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Investment in National CineMedia Inc. | 3 Months Ended
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Mar. 31, 2025
Equity Method Investments and Joint Ventures [Abstract] |
Investment in National CineMedia Inc. | 8. Investment in National CineMedia Inc. NCM operates a digital in-theater network in the U.S. for providing cinema advertising. The Company has an investment in NCM’s parent National CineMedia, Inc. (“NCMI”). The Company is a party to an Exhibitor Services Agreement with NCM (“ESA”), pursuant to which NCM primarily provides screen advertising to the Company’s theaters through its branded “Noovie” pre-show entertainment program and also handles lobby promotions and displays for the Company’s theaters. See further discussion below under Exhibitor Services Agreement. Below is a summary of activity with NCMI and NCM included in each of Holdings' and CUSA's condensed consolidated financial statements:
|  | Investment in NCMI |  | NCM Screen Advertising Advances |  | Other Revenue |  | Interest Expense - NCM |  | Cash Received (3) |
Balance at January 1, 2025 |  | $ | 29.0 |  | $ | (318.5 | ) |  |  |  |  |  |
Screen rental revenue earned under ESA (1) |  |  | — |  |  | — |  | $ | (4.8 | ) | $ | — |  | $ | 3.3 |
Interest accrued related to significant financing component |  |  | — |  |  | (5.4 | ) |  | — |  |  | 5.4 |  |  | — |
Unrealized loss on fair market value adjustment of investment in NCMI (2) |  |  | (3.5 | ) |  | — |  |  | — |  |  | — |  |  | — |
Amortization of screen advertising advances |  |  | — |  |  | 8.2 |  |  | (8.2 | ) |  | — |  |  | — |
Balance as of and for the three months ended March 31, 2025 |  | $ | 25.5 |  | $ | (315.7 | ) | $ | (13.0 | ) | $ | 5.4 |  | $ | 3.3 |
(1) Amounts include the per patron and per digital screen theater access fees, net of amounts due to NCM for on-screen advertising time provided to the Company's beverage concessionaire of approximately $1.6. (2) See Investment in National CineMedia below. (3) The Company had a receivable from NCM of $1.5 as of March 31, 2025. Investment in National CineMedia The Company accounts for its investment in NCMI in accordance with the guidance set forth in FASB ASC Topic 321 Investments - Equity Securities, which requires the Company to measure its investment in common stock of NCMI at fair value and recognize unrealized holding gains and losses on its investment in earnings. The Company recognized an unrealized loss of $3.5 and an unrealized gain of $4.4 on its investment in NCMI in the Company’s condensed consolidated statement of income for the three months ended March 31, 2025 and 2024, respectively. As of March 31, 2025, the Company owned approximately 4.4 shares of NCMI, which represented an interest in NCMI of approximately 4.5%. See Note 8 to the Company’s Annual Report on Form 10-K filed February 19, 2025 for additional discussion of the Company's investment in NCMI. Exhibitor Services Agreement As previously discussed, the Company’s domestic theaters are part of the in-theater digital network operated by NCM, the terms of which are defined in the ESA. The Company receives a monthly theater access fee for participation in the NCM network and also earns screen advertising or screen rental revenue on a per patron basis. See Note 8 to the Company’s Annual Report on Form 10-K filed February 19, 2025 for further discussion of the accounting for revenue earned under the ESA as well as the accounting related to NCM screen advertising advances. The NCM screen advertising advances are recognized as revenue on a straight-line basis over the term of the ESA through February 2041. The table below summarizes when the Company expects to recognize this deferred revenue:
|  | Twelve Months Ended March 31, |  |  |  |  |  |  |
Remaining Maturity |  | 2026 |  |  | 2027 |  |  | 2028 |  |  | 2029 |  |  | 2030 |  |  | Thereafter |  |  | Total |
NCM screen advertising advances (1) |  | $ | 11.4 |  |  | $ | 12.2 |  |  | $ | 13.0 |  |  | $ | 14.0 |  |  | $ | 14.9 |  |  | $ | 250.2 |  |  | $ | 315.7 |
(1) Amounts are net of the estimated interest to be accrued for the periods presented. Significant Financing Component As discussed in Note 8 to the Company’s Annual Report on Form 10-K filed February 19, 2025, the Company’s ESA with NCM includes an implied significant financing component. As a result of the significant financing component, the Company recognized incremental screen rental revenue and interest expense of $8.2 and $5.4, respectively, during the three months ended March 31, 2025 and incremental screen rental revenue and interest expense of $8.1 and $5.5, respectively, during the three months ended March 31, 2024.

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- Definition The entire disclosure for equity method investments and joint ventures. Equity method investments are investments that give the investor the ability to exercise significant influence over the operating and financial policies of an investee. Joint ventures are entities owned and operated by a small group of businesses as a separate and specific business or project for the mutual benefit of the members of the group. + References Reference 1: http://www.xbrl.org/2003/role/recommendedDisclosureRef -Topic 740 -SubTopic 323 -Name Accounting Standards Codification -Section 50 -Paragraph 2 -Subparagraph (f) -Publisher FASB -URI https://asc.fasb.org/1943274/2147478156/740-323-50-2 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Topic 323 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 3 -Subparagraph (a)(3) -Publisher FASB -URI https://asc.fasb.org/1943274/2147481687/323-10-50-3 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Topic 323 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 3 -Subparagraph (d) -Publisher FASB -URI https://asc.fasb.org/1943274/2147481687/323-10-50-3 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Name Accounting Standards Codification -Topic 323 -Publisher FASB -URI https://asc.fasb.org/323/tableOfContent + Details
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