NOTE 4: REAL ESTATE SALES AND ASSETS HELD FOR SALE

Assets Held for Sale—Assets held for sale in the Company’s unaudited Condensed Consolidated Balance Sheets consisted of the following (in thousands):



	September 30, 2017		December 31, 2016
Real estate	$	54,288	$	17,176
FCC licenses	38,900		—
Total assets held for sale	$	93,188	$	17,176

Real Estate Assets Held for Sale—As of September 30, 2017, the Company had two real estate properties held for sale. The Company recorded charges of $1 million in the three months ended September 30, 2016 and $1 million and $15 million in the nine months ended September 30, 2017 and September 30, 2016, respectively, to write down certain properties to their estimated fair value, less the expected selling costs, which were determined based on certain assumptions and judgments that are Level 3 within the fair value hierarchy. These charges are included in SG&A in the Company’s unaudited Condensed Consolidated Statements of Operations.

Sales of Real Estate—In the nine months ended September 30, 2017 and September 30, 2016, the Company sold several properties for net pretax proceeds totaling $61 million and $505 million, respectively, and recognized a net pretax gain of less than $1 million for the three and nine months ended September 30, 2017 and $213 million in the three and nine months ended September 30, 2016, as further described below. The Company defines net proceeds as pretax cash proceeds on the sale of properties, net of associated selling costs.

On January 26, 2017, the Company sold its Denver, CO property for net proceeds of $23 million, which approximated the carrying value, and entered into a lease for the property. On January 31, 2017, the Company sold one of its Chicago, IL properties for net proceeds of $22 million and entered into a lease with a term of 10 years, subject to renewal, retaining the use of more than a minor portion of the property. The Company recorded a deferred pretax gain of $13 million on the sale, which will be amortized over the life of the lease in accordance with sale-leaseback accounting guidance. On April 21, 2017, the Company sold two of its Chicago, IL properties for net proceeds of less than $1 million. On May 22, 2017, the Company sold two of its Baltimore, MD properties for net proceeds of $15 million which approximated their respective carrying values. On August 4, 2017, the Company sold its Williamsburg, VA property for net proceeds of $1 million, which approximated its carrying value.

As of November 8, 2017, the Company has agreements for the sales of certain properties located in Costa Mesa, CA and Fort Lauderdale, FL. These transactions are expected to close during the fourth quarter of 2017. However, the closing of these transactions is subject to certain adjustments and customary closing conditions and there can be no assurance that these sales will be completed in a timely manner or at all.

On May 2, 2016, the Company sold its Deerfield Beach, FL property for net proceeds of $24 million and on June 2, 2016, the Company sold its Allentown, PA property for net proceeds of $8 million. In the second quarter of 2016, the Company recorded a net loss of less than $1 million on the sale of these properties that is included in SG&A. On July 7, 2016, the Company sold its Seattle, WA property for net proceeds of $19 million and entered into a lease retaining the use of more than a minor portion of the property. The Company recorded a deferred pretax gain of $8 million on the sale which will be amortized over the life of the lease due to the transaction being a sale-leaseback. On July 12, 2016, the Company sold two of its Orlando, FL properties for net proceeds of $34 million and recorded a pretax gain of $2 million. On July 14, 2016, the Company sold its Arlington Heights, IL property for net proceeds of $0.4 million. On September 26, 2016, the Company sold Tribune Tower and the north block of the Los Angeles Times Square property (“LA Times Property”) for net proceeds of $200 million and $102 million, respectively, and recognized a pretax gain of $93 million and $59 million, respectively. Pursuant to the terms of the sale agreements, the Company could receive contingent payments of up to an additional $35 million related to the Tribune Tower transaction and an additional $10 million related to the LA Times Property transaction. For both the Tribune Tower and LA Times Property sales, the contingent payments become payable if certain conditions are met pertaining to development rights related to the respective buyer’s plans for development of portions of the two properties. The contingency period for both properties ends five years from the sale date with the possibility of extension in certain circumstances. On September 27, 2016, the Company sold the Olympic Printing Plant facility for net proceeds of $119 million and recognized a pretax gain of $59 million.

FCC Licenses Held for Sale—As of September 30, 2017, certain FCC licenses that were part of the FCC spectrum auction are included in assets held for sale. The gross proceeds received for these licenses totaled $172 million, which is currently reflected in other current liabilities in the Company’s unaudited Condensed Consolidated Balance Sheet at September 30, 2017. The Company expects to recognize a net gain of approximately $133 million at the time the spectrum associated with these licenses is relinquished to the FCC. See Note 9 for additional information regarding the Company’s participation in the FCC spectrum auction.