Quarterly report pursuant to Section 13 or 15(d)

Other Investments

v3.8.0.1
Other Investments
3 Months Ended
Mar. 31, 2018
Financial Support For Nonconsolidated Legal Entity [Abstract]  
Other Investments

8.

Other Investments

Below is a summary of activity for each of the Company’s other investments for the three months ended March 31, 2018:

 

 

 

DCIP

 

 

AC JV,

LLC

 

 

DCDC

 

 

Other

 

 

Total

 

Balance at January 1, 2018

 

$

106,215

 

 

$

5,916

 

 

$

3,598

 

 

$

4,316

 

 

$

120,045

 

Cash contributions made

 

 

326

 

 

 

 

 

 

 

 

 

78

 

 

 

404

 

Cash distributions received

 

 

(5,201

)

 

 

 

 

 

 

 

 

 

 

 

(5,201

)

Equity in income

 

 

4,142

 

 

 

253

 

 

 

226

 

 

 

 

 

 

4,621

 

Equity in other comprehensive income

 

 

136

 

 

 

 

 

 

 

 

 

 

 

 

136

 

Other

 

 

 

 

 

 

 

 

(1,168

)

 

 

(48

)

 

 

(1,216

)

Balance at March 31, 2018

 

$

105,618

 

 

$

6,169

 

 

$

2,656

 

 

$

4,346

 

 

$

118,789

 

 

Digital Cinema Implementation Partners LLC (“DCIP”)

On February 12, 2007, the Company, AMC and Regal entered into a joint venture known as DCIP to facilitate the implementation of digital cinema in the Company’s theatres and to establish agreements with major motion picture studios for the financing of digital cinema. As of March 31, 2018, the Company had a 33% voting interest in DCIP and a 24.3% economic interest in DCIP. The Company accounts for its investment in DCIP and its subsidiaries under the equity method of accounting.

Below is summary financial information for DCIP for the periods indicated:

 

 

 

Three Months Ended

 

 

 

March 31, 2018

 

 

March 31, 2017

 

Gross revenues

 

$

41,033

 

 

$

45,479

 

Operating income

 

$

23,445

 

 

$

27,934

 

Net income

 

$

21,534

 

 

$

24,142

 

 

 

 

As of

 

 

 

March 31, 2018

 

 

December 31, 2017

 

Current assets

 

$

52,531

 

 

$

56,296

 

Noncurrent assets

 

$

750,571

 

 

$

772,438

 

Current liabilities

 

$

62,251

 

 

$

59,153

 

Noncurrent liabilities

 

$

265,475

 

 

$

296,889

 

Members' equity

 

$

475,376

 

 

$

472,692

 

 

As of March 31, 2018, the Company had 3,817 digital projection systems being leased under the master equipment lease agreement with Kasima LLC, which is an indirect subsidiary of DCIP and a related party to the Company. The Company had the following transactions with DCIP, reflected in utilities and other costs on the condensed consolidated statements of income, during the three months ended March 31, 2018 and 2017:

 

 

 

Three Months Ended

 

 

 

March 31, 2018

 

 

March 31, 2017

 

Equipment lease payments

 

$

1,217

 

 

$

1,369

 

Warranty reimbursements from DCIP

 

$

(2,501

)

 

$

(1,884

)

Management service fees

 

$

194

 

 

$

206

 

 

AC JV, LLC

During December 2013, the Company, Regal, AMC (the “AC Founding Members”) and NCM entered into a series of agreements that resulted in the formation of AC JV, LLC (“AC”), a joint venture that owns “Fathom Events” formerly operated by NCM.  The Fathom Events business focuses on the marketing and distribution of live and pre-recorded entertainment programming to various theatre operators, including concerts, opera and symphony, DVD product releases and marketing events, theatrical premieres, Broadway plays, live sporting events and other special events. The Company paid event fees to AC of $2,571 and $3,369 for the three months ended March 31, 2018 and 2017, respectively, which are included in film rentals and advertising costs on the condensed consolidated statements of income.  Additionally, the remaining outstanding balance of a note payable from the Company to NCM, related to the formation of AC, was $2,778 as of March 31, 2018.

Digital Cinema Distribution Coalition

Digital Cinema Distribution Coalition (“DCDC”) is a joint venture among the Company, Universal, Warner Bros., AMC and Regal.  DCDC operates a satellite distribution network that distributes all digital content to U.S. theatres via satellite. The Company has an approximate 14.6% ownership in DCDC. The Company paid approximately $234 and $278 to DCDC during the three months ended March 31, 2018 and 2017, respectively, related to content delivery services provided by DCDC.  These fees are included in film rentals and advertising costs on the condensed consolidated statements of income.