Investments

The carrying amounts of investments, by category, at March 31, 2017 and March 31, 2016 were as follows:



	March 31, 2017		March 31, 2016
	(Amounts in millions)
Equity method investments	$	322.9	$	297.5
Available-for-sale securities	8.0		124.0
Cost method investments	40.6		42.8
	$	371.5	$	464.3

Equity Method Investments:

The carrying amounts of equity method investments at March 31, 2017 and March 31, 2016 were as follows:



	March 31, 2017
Equity Method Investee	Ownership Percentage	March 31, 2017		March 31, 2016
		(Amounts in millions)
EPIX	31.15%	$	188.8	$	171.8
Pop	50.0%	96.8		98.7
Other	Various	37.3		27.0
		$	322.9	$	297.5

Equity interests in equity method investments for the years ended March 31, 2017, 2016 and 2015 were as follows (income (loss)):



	Year Ended
	March 31,
Equity Method Investee	2017			2016			2015
	(Amounts in millions)
EPIX	$	31.0		$	52.1		$	48.7
Pop	(6.9		)	(1.8		)	(9.6		)
Other⁽¹⁾	(13.4		)	(6.1		)	13.4
	$	10.7		$	44.2		$	52.5

____________________


(1)	The Company records its share of the net income or loss of other equity method investments on a one quarter lag. Equity interest income from other equity method investments for the year ended March 31, 2015 includes a gain on sale of the Company's investment in FEARnet of $11.4 million.

EPIX. In April 2008, the Company formed a joint venture with Viacom, its Paramount Pictures unit and Metro-Goldwyn-Mayer Studios to create a premium television channel and subscription video-on-demand service named “EPIX”. The Company invested $80.4 million through September 30, 2010, and no additional amounts have been funded since. Since the Company's original investment in April 2008, the Company has received distributions from EPIX of $42.0 million through March 31, 2017. During the year ended March 31, 2017, the Company received distributions from EPIX of $14.0 million (2016 - none, 2015 - $7.8 million). In May 2017, the Company sold all of its 31.15% equity interest in EPIX to MGM (see Note 23).

EPIX Financial Information:

The following table presents summarized balance sheet data as of March 31, 2017 and March 31, 2016 for EPIX:



	March 31, 2017		March 31, 2016
	(Amounts in millions)
Current assets	$	408.3	$	355.7
Non-current assets	$	399.4	$	360.4
Current liabilities	$	116.1	$	90.8
Non-current liabilities	$	18.5	$	23.9

The following table presents the summarized statements of income for the twelve months ended March 31, 2017, 2016 and 2015 for EPIX and a reconciliation of the net income reported by EPIX to equity interest income recorded by the Company:



	Twelve Months Ended
	March 31,
	2017			2016			2015
	(Amounts in millions)
Revenues	$	400.1		$	413.8		$	442.8
Expenses:
Operating expenses	259.8			221.6			252.9
Selling, general and administrative expenses	23.3			24.0			23.3
Operating income	117.0			168.2			166.6
Interest and other expense	(0.3		)	(2.2		)	(2.0		)
Net income	$	116.7		$	166.0		$	164.6
Reconciliation of net income reported by EPIX to equity interest income:
Net income reported by EPIX	$	116.7		$	166.0		$	164.6
Ownership interest in EPIX	31.15		%	31.15		%	31.15		%
The Company's share of net income	36.4			51.7			51.3
Eliminations of the Company’s share of profits on licensing sales to EPIX⁽¹⁾	(12.4		)	(7.3		)	(10.2		)
Realization of the Company’s share of profits on licensing sales to EPIX⁽²⁾	7.0			7.7			7.6
Total equity interest income recorded	$	31.0		$	52.1		$	48.7

_________________________


(1)	Represents the elimination of the gross profit recognized by the Company on licensing sales to EPIX in proportion to the Company's ownership interest in EPIX.


(2)	Represents the realization of a portion of the profits previously eliminated. This profit remains eliminated until realized by EPIX. EPIX initially records the license fee for the title as inventory on its balance sheet and amortizes the inventory over the license period. Accordingly, the profit is realized as the inventory on EPIX's books is amortized.

Pop. Pop is the Company's joint venture with CBS. The Company’s investment interest in Pop consists of an equity investment in its common stock units and mandatorily redeemable preferred stock units. CBS has a call option to purchase a portion of the Company's ownership interest in Pop at fair market value, which would result in CBS owning 80% of Pop, exercisable beginning March 26, 2018 for a period of 30 days. During the year ended March 31, 2017, the Company made contributions of $5.0 million to Pop (2016 - $8.8 million, 2015 - $15.0 million).

The mandatorily redeemable preferred stock units carry a dividend rate of 10% compounded annually and are mandatorily redeemable in May 2019 at the stated value plus the dividend return and any additional capital contributions less previous distributions. The mandatorily redeemable preferred stock units were initially recorded based on their estimated fair value, as determined using an option pricing model. The mandatorily redeemable preferred stock units and the 10% dividend are being accreted up to their redemption amount over the ten-year period to the redemption date, which is recorded as income within equity interest.

