Good day, and welcome to the National CineMedia, Inc. Third Quarter 2015 Earnings Conference Call. Today's conference is being recorded. At this time, I would like to turn the conference over to David Oddo, SVP of Finance for National CineMedia, Inc. Please go ahead.

Good afternoon. I'd like to remind our listeners that this conference call contains forward-looking statements within the meaning of Section 27-A of the Securities Act of 1933, as amended, and Section 21-E of the Securities Exchange Act of 1934, as amended. All statements other than the statements of historical facts communicated during this conference call may constitute forward-looking statements. These forward-looking statements involve risks and uncertainties. Important factors that can cause actual results to differ materially from the company's expectations are disclosed in the risk factors contained in the company's filings with the SEC. All forward-looking statements are expressly qualified in their entirety by such factors. Further, our discussion today includes some non-GAAP measures. In accordance with Regulation G, we have reconciled these amounts back to the closest GAAP-basis measurement. These reconciliations can be found either at the end of today's earnings release, or on the Investor page of our website at www.ncm.com. Now, I'll turn the call over to Kurt Hall, CEO of National CineMedia. Kurt C. Hall - Chairman, President & Chief Executive Officer: Good afternoon, everyone. Thank you for joining us for our 2015 third quarter earnings conference call. Before we begin, I want to let you know that our CEO search process is progressing very well and we expect to complete the process before year-end. As you can see from our Q3 operating performance and improved 2015 outlook, this leadership change process is clearly not impacted our ability to grow our business as favorable ad market trends and great execution by our management team have driven meaningful progress against our business plan, including the completion of a record upfront sales campaign. Now I will provide you with a more detailed discussion about our Q3 results, including some color on our increased guidance for full-year 2015 and…

Thanks Kurt. For the third quarter, our total revenue increased 10.8% versus Q3 2014 driven by a 26.9% increase in national advertising revenue, excluding beverage, partially offset by an 11.8% decrease in local advertising revenue and a 28.9% decrease in beverage revenue. Total Q3 adjusted OIBDA increased 14.2% and adjusted OIBDA margin increased 53.4% from 51.8%, reflecting an increase in high margin national advertising revenue that was partially offset by the decreases in lower margin, local advertising revenue and 100% margin beverage revenue. For the first nine months of 2015 total revenue increased 14.5%, adjusted OIBDA increased 22%, and adjusted OIBDA margin increased to 49.9% from 46.8% versus the first nine months of 2014 due to the higher revenue and cost containment. We also recorded $700,000 of AMC Rave and Cinemark Rave integration payments for the third quarter versus $600,000 in Q3 2014. You should note that these integration payments are added to adjusted OIBDA for debt compliance purposes, but are not included in our reported revenue and adjusted OIBDA as they are recorded as a reduction to net intangible assets on our balance sheet. We expect to record approximately $800,000 of these integration payments from our founding members in the fourth quarter totaling approximately $2.6 million for all of 2015. Our Q3 2015 advertising revenue mix shifted due to the higher national growth to 71% national, 23% local and 6% beverage, versus Q3 2014 that was 62%, 29% and 9% respectively. The 26.9% increase in Q3 national ad revenue excluding beverage versus Q3 2014 was driven primarily by an 18.4% increase in impressions sold and a 12.4% increase in CPMs. The increase in impressions sold was driven by an increase in inventory utilization to 145.8% from 125.3% in Q3, 2014 on approximately flat network attendance due to an overall…

And we'll go first to Eric Handler of MKM Partners.

