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INVESTMENTS | 12 Months Ended
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Dec. 31, 2015
INVESTMENTS |
INVESTMENTS | NOTE 5—INVESTMENTS Investments in non-consolidated affiliates and certain other investments accounted for under the equity method generally include all entities in which the Company or its subsidiaries have significant influence, but not more than 50% voting control, and are recorded in the Consolidated Balance Sheets in other long-term assets. Investments in non-consolidated affiliates as of December 31, 2015, include interests in NCM of 17.66%, DCIP of 29%, DCDC of 15.45%, Open Road Films of 50%, and AC JV, owner of Fathom Events, of 32%. The Company also has partnership interests in two U.S. motion picture theatres and one IMAX screen of 50% ("Theatre Partnerships"). Indebtedness held by equity method investees is non-recourse to the Company. At December 31, 2015, the Company's recorded investments are less than its proportional ownership of the underlying equity in these entities by approximately $16,876,000, excluding NCM and Open Road Films. Amounts payable to Theatre Partnerships were $2,897,000 and $6,194,000 as of December 31, 2015 and December 31, 2014, respectively. RealD Inc. Common Stock The Company holds an investment in RealD Inc. common stock, which is accounted for as an equity security, available for sale, and is recorded in the Consolidated Balance Sheets in other long-term assets at fair value (Level 1). Under its RealD Inc. motion picture license agreement, the Company received a ten-year option to purchase 1,222,780 shares of RealD Inc. common stock at approximately $0.00667 per share. The stock options vested in 3 tranches upon the achievement of screen installation targets and were valued at the underlying stock price at the date of vesting. At the dates of exercise, the fair value of the RealD Inc. common stock was recorded in other long-term assets with an offsetting entry recorded to other long-term liabilities as a deferred lease incentive. The unamortized deferred lease incentive is being amortized on a straight-line basis over the remaining contract life of approximately 5 years as of December 31, 2015, to reduce RealD license expense recorded in the consolidated statements of operations under operating expense. As of December 31, 2015, the unamortized deferred lease incentive balance included in other long-term liabilities was $13,408,000. Fair value adjustments for RealD Inc. common stock are recorded to other long-term assets with an offsetting entry to accumulated other comprehensive income. NCM Transactions On March 29, 2005, the Company along with Regal combined their screen advertising operations to form NCM. On July 15, 2005, Cinemark joined the NCM joint venture by contributing its screen advertising business. The Company, Regal and Cinemark are the "Founding Members" of NCM. On February 13, 2007, National CineMedia, Inc. ("NCM, Inc."), a newly formed entity that now serves as the sole manager of NCM, closed its initial public offering, or IPO, of 42,000,000 shares of its common stock at a price of $21.00 per share. As of December 31, 2015, the Company owns a 17.66% interest in NCM. As a Founding Member, the Company has the ability to exercise significant influence over the governance of NCM, and, accordingly accounts for its investment following the equity method. All of the Company's NCM membership units are redeemable for, at the option of NCM, Inc., cash or shares of common stock of NCM, Inc. on a share-for-share basis. In December 2015, the Company elected to exchange 200,000 NCM membership units for 200,000 common shares of NCM, Inc. No gain or loss was recorded on the exchange and the common stock investment in NCM, Inc. follows the equity method of accounting. The fair