinum Spot revenue share when the theaters are not displaying the
Company's show or when the Company does not have access to the theaters. As such, the Company did not incur fees for the
period of time the founding members' theaters were temporarily closed due to the COVID-19 Pandemic and future fees will be
reduced if attendance remains lower than historical levels. The digital screen fee is calculated based upon average screens in use
during each month. No digital screen fees were incurred for the period of time the founding member's theaters were temporarily
closed due to the COVID-19 Pandemic and were reduced for months where screens were in use for only part of the month.

The network affiliates compensation is considered variable lease expense and varies by circuit depending upon the
agreed upon terms of the network affiliate agreement. The majority of agreements are centered around a revenue share where an
agreed upon percentage of the advertising revenue received from a theater’s attendance is paid to the circuit. As part of the
network affiliate agreements entered into in the ordinary course of business under which the Company sells advertising for
display in various network affiliate theater chains, the Company has agreed to certain minimum revenue guarantees on a per
attendee basis. If a network affiliate achieves the attendance set forth in their respective agreement, the Company has
guaranteed minimum revenue for the network affiliate per attendee if such amount paid under the revenue share arrangement is
less than its guaranteed amount. As of December 29, 2022, the maximum potential amount of future payments the Company
could be required to make pursuant to the minimum revenue guarantees is $141.7 million over the remaining terms of the
network affiliate agreements. These minimum guarantees relate to various affiliate agreements ranging in term from one to
fourteen years, prior to any renewal periods of which some are at the option of the Company. During the year ended December
29, 2022 and December 30, 2021 the Company paid $0.0 million and $0.2 million, respectively, related to these minimum
guarantees. As of December 29, 2022 and December 30, 2021, the Company had $0.4 million and $0.4 million in liabilities
recorded within “Accounts payable” in the Consolidated Balance Sheet for these obligations, as such guarantees are less than
the expected share of revenue paid to the affiliate. As the guaranteed minimums are based upon agreed upon minimum
attendance or affiliate revenue levels, the Company did not incur minimum revenue share fees during the period of time the
respective affiliate's theaters were temporarily closed due to the COVID-19 Pandemic and will not for the remaining duration
an affiliate's theater attendance or revenue levels are low as the minimum levels must first be met by the affiliate.

14.

FAIR VALUE MEASUREMENTS

Non-Recurring Measurements—Certain assets are measured at fair value on a non-recurring basis. These assets are not

measured at fair value on an ongoing basis but are subject to fair value adjustments in certain circumstances. These assets
include long-lived assets, intangible assets, cost and equity method investments and borrowings.

Long-Lived Assets, Intangible Assets and Other Investments—As described in Note 1—Basis of Presentation and

Summary of Significant Accounting Policies, the Company regularly reviews long-lived assets (primarily property, plant and
equipment), intangible assets, investments accounted for under the cost or equity method and notes receivable for impairment
whenever events or changes in circumstances indicate that the carrying amounts of the assets may not be fully
recoverable. When the estimated fair value is determined to be lower than the carrying value of the asset, an impairment charge
is recorded to write the asset down to its estimated fair value.

Other investments consisted of the following (in millions):

As of

December 29, 2022

December 30, 2021

Investment in AC JV, LLC (1)........................................................................................... $

Other investments (2)..........................................................................................................

Total................................................................................................................................ $

0.8 $

0.1

0.9 $

0.7

0.1

0.8

(1) Refer to Note 9—Related Party Transactions.

(2) The Company received equity securities in privately held companies as consideration for a portion of advertising
contracts. The equity securities were accounted for under the cost method and represent an ownership of less than
20%. The Company does not exert significant influence on these companies’ operating or financial activities.

During the years ended December 29, 2022 and December 30, 2021, the Company recorded impairment charges of $0.1

million and $0.0 million million, respectively, on certain of its investments due to new information regarding the fair value of

NATIONAL CINEMEDIA, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

the investee, which brought the total remaining value of the respective impaired investments to $0.1 million as of December 29,
2022. As of December 29, 2022, no other observable price changes or impairments have been recorded as a result of the
Company’s qualitative assessment of identified events or changes in the circumstances of the remaining investments. The
investment in AC JV was initially valued using comparative market multiples. The other investments were recorded based upon
the fair value of the services provided in exchange for the investment. Refer to Note 1—Basis of Presentation and Summary of
Significant Accounting Policies for more details. As the inputs to the determination of fair value are based upon non-identical
assets and use significant unobservable inputs, they have been classified as Level 3 in the fair value hierarchy.

Borrowings—The estimated fair values of the Company’s financial instruments where carrying values do not

approximate fair value are as follows (in millions):

As of December 29, 2022

As of December 30, 2021

Carrying Value

Fair Value (1)

Carrying Value

Fair Value (1)

Revolving credit facilities.............................................. $

Term Loans - first tranche.............................................. $

Term Loans - second tranche......................................... $

Senior Notes due 2028................................................... $

Senior Notes due 2026................................................... $

217.0 $

258.5 $

49.3 $

374.2 $

230.0 $

58.0 $

65.8 $

13.1 $

91.7 $

6.9 $

167.0 $

261.2 $

49.8 $

400.0 $

230.0 $

167.0

236.4

48.1

357.0

179.4

(1) The Company has estimated the fair value on an average of at least two non-binding broker quotes and the
Company’s analysis. If the Company were to measure the borrowings in the above table at fair value on the
balance sheet they would be classified as Level 2.

Recurring Measurements—All current assets and liabilities are estimated to approximate their fair value due to the

short-term nature of these balances. The fair values of the Company’s assets and liabilities measured on a recurring basis
pursuant to ASC 820-10 Fair Value Measurements and Disclosures are as follows (in millions):

Fair Value Measurements at
Reporting Date Using

Fair Value As of
December 29,
2022

Quoted Prices in
Active Markets
for Identical
Assets
(Level 1)

Significant Other
Observable
Inputs
(Level 2)

Significant
Unobservable
Inputs
(Level 3)

ASSETS:

Cash equivalents (1)....................................................... $

0.8 $

— $

Short-term marketable securities (2)..............................

Long-term marketable securities (2)..............................

0.7

0.3

—

0.7

0.3

Total assets................................................................. $

1.8 $

0.8 $

1.0 $

—

Fair Value Measurements at
Reporting Date Using

Fair Value As of
December 30,
2021

Quoted Prices in
Active Markets
for Identical
Assets
(Level 1)

Significant Other
Observable
Inputs
(Level 2)

Significant
Unobservable
Inputs
(Level 3)

ASSETS:

Cash equivalents (1)....................................................... $

37.1 $

— $

Short-term marketable securities (2)..............................

Long-term marketable securities (2)..............................

0.3

1.0

—

0.3

1.0

Total assets................................................................. $

38.4 $

37.1 $

1.3 $

—

(1) Cash Equivalents—The Company’s cash equivalents are carried at estimated fair value. Cash equivalents consist

of money market accounts which the Company has classified as Level 1 given the active market for these
accounts.

(2) Short-Term and Long-Term Marketable Securities—The carrying amount and fair value of the marketable

securities are equivalent since the Company accounts for these instruments at fair value. The Company’s

NATIONAL CINEMEDIA, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

government agency bonds, commercial paper and certificates of deposit are valued using third-party broker
quotes. The value of the Company’s government agency bonds and municipal bonds are derived from quoted
market information. The inputs in the valuation are classified as Level 1 if there is an active market for these
securities; however, if an active market does not exist, the inputs are recorded at a lower level in the fair value
hierarchy. The value of commercial paper and certificates of deposit is derived from pricing models using inputs
based upon market information, including contractual terms, market prices and yield curves. The inputs to the
valuation pricing models are observable in the market, and as such are generally classified as Level 2 in the fair
value hierarchy. Original cost of short term marketable securities is based on the specific identification method.
As of December 29, 2022, there was $0.2 million of available-for-sale debt securities in unrealized loss positions
without an allowance for credit losses. The Company has not recorded an allowance for credit losses for the
marketable securities balance as of December 29, 2022 given the immaterial difference between the amortized
cost basis and the aggregate fair value of the Company's securities.

The amortized cost basis, aggregate fair value and maturities of the marketable securities the Company held as of

December 29, 2022 and December 30, 2021 are as follows:

As of December 29, 2022

Amortized Cost
Basis (in millions)

Aggregate Fair
Value (in millions)

Maturities (1)
(in years)

MARKETABLE SECURITIES:

Short-term certificates of deposit.................................................... $

0.7 $

Total short-term marketable securities..................................

Long-term certificates of deposit....................................................

Total long-term marketable securities...................................

0.7

0.3

Total marketable securities............................................. $

1.0 $

1.0

1.3

0.7

0.3

1.0

As of December 30, 2021

Amortized Cost
Basis (in millions)

Aggregate Fair
Value (in millions)

Maturities (1)
(in years)

MARKETABLE SECURITIES:

Short-term certificates of deposit................................................... $

0.3 $

Total short-term marketable securities.................................

Long-term certificates of deposit...................................................

Total long-term marketable securities..................................

0.3

1.0

Total marketable securities........................................... $

1.3 $

0.3

1.0

1.3

0.9

2.0

(1) Maturities— Securities available for sale include obligations with various contractual maturity dates some of

which are greater than one year. The Company considers the securities to be liquid and convertible to cash within
30 days.

15.

VALUATION ACCOUNT

The Company’s valuation allowance on deferred tax assets for the years ended December 29, 2022 and December 30,

2021 was as follows (in millions):

Years Ended

December 29,
2022

December 30,
2021

VALUATION ALLOWANCE ON DEFERRED TAX ASSETS:

Balance at beginning of period.................................................................................................... $

223.8 $

Valuation allowance added (1)...............................................................................................

Valuation allowance reversed.................................................................................................

21.7

—

Balance at end of period.............................................................................................................. $

245.5 $

212.0

11.8

—

223.8

(1) The increase within the valuation allowance during the years ended December 29, 2022 and December 30, 2021
relate to its deferred tax assets which the Company determined it is more-likely-than-not it will not be able to
realize before they expire.

NATIONAL CINEMEDIA, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

16.

SUBSEQUENT EVENTS

Credit Agreement Amendment—Subsequent to year-end, on January 17, 2023, NCM LLC entered into (i) Credit
Agreement Amendment Fourth Amendment to its Credit Agreement, dated as of June 20, 2018, among NCM LLC, the several
banks and other financial institutions or entities from time to time parties thereto, and JPMorgan Chase Bank, N.A., as
administrative agent, as previously amended and (ii) Revolving Credit Agreement Amendment. The Credit Agreement
Amendment Fourth Amendment and Revolving Credit Agreement Amendment provide for the addback of specified
professional fees paid by NCM LLC during the period of January 6, 2023 through the date NCM LLC delivers a compliance
certificate for the quarter ending on or about December 28, 2023, when calculating the sum of unrestricted cash on hand at
NCM LLC and revolving credit facility availability under the Credit Agreement and Revolving Credit Agreement required to be
maintained under each respective agreement.

On March 31, 2023, NCM LLC as the Borrower, entered into Amendment No. 5 (the “Fifth Credit Agreement
Amendment”) to its Credit Agreement, dated as of June 20, 2018, among the Borrower, the several banks and other financial
institutions or entities from time to time parties thereto, and JPMorgan Chase Bank, N.A., as administrative agent, as previously
amended (the “Credit Agreement”). The Fifth Credit Agreement Amendment extends the grace period available for certain
payments under the Credit Agreement for nine business days.

Indenture Amendment—On February 15, 2023, NCM LLC elected to enter into a 30-day grace period for the interest
payment in the amount of $6.6 million under the Senior Notes due 2026 under the indenture governing the Senior Notes due
2026. The Company and NCM LLC are actively engaged in negotiations with certain of NCM LLC’s secured lenders regarding
NCM LLC’s indebtedness.

On March 15, 2023, NCM LLC entered into a First Supplemental Indenture to the Indenture, dated as of August 19,
2016 (the “Indenture”) relating to NCM LLC’s 5.75% Senior Notes due 2026 with Computershare Trust Company, N.A., as
Trustee. The First Supplemental Indenture was approved by holders of the Senior Notes due 2026 holding at least a majority of
the aggregate principal amount of the Senior Notes due 2026. The First Supplemental Indenture amends Section 6.01(a) of the
Indenture by extending the grace period for payment of interest due on the Senior Notes due 2026 from 30 days to 47 days.

On March 31, 2023, NCM LLC entered into a Second Supplemental Indenture to the Indenture, relating to NCM LLC’s
5.75% Senior Notes due 2026 with Computershare Trust Company, N.A., as Trustee. The Second Supplemental Indenture was
approved by holders of the Senior Notes due 2026 holding at least a majority of the aggregate principal amount of the Senior
Notes due 2026. The Second Supplemental Indenture amends Section 6.01(a) of the Indenture by extending the grace period for
payment of interest due on the Senior Notes due 2026 from 47 days to 57 days.

Redemptions—On February 23, 2023 and March 23, 2023, Cinemark redeemed 41,969,862 and 1,720,935,
respectively, of their outstanding common membership units, in exchange for shares of NCM, Inc. common stock. These
redemptions reduced Cinemark’s ownership interest to 0.0% as of March 23, 2023. This redemption will cause the “Payable to
founding members under the TRA” to increase by approximately $15.0 million. This is driven primarily by the increase in
NCM, Inc.’s ownership in NCM LLC increasing and the corresponding increase in NCM, Inc.’s percentage of NCM LLC’s
deferred tax liabilities.

Bankruptcy Petition—On April 11, 2023, NCM LLC filed a voluntary petition for reorganization with a prearranged

Chapter 11 plan under Chapter 11 of the Bankruptcy Code in the U.S. Bankruptcy Court for the Southern District of Texas. The
Chapter 11 Case is being administered under the caption In re: National CineMedia, LLC, Case No. 23-90291.

Operation and Implications of the Bankruptcy Filing

NCM, Inc. expects to continue to manage NCM LLC, the debtor in possession, under the jurisdiction of the Bankruptcy
Court and in accordance with the applicable provisions of the Bankruptcy Code and orders of the Bankruptcy Court. The debtor
in possession intends to continue to operate businesses in the ordinary course during the pendency of the Chapter 11 Case.

In general, as debtor in possession, under the Bankruptcy Code, NCM LLC is authorized to continue to operate as an

ongoing business, but may not engage in transactions outside the ordinary course of business without the prior approval of the
Bankruptcy Court. Pursuant to “first day” motions filed with the Bankruptcy Court, the Bankruptcy Court authorized NCM
LLC to conduct business activities in the ordinary course and, among other things and subject to the terms and conditions of
such orders, authorized certain employees at NCM, Inc. to continue providing day-to-day management services to NCM LLC
and NCM LLC to pay employee wages and benefits and vendors and suppliers in the ordinary course for all goods and services
going forward.

Ongoing Negotiations on Proposed Plan of Reorganization

NCM LLC will continue to pursue approval of a plan of reorganization, which will incorporate the terms of the

Restructuring Support Agreement.

NATIONAL CINEMEDIA, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Confirmation of a plan of reorganization could materially alter the classifications and amounts reported in our
consolidated financial statements. The financial statements as of and for the year ended December 29, 2022, do not give effect
to any adjustments to the carrying values of assets or amounts of liabilities that might be necessary as a consequence of
confirmation of a plan of reorganization or other arrangement or the effect of any operational changes that may be
implemented.

Item 9.

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

Not applicable.

Item 9A.

Controls and Procedures

Evaluation of Disclosure Controls and Procedures. The Company maintains disclosure controls and procedures as

defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), that are
designed to ensure that information required to be disclosed in the Company’s reports filed under the Exchange Act is recorded,
processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information
is accumulated and communicated to management, including the Company’s Chief Executive Officer (principal executive
officer) and Chief Financial Officer (principal financial officer), as appropriate, to allow timely decisions regarding required
disclosure.

Management, with the participation of the Chief Executive Officer (CEO) and Chief Financial Officer (CFO), performed

an evaluation of the effectiveness of the Company’s disclosure controls and procedures pursuant to Rule 13a-15(e) and
15d-15(e) of the Exchange Act as of December 29, 2022, the end of the period covered by this Annual Report on Form 10-K.
Based on such evaluation, the CEO and CFO concluded that the Company’s disclosure controls and procedures were effective.

Management’s Annual Report on Internal Control over Financial Reporting. Management is responsible for

establishing and maintaining adequate internal control over financial reporting as defined in Exchange Act Rules 13a-15(f) and
15d-15(f). Management evaluated the design and operating effectiveness of the Company’s internal control over financial
reporting based on the framework in Internal Control- Integrated Framework (2013) issued by the Committee of Sponsoring
Organizations of the Treadway Commission (COSO). Based on that evaluation, the Company's management concluded that the
Company's internal control over financial reporting as of December 29, 2022 was effective.

