INVESTMENTS

Investment in National CineMedia, LLC

We maintain an investment in National CineMedia. National CineMedia concentrates on in-theatre advertising for its theatrical exhibition partners, which includes us, AMC and Cinemark.

On February 13, 2007, National CineMedia, Inc. ("NCM, Inc."), the sole manager of National CineMedia, completed an initial public offering ("IPO") of its common stock. NCM, Inc. sold 38.0 million shares of its common stock for $21 per share in the IPO, less underwriting discounts and expenses. NCM, Inc. used a portion of the net cash proceeds from the IPO to acquire newly issued common units from National CineMedia. At the closing of the IPO, the underwriters exercised their over-allotment option to purchase an additional 4.0 million shares of common stock of NCM, Inc. at the initial offering price of $21 per share, less underwriting discounts and commissions. In connection with this over-allotment option exercise, Regal, AMC and Cinemark each sold to NCM, Inc. common units of National CineMedia on a pro rata basis at the initial offering price of $21 per share, less underwriting discounts and expenses. Upon completion of this sale of common units, Regal held approximately 21.2 million common units of National CineMedia ("Initial Investment Tranche"). Such common units are immediately redeemable on a one-to-one basis for shares of NCM, Inc. common stock.

As a result of the transactions associated with the IPO and receipt of proceeds in excess of our investment balance, the Company reduced its investment in National CineMedia to zero. Accordingly, we will not provide for any additional losses as we have not guaranteed obligations of National CineMedia and we are not otherwise committed to provide further financial support for National CineMedia. In addition, subsequent to the IPO, the Company determined it would not recognize its share of any undistributed equity in the earnings of National CineMedia pertaining to the Company's Initial Investment Tranche in National CineMedia until National CineMedia's future net earnings, net of distributions received, equal or exceed the amount of the above described excess distribution. Until such time, equity in earnings related to the Company's Initial Investment Tranche in National CineMedia will be recognized only to the extent that the Company receives cash distributions from National CineMedia. The Company believes that the accounting model provided by ASC 323-10-35-22 for recognition of equity investee losses in excess of an investor's basis is analogous to the accounting for equity income subsequent to recognizing an excess distribution. The Company's Initial Investment Tranche is recorded at $0 cost.

In connection with the completion of the IPO, the joint venture partners, including RCI, amended and restated their exhibitor services agreements with National CineMedia in exchange for a significant portion of its pro rata share of the IPO proceeds. The modification extended the term of the exhibitor services agreement ("ESA") to 30 years, provided National CineMedia with a 5-year right of first refusal beginning one year prior to the end of the term and changed the basis upon which RCI is paid by National CineMedia from a percentage of revenues associated with advertising contracts entered into by National CineMedia to a monthly theatre access fee. The theatre access fee is composed of a fixed $0.0756 payment per patron which increases by 8% every 5 years starting at the end of fiscal 2011, a fixed $800 payment per digital screen each year, which increases by 5% annually starting at the end of fiscal 2007 (or $1,182 for fiscal 2015) and an additional payment per digital screen of $608 for fiscal 2015. The access fee revenues received by the Company under its contract are determined annually based on a combination of both fixed and variable factors which include the total number of theatre screens, attendance and actual revenues (as defined in the ESA) generated by National CineMedia. The ESA does not require us to maintain a minimum number of screens and does not provide a fixed amount of access fee revenue to be earned by the Company in any period. The theatre access fee paid in the aggregate to us, AMC and Cinemark will not be less than 12% of NCM's aggregate advertising revenue, or it will be adjusted upward to meet this minimum payment. On-screen advertising time provided to our beverage concessionaire is provided by National CineMedia under the terms of the ESA. In addition, we receive mandatory quarterly distributions of any excess cash from National CineMedia.

The amount we received for agreeing to the ESA modification was approximately $281.0 million, which represents the estimated fair value of the ESA modification payment. We estimated the fair value of the ESA payment based upon a valuation performed by the Company with the assistance of third party specialists. This amount has been recorded as deferred revenue and will be amortized to advertising revenue over the 30 year term of the ESA following the units of revenue method. Under the units of revenue method, amortization for a period is calculated by computing a ratio of the proceeds received from the ESA modification payment to the total expected decrease in revenues due to entry into the new ESA over the 30 year term of the agreement and then applying that ratio to the current period's expected decrease in revenues due to entry into the new ESA.

