National CineMedia, Inc. Reports Results for Fiscal Fourth Quarter and Full Year 2012

  National CineMedia, Inc. Reports Results for Fiscal Fourth Quarter and Full
  Year 2012

                          ~ Provides 2013 Outlook ~

                    ~ Announces Quarterly Cash Dividend ~

Business Wire

CENTENNIAL, Colo. -- February 21, 2013

National CineMedia, Inc. (NASDAQ: NCMI) (the Company), the managing member and
owner of 48.6% of National CineMedia, LLC (NCM LLC), the operator of the
largest in-theatre digital media network in North America, today announced
consolidated results for the fiscal fourth quarter and fiscal year ended
December 27, 2012.

Total revenue for the fourth quarter of 2012 increased 1.1% to $115.9 million
from $114.6 million for the comparable quarter last year. Advertising revenue
for the fourth quarter of 2012 was $103.9 million, an increase of 2.6%
compared to $101.3 million for the comparable quarter last year. Fathom Events
revenue decreased 9.8% to $12.0 million for the fourth quarter of 2012
compared to $13.3 million for the comparable quarter last year. Net loss for
the fourth quarter of 2012 was $0.5 million, or $0.01 per diluted share
compared to net income of $6.7 million or $0.12 per diluted share for the
fourth quarter of 2011. Net loss for the fourth quarter of 2012 and net income
for the fourth quarter of 2011 includes non-cash and other items. Excluding
these items for both years net income would have been $8.6 million or $0.16
per diluted share for the fourth quarter of 2012 compared to net income of
$9.7 million or $0.18 per diluted share for the fourth quarter of 2011.
Adjusted OIBDA decreased 7.5% to $58.3 million for the fourth quarter of 2012
from $63.0 million for the comparable quarter last year.

For the year ended December 27, 2012, total revenue grew 3.1% to $448.8
million compared to $435.4 million for the 2011 period. Advertising revenue
for the year ended December 27, 2012 was $409.5 million, an increase of 6.0%
compared to $386.2 million for the 2011 period. Fathom Events revenue
decreased 20.1% to $39.3 million for the year ended December 27, 2012 compared
to $49.2 million for the 2011 period. Net income for the year ended December
27, 2012 was $13.4 million, or $0.24 per diluted share, compared to net income
of $31.5 million for year ended December 29, 2011, or $0.58 per diluted share.
Net income for the years ended December 27, 2012 and December 29, 2011
includes non-cash and other items. Excluding these items for both years net
income would have been $31.8 million or $0.58 per diluted share for the year
ended December 27, 2012 compared to net income of $35.7 million or $0.65 per
diluted share for the year ended December 29, 2011. For the year ended
December 27, 2012, Adjusted OIBDA decreased 1.4% to $221.2 million versus
$224.3 million for the 2011 period.

The Company announced today that its Board of Directors has authorized the
Company’s fourth quarter cash dividend of $0.22 per share of common stock. The
dividend will be paid on March 21, 2013, to stockholders of record on March 7,
2013. The Company intends to pay a regular quarterly dividend for the
foreseeable future at the discretion of the Board of Directors dependent on
available cash, anticipated cash needs, overall financial condition, future
prospects for earnings and cash flows as well as other relevant factors.

"We continued to make great progress on our strategy to broaden our client
base and expand our digital network as our national advertisingrevenue grew
7.9% (excluding beverage) and our local advertising business finished the year
strong with fourth quarter revenue growth of 19% versus 2011. This revenue
growth could have been even stronger had the economy not sputtered during Q4,
including the impact of Sandy,"said Kurt Hall, National CineMedia’s Chairman
and CEO. Mr. Hall concluded, “While contractual increases in our theatre
access fees negatively impacted our 2012 Adjusted OIBDA growth, with those
fees stabilizingduring the next few yearsand our upfront strategy
progressing we are well positioned forAdjusted OIBDA growth over the next few
years."

2013 Outlook

For the first quarter of 2013, the Company expects total revenue in the range
of $79.0 million to $84.0 million, or approximately flat to up 6% compared to
total revenue for the first quarter of 2012 of $79.1 million and Adjusted
OIBDA in the range of $24.0 million to $28.0 million, or a decline of 3% to an
increase of 13% compared to Adjusted OIBDA for the first quarter of 2012 of
$24.8 million.

For the full year 2013, the Company expects total revenue in the range of
$455.0 million to $465.0 million, or an increase of 1% to 4% compared to total
revenue for the full year of 2012 of $448.8 million, and Adjusted OIBDA in the
range of $225.0 million to $235.0 million, or an increase of 2% to 6% compared
to Adjusted OIBDA for the full year of 2012 of $221.2 million.

