National CineMedia, Inc. Reports Results For Fiscal Fourth Quarter And Full Year 2012

Conference Call

The Company will host a conference call and audio webcast with investors, analysts and other interested parties February 21, 2013 at 5:00 P.M. Eastern time. The live call can be accessed by dialing 1-877-407-9039 or for international participants 1-201-689-8470. Participants should register at least 15 minutes prior to the commencement of the call. Additionally, a live audio webcast will be available to interested parties at www.ncm.com under the Investor Relations section. Participants should allow at least 15 minutes prior to the commencement of the call to register, download and install necessary audio software.

The replay of the conference call will be available until midnight Eastern Time, March 7, 2013, by dialing 1-877-870-5176 or for international participants 1-858-384-5517, and entering conference ID 408030.

About National CineMedia, Inc.

NCM operates NCM Media Networks, a leading integrated media company reaching U.S. consumers in movie theaters, online and through mobile technology. The NCM Cinema Network and NCM Fathom present cinema advertising and events across the nation’s largest digital in-theater network, comprised of theaters owned by AMC Entertainment Inc., Cinemark Holdings, Inc. (NYSE: CNK), Regal Entertainment Group (NYSE: RGC) and other leading regional theater circuits. NCM’s theater advertising network covers 183 Designated Market Areas ^® (49 of the top 50) and includes over 19,300 screens (approximately 18,500 digital). During 2012, approximately 710 million patrons (on an annualized basis) attended movies shown in theaters in which NCM currently has exclusive cinema advertising agreements in place. The NCM Fathom Events live digital broadcast network (“DBN”) is comprised of over 740 locations in 172 Designated Market Areas ^® (including all of the top 50). The NCM Interactive Network offers 360-degree integrated marketing opportunities in combination with cinema, encompassing 41 entertainment-related websites, online widgets and mobile applications. National CineMedia, Inc. (NASDAQ: NCMI) owns a 48.6% interest in and is the managing member of National CineMedia LLC. For more information, visit www.ncm.com. (NCMI-F)

Forward Looking Statements

This press release contains various forward-looking statements that reflect management’s current expectations or beliefs regarding future events, including statements regarding guidance and the dividend policy. Investors are cautioned that reliance on these forward-looking statements involves risks and uncertainties. Although the Company believes that the assumptions used in the forward looking statements are reasonable, any of these assumptions could prove to be inaccurate and, as a result, actual results could differ materially from those expressed or implied in the forward looking statements. The factors that could cause actual results to differ materially from those expressed or implied in the forward-looking statements are, among others, 1) the level of expenditures on cinema advertising; 2) increased competition for advertising expenditures; 3) technological changes and innovations; 4) popularity of major motion picture releases and level of theatre attendance; 5) shifts in population and other demographics that affect theatre attendance; 6) our ability to renew or replace expiring advertising and content contracts; 7) our need for additional funding, risks and uncertainties relating to our significant indebtedness; 8) fluctuations in operating costs; 9) changes in interest rates, and 10) changes in accounting principles. In addition, the outlook provided does not include the impact of any future unusual or infrequent transactions; unidentified restructuring charges; sales and acquisitions of operating assets and investments; any future noncash impairments of goodwill, intangible and fixed assets; amounts related to securities litigation; or the related impact of taxes that may occur from time to time due to management decisions and changing business circumstances. The Company is currently unable to forecast precisely the timing and/or magnitude of any such amounts or events. Please refer to the Company's Securities and Exchange Commission filings for further information about these and other risks.

