We maintain contractual agreements relating to certain entities affiliated with the Dolby family, who is considered a related party as our principal stockholder. These jointly-owned entities were established for the purpose of acquiring and leasing commercial property in the U.S. and U.K. primarily for our operational use. Although the entities affiliated with the Dolby family are the limited member or LP in each of these entities, they have a controlling interest based on holding majority economic ownership. We are the managing member or general partner in each of these affiliated entities, and with the exception of isolated instances where portions of these facilities are leased to third parties, we occupy the majority of the space. Therefore, since these affiliated entities are an integrated part of our operations, we have consolidated the entities’ assets and liabilities and results of operations in our consolidated financial statements. The share of earnings and net assets of the entities attributable to the limited member or LP, as the case may be, is reflected as controlling interest in our consolidated financial statements.

Our interests in these consolidated affiliated entities and the location of the property leased to Dolby Laboratories as of September 25, 2015 is as follows:



Entity Name	Minority Ownership Interest		Location Of Properties
Dolby Properties Brisbane, LLC	49.0	%	Brisbane, California
Dolby Properties Burbank, LLC	49.0	%	Burbank, California
Dolby Properties UK, LLC	49.0	%	Wootton Bassett, England
Dolby Properties, LP	10.0	%	Wootton Bassett, England

Jointly-Owned Real Estate Entities. We lease from our principal stockholder a commercial office building located at 100 Potrero Avenue in San Francisco, California under a term that expires on October 31, 2024, and we lease additional facilities located in California and the U.K. from the jointly-owned real estate entities described above. Related party rent expense included in operating expenses in our consolidated statements of operations was as follows (in thousands):



	Fiscal Year Ended
	September 25, 2015		September 26, 2014		September 27, 2013 (1)
Related party rent expense included in operating expenses	$	3,136	$	2,125	$	2,526


(1)	Related party rent expense recorded during fiscal 2013 from the table above includes a restructuring charge of $1.2 million associated with the exit of a facility. Note that this charge is excluded from our disclosure of rent expense payable to our principal stockholder during fiscal 2013 within Note 12 "Commitments & Contingencies."

Distributions. Distributions made by the jointly-owned real estate entities to our principal stockholder were as follows (in thousands):



	Fiscal Year Ended
	September 25, 2015		September 26, 2014		September 27, 2013
Distributions to principal stockholder	$	5,615	$	—	$	5,039

Related Party Transaction: Sale of interests in Affiliated Entity. During fiscal 2015, we entered into an Agreement with entities affiliated with the Dolby family to sell our 37.5% ownership interest in Dolby Properties, LLC, a jointly-owned real estate entity. As a result of this related party transaction, we no longer have a continuing involvement with, nor retain the rights previously held to control the operations of this entity, and it was therefore deconsolidated from our consolidated financial statements for the fiscal year ended September 25, 2015.

Upon deconsolidation, we recognized a pre-tax gain on sale of $26.2 million, which is included within other income/(expense), net in our consolidated statements of operations. As shown within the table presented below, the gain on sale was measured as the cash consideration received in exchange for our interests of $31.3 million, less the net book value of Dolby Properties, LLC as of the August 5, 2015 transaction date (in thousands). Dolby Properties, LLC was established for operating the commercial office building and approximate 122,000 square feet of space located at 999 Brannan Street in San Francisco, California, and its primary assets represented the land, building and capital improvements made to the property. Therefore, determination of the fair value of the interests sold was based upon an independent appraisal completed by real estate valuation experts.



Deconsolidation of Subsidiary
Cash consideration received (1)	$	31,263
Less: net book value of Dolby, Properties, LLC	(5,042		)
Gain on sale (pre-tax)	$	26,221


(1)	Net cash proceeds from the sale of $27.2 million as disclosed within our consolidated statements of cash flows is derived by deducting cash balances of $4.1 million held by the Subsidiary and acquired by the Purchaser from gross cash consideration received of $31.3 million.

The arrangements and nature of our involvement in the four other real estate entities jointly-owned with Dolby family-affiliated entities were unaffected by this transaction.