value of the 23,862,988 units in National CineMedia, LLC and the 200,000 shares of NCM, Inc. was approximately $378,030,000 based on a price for shares of NCM, Inc. on December 31, 2015 of $15.71 per share. Pursuant to the Company's Common Unit Adjustment Agreement, from time to time common units of NCM held by the Founding Members will be adjusted up or down through a formula ("Common Unit Adjustment"), primarily based on increases or decreases in the number of theatre screens operated and theatre attendance generated by each Founding Member. The common unit adjustment is computed annually, except that an earlier common unit adjustment will occur for a Founding Member if its acquisition or disposition of theatres, in a single transaction or cumulatively since the most recent common unit adjustment, will cause a change of 2% or more in the total annual attendance of all of the Founding Members. In the event that a common unit adjustment is determined to be a negative number, the Founding Member shall cause, at its election, either (a) the transfer and surrender to NCM of a number of common units equal to all or part of such Founding Member's common unit adjustment or (b) pay to NCM an amount equal to such Founding Member's common unit adjustment calculated in accordance with the Common Unit Adjustment Agreement. In March 2013, the Company received 1,728,988 common membership units of NCM from the annual Common Unit Adjustment, primarily due to the increase in screens from the Rave theatre acquisitions in December 2012. The Company recorded the additional units received at a fair value of $26,315,000, based on a price for shares of NCM, Inc. on March 14, 2013, of $15.22 per share, and as a new investment (Tranche 2 Investment), with an offsetting adjustment to the Exhibitor Services Agreement to be amortized to revenues over the remaining term of the ESA following the units-of-revenue method. The Rave theatre screens were under a contract with another screen advertising provider and the Company will continue to receive its share of the advertising revenues. During the remainder of the Rave screen contract, the Company will pay a screen integration fee to NCM in an amount that approximates the EBITDA that NCM would have generated if it had been able to sell advertising on the Rave theatre screens. In March 2014, the Company received 141,731 membership units recorded at a fair value of $2,137,000 ($15.08 per unit), in March 2015, the Company received 469,163 membership units recorded at a fair value of $6,812,000 ($14.52 per unit), and in December 2015, the Company received 4,399,324 membership units recorded at a fair value of $69,289,000 ($15.75 per unit), primarily due to the increase in screens from the Starplex Cinemas acquisition in December 2015. The NCM, Inc. IPO and related transactions have the effect of reducing the amounts NCM, Inc. would otherwise pay in the future to various tax authorities as a result of an increase in its proportionate share of tax basis in NCM's tangible and intangible assets. On the IPO date, NCM, Inc. and the Founding Members entered into a tax receivable agreement. Under the terms of this agreement, NCM, Inc. will make cash payments to the Founding Members in amounts equal to 90% of NCM, Inc.'s actual tax benefit realized from the tax amortization of the NCM intangible assets. For purposes of the tax receivable agreement, cash savings in income and franchise tax will be computed by comparing NCM, Inc.'s actual income and franchise tax liability to the amount of such taxes that NCM, Inc. would have been required to pay had there been no increase in NCM, Inc.'s proportionate share of tax basis in NCM's tangible and intangible assets and had the tax receivable agreement not been entered into. The tax receivable agreement shall generally apply to NCM, Inc.'s