DISCONTINUED OPERATIONS

12 Months Ended

Dec. 31, 2014

DISCONTINUED OPERATIONS

DISCONTINUED OPERATIONS

NOTE 4—DISCONTINUED OPERATIONS

        In August of 2012, the Company closed one theatre with 20 screens located in Canada. The Company paid the landlord $7,562,000 to terminate the lease agreement. Also, the Company sold one theatre with 12 screens located in the United Kingdom in August of 2012. The proceeds received from the sale was $395,000, and was subject to working capital and other purchase price adjustments as described in the asset purchase agreement.

        In July of 2012, the Company sold six theatres with 134 screens located in Canada. The aggregate gross proceeds from the sales were approximately $1,472,000, and were subject to working capital and purchase price adjustments.

        The Company recorded gains, net of lease termination expense, on the disposition of the seven Canada theatres and the one United Kingdom theatre of approximately $39,382,000, primarily due to the write-off of long-term lease liabilities extinguished in connection with the sales and closure during the period March 30, 2012 through August 30, 2012. The Company does not have any significant continuing involvement in the operations of these theatres after the disposition. The results of operations of these theatres have been classified as discontinued operations, and information presented for all periods reflects the classification.

        The Company calculated the gain on sale and closure of its theatres in Canada and in the UK as follows during the period of March 30, 2012 through August 30, 2012:

(In thousands)	Total
	(Predecessor)
Proceeds from sale of UK theatre	$	395
Proceeds from sale of Canada theatres		1,472
Cash payment for closure of Canada theatre		(7,562	)
Net cash payment	$	(5,695	)
Fixed asset write-offs		(1,885	)
Recognition of cumulative translation losses in AOCI(1)		(11,069	)
Legal and professional fees		(1,582	)
Operating Lease Liabilities:
Deferred rent write-off		14,848
Unfavorable lease write-off		31,099
Deferred gain write-off		13,666
Gain on sale, net of lease termination expense	$	39,382

(1) Included in Consolidated Statements of Comprehensive Income (Loss) as follows:

(In thousands)	March 30, 2012 through August 30, 2012
	(Predecessor)
Foreign currency translation adjustment:
Foreign currency translation adjustment, net of tax	$	866
Reclassification adjustment for foreign currency translation loss included in discontinued operations, net of tax		11,069
Total foreign currency translation adjustment, net of tax	$	11,935

        The Company operated all of the Canada and UK theatres pursuant to long-term operating lease agreements with original terms of 20 years. In connection with the sales of these theatres, the buyers assumed responsibility under the operating lease agreements and the Company was relieved of its legal obligation for future payments under the lease agreements. For the theatre that was closed, the Company paid the landlord $7,562,000 to terminate its obligation under the lease at the date of closing.

        During the twelve months ended December 31, 2013, the Company received $4,666,000 for a sales price adjustment from the sale of theatres located in Canada. The sales price adjustment was related to tax attributes of the theatres sold in Canada, which were not determinable or probable of collection at the date of the sale. The Company completed its tax returns for periods prior to the date of sale during the twelve months ended December 31, 2013, at which time the buyer was able to determine amounts due pursuant to the sales price adjustment and remit payment to the Company. The Company recorded the additional gain on sale following the guidance for gain contingencies in ASC 450-30-25-1 when the gains were realizable. The earnings from discontinued operations were partially offset by income taxes, legal and professional fees and contractual repairs and maintenance expenses during the twelve months ended December 31, 2013.

        Components of amounts reflected as (earnings) loss from discontinued operations in the Company's Consolidated Statements of Operations are presented in the following table:

	Calendar 2014			Calendar 2013			Transition Period
(In thousands)	12 Months Ended December 31, 2014			12 Months Ended December 31, 2013			From Inception August 31, 2012 through December 31, 2012			March 30, 2012 through August 30, 2012
	(Successor)			(Successor)			(Successor)			(Predecessor)
Revenues
Admissions	$	—		$	—		$	—		$	16,389
Food and beverage		—			—			—			6,099
Other theatre		—			—			—			548
Total revenues		—			—			—			23,036
Operating costs and expenses
Film exhibition costs		—			—			—			8,706
Food and beverage costs		—			—			66			1,252
Operating expense		—			—			439			15,592
Rent		—			—			—			7,322
General and administrative costs		—			—			221			511
Depreciation and amortization		—			—			—			263
Gain on disposition		(523	)		(2,126	)		(37	)		(46,951	)
Operating costs and expenses		(523	)		(2,126	)		689			(13,305	)
Operating income (loss)		523			2,126			(689	)		36,341
Investment income		—			—			(1	)		(12	)
Total other expense (income)		—			—			(1	)		(12	)
Earnings (loss) before income taxes		523			2,126			(688	)		36,353
Income tax provision		210			830			—			1,200
Net earnings (loss)	$	313		$	1,296		$	(688	)	$	35,153