Investments

The carrying amounts of investments, by category, at December 31, 2016 and March 31, 2016 were as follows:



	December 31, 2016		March 31, 2016
	(Amounts in millions)
Equity method investments	$	314	$	297
Available-for-sale securities	—		124
Cost method investments	43		43
	$	357	$	464

Equity Method Investments:

The carrying amounts of equity method investments at December 31, 2016 and March 31, 2016 were as follows:



	December 31, 2016
Equity Method Investee	Ownership Percentage	December 31, 2016		March 31, 2016
		(Amounts in millions)
EPIX	31.2%	$	179	$	172
Pop	50.0%	94		99
Other	Various	41		26
		$	314	$	297

Equity interests in equity method investments for the three and nine months ended December 31, 2016 and 2015 were as follows (income (loss)):



	Three Months Ended						Nine Months Ended
	December 31,						December 31,
Equity Method Investee	2016			2015			2016			2015
	(Amounts in millions)
EPIX	$	5		$	13		$	21		$	34
Pop	(3		)	—			(5		)	1
Other	(4		)	(2		)	(5		)	(6		)
	$	(2	)	$	11		$	11		$	29

EPIX. In April 2008, the Company formed a joint venture with Viacom, its Paramount Pictures unit and Metro-Goldwyn-Mayer Studios to create a premium television channel and subscription video-on-demand service named “EPIX”. The Company invested $80 million through September 30, 2010, and no additional amounts have been funded since. Since the Company's original investment in April 2008, the Company has received distributions from EPIX of $42 million. During the three and nine months ended December 31, 2016, the Company received distributions from EPIX of $14 million (three and nine months ended December 31, 2015 - none).

EPIX Financial Information:

The following table presents summarized balance sheet data as of December 31, 2016 and March 31, 2016 for EPIX:



	December 31, 2016		March 31, 2016
	(Amounts in millions)
Current assets	$	386	$	356
Non-current assets	$	393	$	360
Current liabilities	$	113	$	91
Non-current liabilities	$	23	$	24

The following table presents the summarized statements of income for the three and nine months ended December 31, 2016 and 2015 for EPIX and a reconciliation of the net income reported by EPIX to equity interest income recorded by the Company:



	Three Months Ended						Nine Months Ended
	December 31,						December 31,
	2016			2015			2016			2015
	(Amounts in millions)
Revenues	$	101		$	98		$	298		$	315
Expenses:
Operating expenses	73			56			194			190
Selling, general and administrative expenses	5			6			18			18
Operating income	23			36			86			107
Interest and other expense	—			—			—			(2		)
Net income	$	23		$	36		$	86		$	105
Reconciliation of net income reported by EPIX to equity interest income:
Net income reported by EPIX	$	23		$	36		$	86		$	105
Ownership interest in EPIX	31.15		%	31.15		%	31.15		%	31.15		%
The Company's share of net income	7			11			27			33
Eliminations of the Company’s share of profits on licensing sales to EPIX⁽¹⁾	(4		)	—			(10		)	(6		)
Realization of the Company’s share of profits on licensing sales to EPIX⁽²⁾	2			2			4			7
Total equity interest income recorded	$	5		$	13		$	21		$	34

_________________________


(1)	Represents the elimination of the gross profit recognized by the Company on licensing sales to EPIX in proportion to the Company's ownership interest in EPIX.


(2)	Represents the realization of a portion of the profits previously eliminated. This profit remains eliminated until realized by EPIX. EPIX initially records the license fee for the title as inventory on its balance sheet and amortizes the inventory over the license period. Accordingly, the profit is realized as the inventory on EPIX's books is amortized.

Pop. Pop is the Company's joint venture with CBS. The Company’s investment interest in Pop consists of an equity investment in its common stock units and mandatorily redeemable preferred stock units. CBS has a call option to purchase a portion of the Company's ownership interest in Pop at fair market value, which would result in CBS owning 80% of Pop, exercisable beginning March 26, 2018 for a period of 30 days. During the three and nine months ended December 31, 2016, the Company made no contributions to Pop (2015 - none and $1 million, respectively).