taxable years up to and including the 30 th anniversary date of the NCM, Inc. IPO and related transactions. As a result of Wanda acquiring Holdings on August 30, 2012, the Company recorded an intangible asset of $20,900,000 as the fair value of the tax receivable agreement. The tax receivable agreement intangible asset is amortized on a straight-line basis against investment income over the remaining life of the ESA. Cash receipts from NCM, Inc. for the tax receivable agreement are recorded to the investment expense (income) account. During the twelve months ended December 31, 2015, the twelve months ended December 31, 2014, and the twelve months ended December 31, 2013, payments received of $6,555,000, $8,730,000, $3,677,000, related to the NCM tax receivable agreement were recorded in investment expense (income), net of related amortization, respectively, for the NCM tax receivable agreement intangible asset. The Company's recorded investment in NCM exceeds its proportional ownership in the equity of NCM by approximately $732,788,000 as of December 31, 2015. The Company recorded the following related party transactions with NCM:
(In thousands) |  | December 31, 2015 |  | December 31, 2014 |
Due from NCM for on-screen advertising revenue |  | $ | 2,406 |  | $ | 2,072 |
Due to NCM for Exhibitor Services Agreement |  |  | 1,226 |  |  | 1,784 |
Promissory note payable to NCM |  |  | 5,555 |  |  | 6,944 |
(In thousands) |  | 12 Months Ended December 31, 2015 |  | 12 Months Ended December 31, 2014 |  | 12 Months Ended December 31, 2013 |
Other theatre revenues: |  |  |  |  |  |  |  |  |  |
Net NCM screen advertising revenues |  | $ | 35,893 |  | $ | 34,523 |  | $ | 33,790 |
Operating expense: |  |  |  |  |  |  |  |  |  |
NCM beverage advertising expense |  |  | 8,256 |  |  | 12,226 |  |  | 13,809 |
DCIP Transactions. The Company will make capital contributions to DCIP for projector and installation costs in excess of an agreed upon cap ($68,000 per system for digital conversions and as of December 31, 2015, $39,000 for new build locations). The Company pays equipment rent monthly and records the equipment rental expense on a straight-line basis over 12 years. The Company recorded the following related party transactions with DCIP:
(In thousands) |  | December 31, 2015 |  | December 31, 2014 |
Due from DCIP for equipment and warranty purchases |  | $ | 1,460 |  | $ | 1,048 |
Deferred rent liability for digital projectors |  |  | 8,725 |  |  | 9,031 |
(In thousands) |  | 12 Months Ended December 31, 2015 |  | 12 Months Ended December 31, 2014 |  | 12 Months Ended December 31, 2013 |
Operating expense: |  |  |  |  |  |  |  |  |  |
Digital equipment rental expense |  | $ | 4,963 |  | $ | 6,639 |  | $ | 11,077 |
Warranty reimbursements from DCIP |  |  | 5,241 |  |  | 3,651 |  |  | 2,166 |
Open Road Films Transactions. Open Road Films was launched by the Company and Regal in March 2011, as an acquisition-based domestic theatrical distribution company that concentrates on wide-release movies. Open Road titles are also distributed in the pay-TV and home entertainment markets. The Company has a remaining commitment to invest up to an additional $10,000,000, in the event additional capital is required. For the twelve months ended December 31, 2015, the Company suspended equity method accounting for its investment in Open Road Films when the negative investment in Open Road Films reached the Company's capital commitment of $10,000,000. The Company's share of cumulative losses from Open Road Films in excess of the Company's capital commitment was $14,422,000 as of December 31, 2015. The Company's recorded investment in Open Road Films exceeds its proportional ownership in the equity of Open Road Films by approximately $19,840,000 as of December 31, 2015. The Company recorded the following related party transactions with Open Road Films:
