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 x No ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted 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 and post such files). Yes x No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ¨ No x

As of ~~October 28, 2014, 60,870,661~~May 7, 2015, 61,465,867 shares of the registrant’s common stock (including unvested restricted shares), par value of $0.01 per share, were outstanding.


	September 25, 2014			December 26, 2013			April 2, 2015			January 1, 2015
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	24.6		$	54.7		$	12.9		$	13.4
Short-term marketable securities		20.3			71.3			18.6			21.7
Receivables, net of allowance of $6.2 and $5.7, respectively		97.2			120.4
Receivables, net of allowance of $4.5 and $4.3, respectively								79.6			116.5
Prepaid expenses (including $0.2 and $0.0 to founding members, respectively)		3.2			3.1			4.3			3.6
Deferred tax assets		4.0			4.2			2.5			6.9
Income tax receivable		10.2			7.6			5.9			6.1
Current portion of notes receivable - founding members		4.2			4.2			4.2			4.2
Other current assets - founding members		0.9			—
Other current assets (including $0.3 and $0.0 with founding members, respectively)								0.6			—

Total current assets		164.6			265.5			128.6			172.4
NON-CURRENT ASSETS:
Property and equipment, net of accumulated depreciation of $76.3 and $69.5, respectively		23.5			25.6
Intangible assets, net of accumulated amortization of $64.0 and $48.7, respectively		494.5			492.0
Property and equipment, net of accumulated depreciation of $75.2 and $72.9, respectively								21.6			22.4
Intangible assets, net of accumulated amortization of $74.6 and $69.3, respectively								515.2			488.6
Deferred tax assets		232.9			244.2			237.9			227.3
Debt issuance costs, net of accumulated amortization of $17.1 and $15.0, respectively		16.2			17.7
Debt issuance costs, net of accumulated amortization of $18.4 and $17.8, respectively								14.9			15.5
Long-term notes receivable, net of current portion - founding members		20.8			20.8			16.6			16.6
Other investments - related party		1.1			1.1
Other investments (including $1.4 and $1.3 with related parties, respectively)								4.2			2.5
Long-term marketable securities		39.4			—			46.0			45.5
Other assets		0.6			0.4			0.6			0.6

Total non-current assets		829.0			801.8			857.0			819.0

TOTAL ASSETS	$	993.6		$	1,067.3		$	985.6		$	991.4

LIABILITIES AND EQUITY/(DEFICIT)
CURRENT LIABILITIES:
Amounts due to founding members	$	23.7		$	30.1		$	2.9		$	34.9
Payable to founding members under tax receivable agreement		21.7			28.6			9.0			19.6
Accrued expenses		22.4			19.7			20.6			19.2
Accrued payroll and related expenses		10.1			13.9			7.3			10.7
Accounts payable (including $0.9 and $0.8 to related party affiliates, respectively)		11.0			20.5
Accounts payable (including $0.1 and $1.0 to related party affiliates, respectively)								15.1			13.3
Deferred revenue		6.3			4.7			9.5			8.5
Deferred tax liability		0.3			—			0.7			1.0
Current portion of long-term debt		14.0			14.0
Other current liabilities - related party		3.3			—

Total current liabilities		112.8			131.5			65.1			107.2
NON-CURRENT LIABILITIES:
Long-term debt		881.0			876.0			938.0			892.0
Deferred tax liability		57.3			61.9			53.9			54.2
Payable to founding members under tax receivable agreement		142.7			144.0			148.4			146.7

Total non-current liabilities		1,081.0			1,081.9			1,140.3			1,092.9

Total liabilities		1,193.8			1,213.4			1,205.4			1,200.1
COMMITMENTS AND CONTINGENCIES (NOTE 6)
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; 175,000,000 shares authorized, 58,746,988 and 58,519,137 issued and outstanding, respectively		0.6			0.6
Common stock, $0.01 par value; 175,000,000 shares authorized, 58,944,045 and 58,750,926 issued and outstanding, respectively								0.6			0.6
Additional paid in capital (deficit)		(263.0	)		(271.7	)		(250.7	)		(261.0	)
Retained earnings (distributions in excess of earnings)		(142.2	)		(80.0	)		(169.8	)		(147.4	)
Accumulated other comprehensive loss		(1.1	)		(3.2	)
Accumulated other comprehensive income/(loss)								—			(0.4	)

Total NCM, Inc. stockholders’ equity/(deficit)		(405.7	)		(354.3	)		(419.9	)		(408.2	)
Noncontrolling interests		205.5			208.2			200.1			199.5

Total equity/(deficit)		(200.2	)		(146.1	)		(219.8	)		(208.7	)

TOTAL LIABILITIES AND EQUITY	$	993.6		$	1,067.3
TOTAL LIABILITIES AND EQUITY/DEFICIT							$	985.6		$	991.4


	Three Months Ended						Nine Months Ended						Three Months Ended
	September 25, 2014			September 26, 2013			September 25, 2014			September 26, 2013			April 2, 2015			March 27, 2014
REVENUE:
Advertising (including revenue from founding members of $9.1, $11.5, $28.4 and $31.6 respectively)	$	100.8		$	127.6		$	270.9		$	318.2
Fathom Events		—			7.5			—			21.9

Total		100.8			135.1			270.9			340.1

Advertising (including revenue from founding members of $7.7 and 9.5, respectively)													$	76.9		$	70.2
OPERATING EXPENSES:
Advertising operating costs (including $1.2, $1.1, $2.6 and $2.6 to related parties, respectively)		6.5			7.9			18.1			21.7
Fathom Events operating costs (including $0.0, $1.3, $0.0 and $3.3 to founding members, respectively)		—			5.4			—			15.4
Advertising operating costs (including $0.0 and $0.5 to related parties, respectively)														5.8			5.0
Network costs		4.4			5.1			13.4			15.2			4.5			4.6
Theatre access fees—founding members		17.0			18.7			52.3			52.4			17.2			17.4
Selling and marketing costs (including $0.2, $0.3, $0.7 and $1.0 to founding members, respectively)		14.7			15.6			43.8			46.7
Merger-related administrative costs		2.0			—			3.7			—
Other administrative and other costs		6.9			7.8			21.6			22.9
Selling and marketing costs (including $0.2 and $0.2 to founding members, respectively)														16.0			15.0
Merger termination fee and related merger costs														33.4			—
Administrative and other costs														8.7			7.6
Depreciation and amortization		8.6			7.2			24.2			18.8			8.0			7.8

Total		60.1			67.7			177.1			193.1			93.6			57.4

OPERATING INCOME		40.7			67.4			93.8			147.0
OPERATING (LOSS) INCOME														(16.7	)		12.8

NON-OPERATING EXPENSES:
Interest on borrowings		12.7			12.8			38.8			38.9			13.1			13.1
Interest income (including $0.3, $0.0, $0.9 and $0.0 from founding members, respectively)		(0.3	)		(0.1	)		(1.2	)		(0.3	)
Interest income (including $0.3 and $0.3 from founding members, respectively)														(0.6	)		(0.4	)
Accretion of interest on the discounted payable to founding members under tax receivable agreement		3.5			3.4			10.8			10.2			3.6			3.8
Amortization of terminated derivatives		2.6			2.6			7.6			7.8			1.6			2.5
Other non-operating expense		0.7			—			0.9			1.2			0.1			0.1

Total		19.2			18.7			56.9			57.8			17.8			19.1

INCOME BEFORE INCOME TAXES		21.5			48.7			36.9			89.2
Income tax expense		2.1			6.4			4.2			13.0
LOSS BEFORE INCOME TAXES														(34.5	)		(6.3	)
Income tax benefit														(4.3	)		(1.7	)

CONSOLIDATED NET INCOME		19.4			42.3			32.7			76.2
Less: Net income attributable to noncontrolling interests		14.6			28.6			27.4			54.0
CONSOLIDATED NET LOSS														(30.2	)		(4.6	)
Less: Net loss attributable to noncontrolling interests														(21.2	)		(1.5	)

NET INCOME ATTRIBUTABLE TO NCM, INC.	$	4.8		$	13.7		$	5.3		$	22.2
NET LOSS ATTRIBUTABLE TO NCM, INC.													$	(9.0	)	$	(3.1	)


NET INCOME PER NCM, INC. COMMON SHARE:
NET LOSS PER NCM, INC. COMMON SHARE:
Basic	$	0.08		$	0.24		$	0.09		$	0.40		$	(0.15	)	$	(0.05	)
Diluted	$	0.08		$	0.24		$	0.09		$	0.40		$	(0.15	)	$	(0.05	)
WEIGHTED AVERAGE SHARES OUTSTANDING:
Basic		58,744,395			56,027,288			58,695,073			55,233,875			58,888,674			58,618,800
Diluted		59,043,769			56,875,241			58,987,945			55,864,471			58,888,674			58,618,800

Dividends declared per common share	$	0.22		$	0.22		$	1.16		$	0.66		$	0.22		$	0.72


	Nine Months Ended						Three Months Ended
	September 25, 2014			September 26, 2013			April 2, 2015			March 27, 2014
CASH FLOWS FROM OPERATING ACTIVITIES:
Consolidated net income	$	32.7		$	76.2
Adjustments to reconcile consolidated net income to net cash provided by operating activities:
Deferred income tax expense		12.2			11.4
Consolidated net loss							$	(30.2	)	$	(4.6	)
Adjustments to reconcile consolidated net loss to net cash provided by operating activities:
Deferred income tax (benefit) expense								(4.4	)		6.2
Depreciation and amortization		24.2			18.8			8.0			7.8
Non-cash share-based compensation		5.1			6.2			3.0			2.0
Excess tax benefit from share-based compensation		0.2			—			(0.1	)		0.2
Accretion of interest on the discounted payable to founding members under tax receivable agreement		10.8			10.2			3.6			3.8
Amortization of terminated derivatives		7.6			7.8			1.6			2.5
Amortization of debt issuance costs		2.1			2.1			0.6			0.7
Write-off of debt issuance costs and other non-operating items		—			1.2
Other								(0.1	)		—
Changes in operating assets and liabilities:
Receivables, net		23.2			(9.8	)		35.2			35.0
Accounts payable and accrued expenses		(6.1	)		(3.2	)		(0.3	)		(17.0	)
Amounts due to founding members		2.6			1.0			0.4			2.7
Payment to founding members under tax receivable agreement		(25.1	)		(10.1	)		(17.2	)		(25.1	)
Income taxes and other		(2.6	)		2.1			0.2			(2.3	)

Net cash provided by operating activities		86.9			113.9			0.3			11.9

CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment		(6.9	)		(7.9	)		(2.0	)		(2.1	)
Purchases of marketable securities		(99.1	)		(96.9	)		(18.4	)		(37.3	)
Proceeds from sale and maturities of marketable securities		110.7			73.8			20.6			46.5
Purchases of intangible assets from affiliate circuits		(3.0	)		(8.9	)
Purchases of intangible assets from network affiliates								(0.9	)		(0.5	)

Net cash provided by (used in) investing activities		1.7			(39.9	)
Net cash (used in) provided by investing activities								(0.7	)		6.6

CASH FLOWS FROM FINANCING ACTIVITIES:
Payment of dividends		(68.1	)		(36.4	)		(13.3	)		(42.3	)
Proceeds from borrowings		92.0			44.0			96.0			49.0
Repayments of borrowings		(87.0	)		(39.0	)		(50.0	)		(32.0	)
Payment of debt issuance costs		(0.7	)		(3.4	)
Founding member integration payments		1.5			1.1			0.8			0.7
Distributions to founding members		(55.7	)		(57.7	)		(32.9	)		(31.0	)
Excess tax benefit from share-based compensation		(0.2	)		—			0.1			(0.2	)
Proceeds from stock option exercises		0.8			16.5			0.4			0.5
Repurchase of stock for restricted stock tax withholding		(1.3	)		(1.7	)		(1.2	)		(1.3	)

Net cash used in financing activities		(118.7	)		(76.6	)		(0.1	)		(56.6	)

CHANGE IN CASH AND CASH EQUIVALENTS		(30.1	)		(2.6	)		(0.5	)		(38.1	)
Cash and cash equivalents at beginning of period		54.7			72.4			13.4			54.7

Cash and cash equivalents at end of period	$	24.6		$	69.8		$	12.9		$	16.6


	Nine Months Ended					Three Months Ended
	September 25, 2014			September 26, 2013		April 2, 2015		March 27, 2014
Supplemental disclosure of non-cash financing and investing activity:
Purchase of an intangible asset with NCM LLC equity	$	16.4		$	160.2	$	31.4	$	16.4
Purchase of subsidiary equity with NCM, Inc. equity		—			41.3
Accrued distributions to founding members	$	21.8		$	36.1	$	—	$	6.2
(Decrease) increase in dividends not requiring cash in the period	$	(0.5	)	$	1.1
Write-off of property and equipment included in accrued expenses	$	(0.4	)	$	—
Increase (decrease) in dividends not requiring cash in the period						$	0.1	$	(0.9	)
Increase in cost and equity method investments						$	1.6	$	—
Supplemental disclosure of cash flow information:
Cash paid for interest	$	34.6		$	34.9	$	10.3	$	10.2
(Refunds) payments for income taxes, net	$	(6.4	)	$	0.5
Payments (refunds) for income taxes, net						$	0.2	$	(7.0	)


				NCM, Inc.																			NCM, Inc.
				Common Stock				Additional Paid in Capital			Retained Earnings (Distribution in Excess of			Accumulated Other Comprehensive			Noncontrolling						Common Stock				Additional Paid in Capital			Retained Earnings (Distribution in Excess of			Accumulated Other Comprehensive			Noncontrolling
	Consolidated			Shares		Amount		(Deficit)			Earnings)			Loss			Interest			Consolidated			Shares		Amount		(Deficit)			Earnings)			Loss			Interest
Balance—January 1, 2015																				$	(208.7	)		58,750,926	$	0.6	$	(261.0	)	$	(147.4	)	$	(0.4	)	$	199.5
NCM LLC equity issued for purchase of intangible asset																					31.4			—		—		14.1			—			—			17.3
Income tax and other impacts of NCM LLC ownership changes																					(2.4	)		—		—		(5.0	)		—			—			2.6
Comprehensive income, net of tax																					(28.9	)		—		—		—			(9.0	)		0.4			(20.3	)
Share-based compensation issued																					(0.8	)		193,119		—		(0.8	)		—			—			—
Share-based compensation expense/capitalized																					3.0			—		—		2.0			—			—			1.0
Cash dividends declared $0.22 per share																					(13.4	)		—		—		—			(13.4	)		—			—

Balance—April 2, 2015																				$	(219.8	)		58,944,045	$	0.6	$	(250.7	)	$	(169.8	)	$	(0.0	)	$	200.1

Balance—December 26, 2013	$	(146.1	)		58,519,137	$	0.6	$	(271.7	)	$	(80.0	)	$	(3.2	)	$	208.2		$	(146.1	)		58,519,137	$	0.6	$	(271.7	)	$	(80.0	)	$	(3.2	)	$	208.2
Distributions to founding members		(46.5	)		—		—		—			—			—			(46.5	)		(6.2	)		—		—		—			—			—			(6.2	)
NCM LLC equity returned for purchase of intangible asset		16.4			—		—		7.5			—			—			8.9
NCM LLC equity issued for purchase of intangible asset																					16.4			—		—		7.5			—			—			8.9
Income tax and other impacts of NCM LLC ownership changes		(0.3	)		—		—		(2.0	)		—			—			1.7			(0.7	)		—		—		(2.2	)		—			—			1.5
Comprehensive income, net of tax		38.9			—		—		—			5.3			2.1			31.5			(2.5	)		—		—		—			(3.1	)		0.7			(0.1	)
Share-based compensation issued		(0.5	)		227,851		—		(0.5	)		—			—			—			(0.9	)		197,209		—		(0.9	)		—			—			—
Share-based compensation expense/capitalized		5.2			—		—		3.5			—			—			1.7			2.0			—		—		1.4			—			—			0.6
Excess tax benefit from share-based compensation		0.2			—		—		0.2			—			—			—			0.2			—		—		0.2			—			—			—
Cash dividends declared $1.16 per share		(67.5	)		—		—		—			(67.5	)		—			—
Cash dividends declared $0.72 per share																					(41.4	)		—		—		—			(41.4	)		—			—

Balance—March 27, 2014																				$	(179.2	)		58,716,346	$	0.6	$	(265.7	)	$	(124.5	)	$	(2.5	)	$	212.9

Balance—September 25, 2014	$	(200.2	)		58,746,988	$	0.6	$	(263.0	)	$	(142.2	)	$	(1.1	)	$	205.5


Balance—December 27, 2012	$	(356.4	)		54,486,259	$	0.5	$	(362.4	)	$	(70.5	)	$	(6.7	)	$	82.7
Distributions to founding members		(72.9	)		—		—		—			—			—			(72.9	)
NCM LLC equity returned for purchase of intangible asset		160.2			—		—		73.2			—			—			87.0
Income tax and other impacts of NCM LLC ownership changes		(14.8	)		—		—		(18.2	)		—			0.3			3.1
Issuance of shares		41.3			2,300,000		—		41.3			—			—			—
NCM, Inc. investment in subsidiary		(41.3	)		—		—		(41.3	)		—			—			—
Comprehensive income, net of tax		82.6			—		—		—			22.2			2.2			58.2
Share-based compensation issued		14.8			1,493,785		0.1		14.7			—			—			—
Share-based compensation expense/capitalized		6.5			—		—		4.4			—			—			2.1
Cash dividends declared $0.66 per share		(37.5	)		—		—		—			(37.5	)		—			—


Balance—September 26, 2013	$	(217.5	)		58,280,044	$	0.6	$	(288.3	)	$	(85.8	)	$	(4.2	)	$	160.2

National CineMedia, Inc. (“NCM, Inc.”) was incorporated in Delaware as a holding company with the sole purpose of becoming a member and sole manager of National CineMedia, LLC (“NCM LLC”), ~~an LLC~~a limited liability company owned by NCM, Inc., American Multi-Cinema, Inc. and AMC ShowPlace Theatres, Inc. (“AMC”), wholly owned subsidiaries of AMC Entertainment, Inc. ~~(“AMCE”)~~, Regal Cinemas, Inc. and Regal CineMedia Holdings, LLC, wholly owned subsidiaries of Regal Entertainment Group (“Regal”) and Cinemark Media, Inc. and Cinemark USA, Inc., wholly owned subsidiaries of Cinemark Holdings, Inc. (“Cinemark”). The terms “NCM”, “the Company” or “we” shall, unless the context otherwise requires, be deemed to include the consolidated entity. AMC, Regal and Cinemark and their affiliates are referred to in this document as “founding members”. The Company operates the largest digital in-theatre network in North America, allowing NCM LLC to sell advertising (the “Services”) under long-term exhibitor services agreements (“ESAs”) with the founding members and certain third-party theatre circuits under long-term network affiliate agreements referred to in this document as “network affiliates”, which have terms from three to twenty years.

