Note 6. Equity method investments

The Company makes investments that support its underlying business strategy and enable it to enter new markets. The carrying values of the Company’s equity method investments are typically consistent with its ownership in the underlying net assets of the investees, with the exception of Canal 1 and Pantaya. Due to losses in excess of capital contributions, the Company has recorded nearly 100% of the losses on Canal 1. The Company has recorded losses in excess of the amount invested in Pantaya. Certain of the Company’s equity investments are variable interest entities, for which the Company is not the primary beneficiary.

On November 3, 2016, we acquired a 25% interest in Pantaya, a newly formed joint venture with Lionsgate, to launch a Spanish-language OTT movie service. The service launched on August 1, 2017. The investment is deemed a variable interest entity ("VIE") that is accounted for under the equity method. As of March 31, 2019, we have funded $5.9 million in capital contributions to Pantaya. We record the income or loss on investment on a one quarter lag. For the three months ended March 31, 2019 and 2018, we have recorded $0.3 million and $2.6 million, respectively in loss on equity method investments in the accompanying unaudited condensed consolidated statements of operations. In accordance with U.S. GAAP, since we are committed to provide future capital contributions to Pantaya, we also present as a liability in the accompanying condensed consolidated balance sheets the net balance recorded for our share of Pantaya’s losses in excess of the amount funded into Pantaya, which was $4.1 million and $5.0 million at March 31, 2019 and December 31, 2018, respectively. As of March 31, 2019, our applicable pro rata share of the inception to date losses exceeds our contractual funding commitment of $10 million, as such our cumulative share of the losses is limited to $10 million.

On November 30, 2016, we, in partnership with Colombian content producers, Radio Television Interamericana S.A., Compania de Medios de Informacion S.A.S. and NTC Nacional de Television y Comunicaciones S.A., were awarded a ten (10) year renewable television broadcast concession license for Canal 1 in Colombia. The partnership began operating Canal 1 on May 1, 2017. On February 7, 2018, Colombian regulatory authorities approved an increase in our ownership in the joint venture from 20% to 40%.The joint venture is deemed a VIE that is accounted for under the equity method. As of March 31, 2019, we have funded $96.6 million in capital contributions to Canal 1. The Canal 1 joint venture losses to date have exceeded the capital contributions of the common equity partners and in accordance with equity method accounting, losses in excess of the common equity have been recorded against the next layer of the capital structure, in this case, preferred equity. The Company is currently the sole preferred equity holder in Canal 1 and therefore, the Company has recorded nearly 100% of the losses of the joint venture. We record the income or loss on investment on a one quarter lag. For the three months ended March 31, 2019 and 2018, we recorded $7.0 million and $7.1 million in loss on equity method investment, net of a preferred return on capital funded, in the accompanying unaudited condensed consolidated statements of operations, respectively. The net balance recorded in equity method investments related to Canal 1 joint venture was $52.2 million and $46.7 million at March 31, 2019 and December 31, 2018, respectively, and is included in equity method investments in the accompanying condensed consolidated balance sheets.

On April 28, 2017, we acquired a 25.5% interest in REMEZCLA, a digital media company targeting English speaking and bilingual U.S. Hispanic millennials through innovative content. As of March 31, 2019, we have recorded $5.0 million in equity method funding related to REMEZCLA. We record the income or loss on investment on a one quarter lag. For the three months ended March 31, 2019 and 2018, we recorded $0.0 million and $0.1 million in loss on equity method investment, net of preferred return on capital funded, in the accompanying unaudited condensed consolidated statement of operations, respectively. The net balance recorded in equity method investments was $4.9 million and $5.0 million at March 31, 2019 and December 31, 2018, respectively, and is included in the accompanying condensed consolidated balance sheets. We have no additional commitment to fund the operations of the venture.

On November 26, 2018, Snap Media acquired a 50% interest in Snap JV, LLC (“ Snap JV”) (the Company owns 75% of Snap Media), a newly formed joint venture with Mar Vista Entertainment, LLC (“MarVista”), to co-produce original movies and series. The investment is deemed a VIE that is accounted for under the equity method. As of March 31, 2019, we have funded $0.1 million in capital contributions to the Snap JV. We record the income or loss on investment on a one quarter lag. For the three months ended March 31, 2019, we have recorded $0.0 million in loss on equity method investments in the accompanying unaudited condensed consolidated statements of operations. The net balance recorded in equity method investments related to the Snap JV was $0.0 million at March 31, 2019, and is included in equity method investments in the accompanying condensed consolidated balance sheets.

The Company records the income or loss on investments on a one quarter lag. Summary unaudited financial data for our equity investments in the aggregate as of and for the three months ended December 31, 2018 are included below (amounts in thousands):



	Total Equity Investees
Current assets	$	21,192
Non-current assets	$	33,842
Current liabilities	$	52,279
Non-current liabilities	$	92,012
Redeemable stock and non-controlling interests	$	(453)
Net revenue	$	7,307
Operating loss	$	(9,501)
Net loss	$	(13,521)