Greetings, and welcome to the National CineMedia Third Quarter 2012 Earnings Conference Call. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Mr. David Oddo, Vice President of Finance for National CineMedia. Thank you. Mr. Oddo, you may begin.

Good afternoon. I'd 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. Now I'll turn the call over to Kurt Hall, CEO of National CineMedia.

Thanks, David, and good afternoon, everyone. Welcome, and thanks for joining us for our 2012 Q3 Earnings Conference Call. Today, I'll provide a brief overview of our Q3 results and make some brief comments about the advertising marketplace and how our business is performing since our last call. Gary Ferrera, our CFO, will then provide a more detailed discussion of our Q3 financial performance and full year guidance, and then, as always, we'll open the lines for questions. Q3 2012 marked another record quarter for us with revenue of $143.7 million and adjusted OIBDA of $85.1 million, representing growth of 5.7% and 6.4%, respectively, over a very strong Q3 2011. You may recall that third quarter '11 adjusted OIBDA grew 7.5% over a very strong Q3 2010. In fact, we've grown Q3 adjusted OIBDA 64% since 2009. These Q3 results reflected the continued expansion of our network and broadening of our client -- national client base, offset somewhat by lower local revenue. Our Q3 national advertising growth was driven primarily by a meaningful 15.9 percentage point increase in utilization on network attendance that was 2.8% lower than Q3 2011. This higher utilization reflects overall -- oversell conditions in some flights and rating groups that was driven by several longer-form ads, including a 2-minute ad for one of our telecommunications clients. The slightly higher CPMs reflected our tight inventory, offset by the impact of lower CPMs on longer-form ads as we generally give a CPM discount for ads in excess of 60 seconds. As we have discussed in the past, we can expand the number of units in the FirstLook pre-show when market demand dictates, especially when there are longer ads, which make the pre-show less choppy. The 2-minute telecommunication ad was part of a groundbreaking integrated campaign that we launched…

Thank you, Kurt. For the third quarter, our total revenue increased 5.7% to $143.7 million, driven by an 8.5% increase in total advertising revenue, including beverage, partially offset by a 35.2% decrease in total Fathom Events revenue. Total Q3 adjusted OIBDA increased 6.4% to $85.1 million from $80 million, and our third quarter adjusted OIBDA margin increased to 59.2% from 58.8% in Q3 2011. The adjusted OIBDA margin increases were primarily due to the increase in our high-margin national advertising revenue, partially offset by the impact of the contracted 8% increase in 2012 for the attendance-based portion of our theater access fee that occurs once every 5 years and the incremental digital cinema maintenance fee related to the increase in the number of high-quality digital cinema projectors connected to our network. Together, these increased our operating cost $1.6 million for Q3 and $5 million year-to-date versus 2011. Additionally, our margins were slightly impacted by the fact that our lower-margin network affiliate-based revenue, which operates under a revenue share model, grew to 17.2% of our total Q3 attendance versus 14.2% in Q3 2011. Our Q3 2012 advertising revenue mix shifted slightly, and with 76% national, 17% local and 7% beverage versus Q3 2011, which was 72%, 20% and 8%, respectively. Q3 national ad revenue excluding beverage increased 13.7% to $104.8 million, primarily driven by a strong 15.9 percentage point increase in utilization from Q3 2011 and a 0.8% increase in CPMs, partially offset by a 2.8% decrease in network attendance. Inventory utilization increased during the quarter because we had a greater number of long-form ads which included the 2-minute telecommunications ad that ran during most of the quarter. We ended the third quarter of 2012 with approximately $1.4 million of make-goods, and as of the end of the quarter, we had…

[Operator Instructions] Our first question is from Eric Handler of MKM Partners.

So 2 things. First, when you look at the fourth quarter numbers and what you've booked so far, the weakness that you're seeing in November, December, is that a function of any particular verticals or maybe your content partner spending and what you're seeing there? And secondly, you said you're sort of targeting being 60% sold as you enter 2013 for National Advertising. Just curious how close are you to that goal as of right now?

