Greetings and welcome to the National CineMedia Third Quarter 2016 Earnings Conference Call. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Katie Scherping, Chief Financial Officer of National CineMedia. Thank you, Ms. Scherping. You may begin.

Thanks, Devin. Good afternoon and thank you everyone for joining the call. I would like to remind our listeners that this conference call contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 as amended and section 21E of the Securities Exchange Act of 1934 as amended. All statements other than 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 at the end of today’s earnings release, which maybe found on the investor page of our website at www.ncm.com. With that, I will turn the call over to Andy England, CEO of National CineMedia.

Thanks, Katie. Good afternoon, everyone. Welcome and thank you for joining us for our third quarter 2016 earnings call. During this call, I will spend a few minutes highlighting the company’s third quarter results in progress against our 2016 business plan. Katie will then provide a more detailed discussion of financial performance for Q3 and provide guidance for Q4 and full year 2016. And then as always we will open the line for questions. I am pleased that we were able to deliver third quarter revenue and adjusted OIBDA results that exceeded both the midpoint of guidance ranges and last year’s Q3 2015 numbers. On the positive side, our national, beverage and digital businesses saw healthy growth this quarter. However, these gains were somewhat offset by disappointing local and regional sales. Our Q3 national revenue increased nearly 4% due primarily to 2% higher CPMs versus Q3 2015 as both upfront and scatter CPMs increased over the prior year. Our impressions sold remained approximately flat quarter-over-quarter on a 9% increase in network attendance, which resulted in lower utilization. Beverage also benefited from a CPM increase in the first quarter in which we lapped the reduced beverage appetizing from one of our founding members. As you know, our national pre-show inventory is sold in three ways through content partnerships, other upfront commitments and the scatter market. While we don’t plan to share numbers around our upfront commitments, I do want to give a sense of how that process has been playing out this season. The 2016-2017 upfront market has been unusual and that the large broadcast companies have reportedly seen low double-digit CPM increases despite TV ratings weaknesses leading into the negotiating period. It’s widely speculated that this is as a result of tight inventory driving very high scatter prices in the…

Thanks Andy. For the third quarter, our total revenue increased 1.6% versus Q3 2015 driven by a 3.8% increase in national advertising revenue and a 17.2% or $1.1 million increase in beverage revenue, partially offset by 8.8% decrease in local and regional advertising revenue. Total Q3 adjusted OIBDA increased 2.2% and adjusted OIBDA margin increased to 53.7% from 53.4% versus Q3 2015. For the first nine months of 2016, total revenue decreased 1.6%, adjusted OIBDA decreased was 6.7% and adjusted OIBDA margins decreased to 47.3% from 49.9% versus the first nine months of 2015. The Q3 increase in adjusted OIBDA was primarily driven by the increase in high margin national advertising revenue. The year-to-date decline in adjusted OIBDA was primarily driven by the lower national advertising and beverage revenue and increases in selling and marketing expense versus 2015 year-to-date. We recorded $700,000 of AMC Rave and Cinemark Rave integration payments for the third quarter of 2016 and the third quarter 2015. You should note that these integration payments are added to adjusted OIBDA for debt compliance and partnership cash distribution purposes, but are not included in reported revenue and adjusted OIBDA as they are recorded as a reduction to net intangible assets on the balance sheet. We now expect to record approximately $2.4 million of these integration payments from our founding members in 2016. Our Q3 2016 advertising revenue mix shifted slightly towards national and beverage and was 72% national, 20% local and regional and 7% beverage versus Q3 2015 that was 71%, 23%, and 6% respectively. Q3 national ad revenue increased 3.8% versus Q3 2015 and was driven by a 2.1% increase in CPMs versus Q3 2015 and an increase in online and other revenue partially offset by a 0.2% decrease in impressions sold. Q3 CPMs benefited from higher…

Thank you. [Operator Instructions] Our first question comes from the line of Alexia Quadrani with JPMorgan. Please proceed with your question.