(In thousands) |  | December 31, 2015 |  | December 31, 2014 |
Due from Open Road Films |  | $ | 2,472 |  | $ | 2,560 |
Film rent payable to Open Road Films |  |  | 1,061 |  |  | 709 |
(In thousands) |  | 12 Months Ended December 31, 2015 |  | 12 Months Ended December 31, 2014 |  | 12 Months Ended December 31, 2013 |
Film exhibition costs: |  |  |  |  |  |  |  |  |  |
Gross exhibition cost on Open Road Films |  | $ | 6,380 |  | $ | 13,300 |  | $ | 12,700 |
AC JV Transactions On December 26, 2013, the Company amended and restated its existing Exhibitor Services Agreement ("ESA") with NCM in connection with the spin-off by NCM of its Fathom Events business to AC JV, a newly-formed company owned 32% by each of the Founding Members and 4% by NCM. In consideration for the spin-off, NCM received a total of $25,000,000 in promissory notes from its Founding Members (approximately $8,333,000 from each Founding Member). Interest on the promissory note is at a fixed rate of 5% per annum, compounded annually. Interest and principal payments are due annually in six equal installments commencing on the first anniversary of the closing. Cinemark and Regal also amended and restated their respective ESAs with NCM in connection with the spin-off. The ESAs were modified to remove those provisions addressing the rights and obligations related to digital programing services of the Fathom Events business. Those provisions are now contained in the Amended and Restated Digital Programming Exhibitor Services Agreements (the "Digital ESAs") that were entered into on December 26, 2013 by NCM and each of the Founding Members. These Digital ESAs were then assigned by NCM to AC JV as part of the Fathom spin-off. There were no significant operations from the closing date until December 31, 2013. The Company recorded the following related party transactions with AC JV:
(In thousands) |  | December 31, 2015 |  | December 31, 2014 |
Due to AC JV for Fathom Events programming |  | $ | 445 |  | $ | 333 |
(In thousands) |  | 12 Months Ended December 31, 2015 |  | 12 Months Ended December 31, 2014 |  | 12 Months Ended December 31, 2013 |
Film exhibition costs: |  |  |  |  |  |  |  |  |  |
Gross exhibition cost on Fathom Events programming |  | $ | 8,511 |  | $ | 6,898 |  | $ | — |
Summary Financial Information Investments in non-consolidated affiliates accounted for under the equity method as of December 31, 2015, include interests in NCM, DCIP, Open Road Films, AC JV, DCDC, two U.S. motion picture theatres and one IMAX screen, and other immaterial investments. Condensed financial information of the Company's non-consolidated equity method investments is shown below and amounts are presented under GAAP for the periods of ownership by the Company:
|  | December 31, 2015 |
(In thousands) |  | NCM |  | DCIP |  | Open Road |  | AC JV |  | Other |  | Total |
Current assets |  | $ | 159,500 |  | $ | 48,833 |  | $ | 48,954 |  | $ | 9,967 |  | $ | 9,083 |  | $ | 276,337 |
Noncurrent assets |  |  | 623,100 |  |  | 955,924 |  |  | 52,359 |  |  | 21,502 |  |  | 29,470 |  |  | 1,682,355 |
Total assets |  |  | 782,600 |  |  | 1,004,757 |  |  | 101,313 |  |  | 31,469 |  |  | 38,553 |  |  | 1,958,692 |
Current liabilities |  |  | 113,100 |  |  | 32,533 |  |  | 65,076 |  |  | 3,802 |  |  | 4,867 |  |  | 219,378 |
Noncurrent liabilities |  |  | 936,000 |  |  | 642,659 |  |  | 95,916 |  |  | — |  |  | — |  |  | 1,674,575 |
Total liabilities |  |  | 1,049,100 |  |  | 675,192 |  |  | 160,992 |  |  | 3,802 |  |  | 4,867 |  |  | 1,893,953 |
Stockholders' equity (deficit) |  |  | (266,500 | ) |  | 329,565 |  |  | (59,679 | ) |  | 27,667 |  |  | 33,686 |  |  | 64,739 |
Liabilities and stockholders' equity (deficit) |  |  | 782,600 |  |  | 1,004,757 |  |  | 101,313 |  |  | 31,469 |  |  | 38,553 |  |  | 1,958,692 |