Thanks for taking my question. Kurt, two questions for you. First, given the success that you're seeing in the upfront, just wondering is there a way to quantify how much more maybe you sold with your shoulder periods for the coming 12 months versus last year's upfront? And then, secondly, as I think about beverage revenue for 2016, am I correct to assume that CPMs next year should be up around 4% for beverage, and will the number of units you have for beverage be the same year-over-year? Kurt C. Hall - Chairman, President & Chief Executive Officer: Yes, the answer to the first question, Eric, is I don't know yet, because we're in the process of allocating those upfront commitments throughout the year. Usually the way that process goes is that you get the commitments and then you work with the agency to try to allocate it to various flights. So I can't really tell you where a lot of the additions happened. I can tell you, however, that given the very high utilizations that we had this year in some of our core months (28:03) and flights, a lot of the growth is coming from some of the other flights. As I mentioned, we've spent a lot of time packaging various flights together to try to get to people's CPM requirements. And so we've been able to put people into more of the slower periods to offset some of the higher CPMs that we're charging and some of the higher demand periods. Obviously, that varies client-by-client but I think that's a fairly safe bet. Your second question as far as the CPMs for next year, I think you can assume whatever you're using for our average CPM for the year increase, and we gave you a few data points around that, you can assume that the CPM increase for the beverage will be a little bit higher, maybe a couple of points higher give or take, and that's because we use our segment one or our best inventory to price the beverage, and that's usually got higher CPMs associated with it than our segment two inventory.

Great. And would the units be the same next year for beverage? Kurt C. Hall - Chairman, President & Chief Executive Officer: You should assume that and at least what we're assuming for now is that the one circuit that only bought 30 seconds is going to buy only 30 seconds for the whole year. We are working with Coke and with that circuit to try to convince them that they should be buying the 60 seconds, but I think for now at least for forecasting purposes, you should use 30 seconds for that one circuit and 60 seconds for the other two.

Thanks, Kurt. Appreciate it. Kurt C. Hall - Chairman, President & Chief Executive Officer: Yes.

And we'll move next to James Marsh of Piper Jaffray. Stan X. Meyers - Piper Jaffray & Co (Broker): Thanks, guys. This is Stan in for James. I was hoping to dig deeper into your guidance. It sounds like you guys are on track for a good Q4. Do you feel it's largely due to demand given the slate or just sort of strong scatter market lifting all boats, or in the past Kurt you mentioned advertisers maybe coming back to more traditional platforms from digital. Just kind of wanted to see where all the demand was coming from? Kurt C. Hall - Chairman, President & Chief Executive Officer: Yes, I would say it's all the above. There's no question that the tentpole slate for the fourth quarter has given the platform a lot of attention clearly in the regional and local business, which you saw significant growth in the fourth quarter. So there is no question that that part of our business is tied more closely to the film schedule, and as we've talked about in the past, that's primarily because that inventory is further back in our show and most of it is also priced on a screen per week basis. So most people reason that people get in their seats earlier for tentpoles and thus the sort of return, if you will, on their spend is higher because there's more people in their seats. So that's clearly part of the story. Although look last year when we sold our upfront, we had a lot of demand for fourth quarter at that point in time. There was a lot of heat around Star Wars obviously, but nowhere near what there is today. And I think the film schedule for the next two years looks quite strong as well.…

And we'll go next to Barton Crockett of FBR Capital Markets.

Okay, thanks for taking the question. I was wondering if you could update us on the percentage that you book at the midpoint of your guidance relative to what you had booked last year versus your full-year actual. I mean (33:00) 39% kind of actual last year versus booked this year at the third quarter call. How does that kind of look now? Kurt C. Hall - Chairman, President & Chief Executive Officer: I don't know if we actually did that. I can't remember doing it at the third quarter call. I know we do that with our yearend call. But we haven't given any numbers on that, Barton. What are you trying to get at? Maybe I can get at it in a different way for you?

I mean, one of the statement about confidence in your guidance was how much you had already booked relative to last year. I think you booked a lot more relative to last year. I'm just trying to get that update at this point? Kurt C. Hall - Chairman, President & Chief Executive Officer: Yes, we haven't finalized our budgets yet, but as I said in my comments, we're very comfortable that when we get to the first of the year we will have booked somewhere in the range of 70% to 75% of our national budget. And again we haven't...

If I could... Kurt C. Hall - Chairman, President & Chief Executive Officer: Yes.