Thanks, Eric, this is Kurt. I don't think there's any specific category that is weak. I'm -- we're seeing activity, we're just not seeing anybody pull the trigger. And it almost appears to me like everybody is just waiting to see what happens with the election because there's, I think, varying views of where the economy and where consumer confidence and all these things are going to go during the election. I think that confusion, if you will, or uncertainty heightened because of the debates, because I think it's very clear where things are going to go until the debates, and now it's tightened things up considerably. So we mentioned October has actually been quite good. And during October, we kept monitoring things and evaluated whether we needed to come out and talk to the Street early like we did last year, and there doesn't seem to be anything going on. And then the last week or so, it's just everything is just -- it's like it's all on hold. Now this week, everything, actually, has been on hold because our people have not been in our office in New York all week, and I think that's the same for all the people that work for all the advertising agencies. So business transactions in the advertising world has come to a screeching halt.

They're happening. We had bookings today, but they're all L.A.-based.

Yes, all the West Coast stuff. So look, Gary gave you, I think, a little more color on the guidance than we usually do on how we formulated the bottom end and the top end, which I hope helps everyone assess that. And we've got plenty of inventory if things open up a little bit. The theater slate looks very strong, so I think there's going to be plenty of impressions and attendance. Again, we've always been as transparent as we can possibly be with where we think the market is and maybe to a fault at times. But that's kind of where we're sitting. Remind me, I went on for so long on this question, Eric, remind me what your second one was.

So you're targeting to be 60% sold, that's your bogey that you want to hit to enter 2013. How close are you to that level right now?

Well, we're still building the book. And the only thing that I can share with you, if you look at our national scatter, which excludes beverage and Sprint and everything else, it's up 18% now. It's versus last year at the same time. So that's a really good sign. The other thing that's very interesting, which, quite honestly, I don't have a great answer for, but our local business is up fairly dramatically, our bookings for 2013 versus last year. Now the numbers are relatively small, but the percentages are, in this case, it's almost 75%. So we're seeing some things that I kind of like for '13. And we've had 2 or 3 deals that we've booked that have been direct results of our upfront process, one recently with a fast food chain where our business development guys sat down with all of our avails for the whole year, a number of really good ideas throughout the year. They were all integrated, new product stuff, very creative stuff. And we sat down with the client, and they shared with us their whole year's plan, and we were able to mix and match our avails and our thoughts and ideas with what their needs were and, in some cases, come up with very creative pricing strategies and ended up booking a deal. And that is really the essence of what we're trying to do with our whole upfront strategy. As I mentioned in my comments, the real underlying goal is to get into the planning process. Because once we're in the planning process, then we can do this sitting down and matching of their needs and the tools that we have. And so that I continue to be very bullish on where this upfront thing is going to go. I mean, we're already starting to schedule meetings for this coming December that are related to next year's upfront. And as you know, we didn't really get into the fray last year until first quarter,, so we were a little bit late. But I think after 2 or 3 years, we're going to be a fixture in that process, and I think we're going to be much more embedded in the planning phases or the planning process of the agencies and clients. And that will be a key, I think, to trying to grow beyond the sort of product launch and some of the other things we do that are more transactional-oriented or special market event-oriented.

Our next question is from Barton Crockett of Lazard Capital Markets.

So I was wondering, it would seem that the backdrops for auto advertising would be relatively strong with car sales good, the Japanese coming back into the market. You guys have some exposure there in auto. What are you seeing in auto? Is that a category that's strong? And maybe there are other categories that are causing some of the weakness in the fourth quarter? A little color there would be helpful.

Yes, I would say auto is still pretty strong, Barton. It's still one of our top categories. And so I don't think there's anything particular going on in auto. We've done some deals throughout the year with the auto makers. So that's not the problem. And if you look at our book -- across our book, it's a pretty good mix of clients. As I mentioned in my comments, we've brought on quite a few new clients that some of which are in categories that are more difficult. So again, there's just a lot of stickiness out there that we're hoping it releases. If it doesn't release, then we'll likely be at the bottom end of our range. If it does release, we'll likely be at the top, maybe over it. And I don't know how we can be any more transparent than that.