Hi, thank you. This is Julia Yue on for Alexia. If your box office for two quarters this year outperform expectations, can you talk about how much of this is a benefit to your business both in the quarter itself in terms of being able to sell extra inventory and maybe longer term such as the changes to advertiser demand in the next couple of quarters or perceptions for the overall health of the industry?

Yes, thank you, Julie. That’s a good question. The way I’d characterize it is I think it’s difficult for us to react particularly when it comes to national. It’s difficult to react to a specific success. So put another way, if there is expectation that a movie is going to do very well and then the movie does very well that’s very helpful to us. If people don’t know whether a movie is going to do well and it actually does well, that’s significantly less useful to us, because it’s harder to sell into. So to your point, the fact that Q3 box office was so strong was not as helpful as we would like it to be. On the other hand, we think that the fact that the 2016 box office has been stronger in general than perhaps the pundits expected and the fact that people are feeling good about the 2017 film slate, I think is generally helpful to us. The one caveat I will put on that is I think it is a little easier for our local team to react to a movie doing very well. They seem to, in general, not demonstrate it in this third quarter, but they do seem to be able to react more swiftly. But it’s a good question.

Thanks. And then just on the point that you made about linear TV CPMs continuing to increase and ratings declining, have you seen the effect of this more recently, I guess, in your conversations with advertisers on their interest in cinema or maybe a benefit to your CPMs?

I think it’s a benefit to the overall conversation. And I think the way I think about it is that advertisers – there is a lot of advertisers who are deep believers in TV broadly in terms of its overall impact. And importantly, I think advertisers have a history of being able to quantify whether or not they received an ROI from advertising on television. So, their systems are setup to reevaluate that. So, there is a lot of stickiness, if you like, in TV. With that said, obviously there is huge number of dollars moving straight to digital and that’s something that is an ongoing, as you are well aware, reality of the broader media marketplace. I will say that, that broader industry situation enables conversations. It’s certainly a good time for us to be having conversations about frankly the stability and appeal of our network, particularly as it relates to millennials where we are so strong.

Got it. Thank you so much.

Thank you.

Thank you. Our next question comes from the line of Barton Crockett with FBR Capital Markets. Please proceed with your questions.

Hey, great. Thanks for taking the question. I was curious about your characterization of the upfront, which was the level kind of inscrutable and I think deliberately so, because you don’t want to talk too much about what you are seeing. But I just wanted to make sure I understood one of the point that I think you were trying to make. You talked about how the broadcast kind of upfront has taken some money out of the market. So to be clear, are you saying that the success of the broadcast networks in the upfront is a headwind for your business in 2017? And when you say you expect to be positioned for success, are you saying you expect to be able to do things that overcome that headwind? Is that the point you are trying to convey?

We are not necessarily saying it was a headwind. It’s more of an observation of, I think the unusual circumstances in which we operate today. I think we, like all of you, are really observers of what happens with the larger broadcast TV companies and look to understand why that’s happening and its implications for us. I think, for whatever reason, advertisers have chosen. We speculated, but for whatever reason, advertisers have chosen to commit more dollars to the upfront at higher CPMs and with expectations of lower ratings, which on the face of it seems irrational and I think the apparent reason is because of concern about scatter prices that really sort of did get out of control. So obviously, we worry that dollars get too locked up. I think the reality is that we continue to have a good opportunity to compete in the marketplace. We just don’t tend to be the first at the trough, if you like.

Okay. But just to follow-up a little bit more on your upfront, I mean, I understand you don’t want to go into the specifics, but in general terms, can you say whether your upfront process and what’s emerged from that is something that is going to be helpful in your ambition to grow in 2017 or is it something that you would need to overcome in order to grow in 2017?

So, let me say this, Barton. I think these are fair questions, but let me characterize it this way. I believe National CineMedia has operated in the upfront marketplace since 2012. I think it’s a good strategy for us. It’s a good strategy for us, because firstly, it positions us in the broader premium television marketplace or premium video marketplace. So, it establishes that those are the broader bucket of dollars that we are going after. And to our earlier discussion with ratings where they are that leads to I think good discussion. So, I think it helps position us as a business for one. The second thing it does is essentially give us more predictability of our business or at least in theory. It gives us a predictability of the large chunk of that business, let me put it that way. And so I think it is a very healthy process and a way of going about business for us. And it’s one that I am supportive of. As I look at the upfront that we have just gone through, I think I am going to – as we talked about in the past, I am going to resist giving you a percentage just because frankly, I don’t think it’s constructive or helpful. I will just say that I think our upfront is encouraging.