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The Company's recorded investment(1) |  | $ | 327,471 |  | $ | 85,710 |  | $ | (10,000 | ) | $ | 5,605 |  | $ | 10,886 |  | $ | 419,672 |
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|  | December 31, 2014 |
(In thousands) |  | NCM |  | DCIP |  | Open Road |  | AC JV |  | Other |  | Total |
Current assets |  | $ | 134,900 |  | $ | 53,229 |  | $ | 44,498 |  | $ | 10,993 |  | $ | 11,649 |  | $ | 255,269 |
Noncurrent assets |  |  | 546,200 |  |  | 1,044,417 |  |  | 12,260 |  |  | 22,948 |  |  | 25,296 |  |  | 1,651,121 |
Total assets |  |  | 681,100 |  |  | 1,097,646 |  |  | 56,758 |  |  | 33,941 |  |  | 36,945 |  |  | 1,906,390 |
Current liabilities |  |  | 106,500 |  |  | 24,036 |  |  | 41,080 |  |  | 4,238 |  |  | 3,538 |  |  | 179,392 |
Noncurrent liabilities |  |  | 892,000 |  |  | 821,282 |  |  | 45,582 |  |  | — |  |  | — |  |  | 1,758,864 |
Total liabilities |  |  | 998,500 |  |  | 845,318 |  |  | 86,662 |  |  | 4,238 |  |  | 3,538 |  |  | 1,938,256 |
Stockholders' equity (deficit) |  |  | (317,400 | ) |  | 252,328 |  |  | (29,904 | ) |  | 29,703 |  |  | 33,407 |  |  | (31,866 | )
Liabilities and stockholders' equity (deficit) |  |  | 681,100 |  |  | 1,097,646 |  |  | 56,758 |  |  | 33,941 |  |  | 36,945 |  |  | 1,906,390 |
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The Company's recorded investment(1) |  | $ | 265,839 |  | $ | 62,236 |  | $ | (9,570 | ) | $ | 6,255 |  | $ | 7,680 |  | $ | 332,440 |
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(1) | Certain differences in the Company's recorded investments, and its proportional ownership share resulting from the acquisition of Holdings by Wanda on August 30, 2012, where the investments were recorded at fair value, are amortized to equity in (earnings) losses of non-consolidated entities over the estimated useful lives of the underlying assets and liabilities. Other non-amortizing differences are considered to represent goodwill and are evaluated for impairment annually.
Condensed financial information of the Company's non-consolidated equity method investments is shown below and amounts are presented under GAAP for the periods of ownership by the Company:
|  | 12 Months Ended December 31, 2015 |
(In thousands) |  | NCM |  | DCIP |  | Open Road |  | AC JV |  | Other |  | Total |
Revenues |  | $ | 446,500 |  | $ | 172,256 |  | $ | 119,227 |  | $ | 53,371 |  | $ | 30,637 |  | $ | 821,991 |
Operating costs and expenses |  |  | 359,000 |  |  | 93,001 |  |  | 149,002 |  |  | 50,600 |  |  | 27,634 |  |  | 679,237 |
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Net earnings (loss) |  | $ | 87,500 |  | $ | 79,255 |  | $ | (29,775 | ) | $ | 2,771 |  | $ | 3,003 |  | $ | 142,754 |
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|  | 12 Months Ended December 31, 2014 |
(In thousands) |  | NCM |  | DCIP |  | Open Road |  | AC JV |  | Other |  | Total |
Revenues |  | $ | 394,000 |  | $ | 170,724 |  | $ | 175,374 |  | $ | 42,102 |  | $ | 26,887 |  | $ | 809,087 |
Operating costs and expenses |  |  | 297,700 |  |  | 109,430 |  |  | 190,602 |  |  | 37,669 |  |  | 26,072 |  |  | 661,473 |
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Net earnings (loss) |  | $ | 96,300 |  | $ | 61,294 |  | $ | (15,228 | ) | $ | 4,433 |  | $ | 815 |  | $ | 147,614 |
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|  | 12 Months Ended December 31, 2013 |
(In thousands) |  | NCM |  | DCIP |  | Open Road |  | AC JV |  | Other |  | Total |
Revenues |  | $ | 462,800 |  | $ | 182,659 |  | $ | 140,350 |  | $ | — |  | $ | 18,517 |  | $ | 804,326 |
Operating costs and expenses |  |  | 299,900 |  |  | 133,700 |  |  | 130,628 |  |  | — |  |  | 18,546 |  |  | 582,774 |
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Net earnings (loss) |  | $ | 162,900 |  | $ | 48,959 |  | $ | 9,722 |  | $ | — |  | $ | (29 | ) | $ | 221,552 |