Okay. Now 4 years ago, in 2008, it seemed that political advertising took up some slack and scatter and squeezed some stuff towards you guys. Is there anything like that happening this year, or it would seem not from your guidance, but how would you compare and contrast the impact of political this year?

Yes, I think what you're seeing is, is in our local. I think this year, more than any other election, there's been a much greater focus on the -- what I'd would call the swing states or the battleground states. And that is more of a local play because you've probably seen this in some of the other companies that you follow. It's the local affiliates that have really benefited mostly by the television spending that's happening right now. And obviously, there's been a lot online and mobile spending that hasn't been there in prior years. But for us, what we seem to have happened is that it was like a complete flip. As soon as August was over, which was down a little bit from last year, September just took off. And as we mentioned in our comments, we were over 20% up in September, October's strong. Our fourth quarter is going to be strong on the local. So we can't tell you exactly where the money is coming from. But it would seem to me that we're seeing the election crowding out effect, if you will, more in our local and regional business, clearly, than we are in the national. And I think that's just because the preponderance of money is being spent more regional than local because of the battleground thing.

And Barton, in Q3, our auto was significantly higher than it was the year before. We had a lot of Nissan in there. If you were in the theaters, you would have seen it.

The next question is from Townsend Buckles of JPMorgan.

As we think about your new guidance, can you say how much of the revision is the softer scatter you're seeing versus the potential impact of the storm? And your revenue guidance is a bit wider than usual. Is this -- the higher level of inventory still to be sold in the past, or again, is the storm uncertainty at play there?

Yes, let's face it, if the storm hadn't happened, and we could've closed a few more deals this week, we may have had a little more confidence and you may have seen a narrower range. It's just that there's so much sitting there right now that people haven't pulled the trigger on. And we literally can't -- we haven't been able to get a hold of anybody. And as I said, our office has been closed now for 4 days. And for any of you living in New York, you probably know why. We didn't even get Internet connectability in our office until today, and we still don't have reliable phone service. So our guys, I think they've been doing the best they can from home. Cliff's [ph], actually, last time I talked to him on the way to Newark Airport to try to get on the plane. So it's been a pretty difficult situation, and we were hopeful this week we would close a few more deals, and maybe able to bring the range down a little bit, at least the high and low part. So look, I can't tell you the percentage of what is what. But as we said at our last call and we're sitting here now with a pipeline that is basically the same, give or take, as it was last year. But as Gary said in his comments, I think we've created a lot of, I guess, you'd call it downside protection just in case everybody freezes up. Because there's no question that the economic activity in the all-important Northeast Corridor, unless you're in the construction or clean-up business, is going to be stalled here for a month or 2. Whether or not that gives pause to certain clients and certain categories, we don't know the answer to that. But there's going to be an economic impact over the next couple of months again unless you're in the construction or clean-up business, and I think they're going to be having economic boom probably over the next couple of months.

That makes sense. And you mentioned the impact of getting deals done. Are the theater closings also a factor or those more immaterial for you?

Yes. It will be a factor, but we've got so many impressions. We've done a good job, I think, of building up our affiliates. I also think the film schedule -- October actually turned out to be quite strong, and November and December look quite strong especially relative to last year. So I'm not too worried about that. We definitely have some theaters down right now, and we're going to have to get out and re-point some dishes and do some other stuff. I don't have an exact count of how many theaters are actually still closed, but there are obviously some. And that's not even the big issue. The big issue is can people actually even get there. And so I suspect you're going to see this week be a pretty low attendance week in the theater business. And usually what that means is that the weekend, the first weekend that things are back on track is usually a big weekend. The only blessing in this storm is it didn't hit smack dab in the middle of a big opening weekend for a big film. It sort of hit -- it hit, obviously, during the week, and it hit during a time when there wasn't a big film opening. That could've been a lot -- it could've been a lot more damaging to the theater industry than it's going to be.

The next question is from James Dix of Wedbush Securities.

Two questions. Do you think there's any potential impact of advertisers, who spend a lot on the Olympics maybe kind of relooking their budgets to the rest of this year and being maybe a little bit more hesitant to commit at this point? I've heard that speculated by some of the ad agencies, who saw some slowdown in September going forward, so I was curious on your take on that. And then I had just one follow-up.