Also in connection with the IPO, the joint venture partners entered into a Common Unit Adjustment Agreement with National CineMedia. Pursuant to our Common Unit Adjustment Agreement, from time to time, common units of National CineMedia held by the joint venture partners will be adjusted up or down through a formula primarily based on increases or decreases in the number of theatre screens operated and theatre attendance generated by each joint venture partner. The common unit adjustment is computed annually, except that an earlier common unit adjustment will occur for a joint venture partner 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 two percent or more in the total annual attendance of all of the joint venture partners. In the event that a common unit adjustment is determined to be a negative number, the joint venture partner shall cause, at its election, either (a) the transfer and surrender to National CineMedia a number of common units equal to all or part of such joint venture partner's common unit adjustment or (b) pay to National CineMedia, an amount equal to such joint venture partner's common unit adjustment calculated in accordance with the Common Unit Adjustment Agreement. If the Company elects to surrender common units as part of a negative common unit adjustment, the Company would record a reduction to deferred revenue at the then fair value of the common units surrendered and a reduction of the Company’s Additional Investments Tranche at an amount equal to the weighted average cost for the Additional Investments Tranche common units, with the difference between the two values recorded as a non-operating gain or loss.

As described further below, subsequent to the IPO and through December 31, 2015, the Company received from National CineMedia approximately 11.8 million newly issued common units of National CineMedia ("Additional Investments Tranche") as a result of the adjustment provisions of the Common Unit Adjustment Agreement. The Company follows the guidance in ASC 323-10-35-29 (formerly EITF 2-18, Accounting for Subsequent Investments in an Investee after Suspension of Equity Loss Recognition) by analogy, which also refers to AICPA Technical Practice Aid 2220.14, which indicates that if a subsequent investment is made in an equity method investee that has experienced significant losses, the investor must determine if the subsequent investment constitutes funding of prior losses. The Company concluded that the construction or acquisition of new theatres that has led to the common unit adjustments included in its Additional Investments Tranche equates to making additional investments in National CineMedia. The Company evaluated the receipt of the additional common units in National CineMedia and the assets exchanged for these additional units and has determined that the right to use its incremental new screens would not be considered funding of prior losses. As such, the Additional Investments Tranche is accounted for separately from the Company's Initial Investment Tranche following the equity method with undistributed equity earnings included as a component of "Earnings recognized from NCM" in the accompanying consolidated financial statements.

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 Regal's proportionate share of tax basis in NCM Inc.'s tangible and intangible assets. On the IPO date, NCM, Inc., the Company, AMC and Cinemark entered into a tax receivable agreement. Under the terms of this agreement, NCM, Inc. will make cash payments to us, AMC and Cinemark in amounts equal to 90% of NCM, Inc.'s actual tax benefit realized from the tax amortization of the intangible assets described above. 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 30th anniversary date of the NCM, Inc. IPO and related transactions.

The Company accounts for its investment in National CineMedia following the equity method of accounting and such investment is included as a component of "Other Non-Current Assets" in the consolidated balance sheets. Below is a summary of activity with National CineMedia included in the Company's consolidated financial statements as of and for the years ended December 31, 2015, January 1, 2015 and December 26, 2013 (in millions):