NATIONAL CINEMEDIA, INC.
Condensed Consolidated Statements of Income
Unaudited
($ in millions, except per share data)
		Quarter Ended				Quarter Ended				Year Ended				Year Ended
		December 27,				December 29,				December 27,				December 29,
		2012				2011				2012				2011
REVENUE:
Advertising (including revenue from founding members of $9.9, $8.6, $39.9 and $38.2 million respectively)		$	103.9			$	101.3			$	409.5			$	386.2
Fathom Events			12.0				13.3				39.3				49.2
Total			115.9				114.6				448.8				435.4
OPERATING EXPENSES:
Advertising operating costs			7.6				6.8				31.3				24.6
Fathom Events operating costs			9.0				9.4				29.0				34.1
Network costs			4.5				4.3				19.8				18.6
Theatre access fees—founding members			16.2				13.3				64.5				55.4
Selling and marketing costs			14.8				14.7				60.5				59.8
Administrative and other costs			6.9				6.8				31.5				30.4
Depreciation and amortization			5.5				4.8				20.4				18.8
Total			64.5				60.1				257.0				241.7
OPERATING INCOME			51.4				54.5				191.8				193.7
NON-OPERATING EXPENSES:
Interest on borrowings			14.0				13.9				56.7				49.2
Interest income			(0.1	)			(0.1	)			(0.4	)			(0.3	)
Accretion of interest on the discounted income taxes payable to founding members under tax sharing agreement			(1.1	)			4.2				10.0				15.1
Change in derivative fair value			0.8				(1.4	)			1.0				1.3
Impairment on investment			−				6.7				−				6.7
Loss on swap terminations			−				−				26.7				−
Other non-operating			3.4				0.2				5.8				1.7
Total			17.0				23.5				99.8				73.7
INCOME BEFORE INCOME TAXES			34.4				31.0				92.0				120.0
Income tax expense			17.9				6.2				26.7				19.4
CONSOLIDATED NET INCOME			16.5				24.8				65.3				100.6
Less: Net Income Attributable to Noncontrolling Interests			17.0				18.1				51.9				69.1
NET INCOME/(LOSS) ATTRIBUTABLE TO NCM, INC.		$	(0.5	)		$	6.7			$	13.4			$	31.5
EARNINGS/(LOSS) PER SHARE:
Basic		$	(0.01	)		$	0.12			$	0.25			$	0.58
Diluted		$	(0.01	)		$	0.12			$	0.24			$	0.58

NATIONAL CINEMEDIA, INC.
Selected Balance Sheet Data
Unaudited ($ in millions)
		December 27, 2012				December 29, 2011
Cash and cash equivalents		$	72.4			$	65.9
Short and long-term marketable securities			34.2				32.2
Receivables, net			98.5				98.6
Property and equipment, net			25.7				24.6
Total Assets			810.5				820.2
Long-term borrowings			879.0				794.0
Total equity/(deficit)			(356.4	)			(346.8	)
Total Liabilities and Equity/(Deficit)			810.5				820.2

NATIONAL CINEMEDIA, INC.
Operating Data
Unaudited
		Quarter and			Quarter and
		Year			Year
		Ended			Ended
		December 27,			December 29,
		2012			2011
Total Screens at Period End (1) (6)			19,359			18,670
Founding Member Screens at Period End (2) (6)			15,528			15,265
Total Digital Screens at Period End (3) (6)			18,491			17,698
		Quarter			Quarter			Year			Year
		Ended			Ended			Ended			Ended
		December 27,			December 29,			December 27,			December 29,
		2012			2011			2012			2011
Total Attendance for Period (4) (6) (in millions)			171.2			147.7			690.4			636.8
Founding Member Attendance for Period (5) (6) (in millions)			142.9			125.7			577.3			553.1
Capital Expenditures (in millions)		$	2.6		$	4.1		$	10.4		$	13.7

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

(2) Represents the sum of founding member screens.

(3) Represents the total number of screens that are connected to the digital content network.

(4) Represents the total attendance within NCM LLC’s advertising network.

(5) Represents the total attendance within NCM LLC’s advertising network in theatres operated by the founding members.

(6) Excludes Consolidated Theatres for all periods presented prior to June 2011.

NATIONAL CINEMEDIA, INC.
Operating Data
Unaudited
(In millions, except advertising revenue per attendee and per share data)
		Quarter				Quarter				Year				Year
		Ended				Ended				Ended				Ended
		December 27,				December 29,				December 27,				December 29,
		2012				2011				2012				2011
Advertising Revenue		$	103.9			$	101.3			$	409.5			$	386.2
Total Revenue			115.9				114.6				448.8				435.4
Operating Income			51.4				54.5				191.8				193.7
Total Attendance (1)			171.2				147.7				690.4				636.8
Advertising Revenue / Attendee		$	0.607			$	0.686			$	0.593			$	0.606
OIBDA		$	56.9			$	59.3			$	212.2			$	212.5
Adjusted OIBDA			58.3				63.0				221.2				224.3
Adjusted OIBDA Margin			50.3	%			55.0	%			49.3	%			51.5	%
Earnings/(Loss) Per Share – Basic		$	(0.01	)		$	0.12			$	0.25			$	0.58
Earnings/(Loss) Per Share – Diluted		$	(0.01	)		$	0.12			$	0.24			$	0.58

(1) Represents the total attendance within NCM LLC’s advertising network. Excludes Consolidated Theatres attendance for all periods presented prior to June 2011.

(See attached tables for the non-GAAP reconciliation)

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