Okay. Yes, we actually toyed around with talking about the Olympics. But our Q3 was so strong on the back of the big deal we talked about and some other stuff that we had going that it was hard to say that whether we were impacted or not by the Olympics. The facts are that could we have taken a little more money in September and handled it? Sure. If that money were to come in, in August, we couldn't do anything about it anyway. We were completely oversold. I mean, you can tell by our utilizations at 130% for the quarter, July and August was completely oversold. And we stopped selling July and August in sort of late April, early May. So -- and I'm sure that helped the other guys because I'm sure there was a lot of money that ended up going to them as a result of us being sold out. So I can't say what the Olympic impact. I do know that the ratings on the Olympics put another $200 million or so of inventory into the market that nobody expected would be there. So there was clearly a big sucking sound sometime in August or late July whenever they figured out they had all these incremental rating points. And could that have maybe sucked up the money that would've flown into September? I don't know. Could be.

Yes. No, I was also curious as to whether you thought that might be having any impact on the hesitancy about the fourth quarter. Just a lot of -- there might have been some pull forward. Advertisers who said, "Look, we have to spend on the Olympics," and now after, it's the macroeconomic environment being somewhat uncertain. Will that -- the fact that they just spent on a big event, does that increase their level of hesitancy as you look into the fourth quarter?

I think there's probably no question that, that was the case with the Olympic sponsors because I'm assuming when the extra rating points came into the market that they had first shot at it on some basis. And so clearly, it impacted, for instance, our spending with GM this year because GM spent so much money on their Olympic connection. So I think there could be some of that, but I haven't got any specific data to support that. [Technical Difficulty]

And then I just had one other one. Just looking longer term, Kurt, as you think about the place of cinema and as you're rolling out a more aggressive upfront strategy, do you think there are any milestones that you guys need to reach in terms of data on impact and having a better targeting capability just as more advertisers think about using TV in a targeted way with better cross-platform measurements and then -- and just better use of data going forward instead of just a purely mass-reach play?

Yes. Look, I think all of this for us goes back to this idea of getting into the planning cycle of the brands. And there's no question that we're going to have to when we -- as we work with the brands in the planning cycle, we're going to have to give them more flexibility to target in certain ways, whether it's by genre, types of film groups. Probably we'll never get to just allowing people to buy a specific film in a specific theater. But clearly, targeting is an ongoing theme. I think clearly, the other ongoing theme, and we've talked about this in our last calls, is pricing especially for the, what I'll call, maintenance spending, not necessarily product launches or special events or any of that kind of stuff. But just for the maintenance spending, there's going to continue to be pressure on pricing and pressure on us to come up with pricing strategies and combinations of strategies that will allow people like P&G and other CPG companies and retailers to use some of their GRP or maintenance money, if you will, in cinema. And we experimented a little bit in the first quarter with quite a bit of success. Our CPMs are down 11%, but our cash flow is up double digits, so that's obviously a good trade. Certain times of the year, we don't have to do that. Clearly, third quarter with all the demand that's there, we don't have to really do that. Our third quarter CPMs would've been up quite a bit more had it not been for the mix of ads that we had playing, one of which was a 2-minute ad, which clearly garners a meaningful CPM discount once you get past the 60 seconds. So I think for us, it's just building these deeper, more planning-oriented relationships with clients, so they know how to use cinema better. And cinema, while I think we have come from a tertiary now to a secondary, and we sold a lot of clients a primary medium, we still don't spend enough time talking to clients during the planning. And that's really been our focus. And you're also going to see us start adjusting some of our investment in people to more and more, and we've been doing this over the last 2 or 3 years, more and more business development-type people because I think that we've got to continue to focus on developing the business.

Our next question is from James Marsh of Piper Jaffray.

A couple of questions here. One, I'm just really trying to get a sense for what's so much different this year when you guys ease back your guidance and last year when you did the same. It's just seems like there's a number of similarities there. I mean, both had uncertainty going into year end. Last year, we had the big snowstorm on the East Coast, this year, it's the hurricane. And you guys ended up doing much better than you originally guided to, obviously, last year. So I'm just trying to get a sense, what's the -- different when you compare the 2?