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The components of the Company's recorded equity in earnings (losses) of non-consolidated entities are as follows:
(In thousands) |  | 12 Months Ended December 31, 2015 |  | 12 Months Ended December 31, 2014 |  | 12 Months Ended December 31, 2013 |
National CineMedia, LLC |  | $ | 11,194 |  | $ | 11,311 |  | $ | 23,196 |
Digital Cinema Implementation Partners, LLC |  |  | 24,522 |  |  | 20,929 |  |  | 18,660 |
Open Road Releasing, LLC |  |  | (430 | ) |  | (7,650 | ) |  | 4,861 |
AC JV, LLC |  |  | 950 |  |  | 1,470 |  |  | — |
Other |  |  | 895 |  |  | 555 |  |  | 718 |
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The Company's recorded equity in earnings |  | $ | 37,131 |  | $ | 26,615 |  | $ | 47,435 |
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The Company recorded the following changes in the carrying amount of its investment in NCM and equity in earnings of NCM during the twelve months ended December 31, 2015, December 31, 2014, and December 31, 2013:
(In thousands) |  | Investment in NCM(1) |  | Exhibitor Services Agreement(2) |  | Other Comprehensive (Income) |  | Cash Received |  | Equity in (Earnings) Losses |  | Advertising (Revenue) |
Ending balance at December 31, 2012 |  | $ | 245,047 |  | $ | (318,154 | ) | $ | (797 | ) |  |  |  |  |  |  |  |  |
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Receipt of common units |  |  | 26,315 |  |  | (26,315 | ) |  | — |  | $ | — |  | $ | — |  | $ | — |
Receipt of excess cash distributions |  |  | (27,453 | ) |  | — |  |  | — |  |  | 27,453 |  |  | — |  |  | — |
Amortization of ESA |  |  | — |  |  | 14,556 |  |  | — |  |  | — |  |  | — |  |  | (14,556 | )
Unrealized gain from cash flow hedge |  |  | 1,485 |  |  | — |  |  | (1,485 | ) |  | — |  |  | — |  |  | — |
Adjust carrying value of AC JV, LLC(3) |  |  | 3,817 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Change in interest gain(4) |  |  | 5,012 |  |  | — |  |  | — |  |  | — |  |  | (5,012 | ) |  | — |
Equity in earnings(5) |  |  | 21,149 |  |  | — |  |  | — |  |  | — |  |  | (21,149 | ) |  | — |
Equity in loss from amortization of basis difference(6) |  |  | (2,965 | ) |  | — |  |  | — |  |  | — |  |  | 2,965 |  |  | — |
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Ending balance at December 31, 2013 |  | $ | 272,407 |  | $ | (329,913 | ) | $ | (2,282 | ) | $ | 27,453 |  | $ | (23,196 | ) | $ | (14,556 | )
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Receipt of common units |  |  | 2,137 |  |  | (2,137 | ) |  | — |  |  | — |  |  | — |  |  | — |
Receipt of excess cash distributions |  |  | (21,514 | ) |  | — |  |  | — |  |  | 21,514 |  |  | — |  |  | — |
Amortization of ESA |  |  | — |  |  | 15,235 |  |  | — |  |  | — |  |  | — |  |  | (15,235 | )
Unrealized gain from cash flow hedge |  |  | 1,498 |  |  | — |  |  | (1,498 | ) |  | — |  |  | — |  |  | — |
Equity in earnings(5) |  |  | 14,446 |  |  | — |  |  | — |  |  | — |  |  | (14,446 | ) |  | — |
Equity in loss from amortization of basis difference(6) |  |  | (3,135 | ) |  | — |  |  | — |  |  | — |  |  | 3,135 |  |  | — |
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Ending balance at December 31, 2014 |  | $ | 265,839 |  | $ | (316,815 | ) | $ | (3,780 | ) | $ | 21,514 |  | $ | (11,311 | ) | $ | (15,235 | )
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Receipt of common units |  |  | 76,101 |  |  | (76,101 | ) |  | — |  |  | — |  |  | — |  |  | — |
Exchange of common units |  |  | (3,156 | ) |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Receipt of excess cash distributions |  |  | (22,741 | ) |  | — |  |  | — |  |  | 22,741 |  |  | — |  |  | — |
Amortization of ESA |  |  | — |  |  | 15,317 |  |  | — |  |  | — |  |  | — |  |  | (15,317 | )