In designing and evaluating our disclosure controls and procedures, management recognizes that any control, no matter

how well designed and operated, can provide only reasonable, not absolute, assurance of achieving the desired control
objectives. Due to the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that
misstatements due to error or fraud will not occur or that all control issues and instances of fraud, if any, within the Company
have been detected.

Changes in Internal Control over Financial Reporting. There were no changes in our internal control over financial

reporting that occurred during the quarter ended December 29, 2022 that have materially affected, or are reasonably likely to
materially affect, our internal control over financial reporting.

Item 9B.

Other Information

On April 11, 2023 (the “Petition Date”), NCM LLC filed a voluntary petition for reorganization with a prearranged

Chapter 11 plan under Chapter 11 of the U.S. Bankruptcy Code in the U.S. Bankruptcy Court for the Southern District of
Texas. NCM LLC’s case will be administered under the captions In re: National CineMedia, LLC, Case No. 23-90291. NCM,
Inc. expects to continue to manage NCM LLC, the “debtor in possession”, under the jurisdiction of the Bankruptcy Code and in
accordance with the applicable provisions of the Bankruptcy Code and orders of the Bankruptcy Court. As a result of this filing
and in accordance with applicable GAAP, the Company concluded that NCM, Inc. will no longer control NCM LLC for
accounting purposes as of the Petition Date, and therefore, NCM LLC will be deconsolidated from the Company’s consolidated
financial statements prospectively. In connection with the deconsolidation of NCM LLC and in accordance with Regulation S-
X Article 11, the following unaudited pro forma financial statements of the Company are included herein:

•

Unaudited Pro Forma Balance Sheet as of December 29, 2022;

Unaudited Pro Forma Statement of Operations for the year ended December 29, 2022; and

Notes to unaudited pro forma financial statements.

The following unaudited pro forma financial statements (“pro forma financial statements”) are based upon the historical

consolidated financial statements of the Company, adjusted to reflect the deconsolidation of NCM LLC as a result of NCM
LLC voluntarily initiating its financial restructuring plan under Chapter 11 of the United States Bankruptcy Code on the
Petition Date. Subsequent to the deconsolidation, the Company will account for the investment in NCM LLC in accordance
with ASC 321-Investments-Equity Securities, which is reflected as a pro forma adjustment in the unaudited Pro Forma Balance
Sheet (“Pro Forma Balance Sheet”). See “Notes to unaudited Pro Forma Financial Statements” for explanation of other
adjustments. The pro forma financial statements of the Company should be read in conjunction with the historical consolidated
financial statements of the Company and the related notes included in Item 8 - Financial Statements and Supplementary Data.
The Company prepared the unaudited pro forma financial statements included herein on the same basis as the annual audited
consolidated financial statements.

The Pro Forma Balance Sheet reflects the deconsolidation of NCM LLC assuming the Chapter 11 filing had occurred on

December 29, 2022, while the unaudited Pro Forma Statement of Operations (“Pro Forma Statement of Operations”) gives
effect to the deconsolidation assuming the Chapter 11 filing had occurred on December 31, 2021. The pro forma adjustments
are based on the best available information including certain assumptions that the Company believes are reasonable. The
Company believes that such adjustments are appropriate and directly attributable to the deconsolidation of NCM LLC. The pro
forma adjustments assume that NCM LLC continues to operate its business in the ordinary course throughout the restructuring.

NCM, Inc. is a separate entity and has not filed for bankruptcy relief. In addition, the pro forma adjustments do not
include any adjustments to reflect any resolution of the Chapter 11 Case entered into by NCM LLC and certain creditors of
NCM LLC, including the restructuring of NCM LLC’s capital structure. For tax purposes, the Company has not made any
assumptions regarding the ultimate form of the restructuring and the impact, if any, of a continuing equity investment in NCM
LLC. As such, the pro forma adjustments do not include the deferred tax impacts of any outside basis difference in NCM LLC.
Accordingly, actual results could differ materially from the pro forma presentation included herein depending on these factors,
among others.

The pro forma financial statements are provided for illustrative purposes only and are not indicative of the operating

results or financial position that would have occurred had the deconsolidation of NCM LLC occurred on December 29, 2022 for
the Pro Forma Balance Sheet, or on December 31, 2021 for the Pro Forma Statement of Operations for the year ended
December 29, 2022. Readers should not rely on the Pro Forma Financial Statements as being indicative of the historical
operating results that the Company would have achieved if the deconsolidation had occurred on such dates or any future
operating results or financial position that it will experience after the effective date of the Chapter 11 filing including the final
result and effect of any potential outcome resulting from the planned restructuring of NCM LLC.

NATIONAL CINEMEDIA, INC.
Unaudited Pro Forma Balance Sheet
(In millions, except share and per share data)

Historical
NCM, Inc.
Consolidated

Pro Forma
Adjustments

Pro Forma
NCM, Inc.

ASSETS
CURRENT ASSETS:

Cash and cash equivalents.......................................................................................... $
Restricted cash............................................................................................................
Short-term marketable securities................................................................................
Receivables, net..........................................................................................................
Amounts due from NCM LLC, net............................................................................
Prepaid expenses and other current assets..................................................................
Total current assets...............................................................................................

NON-CURRENT ASSETS:

Property and equipment, net.......................................................................................
Intangible assets, net..................................................................................................
Investment in NCM LLC...........................................................................................
Other investments.......................................................................................................
Long-term marketable securities................................................................................
Debt issuance costs, net..............................................................................................
Other assets................................................................................................................
Total non-current assets.......................................................................................

TOTAL ASSETS............................................................................................................ $
LIABILITIES AND EQUITY/(DEFICIT)
CURRENT LIABILITIES:

Amounts due to founding members........................................................................... $
Payable to founding members under the TRA...........................................................
Accrued expenses.......................................................................................................
Accrued payroll and related expenses........................................................................
Accounts payable.......................................................................................................
Deferred revenue........................................................................................................
Short-term debt, net....................................................................................................
Other current liabilities...............................................................................................
Total current liabilities.........................................................................................

NON-CURRENT LIABILITIES:

Payable to founding members under the TRA...........................................................
Other liabilities...........................................................................................................
Total non-current liabilities..................................................................................
Total liabilities......................................................................................................

EQUITY/(DEFICIT):

NCM, Inc. Stockholders’ Equity/(Deficit):
Preferred stock, $0.01 par value; 10,000,000 shares authorized, none issued and
outstanding, respectively............................................................................................
Common stock, $0.01 par value; 260,000,000 shares authorized, 128,402,636
issued and outstanding, respectively...............................................................................
Additional paid in capital (deficit).............................................................................
Retained earnings (distributions in excess of earnings).............................................
Total NCM, Inc. stockholders’ equity/(deficit)....................................................
Noncontrolling interests.............................................................................................
Total equity/(deficit)............................................................................................

TOTAL LIABILITIES AND EQUITY/DEFICIT.......................................................... $

61.7 $
2.1
0.7
92.0
—
7.9
164.4

13.0
586.7
—
0.9
0.3
3.3
23.8
628.0
792.4 $

18.2 $
0.3
17.8
8.3
25.0
10.2
1,121.1
2.2
1,203.1

35.3
18.0
53.3
1,256.4

(59.4) (a) $
(2.1) (a)

—
(82.9) (a)
18.9
(b)
(7.0) (a)

(132.5)

(13.0) (a)
(586.7) (a)
(d)
70.7
(0.9) (a)
5.9
(a)
(3.3) (a)
(23.8) (a)
(551.1)
(683.6)

(18.2) (b) $

—
(17.0) (a)
(7.7) (a)
(23.3) (a)
(10.2) (a)
(1,121.1) (a)
(2.1) (a)

(1,199.6)

—
(18.0) (b)
(18.0)
(1,217.6)

2.3
—
0.7
9.1
18.9
0.9
31.9

—
—
70.7
—
6.2
—
—
76.9
108.8

—
0.3
0.8
0.6
1.7
—
—
0.1
3.5

35.3
—
35.3
38.8

—

1.3
(146.2)
(370.4)
(515.3)
51.3
(464.0)
792.4 $

(d)

—
—
585.3
585.3
(51.3) (a)
534.0
(683.6)

—

1.3
(146.2)
214.9
70.0
—
70.0
108.8

See accompanying Notes to unaudited Pro Forma Financial Statements.

100

NATIONAL CINEMEDIA, INC.
Unaudited Pro Forma Statement of Operations
Year Ended December 29, 2022
(In millions)

Revenue
OPERATING EXPENSES:

Historical
NCM, Inc.
Consolidated
$

Pro Forma
Adjustments

Pro Forma
NCM, Inc.

249.2 $

(238.2) (c) $

11.0

Advertising operating costs..................................................................................
Network costs.......................................................................................................
Theater access fees and revenue share to founding members...............................
Selling and marketing costs..................................................................................
Administrative and other costs.............................................................................
Impairment of long-lived assets............................................................................
Depreciation expense............................................................................................
Amortization of intangibles recorded for network theater screen leases..............
Total.................................................................................................................
OPERATING INCOME (LOSS)....................................................................

27.2
8.4
82.3
42.8
44.3
5.8
6.5
25.0
242.3
6.9

(27.2) (c)
(8.4) (c)
(82.3) (c)
(42.8) (c)
(32.8) (c)
(5.8) (c)
(6.5) (c)
(25.0) (c)
(230.8)
(7.4)

NON-OPERATING EXPENSES:

Interest on borrowings..........................................................................................
(Gain) loss on early retirement of debt, net..........................................................
Loss on re-measurement of the payable to founding members under the TRA...
Gain on sale of asset.............................................................................................
Gain on deconsolidation.......................................................................................
Other non-operating income, net..........................................................................
Total.................................................................................................................
(LOSS) INCOME BEFORE INCOME TAXES.......................................................
Income tax expense...............................................................................................
CONSOLIDATED NET (LOSS) INCOME.............................................................
Less: Net (loss) income attributable to noncontrolling interests.........................
NET (LOSS) INCOME ATTRIBUTABLE TO NCM, INC....................................
COMPREHENSIVE (LOSS) INCOME ATTRIBUTABLE TO NCM, INC........... $

79.7
(5.9)
2.2
(2.2)
—
(0.7)
73.1
(66.2)
—
(66.2)
(37.5)
(28.7)
(28.7) $

NET LOSS PER NCM, INC. COMMON SHARE:

Basic...................................................................................................................... $
Diluted.................................................................................................................. $

(0.35)
(0.35)

(79.7) (c)
(c)

5.9
—
2.2
(c)
(622.4) (d)
(c)

13.5
(680.5)
673.1
—
673.1
37.5
635.6
635.6

(c)

$
$

—
—
—
—
11.5
—
—
—
11.5
(0.5)

—
—
2.2
—
(622.4)
12.8
(607.4)
606.9
—
606.9
—
606.9
606.9

7.40
7.40

WEIGHTED AVERAGE SHARES OUTSTANDING:

Basic......................................................................................................................
Diluted..................................................................................................................

81,968,007
81,968,007

81,968,007
82,015,111

See accompanying Notes to unaudited Pro Forma Financial Statements.

101

NATIONAL CINEMEDIA, INC.
Notes to unaudited Pro Forma Financial Statements

(a) Reflects the deconsolidation of NCM LLC’s assets and liabilities at their carrying amounts included in the Company's

historical consolidated financial statements as of December 29, 2022.

(b) Represents adjustments to reverse the removal of NCM LLC’s intercompany balances with NCM, Inc. in order to
reflect intercompany amounts and transactions that were previously eliminated from the Company's historical
consolidated financial statements as of December 29, 2022.

financial statements for the year ended December 29, 2022.

(d) Represents the adjustments made to reflect the estimated gain on deconsolidation, which represents the de-recognition
of the carrying amounts of NCM LLC’s assets and liabilities compared to the non-controlling interest previously
consolidated in the Company’s historical consolidated financial statements and the remaining estimated fair value of
the investment in NCM LLC in accordance with ASC 321-Investments-Equity Securities as of December 29, 2022 for
the Pro Forma Balance Sheet and as of December 31, 2021 for the Pro Forma Statement of Operations.

Item 9C.

Disclosure Regarding Foreign Jurisdictions that Prevent Inspections

None.

PART III

Item 10.

Directors, Executive Officers and Corporate Governance

The information required by this item regarding our executive officers is set forth in Part I of this Annual Report on

Form 10-K under the heading “Information about our Executive Officers” and is incorporated herein by this reference.

Our Board of Directors currently consists of eight directors with one vacancy. Under the director designation agreement
dated as of February 13, 2007 (the “Director Designation Agreement”), two of our founding members – Cinemark and Regal –
are each permitted to appoint or designate up to two persons for nomination to election on our Board of Directors under the
terms set forth in the Director Designation Agreement, one of whom must qualify as “independent” as required by the rules
promulgated by the SEC under the Exchange Act, and by Nasdaq. See “Certain Relationships and Related Party Transactions –
Transactions with Founding Members – Director Designation Agreement.” The designees pursuant to the Director Designation
Agreement for Cinemark are Donna Reisman and Mark Zoradi and for Regal is Mark B. Segall.

Our Certificate of Incorporation provides that all directors are included within one class and that the number of total
directors will not be more than eleven. The number of currently authorized director positions is nine pursuant to our Bylaws.
Each member serves a one-year term until the next Annual Meeting and until his or her successor is duly elected and qualified.

The following table provides information regarding our directors as of April 10, 2023.

102

Name

Age

Director
Since

Independent

Occupation

David E. Glazek

Lawrence A.
Goodman

Kurt C. Hall

Juliana F. Hill

Thomas F.
Lesinski

Donna Reisman

Mark B. Segall

Mark Zoradi

2019

2007

2007-2016;
2019

2020

2014

2019

2018

Yes

2021

Executive Chairman of Turning
Point Brands, Inc.
Former President of Sales and
Marketing of CNN

Former President and CEO of
NCM, Inc. and Former Chairman
of the NCM, Inc. Board

Current Committee
Membership*
C

Chair

Former Senior Vice President of
Liquidity and Asset Management
of iHeartMedia, Inc.

Chair

CEO of NCM, Inc.

President of Ad Sales and
Marketing for Univision

Founder and Managing Director of
Kidron Corporate Advisors LLC

Member of the Board of Directors
and Former CEO of Cinemark
Holdings, Inc.

* A = Audit Committee, C = Compensation Committee, NG = Nominating and Governance Committee

David E. Glazek
Independent Director

Director Since: 2019
Age: 45

Committees:
Compensation
Nominating and
Governance - Chair

Mr. Glazek has over 15 years of experience investing in distressed, special situations and private
credit strategies, including as a Partner and Portfolio Manager of Standard General, LP. from
2008-2023. He also serves as Executive Chairman of Turning Point Brands, Inc., a Director of
Workers Benefit Consortium, Inc., and an Adjunct Professor at Columbia Business School. He
previously worked at Lazard Freres & Co, where he focused on mergers and acquisitions and
corporate debt restructuring. He has also worked at the Blackstone Group. Throughout his career
he has served on numerous public and private company boards of directors. Mr. Glazek holds a
Bachelor of Arts from the University of Michigan and a J.D. from Columbia Law School.
Qualifications:

Mr. Glazek’s extensive experience overseeing the operations of public and private companies, as
well as his deep capital markets, legal, governance, transactional, and restructuring expertise
qualifies him to serve on our Board of Directors.

Lawrence A.
Goodman
Independent Director

Director Since: 2007
Age: 69

Committees:
Audit
Compensation - Chair

Mr. Goodman has been a media and advertising consultant since 2015, including founding and
serving as CEO of Newfound Frontier, LLC, a provider of media and advertising consulting and
advisory services, since its inception in 2019. Mr. Goodman also founded White Mountain Media,
a media consulting company, in July 2004 and served as its president since inception until 2015.
From July 2003 to July 2004, Mr. Goodman was retired. From March 1995 to July 2003,
Mr. Goodman was the President of Sales and Marketing for CNN, a division of Turner
Broadcasting System, Inc. Mr. Goodman also serves on three private company boards.

Qualifications:

Mr. Goodman’s extensive background in the media industry allows him to provide media sales
and marketing advice to our management and Board. Mr. Goodman brings significant business
experience to provide strategies and solutions to resolve the issues addressed by our Board.

103

Kurt C. Hall
Independent Director

Director Since: 2019
Age: 64

Committees:
Audit
Compensation

Mr. Hall previously served as the Company's President, Chief Executive Officer and Chairman
from 2007 until his retirement in January 2016, and he held the same positions at NCM LLC from
March 2005 until 2007. Prior to this, from May 2002 to May 2005, Mr. Hall served as Co-
Chairman and Co-Chief Executive Officer of Regal Entertainment Group and President and Chief
Executive Officer of its media subsidiary and NCM predecessor, Regal CineMedia Corporation.
Mr. Hall also serves on the board of two private companies.