As of ~~September 25, 2014,~~April 2, 2015, NCM LLC had ~~128,290,567~~130,648,539 common membership units outstanding, of which ~~58,746,988 (45.8%~~58,944,045 (45.1%) were owned by NCM, Inc., ~~25,792,942 (20.1%~~26,409,784 (20.2%) were owned by Regal, ~~24,556,136 (19.1%~~25,631,046 (19.6%) were owned by Cinemark and ~~19,194,501 (15.0%~~19,663,664 (15.1%) were owned by AMC. The membership units held by the founding members are exchangeable into NCM, Inc. common stock on a one-for-one basis.

On ~~December 26, 2013, NCM LLC sold its Fathom Events business to a newly formed limited liability company owned 32% by each of the founding members and 4% by NCM LLC, as described further in Note 4—~~~~Related Party Transactions~~.

On May 5, 2014, NCM, Inc. entered into an Agreement and Plan of Merger (the “Merger Agreement”) to merge with Screenvision, LLC (“Screenvision”) ~~for $375 million, consisting of $225 million in cash and $150 million of NCM, Inc. common stock (9,900,990 shares based on a price of $15.15 per share) (“the Merger”)~~. The merger consideration is subject to adjustment based upon Screenvision’s Adjusted EBITDA for the twelve months ended April 30, 2014 and Screenvision’s working capital at closing. Consummation of the Merger is subject to clearance under the Hart-Scott-Rodino Antitrust Improvements Act (“HSR Act”) and other customary closing conditions, including satisfaction of representations, warranties and covenants. All necessary corporate action by NCM, Inc. and Screenvision to approve the Merger has occurred. Following the Merger, NCM, Inc. will evaluate whether to contribute the Screenvision assets to NCM LLC. Although it is under no obligation to do so, upon approval of NCM, Inc.’s Board of Directors and the founding members, NCM, Inc. may contribute Screenvision assets and NCM, Inc. debt to NCM LLC in exchange for 9,900,990 NCM LLC membership units. NCM, Inc. has secured a commitment from a group of financial institutions for a $250 million term loan to finance the $225 million portion of the merger consideration that will be paid in cash, along with fees and expenses incurred in connection with the term loan and the merger. In addition, NCM LLC amended its senior secured credit facility to allow for the contribution of the Screenvision assets and NCM, Inc. debt to NCM LLC following the closing of the Merger. On November 3, 2014, the ~~U.S.~~ Department of Justice ~~(the “DOJ”)~~ filed an antitrust lawsuit seeking to enjoin the ~~proposed merger between~~merger. On March 16, 2015, the Company announced the termination of the Merger Agreement. The antitrust lawsuit has been dismissed. After the Merger Agreement was terminated, NCM LLC reimbursed NCM, Inc. for certain expenses pursuant to an indemnification agreement among NCM LLC, NCM, Inc. and ~~Screenvision.~~the founding members. During the three months ended April 2, 2015, NCM LLC paid Screenvision an approximate $26.8 million termination payment on behalf of NCM, Inc. This payment was $2 million lower than the reverse termination fee contemplated by the Merger Agreement. During the three months ended April 2, 2015, NCM LLC also either paid or reimbursed NCM, Inc. for the legal and other merger-related costs of approximately $14.1 million ($7.5 million incurred during the year ended January 1, 2015 and approximately $6.6 million incurred during the three months ended April 2, 2015). The Company and ~~Screenvision intend to defend~~the founding members each bore a pro rata portion of the merger termination fee and the related merger expenses based on their ~~proposed merger. Refer to Note 10 –~~~~Subsequent Events~~ ~~for further information.~~aggregate ownership percentages in NCM LLC.

The Company has prepared the unaudited Condensed Consolidated Financial Statements and related notes of NCM, Inc. in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and the rules and regulations of the Securities and Exchange Commission (“SEC”). Accordingly, certain information and footnote disclosures typically included in an annual report have been condensed or omitted for this quarterly report. Certain reclassifications have been made to the prior years’ financial statements to conform to the current presentation. These reclassifications had no effect on previously reported results of operations or retained earnings. The balance sheet as of ~~December 26, 2013~~January 1, 2015 is derived from the audited financial statements of NCM, Inc. Therefore, the unaudited Condensed Consolidated Financial Statements should be read in conjunction with the audited Consolidated Financial Statements and notes thereto included in the Company’s annual report on Form 10-K filed for the fiscal year ended ~~December 26, 2013.~~January 1, 2015.

In the opinion of management, all adjustments (which include only normal recurring adjustments) necessary to present fairly in all material respects the financial position, results of operations and cash flows for all periods presented have been made. The Company’s business is seasonal and for this and other reasons operating results for interim periods may not be indicative of the Company’s full year results or future performance. As a result of the various related party agreements discussed in Note 4—Related Party Transactions, the operating results as presented are not necessarily indicative of the results that might have occurred if all agreements were with non-related third parties. The Company manages its business under one reportable segment: advertising.

Estimates—The preparation of ~~our~~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 and income taxes. Actual results could differ from those estimates.

The Company’s annual financial statements included in its Form 10-K filed for the fiscal year ended ~~December 26, 2013~~January 1, 2015 contain a complete discussion of the Company’s significant accounting policies. Following is additional information related to ~~our~~the Company’s accounting policies.

~~Segment Reporting~~— Subsequent to the sale of the Fathom business on December 26, 2013, the sale of advertising is the sole business activity of the Company and is the Company’s reportable segment under the requirements of ASC 280,~~Segment Reporting~~(“ASC 280”). Until its sale, Fathom Events was an operating segment under ASC 280, but did not meet the annual quantitative thresholds for segment reporting. The Company does not evaluate its segments on a fully allocated cost basis, nor does the Company track segment assets separately. Therefore, the measurement of segment operating income net of direct expenses presented herein is not prepared on the same basis as operating income in the unaudited Condensed Consolidated Statements of Income and the results are not indicative of what segment results of operations would have been had it been operated on a fully allocated cost basis. The Company cautions that it would be inappropriate to assume that unallocated operating costs are incurred proportional to segment revenue or any directly identifiable segment expenses. Refer to Note 9—~~Segment Reporting~~.

Concentration of Credit Risk and Significant Customers—Bad debts are provided for using the allowance for doubtful accounts method based on historical experience and management’s evaluation of outstanding receivables at the end of the period. Receivables are written off when management determines amounts are uncollectible. Trade accounts receivable are uncollateralized and represent a large number of geographically dispersed debtors. The collectability risk with respect to ~~our~~ national and regional advertising is reduced by ~~dealing~~the fact that the majority of accounts receivable are with ~~founding members or~~ large, national advertising agencies ~~who~~that have strong reputations in the advertising industry and clients with stable financial positions. ~~We have~~The Company has smaller contracts with thousands of local clients that are not individually significant. As of ~~September 25, 2014~~April 2, 2015 and ~~December 26, 2013,~~January 1, 2015, there were no advertising agency groups or individual customers through which the Company sources national advertising revenue representing more than 10% of the Company’s outstanding gross receivable balance. During the ~~nine months ended September 25, 2014, revenue related to NCM LLC’s founding members’ beverage supplier accounted for 10.4% of total revenue. During the~~ three months ended ~~September 25, 2014 and the three and nine months ended September 26, 2013,~~April 2, 2015, there were no customers that accounted for more than 10% of revenue, and during the three months ended March 27, 2014, revenue related to advertisements of NCM LLC’s founding members’ beverage supplier accounted for 13.3% of total revenue.

Share-Based Compensation—The Company has issued stock options, restricted stock and restricted stock units to its employees and independent directors. In ~~2014~~2015 and ~~2013,~~2014, the Company did not grant stock options. ~~Restricted stock~~In 2015 and restricted stock units granted prior to 2013 vest upon the achievement of Company performance measures and service conditions. In 2013, the Company granted restricted stock and restricted stock units that vest upon the achievement of Company performance measures and service conditions, or only service conditions, depending on the title of the employee. In 2014, restricted stock grants for Company officers vest upon the achievement of Company performance measures and service conditions, or only service conditions, while non-officer grants vest only upon the achievement of service conditions. Compensation expense of restricted stock that vests upon the achievement of 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 of restricted stock expected to vest. Ultimately, the Company adjusts the expense recognized to reflect the actual vested shares following the resolution of the performance conditions. Dividends are accrued when declared on unvested restricted stock that is expected to vest and are only paid with respect to shares that actually vest. During the three ~~and nine~~ months ended ~~September 25,~~April 2, 2015 and March 27, 2014, 238,315 and ~~the three and nine months ended September 26, 2013, 1,930, 253,590, 1,000, and 360,258~~247,988 shares of restricted stock and restricted stock units ~~vested.~~vested, respectively. During the three ~~and nine~~ months ended ~~September 25,~~April 2, 2015 and March 27, 2014, ~~3,605~~32,515 and ~~56,052~~21,298 stock options were exercised at a weighted average exercise price of ~~$11.54~~$12.24 and $13.58 per share, respectively, and during the three and nine months ended September 26, 2013, 612,585 and 1,249,066 stock options were exercised at a weighted average exercise price of $14.94 and $13.23$15.35 per share, respectively.

In connection with the Company’s March 2014 special cash dividend of $0.50 per share and pursuant to the antidilution adjustment terms of the Company’s Equity Incentive Plan, the exercise price and the number of shares of common stock subject to options held by the Company’s employees were adjusted to prevent dilution and restore their economic value that existed immediately before the special dividend. The antidilution adjustments made with respect to such options resulted in a decrease in the range of exercise prices from $5.35 - $24.68 per share to $5.18 - $23.90 per share and an increase in the aggregate number of shares issuable upon exercise of such options by 98,589 shares, or 3.3%, of previously outstanding options. The number of shares authorized under the Equity Incentive Plan increased by an equivalent number of shares. There were no accounting consequences for the changes made to reduce the exercise prices and increase the number of underlying options as a result of the special cash dividend because the aggregate fair values of the awards immediately before and after the modifications were the same.

Consolidation—NCM, Inc. consolidates the accounts of NCM LLC under the ~~provision~~provisions of ASC 810,Consolidation(“ (“ASC 810”). Under ASC 810, a managing member of a limited liability company (“LLC”) is presumed to control the LLC, unless the non-managing members have the right to dissolve the entity or remove the managing member without cause, or if the non-managing members have substantive 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 participation rights under ASC 810, as they do not limit NCM, Inc.’s ability to make decisions in the ordinary course of business.

The following table presents the changes in NCM, Inc.’s equity resulting from net ~~income~~loss attributable to NCM, Inc. and transfers to or from noncontrolling interests (in millions):


	Nine Months Ended						Three Months Ended
	September 25, 2014			September 26, 2013			April 2, 2015			March 27, 2014
Net income attributable to NCM, Inc.	$	5.3		$	22.2
Net loss attributable to NCM, Inc.							$	(9.0	)	$	(3.1	)
NCM LLC equity issued for purchase of intangible asset		7.5			73.2			14.1			7.5
Income tax and other impacts of subsidiary ownership changes		(2.0	)		(18.2	)		(5.0	)		(2.2	)

Change from net income attributable to NCM, Inc. and transfers from noncontrolling interests	$	10.8		$	77.2		$	0.1		$	2.2

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. 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 ~~March 2014, the Emerging Issues Task Force (“EITF”) reached a final consensus on Issue 13-D,~~~~Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could be Achieved after the Requisite Service Period~~ (“EITF 13-D”). Under EITF 13-D, a performance target that can be achieved after the requisite service period should be treated as a performance condition that affects vesting, rather than a condition

that affects grant date fair value. Compensation cost is recognized over the requisite service period if it is probable that the performance condition will be achieved. If necessary, compensation cost is subsequently adjusted, to reflect those awards that ultimately vest. EITF 13-D will be effective, on a prospective basis, for the Company during its first quarter of 2016, with early adoption permitted. The adoption of this standard is not anticipated to have a material impact on the Company’s unaudited Condensed Consolidated Financial Statements or notes thereto.

In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update 2014-09, Revenue from Contracts with Customers (Topic 606) (“ASU 2014-09”), which supersedes the revenue recognition requirements in Accounting Standards Codification 605, Revenue Recognition. The new revenue recognition standard requires entities to recognize revenue in a way that depicts the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled to in exchange for those goods or services. This guidance will be effective for annual periods beginning ~~in fiscal year~~after December 15, 2017 and early adoption is ~~not permitted.~~permitted no earlier than fiscal years beginning after December 15, 2016. The standard allows for either a full retrospective or a modified retrospective transition method. The Company is currently evaluating the effect that adopting this new accounting guidance will have on its unaudited Condensed Consolidated Financial Statements or notes thereto, as well as, which transition method it intends to use.

In ~~August 2014,~~January 2015, the FASB issued Accounting Standards Update ~~2014-15,~~2015-01, Income Statement Extraordinary and Unusual Items (Subtopic 225-20): Simplifying Income Statement Presentation by Eliminating the Concept of ~~Financial Statements - Going Concern~~Extraordinary Items (“ASU ~~2014-15”~~2015-01”)., which eliminates the concept of extraordinary items from GAAP. Under ASU ~~2014-15 requires~~2015-01, reporting entities will no longer be required to assess whether an underlying event or transaction is

extraordinary, however, presentation and disclosure guidance for items that ~~management evaluate at each annual~~are unusual in nature or occur infrequently are retained, and ~~interim reporting period whether there~~are expanded to include items that are both unusual in nature and infrequently occurring. This guidance is ~~a substantial doubt about an entity’s ability to continue as a going concern within one year of the date that the financial statements are issued. ASU 2014-15 will be~~ effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015. Early adoption is permitted provided that the guidance is applied from the beginning of the fiscal year of adoption. A reporting entity may apply ASU 2015-01 prospectively. A reporting entity may also apply ASU 2015-01 retrospectively to all periods presented in the financial statements. The Company expects to adopt this accounting guidance in its first quarter of 2016 and ~~early application is permitted. The Company~~ does not expect ~~that~~ the application of ASU ~~2014-15 will~~2015-01 to have an impact onin the unaudited Condensed Consolidated Financial Statements or notes thereto.

In February 2015, the FASB issued Accounting Standards Update 2015-02,Consolidation (Topic 810): Amendments to the Consolidation Analysis (“ASU 2015-02”). ASU 2015-02 amends current consolidation guidance by modifying the evaluation of whether limited partnerships and similar legal entities are variable interest entities or voting interest entities, eliminating the presumption that a general partner should consolidate a limited partnership, and affects the consolidation analysis of reporting entities that are involved with variable interest entities. ASU 2015-02 is effective for interim and annual reporting periods beginning after December 15, 2015, with early adoption permitted. The Company does not expect the application of ASU 2015-02 to have an impact in the unaudited Condensed Consolidated Financial Statements or notes thereto.

In April 2015, the FASB issued Accounting Standards Update 2015-03, Interest - Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs (“ASU 2015-03”), which provides guidance for simplifying the presentation of debt issuance costs. ASU 2015-03 requires that debt issuance costs be presented in the balance sheet as a direct deduction from the carrying amount of debt liability, consistent with debt discounts or premiums. This guidance will be effective for fiscal years beginning after December 15, 2015, and early adoption is permitted for financial statements that have not been previously issued. The standard requires application on a retrospective basis and represents a change in accounting principle. The Company expects to adopt this accounting guidance in its first quarter of 2016 and will present debt issuance costs as a reduction of debt, rather than an asset.

The Company has considered all other recently issued accounting pronouncements and does not believe the adoption of such pronouncements will have a material impact on its unaudited Condensed Consolidated Financial Statements.

Basic ~~earnings~~loss per share ~~are~~is computed on the basis of the weighted average number of common shares outstanding. Diluted ~~earnings~~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 restricted stock units using the treasury stock method. The components of basic and diluted ~~earnings~~loss per NCM, Inc. share are as follows:


	Three Months Ended				Nine Months Ended				Three Months Ended
	September 25, 2014		September 26, 2013		September 25, 2014		September 26, 2013		April 2, 2015			March 27, 2014
Net income attributable to NCM, Inc. (in millions)	$	4.8	$	13.7	$	5.3	$	22.2
Net loss attributable to NCM, Inc. (in millions)									$	(9.0	)	$	(3.1	)

Weighted average shares outstanding:
Basic		58,744,395		56,027,288		58,695,073		55,233,875		58,888,674			58,618,800
Add: Dilutive effect of stock options and restricted stock		299,374		847,953		292,872		630,596		—			—

Diluted		59,043,769		56,875,241		58,987,945		55,864,471		58,888,674			58,618,800

Income per NCM, Inc. share:
Loss per NCM, Inc. share:
Basic	$	0.08	$	0.24	$	0.09	$	0.40	$	(0.15	)	$	(0.05	)
Diluted	$	0.08	$	0.24	$	0.09	$	0.40	$	(0.15	)	$	(0.05	)

The effect of ~~69,543,579, 66,953,757, 69,220,792~~69,923,520 and ~~62,806,362~~68,575,219 exchangeable NCM LLC common units held by the founding members for the three months ended ~~September 25,~~April 2, 2015 and March 27, 2014, ~~and September 26, 2013 and the nine months ended September 25, 2014 and September 26, 2013,~~ respectively, have been excluded from the calculation of diluted weighted average shares and earnings per NCM, Inc. share as they were antidilutive. NCM LLC common units do not participate in NCM, Inc. dividends. In addition, there were ~~10,125, 9,533, 97,767~~5,529,103 and ~~36,923~~5,196,784 stock options and non-vested (restricted) shares for the three months ended ~~September 25,~~April 2, 2015 and March 27, 2014, ~~and September 26, 2013 and the nine months ended September 25, 2014 and September 26, 2013,~~ respectively, excluded from the calculation as they were antidilutive, primarily ~~because exercise prices were above~~due to the ~~average market value.~~

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 theatre additions or dispositions during the previous year. During the first quarter of ~~2014~~2015 and ~~2013,~~2014, NCM LLC issued ~~1,087,911~~2,160,915 and ~~4,536,014~~1,087,911 common membership units to its founding members, respectively, for the rights to exclusive access to ~~net new~~the theatre screens and attendees added, net of dispositions by the founding members to NCM LLC’s network during the previous year. NCM LLC recorded a net intangible asset of ~~$16.4~~$31.4 million and ~~$69.0~~$16.4 million during the ~~first quarter of~~three months ended April 2, 2015 and March 27, 2014, ~~and 2013,~~ respectively, as a result of the Common Unit Adjustments.