Okay, that’s helpful. Thank you.

Thank you, Barton.

Thank you. Our next question comes from the line of James Dix with Wedbush Securities. Please proceed with your question.

Thanks very much. Just one more follow-up if you can take it on the upfront, did it complete roughly the same time as last year or was there a material lengthening of the process? And then I had two others.

Thanks for the question, James. That is a difficult one for me to answer and I don’t think Katie is going to be helpful to me either for the obvious reason that neither of us were here last year. So I don’t know. My sense of it is from discussions we have had with our sales team that the upfront process has happened on a similar timeline to what happened last year, so there was an understanding that we don’t tend to be as I said, first to the trough when it comes to the upfront. We tend to spread significantly and our conversations spread significantly into the fall. And I think that’s good and appropriate, but nonetheless we are pretty much at the end of that process, I have a pretty good sense of it.

Great. And then second, you mentioned a little bit about the volatility of the business being maybe a little bit higher than you would like, I mean is it changing at all this year, anything in particular which you think is contributing to that volatility, I mean has there been times talking to the sales team when the business has been less volatile, when anything that’s changed make it more so and then anything which you were – any initiatives you are taking to reduce that volatility. And then my final one is just in terms of audience measurements, any changes that you are planning in terms of measurement of your audience, it’s obviously a hot button topic in the TV video market generally, but just wondering if there is anything there that you are anticipating and perhaps in connection with the move to theaters to doing a little bit more pre-assigned seating over time? Thanks.

Thank you. When it comes to volatility, volatility is obviously a double edged sword. When advertisers don’t return, that’s bad volatility. When advertisers appear out of nowhere and want to spend large amounts of money, that’s good volatility. And so volatility is not necessarily a bad thing. It’s just obviously would always – I think everyone would prefer a more predictable business. And I know people would, if you look at what’s happening tomorrow in our country, obviously people prefer to understand what’s happening in the future. But nonetheless, volatility I think is just a part of our business. And I think there is relatively little that we can do to change that other than get more advertisers onboard. I think more advertisers is a healthy thing, because you are – advertisers essentially hedge each other. But at the end of the day, when advertisers decide to advertise, it’s very much up to them and it’s up to the quirks and peccadilloes of their business, not of ours. And we have to be sensitive to that, so when people have something important happening and they want to communicate it to our audience and come to us to spend money, obviously we welcome them with open arms. And that’s at the core of the volatility of our business, I think. When it comes to audience measurement, I think there is a couple things I would say. I think one of which was perhaps, what you intended and then the other perhaps isn’t. When it comes to audience measurement, we constantly seek to better understand our audience. I mean this is where data comes in. The extent that we can better understand who our audience are, that essentially fuels our DMP. It enables CATO, which enables people for much better target against our audience. So when it comes to data that helps us measure exactly who our audience are, that’s extremely valuable and something we are very focused on. When it comes to what I think was more your intention, the impact of reserve seating, what Nielsen would tell us and obviously Nielsen is the third-party provider who we rely on for such information. Nielsen would tell us that the reserve seating is not having an impact when you look at what Nielsen shows us to be the audience build over the last 3 years, it’s remained stable, so that’s where we are.

Great. Thanks very much.

Thank you, James.

Thank you. [Operator Instructions] There appear to be no further questions at this time. I would like to turn the floor back over to management for closing comments.

Thank you, Devin. So again, I think we were pleased with the quarter. We are pleased to be able to reiterate the guidance we provided earlier and we are busy making sure that we prepare for 2017 and the years beyond. So thank you for taking the time to listen in and have good evening.

This concludes today’s teleconference. You may disconnect your lines at this time. Thank you for your participation.