Previously, Mr. Hall has held various executive positions with United Artist Theatre Company,
and its predecessor companies, including Chief Financial Officer and then Chief Executive Officer
when it became part of Regal Entertainment Group in 2002.

Qualifications:

Mr. Hall's extensive background with the Company and our business allows him to provide sales
and management advice to our management and Board.

Juliana F. Hill
Independent Director

Director Since: 2020
Age: 54

Committees:
Audit - Chair

Ms. Hill is the owner of JFH Consulting, which she founded in 2013 to provide financial and
strategic advisory services. From 2013 to 2019, Ms. Hill worked at iHeartMedia, Inc., formerly
Clear Channel Communications, Inc., as the Senior Vice President of Liquidity and Asset
Management, and also led a steering committee for the separation of iHeartMedia's subsidiary,
Clear Channel Outdoor Holdings. Prior to this, from 2000 to 2010, she worked as iHeartMedia’s
Senior Vice President of Finance. Ms. Hill also serves on the board of one public company.

Previously, Ms. Hill was an associate in US West Communications, Inc.’s executive development
program and an audit manager at Ernst & Young LLP.

Qualifications:

Ms. Hill's experience as a financial executive in a media company qualifies her to serve on our
Board of Directors and as chairperson of our Audit Committee and to provide guidance to our
internal audit function and financial advice to our Board.

Thomas F.
Lesinski
Chief Executive Officer
and Director

Director Since: 2014
Age: 63

Committees:
None

Mr. Lesinski was appointed the Chief Executive Officer of NCM effective August 2, 2019.
Previously, he served as the Chief Executive Officer of Sonar Entertainment, an independent
entertainment studio from January 2016 to August 2019 and a member of its Board until February
2020. Mr. Lesinski served as the founder and CEO of Energi Entertainment, a multi-media content
production company, from August 2014 until December 2015. From 2013 to 2014, Mr. Lesinski
was President of Digital Content and Distribution at Legendary Entertainment, a leading media
company dedicated to owning, producing and delivering content to mainstream audiences with a
targeted focus on the fandom demographic. Prior to that role, from 2006 to 2013, Mr. Lesinski
served as President, Digital Entertainment at Paramount Pictures, a global producer and distributor
of filmed entertainment. Mr. Lesinski also served as President of Worldwide Home Entertainment
at Paramount Pictures for three years, prior to which, he spent ten years in various leadership
positions at Warner Bros. Entertainment and was a Managing Director for an advertising agency.

Mr. Lesinski served as Non-Employee Chairman from August 1, 2018 to August 1, 2019.

Qualifications:

Mr. Lesinski’s experience in home entertainment and digital media gives him the experience to
critically review the various business considerations necessary to run a business such as ours and
offers a valuable perspective as the media marketplace becomes more competitive, particularly
with the growth of online and mobile advertising platforms. Mr. Lesinski's previous experience as
a Chief Executive Officer and current role as the Company's Chief Executive Officer provides
valuable perspective as a director.

Donna Reisman
Independent Director

Director Since: 2019
Age: 60

Committees:
Compensation
Nominating and
Governance

Ms. Reisman, also known as Ms. Speciale, is currently the President of Ad Sales and Marketing
for Univision. Ms. Reisman was the president of WarnerMedia from 2014 to 2019, where she
oversaw advertising revenue for Turner Broadcasting’s domestic television and digital
entertainment, news, kids and young adult brands. She previously served as the president of
Turner Entertainment and Young Adult Ad Sales from 2012 to 2014. Prior to that role, she was
President, Investment & Activation and Agency Operations at MediaVest Worldwide from 2003
to 2012. Ms. Reisman also serves on a number of private company boards.

Qualifications:

Ms. Reisman’s extensive experience in the media and advertising industry allows her to provide
media strategy, sales and marketing advice to the Company's management and Board.

104

Mark B. Segall
Director

Director Since: 2018
Age: 60

Committees:
None

Mr. Segall is the owner and Managing Director of Kidron Corporate Advisors LLC, a New York
based mergers and acquisitions corporate advisory boutique founded in 2003, and has been the
CEO of Kidron Capital Advisors LLC since 2009. Previously, he served as the Co-Chief
Executive Officer of Investec, Inc., an asset management company, from 2001 to 2003, following
his role as Investec Inc.’s head of investment banking and general counsel. Prior to that, he was a
partner at the law firm of Kramer, Levin, Naftalis & Frankel LLP, specializing in cross-border
mergers and acquisitions and capital markets activities. Mr. Segall serves as a director of Bel
Fuse, Inc. (2011 to present). In the past five years he has served on other public company boards
including: Ronson Europe N.V. (2008 to 2017) and Temco Service Industries, Inc. (2011 to
2016). Mr. Segall also serves on a number of private company boards.

Qualifications:

Mr. Segall’s two decades of board leadership experience at both public and private companies,
gives him the ability to offer guidance to the Company and its operations.

Mark Zoradi
Director

Director Since: 2021
Age: 69

Committees:
None

Mr. Zoradi served as CEO of Cinemark Holdings, Inc. from August 2015 to December 2021 and a
director on the Board of Cinemark Holdings, Inc. from August 2015 to the present. Mr. Zoradi
spent 30 years at The Walt Disney Company, a major motion picture studio, including serving as
the President of Walt Disney Studios Motion Picture Group. Prior to that, Mr. Zoradi served in a
variety of positions of increasing responsibility with The Walt Disney Company, including as the
General Manager of Buena Vista Television and President of Buena Vista International with
responsibility for the international theatrical and home entertainment marketing and distribution of
Disney, Touchstone and Pixar films. Mr. Zoradi also served as the President and Chief Operating
Officer (COO) of Dick Cook Studios from January 2011 until July 2014 and the COO of
DreamWorks Animation SKG, Inc. from August 2014 until January 2015.

Qualifications:
Mr. Zoradi has extensive experience in the cinema and film industries and will bring important
insights to our Board regarding our industry. Since Mr. Zoradi is a Board designee for one of our
founding members, he brings to our Board the perspective of a major stakeholder.

Audit Committee

Key Responsibilities:

Committee Members
Juliana F. Hill, Chair
Lawrence A. Goodman
Kurt C. Hall

Number of meetings in 2022:

Our Audit Committee is primarily concerned with overseeing management’s processes
and activities relating to the following:

u maintaining the reliability and integrity of our accounting policies, financial

reporting practices and financial statements;

u review all “Related Party Transactions” as such term is defined under Nasdaq
rules and the Statement of Policy with Respect to Related Party Transactions;

u the performance of our internal audit function and independent auditor; and
u confirming compliance with laws and regulations, and the requirements of any
stock exchange or quotation system on which our securities may be listed.

Our Audit Committee also is responsible for establishing procedures for the receipt of
complaints regarding our accounting, internal accounting controls or audit matters, and
the confidential, anonymous submission of concerns regarding questionable
accounting or auditing matters, and overseeing the Company's compliance with
applicable laws and regulations, the Company’s Code of Business Conduct and Ethics
and insider trading policy and other general risk assessment and management. Our
Audit Committee’s responsibilities are set forth in its charter, the current version of
which was most recently reviewed by the Committee and approved by our Board in
January 2022 in conjunction with the charter's annual review. The current version of
the charter is available on our website at www.ncm.com at the Investor Relations link.

Independence and Financial Literacy
Each of the committee members was determined to be “independent” as required by
the rules promulgated by the SEC under the Exchange Act and by Nasdaq. Each of
them also meets the financial literacy requirements of Nasdaq. Our Board of Directors
has determined that Ms. Hill qualifies as an “audit committee financial expert” as
defined in the federal securities laws and regulations.

As the need to fill vacancies arises in the future, our Nominating and Governance Committee will seek individuals

qualified to become Board members for recommendation to our Board. Our Nominating and Governance Committee would

105

consider potential director candidates recommended by stockholders and use the same criteria for screening all candidates,
regardless of who proposed such candidates.

Our Nominating and Governance Committee and Board of Directors consider whether candidates for nomination to our

Board of Directors possess the following qualifications, among others:

(a)

the highest level of personal and professional ethics, integrity, and values;

(b) expertise that is useful to us and is complementary to the background and expertise of the other members of our

Board of Directors;

our Board of Directors;

(d) a desire to ensure that our operations and financial reporting are conducted in a transparent manner and in

compliance with applicable laws, rules, and regulations; and

(e) a dedication to the representation of the best interests of all our stockholders.

Diversity of Directors. In considering whether to recommend any candidate for inclusion in the slate of director
nominees, our Nominating and Governance Committee complies with the Company’s Corporate Governance Guidelines and
Corporate Code of Business Conduct and Ethics. In addition to considering the qualifications listed above, the Committee seeks
nominees that will complement the existing members and provide diversity of background, professional expertise, gender and
ethnicity and that will be in compliance with applicable law and stock exchange requirements and taking into account proxy
advisory firm guidelines. Our Nominating and Governance Committee periodically reviews and assesses its evaluation process
for considering nominee directors.

Board Diversity Matrix

The following matrix summarizes self-identified diversity characteristics and is provided in accordance with applicable

Nasdaq listing Requirements:

Total Number of Directors

BOARD DIVERSITY MATRIX AS OF DECEMBER 29, 2022

Female

Male

Non-Binary

Did Not
Disclose Gender

—

Part I: Gender Identity
Directors
Part II: Demographic Background
African American or Black
Alaskan Native or Native American
Asian
Hispanic or Latinx
Native Hawaiian or Pacific Islander
White
Two or More Races or Ethnicities
LGBTQ+
Did Not Disclose Demographic
Background
Our Board adopted a Code of Business Conduct and Ethics that applies to all of our employees, including our Board of

—
—
—
—
—
—
—

—
—
—
—
—
6
—

—
—
—
—
—
—
—

—
—
—
—
—
2
—

—
—

—

Directors, Chief Executive Officer and principal financial officer. The Code of Business Conduct and Ethics sets forth the
Company’s conflict of interest policy, records retention policy, insider trading policy and policies for protection of the
Company’s property, business opportunities and proprietary information. Our Code of Business Conduct and Ethics is available
free of charge on our website at ncm.com under the tab “Investor Relations– Corporate Governance.” We intend to post on our
website any amendments to, or waivers from our Code of Business Conduct and Ethics applicable to senior financial
executives.

Delinquent Section 16(a) Reports

Section 16(a) of the Exchange Act requires our officers and directors, and persons who own more than ten percent of our

common stock, to file reports of ownership and changes in ownership on Forms 3, 4 and 5 with the SEC. As a matter of
practice, we assist many of our directors and all of our executive officers by preparing initial ownership reports and reporting

106

ownership changes, and typically file these reports on their behalf. To our knowledge, based solely on our review of the copies
of such reports filed electronically with the SEC and on written information given to us by the reporting persons, we believe
that all Section 16(a) filing requirements applicable to our officers, directors and greater than ten percent beneficial owners
were complied with on a timely basis during the fiscal year ended December 29, 2021, except that one Form 4 for Maria Woods
was filed on February 27, 2023 for a September 1, 2022 time-based restricted stock unit (“TBRSU”) vesting.

Item 11.

Executive Compensation

EXECUTIVE COMPENSATION TABLES

FISCAL 2022 SUMMARY COMPENSATION TABLE

The following table shows the amount of compensation earned by our NEOs during the years indicated. For additional

information regarding the material terms of each NEOs’ employment agreement, see “Employment Agreements” and “Potential
Payments Upon Termination or Change in Control” below.

Name and Principal
Position
Thomas F. Lesinski
Chief Executive
Officer.....................
Ronnie Y. Ng
Chief Financial
Officer.....................

Year

Salary (1)

Stock
Awards (2)

Option
Awards

Non-Equity
Incentive Plan
Compensation
(3)

All Other
Compensation
(4)

2022 $ 844,027 $ 499,999 $
2021 $ 759,808 $ 1,125,000 $

428,771
250,000

$
$

771,702 $
524,080 $

27,158
7,158

Total
$ 2,571,657
$ 2,666,046

2022 $ 450,000 $
2021 $ 102,115 $

337,167 $
126,244 $

— $

150,000

306,450 $
48,098 $

1,823
10,340

$ 1,095,440
436,797
$

Scott D. Felenstein
President.................

2022 $ 669,500 $
2021 $ 585,361 $

497,697 $
509,834 $

— $
— $

516,720 $
334,803 $

2,948 $ 1,686,865
$ 1,432,747
2,749

(1) The amounts represent the prorated total salaries paid to the NEO's inclusive of the annual merit increase in

February 2022 and other increases, as applicable.

(2) The amounts represent the aggregate grant date fair value of the target level of stock awards computed in

accordance with ASC Topic 718. For a discussion of the assumptions and methodologies used in calculating the
grant date fair value of these awards, refer to Note 11—Share-based Compensation within the notes to the
Company’s consolidated financial statements. Certain of the stock awards granted in 2022 and 2021 are scheduled
to vest based upon the achievement of performance conditions relating to cumulative “Free Cash Flow” at the end
of a two or three-year measuring period, respectively. Free Cash Flow is a non-GAAP measure used by
management to measure the Company’s operating cash flow in determining whether PBRSU targets have been
achieved. The amounts for these awards are presented based on 100% of the fair market value on the date of grant.
When there is a stock award, but no performance metric set for portions of the award, the portion is considered
granted upon approval of the performance metric. As the 2022 performance metric for portions of the 2021
performance-based restricted stock units (“PBRSU”) award and the 2022 PBRSU award were set in January and
February 2022, the amounts include, and only include, those portions of the awards. Actual results could
materially differ from this estimate. The maximum amounts payable for awards granted during fiscal 2022
assuming the highest level of performance cannot exceed the total amount granted.

(3) The bonus amounts were calculated off of the prorated total salary for Mr. Lesinski, to reflect his amended

employment agreement, effective August 1, 2022. Prior to the amended employment agreement, his salary was
increased from his 2021 base salary to $795,675 in February 2022.

(4) The following table provides details about each component of the “All Other Compensation” column from the

Fiscal 2022 Summary Compensation Table above for fiscal 2022.

107

Year

Name
Thomas F. Lesinski........................ 2022
Ronnie Y. Ng.................................
2022
Scott D. Felenstein......................... 2022

401(k)
Employer
Contribution
(a)

Term Life
Insurance
(b)

Disability
Insurance
(c)

Misc.
(d)

Total All
Other
Compensation

$
$

— $

5,118 $

720 $ 21,320 $

27,158

— $
— $

443 $
1,568 $

720 $
720 $

660 $
660 $

1,823

2,948

(a) Represents matching contributions made pursuant to NCM LLC’s defined contribution 401(k) plan. Eligible

employees, including the NEOs, are eligible for a discretionary contribution under the 401(k) plan on base pay up
to IRS limits. Note that the 401(k) match has been suspended since April 2020.

(b) Represents imputed income for term life insurance coverage.

(d) Represents taxable fringe benefits and allowances for Messrs. Ng and Felenstein and contractual compensation

outlined within Mr. Lesinski’s amended employment agreement as discussed further within section “Employment
Agreements”.

OUTSTANDING EQUITY AWARDS AT DECEMBER 29, 2022

Stock Option Awards

Restricted Stock Awards and RSUs

Number of
Securities
Underlying
Unexercised
Options
Unexercisable
$
—
166,689 (3) $

Option
Exercise
Price

8.00
2.71

Option
Expiration
Date (1)

8/2/2029
7/29/2030

Equity
Incentive
Plan
Award:
Number of
Unearned
Shares
That
Have Not
Vested

Market
Value
of Shares
of Stock
That
Have Not
Vested
(2)

Equity
Incentive
Plan Award:
Market or
Payout Value
of Unearned
Shares That
Have Not
Vested (2)

Number
of Shares
of Stock
That
Have Not
Vested

—

—
92,251 (7) $ 22,140

—

$ —

—

39,725 (8) $

9,534

146,658 (4) $

3.09

8/4/2031

161,812 (9) $ 38,835

370,930 (5) $
250,000 (5) $
70,732 (6) $

1.58
3.50
3.80
$ —
$ —
$ —
$ —
$ —
$ —
$ —
$ —
$ —

8/1/2032
8/1/2032
9/27/2031
—
—
—
—
—
—
—
—
—

—

$
14,815 (11) $
11,000 (12) $

237,341 (10) $ 56,962
—
3,556
2,640
121,212 (13) $ 29,091
2,640
3,814
9,783
7,338
403
299
161,616 (13) $ 38,788

11,000 (14) $
15,890 (8) $
40,764 (15) $
30,573 (12) $
1,680 (16) $
1,247 (12) $

—
—
—
—
—
—
—
—
—

—
—

—

$
$

—

79,114 (17) $
$
11,167 (18) $
$
15,152 (19) $
49,500 (18) $
$
30,574 (18) $
$
1,266 (18) $
$
20,202 (19) $

—

—
—

—

5,696
—
1,206
—
1,636
5,346
—
3,302
—
137
—
2,182

Name
Thomas F.
Lesinski....