I was asking about the fourth quarter, not for next year? Kurt C. Hall - Chairman, President & Chief Executive Officer: Oh, fourth quarter. I'm sorry. I missed that.

Yes. Kurt C. Hall - Chairman, President & Chief Executive Officer: Let me put it this way, our inventory is very, very tight for fourth quarter. So the guidance that we've given for fourth quarter is pretty solid. And is there a potential for some upside on that as we move closer to December and we have a tiny bit of remnant inventory left? Yes, sure, but our range that we gave you is pretty solid.

Okay. Kurt C. Hall - Chairman, President & Chief Executive Officer: Got it.

I And if I could switch gears a little bit. You're pushing pricing in the upfront. One of the, I think, good things about theater advertising over the past year has been that your pricing had gotten down to a level (34:44) with the high end of TV. Now you're going up 11%, so are you pricing yourself out of the high end of TV? Does that have any implication for sustainability do you think? Kurt C. Hall - Chairman, President & Chief Executive Officer: No, I don't actually think so, because one of the things that is driving that is that we are being a lot more proactive about pricing week-to-week, and as I said in my comments, this whole dynamic pricing strategy that we've employed this year in scatter, we're also now employing actually in the upfront as well. And for the first time this year, we spent a lot of time with clients going week-by-week based on when they wanted the media, what our knowledge was of the film schedule and other demand characteristics, and we really tried to push it. We also had a number of – I think I mentioned it, we had a few clients that didn't rebook with us this year upfront. Generally their CPMs were very, very low. I think I mentioned in my comments, those CPMs were almost 50% lower than all the combined average CPMs of all of our new upfront clients this year. So there was this process that we went through this year of making some decisions where certain people were dropping out, certain new people were coming in at much higher CPMs. That obviously is a good phenomenon for us. So, again, I can't tell you all the reasons people are coming back and having an interest at a higher price. All I can tell you is I think that it does have something to do with what's going on in the TV marketplace. And look, the TV guys are having a very strong fourth quarter as well. So even though they booked less in their upfront, what we may be seeing is we may be seeing some money come back into the traditional video marketplace that had gone over to digital and maybe it's coming back a little bit. You're obviously seeing a tightening of inventory in general in the TV market because of the continued ratings declines, so that may be bringing pricing up as well. In an odd way, it's actually a very good thing for pricing. The TV ratings have been falling pretty dramatically, because it means there is less of that prime inventory available. So as that floor comes up in the TV pricing, that's obviously good for us as well.

Okay, great. Thanks for the color. Kurt C. Hall - Chairman, President & Chief Executive Officer: You're welcome.

And we'll go next to James Dix of Wedbush Securities.

Hey, good afternoon, guys. I guess the first is just any color you can give, Kurt, on the verticals that came in on the upfront. Where you saw the growth? I think that would be interesting. And then just what do you think in terms of the dynamic of getting more agency deals in the upfront? I'm curious as to how you see that as part of the growth of that part of your selling strategy? Is that important? Do you expect that to just start to fall in line with how the television market has gone overtime? I'm curious on that just because there is definitely some pretty big dollars associated with those? Kurt C. Hall - Chairman, President & Chief Executive Officer: Yes. As I mentioned in my comments, there was one other fairly sizable agency commitment that we passed on, because it just didn't meet our pricing expectations. The one big agency that we had last year increased their commitment this year nicely, and so we're very happy with that. The deal with them during the year went very, very well. That helped bring a lot of new clients into our business. So we will clearly continue to focus on the agency route, but what we're finding is, is that if we can get enough clients to get us into that 70% to 75% range by doing those more direct deals, if you will, they are still done through agencies, but it's just not a big agency unidentified client deal, if you will, then we're going to continue to do that. Again, we're really focused on kind of maintaining that 70% to 75% of whatever our upcoming target or budget for the year is going to be. That seemed to work really well for us in 2015.…

