NOTE 6: INVESTMENTS

Investments consisted of the following (in thousands):



	September 30, 2017		December 31, 2016
Equity method investments	$	1,247,914	$	1,642,117
Cost method investments	25,943		26,748
Marketable equity securities	—		6,018
Total investments	$	1,273,857	$	1,674,883

Equity Method Investments—Income from equity investments, net reported in the Company’s unaudited Condensed Consolidated Statements of Operations consisted of the following (in thousands):



	Three Months Ended						Nine Months Ended
	September 30, 2017			September 30, 2016			September 30, 2017			September 30, 2016
Income from equity investments, net, before amortization of basis difference	$	33,609		$	45,381		$	139,808		$	155,254
Amortization of basis difference	(12,551		)	(13,644		)	(40,952		)	(40,959		)
Income from equity investments, net	$	21,058		$	31,737		$	98,856		$	114,295

As discussed in Note 8 to the Company’s audited consolidated financial statements for the fiscal year ended December 31, 2016, the carrying value of the Company’s investments was increased by $1.615 billion to a fair value aggregating $2.224 billion as a result of fresh start reporting adopted on the Effective Date (as defined in Note 9). Of the $1.615 billion increase, $1.108 billion was attributable to the Company’s share of theoretical increases in the carrying values of the investees’ amortizable intangible assets had the fair value of the investments been allocated to the identifiable intangible assets of the investees’ in accordance with ASC Topic 805 “Business Combinations.” The remaining $507 million of the increase was attributable to goodwill and other identifiable intangibles not subject to amortization, including trade names. The Company amortizes the differences between the fair values and the investees’ carrying values of the identifiable intangible assets subject to amortization and records the amortization (the “amortization of basis difference”) as a reduction of income on equity investments, net in its unaudited Condensed Consolidated Statements of Operations. The remaining identifiable net intangible assets subject to amortization of basis difference as of September 30, 2017 totaled $698 million and have a weighted average remaining useful life of approximately 16 years.

Cash distributions from the Company’s equity method investments were as follows (in thousands):



	Three Months Ended				Nine Months Ended
	September 30, 2017		September 30, 2016		September 30, 2017		September 30, 2016
Cash distributions from equity investments	$	32,911	$	17,953	$	182,561	$	143,557

TV Food Network—The Company’s 31% investment in Television Food Network, G.P. (“TV Food Network”) totaled $1.215 billion and $1.279 billion at September 30, 2017 and December 31, 2016, respectively. The Company recognized equity income from TV Food Network of $26 million and $24 million for the three months ended September 30, 2017 and September 30, 2016, respectively, and equity income of $103 million and $94 million for the nine months ended September 30, 2017 and September 30, 2016, respectively. The Company received cash distributions from TV Food Network of $17 million and $18 million for the three months ended September 30, 2017 and September 30, 2016, respectively, and cash distributions of $167 million and $144 million in the nine months ended September 30, 2017 and September 30, 2016, respectively.

CareerBuilder—The Company’s investment in CareerBuilder, LLC (through its investment in Camaro Parent, LLC) (“CareerBuilder”) totaled $11 million and $341 million at September 30, 2017 and December 31, 2016, respectively. The Company recognized an equity loss from CareerBuilder of $5 million for the three months ended September 30, 2017 and equity income of $8 million for the three months ended September 30, 2016, and an equity loss, excluding impairment charges, of $3 million for the nine months ended September 30, 2017 and equity income of $22 million for the nine months ended September 30, 2016.

On September 7, 2016, TEGNA Inc. (“TEGNA”) announced that it began evaluating strategic alternatives for CareerBuilder, including a possible sale. In March 2017, the range of possible outcomes was narrowed and based on operating performance and updated bids received by TEGNA, the Company determined that there was sufficient indication that the carrying value of its investment in CareerBuilder may be impaired. As of the assessment date in the first quarter of 2017, the carrying value of the Company’s investment in CareerBuilder included $72 million of unamortized basis difference that the Company recorded as a result of fresh start reporting discussed above. In the first quarter of 2017, the Company recorded a non-cash pretax impairment charge of $122 million to write down its investment in CareerBuilder, which eliminated the remaining fresh start reporting basis difference. The write down resulted from a decline in the fair value of the investment that the Company determined to be other than temporary.