Ronnie Y.
Ng.............

Scott D.
Felenstein.

Number of
Securities
Underlying
Unexercised
Options
Exercisable
650,198
333,737

—

73,329

—
—
35,365
—
—
—
—
—
—
—
—
—

(1) Options generally expire 90 days from the term date if the NEO terminates employment. In the event of

termination without cause, Mr. Lesinski’s options expire 180 days from the term date.

(2) Amounts are based on the closing stock price, $0.24 per share, on December 29, 2022 based on the target level of

performance. The amounts for these awards are presented based on 100% of the fair market value on the date of
grant. When there is a stock award, but no performance metric set for portions of the award, the portion is
considered granted upon approval of the performance metric. As the 2022 performance metric for portions of the
2021 PBRSU award and the 2022 PBRSU award were set in January and February 2022, the amounts include, and
only include, those portions of the awards.

(3) The stock options vest 33.33% per year commencing on July 29, 2020, subject to continuous service.

108

(4) The stock options vest 33.33% per year commencing on August 4, 2021, subject to continuous service.

(5) The stock options vest 33.33% per year commencing on August 1, 2022, subject to continuous service.

(6) The stock options vest 33.33% per year commencing on September 27, 2021, subject to continuous service.

(7) The restricted stock units vest 33.33% per year commencing on July 29, 2020, subject to continuous service.

(8) The restricted stock units vest 50.0% per year commencing on February 28, 2021, subject to continuous service.

(9) The restricted stock units vests 33.33% per year commencing on August 4, 2021, subject to continuous service.

(10) The restricted stock units vests 33.33% per year commencing on August 1, 2022, subject to continuous service.

(11) The restricted stock units vests 33.33% per year commencing on September 27, 2021, subject to continuous

service.

(12) The restricted stock units vest February 26, 2024, subject to continuous service.

(13) The restricted stock units vests 33.33% per year commencing on February 23, 2022, subject to continuous service.

(14) The restricted stock vests 33.33% per year commencing on January 22, 2020, subject to continuous service.

(15) The restricted stock units vests 33.33% per year commencing on January 20, 2021, subject to continuous service.

(16) The restricted stock units vests 33.33% per year commencing on July 2, 2021, subject to continuous service.

(17) The restricted stock unit awards are scheduled to vest based on achievement of the actual cumulative “Free Cash
Flow” target at the end of the three-year measuring period. These figures assume 100% vesting of PBRS prior to
any modification. The performance metrics for the 2023 and 2024 performance years have not yet been set.

(18) The restricted stock awards are scheduled to vest based on achievement of the actual cumulative “Free Cash

Flow” target at the end of the three-year measuring period for the 2020 and 2021 grants. These figures assume
100% vesting of PBRS prior to any modification.

(19) The restricted stock unit awards are scheduled to vest based on achievement of the actual cumulative “Free Cash
Flow” target at the end of the two-year measuring period the 2022 grants. These figures assume 90% vesting of
PBRS prior to any modification. The performance metric for the 2023 performance year has not yet been set.

POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL

The following summaries set forth potential payments payable to our NEOs upon termination of their employment or a

change in control of NCM, Inc. under their employment agreements, as amended, and under the Equity Incentive Plan. The
following discussion is based on the assumption that the actual bonus amount would be the target amount reported as a non-
equity incentive plan award in the Grants of Plan Based Awards table. Actual payments may be more or less than the amounts
described below. In addition, the Company may enter into new arrangements or modify these arrangements, from time to time.
Each employment agreement provides additional detail and definitions for the termination reasons, such as disability, cause and
change in control, among others.

The following table assumes the executive’s employment was terminated under each of these circumstances on

December 29, 2022 and such payments and benefits have an estimated value of:

109

Thomas F. Lesinski (a)

Without Cause or For Good Reason
or Non-renewal by Company.............

Without Cause or For Good Reason
in connection with a Change of
Control**...........................................
Death..................................................

Disability*..........................................
Ronnie Y. Ng (b)

Without Cause or For Good Reason
or Non-renewal by Company.............

Without Cause or For Good Reason
in connection with a Change of
Control**...........................................
Death..................................................

Disability*..........................................
Scott D. Felenstein (c)

Without Cause or For Good Reason
or Non-renewal by Company.............

Without Cause or For Good Reason
in connection with a Change of
Control**...........................................
Death..................................................

Disability*..........................................

Cash
Severance
(1) (2)

Medical
Insurance
(3)

Term Life
Insurance
(4)

Disability
Insurance
(4)

401(k)
Employer
Contribution
(4)

Value of
Accelerated
Equity
Awards (5)

Total

$ 1,769,027 $

19,605 $

— $

65,918 $ 1,854,550

$ 3,538,054 $

19,605 $

— $

19,605 $

— $

462,500 $

19,605 $

5,118 $

720 $

— $

257,664 $ 3,815,323

65,918 $

85,523

65,918 $ 553,861

787,500 $

17,202 $

— $

25,869 $ 830,571

787,500 $

17,202 $

— $

17,202 $

— $

225,000 $

17,202 $

443 $

720 $

— $

49,697 $ 854,399

25,869 $

43,071

25,869 $ 269,234

$ 1,238,575 $

— $

68,986 $ 1,307,561

$ 1,238,575 $

— $

334,750 $

— $

1,568 $

720 $

—

— $

114,111 $ 1,352,686

68,986 $

68,986

68,986 $ 406,024

Net of amounts offset by disability insurance payments

A change of control is defined as 12 months following the change of control within the respective employee
agreements and 3 months prior to or one year following a change of control within the respective equity agreements.

(1) If the employment of the NEO is terminated by NCM, Inc. for reasons other than disability, death or cause, or the
executive resigns for good reason, as defined in the NEO's employment agreement, or the agreement is not
renewed on substantially equal terms, the NEO will be entitled to severance for the period specified in the
respective employment agreement. If the NEO’s employment terminates due to death, the NEO’s beneficiaries
will receive the base salary paid through the end of the month of death. If Mr. Lesinski terminates his employment
on account of his disability, in exchange for a release of claims against the Company, and if, and only if he is not
eligible to receive benefits following the termination date under the Company’s long-term disability plan, he will
be entitled to 50% of his base salary. If Mr. Ng or Mr. Felenstein terminates employment on account of his
disability, in exchange for a release of claims against the Company, he will be entitled to 50% of his then base
salary, offset by any disability benefits provided under a company sponsored benefit arrangement.

(a) Mr. Lesinski's severance represents 100% of his base salary, plus 100% of his target bonus based on his

salary in effect on December 29, 2022 paid over 12 months.

(b) Mr. Ng’s severance represents 100% of his base salary, plus 100% of his target bonus based on his salary in

effect on December 29, 2022 paid over 12 months.

bonus based on his base salary in effect on December 29, 2022 paid over 12 months.

(2) If the employment of Messrs. Lesinski, Ng or Felenstein is terminated by NCM, Inc. for any reason, the respective

NEO is entitled to any annual, long-term or other incentive award that relates to a completed fiscal year or
performance period, as applicable, and is payable (but not yet paid) on or before the date of termination or
resignation.

(3) If the employment of Messrs. Lesinski, Ng or Felenstein is terminated by NCM, Inc. for reasons other than death
or cause, or he resigns for good reason, as defined in the respective NEO's employment agreement, the applicable
NEO is entitled to one year of continued coverage under the NCM, Inc. medical and health insurance plan
pursuant to COBRA. The amount for Messrs. Lesinski, Ng and Felenstein represents an amount equal to 100% of
the premium costs for a 12-month period.

110

(4) If the employment of Mr. Felenstein or Mr. Ng is terminated by NCM, Inc. on account of disability, they are

entitled to receive an amount equal to the cost that would be incurred by the NEO in obtaining individual benefits
equivalent to the NCM, Inc. employee benefit plan or program that the NEO was participating in on the effective
date of the termination for a period of up to one year.

(5) Under the Equity Incentive Plan, if within three months prior to or one year after the consummation of a change of

control, as defined in the Equity Incentive Plan and each NEO’s employment agreement, the NEO’s employment
is terminated by NCM, Inc., its affiliate or a successor in interest without cause or by the NEO for good reason,
both as defined in the Equity Incentive Plan and each NEO’s employment agreement, then all outstanding options
and stock appreciation rights shall become immediately exercisable and all other awards shall become vested and
any restrictions will lapse. Pursuant to the restricted stock agreements, in the case of involuntary terminations
without cause, death and disability, each NEO would retain a prorated amount of shares of TBRS and PBRS
equivalent to time employed during the vesting period. The retained shares would vest upon termination in the
case of TBRS and upon the achievement of performance conditions in the case of PBRS. Amounts are based on
the closing stock price, $0.24 per share, on December 29, 2022. Pursuant to the stock option agreements, in the
case of involuntary terminations without cause, Mr. Ng’s vested stock options would expire after 90 days and Mr.
Lesinski’s vested stock options would expire after 180 days. Vested stock options would expire after twelve
months in the case of death or disability for either NEO. Mr. Lesinski’s and Mr. Ng’s unvested options would be
forfeited on the termination date in the case of death or disability but will vest equal to the portion of the vesting
period they served in their respective roles in the case of termination without cause.

EMPLOYMENT AGREEMENTS

The following provides a discussion of the material terms of the employment agreements between NCM, Inc. and each

of our NEOs. Our Compensation Committee believes these employment agreements are consistent with the standard in our
industry for senior executives. The agreements provide for payments and benefits if each executive’s employment with the
Company and its affiliates is terminated (i) without cause (as defined in the agreements), (ii) for good reason (as defined in the
agreements), (iii) without cause or good reason three months prior to or within one year following a change of control (as
defined in the agreements), (iv) in the event of death, and (v) in the event of disability. See “Potential Payments Upon
Termination or Change in Control” for additional information about such payments and benefits.

Thomas F. Lesinski

Mr. Lesinski’s employment agreement was amended on July 20, 2022 and provides that he will serve as Chief Executive

Officer of NCM, Inc. The amended employment agreement became effective August 1, 2022 and shall expire on the earlier of
(i) December 31, 2025 or (ii) the termination of Mr. Lesinski's employment under the agreement. Prior to this amendment, Mr.
Lesinski’s original employment agreement was effective August 1, 2019, and would have expired on August 2, 2022. The
amended employment agreement provides for an annual base salary of $925,000. In addition to base salary, Mr. Lesinski is
eligible to receive an annual cash bonus pursuant to the Company’s annual non-equity incentive plan based upon attainment of
performance goals determined by our Compensation Committee at a target of 100% of base salary. Mr. Lesinski shall also have
the opportunity to receive long-term incentive awards with a grant date fair value of at least $1,000,000 plus $250,000 of
premium priced options each year during the term, in such amounts and pursuant to such terms as may be determined in the
sole discretion of the Board, subject to limitations in the Amended Employment Agreement related to the mix of equity awards.

If Mr. Lesinski's employment is involuntarily terminated by the Company, he will receive an amount equal to 100% of

his annual base salary plus 100% of the target bonus. If Mr. Lesinski's employment is involuntarily terminated during the 12-
month period following a change of control (as defined in the agreement), on the first payroll that occurs after the 55th day
following the effective date of such termination he will receive a lump sum cash payment in an amount equal to 200% of his
annual base salary plus 200% of the target bonus, payable in equal installments over a 12-month period. For up to 12 months
following any such termination of employment, the Company will pay Mr. Lesinski an amount equal to 100% of the monthly
premium paid by Mr. Lesinski for COBRA coverage under the Company’s group health and dental plans. Under the agreement,
during his employment and for a one-year period following employment, Mr. Lesinski has agreed not to compete with NCM,
Inc. or any of its affiliates or subsidiaries, or solicit any of the employees, officers or agents of these entities. Under the
agreement, Mr. Lesinski has also agreed not to divulge or disclose customer lists or trade secrets of NCM, Inc. or its affiliates or
subsidiaries except in the course of carrying out his duties under the agreement or as required by law.

Ronnie Y. Ng

Mr. Ng’s employment agreement provides that he will serve as Chief Financial Officer of NCM, Inc. The employment
agreement was effective September 15, 2021, and expires on September 15, 2024. The employment agreement provides for an
annual base salary, subject to annual increases at the discretion of our Compensation Committee based on previous year
performance, market conditions and other factors deemed relevant by our Compensation Committee. Our Compensation

111

Committee set Mr. Ng’s base salary at $450,000 for 2022. In addition to base salary, Mr. Ng is eligible to receive an annual
cash bonus pursuant to the Company’s annual non-equity incentive plan based upon attainment of performance goals
determined by our Compensation Committee at a target of 75% of base salary. Mr. Ng shall also have the opportunity to receive
long-term incentive awards of at least $300,000 annually as determined by our Board.

If Mr. Ng’s employment is involuntarily terminated by the Company, on the first payroll that occurs after the 55th day

following the effective date of such termination he will receive an amount equal to 100% of his annual base salary plus 100% of
the target bonus, payable in equal installments over a 12-month period. If Mr. Ng’s employment is involuntarily terminated
during the 12-month period following a change of control (as defined in the agreement), on the first payroll that occurs after the
55th day following the effective date of such termination he will receive an amount equal to 100% of his annual base salary
plus 100% of the target bonus, payable in equal installments over a 12-month period. For up to 12 months following any such
termination of employment, the Company will pay Mr. Ng an amount equal to 100% of the monthly premium paid by Mr. Ng
for COBRA coverage under the Company’s group health and dental plans. Under the agreement, during his employment and
for a one-year period following employment, Mr. Ng has agreed not to compete with NCM, Inc. or any of its affiliates or
subsidiaries, or solicit any of the employees, officers or agents of these entities. Under the agreement, Mr. Ng has also agreed
not to divulge or disclose customer lists or trade secrets of NCM, Inc. or its affiliates or subsidiaries except in the course of
carrying out his duties under the agreement or as required by law.

Scott D. Felenstein

Mr. Felenstein was promoted to President – Sales, Marketing & Partnerships on July 2, 2021. Prior to this promotion,
Mr. Felenstein served as Chief Revenue Officer of NCM, Inc. Mr. Felenstein’s original employment agreement was effective
April 24, 2017 and his amended and restated employment agreement is effective July 2, 2021 and expires on June 30, 2024.
The original and new employment agreements provide for an annual base salary, subject to annual increases at the discretion of
our Compensation Committee based on previous year performance, market conditions and other factors deemed relevant by our
Compensation Committee. Our Compensation Committee set Mr. Felenstein’s base salary at $669,500 for 2022. In addition to
base salary, Mr. Felenstein is eligible to receive an annual cash bonus pursuant to the Company’s annual non-equity incentive
plan based upon attainment of performance goals determined by our Compensation Committee at a target of base salary of 75%
before his promotion and 85% upon his promotion of base salary and long-term incentive awards as determined by the Board.
Mr. Felenstein shall also have the opportunity to receive long-term incentive awards of at least $600,000 annually as
determined by our Board.

In his employee agreements, if Mr. Felenstein’s employment is involuntarily terminated by the Company, on the first

payroll that occurs after the 55th day following the effective date of such termination he will receive an amount equal to 100%
of his annual base salary plus 100% of the target bonus, payable in equal installments over a 12-month period. If Mr.
Felenstein’s employment is involuntarily terminated during the 12-month period following a change of control (as defined in
the employment agreement), on the first payroll that occurs after the 55th day following the effective date of such termination
he will receive an amount equal to 100% of his annual base salary plus 100% of the target bonus, payable in equal installments
over a 12-month period, and Mr. Felenstein will vest in full in any unvested shares of his initial sign-on equity grant. For up to
12 months following any such termination of employment, the Company will pay Mr. Felenstein an amount equal to 100% of
the monthly premium paid by Mr. Felenstein for COBRA coverage under the Company’s group health and dental plans. Under
the agreement, during his employment and for a one-year period following employment, Mr. Felenstein has agreed not to
compete with NCM, Inc. or any of its affiliates or subsidiaries, or solicit any of the employees, officers or agents of these
entities. Under the agreement, Mr. Felenstein has also agreed not to divulge or disclose customer lists or trade secrets of NCM,
Inc. or its affiliates or subsidiaries except in the course of carrying out his duties under the agreement or as required by law.

