Discontinued Operations (Tables)

12 Months Ended

Dec. 31, 2016

Gracenote Companies

Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]

Disposal Groups, Including Discontinued Operations

The following table represents the components of the results from discontinued operations associated with the Gracenote Sale as reflected in the Company’s Consolidated Statements of Operations (in thousands):

	Year Ended
	December 31, 2016			December 31, 2015			December 28, 2014
Operating revenues	$	225,903		$	209,964		$	168,734
Direct operating expenses	75,457			59,789			56,566
Selling, general and administrative	110,713			104,968			86,833
Depreciation	13,584			9,735			7,744
Amortization	29,999			28,826			21,233
Operating (loss) profit	(3,850		)	6,646			(3,642		)
Interest income	96			109			104
Interest expense (1)	(15,317		)	(15,843		)	(16,237		)
Gain on investment transaction	—			—			700
Other non-operating gain, net	—			912			—
Loss before income taxes	(19,071		)	(8,176		)	(19,075		)
Income tax expense (benefit) (2)	53,723			(3,595		)	(5,567		)
Loss from discontinued operations, net of taxes	$	(72,794	)	$	(4,581	)	$	(13,508	)

(1) The Company used $400 million of proceeds from the Gracenote Sale to pay down a portion of its outstanding borrowings under the Company’s Term Loan Facility (as defined and described in Note 9). Interest expense associated with the Company’s outstanding Term Loan Facility was allocated to discontinued operations based on the ratio of the $400 million prepayment to the total outstanding indebtedness under the Term Loan Facility in effect in each respective period.

(2) In the fourth quarter of 2016, as a result of meeting all criteria under ASC Topic 205 to classify Gracenote Companies as discontinued operations, the Company recorded tax expense of $62 million to increase the Company’s deferred tax liability for the outside basis difference related to the Gracenote Companies included in the Gracenote Sale. This charge was required to be recorded in the period the Company signed a definitive agreement to divest the business. Exclusive of this $62 million charge, the effective tax rates on pretax income from discontinued operations was 45.0%, 44.0%, and 29.2% for the years ended December 31, 2016, December 31, 2015, and December 28, 2014, respectively. These rates differ from the U.S. federal statutory rate of 35% primarily due to state income taxes (net of federal benefit), foreign tax rate differences, and the impact of certain nondeductible transaction costs and other adjustments.

Net Assets Classified as Held for Sale

The following is a summary of the assets and liabilities classified as held for sale in connection with the Gracenote Sale (in thousands):

	December 31, 2016		December 31, 2015
Carrying Amounts of Major Classes of Current Assets Included as Part of Discontinued Operations
Cash and cash equivalents	$	12,751	$	14,824
Accounts receivable, net	38,727		49,751
Prepaid expenses and other	11,127		8,123
Total current assets held for sale	62,605		72,698
Carrying Amounts of Major Classes of Non-Current Assets Included as Part of Discontinued Operations
Property, plant and equipment, net	49,348		42,287
Goodwill	333,258		333,588
Other intangible assets, net	219,287		250,197
Other long-term assets	6,260		6,370
Total non-current assets held for sale (1)	608,153		632,442
Total Assets Classified as Held For Sale in the Consolidated Balance Sheets	$	670,758	$	705,140
Carrying Amounts of Major Classes of Current Liabilities Included as Part of Discontinued Operations
Accounts payable	$	6,237	$	6,522
Employee compensation and benefits	17,011		14,973
Deferred revenue	27,113		29,972
Accrued expenses and other current liabilities	3,923		8,495
Total current liabilities held for sale	54,284		59,962
Carrying Amounts of Major Classes of Non-Current Liabilities Included as Part of Discontinued Operations
Deferred income taxes	89,029		93,326
Postretirement, medical, life and other benefits	2,786		2,842
Other obligations	3,499		3,455
Total non-current liabilities held for sale	95,314		99,623
Total Liabilities Classified as Held For Sale in the Consolidated Balance Sheets	$	149,598	$	159,585
Net Assets Classified as Held for Sale	$	521,160	$	545,555

(1) Excludes $17 million and $206 million as of December 31, 2016 and December 31, 2015, respectively related to real estate assets held for sale. See Note 6 for further details.

Cash Flows of Disposal Group

The following table represents the components of the results from discontinued operations associated with the Gracenote Sale as reflected in the Company’s Consolidated Statements of Cash Flows (in thousands):

	2016			2015			2014
Significant operating non-cash items:
Stock-based compensation	$	4,196		$	2,239		$	1,641
Depreciation	13,584			9,735			7,744
Amortization	29,999			28,826			21,233
Significant investing items(1):
Acquisitions, net of cash acquired	—			(58,996		)	(246,051		)
Capital expenditures	23,548			23,626			13,102
Significant financing items(1):
Settlements of contingent consideration, net	(3,636		)	1,174			—

(1) Non-cash investing and financing activities of Digital and Data businesses included in the Gracenote Sale were immaterial.    

tronc

Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]

Disposal Groups, Including Discontinued Operations

Summarized results of the Company’s discontinued operations and the impact of associated Publishing Spin-off adjustments are as follows (in thousands):

	2014 (1)
Operating revenues	$	970,501
Operating profit	38,712
Loss on equity investments, net	(626		)
Interest expense (2)	(6,837		)
Gain on investment transactions	1,484
Reorganization items, net	(9		)
Income before income taxes	32,724
Income tax expense (3)	19,172
Income from discontinued operations, net of taxes	$	13,552

(1) Results of operations for the tronc businesses are reflected through August 4, 2014, the date of the Publishing Spin-off.

(2) In connection with the Publishing Spin-off, the Company received a $275 million cash dividend from tronc utilizing borrowings of $350 million under a senior secured credit facility entered into by tronc prior to the Publishing Spin-off. The full amount of the $275 million cash dividend was used to repay $275 million of outstanding borrowings under the Company’s Term Loan Facility (as defined and described in Note 9). Interest expense associated with the Company’s outstanding debt was allocated to discontinued operations based on the ratio of the $275 million cash dividend received from tronc to the total outstanding indebtedness under the outstanding credit facilities in effect in each respective period prior to the Publishing Spin-off and totaled $7 million for the year ended December 28, 2014.

(3) The effective tax rate on pretax income from discontinued operations was 58.6% for the year ended December 28, 2014. This rate differs from the U.S. federal statutory rate of 35% primarily due to state income taxes (net of federal benefit) and the impact of certain nondeductible transaction costs.