Here's the big difference, James, is that we started to sense that there were issues in August. And of course, the market fell apart significantly in August, the financial markets and pretty much every market. It didn't get much better in September, and then it started to recover a little bit in October. So that didn't happen this year. And in fact, our September, and as we've already mentioned, October numbers are actually quite good. And one of the reasons we gave you a little more color, Gary gave you a little more color this time on exactly what we were thinking about when we set the low end and the high end of our guidance was because there's clearly that -- there's a different level of uncertainty staring us in the face. A week from now, we will be smarter about where the economy is going to go than we are right now. I don't -- I can't remember in my lifetime an election that was so uncertain this close to the day. And by the way, not only uncertain, but the outcome, depending on who gets elected, being so diametrically different as it relates to the economy and the direction of the economy. And so -- and then of course, all of this is a little bit colored with what the hell's going to happen with the fiscal cliff and all of that, which, of course, is tied to the election as well. So I think there's a lot more, what I would call, near-term uncertainty that could get cleared up in the next 2 or 3 weeks, but we're sitting here today having to give you numbers. And the last thing we want to do is have to come out 3 weeks from now or 4 weeks from now or whenever before we report and do this again. So that -- and look, Gary told you, the bottom end of our guidance is only 25% of what we booked from this time forward last year, so that should give you a pretty good indication. And what we've got in the book right now, basically if we book that, we'll be at the high end of our guidance. So you guys will use that however you want to use it, but we thought that given all of this uncertainty, we needed to be a lot more transparent with our guidance thinking than we usually were.

Appreciate that. And then just one quick question. On the wireless advertising side, we've got some consolidation taking place on the wireless carrier side. What's you guys' take on how this could impact ad spend? Does it just, kind of, reinvigorate one that was a little tired or does it become more oligopolistic? I mean, what's your kind of view there?

Are you talking about the Sprint deal?

Yes.

Yes. Well clearly, we have a big deal with Sprint that goes through the end of next September. So obviously, we're continuing to work with them and quite a few others on our PSA thing because with new ownership coming in, theoretically or I guess that looks like that deals actually going to happen, you never know. And we're not counting on -- we never count on a renewal. We always make sure that we have backups. And I think for our Sprint, the PSA that we have, that inventory is the absolute -- that 30 seconds is the best inventory we have. We have other people that we're talking to that are interested in it. There could be structural changes to that placement that makes it even more valuable. So it's not something that is a big worry just because of the quality of the inventory. So I do think that it's going to create some interesting dynamics in the telecommunications industry. I think it's going to get more frothy around marketing, more frothy around trying to move people over to your network versus another. It's going to be very interesting to see how it plays out. Clearly, it's going to make, I think, Sprint a much stronger competitor, which may, because I think -- I'm assuming they're going to use a lot of the money to rebuild their network and finish some of the things they've got to do there. So I think it's going to be actually more competitive than it even has been.

The next question is from Anthony DiClemente of Barclays.

This is actually Bo Tang in for Anthony. In one of the broadcast TV seasons getting off to somewhat of a sluggish start for many of the broadcasters, is this generally a positive for you guys? Or is it possible that if we end up seeing a squeeze in scatter pricing from these broadcast ratings shortfalls that this could actually pose somewhat of a challenge for you guys?

It's a great question. Here's my sort of macro view on where this could all go over the next 2 or 3 years. There's clearly -- we're clearly approaching very quickly a tipping point on DVR penetration. And I don't know what is impacting the ratings because you see these week-to-week ratings being down as much as 20% or 30% for some networks, but most of them are all high-single-digit or low-double-digit decreases week over week over week. So there's clearly something going on. I don't know exactly what it is. It could be that people's viewing is shifting to some of the online platforms. Now for the networks, that's not necessarily bad news because they're just moving the money from something called broadcast to something called digital, and they own both of them. Now whether or not they're able to maintain their CPMs for a lot of the online video, especially the player stuff, you can't skip the ad. So they're getting quite good CPMs for those. Now I have a view that, that's not going to last for long because technology will figure out how to let consumers skip ads if they want to. It took a while for television to figure that out, but we're clearly there now. And so when I look at our business, there aren't many sight, sound and motion. In fact, I can't think of any sight, sound and motion businesses out there, where you can't make the ads go away. And over the next 2 or 3 years, I think we're going to see the DVR and maybe other things like our friend Charlie Ergen are doing to profoundly affect viewing on television. Now whether this is just a shift from one pocket to the other for the owners of the programming…

