INVESTMENTS

Equity Method Investments

As of April 1, 2018, our investments in joint ventures of $1.8 million consisted of a 40% equity ownership interest in Madison Paper Industries (“Madison”), a partnership that previously operated a supercalendered paper mill in Maine.

The investment is accounted for under the equity method, and is recorded in “Investments in joint ventures” in our Condensed Consolidated Balance Sheets. Our proportionate share of the operating results of our investment is recorded in “Gain from joint ventures” in our Condensed Consolidated Statements of Operations.

The Company and UPM-Kymmene Corporation (“UPM”), a Finnish paper manufacturing company, are partners through subsidiary companies in Madison. The Company’s 40% ownership of Madison is through an 80%-owned consolidated subsidiary which owns 50% of Madison. UPM owns 60% of Madison, including a 10% interest through a 20% noncontrolling interest in the consolidated subsidiary of the Company. In 2016, the paper mill closed and we recognized a $41.4 million loss from joint ventures related to the closure. The Company’s proportionate share of the loss was $20.1 million after tax and net of noncontrolling interest. As a result of the mill closure, we wrote our investment down to zero. In 2017 we recognized a gain of $20.8 million, primarily related to the sale of the remaining assets, partially offset by the loss related to our proportionate share of Madison’s settlement of certain pension obligations.

The Company’s joint venture in Madison is currently being liquidated. In the fourth quarter of 2016, Madison sold certain assets at the mill site and we recognized a gain of $3.9 million related to the sale. In the first quarter of 2018 we recognized a de minimis gain from joint ventures. We expect to receive our proportionate share of a cash distribution from the wind down of our Madison investment in 2018.

The following table presents summarized income statement information for Madison, which follows a calendar year:



	For the Quarters Ended
(In thousands)	March 31, 2018		March 31, 2017
Revenues	$	—	$	—
Expenses:
Cost of sales	—		(1,054		)
General and administrative income/(expense) and other	9		(26		)
Total income/(costs)	9		(1,080		)
Operating income/(loss)	9		(1,080		)
Other income/(expense)	20		(2		)
Net income/(loss)	$	29	$	(1,082	)

We received no distributions from Madison in the first quarters of 2018 and 2017.

Non-Marketable Equity Securities

Our non-marketable equity securities are investments in privately held companies/funds without readily determinable market values. Prior to January 1, 2018, we accounted for our non-marketable equity securities at cost less impairment. Realized gains and losses on non-marketable securities sold or impaired were recognized in “Interest expense and other, net”. As of December 31, 2017, non-marketable equity securities included in “Miscellaneous assets’’ in our Condensed Consolidated Balance Sheets accounted for under the cost method had a carrying value of $13.6 million.

Non-marketable equity securities remeasured during the first quarter ended April 1, 2018, are classified within Level 3 in the fair value hierarchy because we estimate the value based on valuation methods using the observable transaction price at the transaction date. See Note 9 for the definition of Level 3. As of April 1, 2018, non-marketable equity securities had a carrying value of $14.1 million. We did not have any material fair value adjustments in the first quarter of 2018.