	As of the period ended								For the period ended
	Investment in NCM			Deferred Revenue			Cash Received		Earnings recognized from NCM			Other NCM Revenues			Gain on sale of NCM, Inc. common stock
Balance as of and for the period ended December 27, 2012	$	73.9		$	(344.3	)	$	49.5	$	(34.8	)	$	(17.0	)	$	—
Receipt of additional common units(1)	33.8			(33.8		)	—		—			—			—
Receipt of common units due to extraordinary common unit adjustment(1)	61.4			(61.4		)	—		—			—			—
Receipt of excess cash distributions(2)	(9.1		)	—			35.4		(26.3		)	—			—
Receipt under tax receivable agreement(2)	(0.9		)	—			4.6		(3.7		)	—			—
Revenues earned under ESA(3)	—			—			12.6		—			(12.6		)	—
Amortization of deferred revenue(4)	—			7.3			—		—			(7.3		)	—
Equity income attributable to additional common units(5)	7.5			—			—		(7.5		)	—			—
Redemption/sale of NCM stock(6)	(10.0		)	—			40.9		—			—			(30.9		)
Deferred gain on AC JV, LLC transaction(7)	1.9			—			—		—			—			—
Balance as of and for the period ended December 26, 2013	$	158.5		$	(432.2	)	$	93.5	$	(37.5	)	$	(19.9	)	$	(30.9	)
Receipt of additional common units(1)	5.9			(5.9		)	—		—			—			—
Receipt of excess cash distributions(2)	(10.2		)	—			27.1		(16.9		)	—			—
Receipt under tax receivable agreement(2)	(3.9		)	—			12.0		(8.1		)	—			—
Revenues earned under ESA(3)	—			—			14.2		—			(14.2		)	—
Amortization of deferred revenue(4)	—			9.6			—		—			(9.6		)	—
Equity income attributable to additional common units(5)	7.1			—			—		(7.1		)	—			—
Balance as of and for the period ended January 1, 2015	$	157.4		$	(428.5	)	$	53.3	$	(32.1	)	$	(23.8	)	$	—
Receipt of additional common units(1)	9.0			(9.0		)	—		—			—			—
Receipt of excess cash distributions(2)	(11.8		)	—			30.5		(18.7		)	—			—
Receipt under tax receivable agreement(2)	(3.5		)	—			9.5		(6.0		)	—			—
Revenues earned under ESA(3)	—			—			16.7		—			(16.7		)	—
Amortization of deferred revenue(4)	—			10.8			—		—			(10.8		)	—
Equity income attributable to additional common units(5)	6.3			—			—		(6.3		)	—			—
Balance as of and for the period ended December 31, 2015	$	157.4		$	(426.7	)	$	56.7	$	(31.0	)	$	(27.5	)	$	—

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(1)

On March 17, 2015, March 13, 2014, and March 14, 2013, we received from National CineMedia approximately 0.6 million, 0.4 million and 2.2 million, respectively, newly issued common units of National CineMedia in accordance with the annual adjustment provisions of the Common Unit Adjustment Agreement. In addition, on November 19, 2013, we received from National CineMedia approximately 3.4 million newly issued common units of National CineMedia in accordance with the adjustment provisions of the Common Unit Adjustment Agreement in connection with our acquisition of Hollywood Theaters. The Company recorded the additional common units (Additional Investments Tranche) at fair value using the available closing stock prices of NCM, Inc. as of the dates on which the units were issued. As a result of these adjustments, the Company recorded increases to its investment in National CineMedia (along with corresponding increases to deferred revenue) of $9.0 million, $5.9 million and $95.2 million during the years ended December 31, 2015, January 1, 2015 and December 26, 2013, respectively. Such deferred revenue amounts are being amortized to advertising revenue over the remaining term of the ESA between RCI and National CineMedia following the units of revenue method as described in (4) below. These transactions, together with the transaction described in (6) below, caused a proportionate net increase in the Company's Additional Investments Tranche and increased our ownership share in National CineMedia to 26.4 million common units. As a result, on a fully diluted basis, we own a 19.5% interest in NCM, Inc. as of December 31, 2015.

(2)

During the years ended December 31, 2015, January 1, 2015 and December 26, 2013, the Company received $40.0 million, $39.1 million, $40.0 million, respectively, in cash distributions from National CineMedia, exclusive of receipts for services performed under the ESA (including payments of $9.5 million, $12.0 million, and $4.6 million received under the tax receivable agreement). Approximately $15.3 million, $14.1 million and $10.0 million of these cash distributions received during the years ended December 31, 2015, January 1, 2015 and December 26, 2013, respectively, were attributable to the Additional Investments Tranche and were recognized as a reduction in our investment in National CineMedia. The remaining amounts were recognized in equity earnings during each of these periods and have been included as components of "Earnings recognized from NCM" in the accompanying consolidated financial statements.