The next question comes from Mike Hickey of National Alliance Capital.

Kurt, can you just update us your thoughts on Screenvision?

Sure. I would say given that we do see their results, we've been monitoring them, we can do this through the Cinemark -- or sorry, the Carmike financial statements. If any of you looked at the 10-Qs and 10-Ks of Carmike, they actually have a footnote that discloses Screenvision's revenue and income. So we can see what's going on there, and they've had a reasonably difficult year. Their third quarter was a bit stronger than we actually thought it was going to be. We assumed that some of that was because the market was tight. We were sold out in particular in July and August, so that helped. But we just continue to monitor them. We continue to believe that a combination of some sort would be very beneficial for all parties involved, including media buyers and so on because they would have a bigger platform to be able to buy consistent pricing, consistent programmings, consistent preshow, all that kind of stuff. So we monitor it very closely. We're not obviously just sitting around doing nothing. We continue to aggressively go after new affiliates. And as we mentioned in our comments, there's a lot going on there that we think could be positive. There's a lot of M&A activity that's going on. The only thing that's been announced recently was Carmike buying some of the Rave theaters. As those theaters were already part of the Screenvision network, it had no impact on us at all. So, yes, we're going to continue to do what we've been doing. And I'm hopeful that at some point, it makes more sense for the Screenvision owners to own maybe a piece of us as opposed to trying to make a go of it owning private equity.

Okay. And then on Samsung, obviously, you had huge success this year of signing integrated solutions, and you created kind of a megadeal. Just curious kind of the data that you got back from that, maybe on the success or not and the relationship with Samsung. It certainly creates some confidence seems to also create an opportunity for you. So when you think forward to '13, how should we think about kind of these megadeals from the integrated solution?

Well, the integration has always been a part of our strategy from Day 1. So this just happened to be one that just hit on all cylinders. And as I mentioned in my comments, a lot of our capabilities from a production standpoint, a creative standpoint and so on, led to us getting this deal, and as it turned out getting 100% of the deal. And so I think that the strategy that we've employed here of really being a creative and production agency inside of us has really borne some fruit in this instance, and will continue to do that, especially as clients get more and more demanding around integration. The day where you're just buying 30s and that's all you're going to buy, that happens. But even in the networks today, they're doing a lot of other things at the same time, whether it's online or whatever. And in the case of somebody like ESPN, you're getting the online, the mobile, the magazine, obviously, the broadcast and so on. So this is a trend that if you're not in an integrated -- if you don't have the capability to be an integrated seller, it's going to be very tough in the future media world. So I'm very bullish about what we can do, and it's further -- we can do 3D and we can do a lot of other things that other people can't do at all. So all of that I think plays a good role on that.

Yes. And then last one. On the Cinema Sync, can you give us any update there on how that's tracking?

Yes, I mean, the use of it -- some of our affiliates are starting to adopt it. We're working with some of our founding member circuits to try to build it into some of their future marketing plan, so that they can use it to sell more concessions, possibly tickets. We have a lot of our content partners that are very bullish on it, especially the entertainment guys. So all of these things, I think, are very positive. The key is, of course, building distribution. And one of the things that we recently did is that we originally released Cinema Sync as an integrated part of our Movie Night Out app. And it became apparent that it was a better strategy to just give consumers the opportunity to just get Cinema Sync and nothing else. And so we've just released a version of Cinema Sync in the iPhone and Android stores on a stand-alone basis, which we think -- that just happened a few weeks ago. We're working on some marketing campaigns for that. And so you're going to see more and more about this as the circuit starts to embrace it to try to help their business. And then obviously, we're going to use it to try to get clients to use it for, as I mentioned in my comments, coupon downloading and other things.