Non-Employee Directors

NON-EMPLOYEE DIRECTOR COMPENSATION

For our 2022 fiscal year, the base retainers and meeting fees for our directors who were not our employees, employees

of our founding members, or employees of Standard General (“non-employee directors”) are as follows. In accordance with
one of the Company’s cash preservation measures implemented in response to the COVID-19 pandemic, the non-employee
directors were paid 80% of the 2021 retainer balances through the 2022 annual meeting date upon which the following retainers
were approved by the Nominating and Governance Committee. The 2022 compensation was altered to include a larger mix of
equity to retainer.

112

Retainer for non-employee director

$80,000 per annum....................
$280,000 per annum.................. Retainer for serving as Non-Employee Chairman
$25,000 per annum....................
$19,000 per annum....................
$15,000 per annum....................
$13,000 per annum....................
$12,500 per annum....................
$10,000 per annum....................

Additional retainer for serving as Chairman of the Audit Committee
Additional retainer for serving as Chairman of the Compensation Committee
Additional retainer for serving as Chairman of the Nominating and Governance Committee
Additional retainer for serving as a member of the Audit Committee
Additional retainer for serving as a member of the Compensation Committee
Additional retainer for serving as a member of the Nominating and Governance Committee

Non-Employee Chairman Cash Retainers. The compensation for the non-employee chairman is inclusive of all
committee chair and member fees and was reviewed by the Nominating and Governance Committee, with the assistance of FW
Cook, and approved by the Board.

Restricted Stock Units. Non-employee directors serving on the Board as of the annual meeting date of May 4, 2022,

received a grant of equal to $120,000. Each of the RSUs vested on February 23, 2023 and had a value of $12,852 based on the
closing price of the Company’s common stock on the vesting date. The RSUs were settled in shares of the Company’s common
stock. The RSU awards include the right to receive dividend equivalents, subject to vesting.

We reimburse all of our directors for reasonable travel, lodging and other expenses related to their service on our Board

of Directors.

Stock in Lieu of Cash Compensation. Beginning with the first quarter of 2021 and in an effort to further preserve cash,

non-employee directors may elect to receive shares of the Company’s common stock in lieu of all or a portion of their cash
compensation (i.e. base retainers and additional retainers for serving as a Chair or member of a Committee) on a quarterly basis.
A director can make the election to receive stock for each quarter of 2022 during the seven calendar day period immediately
prior to the start of the respective quarter-end blackout period. The portion of his or her quarterly cash compensation designated
by the director will then be converted into a number of shares of the Company’s common stock utilizing the fair market value
of the common stock on the seventh calendar day of the respective election period. Once an election is made with respect to a
particular calendar quarter, it may not be withdrawn or substituted.

Employee Directors

Our employees, employees of our founding members and employees of Standard General who also serve as directors
receive compensation for their services as employees from their respective employers, but they do not receive any additional
compensation from us for their service as our directors or members or chairs of committees.

113

FISCAL 2022 NON-EMPLOYEE DIRECTOR COMPENSATION

Fees Earned or
Paid in Cash (1)
Name
$
Lawrence A. Goodman.............................
Kurt C. Hall............................................... $
$
Juliana F. Hill............................................
$
Donna Reisman.........................................
$
Mark B. Segall..........................................
$
Mark Zoradi..............................................

103,678 (3) $
101,024 (4) $
100,558
$
101,631 (3) $
245,000 (5) $
$
77,267

Stock Awards
(2)

All Other
Compensation

119,999 $
119,999 $
119,999 $
119,999 $
119,999 $
66,428 $

— $
— $
— $
— $
— $
— $

Total

223,677
221,023
220,557
221,630
364,999
143,695

(1) The following table provides details about each component of the “Fees Earned or Paid in Cash” column from the
Fiscal 2022 Director Compensation Table above. All of the Fees Earned or Paid in Cash shown above were
reduced by 20% beginning in April 2020 and were returned to 100% on May 4, 2022 and reflect the prorated
amounts paid for this increase or any prorated amounts due to change in positions.

Name
Lawrence A. Goodman................. $
Kurt C. Hall..................................
$

Annual
Retainer

77,267

Juliana F. Hill...............................

77,267

Donna Reisman............................
$
Mark B. Segall.............................. $ 245,000 (5) $
Mark Zoradi.................................. $
$

77,267

Committee
Chair
Retainer

Committee
Member
Retainer

Total Fees
Earned or Paid
in Cash

5,779

—

23,292

12,952

—

20,633 (3) $

23,758

—

11,413 (3) $

—

103,678

101,024

100,558

101,631

245,000

77,267

(2) The amounts represent the aggregate grant date fair value of the restricted stock unit awards as computed under

ASC 718 and do not represent cash payments made to the individuals or amounts realized. For a discussion of the
assumptions and methodologies used in calculating the grant date fair value of these awards, please see Note 11 to
the Company’s consolidated financial statements.

(3) Mr. Goodman’s compensation was prorated for his time served in each position, as he was appointed to be chair

of the Compensation Committee effective August 3, 2022. Ms. Reisman’s compensation was prorated for her time
served as committee chair until Mr. Goodman’s appointment.

(4) This fee includes 17,861 shares received in lieu of cash payments in accordance with our stock in lieu of cash

program.

(5) Mr. Segall temporarily recused himself from all board activities due to his conflict of interest as the Regal

designee during the Cineworld Proceeding. Following his recusal, Mr. Segall received the non-employee director
retainer in the fourth quarter of 2022.

The RSUs are also subject to the terms and provisions of the Equity Incentive Plan. The following table provides details

about the “Stock Awards” column from the Fiscal 2022 Director Compensation Table above and outstanding stock awards at
December 29, 2022.

Fiscal 2022 Grants

Outstanding Equity Awards at
December 29, 2022

Name
Lawrence A. Goodman
Kurt C. Hall..................
Juliana F. Hill...............
Donna Reisman............
Mark B. Segall..............
Mark Zoradi..................

Grant
Date
5/4/2022
5/4/2022
5/4/2022
5/4/2022
5/4/2022
8/24/2022

Number of
RSUs

Grant Date
Fair Value of
Stock Awards
(a)
119,999
119,999
119,999
119,999
119,999
66,428

53,571 $
53,571 $
53,571 $
53,571 $
53,571 $
53,571 $

Number of
RSUs That Have
Not Vested

Market Value of
Shares of Stock That
Have Not Vested (b)

53,571 $
53,571 $
53,571 $
53,571 $
53,571 $
53,571 $

12,857
12,857
12,857
12,857
12,857
12,857

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(a) Calculated in accordance with ASC Topic 718 as described in footnote (1) to the Fiscal 2022 Director

Compensation Table above and based on a stock price of $2.24.

(b) Amounts are based on the closing stock price, $0.24 per share, on December 29, 2022. The shares vested on

February 23, 2023.

Item 12.

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

Beneficial Ownership

Beneficial ownership is determined under the rules of the SEC and generally includes voting or investment power over
securities. Except in cases where community property laws apply or as indicated in the footnotes to this table, we believe that
each stockholder identified in the table possesses sole voting and investment power over all shares of common stock shown as
beneficially owned by the stockholder. As of April 10, 2023, the percentage of beneficial ownership for NCM, Inc. is based on
174,076,268 shares of common stock outstanding (including unvested restricted stock). Unless indicated below, the address of
each individual listed below is 6300 South Syracuse Way, Suite 300, Centennial, Colorado 80111. The following table sets
forth information regarding the beneficial ownership of our common stock as of April 10, 2023, by:

•

each person (or group of affiliated persons) who is known by us to own beneficially more than 5% of our common
stock;

each of our NEOs;

each of our directors and nominees for director; and

all current directors and executive officers as a group.

Name of Beneficial Owner
Five Percent Stockholders

Cinemark Holdings, Inc. and Affiliates (“Cinemark”) (2)............

Regal Entertainment Group and Affiliates (“Regal”) (3).............

Standard General L.P. (4)..............................................................
Directors and Executive Officers

Thomas F. Lesinski (5).................................................................

Scott D. Felenstein........................................................................

Ronnie Y. Ng (6)...........................................................................

Maria V. Woods............................................................................

Lawrence A. Goodman.................................................................

David E. Glazek............................................................................

Kurt C. Hall...................................................................................

Juliana F. Hill................................................................................

Donna Reisman.............................................................................

Mark B. Segall..............................................................................
Mark Zoradi..................................................................................
All current directors and executive officers as a group (11
persons) (5)(6)...............................................................................

Less than one percent

Shares of
NCM, Inc.
Common
Stock

NCM LLC
Common
Membership
Units (1)

Percent of
NCM, Inc.
Common
Stock

43,690,797

40,683,797

12,932,382

1,388,387

220,315

72,992

35,959

181,397

—

808,712

102,271

108,626

85,530
53,571

—

25.1 %

23.4 %

7.4 %

0.8 %

*
*

3,057,760

1.8 %

(1) NCM LLC common membership units are redeemable at any time at the option of the holder. Upon any

redemption, we may choose whether to redeem the units for shares of our common stock on a one-for-one basis or
for a cash payment equal to the market price of shares of NCM, Inc. common stock. NCM LLC provided written
notices effective as of March 29, 2023 setting forth the determination of 21,431,174 common membership units
to two founding members. The common membership units have not been issued as of April 10, 2023.

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(2) Includes Cinemark Holdings, Inc., Cinemark USA Inc. and Cinemark Media, Inc. The address of these

stockholders is 3900 Dallas Parkway, Suite 500, Plano, Texas 75093. Represents beneficial ownership as of
March 29, 2023 based on the Schedule 13D/A filed on April 3, 2023.

(3) Includes Regal Entertainment Group, Regal Entertainment Holdings, Inc., Regal Cinemas Corporation, Regal

Cinemas, Inc., Regal CineMedia Holdings, LLC and Regal CineMedia Corporation at 101 East Blount Avenue,
Knoxville, Tennessee 37920 and Cineworld Group plc at 8th Floor, Vantage London, Great West Road,
Brentford, United Kingdom TW8 9AG. Represents beneficial ownership as of December 28, 2022 based on the
Schedule 13D/A filed on December 30, 2022.

(4) The address of this stockholder is 767 Fifth Avenue, 12th Floor, New York, New York 10153. Represents

beneficial ownership as of September 7, 2022 based on the Schedule 13D/A filed on September 9, 2022.

(5) Includes 1,057,264 stock options that were vested and exercisable within 60 days of April 10, 2023.

(6) Includes 35,365 stock options that were vested and exercisable within 60 days of April 10, 2023.

The following table sets forth, as of December 29, 2022, information for all equity compensation plans under which our

EQUITY COMPENSATION PLAN INFORMATION

equity securities were authorized for issuance.

Number of
securities to be
issued upon
exercise of
outstanding
options,
warrants and
rights

Weighted-average
exercise price of
outstanding options,
warrants and rights

Number of securities
remaining available for
future issuance under
equity compensation
plans (excluding
securities reflected in
the first column)

7,273,378

(1)

4.34

(2)

8,868,249

(3)

—
7,273,378

—
4.34

—
8,868,249

Plan Category
Equity compensation plans
approved by security holders........

Equity compensation plans not
approved by security holders........

Total..........................................

(1) Includes 2,097,818 stock option grants and 5,175,560 restricted stock and restricted stock units; 0 additional
shares for the 2022, 2021 and 2020 PBRS grants, respectively, that may be issued as the highest level of
performance possible is 100%. Actual results could vary from estimates, especially in the later years included in
the two or three-year projections.

(2) Restricted stock awards and restricted stock units are excluded as there is no exercise price for these awards.

(3) Represents remaining shares of our common stock available for issuance under the Equity Incentive Plan.

The Equity Incentive Plan was approved by our stockholders on April 28, 2020, with additional shares authorized for

issuance under the Equity Incentive Plan approved on May 4, 2022.

Item 13.

Certain Relationships and Related Transactions, and Director Independence

General

Before the completion of our IPO in February 2007, NCM LLC was wholly owned by the founding members. After the
IPO, NCM LLC was owned by us and the founding members. In connection with the IPO, we entered into several agreements
to define and regulate the relationships among us, NCM LLC and the founding members. As of December 29, 2022, NCM, Inc.
owned approximately 74.6% of the outstanding common membership units in NCM LLC. NCM LLC’s other member is
Cinemark, one of the largest motion picture exhibition companies in the U.S., which held the remaining 25.4% of NCM LLC’s
common membership units as of December 29, 2022. In December 2022, AMC and Regal each redeemed all of their
outstanding membership units, 5,954,646 and 40,683,797, respectively, in exchange for shares of NCM, Inc. common stock,
reducing AMC’s and Regal’s ownership to 0.0% as of December 29, 2022. In February and March of 2023, Cinemark
redeemed a total of 43,690,797 of its outstanding common membership units, in exchange for shares of NCM, Inc. common
stock, reducing Cinemark’s ownership interest to 0.0% as of March 23, 2023. NCM, Inc.’s primary source of cash flow from
operations is distributions from NCM LLC pursuant to the NCM LLC Operating Agreement. NCM, Inc. also receives

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management fees pursuant to a management services agreement with NCM LLC in exchange for providing specified
management services to NCM LLC.

Further transactions between NCM, Inc. and our founding members, if any, have been and will continue to be approved

by our Audit Committee, which is composed of independent members of our Board of Directors, or another committee
comprised entirely of independent members of our Board. Our Audit Committee charter authorizes our Audit Committee to hire
financial advisors and other professionals to assist the committee in evaluating and approving any transaction between us and
any related party, including our founding members.

On July 5, 2018, AMC sold 100.0% of its remaining NCM LLC membership units to Regal and Cinemark. Following
the sale, AMC remains a party to the ESA, Common Unit Adjustment Agreement, TRA and certain other original agreements
which are discussed further below. As such, AMC will continue to participate in the annual common unit adjustment, receive
TRA payments, receive theater access fee payments, and make payments under the beverage concessionaire agreements, among
other things. Further, the sale does not impact future integration payments and other encumbered theater payments owed to
NCM LLC by AMC. As of December 29, 2022, AMC did not have any NCM LLC membership units.

Transactions with Founding Members

Exhibitor Services Agreements

In connection with the IPO, NCM LLC and each of AMC, Cinemark and Regal executed an amended and restated ESA,
effective as of February 13, 2007, which replaced the exhibitor services agreements previously in effect. In connection with the
sale of the Fathom Events business, on December 26, 2013, NCM LLC and each of AMC, Cinemark and Regal amended and
restated the ESAs to remove those provisions addressing the rights and obligations related to the digital programming services
of the Fathom Events business. In November 2019, NCM LLC and each of Cinemark and Regal amended the ESAs to extend
the terms of the ESAs and modify the program distributed by NCM LLC through its Digital Content Network for exhibition in
Cinemark and Regal theaters. Certain basic terms of the ESAs are discussed below:

Advertising Services. Under the ESAs, NCM LLC is the exclusive provider within the United States of advertising

services in the founding members’ theaters (subject to pre-existing contractual obligations and other limited exceptions for the
benefit of the founding members). Following the 2019 ESA Amendments, the ESAs with Regal and Cinemark have a term of
34 years from the completion of the IPO, and the ESA with AMC has a term of 30 years from the completion of the IPO, in
each case with a five-year right of first refusal to enter into a services agreement for the services provided under the ESA with
the applicable founding member on terms equivalent to those offered by a third-party.

The advertising services include the on-screen advertising of the Noovie pre-show, use of the lobby entertainment

network or LEN and lobby promotions. The pre-show is generally 20 to 30 minutes long. Beginning on November 1, 2019 in
accordance with the 2019 ESA Amendments, NCM LLC is entitled to display up to five minutes of the Noovie pre-show after
the advertised showtime of a feature film and the Platinum Spot in Cinemark and Regal theaters. The “attached” trailers are
those provided by studios to Cinemark and Regal that are with the feature film, which is at least one trailer, but sometimes two
trailers. The amount of time included in the Noovie pre-show displayed prior to showtime will be reduced by the sum of five
minutes plus the aggregate length of time of any Platinum Spot.

The Noovie pre-show includes up to two minutes for the founding members to be used to promote various activities
associated with operation of the theaters, including concessions, ticketing partners, gift card and loyalty programs, founding
member special events and vendors of non-film related services provided to theaters, only if the promotion is incidental to the
vendor’s service (called theater advertising). Under the ESAs, up to 90 seconds of the Noovie program can be sold to NCM
LLC’s founding members to satisfy their on-screen advertising commitments under their beverage concessionaire agreements.
During 2022, we sold 60 seconds to Regal and Cinemark to satisfy their on-screen advertising commitments under their
beverage concessionaire agreements. In accordance with the 2019 ESA Amendments beginning in 2020, the annual cost per
thousand (“CPM”) charged to Regal and Cinemark increases at a fixed rate of 2.0%. Prior to the 2019 ESA Amendments in
2019, the CPM was priced equal to the greater of (1) the advertising CPM charged by NCM LLC in the previous year for the
time sold to the founding member beverage supplier and (2) the advertising CPM for the previous year charged by NCM LLC
to unaffiliated third parties during segment one (closest to showtime) of the Noovie pre-show in the founding member’s
theaters, limited to the highest advertising CPM being then-charged by NCM LLC pursuant to the ESAs.