(3)

The Company recorded other revenues, excluding the amortization of deferred revenue, of approximately $16.7 million, $14.2 million and $12.6 million for the years ended December 31, 2015, January 1, 2015 and December 26, 2013, respectively, pertaining to our agreements with National CineMedia, including per patron and per digital screen theatre access fees (net of payments $11.8 million, $14.0 million and $15.5 million for the years ended December 31, 2015, January 1, 2015 and December 26, 2013, respectively) for on-screen advertising time provided to our beverage concessionaire and other NCM revenues. These advertising revenues are presented as a component of "Other operating revenues" in the Company's consolidated financial statements.


(4)	Amounts represent amortization of ESA modification fees received from NCM to advertising revenue utilizing the units of revenue amortization method. These advertising revenues are presented as a component of "Other operating revenues" in the Company's consolidated financial statements.

(5)

Amounts represent the Company's share in the net income of National CineMedia with respect to the Additional Investments Tranche. Such amounts have been included as a component of "Earnings recognized from NCM" in the consolidated financial statements. On May 5, 2014, NCM, Inc. announced that it had entered into a merger agreement to acquire Screenvision, LLC ("Screenvision") for $375 million, consisting of cash and NCM, Inc. common stock. On November 3, 2014, the U.S. Department of Justice ("DOJ") filed an antitrust lawsuit seeking to enjoin the proposed merger between NCM, Inc. and Screenvision. On March 16, 2015, NCM, Inc. announced that it had agreed with Screenvision to terminate the merger agreement. The termination of the merger agreement was effective upon NCM Inc.’s payment of a $26.8 million termination payment to Screenvision. National CineMedia indemnified NCM, Inc. for the termination fee. Accordingly, each founding member bore a pro rata portion of this fee (along with approximately $14.1 million of associated merger costs) based upon their respective ownership percentage in National CineMedia. The Company recorded the impact of its pro rata portion of this fee and associated merger costs as a $3.3 million reduction of equity earnings in NCM during the year ended December 31, 2015.

(6)

During the year ended December 26, 2013, the Company redeemed 2.3 million of its National CineMedia common units for a like number of shares of NCM, Inc. common stock, which the Company sold in an underwritten public offering (including underwriter over-allotments) for $17.79 per share, reducing our investment in National CineMedia by approximately $10.0 million, the average carrying amount of the shares sold. The Company received approximately $40.9 million in proceeds, resulting in a gain on sale of approximately $30.9 million. We accounted for this transaction as a proportionate decrease in the Company's Initial Investment Tranche and Additional Investments Tranche and decreased our ownership share in National CineMedia.

(7)

As described further below under "Investment in AC JV, LLC," in connection with the sale of its Fathom Events business to AC JV, LLC, National CineMedia recorded a gain of approximately $25.4 million in connection with the sale. The Company's proportionate share of such gain (approximately $1.9 million) was excluded from equity earnings in National CineMedia and recorded as a reduction in the Company's investment in AC JV.

As of December 31, 2015, approximately $2.8 million and $1.3 million due from/to National CineMedia were included in "Trade and other receivables, net" and "Accounts payable," respectively. As of January 1, 2015, approximately $2.7 million and $1.5 million due from/to National CineMedia were included in "Trade and other receivables, net" and "Accounts payable," respectively.

As of the date of this Form 10-K, no summarized financial information for National CineMedia was available for the year ended December 31, 2015. Summarized consolidated statements of income information for National CineMedia for the years ended January 1, 2015, December 26, 2013 and December 27, 2012 is as follows (in millions):



	Year Ended January 1, 2015		Year Ended December 26, 2013		Year Ended December 27, 2012
Revenues	$	394.0	$	462.8	$	448.8
Income from operations	159.2		202.0		191.8
Net income	96.3		162.9		101.0

Summarized consolidated balance sheet information for National CineMedia as of January 1, 2015 and December 26, 2013 is as follows (in millions):