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       Year Ended   Year Ended
                                      Ended
                      December 27,    December 29,   December      December
                                                     27,           29,
                      2012           2011          2012         2011
REVENUE:
Advertising
(including revenue
from founding
members of $9.9,      $   103.9       $  101.3       $  409.5      $  386.2
$8.6, $39.9 and
$38.2 million
respectively)
Fathom Events            12.0        13.3        39.3       49.2   
Total                    115.9       114.6       448.8      435.4  
                                                                   
OPERATING EXPENSES:
Advertising               7.6            6.8            31.3          24.6
operating costs
Fathom Events             9.0            9.4            29.0          34.1
operating costs
Network costs             4.5            4.3            19.8          18.6
Theatre access
fees—founding             16.2           13.3           64.5          55.4
members
Selling and               14.8           14.7           60.5          59.8
marketing costs
Administrative and        6.9            6.8            31.5          30.4
other costs
Depreciation and         5.5         4.8         20.4       18.8   
amortization
Total                    64.5        60.1        257.0      241.7  
                                                                   
OPERATING INCOME         51.4        54.5        191.8      193.7  
                                                                   
NON-OPERATING
EXPENSES:
Interest on               14.0           13.9           56.7          49.2
borrowings
Interest income           (0.1   )       (0.1   )       (0.4   )      (0.3   )
                                                                   
                                                                   
Accretion of
interest on the
discounted income
taxes payable to          (1.1   )       4.2            10.0          15.1
founding members
under tax sharing
agreement
Change in
derivative fair           0.8            (1.4   )       1.0           1.3
value
Impairment on             −              6.7            −             6.7
investment
Loss on swap              −              −              26.7          −
terminations
Other non-operating      3.4         0.2         5.8        1.7    
Total                    17.0        23.5        99.8       73.7   
                                                                   
INCOME BEFORE            34.4        31.0        92.0       120.0  
INCOME TAXES
                                                                   
Income tax expense       17.9        6.2         26.7       19.4   
                                                                   
CONSOLIDATED NET          16.5           24.8           65.3          100.6
INCOME
Less: Net Income
Attributable to          17.0        18.1        51.9       69.1   
Noncontrolling
Interests
NET INCOME/(LOSS)
ATTRIBUTABLE TO       $   (0.5   )   $  6.7       $  13.4     $  31.5   
NCM, INC.
                                                                   
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                34.2                32.2
securities
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      December
                       27,           29,
                       2012         2011
                                                                  
Total Screens at           19,359        18,670
Period End (1) (6)
                                                                  
Founding Member
Screens at Period          15,528        15,265
End (2) (6)
                                                                  
Total Digital
Screens at Period          18,491        17,698
End (3) (6)
                                                                  
                       Quarter       Quarter       Year           Year
                       Ended         Ended         Ended          Ended
                       December      December      December 27,   December 29,
                       27,           29,
                       2012         2011         2012          2011
                                                                  
Total Attendance for
Period (4) (6)             171.2         147.7          690.4          636.8

(in millions)
                                                                  
Founding Member
Attendance for
Period (5) (6)             142.9         125.7          577.3          553.1

(in millions)
                                                                  
Capital Expenditures   $   2.6       $   4.1       $    10.4      $    13.7
(in millions)
                                                                  

(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          $  103.9       $  101.3       $  409.5       $  386.2
Revenue
Total Revenue           115.9          114.6          448.8          435.4
Operating Income        51.4           54.5           191.8          193.7
                                                                  
Total Attendance        171.2          147.7          690.4          636.8
(1)
Advertising          $  0.607       $  0.686       $  0.593       $  0.606
Revenue / Attendee
                                                                  
OIBDA                $  56.9        $  59.3        $  212.2       $  212.5
Adjusted OIBDA          58.3           63.0           221.2          224.3
Adjusted OIBDA          50.3   %       55.0   %       49.3   %       51.5   %
Margin
                                                                  
Earnings/(Loss)      $  (0.01  )    $  0.12        $  0.25        $  0.58
Per Share – Basic
Earnings/(Loss)
Per Share –          $  (0.01  )    $  0.12        $  0.24        $  0.58
Diluted
                                                                            

(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)

                           NATIONAL CINEMEDIA, INC.
                           Non-GAAP Reconciliations
                                  Unaudited

OIBDA, Adjusted OIBDA and Adjusted OIBDA Margin

Operating Income before Depreciation and Amortization (OIBDA), Adjusted OIBDA
and Adjusted OIBDA margin are not financial measures calculated in accordance
with generally accepted accounting principles (GAAP) in the United States.
OIBDA represents operating income (loss) before depreciation and amortization
expense. Adjusted OIBDA excludes from OIBDA non-cash share based payment costs
and deferred stock compensation. 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 and non-cash share based compensation programs, or different 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 and deferred stock compensation. 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 operating 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.