In the lobby, the founding members are required to provide a specified number of LEN screens according to the number

of auditoriums in the theater. The founding members have the right to install additional screens in their theater lobbies, but
these screens can only be used for limited strategic programs, described below, concessions and theater advertising. NCM
LLC’s founding members may conduct a limited number of lobby promotions at no charge in connection with the promotion of
motion pictures and their strategic programs; however, such activities do not reduce the lobby promotions inventory available to
us.

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Payments. In consideration for access to the founding members’ theater attendees for on-screen advertising and use of

the founding members’ theaters for the LEN and lobby promotions, the founding members receive a monthly theater access fee.
The theater access fee is composed of a fixed payment per patron and a fixed payment per digital screen, which may be adjusted
for any advertising exhibited by some, but not all, theaters or founding members because of content objections or technical
capacity. The theater access fee paid to founding members included an additional fee for digital cinema systems connected to
our advertising network. The payment per digital screen and for the digital cinema systems increases annually by 5%. The
payment per theater patron increased increase by 8% every five years with the next occurrence in 2027.

Pursuant to the 2019 ESA Amendments, Cinemark and Regal each received an additional monthly theater access fee

beginning November 1, 2019 in consideration for NCM LLC’s access to certain on-screen advertising inventory after the
advertised showtime of a feature film. These fees are also based upon a fixed payment per patron beginning at $0.0375 per
patron beginning on November 1, 2020, (ii) $0.05 per patron beginning on November 1, 2021, (iii) $0.052 per patron beginning
on November 1, 2022 and (iv) increasing 8% every five years beginning November 1, 2027.

The theater access fee and revenue share aggregate payments to related parties totaled $59.4 million for the year ended

December 29, 2022 as compared to $34.3 million for the year ended December, 30, 2021, when theater access fees were not
incurred when theaters were temporarily closed in response to the COVID-19 pandemic and attendance-based fees were
reduced for the period of the year that attendance was lower than historical levels. Also, in 2022, total revenue from related
parties related to beverage concessionaire agreements totaled $14.4 million as compared to $8.8 million in 2021.

Net Payments to Related Parties. In 2022 the net payments to each related party for theater access fees and revenue share

and payments for use of their screens, less the purchase from NCM LLC of advertising under the founding member’s beverage
concessionaire agreements were $18.6 million to Regal and Cinemark as compared to $11.1 million in 2021. As of
December 29, 2022 and December, 30, 2021, amounts payable to Regal and Cinemark were $15.2 million and $11.4 million,
respectively. Refer to the ‘Common Unit Adjustment Agreement’ section for further discussion of the nature and magnitude of
these payments in 2022 and 2021.

NCM LLC Operating Agreement

NCM, Inc., AMC, Cinemark and Regal executed the NCM LLC third amended and restated limited liability company

operating agreement, effective as of February 13, 2007, which was amended on March 16, 2009 (to permit NCM LLC to
provide advertising to a variety of out-of-home advertising venues), on August 6, 2010 and September 3, 2013 (in each case, to
modify the timing of written notice should a founding member desire to exercise its option to redeem common membership
units), and on January 23, 2019 (to update the member’s rights following changes within the tax partnership rules). Certain
basic terms of the restated operating agreement are as follows:

Manager of NCM LLC. NCM, Inc. is a member and the sole manager of NCM LLC. As the sole manager, NCM, Inc.

controls all of the day to day business affairs and decision-making of NCM LLC through our officers and directors without the
approval of any other member. Furthermore, we cannot be removed as manager of NCM LLC. As long as we are the manager
of NCM LLC, unless the founding members approve, our business will be limited to owning and managing the common units,
managing the business of NCM LLC, fulfilling our obligations under the Exchange Act and activities incidental to the
foregoing. We are not entitled to compensation for our services as manager except as provided in the Management Services
Agreement described under “– Transactions with NCM LLC – Management Services Agreement” below or as otherwise
approved by the members under the restated operating agreement.

Issuance of Units upon Exercise or Vesting of Equity Compensation. Upon the exercise of options we have issued or the

vesting of shares for other types of equity compensation, we will have the right to acquire from NCM LLC a number of
common units equal to the number of our shares being issued in connection with the exercise of options or vesting of shares for
other types of equity compensation. In consideration for such units, we will contribute to NCM LLC the consideration we
received for the exercise of options or vesting of shares for other types of equity compensation. In 2022 and 2021, we acquired
1,137,304 and 1,195,504 units, respectively, due to vesting of restricted stock and restricted stock units.

Founding Member Approval Rights. If any director designee to our Board of Directors designated by Regal and

Cinemark, under the Director Designation Agreement, described below, is not appointed to our Board, nominated by us or
elected by our stockholders, as applicable, then each of the other members (so long as such other member continues to own 5%
of NCM LLC’s issued and outstanding common membership units) will be entitled to approve certain actions of NCM LLC as
identified in the restated operating agreement. AMC is currently a member under the terms of the NCM LLC Operating
Agreement and no longer a founding member for purposes of this agreement, and thus, no longer has such approval rights.

Distributions. We are required to make mandatory distributions to members of all “Available Cash,” as defined in the

restated operating agreement. Available Cash does not include amounts drawn or paid under NCM LLC’s working capital line
of credit. The mandatory distributions must occur quarterly. Following the third amendment to NCM LLC’s credit agreement,
NCM LLC may not make any available cash distributions to its members (Cinemark, Regal and NCM, Inc.) until after NCM

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LLC delivers its compliance certificate to the lenders for the fourth quarter of 2023. After the delivery of the compliance
certificate for the fourth quarter of 2023, NCM LLC may make available cash distributions to its members so long as NCM
LLC’s consolidated net senior secured leverage ratio is equal to or less than 4.00 to 1.00, outstanding loans under the revolving
credit facility are equal to or less than $39.0 million and no default or event of default under the Credit Agreement has occurred
and is continuing.

In 2022 and 2021, positive available cash distributions to related parties totaled $19.3 million and $0.0 million,

respectively. Of that amount in 2022, particularly the fourth quarter of 2022, the portion payable to NCM, Inc., Regal and
Cinemark totaled $14.4 million, $0.0 million and $4.9 million, respectively. Due to the adverse impacts of the COVID-19
Pandemic on the Company’s operations, the Company generated negative available cash by NCM LLC to its related party
founding members and NCM, Inc. for the nine months ended September 29, 2022 of $39.4 million (including negative $10.5
million for Cinemark, negative $9.3 million for Regal and negative $19.6 million for NCM, Inc.) and $93.7 million (including
negative $24.3 million for Cinemark, negative $24.2 million for Regal and negative $45.2 million for NCM, Inc.) for the year
ended December, 30, 2021. Under the terms of the NCM LLC Operating Agreement, these negative amounts will be netted
against future positive available cash distributions in the second quarter of each fiscal year, contingent upon the Company's
compliance with the covenants defined within Note 10—Borrowings and in accordance with the NCM LLC Operating
Agreement.

Common Unit Redemption Right. Members have a redemption right to exchange common membership units of NCM

LLC for newly issued shares of our common stock on a one-for-one basis (as adjusted for certain events), or at our option, a
cash payment equal to the market price of one share of our common stock. Under our amended and restated certificate of
incorporation, upon the surrender of the NCM LLC common units, we will then contribute cash or issue new shares of our
common stock to NCM LLC in exchange for an amount of newly issued common units equal to the number of units
surrendered by the redeeming member. NCM LLC will then distribute the cash or shares of common stock to the redeeming
member to complete the redemption. AMC exercised the redemption right of an aggregate 200,000 common membership units
in 2015, 15,600,000 common membership units in 2017, 197,118 common membership units in 2019, 1,390,567 common
membership units in 2021 and 5,954,646 common membership units in 2022, whereby AMC surrendered 200,000, 15,600,000,
197,118, 1,390,567 and 5,954,646 common membership units, respectively, to NCM LLC for cancellation. The Company
contributed an aggregate of 200,000, 15,600,000, 197,118 and 1,390,567 shares of its common stock to NCM LLC in exchange
for a like number of newly issued common membership units. NCM LLC then distributed the shares of common stock to AMC
to complete the redemptions.

Regal exercised the redemption right of 40,683,797 common membership units in December 2022, where by Regal
surrendered 40,683,797 common membership units to NCM LLC for cancellation. The Company contributed 40,683,797 shares
of its common stock to NCM LLC in exchange for a like number of newly issued common membership units. NCM LLC then
distributed the shares of common stock to Regal to complete the redemptions.

Cinemark exercised the redemption right of 43,690,797 common membership units in February and March of 2023,

where by Cinemark surrendered 43,690,797 common membership units to NCM LLC for cancellation. The Company
contributed 43,690,797 shares of its common stock to NCM LLC in exchange for a like number of newly issued common
membership units. NCM LLC then distributed the shares of common stock to Cinemark to complete the redemptions.

Common Unit Adjustment Agreement

NCM, Inc., NCM LLC, AMC, Cinemark and Regal executed the common unit adjustment agreement, effective as of

February 13, 2007. The common unit adjustment agreement provides a mechanism for adjusting membership units held by the
founding members based on increases or decreases in the number of screens operated by each founding member. Increases in
the number of screens are included in the unit adjustment if arising from acquisition of a theater or opening of a newly
constructed theater (subject to certain exceptions). Decreases in the number of screens are included in the unit adjustment if
arising from disposition of a theater (subject to certain exceptions).

NCM LLC adjusts its membership units annually, except that an earlier adjustment will occur for a founding member if
it acquires or disposes of theaters, in a single transaction or cumulatively that will result in a change of two percent or more in
the total annual attendance of all founding members (called an extraordinary attendance increase or decrease). The changes in
annual attendance are calculated based on attendance at the relevant theaters during the prior twelve fiscal months; however, if
an acquired theater has not been operating during the twelve prior fiscal months, the change in annual attendance will be
calculated based on 75% of the projected annual attendance for such theater, with a subsequent adjustment for the actual
attendance.

During the first quarter of 2022 and the first quarter of 2021, NCM LLC issued 4,140,896, net of 2,342,997 returned

common membership units, and 3,047,582 common membership units to its founding members for the rights to exclusive
access to the theater screens and attendees added, net of dispositions by the founding members to NCM LLC’s network during

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the 2020 fiscal year and 2019 fiscal year, respectively. During the first quarter of 2021, NCM LLC also calculated a negative
common membership unit adjustment for AMC for which NCM LLC received $9.3 million in cash.

If an existing on-screen advertising agreement with an alternative provider is in place with respect to any acquired

theaters, the founding members may elect to receive common membership units related to those encumbered theaters in
connection with the common unit adjustment. If the founding members make this election, then they are required to make
integration payments. Founding members may also elect to delay receipt of the common unit membership units until such time
as the acquired theaters are no longer encumbered and the theaters then join NCM LLC’s network. Because the AMC Carmike
and Cinemark Paragon theaters were subject to an existing on-screen advertising agreement with an alternative provider during
2022 and 2021, and AMC and Cinemark elected to receive common membership units, AMC and Cinemark will make
integration payments to NCM LLC. The integration payments will continue until the earlier of (i) the date the theaters are
transferred to NCM LLC’s network or (ii) the expiration of the ESA. Integration payments are calculated based upon the
advertising cash flow that the Company would have generated if it had exclusive access to sell advertising in the theaters with
pre-existing advertising agreements. The ESA additionally entitles NCM LLC to payments related to the founding members’
on-screen advertising commitments under their beverage concessionaire agreements for encumbered theaters (“encumbered
theater payments”). These payments are also accounted for as a reduction to the intangible asset. If common membership units
are issued to a founding member for newly acquired theaters that are subject to an existing on-screen advertising agreement
with an alternative provider, the amortization of the intangible asset commences after the existing agreement expires and NCM
LLC can utilize the theaters for all of its services. During the years ended December 29, 2022 and December, 30, 2021, the
Company recorded a reduction to net intangible assets of $5.4 million and $1.6 million related to these Carmike and Paragon
integration and encumbered theater payments, respectively. During the years ended December 29, 2022 and December, 30,
2021, AMC and Cinemark paid a total of $2.8 million and $0.5 million, respectively, related to the integration and other
encumbered theater payments (as payments are made one quarter and one month in arrears, respectively).

Tax Receivable Agreement

NCM, Inc., NCM LLC, AMC, Cinemark, and Regal executed the tax receivable agreement, effective as of February 13,
2007, as amended on April 29, 2008 to permit NCM, Inc. to make estimated payments to each of the founding members or ESA
parties.

The tax receivable agreement provides for the effective payment by us to the founding members of 90% of the amount

of cash savings, if any, in U.S. federal, state, and local income tax or franchise tax that we actually realized as a result of certain
increases in our proportionate share of tax basis in NCM LLC’s tangible and intangible assets resulting from our IPO and
related transactions, including increases attributable to payments made under the tax receivable agreement. These tax benefit
payments are not conditioned upon one or more of the founding members maintaining a continued ownership interest in either
NCM LLC or NCM, Inc. We expect to benefit from the remaining 10% of cash savings, if any, that we may actually realize.

Under the tax receivable agreement, cash savings in income and franchise tax are computed by comparing our actual

income and franchise tax liability to the amount of such taxes that we would have been required to pay had there been no
increase in our proportionate share of tax basis in NCM LLC’s tangible and intangible assets and had the tax receivable
agreement not been entered into. The tax receivable agreement generally applies to our taxable years up to and including the
30th anniversary date of our IPO and will continue until any utilized benefits are no longer subject to potential audit or
examination by a taxing authority. The term of the tax receivable agreement may, however, be terminated at an earlier date in
the event that we exercise our right to terminate the agreement pursuant to an early termination procedure that requires us to pay
the founding members an agreed upon amount equal to the present value of the estimated remaining payments to be made under
the revenue sharing agreement.

Although the actual timing and amount of any payments that may be made under the tax receivable agreement varies

depending upon a number of factors (including the timing of any redemptions of common membership units in NCM LLC by
our founding members, the extent to which such redemptions are taxable, the trading price of shares of our common stock at the
time of any such redemptions, and the amount and timing of our income), we expect the payments that we may effectively
make to the founding members could be substantial. If the Internal Revenue Service or other taxing authority were to
subsequently challenge any of our cash savings covered by the tax receivable agreement, and if such challenge were ultimately
upheld, the terms of the tax receivable agreement require the founding members to repay to us an amount equal to the prior
payments effectively made by us in respect of such disallowed cash savings, plus a proportionate share of any applicable
interest and penalties. In such an event, and if a founding member is unable to make a timely repayment to us under the terms of
the tax receivable agreement, we will have the ability to cause NCM LLC to offset against payments owed to the founding
member. The repayment obligation is a several liability of each founding member and not a joint liability among the founding
members.

As of December 29, 2022 we had a balance recorded for the payable to our related parties under the tax receivable

agreement of approximately $25.7 million. The Company does expect to owe a payment for the 2022 taxable year in 2023. As

120

of December, 30, 2021 we had a balance recorded for the payable to our related parties under the tax receivable agreement of
approximately $11.9 million. In 2022, the Company did not make a payment for the 2021 taxable year as the net operating loss
generated during the year ended December, 30, 2021 exceeded the gross deductions related to the tax receivable agreement for
the year ended December, 30, 2021.

Software License Agreement

NCM LLC, AMC, Cinemark, Regal CineMedia Corporation (“RCM”) and Digital Cinema Implementation Partners,
LLC, a company jointly owned by the founding members (“DCIP”), executed the Second Amended and Restated Software
License Agreement effective as of February 13, 2007 (the “license agreement”). Certain basic terms of the license agreement
are discussed below:

AMC and RCM granted to NCM LLC an exclusive license (subject to certain exceptions) to identified technology for

use in the United States with respect to the services provided under the ESAs. The founding members and DCIP each granted to
NCM LLC a license, subject to certain limitations, to any existing and future developments of such party based on the licensed
technology that has application to the services provided under the ESAs. NCM LLC granted to the founding members a license,
subject to certain limitations, to any NCM LLC developments that existed at the IPO date based on licensed technology, solely
for the founding members’ internal business purposes that are outside of the services that are defined in the ESAs (but not
including digital cinema applications). NCM LLC granted DCIP a license, subject to certain exceptions, to any existing and
future NCM LLC developments that may have digital cinema applications.

Director Designation Agreement

NCM, Inc., AMC, Cinemark and Regal executed the Director Designation Agreement effective as of February 13, 2007.

AMC no longer has rights under this agreement.

