XML 44 R17.htm IDEA: XBRL DOCUMENT
v3.20.1

Other Investments | 3 Months Ended
--- | ---
Mar. 31, 2020
Financial Support For Nonconsolidated Legal Entity [Abstract] |
Other Investments |
10. | Other Investments
Below is a summary of activity for each of the Company’s other investments for the three months ended March 31, 2020:
|  | DCIP |  | AC JV, LLC |  | DCDC |  | FE Concepts |  | Other |  | Total |
Balance at January 1, 2020 |  | $ | 124,696 |  | $ | 5,022 |  | $ | 3,169 |  | $ | 19,519 |  | $ | 2,879 |  | $ | 155,285 |
Cash distributions received |  |  | (5,161 | ) |  | — |  |  | (878 | ) |  | — |  |  | — |  |  | (6,039 | )
Equity in income (loss) |  |  | 1,249 |  |  | 740 |  |  | 194 |  |  | (223 | ) |  | — |  |  | 1,960 |
Other |  |  | 50 |  |  | — |  |  | — |  |  | — |  |  | (24 | ) |  | 26 |
Balance at March 31, 2020 |  | $ | 120,834 |  | $ | 5,762 |  | $ | 2,485 |  | $ | 19,296 |  | $ | 2,855 |  | $ | 151,232 |
Digital Cinema Implementation Partners LLC (“DCIP”) On February 12, 2007, the Company, AMC and Regal (the “Exhibitors”) 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. On March 10, 2010, DCIP and its subsidiaries completed an initial financing transaction to enable the purchase, deployment and leasing of digital projection systems to the Exhibitors under equipment lease and installation agreements. On March 31, 2011, DCIP obtained incremental financing necessary to complete the deployment of digital projection systems. DCIP also entered into long-term Digital Cinema Deployment Agreements (“DCDAs”) with six major motion picture studios pursuant to which Kasima LLC, one of DCIP’s subsidiaries, receives a virtual print fee ("VPF") each time the studio books a film or certain other content on the leased digital projection systems. Other content distributors entered into similar DCDAs that provide for the payment of VPFs for bookings of the distributor's content on a leased digital projection system. The DCDAs end on the earlier to occur of (i) the tenth anniversary of the "mean deployment date" for all digital projection systems scheduled to be deployed over a period of up to five years, or (ii) the date DCIP achieves "cost recoupment", each as defined in the DCDAs. Cost recoupment occurs when revenues attributable to the digital projection systems exceed the financing, deployment, administration and other costs associated with the purchase of the digital projection systems. DCIP expects cost recoupment to occur during 2021. The timing of cost recoupment is dependent on VPF payments from studios. Pursuant to the operating agreement between the Exhibitors and DCIP, DCIP began to distribute excess cash to the Exhibitors upon the payoff of its outstanding debt, which occurred during the year ended December 31, 2019. As of March 31, 2020, 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, 2020 |  |  | March 31, 2019 |  |
Gross revenues |  | $ | 32,510 |  |  | $ | 44,774 |  |
Operating income (loss) |  | $ | (5,239 | ) |  | $ | 20,208 |  |
Net income (loss) |  | $ | (11,140 | ) |  | $ | 18,485 |  |
|  | As of |
|  | March 31, 2020 |  |  | December 31, 2019 |
Current assets |  | $ | 40,241 |  |  | $ | 51,382 |
Noncurrent assets |  | $ | 531,867 |  |  | $ | 581,547 |
Current liabilities |  | $ | 55,737 |  |  | $ | 70,515 |
Noncurrent liabilities |  | $ | 159 |  |  | $ | 190 |
Members' equity |  | $ | 516,212 |  |  | $ | 562,224 |
As of March 31, 2020, the Company had 3,866 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, 2020 and 2019:
|  |  | Three Months Ended |
|  |  | March 31, 2020 |  |  | March 31, 2019 |
Equipment lease payments |  |  | $ | 1,038 |  |  | $ | 1,121 |
Warranty reimbursements from DCIP |  |  | $ | (3,123 | ) |  | $ | (2,938 | )
Management service fees |  |  | $ | 84 |  |  | $ | 158 |
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 $1,673 and $5,317 for the three months ended March 31, 2020 and 2019, respectively, which are included in film rentals and advertising costs on the condensed consolidated statements of income. The Company accounts for its investment in AC under the equity method of accounting. 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 $105 and $263 to DCDC during the three months ended March 31, 2020 and 2019, 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. The Company accounts for its investment in DCDC under the equity method of accounting. FE Concepts, LLC During April 2018, the Company, through its wholly-owned indirect subsidiary CNMK Texas Properties, LLC (“CNMK”), formed a joint venture, FE Concepts, LLC (“FE Concepts”) with AWSR Investments, LLC (“AWSR”), an entity owned by Lee Roy Mitchell and Tandy Mitchell. FE Concepts operates a family entertainment center that offers bowling, gaming, movies and other amenities that opened during December 2019. The Company and AWSR each invested approximately $20,000 and each have a 50% voting interest in FE Concepts. The Company accounts for its investment in FE Concepts under the equity method of accounting. The Company has a theatre services agreement with FE Concepts under which it provides film booking and equipment monitoring services. The Company recorded $10 of theatre services revenue under the agreement during the three months ended March 31, 2020. Additional Considerations Each of the investments above have been temporarily impacted by the COVID-19 pandemic (see Note 2) due to the temporary closure of theatres across the U.S. The Company does not believe that any resulting decline in value of the underlying investments is other than temporary as the Company and other industry participants, who also have equity ownership interests in certain of the above investments, are planning to reopen theatres during the next few months, and the Company expects industry attendance to recover gradually over time.

X
- References No definition available. + Details
Name: | us-gaap_FinancialSupportForNonconsolidatedLegalEntityAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for the information summarizing investments in and advances to majority-owned subsidiaries, other controlled companies, and other affiliates. It reflects specified information about ownership, financial results from, and financial position in such entities. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 946 -SubTopic 320 -URI http://asc.fasb.org/subtopic&trid=2324412 + Details
Name: | us-gaap_InvestmentsInAndAdvancesToAffiliatesScheduleOfInvestmentsTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration