Discontinued Operations

On October 18, 2016, the sale of GovDelivery to Vista was consummated for $153.0 million in cash, subject to certain adjustments for working capital, cash, debt and other items. Actua realized approximately $133.0 million in cash, of which approximately $10.0 million is being held in escrow and is subject to pending and potential indemnification claims. Actua recorded a gain of $124.8 million related to the transaction during the fourth quarter of 2016.

On September 23, 2017, Actua entered into the Velocity/Bolt Sale Agreement under which CVC would acquire Actua's interests in VelocityEHS and Bolt (each previously reported in Actua's vertical cloud segment.) This transaction is subject to approval by Actua stockholders and is expected to close in the fourth quarter of 2017. Based on this and other relevant factors, the criteria for held-for-sale classification and discontinued operations presentation were met on September 30, 2017. For presentational purposes, all prior periods presented in this Report have been reclassified to match the current period's held-for-sale classification and discontinued operations presentation.

On September 25, 2017, FolioDynamix entered into the Folio Sales Agreement under which Envestnet would acquire FolioDynamix (previously reported in Actua's vertical cloud segment.) This transaction is expected to close in the first quarter of 2018. Based on this and other relevant factors, the criteria for held-for-sale classification and discontinued operations presentation was met on September 30, 2017. For presentational purposes, all prior periods presented in this Report have been reclassified to match the current period's held-for-sale classification and discontinued operations presentation.

Due to the sale of GovDelivery and the pending sales of Bolt, VelocityEHS and FolioDynamix (Actua's remaining Vertical Cloud businesses), all of which were previously presented in the Vertical Cloud reporting segment, Actua will no longer present separate segments.

The results of Actua's discontinued operations, which are presented on the line item "Income (loss) from discontinued operations, net of tax" in Actua’s Consolidated Statements of Operations and Comprehensive Income (Loss), is summarized below:



(in thousands)	Three Months Ended September 30,						Nine Months Ended September 30,
Major classes of line items constituting pretax loss of discontinued operations	2017			2016			2017			2016
Revenue	$	31,315		$	39,298		$	93,011		$	110,617
Cost of revenue	(7,700		)	(11,995		)	(23,378		)	(33,027		)
Selling, general, administrative and other operating expenses	(24,152		)	(35,724		)	(77,429		)	(101,459		)
Other non-major income and expense items	(248		)	(135		)	(525		)	(502		)
Total discontinued operations before income taxes	(785		)	(8,556		)	(8,321		)	(24,371		)
Income tax benefit (expense)	(233		)	(93		)	(682		)	(321		)
Total discontinued operations, net of income taxes	(1,018		)	(8,649		)	(9,003		)	(24,692		)
Less: discontinued operations attributable to noncontrolling interests	(424		)	(1,019		)	(1,369		)	(2,888		)
Discontinued operations attributable to Actua Corporation	$	(594	)	$	(7,630	)	$	(7,634	)	$	(21,804	)

Assets and liabilities of discontinued operations, which are presented in the line items “Assets of discontinued operations” and “Liabilities of discontinued operations” on Actua's Consolidated Balance Sheets, consist of the following:



(in thousands)
Carrying amounts of major classes of assets included as part of discontinued operations	September 30, 2017		December 31, 2016
Cash and cash equivalents	$	27,982	$	20,834
Accounts receivables, net of allowance	18,446		1,648
Fixed assets, net of accumulated depreciation and amortization	4,513		5,266
Goodwill	231,424		231,787
Intangible assets, net	60,121		72,706
Other assets included in the disposal group	6,714		26,281
Total assets of discontinued operations	$	349,200	$	358,522


Carrying amounts of major classes of liabilities included as part of discontinued operations	September 30, 2017		December 31, 2016
Accounts payable	$	12,670	$	11,161
Accrued expenses	7,572		8,415
Accrued compensation and benefits	6,566		7,671
Deferred revenue	37,081		36,824
Other liabilities included in the disposal group	9,749		14,753
Total liabilities of discontinued operations	$	73,638	$	78,824

As of September 30, 2017 and December 31, 2016, Actua accounted for a contingent earn-out payment that was a component of the purchase price in FolioDynamix’s 2016 acquisition of assets of SAS Capital Management, LLC ("SAS") (such earnout payment, the "SAS Earnout"). Under the terms of the underlying asset purchase agreement, upon a change of control of FolioDynamix, the amount of the SAS Earnout would become fixed and payable. In connection with the pending Folio Sale, the fair value of the SAS Earnout has been estimated to be approximately $1.3 million. Due to the reduction of the SAS Earnout liability from $8.6 million to $1.3 million, a gain of $7.3 million has been recognized in the three months ended September 30, 2017. The SAS Earnout liability is reflected in the "Liabilities held for sale" line item on Actua's Consolidated Balance Sheets; changes in the fair value of the SAS Earnout were reflected in the "Income (loss) from discontinued operations, net of tax" line item on Actua's Consolidated Statements of Operations and Comprehensive Income (Loss).

Impairment

Actua completed its annual impairment testing in the fourth quarter of 2016, which resulted in no impairments related to Actua’s consolidated businesses because the fair value of the reporting units exceeded their carrying value for each of those reporting units, including goodwill.