3. DISCONTINUED OPERATIONS

As discussed in Note 1, on December 23, 2015, the Company closed the sale of 75% of the outstanding participation interests in its subsidiary CTC Investments to UTH, a private television broadcaster in Russia. The Company received $150.5 million in cash at closing. An additional $50 million was held back and was subject to adjustment based on the performance of the business during the second half of 2015 and agreed indemnity obligations. On February 12, 2016, the Company received $42.5 million of this additional consideration in cash, based on the final price determination. The total consideration received in connection with the sale amounted to $193.1 million. The amount of cash disposed of at the date of a sale comprised $51,632.

CTC Investments is a Russian holding company which controls Russian and Kazakh businesses operating CTC, Domashny, Che and CTC Love television channels in Russia and Channel 31 in Kazakhstan. The results of these businesses have been presented as discontinued operations in the accompanying Statements of Income for the years ended December 31, 2013, 2014 and 2015. The accompanying Balance Sheets have been adjusted to present assets and liabilities of discontinued operations separately from those of continuing operations. The following table presents major line items of income/loss from discontinued operations for the years ended December 31, 2013, 2014 and 2015:

	Year Ended December 31,
	2013			2014			2015
REVENUES:
Advertising	$	805,546		$	698,111		$	341,898
Sublicensing and other revenues		25,516			12,315			8,662

Total operating revenues		831,062			710,426			350,560

EXPENSES:
Direct operating expenses (exclusive of programming expenses, shown below; exclusive of depreciation and amortization of $29,024, $22,583 and $12,298 in 2013, 2014 and 2015, respectively)		(46,351	)		(45,281	)		(32,569	)
Selling, general and administrative (exclusive of depreciation and amortization $4,092, $3,499 and $2,004 in 2013, 2014 and 2015, respectively)		(167,539	)		(152,249	)		(86,631	)
Stock-based compensation benefit (expense)		(1,834	)		171			(4,185	)
Programming expenses		(338,215	)		(299,750	)		(199,288	)
Depreciation and amortization		(33,116	)		(26,082	)		(14,302	)
Impairment loss		(29,869	)		(29,356	)		(8,991	)

Total operating expenses		(616,924	)		(552,547	)		(345,966	)

OPERATING INCOME		214,138			157,879			4,594
OTHER NON-OPERATING INCOME (LOSS), net		14,187			11,698			2,110
Income from discontinued operations before income tax		228,325			169,577			6,704

INCOME TAX BENEFIT/(EXPENSE)		(63,725	)		(55,283	)		36,610

NET INCOME BEFORE INCOME ATTRIBUTABLE TO NONCONTROLLING INTEREST	$	164,600		$	114,294		$	43,314


LESS: INCOME ATTRIBUTABLE TO NONCONTROLLING INTEREST	$	(7,821	)	$	(5,284	)	$	(1,386	)


LOSS ON DISPOSAL, including tax benefit of $7,476:		—			—			(529,129	)


Including loss on reclassification of accumulated other comprehensive losses to earnings		—			—			(523,755	)


NET INCOME FROM DISCONTINUED OPERATIONS	$	156,779		$	109,010		$	(487,201	)

The financial information of discontinued operations presented above include allocations of expenses from the Company's corporate headquarters to CTC Investments in the amounts of $4.1, $3.2 and $6.1 million in 2013, 2014 and 2015, respectively. These costs primarily include salaries and stock-based compensation of operational management. Costs and expenses relating to CTC Media, Inc. are included in the results of continuing operations. Costs related to sale of 75% in CTC Group in the amount of $6.9 million are classified in discontinued operations. In addition, the Company allocated income tax benefit/(expense) to continuing operations based on pre-tax income/ (losses) of continuing operations and a US income tax rate of 35%. The remaining portion of income tax benefit/(expense) was allocated to discontinued operations. As of September 30, 2015, the income tax position was significantly affected by the one-off recognition of $40.2 million of deferred tax benefit resulting from the remeasurement of the Company's deferred tax liability in respect of unremitted earnings of its Russian and Kazakh businesses. This remeasurement was triggered by a change in the Company's expectations for the US tax position due to sale transaction. Based on the terms of the Framework Agreement, CTC Investments distributed substantially all of outstanding cash of its subsidiaries to CTC Media, Inc; this distribution was estimated to be tax free in the US due to significant amount of foreign tax credits available to offset US income tax. Further, it was estimated that the potential sale of a 75% interest in the group's Russian and Kazakh business and subsequent merger transaction would not result in US income tax to the Company, based on the sale price outlined in the Framework Agreement and available foreign tax credits. Accordingly, the Company has adjusted its income tax expense in the third quarter of 2015 for the respective amount of deferred taxes.