	January 1, 2015			December 26, 2013
Current assets	$	134.9		$	141.6
Noncurrent assets	546.2			557.6
Total assets	681.1			699.2
Current liabilities	106.5			122.4
Noncurrent liabilities	892.0			876.0
Total liabilities	998.5			998.4
Members' deficit	(317.4		)	(299.2		)
Liabilities and members' deficit	681.1			699.2

Investment in Digital Cinema Implementation Partners

We maintain an investment in Digital Cinema Implementation Partners, LLC, a Delaware limited liability company ("DCIP"). DCIP is a joint venture company formed by Regal, AMC and Cinemark. Regal holds a 46.7% economic interest in DCIP as of December 31, 2015 and a one-third voting interest along with each of AMC and Cinemark. Since the Company does not have a controlling financial interest in DCIP or any of its subsidiaries, it accounts for its investment in DCIP under the equity method of accounting. The Company's investment in DCIP is included as a component of "Other Non-Current Assets" in the accompanying consolidated balance sheets. The changes in the carrying amount of our investment in DCIP for the years ended December 31, 2015, January 1, 2015, and December 26, 2013 are as follows (in millions):



Balance as of December 27, 2012	$	72.8
Equity contributions	3.5
Equity in earnings of DCIP(1)	22.9
Change in fair value of equity method investee interest rate swap transactions	2.4
Balance as of December 26, 2013	101.6
Equity contributions	3.6
Equity in earnings of DCIP(1)	28.6
Receipt of cash distributions(2)	(6.3		)
Change in fair value of equity method investee interest rate swap transactions	(1.2		)
Balance as of January 1, 2015	126.3
Equity contributions	0.4
Equity in earnings of DCIP(1)	37.0
Receipt of cash distributions(2)	(2.0		)
Change in fair value of equity method investee interest rate swap transactions	(1.0		)
Balance as of December 31, 2015	$	160.7

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(1)	Represents the Company's share of the net income of DCIP. Such amount is presented as a component of "Equity in income of non-consolidated entities and other, net" in the accompanying consolidated statements of income.


(2)	Represents cash distributions from DCIP as a return on its investment.

DCIP funds the cost of digital projection principally through the collection of virtual print fees from motion picture studios and equipment lease payments from participating exhibitors, including us. In accordance with the master equipment lease agreement (the "Master Lease"), the digital projection systems are leased from a subsidiary of DCIP under a twelve-year term with ten one-year fair value renewal options. The Master Lease also contains a fair value purchase option. On March 31, 2014, the junior capital raised by DCIP in the initial financing transactions was paid in full by DCIP. In connection with this repayment, the Master Lease was amended to eliminate the incremental minimum rent payment provision of $2,000 per digital projection system. DCIP incurred a loss on debt extinguishment of approximately $6.0 million as a result of the debt repayment and Regal recorded its pro rata share of such loss (approximately $2.8 million) during the year ended January 1, 2015 as a reduction of equity in earnings of DCIP. As a result of the amendment to the Master Lease, the Company's deferred rent balance associated with the incremental minimum rental payment of $2,000 per digital projection system is being amortized on a straight-line basis as a reduction of rent expense from the effective date of the amendment (March 31, 2014) through the end of the remaining lease term. As of December 31, 2015, under the Master Lease, the Company continues to pay annual minimum rent of $1,000 per digital projection system from the effective date of the original agreement through the end of the lease term. The Company considers the $1,000 rent payment to be a minimum rental and accordingly records such rent on a straight-line basis in its consolidated financial statements. The Company is also subject to various types of other rent if such digital projection systems do not meet minimum performance requirements as outlined in the Master Lease. Certain of the other rent payments are subject to either a monthly or an annual maximum. The Company accounts for the Master Lease as an operating lease for accounting purposes. During the years ended December 31, 2015, January 1, 2015, and December 26, 2013, the Company incurred total rent expense of approximately $5.4 million, $7.7 million, and $14.5 million, respectively, associated with the leased digital projection systems. Such rent expense is presented as a component of "Other operating expenses" in the Company's consolidated statements of income.

