Discontinued Operations (Tables) - Gracenote Companies

12 Months Ended

Dec. 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 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, 2017 (1)			December 31, 2016			December 31, 2015
Operating revenues	$	18,168		$	225,903		$	209,964
Direct operating expenses	7,292			75,457			59,789
Selling, general and administrative	15,349			110,713			104,968
Depreciation (2)	—			13,584			9,735
Amortization (2)	—			29,999			28,826
Operating (loss) profit	(4,473		)	(3,850		)	6,646
Interest income	16			96			109
Interest expense (3)	(1,261		)	(15,317		)	(15,843		)
Other non-operating gain, net	—			—			912
Loss before income taxes	(5,718		)	(19,071		)	(8,176		)
Pretax gain on the disposal of discontinued operations	33,492			—			—
Total pretax income (loss) on discontinued operations	27,774			(19,071		)	(8,176		)
Income tax expense (benefit) (4)	13,354			53,723			(3,595		)
Income (loss) from discontinued operations, net of taxes	$	14,420		$	(72,794	)	$	(4,581	)

(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 prepay 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.

(4) 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 48.1%, 45.0% and 44.0% for the years ended December 31, 2017, December 31, 2016, and December 31, 2015, 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 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 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 of discontinued operations	95,314
Total Liabilities Classified as Discontinued Operations in the 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 Consolidated Statements of Cash Flows (in thousands):

	2017 (1)		2016			2015
Significant operating non-cash items:
Stock-based compensation	$	1,992	$	4,196		$	2,239
Depreciation (2)	—		13,584			9,735
Amortization (2)	—		29,999			28,826
Significant investing items (3):
Acquisitions, net of cash acquired	—		—			(58,996		)
Capital expenditures	1,578		23,548			23,626
Net proceeds from sale of business (4)	557,793		—			—
Significant financing items (3):
Settlements of contingent consideration, net	—		(3,636		)	1,174

(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 $584 million, net of $17 million of the Gracenote Companies’ cash and cash equivalents included in the sale and $9 million of selling costs.