So long as Regal or Cinemark, respectively, owns at least 5% of NCM LLC’s issued and outstanding common
membership units, on an as-converted basis, such founding member has the right to designate two nominees to our Board of
Directors who are voted upon by our stockholders. At least one of the designees of such founding member must qualify as an
“independent director” at the time of designation so that a majority of the members of our Board are “independent directors”
under the Nasdaq rules. We have agreed to include each director designee in our Board’s slate of nominees submitted to our
stockholders for election of directors and in the proxy statement prepared by management for every meeting of our stockholders
called with respect to the election of members of our Board, subject to certain exceptions.

If a vacancy occurs because of the death, disability, resignation or removal of a director designee, then our Board, or any

Board committee, will not vote, fill the vacancy or take any action subject to the veto rights of the directors designated by
Cinemark and Regal under our amended and restated certificate of incorporation until (i) the founding member has designated a
successor director designee and our Board has appointed such successor director designee, (ii) the founding member fails to
designate a successor director designee within 10 business days of such vacancy, or (iii) the founding member has waived its
rights to designate a successor director designee and has consented to our Board, or any Board committee, taking a vote on the
specified actions prior to our Board filling the vacancy with a successor director designee.

Registration Rights Agreement

NCM, Inc., AMC, Cinemark and Regal executed the registration rights agreement effective as of February 13, 2007.

The registration rights agreement requires us to use our reasonable efforts to file a registration statement on the first

business day after the one-year anniversary of the closing of our IPO to register all registrable securities held by the founding
members that are not already registered, if necessary, and to file resale registration statements after that time for any additional
registrable securities that we issue to any founding member in the future, within 20 days after such issuance. Additionally, we
must maintain effectiveness of these mandatory registration statements until the earlier of the time when the founding members
have disposed of all their registrable securities and the time when all registrable securities held by the founding members are
eligible for resale under specified securities regulations. We are responsible for the expenses in connection with the registration
of securities pursuant to the registration rights agreement.

Joint Defense Agreements

NCM, Inc., NCM LLC and the founding members from time to time may enter into a joint defense and common interest

agreement, under which the parties agree to cooperate and share information in order to advance their shared interests in
owning and operating NCM LLC.

Agreements with Founding Members—Services

In 2022 and 2021, NCM LLC incurred fees of approximately $0.1 million and $0.2 million to Cinemark and Regal for

payments made to the founding members in the ordinary course of business, including the purchase of movie tickets,

121

concession products, rental of theater space primarily for marketing to NCM LLC’s advertising clients and other advertising
operating costs, respectively.

Other Transactions

Sale of Fathom Events Business to AC JV, LLC

On December 26, 2013, NCM LLC sold the Fathom Events business to AC JV, LLC owned 32% by each of the
founding members and 4% by us. In consideration for the sale, NCM LLC received a total of $25.0 million in promissory notes
from our founding members (one-third or approximately $8.3 million from each founding member). The notes bear interest at a
fixed rate of 5.0% per annum, compounded annually. Interest and principal payments are due annually in six equal installments
commencing on December 26, 2014. Due to the related party nature of the transaction, we formed a committee of independent
directors that hired a separate legal counsel and an investment banking firm who advised the committee and rendered an
opinion as to the fairness of the transaction. NCM LLC’s investment in AC JV, LLC was $0.8 million as of December 29, 2022
and $0.7 million as of December, 30, 2021. During the years ended December 29, 2022 and December, 30, 2021, NCM LLC
received cash distributions from AC JV, LLC of $0.4 million and $0.0 million, respectively. During the years ended
December 29, 2022 and December, 30, 2021, NCM LLC recorded equity in earnings of $0.4 million and $0.0 million for AC
JV, LLC, respectively. In connection with the sale, we entered into a transition services agreement and a services agreement.

Services Agreement with AC JV, LLC. NCM LLC entered into a services agreement with AC JV, LLC upon the closing

of the sale of Fathom Events. The agreement grants AC JV, LLC advertising on-screen and on our LEN and a pre-feature
program prior to Fathom events reasonably consistent with what was previously dedicated to Fathom. In addition, the services
agreement provides that we will assist with event sponsorship sales in return for a share of the sponsorship revenue. NCM LLC
has also agreed to provide creative and media production services for a fee. The term of the agreement coincides with the ESAs,
subject to certain exceptions.

Network Advertiser Transactions

NCM LLC earned revenue from an advertiser for which Donna Reisman, director of the Company’s Board of Directors,

serves as President, in the amount of $0.3 million during the year ended December 29, 2022 and $0.2 million during the year
ended December, 30, 2021.

Transactions with NCM LLC

Management Services Agreement

On February 13, 2007, NCM, Inc. and NCM LLC executed the management services agreement under which we

provide certain management services to NCM LLC, including services typically provided by the individuals serving in the
positions of chief executive officer, president, chief financial officer, and general counsel. In exchange for the services, NCM
LLC reimburses us for compensation and other expenses of our officers and employees and for certain out-of-pocket costs.
NCM LLC provides administrative and support services to us, such as office facilities, equipment, supplies, payroll and
accounting and financial reporting. The management services agreement also provides that our employees may participate in
NCM LLC’s benefit plans, and that NCM LLC employees may participate in the National CineMedia, Inc. 2007 Equity
Incentive Plan, the National CineMedia, Inc. 2016 Equity Incentive Plan and the National CineMedia, Inc. 2020 Omnibus
Incentive Plan. Pursuant to this agreement, NCM LLC incurred approximately $11.0 million during 2022 and $10.2 million in
2021.

Receivables Sales Agreements

On November 3, 2022, NCM LLC and NCM, Inc. entered into a Receivable Sales Agreement pursuant to which, NCM,

Inc. acquired the right to approximately $5.0 million of NCM LLC’s accounts receivable at a purchase price equal to the book
value of the accounts receivable in exchange for a cash payment. On December 28, 2022, NCM LLC and NCM, Inc. entered
into an additional Receivables Sales Agreement pursuant to which, NCM, Inc. acquired the right to approximately $5.0 million
of NCM LLC’s accounts receivable at a purchase price equal to the book value of the accounts receivable in exchange for a
cash payment.

Independence of Our Board of Directors

Our Board of Directors has determined that David E. Glazek, Lawrence A. Goodman, Kurt C. Hall, Juliana F. Hill,

Donna Reisman and Mark B. Segall, all current directors of the Company, qualify as “independent” directors under the rules
promulgated by the SEC under the Exchange Act, and by Nasdaq. There are no family relationships among any of our
executive officers, directors or nominees for director.

122

Item 14.

Principal Accounting Fees and Services

Fees Paid to Independent Auditors

We paid Deloitte & Touche LLP, the Company’s independent registered public accounting firm for fiscal years 2022

and 2021, the following amounts:

Audit Fees (1)...........................................................................................................
Audit Related Fees....................................................................................................
Total Audit and Related Fees...............................................................................
Tax Fees....................................................................................................................
All Other Fees...........................................................................................................
Total Fees.............................................................................................................

1,208,989 $

—
1,208,989
—
—

1,208,989 $

1,015,536
—
1,015,536
—
—
1,015,536

2022

2021

(1) In 2022 and 2021, audit fees included $182,500 and $20,000, respectively, of fees for the issuance of consents and

other procedures in connection with registration statement filings and other finance transactions.

Pre-Approval Policies and Procedures

All auditing services, internal control-related services, and permitted non-audit services (including the fees and terms

thereof) to be performed for the Company by our independent auditors must be approved by our Audit Committee in advance,
subject to the de minimis exceptions for non-audit services described in Section 10A(i)(l)(B) of the Exchange Act that are
approved by our Audit Committee prior to the completion of the audit. Our Audit Committee may form and delegate authority
to subcommittees consisting of one or more of its members or may delegate authority to one or more members, including the
authority to grant pre-approvals of audit and permitted non-audit services, provided that all decisions to grant pre-approvals
pursuant to such delegated authority will be presented to the entire Audit Committee at its next scheduled meeting. Effective
with the completion of our initial public offering in February 2007, all of our independent auditors’ services were pre-approved
by our Audit Committee.

123

PART IV

Item 15.

Exhibits, Financial Statement Schedules

(a) (1) and (a) (2) Financial statements and financial statement schedules

Refer to Index to Financial Statements on page 64.

(b) Exhibits

Refer to Exhibit Index, beginning on page 125.

Financial Statement Schedules not included herein have been omitted because they are either not required, not
applicable, or the information is otherwise included herein.

124

INDEX TO EXHIBITS

Exhibit
3.1

3.2

4.1

4.2

4.3

4.4

4.5

4.6

4.7

10.1

10.1.1

10.1.2

10.1.3

Ref. Description

The Bylaws, as amended May 4, 2022

Second Amended and Restated Certificate of
Incorporation of National CineMedia, Inc. as
amended as of May 4, 2022

Indenture, dated as of August 19, 2016, by and
between National CineMedia, LLC and Wells
Fargo Bank, National Association, as trustee.

Form of 5.750% Senior Unsecured Notes due
2026 (included in Exhibit 4.1).

Indenture, dated as of October 8, 2019, by and
between NCM LLC and Wells Fargo Bank,
National Association, as trustee.

Incorporation by Reference

Form
10-Q

10-Q

SEC File No.
001-33296

Exhibit
3.1

001-33296

3.2

Filing
Date
5/9/2022

5/9/2022

8-K

001-33296

4.1

8/19/2016

8-K

001-33296

8-K

001-33296

4.1

8/19/2016

10/8/2019

Form of 5.875% Senior Secured Notes due 2028
(included in Exhibit 4.3).

8-K

001-33296

4.1

10/8/2019

8-K

001-33296

4.1

3/16/2023

8-K

001-33296

4.1

3/31/2023

8-K

001-33296

10.1

2/16/2007

10-Q

001-33296

10.1.1

8/7/2009

8-K

001-33296

10.1

8/10/2010

8-K

001-33296

10.1.3

9/9/2013

First Supplemental Indenture, dated as of March
15, 2023, by and between National CineMedia,
LLC and Computershare Trust Company, North
America, as trustee.

Second Supplemental Indenture, dated as of
March 31, 2023, by and between National
CineMedia, LLC and Computershare Trust
Company, as trustee.

Description of the Registrant’s Securities

National CineMedia, LLC Third Amended and
Restated Limited Liability Company Operating
Agreement dated as of February 13, 2007, by and
among American Multi-Cinema, Inc., Cinemark
Media, Inc., Regal CineMedia Holdings, LLC and
National CineMedia, Inc.

First Amendment to Third Amended and Restated
Limited Liability Company Operating Agreement
of National CineMedia, LLC dated as of March
16, 2009, by and among American Multi-Cinema,
Inc., Cinemark Media, Inc., Regal CineMedia
Holdings, LLC and National CineMedia, Inc.

Second Amendment to Third Amended and
Restated Limited Liability Company Operating
Agreement of National CineMedia, LLC dated as
of August 6, 2010, by and among American Multi-
Cinema, Inc., Cinemark Media, Inc., Regal
CineMedia Holdings, LLC and National
CineMedia, Inc.

Third Amendment to the Third Amended and
Restated Limited Liability Company Operating
Agreement of National CineMedia, LLC dated
September 3, 2013, by and among American
Multi-Cinema, Inc., AMC ShowPlace Theatres,
Inc., Cinemark Media, Inc., Regal CineMedia
Holdings, LLC, Regal Cinemas, Inc. and National
CineMedia, Inc.

125

Incorporation by Reference

Form
10-K

SEC File No.
001-33296

Exhibit
10.1.4

Filing
Date
2/21/2019

10-K

001-33296

10.2.4

2/21/2014

8-K

001-33296

10.1

3/15/2017

10-K

001-33296

10.3.4

2/21/2014

8-K

001-33296

10.3

3/15/2017

8-K

001-33296

10.1

9/17/2019

10-Q

001-33296

10.4

8/8/2022

10-K

001-33296

10.4.4

2/21/2014

8-K

001-33296

10.2

3/15/2017

8-K

001-33296

10.2

9/17/2019

10-Q

001-33296

10.5

8/8/2022

Exhibit

10.1.4

10.2

10.2.1

10.3

10.3.1

10.3.2

10.3.3

10.4

10.4.1

10.4.2

10.4.3

Ref. Description

Fourth Amendment to the Third Amended and
Restated Limited Liability Company Operating
Agreement of National CineMedia, LLC dated
January 23, 2019, by and among Cinemark Media,
Inc., Cinemark USA, Inc., Regal Cinemedia
Holdings, LLC, Regal Cinemas, Inc., and National
CineMedia, Inc.

Amended and Restated Exhibitor Services
Agreement dated as of December 26, 2013, by and
between National CineMedia, LLC and American
Multi-Cinema, Inc. (Portions omitted pursuant to
request for confidential treatment and filed
separately with the Commission.)

First Amendment to Amended and Restated
Exhibitor Services Agreement dated as of March
9, 2017, by and between National CineMedia,
LLC and American Multi-Cinema, Inc.

Amended and Restated Exhibitor Services
Agreement dated as of December 26, 2013, by and
between National CineMedia, LLC and Cinemark
USA, Inc. (Portions omitted pursuant to request
for confidential treatment and filed separately with
the Commission.)

Waiver of Section 12.06 of the Exhibitor Services
Agreement dated as of March 14, 2017, by and
between National CineMedia, LLC and Cinemark
USA, Inc.

First Amendment to Amended and Restated
Exhibitor Services Agreement dated as of
September 17, 2019, by and between National
CineMedia, LLC and Cinemark USA, Inc.

Second Amendment to Amended and Restated
Exhibitor Services Agreement dated as of July 29,
2022, by and between National CineMedia, LLC
and Cinemark USA, Inc.

Amended and Restated Exhibitor Services
Agreement dated as of December 26, 2013, by and
between National CineMedia, LLC and Regal
Cinemas, Inc. (Portions omitted pursuant to
request for confidential treatment and filed
separately with the Commission.)

First Amendment to Amended and Restated
Exhibitor Services Agreement dated as of March
9, 2017, by and between National CineMedia,
LLC and Regal Cinemas, Inc.

Second Amendment to the Amended and Restated
Exhibitor Services Agreement dated as of
September 17, 2019, by and between National
CineMedia, LLC and Regal Cinemas, Inc.

Third Amendment to the Amended and Restated
Exhibitor Services Agreement dated as of July 29,
2022, by and between National CineMedia, LLC
and Regal Cinemas, Inc.

126

Exhibit
10.5

10.6

10.6.1

10.7

10.8

10.9

Ref. Description

Common Unit Adjustment Agreement dated as of
February 13, 2007, by and among National
CineMedia, Inc., National CineMedia, LLC, Regal
CineMedia Holdings, LLC, American Multi-
Cinema, Inc., Cinemark Media, Inc., Regal
Cinemas, Inc. and Cinemark USA,
Inc. (Confidential treatment granted as to certain
portions, which portions were omitted and filed
separately with the Commission.)

Tax Receivable Agreement dated as of February
13, 2007, by and among National CineMedia, Inc.,
National CineMedia, LLC, Regal CineMedia
Holdings, LLC, Cinemark Media, Inc., Regal
Cinemas, Inc., American Multi-Cinema, Inc. and
Cinemark USA, Inc.

Second Amendment to Tax Receivable Agreement
effective as of April 29, 2008, by and by and
among NCM, Inc. and National CineMedia, LLC
and the Founding Members and the ESA Parties,
amending the Tax Receivable Agreement dated as
of February 13, 2007 and as first amended by the
First Amendment to the Tax Receivable
Agreement effective as of August 7, 2007.

Second Amended and Restated Software License
Agreement dated as of February 13, 2007, by and
among American Multi-Cinema, Inc., Regal
CineMedia Corporation, Cinemark USA, Inc.,
Digital Cinema Implementation Partners, LLC and
National CineMedia, LLC.

Director Designation Agreement dated as of
February 13, 2007, by and among National
CineMedia, Inc., American Multi-Cinema, Inc.,
Cinemark Media, Inc. and Regal CineMedia
Holdings, LLC.

Registration Rights Agreement dated as of
February 13, 2007, by and among National
CineMedia, Inc., American Multi-Cinema, Inc.,
Regal CineMedia Holdings, LLC and Cinemark
Media, Inc.

Incorporation by Reference

Form
8-K

SEC File No.
001-33296

Exhibit
10.6

Filing
Date
2/16/2007

8-K

001-33296

10.7

2/16/2007

8-K

001-33296

10.1

5/5/2008

8-K

001-33296

10.9

2/16/2007

8-K

001-33296

10.10

2/16/2007

8-K

001-33296

10.11

2/16/2007

10.10

Management Services Agreement dated as of

8-K

001-33296

10.12

2/16/2007

10.11

10.11.1

10.11.2

February 13, 2007, by and among National
CineMedia, Inc. and National CineMedia, LLC.