Unrealized gain from cash flow hedge |  |  | 234 |  |  | — |  |  | (234 | ) |  | — |  |  | — |  |  | — |
Equity in earnings(5) |  |  | 14,435 |  |  | — |  |  | — |  |  | — |  |  | (14,435 | ) |  | — |
Equity in loss from amortization of basis difference(6) |  |  | (3,241 | ) |  | — |  |  | — |  |  | — |  |  | 3,241 |  |  | — |
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Ending balance at December 31, 2015 |  | $ | 327,471 |  | $ | (377,599 | ) | $ | (4,014 | ) | $ | 22,741 |  | $ | (11,194 | ) | $ | (15,317 | )
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
(1) | The following table represents AMC's investment in common membership units including units received under the Common Unit Adjustment Agreement dated as of February 13, 2007:
|  | Common Membership Units |
|  | Tranche 1 |  | Tranche 2(a) |
Beginning balance at December 31, 2012 |  |  | 17,323,782 |  |  | — |
Additional units received in March 2013 |  |  | — |  |  | 1,728,988 |
Additional units received in March 2014 |  |  | — |  |  | 141,731 |
Additional units received in March 2015 |  |  | — |  |  | 469,163 |
Additional units received in December 2015 |  |  | — |  |  | 4,399,324 |
Units exchanged for NCM, Inc. shares in December 2015 |  |  | — |  |  | (200,000 | )
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Ending balance at December 31, 2015 |  |  | 17,323,782 |  |  | 6,539,206 |
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
(a) | The additional units received in March 2013, March 2014, March 2015, and December 2015 were measured at fair value (Level 1) using NCM, Inc.'s stock price of $15.22, $15.08, $14.52, and $15.75 respectively.
(2) | Represents the unamortized portion of the ESA with NCM. Such amounts are being amortized to other theatre revenues over the remainder of the 30 year term of the ESA ending in 2036, using a units-of-revenue method, as described in ASC 470-10-35 (formerly EITF 88-18, Sales of Future Revenues).
(3) | On December 26, 2013, NCM spun-off its Fathom Events business to a newly formed limited liability company, AC JV, LLC which is owned 32% by each founding member and 4% by NCM. In consideration for the sale, each of the three founding members issued promissory notes of approximately $8,333,000 to NCM. The Company's share of the gain recorded by NCM, as a result of the spin-off, has been excluded from equity in earnings and has been applied as a reduction in the carrying value of AC JV, LLC investment.
(4) | Non-cash gains were recorded in 2013 to adjust the Company's investment balance due to NCM's issuance of 8,688,078 common membership units to other founding members, at a price per share in excess of the Company's average carrying amount per share.
(5) | Represents equity in earnings on both Tranche 1 and Tranche 2 Investments.
(6) | Certain differences between the Company's carrying value and the Company's share of NCM's membership equity have been identified and are amortized to equity in (earnings) losses in non-consolidated entities over the respective lives of the assets and liabilities.

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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/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 323 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=6382943&loc=d3e33918-111571 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 323 -SubTopic 10 -Section 35 -Paragraph 35 -URI http://asc.fasb.org/extlink&oid=49116238&loc=d3e32847-111569 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 210 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.5-02.12) -URI http://asc.fasb.org/extlink&oid=6877327&loc=d3e13212-122682 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 323 -SubTopic 10 -Section 35 -Paragraph 32 -URI http://asc.fasb.org/extlink&oid=49116238&loc=d3e32787-111569 + Details
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