Discontinued Operations (Tables) - Gracenote Companies

3 Months Ended

Mar. 31, 2017

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

Disposal Groups, Including Discontinued Operations

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

	Three Months Ended
	March 31, 2017 (1)			March 31, 2016
Operating revenues	$	18,168		$	52,592
Direct operating expenses	7,292			16,694
Selling, general and administrative	15,349			28,065
Depreciation (2)	—			2,896
Amortization (2)	—			7,713
Operating loss	(4,473		)	(2,776		)
Interest income	16			13
Interest expense (3)	(1,261		)	(3,835		)
Loss before income taxes	(5,718		)	(6,598		)
Pretax gain on the disposal of discontinued operations	35,462			—
Total pretax gain (loss) on discontinued operations	29,744			(6,598		)
Income tax expense (benefit) (4)	14,126			(2,589		)
Gain (loss) from discontinued operations, net of taxes	$	15,618		$	(4,009	)

(1) Results of operations for the Gracenote Companies are reflected through January 31, 2017, the date of the Gracenote Sale.

(2) No depreciation expense or amortization expense was recorded by the Company in 2017 as the Gracenote Companies’ assets were held for sale as of December 31, 2016.

(3) 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 6). 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.

(4) The effective tax rates on pretax income from discontinued operations were 47.5% and 39.2% for the three months ended March 31, 2017 and March 31, 2016, respectively. The 2017 rate differs from the U.S. federal statutory rate of 35% primarily due to state income taxes (net of federal benefit), foreign tax rate differences, and an adjustment relating to the sale of the Gracenote Companies. The 2016 rate differs from the U.S. federal statutory rate of 35% primarily due to state income taxes (net of federal benefit) and foreign tax rate differences.

Net Assets Classified as Held for Sale

The following is a summary of the assets and liabilities of discontinued operations (in thousands):

	December 31, 2016
Carrying Amounts of Major Classes of Current Assets Included as Part of Discontinued Operations
Cash and cash equivalents	$	12,751
Accounts receivable, net	38,727
Prepaid expenses and other	11,127
Total current assets of discontinued operations	62,605
Carrying Amounts of Major Classes of Non-Current Assets Included as Part of Discontinued Operations
Property, plant and equipment, net	49,348
Goodwill	333,258
Other intangible assets, net	219,287
Other long-term assets	6,260
Total non-current assets of discontinued operations	608,153
Total Assets Classified as Discontinued Operations in the Unaudited Condensed Consolidated Balance Sheets	$	670,758
Carrying Amounts of Major Classes of Current Liabilities Included as Part of Discontinued Operations
Accounts payable	$	6,237
Employee compensation and benefits	17,011
Deferred revenue	27,113
Accrued expenses and other current liabilities	3,923
Total current liabilities of discontinued operations	54,284
Carrying Amounts of Major Classes of Non-Current Liabilities Included as Part of Discontinued Operations
Deferred income taxes	89,029
Postretirement, medical, life and other benefits	2,786
Other obligations	3,499
Total non-current liabilities discontinued operations	95,314
Total Liabilities Classified as Discontinued Operations in the Unaudited Condensed Consolidated Balance Sheets	$	149,598
Net Assets Classified as Discontinued Operations	$	521,160

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 unaudited Condensed Consolidated Statements of Cash Flows (in thousands):

	Three Months Ended
	March 31, 2017 (1)		March 31, 2016
Significant operating non-cash items:
Stock-based compensation	$	1,992	$	989
Depreciation (2)	—		2,896
Amortization (2)	—		7,713
Significant investing items (3):
Capital expenditures	1,578		4,923
Net proceeds from the sale of business (4)	554,725		—

(1) Results of operations for the Gracenote Companies are reflected through January 31, 2017, the date of the Gracenote Sale.

(2) No depreciation expense or amortization expense was recorded by the Company in 2017 as the Gracenote Companies’ assets were held for sale as of December 31, 2016.

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

(4) Net proceeds from the sale of business reflects the gross proceeds from the Gracenote sale of $581 million, net of $17 million of the Gracenote Companies’ cash and cash equivalents included in the sale and $9 million of selling costs.