Pop Financial Information:

The following table presents summarized balance sheet data as of March 31, 2017 and March 31, 2016 for Pop:



	March 31, 2017		March 31, 2016
	(Amounts in millions)
Current assets	$	45.6	$	38.3
Non-current assets	$	184.0	$	192.5
Current liabilities	$	28.5	$	29.1
Non-current liabilities	$	555.7	$	8.2
Redeemable preferred stock	$	547.3	$	466.5

The following table presents the summarized statements of operations for the years ended March 31, 2017, 2016 and 2015 for Pop and a reconciliation of the net loss reported by Pop to equity interest income (loss) recorded by the Company:



	Year Ended
	March 31,
	2017			2016			2015

Revenues	$	95.0		$	86.4		$	79.0
Expenses:
Cost of services	52.7			39.7			38.8
Selling, marketing, and general and administration	47.6			42.1			49.5
Depreciation and amortization	7.9			7.8			7.8
Operating loss	(13.2		)	(3.2		)	(17.1		)
Other (income) loss	—			—			0.4
Interest expense, net	0.6			0.5			0.7
Accretion of redeemable preferred stock units⁽¹⁾	67.8			57.7			48.5
Total interest expense, net	68.4			58.2			49.6
Net loss	$	(81.6	)	$	(61.4	)	$	(66.7	)
Reconciliation of net loss reported by Pop to equity interest loss:
Net loss reported by Pop	$	(81.6	)	$	(61.4	)	$	(66.7	)
Ownership interest in Pop	50		%	50		%	50		%
The Company's share of net loss	(40.8		)	(30.7		)	(33.4		)
Accretion of dividend and interest income on redeemable preferred stock units⁽¹⁾	33.9			28.8			24.3
Elimination of the Company's share of profits on licensing sales to Pop	(0.6		)	(0.8		)	(0.9		)
Realization of the Company’s share of profits on licensing sales to Pop	0.6			0.9			0.4
Total equity interest loss recorded	$	(6.9	)	$	(1.8	)	$	(9.6	)

___________________

(1)

Accretion of mandatorily redeemable preferred stock units represents Pop's 10% dividend and the amortization of discount on its mandatorily redeemable preferred stock units held by the Company and the other interest holder. The Company recorded its share of this expense as income from the accretion of dividend and discount on mandatorily redeemable preferred stock units within equity interest income (loss).

Other Equity Method Investments

Defy Media. In June 2007, the Company acquired an interest in Break Media, a multi-platform digital media company and a leader in male-targeted content creation and distribution. In October 2013, Break Media merged with Alloy Digital to create Defy Media. The Company's effective economic interest in Defy Media through its investment in Break Media and its direct investment in Defy Media is approximately 11%. The Company is accounting for its investment in Defy Media, a limited liability company, under the equity method of accounting due to the Company's board representation that provides significant influence over the investee.

Roadside Attractions. Roadside Attractions is an independent theatrical distribution company. The Company owns a 43% interest in Roadside Attractions.

Pantelion Films. Pantelion Films is a joint venture with Videocine, an affiliate of Televisa, which produces, acquires and distributes a slate of English and Spanish language feature films that target Hispanic moviegoers in the U.S. The Company owns a 49% interest in Pantelion Films.

Atom Tickets. Atom Tickets is the first-of-its-kind theatrical mobile ticketing platform and app. The Company made initial investments totaling $4.3 million in Atom Tickets during the year ended March 31, 2015. During the year ended March 31, 2016, the Company agreed to participate in an equity offering of Atom Tickets and subscribed for an additional $7.9 million in equity interests. The Company owns an interest of approximately 15% in Atom Tickets. The Company is accounting for its investment in Atom Tickets, a limited liability company, under the equity method of accounting due to the Company's board representation that provides significant influence over the investee.

Playco. Playco Holdings Limited ("Playco") offers a STARZ-branded online subscription video-on-demand service in the Middle East and North Africa. The Company owns an approximately 41.3% interest in Playco.

Other. In addition to the equity method investments discussed above, the Company holds ownership interests in other immaterial equity method investees.

Available-for-Sale Securities:

The cost basis, unrealized losses and fair market value of available-for-sale securities were as set forth below:



	March 31, 2017		March 31, 2016
	(Amounts in millions)
Cost basis	$	2.6	$	158.9
Gross unrealized gain (loss)	5.4		(34.9		)
Fair value	$	8.0	$	124.0

Next Games. Next Games is a mobile games development company headquartered in Helsinki, Finland, with a focus on crafting visually impressive, highly engaging games. In July 2014, the Company invested $2.0 million in Next Games for a small minority ownership interest. As of March 31, 2016, the Company's investment in Next Games was accounted for as a cost method investment. During the year ended March 31, 2017, Next Games became a publicly traded company and therefore had a readily determinable fair value, and accordingly, as of March 31, 2017, the Company's investment has been accounted for at fair value as available-for-sale securities.

Starz. At March 31, 2016, available-for-sale securities consisted of the Company's minority interest in Starz. On March 27, 2015, pursuant to the terms of a stock exchange agreement entered into on February 10, 2015 (the "Exchange Agreement"), the Company exchanged 4,967,695 of the then newly issued common shares for 2,118,038 shares of Series A common stock of Starz and 2,590,597 shares of Series B common stock of Starz held by certain affiliates of John C. Malone ("Dr. Malone") (the exchange transaction, the "Exchange").

On December 8, 2016, the Company merged with Starz (see Note 3), and accordingly, the difference between the fair value of the Starz available-for-sale securities on December 8, 2016 of $179.3 million and the original cost of the Starz available-for-sale securities of $158.9 million represented a gain of $20.4 million, which has been reflected in the gain on Starz investment line item in the Company's consolidated statements of operations for the year ended March 31, 2017. Such amounts have been reclassified out of accumulated other comprehensive loss to net income for the year ended March 31, 2017.

Cost Method Investments:

Telltale. Telltale Games ("Telltale") is a creator, developer and publisher of interactive software episodic games based upon popular stories and characters across all major gaming and entertainment platforms. In February 2015, the Company invested $40.0 million in Telltale, which consisted of cash of $28.0 million and 361,229 shares of then newly issued common shares of the Company with a fair value of approximately $12.0 million representing in the aggregate an approximately 14% economic interest in Telltale.