I just got one follow-up. I just wanted to make sure I understood your comments on pricing the CPMs in the upfront versus with data for next year. I mean, you know, generally are you envisioning that in terms of equivalent inventory, the upfront will be at a discount and therefore the scatter pricing will be at a premium as you go forward. And that you are just simply indicating to us that some of your best inventory went in the upfront, so it isn't apples-to-apples. I just want to make sure I understand that? Kurt C. Hall - Chairman, President & Chief Executive Officer: Yes, what I don't want people to do is listen to two numbers that we stated that our upfront for the calendar years were up 15% and our upfront CPMs were up 11%. I just don't want people to run with those numbers. I wanted them to make sure they had the background that a lot of our best inventory is sold in the upfront, and so that's going to affect both CPM and potentially utilization. So I just didn't want people to just take those and plug those into their model. Obviously, we haven't finished our budgets for next year. We're obviously not giving any 2016 guidance today. But I didn't want people to just run with those numbers. Having said that, it's hard to predict what the scatter market is going to be. We obviously didn't predict that our scatter pricing would be up 20%, 30% when we did our budgets for this year. And that's been some of the reason that we are trending ahead of our internal plans for the year.

Great, thanks very much. Kurt C. Hall - Chairman, President & Chief Executive Officer: Yeah, you're welcome.

And we'll go next to Ben Mogil of Stifel Financial. Benjamin Mogil - Stifel, Nicolaus & Co., Inc.: Hi. Good evening and thanks for taking my question. So just a quick one. Obviously you have left the M&A space vis-à-vis Screenvision, are you getting more inbound calls from companies that you think – you know sort of some are interested in doing more stuff with you on that end? Are you looking at more stuff? Kurt C. Hall - Chairman, President & Chief Executive Officer: We've really tried to focus on getting our systems in order of the way I talked about improving them, making the data analytics and the targeting a much more robust. I would say that, we're taking a bit of a breather on the M&A front right now. Having said that, as I indicated in my comments we've gotten a lot of inbound calls from exhibitors, which is obviously a good thing. And so we're going to continue to pursue that and pursue the expansion of our impression base which was really what the Screenvision acquisition was all about to begin with. Benjamin Mogil - Stifel, Nicolaus & Co., Inc.: That's great. Thanks guys. Kurt C. Hall - Chairman, President & Chief Executive Officer: Yep.

And we'll go next to Mike Hickey of The Benchmark Company.

Hey Kurt and David, congrats on what looks to be a really strong Q4 for you guys and year, quite a turnaround from prior year. Thinking about 2016, curious if you anticipate TV political spend and maybe also the Olympics with provider network and the potential benefits. Secondarily, curious why you determined to not allow political spend on cinema. It would seem to provide some sort of low hanging fruit for you or maybe the push back was more from the exhibitors? And I have a quick follow up. Kurt C. Hall - Chairman, President & Chief Executive Officer: Yeah, no, the pushback wasn't from exhibitors at all. In fact, the whole strategy was really built around some of the feedback that we have been getting from advertisers where the risk of preemption, the risk of being squeezed out of certain inventory that they'd like, there were a lot of negative comments about all the negativity that goes along with all the political advertising, and after hearing these comments for a few years, I just felt that why fight it. Why not be the one network in the United States that is not taking political advertising. I actually view that as a very strong marketing point when it comes to talking to the advertising marketplace. And you will continue to see increased marketing on that for us as we move more into the election cycle. And obviously for us, it's a good thing for the audience and we've gotten a lot of really good feedback from the circus, we've gotten a lot of good feedback from just patrons, people that are frequent moviegoers. It's just not the right environment to show political advertising unless you could get positives. And you know last year we tried to get positive political ads from campaigns, and in most cases they sort of laughed at us because that just isn't the way these guys go about it.

Yes, fair enough. I'm certainly not going to miss them, I will tell you that. The first part of the question is if you feel that the political spend on TV and maybe the push out there and then the added demand with the Olympics, if that is theoretically a direct benefit to your network? Kurt C. Hall - Chairman, President & Chief Executive Officer: Well, the Olympics is a funny one. We have a content partnership with NBC networks and that will help us there because they are going to be marketing the Olympics on their networks. And so, that's a good thing for our relationship with NBC. I don't think there's any question that the political advertising in general will make inventory tighter, and it will be more difficult for advertisers to get the inventory they want, especially in the swing states, because I think when you look at the political spend, it's going to be very highly concentrated, especially when we get into the general election, very highly concentrated in five or six so-called swing states: Florida, Ohio, Colorado and so on. And so, our local and regional business actually maybe benefited even more than the national business in those swing states. So, we've even thought about putting together a swing state package as a regional buy, special regional buy where you could buy just the swing states. So there's a lot of cool things that we can do there. I just think, in general, the tightness of inventory is going to help us. I also think there's going to be a lot of advertisers that are not going to want to be in TV advertising pods that have a lot of political advertising in it. You could also see a pickup in DVR usage where in if the first or second ad in a pod is a political ad that people are going to be more – they're going to more often just skip the whole pod. Nielsen keeps telling us that a high percentage of ads that are recorded are viewed, which we obviously look at somewhat skeptically, I think those numbers could go down dramatically as people skip through the first couple of ads and then just keep going. So all of those dynamics around politics for 2016, I think, are good for us.

Okay, good. I know you touched on it briefly in your prepared remarks, but on your CEO search, just sort of curious if you have a final list of candidates at this point. If you still have – I believe you noted before, you may have an internal candidate, if that is still the case. I guess any more clarity on that would be appreciated. Kurt C. Hall - Chairman, President & Chief Executive Officer: Yeah. I'm not going to comment on the specifics. We have gotten the field narrowed down to a pretty small group. So there would be no way of getting from where we are today to having somebody on board by the end of the year if we didn't have it down to a pretty small group, especially when you consider Thanksgiving holiday and Christmas and all that. So, yeah, we do have it down to a pretty small group.

All right, guys, best of luck. Happy holiday. Kurt C. Hall - Chairman, President & Chief Executive Officer: Thank you. You too.

And we'll go next to Eric Wold of B. Riley. Eric Wold - B. Riley & Co. LLC: Thank you. A couple of questions. One, I guess, Kurt, you mentioned that some of the advertisers that decided not to opt back in for this upfront dropdown and you guys came in at 50% higher CPMs. Any reason you heard from the ones that decided not to re-up, was it that they didn't see the return they're looking for with original (48:53), were they kind of testing the market last year with kind of a more opportunistic pricing, maybe not optimistic on the 2016, so any color there? Kurt C. Hall - Chairman, President & Chief Executive Officer: Yeah. I think the general response we got from people, and this is a trend not just with us, I think this is a trend in general that people are looking for more and more flexibility, and one of the things digital has given people, and especially in the video market as there's been a significant increase in digital video impressions out there, that people can wait longer. And a lot of clients were coming to us and say, look, don't feel bad, we're not committing as much upfront as we have in the past, just because we want the flexibility to wait. Now, we've seen this for years, even before digital came along that in a year where people didn't commit as much money upfront and then they kind of got hit with much higher pricing in the scatter market, the next year they tended to increase their upfront buys. So, we'll see how this cycle goes, but I do think the trend with more and more digital has been to – it allows advertisers to wait longer, make last-minute decisions if…

And that concludes today's question-and-answer session. At this time, I'll turn the call back to Kurt Hall, CEO of National CineMedia for any additional or closing remarks. Kurt C. Hall - Chairman, President & Chief Executive Officer: Great. Thanks everyone for everyone's support. I don't know if this will be my last call or whether next call will be a transition call, but I really appreciate the relationship over the years. I really appreciate the way you guys were fair with us through good times and through bad. So, thank you for all of that and as always, if there are any follow-up questions, Dave and I will be around for a while and hopefully I'll be talking to you soon. Take care. Thanks.