Summarized consolidated statements of operations information for DCIP for the years ended December 31, 2015, December 31, 2014, and December 31, 2013 is as follows (in millions):



	Year Ended December 31, 2015		Year Ended December 31, 2014		Year Ended December 31, 2013
Net revenues	$	172.3	$	170.7	$	182.7
Income from operations	103.4		102.0		116.2
Net income	79.3		61.3		49.0

Summarized consolidated balance sheet information for DCIP as of December 31, 2015 and 2014 is as follows (in millions):



	December 31, 2015		December 31, 2014
Current assets	$	48.8	$	53.2
Noncurrent assets	956.0		1,044.4
Total assets	1,004.8		1,097.6
Current liabilities	32.5		24.0
Noncurrent liabilities	642.7		821.3
Total liabilities	675.2		845.3
Members' equity	329.6		252.3
Liabilities and members' equity	1,004.8		1,097.6

Investment in Open Road Films

We maintain an investment in Open Road Films, a film distribution company jointly owned by us and AMC. The Company's cumulative cash investment in Open Road Films totaled $20.0 million as of December 31, 2015 and the Company may invest an additional $10.0 million in this joint venture. We account for our investment in Open Road Films using the equity method of accounting. As a result of cumulative losses recorded in Open Road Films, the Company's investment in Open Road Films was reduced to a minimum carrying value of $(10.0) million as of March 27, 2014. Consistent with the accounting model provided by ASC 323-10-35-22, as of March 27, 2014, the Company has not provided for any additional losses of Open Road Films since it has not guaranteed obligations of Open Road Films and otherwise has not committed to provide further financial support for Open Road Films above its initial $30.0 million commitment. Accordingly, the Company discontinued equity method accounting for its investment in Open Road Films as of March 27, 2014. The amount of excess losses incurred through December 31, 2015 continued to be in excess of the Company's initial $30.0 million commitment by approximately $19.9 million.

The Company's investment in Open Road Films is included as a component of "Other Non-Current Liabilities" in the consolidated balance sheets. The changes in the carrying amount of our investment in Open Road Films for the years ended December 31, 2015, January 1, 2015 and December 26, 2013 are as follows (in millions):



Balance as of December 27, 2012	$	(10.0	)
Equity in earnings attributable to Open Road Films(1)	2.9
Balance as of December 26, 2013	(7.1		)
Equity in loss attributable to Open Road Films(1)	(2.9		)
Balance as of January 1, 2015	(10.0		)
Equity in earnings attributable to Open Road Films(1)	—
Balance as of December 31, 2015	$	(10.0	)

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(1)	Represents the Company’s recorded share of the net income (loss) of Open Road Films. Such amount is presented as a component of “Equity in income of non-consolidated entities and other, net” in the accompanying consolidated statements of income.

Summarized consolidated statements of operations information for Open Road Films for the years ended December 31, 2015, December 31, 2014, and December 31, 2013 is as follows (in millions):



	Year Ended December 31, 2015			Year Ended December 31, 2014			Year Ended December 31, 2013
Revenues	$	119.2		$	175.4		$	140.4
Income (loss) from operations	(27.6		)	(13.3		)	12.3
Net income (loss)	(29.8		)	(15.2		)	9.7

Summarized consolidated balance sheet information for Open Road Films as of December 31, 2015 and 2014 is as follows (in millions):



	December 31, 2015			December 31, 2014
Current assets	$	49.0		$	44.5
Noncurrent assets	52.3			12.3
Total assets	101.3			56.8
Current liabilities	65.1			41.1
Noncurrent liabilities	95.9			45.6
Total liabilities	161.0			86.7
Members' deficit	(59.7		)	(29.9		)
Liabilities and members' deficit	101.3			56.8

Investment in RealD, Inc.