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

                                                             
                     Quarter        Quarter        Year           Year
                     Ended          Ended          Ended          Ended
                     December 27,   December 29,   December 27,   December 29,
                     2012          2011          2012          2011
Operating income     $  51.4        $  54.5        $  191.8       $  193.7
Depreciation and       5.5         4.8         20.4        18.8   
amortization
OIBDA                   56.9           59.3           212.2          212.5
Share-based
compensation costs     1.4         3.7         9.0         11.8   
(1)
Adjusted OIBDA       $  58.3      $  63.0      $  221.2     $  224.3  
Total Revenue        $  115.9     $  114.6     $  448.8     $  435.4  
Adjusted OIBDA         50.3   %     55.0   %     49.3   %     51.5   %
margin
                                                                  
Adjusted OIBDA       $  58.3        $  63.0        $  221.2       $  224.3
Consolidated           −           −           −           0.7    
Theatres Payments
Adjusted OIBDA
after Consolidated   $  58.3      $  63.0      $  221.2     $  225.0  
Theatres Payments
                                                                            

(1) Share-based payment costs are included in network operations, selling and
marketing and administrative expense in the accompanying financial statements.



Outlook (in millions)
                                                    
                                     Quarter Ending    Year Ending
                                     March 28, 2013   December 26, 2013
                                     Low     High    Low      High
Operating Income                     $ 17.0  $ 19.5   $ 193.5  $ 201.5
Depreciation and amortization         5.0    6.0    22.5    23.5
OIBDA                                  22.0     25.2     216.0     225.0
Share-based compensation costs (1)    2.0    2.5    9.0     10.0
Adjusted OIBDA                       $ 24.0  $ 28.0  $ 225.0  $ 235.0
Total Revenue                        $ 79.0  $ 84.0  $ 455.0  $ 465.0
                                                                 

(1) Share-based payment costs are included in network operations, selling and
marketing and administrative expense in the accompanying financial statements.


Net Income and Earnings per Share Excluding Non-Cash and Other Items

Net income and earnings per share excluding non-cash and other items are not
financial measures calculated in accordance with generally accepted accounting
principles (GAAP) in the United States. Net income and earnings per share
excluding non-cash and other items are calculated using reported net income
and earnings per share and the non-cash and other items shown in the below
table. These non-GAAP financial measures are used by management as an
additional tool to evaluate operating performance. 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 a method used by the
Company’s management and helps improve their ability to understand the
Company’s operating performance. Net income excluding non-cash and other items
should not be regarded as an alternative to net income and should not be
regarded as an alternative to earnings per share 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 net income and earnings per share are the most directly comparable GAAP
financial measures. Because not all companies use identical calculations,
these presentations may not be comparable to other similarly titled measures
of other companies.

The following table reconciles net income and earnings per share as reported
to net income and earnings per share excluding non-cash and other items for
the periods presented (dollars in millions):

                                                               
                 Quarter Ended    Quarter Ended    Year Ended       Year Ended
                 December 27,     December 29,     December 27,     December 29,
                 2012             2011             2012             2011
Net income
(loss) as        $ (0.5       )   $ 6.7            $ 13.4           $ 31.5
reported
                                                                    
Non-cash and
other items
Loss on swap       -                -                26.7             -
terminations
Write-off of
debt issuance
costs and          3.4              0.3              5.8              1.7
other
non-operating
Impairment on      -                6.7              -                6.7
investment
Correction of
accretion of       (5.1       )     -                (4.3       )     -
interest
Change in
derivative         0.8              (1.4       )     1.0              1.3
fair value
Effect of
noncontrolling
interest           (2.2       )     (2.9       )     (17.2      )     (5.0       )
(51.4% in 2012
and 51.3% in
2011)
Effect of
provision for
income taxes       1.2              (1.0       )     (4.6       )     (1.8       )
(38% effective
rate)
Tax               11.0          1.3           11.0          1.3        
adjustments
Total non-cash
and other          9.1              3.0              18.4             4.2
items
                                                              
Net income
excluding        $ 8.6          $ 9.7          $ 31.8         $ 35.7       
non-cash and
other items
                                                                    
Weighted
Average Shares
Outstanding as
reported
Basic              54,473,708       53,928,778       54,377,135       53,864,243
Diluted            55,202,174       54,781,116       55,026,771       54,634,697
                                                                    
Weighted
Average Shares
Outstanding as
adjusted
Basic              54,473,708       53,928,778       54,377,135       53,864,243
Diluted            55,202,174       54,781,116       55,026,771       54,634,697
                                                                    
Basic earnings
(loss) per       $ (0.01      )   $ 0.12           $ 0.25           $ 0.58
share as
reported
Net effect of
non-cash and      0.17          0.06          0.34          0.08       
other items
Basic earnings
per share
excluding        $ 0.16         $ 0.18         $ 0.59         $ 0.66       
non-cash and
other items
                                                                    
Diluted
earnings
(loss) per       $ (0.01      )   $ 0.12           $ 0.24           $ 0.58
share as
reported
Net effect of
non-cash and      0.17          0.06          0.34          0.07       
other items
Diluted
earnings per
share            $ 0.16         $ 0.18         $ 0.58         $ 0.65       
excluding
non-cash and
other items
                                                                                 

Contact:

National CineMedia, Inc.
Investors:
David Oddo, 800-844-0935
investors@ncm.com
or
Media:
Amy Jane Finnerty, 212-931-8177
amy.finnerty@ncm.com
 
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