Related Party Transactions (Tables)

6 Months Ended

Jun. 28, 2018

The following tables provide summaries of the transactions between the Company and the founding members (in millions):



	Three Months Ended				Six Months Ended
Included in the Condensed Statements of Income:	June 28, 2018		June 29, 2017		June 28, 2018		June 29, 2017
Revenue:
Beverage concessionaire revenue (included in advertising revenue) (1)	$	8.6	$	7.6	$	16.6	$	16.0
Operating expenses:
Theater access fee (2)	21.5		18.7		42.1		39.3
Purchase of movie tickets and concession products and rental of theater space (included in selling and marketing costs) (3)	0.3		0.3		0.7		0.8
Purchase of movie tickets and concession products and rental of theater space (included in advertising operating costs) (3)	—		0.1		—		0.1
Administrative fee - managing member (4)	4.8		3.3		8.6		6.7
Non-operating expenses:
Interest income from notes receivable (included in interest income) (5)	0.1		0.1		0.2		0.3

(1)

For the three and six months ended June 28, 2018 and June 29, 2017, two of the founding members purchased 60 seconds of on-screen advertising time and one founding member purchased 30 seconds (with all three founding members having a right to purchase up to 90 seconds) from NCM LLC to satisfy their obligations under their beverage concessionaire agreements at a 30 seconds equivalent CPM rate specified by the ESA.


(2)	Comprised of payments per theater attendee and payments per digital screen with respect to the founding member theaters included in the Company’s network, including payments for access to higher quality digital cinema equipment.


(3)	Used primarily for marketing to NCM LLC’s advertising clients.

(4)

Pursuant to the Management Services Agreement between NCM, Inc. and NCM LLC, NCM, Inc. provides certain specific management services to NCM LLC, including the services of the Chief Executive Officer, President, Chief Financial Officer, Executive Vice President, Chief Revenue Officer and Senior Vice President, General Counsel. In exchange for these services, NCM LLC reimburses NCM, Inc. for compensation paid to the officers (including share based compensation) and other expenses of the officers and for certain out-of-pocket costs.

(5)

On December 26, 2013, the Company 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. In consideration for the sale, the Company received a total of $25.0 million in promissory notes from its founding members (one-third or approximately $8.3 million 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.



	As of
Included in the Condensed Balance Sheets:	June 28, 2018		December 28, 2017
Purchase of movie tickets and concession products (included in prepaid expenses)	$	0.2	$	—
Current portion of notes receivable - founding members (1)	4.2		4.2
Long-term portion of notes receivable - founding members (1)	4.1		4.1
Interest receivable on notes receivable (included in other current assets) (1)	0.2		—
Prepaid administrative fees to managing member (2)	1.0		0.8
Common unit adjustments, net of amortization and integration payments (included in intangible assets) (3)	683.3		687.1


(1)	Refer to the discussion of notes receivable from the founding members above.

(2)

The payments to NCM, Inc. for estimated management services related to employment are made one month in advance. NCM LLC also provides administrative and support services to NCM, Inc. such as office facilities, equipment, supplies, payroll, accounting and financial reporting at no charge. Based on the limited activities of NCM, Inc. as a standalone entity, the Company does not believe such unreimbursed costs are significant.


(3)	Refer to Note 3—Intangible Assets for further information on common unit adjustments and integration payments.

Schedule of Mandatory Distributions to Members

Mandatory distributions of available cash for the three and six months ended June 28, 2018 and June 29, 2017 were as follows (in millions):



	Three Months Ended				Six Months Ended
	June 28, 2018		June 29, 2017		June 28, 2018		June 29, 2017
AMC	$	—	$	6.2	$	2.2	$	8.2
Cinemark	8.3		4.5		11.3		6.0
Regal	8.6		4.5		11.8		6.0
Total founding members	16.9		15.2		25.3		20.2
NCM, Inc.	16.2		9.9		24.3		13.1
Total	$	33.1	$	25.1	$	49.6	$	33.3

Schedule of Amounts Due to Founding Members, Net

Amounts due to founding members, net as of June 28, 2018 were comprised of the following (in millions):



	AMC			Cinemark			Regal		Total
Theater access fees, net of beverage revenues and other encumbered theater payments	$	1.7		$	1.1		$	1.7	$	4.5
Distributions payable to founding members	—			8.3			8.6		16.9
Integration payments due from founding members	(4.8		)	(0.3		)	—		(5.1		)
Cost and other reimbursement	—			0.1			—		0.1
Total amounts due (from) to founding members, net	$	(3.1	)	$	9.2		$	10.3	$	16.4

Amounts due to founding members, net as of December 28, 2017 were comprised of the following (in millions):



	AMC			Cinemark			Regal		Total
Theater access fees, net of beverage revenues and other encumbered theater payments	$	1.5		$	1.0		$	1.5	$	4.0
Distributions payable to founding members	10.8			13.5			13.3		37.6
Integration payments due from founding members	(8.5		)	(0.4		)	—		(8.9		)
Total amounts due to founding members, net	$	3.8		$	14.1		$	14.8	$	32.7

Schedule of Amounts Due to/from Managing Member

Amounts due to/from managing member, net were comprised of the following (in millions):



	As of
	June 28, 2018		December 28, 2017
Distributions payable to managing member	$	16.2	$	36.9
Cost and other reimbursement	0.4		1.4
Total amounts due to managing member, net	$	16.6	$	38.3

National CineMedia, LLC 10-Q