On June 19, 2017, TEGNA announced that it entered into an agreement (the “CareerBuilder Sale Agreement”), together with the other owners of CareerBuilder, including Tribune Media Company, to sell a majority interest in CareerBuilder to an investor group led by investment funds managed by affiliates of Apollo Global Management, LLC and the Ontario Teachers’ Pension Plan Board. As a result, in the second quarter of 2017, the Company recorded an additional non-cash pretax impairment charge of $59 million to further write down its investment in CareerBuilder based on the transaction value contemplated in the CareerBuilder Sale Agreement, subject to certain purchase price adjustments. The transaction closed on July 31, 2017 and the Company received cash of $158 million, which included an excess cash distribution of $16 million. The Company recognized a gain on sale of $6 million in the third quarter of 2017. Subsequent to the sale, the Company’s ownership in CareerBuilder declined from 32% to approximately 7%, on a fully diluted basis. Pursuant to ASC Topic 323 “Investments - Equity Method and Joint Ventures,” the Company continues to account for CareerBuilder as an equity method investment.

In the nine months ended September 30, 2017, the total non-cash pretax impairment charges to write down the Company’s investment in CareerBuilder totaled $181 million. The impairment charges resulted from declines in the fair value of the investment that the Company determined to be other than temporary. The investment constitutes a nonfinancial asset measured at fair value on a nonrecurring basis in the Company’s unaudited Condensed Consolidated Balance Sheets and is classified as a Level 3 asset in the fair value hierarchy. See Note 8 for a description of the fair value hierarchy’s three levels.

Dose Media—The Company’s 25% investment in Dose Media, LLC (“Dose Media”) totaled $11 million and $12 million at September 30, 2017 and December 31, 2016, respectively.

Summarized Financial Information—Summarized financial information for TV Food Network is as follows (in thousands):



	Three Months Ended				Nine Months Ended
	September 30, 2017		September 30, 2016		September 30, 2017		September 30, 2016
Revenues, net	$	274,754	$	275,758	$	880,868	$	851,209
Operating income	$	157,207	$	150,471	$	547,363	$	520,848
Net income	$	123,009	$	116,431	$	447,348	$	421,961

Summarized financial information for CareerBuilder and Dose Media is as follows (in thousands):



	Three Months Ended					Nine Months Ended
	September 30, 2017			September 30, 2016		September 30, 2017			September 30, 2016
Revenues, net	$	165,961		$	182,339	$	505,383		$	537,347
Operating (loss) income	$	(9,661	)	$	26,482	$	373		$	70,671
Net (loss) income	$	(14,090	)	$	26,396	$	(842	)	$	70,758

Marketable Equity Securities—As further described in Note 2 to the Company’s audited consolidated financial statements for the fiscal year ended December 31, 2016, on August 4, 2014, the Company completed the Publishing Spin-off and retained 381,354 shares of tronc, Inc. (“tronc”) common stock, representing at that time 1.5% of the outstanding common stock of tronc. As of December 31, 2016, shares of tronc common stock were classified as available-for-sale securities. On January 31, 2017, the Company sold its tronc shares for net proceeds of $5 million and recognized a pretax gain of $5 million.

Cost Method Investments—All of the Company’s cost method investments in private companies are recorded at cost, net of write-downs resulting from periodic evaluations of the carrying value of the investments.

Chicago Cubs Transactions—As defined and further described in Note 8 to the Company’s audited consolidated financial statements for the fiscal year ended December 31, 2016, the Company consummated the closing of the Chicago Cubs Transactions on October 27, 2009. Concurrent with the closing of the transactions, the Company executed guarantees of collection of certain debt facilities entered into by Chicago Entertainment Ventures, LLC (formerly Chicago Baseball Holdings, LLC), and its subsidiaries (collectively, “New Cubs LLC”). The guarantees are capped at $699 million plus unpaid interest. The guarantees are reduced as New Cubs LLC makes principal payments on the underlying loans. To the extent that payments are made under the guarantees, the Company will be subrogated to, and will acquire, all rights of the debt lenders against New Cubs LLC.

Variable Interests—At September 30, 2017 and December 31, 2016, the Company held variable interests in Topix, LLC (through its investment in TKG Holdings II, LLC) (“Topix”) and TREH 200E Las Olas Venture, LLC (“Las Olas LLC”). See Note 1 to the Company’s audited consolidated financial statements for the fiscal year ended December 31, 2016 for additional information relating to these entities.

The Company has determined that it is not the primary beneficiary of Topix and therefore has not consolidated it as of and for the periods presented in the unaudited condensed consolidated financial statements. The Company’s maximum loss exposure related to Topix is limited to its equity investment, which was $5 million at both September 30, 2017 and December 31, 2016.

Las Olas LLC was determined to be a VIE where the Company is the primary beneficiary. The Company consolidates the financial position and results of operations of this VIE. The financial position and results of operations of the VIE as of and for the nine months ended September 30, 2017 were not material.

As further disclosed in Note 1, the Company consolidates the financial position and results of operations of Dreamcatcher, a VIE where the Company is the primary beneficiary.