The Company also maintains an investment in RealD, Inc., an entity specializing in the licensing of 3D technologies. The Company has determined that its RealD, Inc. shares are available for sale securities in accordance with ASC Topic 320-10-35-1, therefore unrealized holding gains and losses are reported as a component of accumulated other comprehensive income (loss) until realized. During fiscal 2013 and 2014, the Company sold 900,000 shares of RealD, Inc. common stock at prices ranging from $11.27 to $15.42 per share. During the year ended December 31, 2015, the Company recorded a net decrease to its investment in RealD, Inc. of approximately $0.4 million and a corresponding net increase to "Accumulated other comprehensive loss, net" of $0.2 million, net of tax. The carrying value of the Company’s investment in RealD, Inc. as of December 31, 2015 was approximately $3.4 million. The Company has recorded this investment within "Other Non-Current Assets." See Note 14—"Fair Value of Financial Instruments" for a discussion of fair value estimation methods and assumptions with respect to the Company’s investment in RealD, Inc.

In addition, on November 9, 2015, RealD, Inc. and Rizvi Traverse Management, LLC announced that they have entered into a definitive agreement pursuant to which Rizvi Traverse Management, LLC will acquire RealD, Inc. for $11.00 per share, in an all-cash merger transaction. Under the terms of the agreement, RealD, Inc. shareholders will receive $11.00 in cash for each share of RealD, Inc.’s common stock. Upon completion of the transaction, RealD, Inc. will become a privately held company. The RealD, Inc. Board of Directors approved the agreement and recommends that RealD, Inc. shareholders vote in favor of the transaction. The proposed transaction is subject to closing conditions including receipt of shareholder and regulatory approvals and is currently expected to close in the fourth quarter of fiscal 2016 or shortly thereafter.

Investment in AC JV, LLC

We maintain an investment in AC JV, LLC (“AC JV”), a Delaware limited liability company owned 32% by each of RCI, AMC and Cinemark and 4% by National CineMedia. AC JV acquired the Fathom Events business from National CineMedia on December 26, 2013. AC JV owns and manages the Fathom Events business, which focuses on the marketing and distribution of live and pre-recorded entertainment programming to various theatre operators (including us, AMC and Cinemark) to provide additional programs to augment their feature film schedule and includes events such as live and pre-recorded concerts, opera and symphony, DVD product releases and marketing events, theatrical premieres, Broadway plays, live sporting events and other special events. In consideration for the sale, National CineMedia received a total of $25 million in promissory notes from RCI, Cinemark and AMC (one-third or approximately $8.3 million from each). The notes bear interest at 5.0% per annum. Interest and principal payments are due annually in six equal installments commencing on the first anniversary of the closing. National CineMedia recorded a gain of approximately $25.4 million in connection with the sale. The Company's proportionate share of such gain (approximately $1.9 million) was excluded from equity earnings in National CineMedia and recorded as a reduction in the Company's investment in AC JV. Since the Company does not have a controlling financial interest in AC JV, it accounts for its investment in AC JV under the equity method of accounting. The Company’s investment in AC JV is included as a component of "Other Non-Current Assets." The changes in the carrying amount of our investment in AC JV for the years ended December 31, 2015, January 1, 2015 and December 26, 2013 are as follows (in millions):



Balance as of December 27, 2012	$	—
Issuance of promissory note to National CineMedia	8.3
Equity contributions	0.3
Adjustment for gain recognized by National CineMedia	(1.9		)
Balance as of December 26, 2013	6.7
Equity in earnings attributable to AC JV, LLC(1)	1.4
Balance as of January 1, 2015	8.1
Receipt of cash distributions(2)	(1.6		)
Equity in earnings attributable to AC JV, LLC(1)	1.0
Balance as of December 31, 2015	$	7.5

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(1)	Represents the Company’s recorded share of the net income of AC JV, LLC. Such amount is presented as a component of “Equity in income of non-consolidated entities and other, net” in the accompanying consolidated statements of income.


(2)	Represents cash distributions from AC JV as a return on its investment.

Investment in Digital Cinema Distribution Coalition

The Company is a party to a joint venture with certain exhibitors and distributors called Digital Cinema Distribution Coalition ("DCDC"). DCDC has established a satellite distribution network that distributes digital content to theatres via satellite. The Company has an approximate 14.6% ownership in DCDC as of December 31, 2015. The Company's investment in DCDC is included within "Other Non-Current Assets." The carrying value of the Company's investment in DCDC was approximately $2.9 million as of December 31, 2015.