The mandatorily redeemable preferred stock units carry a dividend rate of 10% compounded annually and are mandatorily redeemable in May 2019 at the stated value plus the dividend return and any additional capital contributions less previous distributions. The mandatorily redeemable preferred stock units were initially recorded based on their estimated fair value, as determined using an option pricing model. The mandatorily redeemable preferred stock units and the 10% dividend are being accreted up to their redemption amount over the ten-year period to the redemption date, which is recorded as income within equity interest.

Other Equity Method Investments

Defy Media. In June 2007, the Company acquired an interest in Break Media, a multi-platform digital media company and a leader in male-targeted content creation and distribution. In October 2013, Break Media merged with Alloy Digital to create Defy Media. The Company's effective economic interest in Defy Media through its investment in Break Media and its direct investment in Defy Media is approximately 10%. The Company is accounting for its investment in Defy Media, a limited liability company, under the equity method of accounting due to the Company's board representation that provides significant influence over the investee.

Roadside Attractions. Roadside Attractions is an independent theatrical distribution company. The Company owns a 43% interest in Roadside Attractions.

Pantelion Films. Pantelion Films is a joint venture with Videocine, an affiliate of Televisa, which produces, acquires and distributes a slate of English and Spanish language feature films that target Hispanic moviegoers in the U.S. The Company owns a 49% interest in Pantelion Films.

Atom Tickets. Atom Tickets is the first-of-its-kind theatrical mobile ticketing platform and app. The Company made initial investments totaling $4 million in Atom Tickets during the year ended March 31, 2015. During the year ended March 31, 2016, the Company agreed to participate in an equity offering of Atom Tickets and subscribed for an additional $8 million in equity interests. The Company owns an interest of approximately 19% in Atom Tickets. The Company is accounting for its investment in Atom Tickets, a limited liability company, under the equity method of accounting due to the Company's board representation that provides significant influence over the investee.

Playco. Playco Holdings Limited ("Playco") offers a STARZ-branded online subscription video-on-demand service in the Middle East and North Africa. The Company owns an approximately 41.3% interest in Playco.

Other. In addition to the equity method investments discussed above, the Company holds ownership interests in other immaterial equity method investees.

Available-for-Sale Securities:

The cost basis, unrealized losses and fair market value of available-for-sale securities were as set forth below:



	March 31, 2016
	(Amounts in millions)
Cost basis	$	159
Gross unrealized loss	(35		)
Fair value	$	124

Starz. At March 31, 2016, available-for-sale securities consisted of the Company's minority interest in Starz. On March 27, 2015, pursuant to the terms of a stock exchange agreement entered into on February 10, 2015 (the "Exchange Agreement"), the Company exchanged 4,967,695 of the then newly issued common shares for 2,118,038 shares of Series A common stock of Starz and 2,590,597 shares of Series B common stock of Starz held by certain affiliates of John C. Malone ("Dr. Malone") (the exchange transaction, the "Exchange").

On December 8, 2016, the Company merged with Starz (see Note 2), and accordingly, the difference between the fair value of the Starz available-for-sale securities on December 8, 2016 of $179 million and the original cost of the Starz available-for-sale securities of $159 million represented a gain of $20 million, which has been reflected in in the gain on Starz investment line item in the Company's unaudited condensed consolidated statements of operations for the three and nine months ended December 31, 2016. Such amounts have been reclassified out of accumulated other comprehensive loss to net loss for the three and nine months ended December 31, 2016.

Cost Method Investments:

Telltale. Telltale Games ("Telltale") is a creator, developer and publisher of interactive software episodic games based upon popular stories and characters across all major gaming and entertainment platforms. In February 2015, the Company invested $40 million in Telltale, which consisted of cash of $28 million and 361,229 shares of then newly issued common shares of the Company with a fair value of approximately $12 million representing in the aggregate an approximately 14% economic interest in Telltale.

Next Games. Next Games is a mobile games development company headquartered in Helsinki, Finland, with a focus on crafting visually impressive, highly engaging games. In July 2014, the Company invested $2 million in Next Games for a small minority ownership interest.