In addition, NCM LLC’s Common Unit Adjustment Agreement requires that a Common Unit Adjustment occur for a specific founding member if its acquisition or disposition of theatres, in a single transaction or cumulatively since the most recent Common Unit Adjustment, results in an attendance increase or decrease in excess of two percent of the annual total attendance at the prior date. If an existing on-screen advertising agreement with an alternative provider is in place with respect to any acquired theatres, the founding members may elect to receive common membership units related to those encumbered theatres in connection with the Common Unit Adjustment. If the founding members make this election, they are required to make payments on a quarterly basis in arrears in accordance with certain run-out provisions pursuant to the ESAs (“integration payments”). During the three months ended ~~September 25,~~April 2, 2015 and March 27, 2014, ~~and September 26, 2013 and~~ the ~~nine months ended September 25, 2014 and September 26, 2013, respectively, we~~Company recorded a reduction to net intangible assets of ~~$0.6 million, $1.0 million, $1.4~~$0.3 million and ~~$2.1~~$0.2 million, respectively, related to integration payments due from AMC and Cinemark related to their acquisitions of theatres from Rave Cinemas that are encumbered by an existing on-screen advertising agreement with an alternative provider. During the three months ended ~~September 25,~~April 2, 2015 and March 27, 2014, ~~and September 26, 2013 and the nine months ended September 25, 2014 and September 26, 2013,~~ AMC and Cinemark paid a total of ~~$0.6 million, $0.9 million, $1.5~~$0.8 million and ~~$1.1~~$0.7 million, respectively, in integration payments.

The Company’s intangible assets with its founding members are recorded at the fair market value of NCM, Inc.’s publicly traded stock as of the date on which the common membership units were issued. The NCM LLC common membership units are fully convertible into NCM, Inc.’s common stock. In addition, the Company records intangible assets for up-front fees paid to network affiliates upon commencement of a network affiliate agreement. The Company’s intangible assets have a finite useful life and the Company amortizes the assets over the remaining useful life corresponding with the ESAs or the term of the network affiliate agreement. If common membership units are issued to a founding member for newly acquired theatres that are subject to an existing on-screen advertising agreement with an alternative provider, the amortization of the intangible asset commences after the existing agreement expires and NCM LLC can utilize the theatres for all of its services. Integration payments are calculated based upon the advertising cash flow that the Company would have generated if it had exclusive access to sell advertising in the theatres with pre-existing advertising agreements.

Founding Member Transactions—In connection with NCM, Inc.’s initial public offering (“IPO”), the Company entered into several agreements to define and regulate the relationships among NCM, Inc., NCM LLC and the founding members. They include the following:

Following is a summary of the transactions between the Company and the founding members (in millions):

AtOn March 16, 2015, the ~~date~~Company announced the termination of the ~~Company’s Initial Public Offering (“IPO”), we were granted a perpetual, royalty-free license from~~Merger Agreement. After the Merger Agreement was terminated, NCM ~~LLC’s~~LLC reimbursed NCM, Inc. for certain expenses pursuant to an indemnification agreement among NCM LLC, NCM, Inc. and the founding members. During the three months ended April 2, 2015, NCM LLC paid Screenvision an approximate $26.8 million termination payment on behalf of NCM, Inc. This payment was $2 million lower than the reverse termination fee contemplated by the Merger Agreement. During the three months ended April 2, 2015, NCM LLC also either paid or reimbursed NCM, Inc. for the legal and other merger-related costs of approximately $14.1 million ($7.5 million incurred during the year ended January 1, 2015 and approximately $6.6 million incurred during the three months ended April 2, 2015). The Company and the founding members ~~to use certain proprietary software that existed at~~each bore a pro rata portion of the ~~time for~~termination fee and the ~~delivery of digital advertising and other content through our DCN to screens~~related merger expenses based on their aggregate ownership percentages in ~~the U.S. We have made improvements to this software since the IPO date and we own those improvements, except for improvements that were developed jointly by us and~~ NCM ~~LLC’s founding members, if any.~~LLC.

Pursuant to the terms of the NCM LLC Operating Agreement in place since the completion of the Company’s 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. Mandatory distributions of available cash for the three ~~and nine~~ months ended ~~September 25,~~April 2, 2015 and March 27, 2014 ~~and September 26, 2013 are~~were as follows (in millions):


	Three Months Ended				Nine Months Ended				Three Months Ended
	September 25, 2014		September 26, 2013		September 25, 2014		September 26, 2013		April 2, 2015		March 27, 2014
AMC	$	6.0	$	10.6	$	12.8	$	21.2	$	—	$	1.7
Cinemark		7.7		13.3		16.4		26.0		—		2.2
Regal		8.1		12.2		17.2		25.7		—		2.3

Total founding members										—		6.2
NCM, Inc.		18.5		32.3		39.4		63.1		—		5.3

Total	$	40.3	$	68.4	$	85.8	$	136.0	$	—	$	11.5

Due to the merger termination fee and related merger expenses, the mandatory distributions of available cash by NCM LLC to its founding members and NCM, Inc. for the three months ended ~~September 25, 2014 of $21.8~~April 2, 2015 was calculated as negative $25.5 million ~~is included in amounts due to~~($14.0 million for the founding members and $11.5 million for NCM, Inc.). Therefore, there will be no payment made for the second quarter of 2015. Under the terms of the NCM LLC Operating Agreement, this negative amount will be netted against the available cash distributions for the second quarter of 2016, which will be paid in the third quarter of 2016. Until the settlement in the third quarter of 2016, the remaining merger-related costs will be funded through borrowings on the ~~unaudited Condensed Consolidated Balance Sheets as of September 25, 2014 and will be made in the fourth quarter of 2014.~~

Amounts due to founding members as of ~~September 25, 2014~~April 2, 2015 were comprised of the following (in millions):


	AMC			Cinemark			Regal		Total			AMC			Cinemark			Regal		Total
Theatre access fees, net of beverage revenues	$	0.7		$	0.7		$	1.1	$	2.5		$	0.9		$	0.9		$	1.4	$	3.2
Cost and other reimbursement		(0.4	)		(0.2	)		—		(0.6	)		(0.2	)		(0.1	)		—		(0.3	)
Distributions payable to founding members		6.0			7.7			8.1		21.8

Total	$	6.3		$	8.2		$	9.2	$	23.7
Total amounts due to founding members												$	0.7		$	0.8		$	1.4	$	2.9

Amounts due to founding members as of ~~December 26, 2013~~January 1, 2015 were comprised of the following (in millions):


	AMC			Cinemark			Regal			Total			AMC			Cinemark			Regal		Total
Theatre access fees, net of beverage revenues	$	0.6		$	0.7		$	1.1		$	2.4		$	0.8			0.8			1.2	$	2.8
Cost and other reimbursement		(2.0	)		(0.7	)		(0.6	)		(3.3	)		(0.6	)		(0.2	)		—		(0.8	)
Distributions payable to founding members		8.7			10.9			11.4			31.0			9.1			11.6			12.2		32.9

Total	$	7.3		$	10.9		$	11.9		$	30.1
Total amounts due to founding members													$	9.3		$	12.2		$	13.4	$	34.9

AC JV, LLC Transactions ~~–Following is a summary of the transactions between~~—In December 2013, NCM LLC ~~and~~sold its Fathom Events business to a newly formed limited liability company, AC JV, LLC, ~~(in millions):~~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. The Company concluded that its interest was more than minor under the accounting guidance despite the fact that 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’s investment in AC JV, LLC was $1.4 million and $1.3 million as of April 2, 2015 and January 1, 2015, respectively. Equity in earnings from AC JV, LLC was $0.1 million and $0.0 million for the three months ended April 2, 2015 and March 27, 2014, respectively and is included in non-operating expenses in the unaudited Condensed Consolidated Statements of Income.

Related Party Affiliates—NCM LLC enters into network affiliate agreements with network affiliates for NCM LLC to provide in-theatre advertising at theatre locations that are owned by companies that are affiliates of certain of the founding members or directors of NCM, Inc. Related party affiliate agreements are entered into at terms that are similar to those of the Company’s other network affiliates.

~~Following is a summary~~ NCM LLC has an agreement with Starplex Operating L.P. (“Starplex”), an affiliate of one of NCM, Inc.’s former directors, who served on NCM, Inc.’s board of directors during 2014. During the three months ended March 27, 2014, there was approximately $0.5 million included in advertising operating costs ~~in the unaudited Condensed Consolidated Statements~~related to Starplex, and there was approximately $0.9 million of ~~Income between the Company and its related party affiliates (in millions):~~

~~Following is a summary of the~~ accounts payable ~~balance between~~with Starplex as of January 1, 2015. Following the ~~Company and its~~director’s resignation from NCM, Inc.’s board of directors in 2014, Starplex is no longer a related ~~party affiliates included in the unaudited Condensed Consolidated Balance Sheets (in millions):~~party.

Other Transactions—NCM LLC has an agreement with an interactive media company to sell some of its online inventory. One of NCM, Inc.’s directors is also a director of this media company. During the three months ended ~~September 25,~~April 2, 2015 and March 27, 2014, ~~and September 26, 2013 and the nine months ended September 25, 2014 and September 26, 2013, respectively,~~ this company generated approximately $0.0 million and $0.1 million, ~~$0.1 million and $0.2 million~~respectively, in revenue for NCM LLC and there was approximately ~~$0.1~~$0.3 million and ~~$0.2~~$0.3 million of accounts receivable due from this company as of ~~September 25, 2014~~April 2, 2015 and ~~December 26, 2013,~~January 1, 2015, respectively.

NCM LLC has an agreement with AEG Live, an affiliate of The Anschutz Corporation, for AEG Live to showcase musical artists in ~~our~~NCM LLC’sFirstLook preshow. ~~The Anschutz Corporation is a wholly-owned subsidiary of the Anschutz Company, which is the controlling stockholder of Regal.~~ During the three ~~and nine~~ months ended ~~September 25,~~April 2, 2015 and

March 27, 2014, NCM LLC received approximately ~~$0.2~~$0.4 million and ~~$0.2~~$0.0 million, respectively, in revenue from AEG Live and as of ~~September 25, 2014,~~April 2, 2015 and January 1, 2015, had ~~$0.2~~$0.5 million and $0.4 million, respectively, of accounts receivable from AEG Live.

The following table summarizes NCM LLC’s total outstanding debt as of ~~September 25, 2014~~April 2, 2015 and ~~December 26, 2013~~January 1, 2015 and the significant terms of its borrowing arrangements (in millions):


	Outstanding Balance as of										Outstanding Balance as of
Borrowings	September 25, 2014			December 26, 2013			Maturity Date	Interest Rate			April 2, 2015		January 1, 2015		Maturity Date	Interest Rate
Revolving Credit Facility	$	25.0		$	20.0		November 26, 2019 (1)			(2)	$	68.0	$	22.0	November 26, 2019		(1)
Term Loans		270.0			270.0		November 26, 2019			(2)		270.0		270.0	November 26, 2019		(1)
Senior Unsecured Notes		200.0			200.0		July 15, 2021		7.875	%		200.0		200.0	July 15, 2021		7.875	%
Senior Secured Notes		400.0			400.0		April 15, 2022		6.000	%		400.0		400.0	April 15, 2022		6.000	%

Total	$	895.0		$	890.0						$	938.0	$	892.0
Less: current portion of long-term debt		(14.0	)		(14.0	)

Long-term debt, less current portion	$	881.0		$	876.0

Senior Secured Credit Facility—As of ~~September 25, 2014,~~April 2, 2015 and January 1, 2015, NCM LLC’s senior secured credit facility consisted of a ~~$149.0~~$135.0 million revolving credit facility and a $270.0 million term loan. On June 18, 2014, NCM LLC entered into an incremental amendment of its senior secured credit facility whereby the revolving credit facility was increased by $25.0 million from $124.0 million to $149.0 million. In addition, on July 2, 2014, NCM LLC entered into an amendment of its senior secured credit facility whereby the maturity date applicable to $135.0 million of the revolving credit facility was extended by two years to November 26, 2019, which corresponds to the maturity date of the $270 million term loans. The maturity date applicable to the remaining $14.0 million of the revolving credit facility continues to be December 31, 2014. The Amendment also contains certain amendments (“Conditional Amendments”) to the senior secured credit facility that will only be effective upon the contribution of Screenvision assets and NCM, Inc. debt to NCM LLC. Although it is under no obligation to do so, upon approval of NCM, Inc.’s Board of Directors and NCM LLC’s founding members, NCM, Inc. may contribute the Screenvision assets and the new NCM, Inc. debt facility to NCM LLC in exchange for NCM LLC common membership units. To allow for this potential contribution to NCM LLC, the Conditional Amendments include an increase in the amount of incremental senior secured indebtedness permitted by the Amended Credit Facility from $160 million to $250 million. If the Screenvision contribution to NCM LLC does not occur by April 1, 2015, the Conditional Amendments will not become effective and lender consent for the Conditional Amendments will be immediately and automatically revoked.

Revolving Credit Facility—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 ~~September 25, 2014,~~April 2, 2015, NCM LLC’s total availability under the revolving credit facility was ~~$149.0~~$67.0 million. The unused line fee is 0.50% per annum. Of the total available, $14.0 million outstanding principal of the revolving credit facility will not be repaid in connection with any future prepayments of the revolving credit facility amounts. This portion of the revolving credit facility will be paid in full by NCM LLC, along with any accrued and unpaid fees and interest, by December 31, 2014. The maturity date applicable to any remaining outstanding revolving credit facility principal is November 26, 2019.

Borrowings under the revolving credit facility bear interest at NCM LLC’s option of either the LIBOR index plus an applicable margin or the base rate (Prime Rate or the Federal Funds Effective Rate, as defined in the senior secured credit facility) plus an applicable margin. The applicable margin for the revolving credit facility is determined quarterly and is subject to adjustment based upon a consolidated net senior secured leverage ratio for NCM LLC (the ratio of secured funded debt less unrestricted cash and cash equivalents, over a non-GAAP measure defined in the senior secured credit facility). The applicable margins on the $135.0 million portion of the revolving credit facility are the LIBOR index plus 2.00% or the base rate plus 1.00%. The margins on the $14.0 million portion of the revolving credit facility discussed above are at the LIBOR index plus 1.50% or the base rate plus 0.50%. The weighted-average interest rate on the outstanding balance on the revolving credit facility as of ~~September 25, 2014~~April 2, 2015 was ~~1.88%~~2.42%.

Term Loans—The interest rate on the term loans is a rate chosen at NCM LLC’s option of either the LIBOR index plus 2.75% or the base rate (Prime Rate or the Federal Funds Effective Rate, as defined in the senior secured credit facility) plus 1.75%. The weighted-average interest rate on the term loans as of ~~September 25, 2014~~April 2, 2015 was ~~2.91%~~2.93%. Interest on the term loans is currently paid monthly.

The senior secured credit facility contains a number of covenants and financial ratio requirements, with which NCM LLC was in compliance as of ~~September 25, 2014,~~April 2, 2015, including maintaining a consolidated net senior secured leverage ratio of equal to or less than 6.5 times on a quarterly basis. In addition, there are no borrower distribution restrictions as long as NCM LLC’s consolidated net senior secured leverage ratio is below 6.5 times and NCM LLC is in compliance with its debt covenants. As of ~~September 25, 2014,~~April 2, 2015, NCM LLC’s consolidated net senior secured leverage ratio was 3.6 times (versus the covenant of 6.5 times).

Senior Unsecured Notes due 2021—On July 5, 2011, NCM LLC completed a private placement of $200.0 million in aggregate principal amount of 7.875% Senior Unsecured Notes (“Senior Unsecured Notes”) for which the registered exchange offering was completed on September 22, 2011. The Senior Unsecured Notes pay interest semi-annually in arrears on January 15 and July 15 of each year, which commenced January 15, 2012. The notes are subordinated to all existing and future secured debt, including indebtedness under NCM LLC’s existing senior secured credit facility and the Senior Secured Notes defined below. The Senior Unsecured Notes contain certain non-maintenance covenants with which NCM LLC iswas in ~~compliance.~~compliance as of April 2, 2015.

Senior Secured Notes due 2022—On April 27, 2012, NCM LLC completed a private placement of $400.0 million in aggregate principal amount of 6.00% Senior Secured Notes (the “Senior Secured Notes”) for which the registered exchange offering was completed on November 26, 2012. The Senior Secured Notes pay interest semi-annually in arrears on April 15 and October 15 of each year, which commenced October 15, 2012. The Senior Secured Notes are senior secured obligations of NCM LLC, rank the same as NCM LLC’s senior secured credit facility, subject to certain exceptions, and share in the same collateral that secures NCM LLC’s obligations under the senior secured credit facility. The Senior Secured Notes contain certain non-maintenance covenants with which NCM LLC iswas in ~~compliance.~~compliance as of April 2, 2015.

~~NCM, Inc. Commitment Letter~~— On July 2, 2014, in contemplation of the Merger with Screenvision, NCM, Inc. entered into a Commitment and Engagement Letter (the “Commitment Letter”) with certain existing NCM LLC revolving credit facility lenders. Under the Commitment Letter, subject to certain conditions, the lenders committed to make a term loan in an aggregate principal amount of $250 million to fund the Screenvision merger and related expenses. This term loan is expected to finance the $225 million portion of the Merger consideration that will be paid in cash, along with fees and expenses incurred in connection with the term loan and the Merger. The term loan will mature on the second anniversary of the funding of the term loan. NCM, Inc. has the right to contribute the Screenvision assets and the $250 million loan to NCM LLC, at which point, the conditional amendments to the amended senior secured credit facility described above will become effective.6. COMMITMENTS AND CONTINGENCIES

Legal Actions—The Company is subject to claims and legal actions in the ordinary course of business. The Company believes such claims will not have a material effect on its financial position, results of operations or cash flows.

Minimum Revenue Guarantees—As part of the network affiliate agreements entered into in the ordinary course of business under which the Company sells advertising for display in various network affiliate theatre chains, the Company has agreed to certain minimum revenue guarantees on a per attendee basis. If a network affiliate achieves the attendance set forth in their respective agreement, the Company has guaranteed minimum revenue for the network affiliate per attendee if such amount paid under the revenue share arrangement is less than its guaranteed amount. The amount and term varies for each network affiliate, but terms range from three to 20 years, prior to any renewal periods of which some are at the option of the Company. During October 2014, the Company offered to all of its network affiliates an extension of their existing agreements by five years, with the per-attendee guarantee and other terms remaining the same as those on the last year of their original term. None of these

~~agreements have yet been signed.~~ As of ~~September 25, 2014,~~April 2, 2015, the maximum potential amount of future payments the Company could be required to make pursuant to the minimum revenue guarantees is ~~$35.4~~$35.1 million over the remaining terms of the network affiliate agreements, which calculation does not include any potential ~~extensions offered subsequent to September 25, 2014.~~future extensions. As of ~~September 25, 2014 and December 26, 2013,~~April 2, 2015, the Company had no liabilities recorded for these obligations as such guarantees are less than the expected share of revenue paid to the affiliate. As of January 1, 2015, the Company had an inconsequential amount of liabilities recorded for these obligations.

