National CineMedia (NCMI) risk factors, FY2025 10-K

Risks Related to Our Business and Industry

1. 01Significant declines in theater attendance could reduce the attractiveness of cinema advertising and could reduce our revenue88% rewritten
2. 02NCM LLC’s network theater circuits also may not successfully compete for licenses to exhibit quality films and are not assured a consistent supply of motion pictures
3. 03Changes in theater patron behavior could result in declines in the viewership of The Noovie® Show which could reduce the attractiveness of cinema advertising and our revenues
4. 04changes in theater patron amenities, including bars and entertainment within exhibitor lobbies causing increased dwell time of patrons
5. 05Changes in the ESAs with, or lack of support by, the ESA Parties could adversely affect our revenue, growth and profitability56% rewritten
6. 06If the non-competition provisions of the ESAs or other advertising agreements are deemed unenforceable, the counterparties could compete against us and our business could be adversely affected
7. 07is contrary to the public interest
8. 08The ESA with an ESA Party that has declared bankruptcy may be rejected, renegotiated or deemed unenforceable
9. 09Pandemics, epidemics or disease outbreaks, such as the COVID-19 virus, have disrupted and could materially affect our business and the business of NCM LLC’s network theaters in the future51% rewritten
10. 10We may not realize the anticipated benefits of additional Post-Showtime inventory or be successful in increasing the number of theaters in which NCM LLC has the right to display Post-Showtime inventory45% rewritten
11. 11the increased fees payable in connection with the Post-Showtime Inventory with certain counterparties may exceed the increase, if any, in revenue resulting from the access to the Post-Showtime inventoryNew
12. 12Our business relies heavily on technology systems, and any failures, disruptions or cyberattacks may materially and adversely affect our operations
13. 13Our plans for developing additional digital or digital out-of-home revenue opportunities may not be implemented and may not be achieved
14. 14The 2025 Credit Facility contains restrictions and may not provide sufficient capital resources and flexibility for the Company in the future
15. 15The personal information we collect and maintain through our data and digital services, as well as from third-party sources, may expose us to liability or cause us to incur greater operating expenses
16. 16Changes in laws, regulations or rules relating to privacy, data security, the Internet or other areas of our data and digital services may result in the need to alter our business practices or incur greater operating expenses
17. 17The markets for advertising are competitive and we may be unable to compete successfully
18. 18If we do not continue to upgrade our technology, our business could fail to grow and revenue and operating margins could decline
19. 19Economic uncertainty or deterioration in economic conditions may adversely impact our business, operating results or financial condition
20. 20We are subject to risks from changes to regulations, government funding, trade policies and tariffs imposed by governments that impact our advertising clients70% rewritten
21. 21Our contracts for theater advertising allow certain counterparties to engage in activities that might compete with certain elements of our business, which could reduce our revenue and growth potential29% rewritten
22. 22We depend upon our senior management and our business may be adversely affected if we cannot retain or replace them22% rewritten
23. 23Our use of AI in our offerings may not result in the expected benefitsNew
24. 24The ESA Parties and our network affiliates are subject to substantial government regulation, which could limit their current business, slow their future growth of locations and screens and in turn impact our business and slow our growth prospects
25. 25We may be unable to realize the expected benefits and synergies of any acquisitions or investmentsNew
26. 26We may be unable to effectively manage changes to our business strategy to continue the growth of our advertising inventory and network
27. 27Our revenue and Adjusted OIBDA fluctuate from quarter to quarter and may be unpredictable, which could increase the volatility of our stock price
28. 28In some instances, we may not be able to or may choose not to protect, maintain or defend our intellectual property rights or the laws of certain foreign countries may not protect our intellectual property rights to the same extent as do the laws of the U.S

Risks Related to Our Corporate Structure

1. 29We are a holding company with no operations of our own, and we depend on distributions and payments under the NCM LLC operating and management services agreements from NCM LLC to meet our ongoing obligations
2. 30Pursuant to the management services agreement between us and NCM LLC, NCM LLC makes payments to us to fund our day-to-day operating expenses, such as payroll. However, if NCM LLC has insufficient cash flow to make the payments pursuant to the management services agreement, we may be unable to cover these expenses
3. 31The Company’s actual financial results following NCM LLC’s emergence from bankruptcy may not be comparable to the Company’s historical financial information or to NCM LLC’s projections filed with the Bankruptcy Court61% rewritten
4. 32NCM LLC’s other equityholders or their affiliates, as well as our largest stockholders, may have interests that differ from those of our public stockholders and they may be able to influence our affairs
5. 33The original agreements between us and the ESA Parties were made in the context of an affiliated relationship and may contain different terms than comparable agreements with unaffiliated third parties
6. 34Our certificate of incorporation and bylaws contain anti-takeover protections that may discourage or prevent strategic transactions, including a takeover of our Company, even if such a transaction would be beneficial to our stockholders
7. 35do not permit cumulative voting in the election of directors, which would otherwise allow less than a majority of stockholders to elect director candidates
8. 36Any future issuance of membership units by NCM LLC and subsequent redemption of such units for common stock could dilute the voting power of our existing common stockholders and adversely affect the market value of our common stock46% rewritten
9. 37Our future issuance of preferred stock could dilute the voting power of our common stockholders and adversely affect the market value of our common stock
10. 38If we are determined to be an investment company, we would become subject to burdensome regulatory requirements and our business activities could be restricted
11. 39Our TRA with Cinemark is expected to reduce the amount of overall cash flow that would otherwise be available to us and will increase our potential exposure to the financial condition of Cinemark24% rewritten
12. 40The substantial number of shares that are eligible for sale could cause the market price for our common stock to decline or make it difficult for us to sell equity securities in the future