Credit Agreement dated as of June 20, 2018
among National CineMedia LLC, certain lenders
party thereto and JPMorgan Chase Bank, N.A., as
administrative agent.

Amendment No. 1 to the Credit Agreement, dated
as of April 30, 2020, by and among National
CineMedia, LLC, each lender party thereto, and
JPMorgan Chase Bank, N.A., as administrative
agent.

Amendment No. 2 to the Credit Agreement, dated
as of March 8, 2021, by and among National
CineMedia, LLC, each lender party thereto, and
JPMorgan Chase Bank, N.A., as administrative
agent

127

8-K

001-33296

10.1

6/25/2018

8-K

001-33296

10.1

5/5/2020

8-K

001-33296

10.1

3/8/2021

Exhibit

Ref. Description

10.11.3

10.11.4

10.11.5

10.12

10.12.1

10.13

10.14

10.15

10.16

10.17

Amendment No. 3 to the Credit Agreement, dated
as of January 5, 2022, by and among National
CineMedia, LLC, each lender party thereto, and JP
Morgan Chase Bank, N.A., as administrative
agent.

Amendment No.4 to the Credit Agreement, dated
as of January 17, 2023, by and among National
CineMedia, LLC, each lender party thereto, and
JPMorgan Chase Bank, N.A., as administrative
agent.

Amendment No. 5 to the Credit Agreement, dated
as of March 31, 2023, by and among National
CineMedia, LLC, each lender party thereto, and
JPMorgan Chase Bank, N.A., as administrative
agent

Revolving Credit Agreement, dated as of January
5, 2022, by and among National CineMedia, LLC,
each lender party thereto, and Wilmington Savings
Fund Society, FSB, as administrative agent and
collateral agent.

Amendment No. 1 to the Revolving Credit
Agreement, dated as of January 17, 2023, by and
among National CineMedia, LLC, each lender
party thereto, and Wilmington Savings Fund
Society, FSB, as administrative agent.

Standard General L.P. Registration Letter to
National CineMedia, Inc., dated as of June 2,
2022.

Restructuring Support Agreement, dated as of
April 11, 2023, among the Company, NCM LLC
and Consenting Secured Creditors.

Employment Agreement dated as of August 1,
2022, by and between National CineMedia, Inc.
and Thomas F. Lesinski. +

Amended and Restated Employment Agreement,
dated June 9, 2021, by and between National
CineMedia, Inc. and Scott Felenstein.

Employment Agreement dated August 25, 2021
between National CineMedia, Inc. and Ronnie Y.
Ng.

Incorporation by Reference

Form
8-K

SEC File No.
001-33296

Exhibit
10.1

Filing
Date
1/6/2022

8-K

001-33296

10.1

1/19/2023

8-K

001-33296

10.2

3/31/2023

8-K

001-33296

10.2

1/6/2022

8-K

001-33296

10.2

1/19/2023

8-K

001-33296

10.1

6/2/2022

8-K

001-33296

10.1

4/12/2023

10-Q

001-33296

10.3

8/8/2022

8-K

001-33296

10.3

6/10/2021

8-K

001-33296

10.1

9/27/2021

10.17.1

Third Amendment to Employment Agreement

10.18

10.19

10.20

10.21

10.22

10.23

Form of Indemnification Agreement. +

8-K

001-33296

Form of Indemnification Agreement (August
2018)+

10-Q

001-33296

10.1

10.3

2/13/2007

8/7/2018

National CineMedia, Inc. 2007 Equity Incentive
Plan. +

National CineMedia, Inc. 2016 Equity Incentive
Plan. +

National CineMedia, Inc. 2020 Omnibus Incentive
Plan.+

First Amendment to the National CineMedia, Inc.
2020 Omnibus Incentive Plan effective as of May
4, 2022. +

8-K

001-33296

10.2

5/2/2013

S-8

001-33296

4.1

4/29/2016

8-K

001-33296

10.2

5/1/2020

8-K

001-33296

10.1

5/9/2022

128

Exhibit
10.24

10.24

10.25

Ref. Description

Form of 2012 Stock Option Agreement. +

Form of 2019 Stock Option Agreement. +

Form of 2020 Stock Option Agreement. +

Form of 2019 Restricted Stock Agreement (Time
Based). +

Incorporation by Reference

SEC File No.
001-33296

Exhibit
10.22.4

001-33296

10.4

10.5

Filing
Date
2/24/2012

11/4/2019

8/3/2020

001-33296

10.28.9

2/21/2019

Form
10-K

10-Q

10-K

10.25.1

10.25.2

10.25.3

10.25.4

10.25.5

10.26

10.26.1

10.26.2

10.26.3

10.27

10.27.1

10.27.2

10.27.3

10.28

21.1

23.1

24.1

31.1

31.2

Form of 2019 Restricted Stock Agreement
(Performance Based). +

10-K

001-33296

10.28.10

2/21/2019

Form of 2020 Restricted Stock Agreement (Time
Based). +

Form of 2020 Restricted Stock Agreement
(Performance Based). +

Form of 2020 Restricted Stock Unit Agreement
(Time Based). +

Form of 2020 Restricted Stock Unit Agreement
(Performance Based). +

10-K

001-33296

10.26.8

2/20/2020

10-K

001-33296

10.26.9

2/20/2020

10-Q

001-33296

10.6

8/3/2020

10-Q

001-33296

10.1

11/2/2020

Form of Restricted Stock Unit Agreement. +

10-K

001-33296

10.34

3/6/2009

S-8

001-33296

4.4

4/29/2016

10-K

001-33296

10.27.2

2/24/2017

10-Q

001-33296

10.7

8/3/2020

8-K

001-33296

10.1

3/4/2021

8-K

001-33296

10.2

3/4/2021

8-K

001-33296

10.3

3/4/2021

8-K

001-33296

10.1

5/9/2022

10-Q

001-33296

10.2

11/7/2022

Form of Restricted Stock Unit Agreement under
the National CineMedia, Inc. 2016 Equity Plan.

Form of Restricted Stock Unit Agreement under
the National CineMedia, Inc. 2016 Equity Plan,
amended.

Form of Restricted Stock Unit Agreement under
the National CineMedia, Inc. 2020 Omnibus
Incentive Plan - Director

First Modification to the National CineMedia, Inc.
2016 Equity Incentive Plan 2018 Restricted Stock
Agreement dated February 28, 2021.

First Modification to the National CineMedia, Inc.
2016 Equity Incentive Plan 2019 Restricted Stock
Agreement dated March 2, 2021.

First Modification to the National CineMedia, Inc.
2016 Equity Incentive Plan 2020 Restricted Stock
Agreement dated March 2, 2021.

First Modification to the National CineMedia, Inc.
2020 Equity Incentive Plan 2020 Restricted Stock
Agreement dated May 4, 2022.

Form of Receivables Sales Agreement, dated
November 3, 2022, between National CineMedia,
LLC and National CineMedia, Inc.

List of Subsidiaries.

Consent of Deloitte & Touche LLP.

Powers of Attorney of National CineMedia, Inc.

Rule 13a-14(a) Certification of Chief Executive
Officer.

Rule 13a-14(a) Certification of Chief Financial
Officer.

129

Exhibit
32.1

Ref. Description
** Certification of Chief Executive Officer and

Pursuant to 18 U.S.C. Section 1350.

32.2

** Certification of Chief Financial Officer Pursuant

to 18 U.S.C. Section 1350.

Incorporation by Reference

Form

SEC File No.

Exhibit

Filing
Date

Inline XBRL Taxonomy Extension Schema
Document.

Inline XBRL Taxonomy Extension Calculation
Linkbase Document.

Inline XBRL Taxonomy Extension Definition
Linkbase Document.

Inline XBRL Taxonomy Extension Label
Linkbase Document.

Inline XBRL Taxonomy Extension Presentation
Linkbase Document.

Cover Page Interactive Data File (formatted as
Inline XBRL and contained in Exhibit 101)

101.SCH

101.CAL

101.DEF

101.LAB

101.PRE

104

*
**
+

Filed herewith.
Furnished herewith.
Management contract.

Item 16.

Form 10-K Summary

Not applicable.

130

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly

caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

SIGNATURES

Date:

April 13, 2023

NATIONAL CINEMEDIA, INC.
(Registrant)

/s/ Thomas F. Lesinski
Thomas F. Lesinski
Chief Executive Officer and Director
(Principal Executive Officer)

131

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following

persons on behalf of the registrant and in the capacities indicated on the 13th day of April, 2023.

Signature

Title

/s/ Thomas F. Lesinski
Thomas F. Lesinski

/s/ Ronnie Ng
Ronnie Ng

David E. Glazek

Lawrence A. Goodman

Kurt C. Hall

Juliana F. Hill

Donna Reisman

Mark B. Segall

Mark Zoradi

Chief Executive Officer
(Principal Executive Officer)

Chief Financial Officer
(Principal Financial and Accounting Officer)

Director

*By:

/s/ Maria Woods
Maria Woods

Attorney-in-fact

132

Stock Performance Grant

The following graph compares the cumulative total stockholder return on the common stock of the Company (including
dividends paid) for the period December 28, 2017 through December 29, 2022 with the Russell 2000 Index and the Dow Jones
US Media TSM.

The comparisons in the graph below are based upon historical data and are not indicative of, or intended to forecast,

future performance of our common stock.

Dec. 28, 2017 Dec. 27, 2018 Dec. 26, 2019 Dec. 31, 2020 Dec. 30, 2021 Dec. 29, 2022

133

CORPORATE INFORMATION

BOARD OF DIRECTORS

Corporate Headquarters
6300 S. Syracuse Way, Suite 300
Centennial, CO 80111
800.828.2828 | ncm.com

Stock Information
Traded on the NASDAQ Global Select Market
under the symbol NCMI

Investor Relations
Phone: 800.844.0935
Email: investors@ncm.com

Transfer Agent & Registrar
Computershare
P.O. Box 505008
Louisville, KY 40233-9814
computershare.com/investor

Form 10-K
We will provide, without charge, a copy of our Annual
(cid:44)(cid:105)(cid:171)(cid:156)(cid:192)(cid:204)(cid:3)(cid:156)(cid:152)(cid:3)(cid:19)(cid:156)(cid:192)(cid:147)(cid:3)(cid:163)(cid:228)(cid:135)(cid:28)(cid:93)(cid:3)(cid:62)(cid:195)(cid:3)(cid:119)(cid:143)(cid:105)(cid:96)(cid:3)(cid:220)(cid:136)(cid:204)(cid:133)(cid:3)(cid:204)(cid:133)(cid:105)(cid:3)(cid:45)(cid:105)(cid:86)(cid:213)(cid:192)(cid:136)(cid:204)(cid:136)(cid:105)(cid:195)(cid:3)(cid:62)(cid:152)(cid:96)(cid:3)
Exchange Commission, to any stockholder who requests
one. Copies of the 10-K and all exhibits thereto can be
obtained from our website (ncm.com) under the tab
“Investor Relations > Financial Information > SEC Filings.”
These reports are also available free of charge by written
request to the below address:

NCM, Inc.
ATTN: Investor Relations
6300 S. Syracuse Way, Suite 300
Centennial, CO 80111

Code of Business Conduct & Ethics
Our Code of Business Conduct and Ethics, and our other
governance documents, are available free of charge on
our website (ncm.com) under the tab “Investor Relations >
Corporate Governance.”

Annual Meeting
National CineMedia, Inc. stockholders are invited to
attend our annual meeting. The meeting will be held at the
following venue on the date announced within our Proxy
Statement for the 2023 Annual Meeting of Stockholders.

6300 S. Syracuse Way, Suite 300
Centennial, CO 80111

(cid:386)(cid:143)(cid:143)(cid:3)(cid:204)(cid:192)(cid:62)(cid:96)(cid:105)(cid:147)(cid:62)(cid:192)(cid:142)(cid:195)(cid:3)(cid:62)(cid:192)(cid:105)(cid:3)(cid:204)(cid:133)(cid:105)(cid:3)(cid:105)(cid:221)(cid:86)(cid:143)(cid:213)(cid:195)(cid:136)(cid:219)(cid:105)(cid:3)(cid:171)(cid:192)(cid:156)(cid:171)(cid:105)(cid:192)(cid:204)(cid:222)(cid:3)(cid:156)(cid:118)(cid:3)(cid:32)(cid:10)(cid:31)(cid:93)(cid:3)(cid:136)(cid:204)(cid:195)(cid:3)(cid:62)(cid:118)(cid:119)(cid:143)(cid:136)(cid:62)(cid:204)(cid:105)(cid:195)(cid:93)(cid:3)(cid:156)(cid:192)(cid:3)(cid:204)(cid:133)(cid:136)(cid:192)(cid:96)(cid:135)(cid:171)(cid:62)(cid:192)(cid:204)(cid:222)(cid:3)(cid:143)(cid:136)(cid:86)(cid:105)(cid:152)(cid:195)(cid:156)(cid:192)(cid:195)(cid:3)(cid:62)(cid:152)(cid:96)(cid:3)
may not be used without the prior written consent of NCM. This report may contain, or may
(cid:76)(cid:105)(cid:3)(cid:96)(cid:105)(cid:105)(cid:147)(cid:105)(cid:96)(cid:3)(cid:204)(cid:156)(cid:3)(cid:86)(cid:156)(cid:152)(cid:204)(cid:62)(cid:136)(cid:152)(cid:3)(cid:186)(cid:118)(cid:156)(cid:192)(cid:220)(cid:62)(cid:192)(cid:96)(cid:135)(cid:143)(cid:156)(cid:156)(cid:142)(cid:136)(cid:152)(cid:125)(cid:3)(cid:195)(cid:204)(cid:62)(cid:204)(cid:105)(cid:147)(cid:105)(cid:152)(cid:204)(cid:195)(cid:187)(cid:3)(cid:204)(cid:133)(cid:62)(cid:204)(cid:3)(cid:192)(cid:105)(cid:121)(cid:105)(cid:86)(cid:204)(cid:3)(cid:147)(cid:62)(cid:152)(cid:62)(cid:125)(cid:105)(cid:147)(cid:105)(cid:152)(cid:204)(cid:189)(cid:195)(cid:3)(cid:86)(cid:213)(cid:192)(cid:192)(cid:105)(cid:152)(cid:204)(cid:3)
expectations or beliefs regarding future events, including statements regarding guidance and
the dividend policy. By their nature, forward-looking statements involve risks, assumptions, and
uncertainties because they relate to events and depend on circumstances that may or may not
occur in the future. Although the Company believes that the assumptions used in the forward-
looking statements are reasonable, any of these assumptions could prove to be inaccurate
and, as a result, actual results could differ materially from those expressed or implied in the
forward-looking statements. For discussion of some of the important factors that could cause the
Company’s actual results and performance to differ materially from those expressed in, or implied
in the forward-looking statements, please refer to “Item 1A. Risk Factors” in our Annual Report on
Form 10-K for the year ended December 29, 2022 included herein. The Company undertakes no
obligation to update or revise any forward-looking statements.

Lauren Zalaznick
Chair of National CineMedia, Inc., Independent
Advisor & Senior Advisor to The Boston
Consulting Group in the Global TMT Practice

Bernadette Aulestia
Member of the Board of Directors of Denny’s
Corporation, Nexstar Media Group & Latino
Corporate Directors Association

Nicholas Bell
CEO of Fanatics Live

David E. Glazek
Executive Chairman of Turning Point Brands, Inc.

Juliana F. Hill
Former Senior Vice President of Liquidity
&Asset Management of iHeartMedia, Inc.

Thomas F. Lesinski
CEO of NCM, Inc.

Tiago Lourenço
Partner at Blantyre Capital

Jean-Philippe Maheu
Advisor & Member of the Board of Directors
for various growth stage companies

Joe Marchese
General Partner Human Ventures
& Casa Komos Brands Group

EXECUTIVE OFFICERS

Thomas F. Lesinski
(cid:10)(cid:133)(cid:136)(cid:105)(cid:118)(cid:3)(cid:13)(cid:221)(cid:105)(cid:86)(cid:213)(cid:204)(cid:136)(cid:219)(cid:105)(cid:3)(cid:34)(cid:118)(cid:119)(cid:86)(cid:105)(cid:192)

Ronnie Y. Ng
(cid:10)(cid:133)(cid:136)(cid:105)(cid:118)(cid:3)(cid:19)(cid:136)(cid:152)(cid:62)(cid:152)(cid:86)(cid:136)(cid:62)(cid:143)(cid:3)(cid:34)(cid:118)(cid:119)(cid:86)(cid:105)(cid:192)

Scott D. Felenstein
President – Sales, Marketing & Partnerships

Maria V. Woods
Executive Vice President, General Counsel
& Secretary