Income Taxes—The Company is subject to taxation in the U.S. and various states. As of ~~September 25, 2014~~April 2, 2015 and ~~December 26, 2013,~~January 1, 2015, there was no material liability or expense for the periods then ended recorded for payment of interest and penalties associated with uncertain tax positions or material unrecognized tax positions and the Company’s unrecognized tax benefits were not material.

~~Merger Termination Payment –~~ ~~As described in Note 1 –~~ ~~The Company~~, on May 5, 2014, the Company entered into the Merger Agreement to merge with Screenvision. Consummation of the Merger is subject to clearance under the HSR Act, as well, as other customary closing conditions. If prior to May 5, 2015 (or 90 days thereafter if extended by the Company or Screenvision), certain conditions related to the HSR process are not fulfilled, the Merger is prohibited by law or a final non-appealable government order, or if we materially breach our representations or covenants such that the closing conditions in the Merger Agreement cannot be satisfied, Screenvision may be able to terminate the Merger Agreement and, upon termination, we may be required to pay a termination fee of approximately $28.8 million. NCM LLC would indemnify NCM, Inc. and bear a pro rata portion of this fee based upon NCM, Inc.’s ownership percentage in NCM LLC, with NCM LLC’s founding members bearing the remainder of the fee in accordance with their ownership percentage in NCM LLC. If Screenvision or its affiliates materially breach their representations or covenants such that the closing conditions in the Merger Agreement cannot be satisfied, they will be required to pay us a termination fee of $10 million, and if Screenvision is subsequently sold within one year of the termination, an additional amount equal to the amount by which the sale proceeds are greater than $385 million will be paid to us up to a maximum of $28.8 million (including the $10 million). As of September 25, 2014, the Company did not have a liability recorded for this termination fee as it does not believe payment to be probable. On November 3, 2014, DOJ filed an antitrust lawsuit seeking to enjoin the proposed merger between NCM, Inc. and Screenvision. The Company and Screenvision intend to defend their proposed merger. Refer to Note 10 –~~Subsequent Events~~ ~~for further information.~~7. FAIR VALUE MEASUREMENTS

Fair value is the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Fair value is estimated by applying the following hierarchy, which prioritizes the inputs used to measure fair value into three levels and bases the categorization within the hierarchy upon the lowest level of input that is available and significant to the fair value measurement:

Level 1—Quoted prices in active markets for identical assets or liabilities.

Level 2—Observable inputs other than quoted prices in active markets for identical assets and liabilities, quoted prices for identical or similar assets or liabilities in inactive markets, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

Level 3—Inputs that are generally unobservable and typically reflect management’s estimate of assumptions that market participants would use in pricing the asset or liability.

Non-Recurring Measurements—Certain assets are measured at fair value on a non-recurring basis. These assets are not measured at fair value on an ongoing basis but are subject to fair value adjustments in certain circumstances. These assets include long-lived assets, intangible assets, cost and equity method investments, notes receivable and borrowings.

Long-Lived Assets, Intangible Assets, Other Investments and Notes Receivable—The Company regularly reviews long-lived assets (primarily property, plant and equipment), intangible assets, investments accounted for under the cost or equity method and notes receivable for impairment whenever events or changes in circumstances indicate that the carrying amounts of the assets may not be fully recoverable. When the estimated fair value is determined to be lower than the carrying value of the asset, an impairment charge is recorded to write the asset down to its estimated fair value.

As of September 25, 2014 and December 26, 2013, the Company had other investments of $1.1 million, which was comprised of the Company’s investment in AC JV, LLC. As of December 26, 2013, this investment was valued using comparative market multiples. As the inputs to the determination of fair value are based upon non-identical assets and use significant unobservable inputs, we have classified the assets as Level 3 in the fair value hierarchy.

The fair value of the investments ~~was~~has not been estimated as of ~~September 25, 2014~~April 2, 2015 and January 1, 2015 as there were no identified events or changes in the circumstances that had a significant adverse effect on the fair value of the investments and it is not practicable to do so because the equity securities are not in a publicly traded ~~company.~~companies. As the inputs to the determination of fair value are based upon non-identical assets and use significant unobservable inputs, they have been classified as Level 3 in the fair value hierarchy.

As of ~~September 25, 2014~~April 2, 2015 and ~~December 26, 2013,~~January 1, 2015, the Company had notes receivable totaling ~~$25.0~~$20.8 million and $20.8 million, respectively, from its founding members related to the sale of Fathom Events, as described in Note 4—Related Party Transactions. ~~As of December 26, 2013, these~~These notes were valued using comparative market ~~multiples and~~multiples. There were no identified events or changes in circumstances that had a significant adverse effect on the fair value of the notes receivable. The notes are classified as Level 3 in the fair value hierarchy as the inputs to the determination of fair value are based upon non-identical assets and use significant unobservable inputs. The fair value of the notes was not estimated as of September 25, 2014 as there were no identified events or changes in circumstances that had a significant adverse effect on the fair value of the notes receivable.

Borrowings—The carrying amount of the revolving credit facility is considered a reasonable estimate of fair value due to its floating-rate terms. The estimated fair values of the Company’s financial instruments where carrying values do not approximate fair value ~~are~~were as follows (in millions):


	As of September 25, 2014				As of December 26, 2013				As of April 2, 2015				As of January 1, 2015
	Carrying Value		Fair Value *(1)*		Carrying Value		Fair Value *(1)*		Carrying Value		Fair Value *(1)*		Carrying Value		Fair Value *(1)*
Term Loans	$	270.0	$	259.9	$	270.0	$	269.5	$	270.0	$	267.3	$	270.0	$	257.9
Senior Unsecured Notes		200.0		214.1		200.0		220.4		200.0		212.8		200.0		210.8
Senior Secured Notes		400.0		404.8		400.0		414.0		400.0		413.3		400.0		400.8

Recurring Measurements—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 Measurements at Reporting Date Using
	As of September 25, 2014		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		As of April 2, 2015		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)	$	10.0	$	6.5	$	3.5	$	—	$	7.4	$	7.4	$	—	$	—
Short-term marketable securities(2)		20.3		8.4		11.9		—		18.6		15.9		2.7		—
Long-term marketable securities(2)		39.4		36.4		3.0		—		46.0		42.2		3.8		—

Total assets	$	69.7	$	51.3	$	18.4	$	—	$	72.0	$	65.5	$	6.5	$	—


			Fair Value Measurements at Reporting Date Using
	As of December 26, 2013		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)	$	28.3	$	—	$	28.3	$	—
Short-term marketable securities(2)		71.3		4.5		66.8		—

Total assets	$	99.6	$	4.5	$	95.1	$	—

The amortized cost basis, aggregate fair value and maturities of the marketable securities the Company held as of ~~September 25, 2014~~April 2, 2015 and ~~December 26, 2013 are~~January 1, 2015 were as follows:


							As of April 2, 2015
							Amortized Cost Basis (in millions)		Aggregate Fair Value (in millions)		Maturities *(1)* (in years)
MARKETABLE SECURITIES:
Short-term municipal bonds							$	15.9	$	15.9		0.5
Short-term certificates of deposit								2.7		2.7		0.4

Total short-term marketable securities								18.6		18.6
Long-term U.S. government treasury bonds								1.2		1.2		2.6
Long-term municipal bonds								3.4		3.5		1.3
Long-term U.S. government agency bonds								37.5		37.5		3.1
Long-term certificates of deposit:
Financial								3.5		3.5		3.0
Industrial								0.3		0.3		2.6

Total long-term marketable securities								45.9		46.0

Total marketable securities							$	64.5	$	64.6


	As of December 26, 2013						As of January 1, 2015
	Amortized Cost Basis (in millions)		Aggregate Fair Value (in millions)		Maturities *(1)* (in years)		Amortized Cost Basis (in millions)		Aggregate Fair Value (in millions)		*Maturities(1)* (in years)**
MARKETABLE SECURITIES:
Short-term municipal bonds	$	4.5	$	4.5		0.2	$	9.4	$	9.5		0.5
Short-term commercial paper:
Financial		50.3		50.3		0.3		3.4		3.4		—
Industrial		8.8		8.8		0.1		3.3		3.3		0.1
Utility		7.7		7.7		0.1		3.0		3.0		0.2
Short-term certificates of deposit								2.5		2.5		0.6

Total short-term marketable securities								21.6		21.7
Long-term U.S. government treasury bonds								5.1		5.1		2.7
Long-term municipal bonds								0.3		0.3		1.4
Long-term U.S. government agency bonds								36.1		36.1		3.3
Long-term certificates of deposit								4.0		4.0		3.1

Total long-term marketable securities								45.5		45.5

Total marketable securities	$	71.3	$	71.3			$	67.1	$	67.2

During 2012, NCM LLC terminated interest rate swap agreements that were used to hedge its interest rate risk associated with its term loan. Following the termination of the swap agreements, the variable interest rate on NCM LLC’s $270.0 million term loan is unhedged and as of ~~September 25, 2014~~April 2, 2015 and ~~December 26, 2013,~~January 1, 2015, the Company did not have any outstanding derivative assets or liabilities. A portion of the breakage fees paid to terminate the swap agreements was for swaps in which the underlying debt remained outstanding. The balance in AOCI related to these swaps was fixed and ~~is being~~was amortized into earnings over the remaining life of the original interest rate swap agreement, or February 13, ~~2015, as long as the debt remains outstanding.~~2015. The Company considered the guidance in ASC 815,Derivatives and Hedging which states that amounts in AOCI shall be reclassified into earnings in the same period or periods during which the hedged forecasted transaction affects earnings. As of ~~September 25, 2014,~~April 2, 2015, there ~~was approximately $4.0 million~~were no amounts outstanding related to these discontinued cash flow ~~hedges which continues to be reported in AOCI and will be amortized on a straight-line basis into earnings in the next twelve months.~~hedges.

The changes in AOCI by component for the ~~nine~~three months ended ~~September 25,~~April 2, 2015 and March 27, 2014 ~~and September 26, 2013~~ were as follows (in millions):


	Nine Months Ended							Three Months Ended
	September 25, 2014			September 26, 2013			Income Statement Location	April 2, 2015			March 27, 2014			Income Statement Location
Balance at beginning of period	$	(3.2	)	$	(6.7	)		$	(0.4	)	$	(3.2	)
Amounts reclassified from AOCI:
Amortization on discontinued cash flow hedges		7.6			7.8		Amortization of terminated derivatives		1.6			2.5		Amortization of terminated derivatives

Total amounts reclassified from AOCI		7.6			7.8				1.6			2.5

Noncontrolling interest on reclassifications		(4.1	)		(4.2	)			(0.9	)		(1.4	)
Tax effect on reclassifications		(1.4	)		(1.4	)			(0.3	)		(0.4	)

Net other comprehensive income		2.1			2.2				0.4			0.7

Impact of subsidiary ownership changes		—			0.3				—			—

Balance at end of period	$	(1.1	)	$	(4.2	)		$	—		$	(2.5	)

Advertising revenue accounted for 100.0%, 94.4%, 100.0% and 93.6% of consolidated revenue for the three and nine months ended September 25, 2014 and September 26, 2013, respectively. The following tables present revenue less directly identifiable expenses to arrive at income before income taxes, net of direct expenses for the advertising reportable segment, the combined Fathom Events operating segments (disposed on December 26, 2013), and network, administrative and unallocated costs (in millions):

On ~~October 29, 2014,~~May 8, 2015, the Company declared a cash dividend of $0.22 per share (approximately ~~$12.9~~$13.0 million) on each share of the Company’s common stock (not including outstanding restricted stock which will accrue dividends until the shares vest) to stockholders of record on ~~November 20, 2014~~May 26, 2015 to be paid on ~~December 5, 2014.~~June 9, 2015.

On November 3, 2014, the DOJ filed an antitrust lawsuit seeking to enjoin the proposed merger between NCM, Inc. and Screenvision. The Company and Screenvision intend to defend their proposed merger. If we are unsuccessful in our defense of the proposed merger prior to May 5, 2015 (or 90 days thereafter if extended by the Company or Screenvision), Screenvision may be able to terminate the Merger Agreement and, upon termination, we may be required to pay Screenvision a termination fee of approximately $28.8 million. NCM LLC would indemnify NCM, Inc. and bear a pro rata portion of this fee based upon NCM, Inc.’s ownership percentage in NCM LLC, with NCM LLC’s founding members bearing the remainder of the fee in accordance with their ownership percentage in NCM LLC.

Item 2.

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

Some of the information in this Quarterly Report on Form 10-Q includes “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934 (the “Exchange Act”), as amended. All statements other than statements of historical facts included in this Form 10-Q, including, without limitation, certain statements under “Management’s Discussion and Analysis of Financial Condition and Results of Operations”, may constitute forward-looking statements. In some cases, you can identify these “forward-looking statements” by the specific words, including but not limited to “may,” “should,” “expects,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” “potential” or “continue” or the negative of those words and other comparable words. These forward-looking statements involve risks and uncertainties. Our actual results could differ materially from those indicated in these statements as a result of certain factors as more fully discussed under the heading “Risk Factors” contained in our annual report on Form 10-K for the Company’s fiscal year ended ~~December 26, 2013.~~January 1, 2015. The following discussion and analysis should be read in conjunction with the unaudited Condensed Consolidated Financial Statements and notes thereto included herein and the audited financial statements and other disclosure included in our annual report on Form 10-K for the Company’s fiscal year ended ~~December 26, 2013.~~January 1, 2015. In the following discussion and analysis, the term net income refers to net income attributable to NCM, Inc.

NCM LLC operates the largest digital in-theatre media network in North America, ~~for the distribution of advertising.~~through which it sells in-theatre and online advertising and promotions. Our revenue is principally derived from the sale of advertising through long-term ESAs with NCM LLC’s founding members ~~(over~~(approximately 22 years remaining as of ~~September 25, 2014)~~April 2, 2015) and multi-year agreements with network ~~affiliates.~~affiliates, which expire at various dates between October 1, 2015 and July 22, 2031. The ESAs with the founding members and network affiliate agreements grant usNCM LLC exclusive rights in their theatres to sell advertising, subject to limited ~~exceptions, to sell advertising in those theatres.~~exceptions. Our advertisingFirstLook pre-show and ~~lobby entertainment network (“LEN”)~~LEN programming are distributed predominantly via satellite through our proprietary ~~digital content network (“DCN”).~~DCN. Approximately 96% of the aggregate founding member and network affiliate theatre attendance is generated by theatres connected to our DCN ~~(882~~(855 screens receive advertisements on ~~thumb~~USB drives) and 100% of theFirstLook pre-show is projected on digital projectors ~~(85%~~(84% digital cinema projectors and ~~15%~~16% LCD projectors).

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. Senior executives hold meetings ~~at the end of the second and third month of each~~twice per quarter with officers, managers and staff to discuss ~~strategy~~ and analyze operating results and address significant variances to budget and prior year in an effort to identify trends and changes in our ~~business and adjust operating strategy and tactics as needed.~~business. We focus on many operating metrics including changes in revenue, OIBDA, Adjusted OIBDA and Adjusted OIBDA margin, as defined and discussed in “Non-GAAP Financial Measures” below, as some of our primary measurement metrics. In addition, we monitor our monthly advertising performance measurements, including advertising inventory utilization, advertising pricing (CPM), local and total advertising revenue per attendee, as well as, our free cash flow and related financial leverage and cash balances and revolving credit facility availability to ensure that there is adequate cash availability to fund our working capital needs and debt obligations and current and future dividends declared by our Board of Directors.

On December 26, 2013, NCM LLC sold its Fathom Events business to a newly formed limited liability company (AC JV, LLC) owned 32% by each of the founding members and 4% by NCM LLC. The Fathom Events business focused on the marketing and distribution of live and pre-recorded entertainment programming to theatre operators to provide additional programs to augment their feature film schedule. In consideration for the sale, NCM LLC received a total of $25.0 million in promissory notes from its founding members (one-third from each founding member). The notes bear interest at a fixed rate of 5.0% per annum, compounded annually. Interest and principal payments are due annually in six equal installments commencing on the first anniversary of the closing. In connection with the sale, NCM LLC entered into a transition services agreement to provide certain corporate overhead services for a fee and reimbursement for the use of facilities and certain services including creative, technical event management and event management for AC JV, LLC for nine months following closing (which ended September 25, 2014). In addition, NCM LLC entered into a services agreement with a term coinciding with the digital programming ESAs, which 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 the same fee available to the founding members related to the marketing of their core theatrical business.

On May 5, 2014, NCM, Inc. entered into the Merger Agreement to merge with Screenvision for $375 million, consisting of $225 million in cash and $150 million of NCM, Inc. common stock (9,900,990 shares based on a price of $15.15 per share). The merger consideration is subject to adjustment based upon Screenvision’s Adjusted EBITDA for the twelve months ended April 30, 2014 and Screenvision’s working capital at closing. Consummation of the Merger is subject to clearance under the HSR Act and other customary closing conditions, including satisfaction of representations, warranties and covenants. All necessary corporate action by NCM, Inc. and Screenvision to approve the Merger has occurred.Screenvision. On November 3, 2014, the ~~DOJ~~Department of Justice filed an antitrust lawsuit ~~challenging~~seeking to enjoin the ~~proposed merger between~~merger. On March 16, 2015, the Company announced the termination of the Merger Agreement. The antitrust lawsuit has been dismissed. After the Merger Agreement was terminated, NCM LLC reimbursed NCM, Inc. for certain expenses pursuant to an indemnification agreement among NCM LLC, NCM, Inc. and ~~Screenvision.~~the founding members. During the three months ended April 2, 2015, NCM LLC paid Screenvision an approximate $26.8 million termination payment on behalf of NCM, Inc. This payment was $2 million lower than the reverse termination fee contemplated by the Merger Agreement. During the three months ended April 2, 2015, NCM LLC also either paid or reimbursed NCM, Inc. for the legal and other merger-related costs of approximately $14.1 million ($7.5 million incurred during the year ended January 1, 2015 and approximately $6.6 million incurred during the three months ended April 2, 2015). The Company and ~~Screenvision intend to defend~~the founding members each bore a pro rata portion of the termination fee and the related merger expenses based on their ~~proposed merger. Refer to Note 10 –~~~~Subsequent Events~~ ~~for further information.~~aggregate ownership percentages in NCM LLC.