[Operator Instructions] The next question is from Kevin Lee of Stifel, Nicolaus.

It's actually Ben Mogil. So quick, quick question for you, as I got on through most of the call, but I just wanted to get a sense from you from a color perspective. If we were to rewind 2 weeks from now or 2 weeks back in time, there was no storm, the election was maybe not as close as it is right now, I'll leave my own political views on the side, what's your thought on either where you would have stood for fourth quarter guidance? Would you have been more -- would the range be tighter, which I gather, or do you actually feel that you also would've actually been higher up on the range?

Both. In fact, we had significant debates as much as an hour before we had the call so -- before we released our earnings release, so...

And just to be fair, I mean, I think things are starting to pick up, Ben. I mean, literally, we booked some money today. Granted it wasn't New York money, but I think things are starting to pick up. People are getting back on the phones. But when you have a situation like this, and the market is not super strong in general, something like this just gives you a little...

I'll tell you what I really wanted to do, Ben, I wanted to wait until next Wednesday to even release. This idea of releasing a week before this kind of election of 6 days or whatever it is, 5 days before this election creates pause because, as I said before, I don't think there's ever been something -- an election that's this close and where the 2 candidates were so far apart on their vision for our country and for the economy.

Do you think there's any chance that advertisers are simply using election as an excuse to just kind of get you to leave them alone for a couple of weeks?

Yes, they didn't even have to use that excuse this week because we've left them alone because we can't get ahold of them. So that kind of goes to your question on the storm. I mean, who the hell knows what we would've booked this week? For us, the difference between a guidance, that's $5 million higher on the low end, and high end's 1 or 2 deals, right? So it doesn't take much to move where we've moved the guidance. And as I said in my comments, 2 or 3 deals and we're all of a sudden right at the top end of the range and even over it. So that's the problem with the uncertainty that we're dealing with right now. And again, even the fiscal cliff, you could argue, is directly related to what goes on in the election. And not only the presidential, but does the senate move or what happens there. So we'll see. Again, I don't know if you were on the phone. I know you had another call you were on earlier, but Gary, I think, gave a lot more color on what we were thinking and how we developed our guidance. And just to reiterate, the bottom end, we only have the book 25% of what we booked last year forward at this time. And if we book what we did last year, we're at the high end of the guidance.

And I think one of the interesting things that we didn't talk about all that much and we put it in the script that no more question has come. It's been the disconnect between the local market and the national market. I mean, the local market -- local/regional is very, very strong and continues to be. And now this week will, I'm sure, affect that a little bit, but not enough to make a huge difference.

Yes, I think our September numbers and our October numbers were probably election motivated because they turned around so quickly. It was like you turned a light switch on in September. And we went from down in August versus August to up 21% September versus September. So it's hard for me not to think that, that didn't have some election overflow money sitting in it somewhere. I know -- I mean, I haven't watched much television for a whole bunch of reasons the last few weeks, but what I'm told is that pretty much every pod is either 100% election or 60% or 70% election. Now we're in Colorado in a swing state, so that probably makes more sense. But it's -- we've been inundated. The other thing, Ben, is that is going on, and this is something that to the extent that you dig into some of the networks is how much money are they retaining because it's going to online video as opposed to their broadcast. Because there's clearly some shifting going on between the 2. And it'll be interesting and it kind of relates to my comments earlier on the impact of the DVR tipping point that we're approaching. But there's clearly a lot of shifting going on. And what I expect is going to happen is that shifting is going on now because some of these players you can't skip the ad. That's going to change. It already has on YouTube. You can skip the ad on YouTube if you want to. And so I suspect on some of these network players, you're going to see some of the same thing. Technology is going to eventually catch up with that, and people are going to figure out ways to skip ads. And then all of a sudden, online video players aren't going to be the new darling that they are right now.

Our next question is from Jim Goss of Barrington Research.

