Discontinued Operations

On October 18, 2016, the GovDelivery Sale was consummated for $153.0 million in cash, subject to certain adjustments for working capital, cash, debt and other items. Actua received approximately $123.0 million in 2016 and subsequent to 2017 received additional proceeds of approximately $6.7 million in connection with the release of escrowed funds. Actua will record a gain in 2018 for approximately $7.2 million associated with this amount and inclusive of a liability of $0.5 million associated with shareholders representative proceeds previously received in 2016.

On September 23, 2017, Actua entered into the Velocity/Bolt Sale Agreement under which CVC acquired Actua's interests in VelocityEHS and Bolt. The Velocity/Bolt Sale was consummated on December 12, 2017 and Actua received $329.0 million in cash.

On September 25, 2017, FolioDynamix entered into the Folio Sale Agreement under which Envestnet acquired FolioDynamix. This deal was consummated on January 2, 2018 and Actua received $166.3 million in cash, with the potential to receive up to an additional $11.6 million as the Client Consent Adjustment Amount. Based on this and other relevant factors, the criteria for held-for-sale classification and discontinued operations presentation were met.

For presentational purposes, all prior periods presented in the Consolidated Financial Statements have been reclassified to reflect GovDelivery, VelocityEHS, Bolt and FolioDynamix as discontinued operations.

Due to the sales of GovDelivery, Bolt, VelocityEHS and FolioDynamix, 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, including gain on sale, net of tax" in Actua’s Consolidated Statements of Operations and Comprehensive Income (Loss), is summarized below:



(in thousands)	Year ended December 31,
Major classes of line items constituting pretax loss of discontinued operations	2017 ⁽¹⁾			2016 ⁽²⁾			2015
Revenue	$	121,917		$	142,019		$	133,421
Cost of revenue	(30,180		)	(41,255		)	(39,229		)
Selling, general, administrative and other operating expenses	(105,930		)	(132,353		)	(161,379		)
Other non-major income and expense items	(606		)	(520		)	(9		)
Gain on sale of discontinued operations	220,644			124,840			—
Total discontinued operations before income taxes	205,845			92,731			(67,196		)
Income tax (expense) benefit	(11,968		)	(13,332		)	(373		)
Income (loss) from discontinued operations, including gain on sale, net of tax	193,877			79,399			(67,569		)
Plus: discontinued operations attributable to noncontrolling interests	2,415			4,236			4,265
Net income (loss) from discontinued operations	$	196,292		$	83,635		$	(63,304	)


(1)	Amounts included in this column for VelocityEHS and Bolt are from January 1, 2017 through the date of sale, December 12, 2017. The entire year of 2017 is included for FolioDynamix.


(2)	Amounts included in this column for GovDelivery are from January 1, 2016 through the date of sale, October 18, 2016. The entire year of 2016 is included for VelocityEHS, Bolt and FolioDynamix.

Assets and liabilities of discontinued operations, which are presented on 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	December 31, 2017 ⁽¹⁾		December 31, 2016 ⁽²⁾
Cash and cash equivalents	$	4,876	$	20,834
Accounts receivables, net of allowance	7,260		21,033
Fixed assets, net of accumulated depreciation and amortization	927		5,266
Goodwill	136,251		231,787
Intangible assets, net	30,343		72,706
Other assets included in the disposal group	1,427		6,896
Total assets of discontinued operations	181,084		358,522
Less: assets of discontinued operations classified as non-current	—		192,017
Total assets of discontinued operations classified as current	$	181,084	$	166,505

Carrying amounts of major classes of liabilities included as part of discontinued operations	December 31, 2017 ⁽¹⁾		December 31, 2016 ⁽²⁾
Accounts payable	$	5,312	$	11,161
Accrued expenses	2,869		8,415
Accrued compensation and benefits	2,957		7,671
Deferred revenue	2,371		36,824
Other liabilities included in the disposal group	6,317		14,753
Total liabilities of discontinued operations	19,826		78,824
Less: liabilities of discontinued operations classified as non-current	—		27,917
Total liabilities of discontinued operations classified as current	$	19,826	$	50,907


(1)	Amounts included in this column include balances related to FolioDynamix.


(2)	Amounts included in this column include balances related to VelocityEHS, Bolt and FolioDynamix. VelocityEHS and Bolt are presented as current assets or liabilities of discontinued operations. FolioDynamix is presented as non-current assets or liabilities of discontinued operations.

As of December 31, 2017 and 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. The fair value of the SAS Earnout as of December 31, 2017 was adjusted to $5.4 million which equals the value of the payout made to SAS's former shareholders upon the closing of the sale of FolioDynamix on January 2, 2018. The SAS Earnout liability is reflected in the "Liabilities of discontinued operations" 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, including gain on sale, 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 2017 and 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 and intangible assets. In the fourth quarter of 2015, Actua recorded an impairment charge of $39.7 million related to FolioDynamix.