Our operating results may be affected by a variety of internal and external factors and trends described more fully in the section entitled “Risk Factors” in our Form 10-K filed with the SEC on February ~~21, 2014~~27, 2015 for the Company’s fiscal year ended ~~December 26, 2013~~January 1, 2015 and Item 1A of this Form 10-Q.

The following table presents operating data and Adjusted OIBDA (dollars in millions, except share and margin data):


	Three Months Ended						Nine Months Ended						% Change						Three Months Ended						% Change
	Sept. 25, 2014			Sept. 26, 2013			Sept. 25, 2014			Sept. 26, 2013			Q3 2014 to Q3 2013			YTD 2014 to YTD 2013			April 2, 2015			March 27, 2014			Q1 2015 to Q1 2014
Revenue:
Advertising	$	100.8		$	127.6		$	270.9		$	318.2			(21.0	%)		(14.9	%)	$	76.9		$	70.2			9.5	%
Fathom Events		—			7.5			—			21.9			(100.0	%)		(100.0	%)

Total		100.8			135.1			270.9			340.1			(25.4	%)		(20.3	%)
Operating expenses:
Advertising		38.5			41.3			114.5			117.9			(6.8	%)		(2.9	%)		38.6			37.5			2.9	%
Fathom Events		—			6.4			—			18.6			(100.0	%)		(100.0	%)
Network, administrative and unallocated costs		19.6			20.0			58.9			56.6			(2.0	%)		4.1	%		21.6			19.9			8.5	%
Merger-related administrative costs(1)		2.0			—			3.7			—
Merger termination fee and related merger costs(1)																				33.4			—			100.0	%

Total		60.1			67.7			177.1			193.1			(11.2	%)		(8.3	%)		93.6			57.4			63.1	%

Operating income		40.7			67.4			93.8			147.0			(39.6	%)		(36.2	%)
Operating (loss) income																				(16.7	)		12.8			NM
Non-operating expenses		19.2			18.7			56.9			57.8			2.7	%		(1.6	%)		17.8			19.1			(6.8	%)
Income tax expense		2.1			6.4			4.2			13.0			(67.2	%)		(67.7	%)
Net income attributable to noncontrolling interests		14.6			28.6			27.4			54.0			(49.0	%)		(49.3	%)
Income tax benefit																				(4.3	)		(1.7	)		NM
Net loss attributable to noncontrolling interests																				(21.2	)		(1.5	)		NM

Net income attributable to NCM, Inc.	$	4.8		$	13.7		$	5.3		$	22.2			(65.0	%)		(76.1	%)
Net loss attributable to NCM, Inc.																			$	(9.0	)	$	(3.1	)		NM


Net income per NCM, Inc. basic share	$	0.08		$	0.24		$	0.09		$	0.40			(66.6	%)		(77.5	%)
Net income per NCM, Inc. diluted share	$	0.08		$	0.24		$	0.09		$	0.40			(66.3	%)		(77.4	%)
Net loss per NCM, Inc. basic share																			$	(0.15	)	$	(0.05	)		NM
Net loss per NCM, Inc. diluted share																			$	(0.15	)	$	(0.05	)		NM

Adjusted OIBDA	$	52.2		$	76.7		$	126.8		$	172.0			(31.9	%)		(26.3	%)	$	27.7		$	22.6			22.6	%
Adjusted OIBDA margin		51.8	%		56.8	%		46.8	%		50.6	%		(5.0	%)		(3.8	%)		36.0	%		32.2	%		3.8	%
Total theatre attendance (in millions)(2)(3)		163.5			192.0			505.4			533.7			(14.8	%)		(5.3	%)		161.4			166.5			(3.1	%)

Operating Income (Loss) Before Depreciation and Amortization (“OIBDA”), Adjusted OIBDA and Adjusted OIBDA margin are not financial measures calculated in accordance with GAAP in the U.S. ~~GAAP.~~ OIBDA represents consolidated net income plus income tax expense, interest and other costs and depreciation and amortization expense. Adjusted OIBDA excludes from OIBDA non-cash share based payment costs and ~~merger-related~~the merger termination fee and related merger costs. Adjusted OIBDA margin is calculated by dividing Adjusted OIBDA by total revenue. These non-GAAP financial measures are used by management 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 so 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, non-cash share based compensation programs, levels of mergers and acquisitions, interest rates or 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 share based payment costs or costs associated with the ~~proposed~~ Screenvision merger. OIBDA or Adjusted OIBDA should not be regarded as an alternative to operating income, net income or as indicators of operating performance, nor should they be considered in isolation of, or as substitutes for financial measures prepared in accordance with GAAP. The Company believes that consolidated net income is the most directly comparable GAAP financial measure to 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.

The following table reconciles consolidated net ~~income~~loss to OIBDA and Adjusted OIBDA for the periods presented (dollars in millions):


	Three Months Ended						Nine Months Ended						Three Months Ended
	September 25, 2014			September 26, 2013			September 25, 2014			September 26, 2013			April 2, 2015			March 27, 2014
Consolidated net income	$	19.4		$	42.3		$	32.7		$	76.2
Income tax expense		2.1			6.4			4.2			13.0
Consolidated net loss													$	(30.2	)	$	(4.6	)
Income tax benefit														(4.3	)		(1.7	)
Interest and other non-operating costs		19.2			18.7			56.9			57.8			17.8			19.1
Depreciation and amortization		8.6			7.2			24.2			18.8			8.0			7.8

OIBDA	$	49.3		$	74.6		$	118.0		$	165.8		$	(8.7	)	$	20.6
Share-based compensation costs(1)		0.9			2.1			5.1			6.2			3.0			2.0
Merger-related administrative costs(2)		2.0			—			3.7			—
Merger termination fee and related merger costs(2)														33.4			—

Adjusted OIBDA	$	52.2		$	76.7		$	126.8		$	172.0		$	27.7		$	22.6
Total revenue	$	100.8		$	135.1		$	270.9		$	340.1		$	76.9		$	70.2
Adjusted OIBDA margin		51.8	%		56.8	%		46.8	%		50.6	%		36.0	%		32.2	%

The Company has also presented total operating expenses before the merger termination fee and related merger costs within its results of operations section below which is not a financial measure calculated in accordance with GAAP in the United States. Operating expenses before the merger termination fee and related merger costs represent operating costs less costs associated with the terminated Screenvision merger. This non-GAAP financial measure is used to provide readers a comparison of our first quarter 2015 results to our results in the first quarter of 2014 without the nonrecurring the merger termination fee and related merger costs. The Company believes this is an important supplemental measure because it eliminates these nonrecurring costs to highlight trends in its ongoing business that may not otherwise be apparent when relying solely on GAAP financial measures. Operating expenses before the merger termination fee and related merger costs should not be regarded as an alternative to operating expenses or as an indicator of operating performance, nor should it be considered in isolation of, or as a substitute for financial measures prepared in accordance with GAAP. The Company believes that total operating expenses is the most directly comparable GAAP financial measure.

The results of operations data for the three ~~and nine~~ months ended ~~September 25,~~April 2, 2015 and March 27, 2014 ~~and September 26, 2013~~ was derived from the unaudited Condensed Consolidated Financial Statements and accounting records of NCM, Inc. and should be read in conjunction with the notes thereto.

Three Months Ended ~~September 25,~~April 2, 2015 and March 27, 2014 ~~and September 26, 2013~~

~~Revenue.~~Revenue. Total revenue ~~decreased $34.3~~increased $6.7 million, or ~~25.4%~~9.5%, from ~~$135.1~~$70.2 million for the three months ended ~~September 26, 2013~~March 27, 2014 to ~~$100.8~~$76.9 million for the three months ended September 25, 2014, due to a $26.8 million, or 21.0%, decrease in total advertising revenue and a $7.5 million decrease in Fathom Events revenue related to the sale of that part of our business at the end of 2013.April 2, 2015. The following is a summary of revenue by category (in millions):


	Three Months Ended				$ Change			% Change			Three Months Ended				$ Change			% Change
	September 25, 2014		September 26, 2013		Q3 2014 to Q3 2013			Q3 2014 to Q3 2013			April 2, 2015		March 27, 2014		Q1 2015 to Q1 2014			Q1 2015 to Q1 2014
National advertising revenue	$	62.9	$	91.1	$	(28.2	)		(31.0	%)	$	50.9	$	42.7	$	8.2			19.2	%
Local advertising revenue		28.9		25.0		3.9			15.6	%		18.4		18.1		0.3			1.7	%
Founding member advertising revenue from beverage concessionaire agreements		9.0		11.5		(2.5	)		(21.7	%)		7.6		9.4		(1.8	)		(19.1	%)

Total advertising revenue		100.8		127.6		(26.8	)		(21.0	%)

Fathom Consumer revenue		—		7.5		(7.5	)		(100.0	%)
Fathom Business revenue		—		—		—			0.0	%

Total Fathom Events revenue		—		7.5		(7.5	)		(100.0	%)

Total revenue	$	100.8	$	135.1	$	(34.3	)		(25.4	%)	$	76.9	$	70.2	$	6.7			9.5	%

The following table shows data on theatre attendance and revenue per attendee for the three months ended ~~September 25, 2014~~April 2, 2015 and ~~September 26, 2013:~~March 27, 2014:


	Three Months Ended				% Change			Three Months Ended				% Change
	September 25, 2014		September 26, 2013		Q3 2014 to Q3 2013			April 2, 2015		March 27, 2014		Q1 2015 to Q1 2014
National advertising revenue per attendee	$	0.385	$	0.474		(18.8	%)	$	0.315	$	0.256		23.0	%
Local advertising revenue per attendee	$	0.177	$	0.130		36.2	%	$	0.114	$	0.109		4.6	%
Total advertising revenue (excluding founding member beverage revenue) per attendee	$	0.561	$	0.605		(7.3	%)	$	0.429	$	0.365		17.5	%
Total advertising revenue per attendee	$	0.617	$	0.665		(7.2	%)	$	0.476	$	0.422		12.8	%
Total theatre attendance (in millions)(1) (2)		163.5		192.0		(14.8	%)		161.4		166.5		(3.1	%)

National advertising revenue. The ~~$28.2~~$8.2 million, or ~~31.0%~~19.2%, ~~decrease~~increase in national advertising revenue (excluding beverage revenue from NCM LLC’s founding members) was due primarily to a ~~27.2%~~38.2% increase in impressions delivered in the first quarter of 2015, compared to the first quarter of 2014, partially offset by a decrease in national advertising CPMs (excluding ~~beverage revenue) due primarily to a soft television scatter marketplace,~~beverage) of 11.1% in the ~~increase in competition from other national video networks, including several new online and mobile advertising platforms, and the implementation~~first quarter of more aggressive seasonal and volume pricing strategies that contributed to the expansion of our client mix to new client categories that traditionally buy television and other advertising at lower CPMs. National advertising revenue also decreased due to a decline in spending by content partners and scatter spending by our previous cell phone public service announcement (“PSA”) client, which decreased $9.4 million and $5.9 million, respectively,2015, compared to the ~~third~~first quarter of ~~2013. Further, national advertising revenue (excluding beverage revenue) declined due to a decrease~~2014. The increase in ~~utilized~~ impressions ~~of 9.3% in the third quarter of 2014 compared to the third quarter of 2013. The decline in utilized impressions~~delivered was ~~due to a decline in theatre attendance of 14.8% quarter over quarter, partially offset~~driven by an increase in national inventory utilization, which rose from ~~117.6%~~72.6% for the first quarter of 2014 to 99.9% for the first quarter of 2015, due to an overall expansion of our client base, related in part to the success of our strategy to compete in the ~~third quarter of 2013 to 125.3% in the third quarter of 2014.~~national television upfront marketplace. Inventory utilization is calculated as utilized impressions divided by total advertising impressions, which is based on eleven 30-second salable national advertising units in our pre-show, which can be expanded, should market demand dictate. This increase in impressions delivered was partially offset by a decrease in our network theatre attendance of 3.1% that was impacted by our fiscal calendar, whereby the highly attended holiday week (Christmas to New Year’s Day) fell in the fourth quarter of 2014, rather than the first quarter as it did in the prior year. The decrease in national advertising CPMs was due primarily to the mix of our clients during the first quarter of 2015, compared to the first quarter of 2014, related to our focus on increasing utilization during our historically low demand first quarter.

Local advertising revenue. The ~~$3.9~~$0.3 million, or ~~15.6%~~1.7%, increase in local advertising revenue was driven by a ~~9.5%~~5.7% increase in ~~the~~ average contract ~~volume~~value, partially offset by a 5.1% decrease in ~~the third quarter of 2014,~~total contract volume, compared to the ~~third~~first quarter of ~~2013, and a 4.5% increase in contract value in the third quarter of 2014, compared to the third quarter of 2013.~~2014. The increase in average contract value was driven by a ~~$3.6 million, or 131.6%,~~7.8% increase in the ~~total~~average value of contracts ~~over $250,000. The growth in these larger local contracts during~~between $10,000 and $250,000, while the ~~three months ended~~

~~September 25, 2014 was due in part to the growth of our network and better geographic coverage in many markets and states that increased our appeal to advertisers. The increase~~decrease in contract volume was driven ~~primarily~~ by ~~the higher number of larger regional contracts and the improving economy that benefited smaller businesses and the continued expansion of~~a 7.0% decrease in the number of ~~theatres~~contracts under $10,000 and was impacted by the absence of the holiday week during 2015, described above, and a temporary increase in ~~our network.~~the number of open local sales positions related to anticipation of closing the Screenvision merger.

Founding member beverage revenue. The ~~$2.5~~$1.8 million, or ~~21.7%~~19.1%, decrease in national advertising revenue from NCM LLC’s founding members’ beverage concessionaire agreements was due to a ~~16.4%~~14.4% decrease in beverage revenue CPMs and a decrease of 5.5% in founding member attendance in the ~~third~~first quarter of ~~2014,~~2015, compared to the ~~third~~first quarter of ~~2013 and a 5.8% decrease in beverage revenue CPMs, which declined because the 2014~~2014. The 2015 beverage revenue CPM is based on the change in CPM during segment one of theFirstLook pre-show from 2013 to ~~2012.~~

~~Fathom Events revenue.~~ ~~Fathom Events revenue~~2014, which decreased 14.4%. The decrease in founding member attendance was ~~zero for the three months ended September 25, 2014 from $7.5 million for the three months ended September 26, 2013~~ due primarily to the ~~sale~~absence of ~~this portion~~the holiday week during the first quarter of ~~our business on December 26, 2013.~~2015, described above.

Operating expenses. Total operating expenses ~~decreased $7.6~~increased $36.2 million, or ~~11.2%~~63.1%, from ~~$67.7~~$57.4 million for the three months ended ~~September 26, 2013~~March 27, 2014 to ~~$60.1~~$93.6 million for the three months ended ~~September 25, 2014.~~April 2, 2015 due primarily to the Screenvision merger termination fee and related merger costs. The following table shows the changes in operating expense for the three months ended ~~September 25,~~April 2, 2015 and March 27, 2014 ~~and September 26, 2013~~ (in millions):


	Three Months Ended				$ Change			% Change			Three Months Ended				$ Change			% Change
	September 25, 2014		September 26, 2013		Q3 2014 to Q3 2013			Q3 2014 to Q3 2013			April 2, 2015		March 27, 2014		Q1 2015 to Q1 2014			Q1 2015 to Q1 2014
Advertising operating costs	$	6.5	$	7.9	$	(1.4	)		(17.7	%)	$	5.8	$	5.0	$	0.8			16.0	%
Fathom Events operating costs		—		5.4		(5.4	)		(100.0	%)
Network costs		4.4		5.1		(0.7	)		(13.7	%)		4.5		4.6		(0.1	)		(2.2	%)
Theatre access fees—founding members		17.0		18.7		(1.7	)		(9.1	%)		17.2		17.4		(0.2	)		(1.1	%)
Selling and marketing costs		14.7		15.6		(0.9	)		(5.8	%)		16.0		15.0		1.0			6.7	%
Merger-related administrative costs		2.0		—		2.0			100.0	%
Other administrative and other costs		6.9		7.8		(0.9	)		(11.5	%)
Administrative and other costs												8.7		7.6		1.1			14.5	%
Depreciation and amortization		8.6		7.2		1.4			19.4	%		8.0		7.8		0.2			2.6	%

Total operating expenses before the merger termination fee and related merger costs												60.2		57.4		2.8			4.9	%
Merger termination fee and related merger costs												33.4		—		33.4			100.0	%

Total operating expenses	$	60.1	$	67.7	$	(7.6	)		(11.2	%)	$	93.6	$	57.4	$	36.2			63.1	%

Advertising operating costs. Advertising operating costs ~~decreased $1.4~~increased $0.8 million, or ~~17.7%~~16.0%, from ~~$7.9~~$5.0 million for the ~~third~~first quarter of ~~2013~~2014 to ~~$6.5~~$5.8 million for the ~~third~~first quarter of ~~2014.~~2015. This ~~decrease~~increase was primarily the result of a ~~$0.9~~$0.6 million ~~decrease~~increase in affiliate advertising payments ~~a $0.2 million decrease in lobby production supplies~~ and a $0.2 million ~~decrease~~increase in onscreen production costs. The ~~decrease~~increase in affiliate advertising payments was driven by ~~lower~~higher total advertising revenue ~~partially offset by~~and an ~~8.6%~~8.3% or 278 screen increase in the number of average affiliate screens in the ~~third~~first quarter of ~~2014,~~2015, compared to the ~~third~~first quarter of ~~2013~~2014. Onscreen production costs increased due to ~~the addition of 352 affiliate screens~~higher related ~~to newly constructed, acquired and signed affiliate theatres. Lobby production supplies and onscreen production costs decreased due to lower~~ advertising revenue in the period.

~~Fathom Events operating costs.~~ Fathom Events operating costs were zero in the three months ended September 25, 2014 from $5.4 million for the three months ended September 26, 2013 due to the sale of this portion of our business on December 26, 2013.

Network costs. Network costs decreased ~~$0.7~~$0.1 million, or ~~13.7%~~2.2%, from ~~$5.1~~$4.6 million for the ~~third~~first quarter of ~~2013~~2014 to ~~$4.4~~$4.5 million for the ~~third~~first quarter of ~~2014. The decrease was primarily~~2015 due to a decrease in personnel ~~expense of $0.5 million due primarily to lower share-based compensation expense, bonus expense and related taxes (related to lower performance against internal targets) and lower benefit costs.~~expense.