As you pursue your strategy in the national side, is it generally purely national or do you get very active in the national spot market, which is sort of a hybrid involving national advertisers trying to fill in, in local markets, where you have the discrete sites that could play very well in that sort of market maybe at a very good advantage for you?

Yes. We are actually playing it. And when we say regional, I think regional probably captures some of what you're talking about because some of our regional are national clients that are just deciding to buy certain states, certain DMAs or certain combination of DMAs. And so we do have a lot of that. We are futzing around a little bit with our segment 2 inventory to see if there's some ways of attracting more money in that area because some of those clients are a little particular about where they're placed in the show because they view themselves, even though they're buying regionally, they view themselves as national clients. So I think you're going to see more of that happening. I don't know if that's responsive to your question, but I think that's what you were asking me for.

Yes, and it sort of is, but I guess you can probably get premium pricing for a national spot if, I guess, I'll use Coke since it's always there. But let's say if they weren't and they're trying to position themselves in certain markets, they're probably willing to pay a premium price over what they'd want to in a national basis in order to get better penetration in certain markets. So I'm just wondering...

Yes, there's no question and we don't sell our regional and local ad on a CPM basis. But if you actually converted it back into a CPM basis, the CPMs would be much higher, which is completely consistent with what you see in the TV marketplace, where local affiliate CPMs are generally higher than national CPMs. Now there are exceptions, obviously, national sports and certain events like the Academy Awards and other special events that, that's not the case. But generally, local affiliate pricing on a CPM basis is higher than national.

Okay. And also when you talked about the significant sellout you had in July and August, to what would you attribute that? Was it this year was unique because of a couple of bigger movies, or you're just getting further down the line in terms of getting penetration in the blockbuster periods and hopefully it can spread out to other markets?

I would say -- yes, if you analyze Q3, Q3 is the only quarter of the year where we don't have a weak month. If you look at first quarter, you could argue all 3 months are weak, weaker. Second quarter, April is always weak, May sometimes is weak, June's usually is strong. July and August are always strong. And September, over the last several years, last 3 in particular, we've developed a business around back-to-school and other priorities. The sweeps for networks has become very important in September for some of our clients like CBS, for instance, and some of our cable clients as well. So we've got a quarter where all 3 months are really pretty strong. So that's one of the reasons that Q3 has developed into our best quarter of the year. And that transition, by the way, happened in 2009. Used to be fourth quarter was actually the biggest quarter of the year. So it's all about developing clients that will buy certain time periods that you don't just have a lot of general demand for. Now the facts are we were sitting in April, late April, when Samsung came to us, and we were very well sold already. And the reason that you're seeing the 130%, give or take, utilization in Q3 is because we added basically a 2-minute ad on top of already a very strong sell-through. So that obviously put us, especially in July and August, in an oversell. Now the good news is, is that we not only had that 2-minute ad, we had some other long-form stuff in third quarter. So it played -- the show played very, very well because of the longer form stuff. If you have too many ads that are all 30 seconds, the show play is very choppy, and we generally won't even oversell if that's the case, if all we've got are a bunch of 30-second ads. So I think it was the combination of just our ability to sell third quarter in general. And then obviously, we had Samsung come on top of that. Now the other question that a lot of people are probably thinking is "Oh my God, how are they going to replace Samsung next year?" And I mentioned in my comments, I'm much more comfortable trying to replace July and August money than I am -- like we had to do back in 2011 when we lost a $13 million, happened to be Army National Guard, contract that was there in 2010 January, February. And obviously, they didn't come back in 2011. Refilling July and August inventory, there's plenty of demand there. And while clearly Samsung put us over the top, there's no question about that, I don't think the comping issues are significant and as I mentioned that in my comments.

We have no further questions in queue at this time. I'd like to turn the floor back over to management for closing remarks.

Great. Well, thank you very much, everyone, for tuning in, especially for those of you on the East Coast because I know it's probably challenging even getting a phone line that works, so I really appreciate that. And we will continue to keep you posted on the growth of our business, and we'll be talking to you sort of mid-ish, I guess, first quarter. So thank you very much for all your support.

Thank you. Ladies and gentlemen, this concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation.