3.	Discontinued Operations

On July 27, 2016, we entered into a Membership Interest Purchase Agreement (the "Purchase Agreement") with Sharecare, Inc. ("Sharecare") and Healthways SC, LLC ("Healthways SC"), a newly formed Delaware limited liability company and wholly owned subsidiary of the Company, pursuant to which Sharecare acquired the TPHS business, which closed effective July 31, 2016 ("Closing").

At Closing, Sharecare delivered to the Company an Adjustable Convertible Equity Right (the "ACER") with an initial face value of $30.0 million, which will be convertible into shares of common stock of Sharecare 24 months after Closing at an initial conversion price of $249.87 per share, subject to customary adjustment for stock splits, stock dividends and other reorganizations of Sharecare. Additionally, pursuant to the Purchase Agreement, we paid Sharecare $25.0 million in cash at Closing to fund projected losses of the TPHS business during the year following Closing (the "Transition Year").

The Purchase Agreement provided for post-closing adjustments based on (i) net working capital (which resulted in an increase in the face amount of the ACER due to a net working capital surplus, as further discussed below), (ii) negative cash flows of the TPHS business during the Transition Year in excess of $25.0 million (which could have resulted in a reduction in the face amount of the ACER up to a maximum reduction of $20.0 million but did not result in any reduction, as further discussed below), and (iii) any successful claims for indemnification by Sharecare (which may result in a reduction in the face amount of the ACER, unless the Company elects, in its sole discretion, to satisfy any such successful claims with cash payments).

During 2016, we recorded $10.0 million of the ACER's $30.0 million face value (and did not yet record the $20.0 million face value related to the maximum negative cash flow adjustment) at its estimated fair value of $2.7 million as of Closing. In May 2017, we entered into an agreement with Sharecare regarding the final working capital amount delivered at Closing, which resulted in a final net working capital surplus of $9.8 million and a corresponding increase to the face value of the ACER (per the terms of the Purchase Agreement), bringing the adjusted total face value of the ACER to $39.8 million. We recorded the $9.8 million of additional face value at its estimated fair value of $2.6 million. Finally, in September 2017, Sharecare indicated that the contingency was resolved with respect to the portion of the ACER (having a face value of $20.0 million) subject to the negative cash flows adjustment described above, and we recorded it at its estimated fair value of $5.5 million. Therefore, as of December 31, 2017, we have recorded the $39.8 million face value of the ACER at an estimated carrying value of $10.8 million, which is classified as an equity receivable included in other assets.

Pursuant to Sharecare's acquisition of the TPHS business, our ownership interest in the joint venture with Gallup (the "Gallup Joint Venture") was transferred to Sharecare. We agreed with Sharecare to be responsible for two-thirds of the remaining payment obligations in respect of the purchase price to be paid in connection with Sharecare's acquisition of additional membership interest in the Gallup Joint Venture. As of December 31, 2017, the remaining obligation totaled $0.8 million and was included in accrued liabilities.

The terms of the Purchase Agreement also impacted other existing contractual commitments, including the elimination of the minimum fee requirements under our technology services outsourcing agreement with HP Enterprise Services, LLC.

Effective July 31, 2016, in connection with the Closing, the Company and CareFirst Holdings, LLC ("CareFirst"), agreed to terminate the Investment Agreement between them (see Note 7). Also in connection with the Closing, all of the Commercial Agreements (defined in Note 7) between the Company and CareFirst relating to the TPHS business were transferred to Healthways SC that, effective at the Closing, became a wholly-owned subsidiary of Sharecare. As a result, CareFirst no longer has the opportunity to earn CareFirst Warrants (as defined in Note 7) in respect of the periods following the Closing. The Convertible Note, the Registration Rights Agreement and the CareFirst Warrants previously issued to CareFirst were not affected by the termination of the Investment Agreement.

The following table presents financial results of the TPHS business included in "loss from discontinued operations" for the years ended December 31, 2017, 2016, and 2015.

	Year Ended December 31,
(In thousands)	2017			2016				2015

Revenues	$	—		$	151,780		$	318,506
Cost of services		427			173,302			317,849
Selling, general & administrative expenses		349			18,594			32,928
Depreciation and amortization		—			27,207			42,986
Restructuring and related charges		—			8,626			14,395
Equity in income (loss) from joint ventures		98			243			(20,229	)
Pretax loss on discontinued operations		(678	)		(75,706	)		(109,881	)
Pretax loss on release of cumulative translation adjustment ⁽¹⁾		(3,044	)		—			—
Pretax gain on sale of Navvis business		—			—			1,873
Pretax loss on sale of MeYou Health business		—			(4,826	)		—
Pretax income (loss) on sale of TPHS business		4,733			(202,095	)		—
Total pretax income (loss) on discontinued operations		1,011			(282,627	)		(108,008	)
Income tax benefit		(1,474	)⁽²⁾		(97,921	)		(33,056	)
Income (loss) from discontinued operations, net of income tax benefit	$	2,485		$	(184,706	)	$	(74,952	)

(1)	During the second quarter of 2017, we substantially liquidated foreign entities that were part of our TPHS business, resulting in a release of the cumulative translation adjustment of $3.0 million into loss from discontinued operations.

(2)	Income tax benefit for the year ended December 31, 2017 includes the effect of a change in the estimate of net U.S. tax incurred in 2016 on foreign activity classified as discontinued operations.

The depreciation, amortization and significant operating and investing non-cash items of the discontinued operations were as follows:

	Year Ended December 31,
(In thousands)	2017		2016		2015
Depreciation and amortization	$	—	$	27,207	$	42,986
Capital expenditures		—		10,258		29,984
Assets acquired through capital lease obligations		—		—		898
Share-based compensation		—		10,144		3,404