Theatre access ~~fees.~~fees—founding members. Theatre access fees decreased ~~$1.7~~$0.2 million, or ~~9.1%~~1.1%, from ~~$18.7~~$17.4 million for the ~~third~~first quarter of ~~2013~~2014 to ~~$17.0~~$17.2 million for the ~~third~~first quarter of ~~2014.~~2015. The decrease was due to a ~~$2.1~~$0.6 million decrease related to the ~~16.4%~~5.5% decrease in founding member attendance in the ~~third~~first quarter of ~~2014~~2015 compared to the ~~third~~first quarter of ~~2013,~~2014, partially offset by a $0.4 million increase in theatre access fees due to an increase in the fee associated with the number of digital screens that are connected to DCN, including higher quality digital cinema projectors and related equipment. The fees for digital screens and equipment increased $0.3 million related to an annual 5% rate increase specified in the ESAs and $0.1 million from an increase of ~~1.1%~~1.7% in the average number of ~~NCM LLC’s~~ founding member theatres equipped with the higher quality digital cinema ~~equipment quarter-over-quarter due primarily to acquisitions of new theatres by the founding members.~~equipment.

Selling and marketing costs. Selling and marketing costs ~~decreased $0.9~~increased $1.0 million, or ~~5.8%~~6.7%, from ~~$15.6~~$15.0 million for the ~~third~~first quarter of ~~2013~~2014 to ~~$14.7~~$16.0 million for the ~~third~~first quarter of ~~2014.~~2015. This ~~decrease~~increase was primarily due to ~~a decrease~~an increase of ~~$0.4~~$0.9 million in personnel expense due primarily to ~~lower~~$0.5 million of higher non-cash share-based compensation expense, as well as, increases in salaries ~~bonuses~~ and related ~~taxes (related~~benefit costs and an increase in local sales commissions resulting from the higher revenue.

Administrative and other costs. Administrative and other costs increased $1.1 million, or 14.5%, from $7.6 million for the first quarter of 2014 to ~~lower performance against internal targets)~~$8.7 million for the first quarter of 2015 due primarily to a $0.9 million increase in personnel expense due primarily to a $0.6 million increase in non-cash share-based compensation expense and ~~lower~~an increase in salaries and related benefit ~~costs. In addition, selling and marketing~~ costs ~~decreased~~of $0.3 million due primarily to ~~a decline~~annual cost of living increases and select adjustments in ~~marketing research expense.~~annual salaries related to promotions.

~~Merger-related administrative costs.~~Depreciation and amortization. ~~Merger-related administrative costs were $2.0~~Depreciation and amortization expense increased $0.2 million, or 2.6%, from $7.8 million for the ~~third~~first quarter of 2014 to $8.0 million for the first quarter of 2015. The increase was primarily due to NCM LLC founding member common unit adjustments and amortization of intangible assets related to new affiliate agreements.

Merger termination fee and related merger costs. The merger termination fee and related merger costs were $33.4 million for the first quarter of 2015 due to the merger termination payment of approximately $26.8 million and approximately $6.6 million in legal, accounting, advisory and other professional fees associated with the ~~proposed~~terminated Screenvision merger.

~~Other administrative and other costs.~~ Other administrative and other costs decreased $0.9 million, or 11.5%, from $7.8 million for the third quarter of 2013 to $6.9 million for the third quarter of 2014 due primarily to a $0.6 million decrease in personnel expense due primarily to lower share-based compensation expense, bonus expense and related taxes (related to lower performance against internal targets) and lower benefit costs, as well as a $0.2 million decrease in legal and professional fees.

~~Depreciation and amortization.~~ Depreciation and amortization expense increased $1.4 million, or 19.4%, from $7.2 million for the third quarter of 2013 to $8.6 million for the third quarter of 2014. The increase was primarily due to higher amortization of intangible assets related to new affiliate agreements and NCM LLC founding member common unit adjustments, primarily from founding member acquisitions.

Non-operating expenses. Total non-operating expenses ~~increased $0.5~~decreased $1.3 million, or ~~2.7%~~6.8%, from ~~$18.7~~$19.1 million for the three months ended ~~September 26, 2013~~March 27, 2014 to ~~$19.2~~$17.8 million for the three months ended ~~September 25, 2014.~~April 2, 2015. The following table shows the changes in non-operating expense for the three months ended ~~September 25,~~April 2, 2015 and March 27, 2014 ~~and September 26, 2013~~ (in millions):

The increase in non-operating expense was due to an increase in other non-operating expense of $0.7 million due to severance expense for employees of the Fathom Events business that was sold at the end of 2013. In addition, interest income increased by $0.2 million due primarily to interest accrued on the notes receivable from NCM LLC’s founding members from the sale of Fathom Events.

~~Net income~~~~. Net income decreased $8.9 million from $13.7 million for the three months ended September 26, 2013 to $4.8 million for the three months ended September 25, 2014. The~~ decrease in net income was due to a decrease in operating income of $26.7 million and an increase of $0.5 million in non-operating expense, as described further above, partially offset by a $14.0 million decrease in income attributable to noncontrolling interests and a decrease in income tax expense of $4.3 million due primarily to lower net income before taxes in the period.

~~Revenue.~~ Total revenue decreased $69.2 million, or 20.3%, from $340.1 million for the nine months ended September 26, 2013 to $270.9 million for the nine months ended September 25, 2014 due to a $47.3 million, or 14.9%, decrease in advertising revenue and $21.9 million decrease in Fathom Events revenue due to the sale of this part of our business at the end of 2013. The following is a summary of revenue by category (in millions).

~~The following table shows data on theatre attendance and revenue per attendee for the nine months ended September 25, 2014 and September 26, 2013:~~

~~National advertising revenue.~~ The $52.0 million, or 23.0%, decrease in national advertising revenue (excluding beverage revenue from NCM LLC’s founding members) was due primarily to a 21.5% decrease in national advertising CPMs (excluding beverage revenue) due primarily to a soft television scatter market, the increase in competition from other national video networks, including several new online and mobile advertising platforms, and the implementation of more aggressive seasonal and volume pricing strategies that contributed to the expansion of our client mix to new client categories that traditionally buy their television and other advertising at lower CPMs. National advertising revenue also decreased due to a decline in revenue by content partners and scatter spending by our previous cell phone PSA client, which decreased $8.9 million and $12.5 million, respectively, compared to the first nine months of 2013. Further, national advertising revenue (excluding beverage revenue) declined due to a decrease in utilized impressions of 3.2% in the first nine months of 2014 compared to the first nine months of 2013. The decline in utilized impressions was due to a decline in theatre attendance of 5.3% year-over-year, partially offset by an increase in national inventory utilization which rose from 104.9% in the nine months ended September 26, 2013 to 107.3% in the nine months ended September 25, 2014. Inventory utilization is calculated based on eleven 30-second salable national advertising units in our pre-show, which can be expanded, should market demand dictate.

~~Local advertising revenue.~~ The $8.0 million, or 13.2%, increase in local advertising revenue was driven by an increase in local advertising contract volume of 9.6% and an increase in the average contract value of 3.1% in the nine months ended September 25, 2014, compared to the nine months ended September 26, 2013. The increase in average contract value was driven primarily by an $8.3 million, or 107.2%, increase in the total value of contracts over $250,000. The growth in these larger local contracts during the nine months ended September 25, 2014 was due in part to the growth of our network and better geographic coverage in many markets and states that increased our appeal to advertisers and attracted several large additional regional contracts in the automotive and telecommunications industries. The increase in contract volume was driven primarily by the higher number of larger regional contracts and the improving economy that benefited smaller businesses and the continued expansion of the number of theatres in our network.

~~Founding member beverage revenue.~~ The $3.3 million, or 10.5%, decrease in national advertising revenue from NCM LLC’s founding members’ beverage concessionaire agreements was due to a 4.9% decrease in founding member attendance in the nine months ended September 25, 2014, compared to the nine months ended September 26, 2013 and a 5.8% decrease in beverage revenue CPMs, which declined because the 2014 beverage revenue CPM is based on the change in CPM during segment one of the~~FirstLook~~ ~~pre-show from 2013 to 2012.~~

~~Fathom Events revenue.~~ Fathom Events revenue was zero for the nine months ended September 25, 2014 from $21.9 million for the nine months ended September 26, 2013 due to the sale of this portion of our business on December 26, 2013.

~~Operating expenses.~~ Total operating expenses decreased $16.0 million, or 8.3%, from $193.1 million for the nine months ended September 26, 2013 to $177.1 million for the nine months ended September 25, 2014. The following table shows the changes in operating expense for the nine months ended September 25, 2014 and September 26, 2013 (in millions):

~~Advertising operating costs.~~ Advertising operating costs decreased $3.6 million, or 16.6%, from $21.7 million for the nine months ended September 26, 2013 to $18.1 million for the nine months ended September 25, 2014. This decrease was primarily the result of a $2.3 million decrease in affiliate advertising payments, a $0.5 million decrease in onscreen production costs and a $0.4 million decrease in lobby production supplies. The decrease in affiliate advertising payments was driven by lower total advertising revenue and a 2.7% decrease in the number of average affiliate screens in the nine months ended September 25, 2014, compared to the nine months ended September 26, 2013 due to the acquisition of certain affiliate screens by NCM LLC’s founding members, partially offset by the addition of 352 affiliate screens related to newly constructed, acquired and signed affiliate theatres. Lobby production supplies and onscreen production costs decreased due to lower revenue during the period.

~~Fathom Events operating costs.~~ Fathom Events operating costs were zero in the nine months ended September 25, 2014 from $15.4 million for the nine months ended September 26, 2013 due to the sale of this portion of our business on December 26, 2013.

~~Network costs.~~ Network costs decreased $1.8 million, or 11.8%, from $15.2 million for the nine months ended September 26, 2013 to $13.4 million for the nine months ended September 25, 2014. The decrease was primarily due to a decrease in personnel expense of $1.0 million due primarily to lower share-based compensation expense, bonus expense and related taxes (related to lower performance against internal targets) and lower benefit costs, as well as a decrease of $0.2 million for reimbursement of AC JV, LLC transition costs and a decrease of $0.2 million in equipment rental and network maintenance costs.

~~Theatre access fees.~~ Theatre access fees decreased $0.1 million, or 0.2%, from $52.4 million for the nine months ended September 26, 2013 to $52.3 million for the nine months ended September 25, 2014. The decrease was primarily due to a $1.7 million decrease related to the 4.9% decrease in founding member attendance in the first nine months of 2014 compared to the first nine months of 2013, partially offset by a $1.6 million increase in theatre access fees due to an increase in the number of digital screens, including higher quality digital cinema projectors and related equipment. The fees for digital screens and equipment increased

$0.9 million related to an annual 5% rate increase specified in the ESAs and $0.5 million from an increase of 3.7% in the average number of NCM LLC’s founding member theatres equipped with the higher quality digital cinema equipment year-over-year due primarily to acquisitions of new theatres by the founding members.

~~Selling and marketing costs.~~ Selling and marketing costs decreased $2.9 million, or 6.2%, from $46.7 million for the nine months ended September 26, 2013 to $43.8 million for the nine months ended September 25, 2014. This decrease was primarily due to a decrease of $1.7 million in non-cash barter expense related to timing of barter transactions, a decrease of $0.7 million in personnel expense due primarily to lower salaries, bonuses and related taxes (related to lower performance against internal targets) and lower benefit costs and a decrease of $0.3 million in certain marketing expenses.

~~Merger-related administrative costs.~~ Merger-related administrative costs were $3.7 million for the nine months ended September 26, 2014 due primarily to legal, accounting, advisory and other professional fees associated with the proposed Screenvision merger.

~~Other administrative and other costs.~~ Other administrative and other costs decreased $1.3 million, or 5.7%, from $22.9 million for the nine months ended September 26, 2013 to $21.6 million for the nine months ended September 25, 2014 due primarily to a $1.1 million decrease in personnel expense due primarily to lower share based compensation expense, bonus expense and related taxes (related to lower performance against internal targets) and lower benefit costs, as well as a decrease in legal and professional fees of approximately $0.3 million.

~~Depreciation and amortization.~~ Depreciation and amortization expense increased $5.4 million, or 28.7%, from $18.8 million for the nine months ended September 26, 2013 to $24.2 million for the nine months ended September 25, 2014. The increase was primarily due to higher amortization of intangible assets related to new affiliate agreements and NCM LLC founding member common unit adjustments, primarily related to founding member acquisitions.

~~Non-operating expenses~~. Total non-operating expenses decreased $0.9 million, or 1.6%, from $57.8 million for the nine months ended September 26, 2013 to $56.9 million for the nine months ended September 25, 2014. The following table shows the changes in non-operating expense for the nine months ended September 25, 2014 and September 26, 2013 (in millions):

~~The decline~~ in non-operating expense was due primarily to ~~an increase in interest income of~~a $0.9 million ~~due primarily to interest accrued on~~decrease in the ~~notes receivable from NCM LLC’s founding members from~~amortization of terminated derivatives as the sale of Fathom Events. In addition, other non-operating expense decreased $0.3 million due to the absence of the write-off of debt issuance costs, partially offset by severance expense for employees of the Fathom Events business that was sold at the end of 2013. The decrease to non-operating expense was partially offset by an increaseamortization period ended in ~~interest~~February 2015. Interest due to NCM LLC’s founding members under the tax receivable agreement ~~of $0.6~~decreased $0.2 million due primarily to changes in tax rates and NCM LLC ownership rates period over period. In addition, interest income increased by $0.2 million due primarily to the Company’s movement toward a longer-term investment strategy that resulted in higher average returns.

Net ~~income~~loss. Net ~~income decreased $16.9~~loss increased $5.9 million from a net ~~income~~loss of ~~$22.2~~$3.1 million for the ~~nine~~three months ended ~~September 26, 2013~~March 27, 2014 to ~~$5.3~~a net loss of $9.0 million for the ~~nine~~three months ended ~~September 25, 2014.~~April 2, 2015. The ~~decrease~~increase in net ~~income~~loss was primarily due to a decrease in operating income of ~~$53.2~~$29.5 million (due primarily to an increase of $33.4 million of the merger termination fee and ~~a decrease of $0.9 million in non-operating expense,~~related merger costs), as described further above, partially offset by a ~~$26.6~~$19.7 million ~~decrease~~increase in ~~income~~loss attributable to noncontrolling interests, ~~a decrease~~an increase in income tax ~~expense~~benefit of ~~$8.8~~$2.6 million due primarily to ~~lower~~higher net ~~income~~loss before taxes in the ~~period.~~period and a decrease of $1.3 million in non-operating expense, as described above.

Trends and Uncertainties Related to our Business, Industry and Corporate Structure

Changes in the current macro-economic environment and changes in the national and local and regional advertising markets, including increased competition related to the expansion of ~~new~~ online and mobile advertising platforms, present uncertainties that could impact our results of operations, including the timing and amount of spending from our advertising clients. The impact to our business associated with these issues could be mitigated somewhat over time due to factors including the increase in salable advertising impressions and better geographic coverage related to the expansion of our network, diversification and growth inof our advertising client base and improvements in the technical quality of our network and upgrades to our inventory management and audience targeting systems that are ~~in process.~~being accelerated. We could also benefit from the effectiveness of cinema advertising

relative to other advertising mediums as consumer viewing habits shift to smaller less effective mobile devices and TVtelevision ratings and effectiveness declines due to the time-shifting of programming and related ad-skipping associated with the increasing use of DVRs by consumers. The impact of these consumer and media market trends appear to have favorably impacted our upfront national ~~advertising projections for the fourth quarter of 2014~~bookings that ~~are~~were up approximately ~~20% versus~~100% going into 2015 (for the ~~fourth quarter of 2013 and our upfront bookings that are currently up over 125% for the~~ period from October 1, 2014 through ~~the end of 2015 versus the same five quarter period ending in~~ December ~~of 2014, including an agency buying group that is being finalized.~~31, 2015). Consistent with TVthe television industry upfront ~~bookings,~~booking practices, a portion of our upfront commitments ~~after Q4 2014~~ have cancellation options ~~associated with them. Our future revenue growth~~that could ~~also be positively impacted~~reduce what is ultimately spent by clients that have made upfront commitments. Due in part to the ~~expansion~~strength of our 2014 upfront campaign, we experienced 19.2% national advertising ~~network, including~~growth in the ~~proposed merger with Screenvision.~~ first quarter of 2015, compared to the first quarter of 2014 and as of May 8, 2015, 83% of our 2015 national budget has been booked, compared to 60% of the 2014 actual national revenue at the same time last year.

During ~~2013~~2014 and thus far in ~~2014,~~2015, we have ~~added ten~~entered into agreements with seven new affiliate theatre circuits with ~~491 screens and~~406 screens. In total, these affiliate additions are expected to add approximately 15 million ~~annual~~new attendees ~~and our founding members have added 14 theatres with 223 screens and annual attendance of approximately 10 million. The recent affiliate and founding member theatre additions~~on a full-year pro-forma basis, which we expect will result in approximately ~~350~~216 million new salable national advertising impressions (assuming 14 national advertising units of 30 seconds each). ~~The additional~~One of these affiliates, with 142 screens and approximately 7 million attendees, will become a part of our network ~~affiliate and founding member impressions are already integrated into our advertising sales process. These~~in January 2016. We expect these additional attendees ~~will~~to provide our advertising clients a better marketing product with increased advertising impressions, improved geographic coverage and better audience targeting capabilities that is expected to expand our and our theatre circuit partner’s revenue, operating income and cash flow. Our future revenue growth could also be positively impacted by the expansion of our advertising network. We also believe that the continued growth of our ~~network strengthens~~market coverage ubiquity and overall number of impressions will strengthen our selling proposition and competitive positioning versus other national and local video advertising platforms, including television, online and mobile video platforms and other out-of home advertising platforms.

In ~~2013~~2014 and in the first ~~nine months~~quarter of ~~2014,~~2015, we experienced a decline of ~~7.6%~~16.4% and ~~21.5%~~11.1%, respectively, compared to the prior period in national advertising CPMs (excluding beverage revenue) due primarily to the increased competition from other national video networks, including ~~several new~~ online and mobile advertising platforms and the implementation of more aggressive seasonal and volume pricing strategies that contributed to the expansion of our ~~client mix~~inventory utilization related to the addition of new client ~~categories~~industries that traditionally buy their television ~~and other~~ advertising at lower CPMs. ~~We expect this rate of decline to lessen during the fourth quarter of 2014, as compared~~Due to the ~~first nine months~~higher level of ~~2014 because~~upfront bookings which has reduced our reliance on the ~~trend had begun in the fourth quarter of 2013 (CPMs decreased 19%~~scatter market and increased scatter activity, we expect national advertising CPMs (excluding beverage) to continue to stabilize for the ~~fourth quarter~~remainder of 2013 versus the fourth quarter of 2012) due to the greater upfront demand and higher expected utilized impressions driven by a higher expected utilization percentage. While the CPM decline in the fourth quarter of 2014 is expected to be less than the second and third quarters of 2014, we expect our CPMs for 2014 to be approximately 17% to 20% below prior year. However, given the large declines for 2014, we do expect CPMs to begin to stabilize in 2015 due to the greater upfront demand.fiscal year 2015.