The following table summarizes the impairment losses which are included in income from discontinued operations (shown above) for the years ended December 31, 2013, 2014 and 2015 as a result of impairment reviews:

	2013		2014		2015
Umbrella analog licenses	$	—	$	—	$	2,965

Cable network connections		—		—		2,737

Che goodwill*		—		29,356		3,289

Production unit goodwill		29,869		—		—

Total impairment losses	$	29,869	$	29,356	$	8,991


Income tax effect		—		—		(1,140	)


Total effect on net income	$	29,869	$	29,356	$	7,851


*	In November, 2015 Peretz channel was relaunched in a new format as Che.

At December 23, 2015, the Company recognized loss from disposal of the 75% interest in the Russian and Kazakh businesses in the amount of $5.3 million (including transaction costs of $6.9 million). The Company measured this loss as the difference between consideration received of $193,057, the fair value of the remaining 25% interest in CTC Investments of $89,457 and the net assets, net of impairments, when applicable, of the respective net assets sold. At December 23, 2015, the carrying value of Russian and Kazakh businesses (after impairment losses recorded with respect of goodwill and broadcasting licenses at that date) was $287,118. The excess of fair value of 25% interest in CTC Investments over the amount of underlying equity in respective net assets comprised $17,678. In addition, loss on disposal includes accumulated other comprehensive loss related to the Russian and Kazakh businesses reclassified to earnings at the date of sale, in the amount of $523,755.

See also—Summary of significant accounting policies—Fair Value Measurements.

In the years ended December 31, 2013, 2014 and 2015, total operating and investing cash flows related to discontinued operations were as follows:

	2013			2014		2015
Net cash provided by operating activities of discontinued operations	$	190,872		$	106,214	$	28,075

Net cash provided by (used in) investing activities of discontinued operations	$	(60,791	)	$	56,568	$	61,819

As of December 31, 2014, assets and liabilities related to the Russian and Kazakh businesses have been presented in assets of discontinued operations and liabilities associated with discontinued operations, respectively. At December 31, 2014, the carrying amounts of the major classes of these assets and liabilities were as follows:

	December 31, 2014
CURRENT ASSETS OF DISCONTINUED OPERATIONS:
Cash and cash equivalents	$	31,700
Short-term investments		77,800
Trade accounts receivable		25,504
Taxes reclaimable		9,693
Prepayments		42,503
Programming rights		112,708
Deferred tax assets		20,307
Other current assets		63

TOTAL CURRENT ASSETS		320,278

NON-CURRENT ASSETS OF DISCONTINUED OPERATIONS:
Property and equipment		18,503
Intangible assets:		45,969
Goodwill		53,627
Programming rights		72,446
Investments in and advances to investees		3,167
Prepayments		13,719
Deferred tax assets		8,264
Other non-current assets		6,929

TOTAL ASSETS ASSOCIATED WITH ASSETS OF DISCONTINUED OPERATIONS		542,902

CURRENT LIABILITIES ASSOCIATED WITH ASSETS OF DISCONTINUED OPERATIONS:
Bank loans		2,192
Accounts payable		54,371
Accrued liabilities		15,027
Taxes payable		15,440
Deferred revenue		6,650
Deferred tax liabilities		58,827

TOTAL CURRENT LIABILITIES ASSOCIATED WITH ASSETS OF DISCONTINUED OPERATIONS		152,507

NON-CURRENT LIABILITIES ASSOCIATED WITH ASSETS OF DISCONTINUED OPERATIONS:
Deferred tax liabilities		6,910