National CineMedia, Inc. · NASDAQ:NCMI
National CineMedia — ICR XChange 2008
20 slides from National CineMedia's conference presentation, January 2008
Slide 1: ICR XChange
eee AD vxationat = cinemedia y ICR XChange
Slide 2: Forward-Looking Statements
Forw ard-Looking Statements The following information contains, or may be deemed to contain, “forward-looking statements.” By their nature, forward-looking statements involve risks, assumptions and uncertainties because they relate to events and depend on circumstances that may or may not occur in t
Slide 3: NCM Overview - Kurt Hall, Chairman & CEO
eee NCM Overview Kurt Hall Chairman & CEO
Slide 4: What We Sell
What We Sell Onscreen: Lobby • Ad Spots Promotions • Content Segments • Vignettes • Show Integration Fathom Events Box Office Handout CineMeetings & Events LEN Concessions & Exit Sampling 4
Slide 5: Attractive Advertising Segment
Attractive Advertising Segment 2006 total U.S. advertising spending: $257 billion Cinema is only 0.2% of total U.S. Cinema Advertising Market Advantages of Cinema Advertising ($ in millions) ’06-’10 CAGR: 11% $ 910 • Attractive demographics $ 843 $ 757 • Large digitally $ 672 ’96-’06 CAGR: 16% $ 591
Slide 6: FirstLook – Innovative, Branded Digital Pre-Feature Content
FirstLook – Innovative, Branded Digital Pre-Feature Content Local / Regional Advertising All National Advertising 14 Local/Regional 15-Second Units 11 National 30-Second Units Pricing of advertising inventory increases closer to showtime as audience size builds 6
Slide 7: Significant Geographic Reach
Significant Geographic Reach • 16,500+ screens(1) • over 700 million patrons/year(1) • Reaching over 90% digitally NCM Projected Admissions Share of DMA Jan, 1 2008 June 1, 2008 Top 10 DMAs 56% 70% Top 50 DMAs 55% 63% (1) Assumes full year of Loews (2) Current Network has 14,407 screens as of Septem
Slide 8: Loews Joins NCM Network on 6/1/08
Loew s Joins NCM Netw ork on 6/ 1/ 08 • There will be a run-out period from 6/1/08 to 11/30/08 for over 90% of Loews. AMC continues equity payments for approximately 6% to 7% of Loews attendance. • NCM controls 7 minutes closest to film start time during run-out (including Coke). • NCM can start sel
Slide 9: National Advertising Growth
National Advertising Grow th Increased utilization will provide a more favorable supply- demand dynamic driving CPM growth over time Inc rease Adopt ion NCM focuses on broadening client base • Increased client base to approx. 34 clients above $1M Drive utilization increases through Ex p a n d U t i
Slide 10: Customer Diversification & Expansion
Customer Diversification & Expansion Top Clients and Categories Confectionary Military Video Games Apparel Cable TV 2003 Import Auto Movie Studios Telecomm Cable TV Broadcast TV 2007 10
Slide 11: Local & Regional Advertising Growth
Local & Regional Advertising Grow th St r o n g Sa l e s f o r c e + Target ed Mark et ing + B e t t e r M a r k e t Co v e r a g e + St r o n g Fi l m Sl a t e + A t t r a c t i v e Si g h t & So u n d Pr i c e p o i n t = H i g h e r Se l l -T h r u 11
Slide 12: Expanding Advertising Reach
Expanding Advertising Reach Out-of-Home Networks Internet • Leverage existing technology and sales infrastructure • Expand digital advertising impressions • Provide unique bundles and cross-selling opportunities Provides Additional Growth Engine 12
Slide 13: IdeaCast Investment
IdeaCast Investment Operates advertising network in nearly 1,000 health clubs with more than 200 million club visits per year • Ad reinsertion agreement with CNN, CNBC, MSNBC and ESPN • Out-of-home digital network incubator for NCM • Operates as a separate entity so NCM can focus on theatre network
Slide 14: Gary Ferrera, Chief Financial Officer
Gary Ferrera Chief Financial Officer
Slide 15: Ownership and Corporate Structure
Ow nership and Corporate Structure American Multi- Cinemark Holdings, Regal CineMedia National CineMedia, Inc. Cinema, Inc. Inc. (Cinemark; Holdings, LLC (NCM Inc; NASDAQ; (AMC)1 NYSE: CNK) (Regal; NYSE: RGC) NCMI) 18.6% 14.0% 22.6% 44.8% National CineMedia, LLC (NCM LLC) 1 No dilution from Loews jo
Slide 16: Strong Advertising Revenue Growth
Strong Advertising Revenue Grow th Advertising Revenue / Contract Value (1) ($ in millions) % R: 28 28 % G $245.1 CA $223.9 -2 0 06 $203.7 2 20 0 $175.4 $155.6 $135.1 $90.7 2002 2003 2004 2005 2006 YTD YTD 3Q06 3Q07 (1) Advertising contract value defined as total amount of advertising revenue plus l
Slide 17: Seasonality Overview
Seasonality Overview (1) Total Revenue Adjusted EBITDA (percent) 31.8 32.0 32.5 29.2 (percent) 30.3 26.5 25.1 26.8 27.1 28.1 27.1 26.4 18.6 14.9 14.5 9.1 06 07 06 07 06 07 06 07 06 07 06 07 06 07 06 07 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Utilization CPM Growth (percent) 100.2 (percent) 93.1 6.8 83.9 82.5 81.6 6
Slide 18: Financial Model
Financial Model Source(1) Revenues EBITDA Margins National • Drivers: Utilization, CPM, Attendance • Incremental margin: Advertising • CPM range of $28 to $48 >90% (63%) • Long-term CPM growth as sell-thru increases • 6 content partners with 2-yr contracts Local/Regional • Drivers: Utilization, Rate
Slide 19: NCM LLC Capitalization and Cash Flow
NCM LLC Capitalization and Cash Flow ($ in millions) Sept. 27, 2007 December 31, 2006 Actual Pro Forma Cash & Cash Equivalents $23 $7 $80m Revolver 43 $10 (2) Term Loan B 725 725 Total Senior Secured Debt $768 $735 PF Adjusted EBITDA (1) $184 $149 Net Debt / PF Adjusted EBITDA (1) 4.0x 4.9x Strong C
Slide 20: Questions?
Questions? Superior Long-term High Growth Advertising Exhibitor Advertising Platform Commitments Segment Proprietary, Scalable Digital New Business Attractive Distribution Opportunities Financial Technology Characteristics 20