Under the ESAs, up to 90 seconds of theFirstLook program can be sold to NCM LLC’s founding members to satisfy their on-screen advertising commitments under their beverage concessionaire agreements. During ~~2013,~~2014 and in the first quarter of 2015, we sold 60 seconds to NCM LLC’s founding members. In December 2014, we were notified by one of our founding members that beginning in July 2015, they will reduce their beverage advertising from 60 seconds to 30 seconds to accommodate a six-month test of other in-theatre marketing activities by their beverage supplier. During the six-month test, we will have the right to sell the 30 second unit to other clients. We expect this decrease to ~~continue~~result in a reduction in beverage revenue of approximately $2.8 million for the second half of 2015. However, we believe that some or all of this revenue may be replaced through the sale of advertising to ~~sell~~other brands who will find this premium inventory attractive. The other founding members have just signed long-term contracts with their beverage suppliers that require 60 seconds of ~~time to NCM LLC’s founding members in 2014. NCM LLC’s founding members are renegotiating their agreements with their~~ beverage ~~supplier, which~~advertising, although such commitments could change in the ~~amount of advertising time that is bought from us to satisfy those agreements.~~future. Should the amount of time acquired as part of these beverage concessionaire ~~arrangements~~agreements decline ~~that~~with the other founding members, this premium time will be available for sale to other clients. ~~Through 2011, this time was priced on a CPM basis, which changed each year as specified in the ESAs.~~ Per the ESAs, beginning in 2012, ~~this~~the time sold to the founding member beverage supplier is priced equal to ~~the annual percentage change in~~ the advertising CPM for the previous year charged by NCM LLC to unaffiliated third parties during segment one (closest to ~~show time)~~showtime) of theFirstLook pre-show, limited to the highest advertising CPM being then-charged by NCM LLC. Due to ~~the lower~~a 14.4% decline in segment one CPMs ~~that we realized~~ in ~~2013, this reduced~~2014, the CPM on our beverage concessionaire revenue declined during the first ~~nine months~~quarter of ~~2014~~2015 by 14.4% and ~~will reduce the CPM on our beverage concessionaire revenue during~~ the remainder of ~~2014. In addition, our expected lower CPMs for 2014 are expected to further reduce the CPM on our beverage concessionaire revenue during 2015.~~2015 will decline by an equivalent percentage.

In consideration for NCM LLC’s access to NCM LLC’s founding members’ theatre attendees for on-screen advertising and use of lobbies and other space within NCM LLC’s founding members’ theatres for the LEN and lobby promotions, NCM LLC’s founding members receive a monthly theatre access fee under the ESAs. The theatre access fee is composed of a fixed payment per patron and a fixed payment per digital ~~screen.~~screen (connected to the DCN). The payment per theatre patron increases by 8% every five years, with the first such increase taking effect for fiscal year 2012, and the payment per digital screen increases annually by 5%. The theatre access fee paid in the

aggregate to all founding members cannot be less than 12% of NCM LLC’s aggregate ~~founding member~~ advertising revenue (as defined in the ESA), or it will be adjusted upward to reach this minimum payment. Pursuant to ESAs, beginning on October 1, 2010 the theatre access fee paid to the members of NCM LLC included an additional fee for access to the higher quality digital cinema systems. This additional fee will continue to increase as additional screens are equipped with the new digital cinema equipment and the fee increases annually by 5%. As of ~~September 25,~~April 2, 2015 and March 27, 2014, 91% and ~~September 26, 2013, approximately 88.2% and 86.2%~~86%, respectively, of our founding member network screens were showing advertising on digital cinema projectors.

On May 5, 2014, we entered into the Merger Agreement to merge with Screenvision as described in Item 2—Management’s Discussion and Analysis of Financial Condition and Results of Operations—Overview. Consummation of the Merger is subject to clearance under the HSR Act, as well, as other customary closing conditions. On November 3, 2014, the DOJ filed an antitrust lawsuit seeking to enjoin the proposed merger between NCM, Inc. and Screenvision. The Company and Screenvision intend to defend their proposed merger. If prior to May 5, 2015 (or 90 days thereafter if extended by the Company or Screenvision), certain conditions related to the HSR process are not fulfilled, the Merger is prohibited by law or a final non-appealable government order, or if we materially breach our representations or covenants such that the closing conditions in the Merger Agreement cannot be satisfied, Screenvision may be able to terminate the Merger Agreement and, upon termination, we may be required to pay a termination fee of approximately $28.8 million. NCM LLC would indemnify NCM, Inc. and bear a pro rata portion of this fee based upon NCM, Inc.’s ownership percentage in NCM LLC, with NCM LLC’s founding members bearing the remainder of the fee in accordance with their ownership percentage in NCM LLC. If Screenvision or its affiliates materially breach their representations or covenants such that the closing conditions in the Merger Agreement cannot be satisfied, they will be required to pay us a termination fee of $10 million, and if Screenvision is subsequently sold within one year of the termination, an additional amount equal to the amount by which the sale proceeds are greater than $385 million will be paid to us up to a maximum of $28.8 million (including the $10 million). If the Merger is not completed and we are required to pay the termination fee, our financial results would be adversely affected.

During 2014, 2013 and 2012, we amended our senior secured credit facility to extend the maturity, expand the revolver availability and reduce the interest rate spreads. In 2012 and 2011, we issued new Senior Unsecured Notes and Senior Secured Notes primarily to refinance outstanding bank debt. As a result of these financing transactions, we extended the average maturities of our debt by over six years. The average remaining maturity is ~~6.5~~6.0 years as of ~~September 25, 2014.~~April 2, 2015. As of ~~September 25, 2014,~~April 2, 2015, approximately ~~67%~~64% of our total borrowings bear interest at fixed rates. The remaining ~~33%~~36% of our borrowings bear interest at variable rates and as such, our net income (loss) and earnings (loss) per share could fluctuate with interest rate fluctuations related to our borrowings. Refer to Note 5—Borrowings to the unaudited Condensed Consolidated Financial Statements in Item 1 of this Form 10-Q for more information regarding the Company’s borrowings.

~~During~~Due primarily to the ~~nine months ended September 25,~~decrease in our national advertising revenue in 2014, our cash flow available for the payment of dividends (NCM LLC’s Adjusted OIBDA, less capital expenditures, interest expense, distributions to NCM LLC’s founding members, income taxes, tax receivable agreement payments to NCM LLC’s founding members and plus certain cash items) was less than our regular dividend payment in 2014 ($0.88 per share). The deficit was funded by NCM, Inc.’s cash and marketable securities balances, which as of January 1, 2015 were $70.4 million. As of April 2, 2015, these balances totaled $75.0 million. While we ~~paid~~anticipate over time that our revenue growth will result in cash flow available for dividends in excess of our regular ~~quarterly~~dividend payments and believe that our cash ~~dividends~~and marketable securities balances could continue to fund deficits similar to 2014 for the foreseeable future, our Board of ~~$0.66 per share on each share~~Directors will evaluate continued deficits as one of the ~~Company’s common stock and we paid a special dividend of $0.50 per share on each share of~~factors when declaring dividends in the ~~Company’s common stock. These dividend payments totaled $68.1 million during the first nine months of 2014.~~future.

Our short-term marketable securities balance decreased ~~$51.0~~$3.1 million, from ~~$71.3~~$21.7 million as of ~~December 26, 2013~~January 1, 2015 to ~~$20.3~~$18.6 million as of ~~September 25, 2014~~April 2, 2015 and our long-term marketable securities balance increased by ~~$39.4~~$0.5 million, from ~~$0 as of December 26, 2013 to $39.4~~$45.5 million as of ~~September 25, 2014.~~January 1, 2015 to $46.0 million as of April 2, 2015. The decrease in short-term marketable securities and the increase in long-term marketable securities were due primarily to the Company purchasing more marketable securities with original maturities greater than one year to increase its average interest rates and increase interest income on excess cash balances. ~~As investments mature~~

On March 16, 2015, the Company announced the termination of the Merger Agreement. After the Merger Agreement was terminated, NCM LLC reimbursed NCM, Inc. for certain expenses pursuant to an indemnification agreement among NCM LLC, NCM, Inc. and the founding members. During the three months ended April 2, 2015, NCM LLC paid Screenvision an approximate $26.8 million termination payment on behalf of NCM, Inc. This payment was $2 million lower than the reverse termination fee contemplated by the Merger Agreement. During the three months ended April 2, 2015, NCM LLC also either paid or reimbursed NCM, Inc. for the legal and other merger-related costs of approximately $14.1 million ($7.5 million incurred during the ~~remainder~~year ended January 1, 2015 and approximately $6.6 million incurred during the three months ended April 2, 2015). The Company and the founding members each bore a pro rata portion of ~~2014,~~ the ~~Company expects~~termination fee and the related merger expenses based on their aggregate ownership percentages in NCM LLC. We do not expect to ~~continue~~incur additional material expenses related to ~~purchase securities with longer maturities in order to achieve higher average rates of return on its investments.~~the terminated merger.

founding members based on theatre additions or dispositions during the previous year. During the first quarter of 2015 and 2014, NCM LLC issued 2,160,915 and 1,087,911 common membership units to its founding members, respectively, for the rights to exclusive access to ~~net new~~the theatre screens and attendees added, net of dispositions by the

founding members to NCM LLC’s network during ~~2013. Of these units, 432,646 related to theatre acquisitions and 655,265 related to new theatres constructed, net of closures.~~the previous year. NCM LLC recorded a net intangible asset of ~~approximately~~$31.4 million and $16.4 million during the ~~first quarter of~~three months ended April 2, 2015 and March 27, 2014, respectively, as a result of the ~~annual~~ Common Unit Adjustment. The common unit adjustment for the first quarter of 2014 was lower than the adjustment for the first quarter of 2013 primarily due to the fact that the founding members opened fewer net new theatres but two of the founding members made large acquisitions that exceeded the two percent of attendance threshold requiring NCM LLC to make a special common unit adjustment.Adjustments.

Overall, NCM, Inc.’s ownership in NCM LLC decreased to ~~45.8%~~45.1% as of ~~September 25, 2014~~April 2, 2015 compared to ~~46.1%~~45.8% at ~~December 26, 2013~~January 1, 2015 due primarily to the common unit adjustment described above, which has proportionally increased net income attributable to noncontrolling interests and decreased net income attributable to NCM, Inc.

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 NCM LLC’s founding members, interest or principal payments on our term loan and the Senior Secured Notes and Senior Unsecured Notes, income tax payments, tax receivable agreement payments to NCM LLC’s founding members and amount of quarterly dividends to NCM, Inc.’s common stockholders (including special dividends).


	As of						$ Change			$ Change			As of						$ Change			$ Change
	September 25, 2014		December 26, 2013		September 26, 2013		Q3 2014 to YE 2013			Q3 2014 to Q3 2013			April 2, 2015		January 1, 2015		March 27, 2014		Q1 2015 to YE 2014			Q1 2015 to Q1 2014
Cash, cash equivalents and marketable securities(1)	$	84.3	$	126.0	$	127.2	$	(41.7	)	$	(42.9	)	$	77.5	$	80.6	$	78.8	$	(3.1	)	$	(1.3	)
Revolver availability(2)		124.0		104.0		110.0		20.0			14.0			67.0		113.0		87.0		(46.0	)		(20.0	)

Total liquidity	$	208.3	$	230.0	$	237.2	$	(21.7	)	$	(28.9	)	$	144.5	$	193.6	$	165.8	$	(49.1	)	$	(21.3	)

The $21.3 million decrease in liquidity as of April 2, 2015, compared to March 27, 2014, was due primarily to the funding of the merger termination fee and related merger costs during the first quarter of 2015 with NCM LLC’s revolving credit facility. Pursuant to the NCM LLC Operating Agreement, the negative available cash distribution calculation for the first quarter of 2015 will be netted against the available cash distributions for the second quarter of 2016 (to be paid in the third quarter of 2016). As such, the revolving credit facility borrowings related to the remaining merger costs are expected to be repaid at that time.


	Nine Months Ended						Three Months Ended
	September 25, 2014			September 26, 2013			April 2, 2015			March 27, 2014
Operating cash flow	$	86.9		$	113.9		$	0.3		$	11.9
Investing cash flow	$	1.7		$	(39.9	)	$	(0.7	)	$	6.6
Financing cash flow	$	(118.7	)	$	(76.6	)	$	(0.1	)	$	(56.6	)

payable and accrued expenses period over period primarily due to the timing of payments and a $7.9 million lower payment to NCM LLC’s founding members under the tax receivable agreement due ~~primarily~~ to ~~additional payments made for operating~~a larger tax loss ~~carrybacks to prior years, partially offset by an $33.0 million increase~~ in ~~accounts receivable period over period primarily due to the timing of revenue and collections in the period.~~2014.

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 ~~September 25, 2014~~April 2, 2015 were ~~$71.3~~$75.0 million (excluding 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.

Management believes that future funds generated from NCM LLC’s operations and cash on hand should be sufficient to fund working capital requirements, NCM LLC’s debt service requirements, and capital expenditure and other investing requirements, through the next twelve months. Cash flows generated by NCM LLC’s distributions to NCM, Inc. and the founding members can be impacted by the seasonality of advertising sales, stock option exercises, interest on borrowings under our revolving credit agreement and to a lesser extent theatre attendance. NCM LLC is required pursuant to the terms of the NCM LLC Operating Agreement to distribute its ~~“available cash”,~~available cash, as defined in the operating agreement, quarterly to its members (NCM LLC’s founding members and NCM, Inc.). The available cash distribution to the members of NCM LLC for the three months ended ~~September 25, 2014 (which~~April 2, 2015 was calculated as negative $25.5 million ($11.5 million with NCM, Inc.) due to the merger termination fee and related merger costs. Pursuant to the NCM LLC Operating Agreement, there will be no payment made ~~during~~for the ~~fourth~~second quarter of ~~2014) was $40.3 million, of which $18.5 million~~2015 and the negative amount will be ~~distributed to NCM, Inc.~~netted against available cash distributions for the second quarter of 2016, which will be paid in the third quarter of 2016. NCM, Inc. expects to use cash received from ~~the~~future available cash distributions and its cash balances to fund income taxes, payments associated with the tax receivable agreement with NCM LLC’s founding members and current and future dividends as declared by the Board of Directors, including a dividend declared on ~~October 29, 2014~~May 8, 2015 of $0.22 per share (approximately ~~$12.9~~$13.0 million) on each share of the Company’s common stock (not including outstanding restricted ~~stock, which will accrue dividends until the shares vest)~~stock) to stockholders of record on ~~November 20, 2014~~May 26, 2015 to be paid on ~~December 5, 2014.~~June 9, 2015. Distributions from NCM LLC and NCM, Inc. cash balances should be sufficient to fund the above listed items for the foreseeable future at the discretion of the Board of Directors dependent on anticipated cash needs, overall financial condition, future prospects for earnings, available cash and cash flows, as well as other relevant factors.

We expect to make $13.0 million to $15.0 million of capital expenditures in fiscal 2015 (an increase of $2.0 million to $3.0 million from our initial estimates) primarily related to an acceleration of the development of our management systems, including upgrades to our digital content software distribution and content management software and our proposal, inventory and audience targeting management systems. Our total capital expenditure projections also include investments in reporting systems, server and storage upgrades, software licensing, our internet site and network equipment related to currently contracted network affiliate theatres.

For a discussion of accounting policies that we consider critical to our business operations and understanding of our results of operations, and that affect the more significant judgments and estimates used in the preparation of our unaudited Condensed Consolidated Financial Statements, see Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Critical Accounting Policies” contained in our annual report on Form 10-K filed for the fiscal year ended ~~December 26, 2013~~January 1, 2015 and incorporated by reference herein. As of ~~September 25, 2014,~~April 2, 2015, there were no significant changes in those critical accounting policies.

~~In March 2014,~~For a discussion of recent accounting pronouncements, see the ~~Emerging Issues Task Force (“EITF”) reached a final consensus on Issue 13-D,~~information provided under Note 1—~~Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could be Achieved after the Requisite Service Period~~ (“EITF 13-D”). Under EITF 13-D, a performance target that can be achieved after the requisite service period should be treated as a performance condition that affects vesting, rather than a condition that affects grant date fair value. Compensation cost is recognized over the requisite service period if it is probable that the performance condition will be achieved. If necessary, compensation cost is subsequently adjusted, to reflect those awards that ultimately vest. EITF 13-D will be effective, on a prospective basis, for the Company during its first quarter of 2016, with early adoption permitted. The adoption of this standard is not anticipated to have a material impact on the Company’s unaudited Condensed Consolidated Financial Statements or notes thereto.

~~In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update 2014-09,~~ ~~Revenue from Contracts with Customers (Topic 606)~~ (“ASU 2014-09”), which supersedes the revenue recognition requirements in Accounting Standards Codification 605, Revenue Recognition. The new revenue recognition standard requires entities to recognize revenue in a way that depicts the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled to in exchange for those goods or services. This guidance will be effective beginning in fiscal year 2017 and early adoption is not permitted. The standard allows for either a full retrospective or a modified retrospective transition method. The Company is currently evaluating the effect that adopting this new accounting guidance will have on its unaudited Condensed Consolidated Financial Statements or notes thereto, as well as which transition method it intends to ~~use.~~

~~In August 2014, the FASB issued Accounting Standards Update 2014-15,~~~~Presentation of Financial Statements - Going Concern~~ (“ASU 2014-15”). ASU 2014-15 requires that management evaluate at each annual and interim reporting period whether there is a substantial doubt about an entity’s ability to continue as a going concern within one year of the date that the financial statements are issued. ASU 2014-15 will be effective for fiscal years and interim periods beginning after December 15, 2016 and early application is permitted. The Company does not expect that the application of ASU 2014-15 will have an impact on the unaudited Condensed Consolidated Financial Statements ~~or notes thereto.~~in Item 1 of this Form 10-Q.

For a discussion of related party transactions, see the information provided under Note 4—Related Party Transactions to the unaudited Condensed Consolidated Financial Statements in Item 1 of this Form 10-Q.

Our operating lease obligations, which primarily include office leases, are not reflected on our balance sheet. See Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Contractual and Other Obligations” contained in our annual report on Form 10-K for the fiscal year ended ~~December 26, 2013~~January 1, 2015 and incorporated by reference herein. We do not believe these arrangements are material to our current or future financial condition, results of operations, liquidity, capital resources or capital expenditures.

There were no material changes to our contractual obligations during the ~~nine~~three months ended ~~September 25, 2014.~~April 2, 2015.

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. Both advertising expenditures and theatre 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 theatre attendance levels. 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 lower theatre industry attendance levels. Accordingly, 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 ~~2010,~~ 2011, 2012, 2013 and ~~2013.~~2014.


	First Quarter			Second Quarter			Third Quarter			Fourth Quarter
FY 2011		16.3	%		26.2	%		31.2	%		26.3	%
FY 2012		17.6	%		24.5	%		32.1	%		25.8	%
FY 2013		17.8	%		26.5	%		29.2	%		26.5	%
FY 2014		17.8	%		25.4	%		25.6	%		31.2	%

The following table reflects the quarterly percentage of total advertising revenue for the fiscal years ended 2010, 2011, 2012 and 2013.


	First Quarter			Second Quarter			Third Quarter			Fourth Quarter			First Quarter			Second Quarter			Third Quarter			Fourth Quarter
FY 2010		17.9	%		23.7	%		31.0	%		27.4	%
FY 2011		15.3	%		25.5	%		32.9	%		26.3	%		15.3	%		25.5	%		32.9	%		26.3	%
FY 2012		16.2	%		24.7	%		33.7	%		25.4	%		16.2	%		24.7	%		33.7	%		25.4	%
FY 2013		17.3	%		27.4	%		29.9	%		25.4	%		17.3	%		27.4	%		29.9	%		25.4	%
FY 2014														17.8	%		25.4	%		25.6	%		31.2	%

The primary market risk to which we are exposed is interest rate risk. The Senior Unsecured Notes and the Senior Secured Notes are at fixed rates, and therefore are not subject to market risk. As of ~~September 25, 2014,~~April 2, 2015, the only interest rate risk that we are exposed to is related to our ~~$149.0~~$135.0 million revolving credit facility and our $270.0 million term loan. 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 cash interest expense by approximately ~~$3.0~~$3.4 million for an annual period on the ~~$25.0~~$68.0 million revolving credit balance and $270.0 million term loan outstanding as of ~~September 25, 2014.~~April 2, 2015. For a discussion of market risks, see Item 7A. “Quantitative and Qualitative Disclosures About Market Risk” contained in our annual report on Form 10-K for the fiscal year ended ~~December 26, 2013~~January 1, 2015 and incorporated by reference herein.

We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed by us in the reports that we file or submit to the SEC under the Exchange Act, as amended, is recorded, processed, summarized and reported within the time periods specified by the Commission’s rules and forms, and that information is accumulated and communicated to our management, including the Chief Executive Officer (principal executive officer) and Senior Vice President, Finance and Interim Co-Chief Financial Officer (principal financial officer) as appropriate to allow timely decisions regarding required disclosure. As of ~~September 25, 2014,~~April 2, 2015, our management evaluated, with the participation of the Chief Executive Officer and Senior Vice President, Finance and Interim Co-Chief Financial Officer, the effectiveness of the Company’s disclosure controls and procedures pursuant to Rules 13a-15(e) and 15d-15(e) of the Exchange Act. Based on that evaluation, the Company’s management concluded that the Company’s disclosure controls and procedures as of ~~September 25, 2014~~April 2, 2015 were effective.

There have been no changes in the Company’s internal controls over financial reporting that occurred during the quarter ended ~~September 25, 2014~~April 2, 2015 that have materially affected, or are reasonably likely to materially affect, the Company’s internal controls over financial reporting.

On November 3, 2014, the ~~DOJ~~Department of Justice filed, in the U.S. district court for the Southern District of New York, an antitrust lawsuit seeking to enjoin the ~~proposed~~ merger between NCM, Inc. and Screenvision. ~~The DOJ claims that the proposed merger would eliminate competition in the market for preshow services and eliminate competition between~~On March 16, 2015, NCM, Inc. and Screenvision ~~for advertisers. The Company~~agreed to terminate the merger and ~~Screenvision intend to defend their proposed merger.~~the lawsuit has since been dismissed.

In addition, 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.

There have been no material changes from risk factors as previously disclosed in our annual report on Form 10-K filed with the SEC on February ~~21, 2014~~27, 2015 for the fiscal year ended ~~December 26, 2013, except as noted below.~~

~~On May 5, 2014, NCM, Inc., Screenvision and certain~~January 1, 2015. However, on March 16, 2015, the Company announced the termination of ~~their affiliates entered into~~ the Merger Agreement, as described in Note 1 –The Companyto the unaudited Condensed Consolidated Financial Statements in this Form ~~10-Q. On November 3, 2014, the DOJ filed an antitrust lawsuit seeking to enjoin the proposed merger between NCM, Inc.~~10-Q and ~~Screenvision (the “DOJ Action”), as described in Note 10 –~~~~Subsequent Events~~~~to the unaudited Condensed Consolidated Financial Statements in this Form 10-Q.~~

~~The DOJ Action has delayed, and could ultimately prevent, the consummation of the Merger.~~

~~The filing of the DOJ Action has delayed, and, if~~ the Company ~~and Screenvision are unsuccessful in defending against or settling~~believes the DOJ Action, could ultimately prevent, the consummation of the Merger. There can be no assurance that we will be successful in defending against or settling the DOJ Action or that the Merger will be consummated by any particular time, if at all.

In addition, even if the Company enters into a settlement with respect to the DOJ Action, there can be no assurance that we will not be required to agree to terms, conditions, requirements, limitations, costs or restrictions that could further delay completion of the Merger, impose additional material costs on or limit the revenues of the combined company, or limit some of the synergies and other benefits we presently anticipate to realize following the Merger. We cannot provide any assurance that any such terms, conditions, requirements, limitations, costs or restrictions will not result in a material delay in, or the abandonment of, the Merger.

~~Delays in completing the Merger have delayed, and could continue to delay, the benefits expected to be achieved thereunder.~~

The need to satisfy conditions and obtain consents, clearances and approvals for the Merger, as well as the pendency of the DOJ Action, have delayed, and could continue to delay, the consummation of the Merger for a significant period of time or prevent it from occurring. Even if ultimately consummated, the delaymerger-related risk factors in the consummation of the Merger could cause the combined company to be delayed or limited in realizing some of the synergies and other benefits that the parties anticipated had the Merger been successfully completed within its originally expected time frame.

~~If we~~Form 10-K are unsuccessful in our defense of the Merger, we may be required to make a termination payment of $28.8 million, which could adversely impact NCM, Inc.’s stock price and would adversely impact NCM, Inc.’s liquidity and financial condition.

The Merger Agreement contains certain termination rights, including the right of either party to terminate the Merger Agreement upon the material breach of covenants or representations by the other. Furthermore, if the Company is unsuccessful in its defense of the Merger with the DOJ, Screenvision may have the right to terminate the Merger Agreement and, upon termination, we may be required to pay Screenvision a termination fee of $28.8 million. NCM LLC will bear a pro rata portion of this fee based on the aggregate ownership percentages of the founding member theatre circuits in NCM LLC. The payment of such fee could have an adverse impact on our liquidity and financial condition. In addition, if the Merger Agreement is terminated, we may suffer other negative consequences. We will incur substantial expenses and costs related to the Merger, whether or not it is consummated, including legal, accounting and advisory fees. Also, failure to consummate the Merger may result in negative market reactions, and may have an adverse impact on NCM, Inc.’s stock price and future financial results.

~~A continued delay or a failure to ultimately consummate the Merger could materially and adversely affect our future business, financial condition, results of operations and prospects.~~

~~If the Merger is further delayed or is not completed, our ongoing business may be materially and adversely affected, and we will be subject to several risks, including the following:~~no longer applicable.

If the Merger is not completed or is further delayed, there can be no assurance that these risks will not materialize and will not materially and adversely affect NCM, Inc.’s business, financial condition, results of operations and prospects.

The pending Merger, the DOJ Action and our current pre-merger integration planning efforts may divert resources from our management’s day-to-day operations and ongoing efforts related to other strategies and initiatives.

The pending Merger, the DOJ Action and our current pre-merger integration planning efforts may divert our management’s attention from day-to-day business operations and the execution and pursuit of strategic plans and initiatives. The diversion of management attention from ongoing business operations and strategic efforts could result in performance shortfalls, which could adversely impact NCM, Inc.’s business and operations.

The integration of the businesses of NCM LLC and Screenvision may be more difficult, costly or time consuming than expected, and the Merger may not result in any or all of the anticipated benefits, including cost synergies.

Although under no obligation to do so, following the Merger, we may contribute the Screenvision business to NCM LLC. The success of combining Screenvision’s business with NCM LLC, including the realization of the anticipated benefits, will depend, in part, on the ability of the combined company to successfully integrate the two businesses. Failure to effectively integrate the businesses could adversely impact the expected benefits of the Merger, including cost synergies stemming from overlapping sales, operating and general and administrative functions that the Company has estimated could aggregate $30 million per year and the increase in revenue related to the improvement in our advertising product and competitive positioning of NCM, Inc. within the broader video advertising marketplace. The integration of two large independent companies will be complex, and we will be required to devote significant management attention and incur substantial costs to integrate NCM LLC’s and Screenvision’s business practices, policies, cultures and operations. The integration process could also result in the loss of key employees, and the disruption of each company’s ongoing businesses, which could materially impact the combined company’s future financial results.

Furthermore, we may encounter additional challenges, difficulties and costs, including those related to, without limitation, managing a larger combined company; consolidating corporate and administrative infrastructures and eliminating overlapping operations; retaining our existing advertisers and customers; unanticipated issues in integrating our networks and information technology, communications and other systems; and unforeseen and unexpected liabilities related to the Merger or Screenvision’s business. Delays encountered in the integration could adversely impact the business, financial condition and operations of the combined company.

Consummation of the Merger will require the Company to incur significant additional indebtedness, which could adversely impact our financial condition and may hinder our ability to obtain additional financing and pursue other business and investment opportunities.

~~As described in Note 5 –~~~~Borrowings~~, in contemplation of the Merger with Screenvision, we entered into a Commitment Letter for a $250 million term loan with certain existing NCM LLC revolving credit facility lenders to finance the $225 million portion of the merger consideration that will be paid in cash, along with fees and expenses incurred in connection with the term loan and the Merger. Incurrence of additional indebtedness could have negative consequences, including increasing our vulnerability to adverse economic and industry conditions, and limiting our ability to obtain additional financing and implement and pursue strategic initiatives and opportunities. Additionally, if we do not achieve the expected benefits and cost savings from the Merger with Screenvision, or if the financial performance of NCM, Inc., as the combined company, does not meet current expectations, then our ability to service the debt may be adversely impacted. NCM LLC’s credit ratings may also be impacted as a result of the incurrence of additional acquisition-related indebtedness.

The table below provides information about shares delivered to the Company from restricted stock held by Company employees upon vesting for purpose of funding the recipient’s tax withholding obligations.

Pursuant to the requirements 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.


			Page

	PART I

Item 1.	Financial Statements

	Unaudited Condensed Consolidated Balance Sheets			2

	Unaudited Condensed Consolidated Statements of ~~Income~~Loss			3

	Unaudited Condensed Consolidated Statements of Comprehensive ~~Income~~Loss			4

	Unaudited Condensed Consolidated Statements of Cash Flows			5

	Unaudited Condensed Consolidated Statement of Equity/(Deficit)			7

	Notes to Unaudited Condensed Consolidated Financial Statements			8

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations			2522

Item 3.	Quantitative and Qualitative Disclosures about Market Risk			4033

Item 4.	Controls and Procedures			4033

	PART II

Item 1.	Legal Proceedings			4034

Item 1A.	Risk Factors			4034

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds			4334

Item 3.	Defaults Upon Senior Securities			4334

Item 4.	Mine Safety Disclosures			4334

Item 5.	Other Information			4334

Item 6.	Exhibits			4335

Signatures		44		36


	Three Months Ended				Nine Months Ended
Included in the Condensed Consolidated Statements of Income:	September 25, 2014		September 26, 2013		September 25, 2014		September 26, 2013
Revenue:
Beverage concessionaire revenue (included in advertising revenue)(1)	$	9.0	$	11.5	$	28.2	$	31.5
Advertising inventory revenue (included in advertising revenue)(2)		0.1		—		0.2		0.1
Operating expenses:
Theatre access fee(3)		17.0		18.7		52.3		52.4
Revenue share from Fathom Events (included in Fathom Events operating costs)(4)		—		1.3		—		3.0
Purchase of movie tickets and concession products and rental of theatre space (included in Fathom Events operating costs)(5)		—		—		—		0.3
Purchase of movie tickets and concession products and rental of theatre space (included in selling and marketing costs)(6)		0.2		0.3		0.7		1.0
Purchase of movie tickets and concession products and rental of theatre space (included in other administrative and other costs)		—		—		0.1		—
Non-operating expenses:
Interest income from notes receivable (included in interest income)(7)		0.3		—		0.9		—


	As of
Included in the Condensed Consolidated Balance Sheets:	September 25, 2014		December 26, 2013
Purchase of movie tickets and concession products (included in Prepaid expenses)(1)	$	0.2	$	—
Current portion of notes receivable(2)		4.2		4.2
Long-term portion of notes receivable(2)		20.8		20.8
Interest receivable on notes receivable (included in other current assets)(2)		0.9		—
Common unit adjustments and integration payments, net of amortization (included in intangible assets) (3)		463.8		463.4
Current payable to founding members under tax receivable agreement(4)		21.7		28.6
Long-term payable to founding members under tax receivable agreement(4)		142.7		144.0


	Three Months Ended				Nine Months Ended
Related Party Affiliate	September 25, 2014		September 26, 2013		September 25, 2014		September 26, 2013
Starplex (1)	$	1.2	$	1.0	$	2.5	$	2.2
Other		—		0.1		0.1		0.4

Total	$	1.2	$	1.1	$	2.6	$	2.6


			Fair Value Measurements at Reporting Date Using
	As of January 1, 2015		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)	$	2.5	$	2.5	$	—	$	—
Short-term marketable securities(2)		21.7		9.5		12.2		—
Long-term marketable securities(2)		45.5		41.5		4.0		—

Total assets	$	69.7	$	53.5	$	16.2	$	—


	Three Months Ended September 25, 2014
	Advertising		Fathom Events *(1)*		Network, Administrative and Unallocated Costs			Consolidated
Revenue	$	100.8	$	—	$	—		$	100.8
Operating costs		23.5		—		4.4			27.9
Selling and marketing costs		14.4		—		0.3			14.7
Administrative and other costs		0.6		—		8.3			8.9
Depreciation and amortization		—		—		8.6			8.6
Interest and other non-operating costs		—		—		19.2			19.2

Income (loss) before income taxes	$	62.3	$	—	$	(40.8	)	$	21.5


	Three Months Ended September 26, 2013
	Advertising		Fathom Events *(1)*		Network, Administrative and Unallocated Costs			Consolidated
Revenue	$	127.6	$	7.5	$	—		$	135.1
Operating costs		26.6		5.4		5.1			37.1
Selling and marketing costs		14.0		0.8		0.8			15.6
Administrative and other costs		0.7		0.2		6.9			7.8
Depreciation and amortization		—		—		7.2			7.2
Interest and other non-operating costs		—		—		18.7			18.7

Income (loss) before income taxes	$	86.3	$	1.1	$	(38.7	)	$	48.7


	Nine Months Ended September 25, 2014
	Advertising		Fathom Events *(1)*		Network, Administrative and Unallocated Costs			Consolidated
Revenue	$	270.9	$	—	$	—		$	270.9
Operating costs		70.4		—		13.4			83.8
Selling and marketing costs		42.0		—		1.8			43.8
Administrative and other costs		2.1		—		23.2			25.3
Depreciation and amortization		—		—		24.2			24.2
Interest and other non-operating costs		—		—		56.9			56.9

Income (loss) before income taxes	$	156.4	$	—	$	(119.5	)	$	36.9


	Nine Months Ended September 26, 2013
	Advertising		Fathom Events *(1)*		Network, Administrative and Unallocated Costs			Consolidated
Revenue	$	318.2	$	21.9	$	—		$	340.1
Operating costs		74.1		15.4		15.2			104.7
Selling and marketing costs		42.1		2.6		2.0			46.7
Administrative and other costs		1.7		0.6		20.6			22.9
Depreciation and amortization		—		—		18.8			18.8
Interest and other non-operating costs		—		—		57.8			57.8

Income (loss) before income taxes	$	200.3	$	3.3	$	(114.4	)	$	89.2


Period	(a) Total Number of Shares Purchased		(b) Average Price Paid Per Share		(c) Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs		(d) Maximum Number (or Approximate Dollar Value) of Shares that may yet be Purchased under the Plans or Programs
January 2, 2015 through January 29, 2015		77,535	$	14.89		—		N/A
January 30, 2015 through February 26, 2015		—		N/A		—		N/A
February 27, 2015 through April 2, 2015		176	$	15.24		—		N/A


Exhibit	Reference	Description

10.1	*	Employment Agreement dated as of May 8, 2015, by and among National CineMedia, Inc., National CineMedia, LLC and Clifford E. Marks. +

31.1	*	Rule 13a-14(a) Certification of Chief Executive Officer.

31.2	*	Rule 13a-14(a) Certification of Principal Financial Officer.

32.1	**	Certification of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350.

32.2	**	Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350.

101.INS	*	XBRL Instance Document

101.SCH	*	XBRL Taxonomy Extension Schema Document

101.CAL	*	XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF	*	XBRL Taxonomy Extension Definition Linkbase Document

101.LAB	*	XBRL Taxonomy Extension Label Linkbase Document

101.PRE	*	XBRL Taxonomy Extension Presentation Linkbase Document


	Date:	~~November 4, 2014~~ May 12, 2015		/s/ Kurt C. Hall
			Kurt C. Hall
			President and Chief Executive Officer
			(Principal Executive Officer)

Date: May 12, 2015
	~~Date:~~	~~November 4, 2014~~	/s/ David J. Oddo
			David J. Oddo
			Senior Vice President, Finance and InterimCo-Chief Financial Officer (Principal Financial Officer)

Date: May 12, 2015
	~~Date:~~	~~November 4, 2014~~	/s/ Jeffrey T. Cabot
			Jeffrey T. Cabot
			Senior Vice President, Controller and InterimCo-Chief Financial Officer (Principal Accounting Officer)

Large accelerated filer

Accelerated filer

Non-accelerated filer

¨ (Do not check if a smaller reporting company)

Smaller reporting company