NOTE 5: INVESTMENTS

Investments consisted of the following (in thousands):



	September 30, 2018		December 31, 2017
Equity method investments	$	1,205,893	$	1,254,198
Other equity investments	25,980		27,593
Total investments	$	1,231,873	$	1,281,791

Equity Method Investments—Income on 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, 2018			September 30, 2017			September 30, 2018			September 30, 2017
Income on equity investments, net, before amortization of basis difference	$	44,850		$	33,609		$	161,493		$	139,808
Amortization of basis difference	(12,469		)	(12,551		)	(37,407		)	(40,952		)
Income on equity investments, net	$	32,381		$	21,058		$	124,086		$	98,856

As discussed in Note 8 to the Company’s audited consolidated financial statements for the fiscal year ended December 31, 2017, 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 8). 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, 2018 totaled $648 million and have a weighted average remaining useful life of approximately 15 years.

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



	Three Months Ended				Nine Months Ended
	September 30, 2018		September 30, 2017		September 30, 2018		September 30, 2017
Cash distributions from equity investments	$	—	$	32,911	$	158,926	$	182,561

TV Food Network—The Company’s 31% investment in Television Food Network, G.P. (“TV Food Network”) totaled $1.195 billion and $1.234 billion at September 30, 2018 and December 31, 2017, respectively. The Company recognized equity income from TV Food Network of $32 million and $26 million for the three months ended September 30, 2018 and September 30, 2017, respectively, and $114 million and $103 million for the nine months ended September 30, 2018 and September 30, 2017, respectively. The Company received cash distributions from TV Food Network of $17 million for the three months ended September 30, 2017 and $153 million and $167 million in the nine months ended September 30, 2018 and September 30, 2017, respectively. The Company did not receive any cash distributions from TV Food Network in the third quarter of 2018 as TV Food Network adjusted its required year-to-date cash distributions to cover the Company’s taxes on its share of partnership income based on the reduction in tax rates from Tax Reform, which resulted in no distribution required for the third quarter of 2018.

CareerBuilder—On September 13, 2018, the Company sold its remaining 6% investment (on a fully diluted basis, including CareerBuilder, LLC (“CareerBuilder”) employees’ equity awards) (through its investment in Camaro Parent, LLC) in CareerBuilder and received pretax proceeds of $11 million. The Company recognized a pretax loss of $5 million on the sale of its ownership interest in CareerBuilder in the third quarter of 2018.

As of December 31, 2017, the Company’s investment in CareerBuilder totaled $10 million. Through the date of the sale, pursuant to ASC Topic 323 “Investments - Equity Method and Joint Ventures,” the Company accounted for CareerBuilder as an equity method investment. The Company recognized equity income from CareerBuilder of $0.4 million for the three months ended September 30, 2018 and an equity loss of $5 million for the three months ended September 30, 2017. For the nine months ended September 30, 2018, the Company recognized equity income of $10 million and an equity loss, excluding impairment charges, of $3 million for the nine months ended September 30, 2017. The Company received cash distributions from CareerBuilder of $6 million for nine months ended September 30, 2018, of which $5 million related to a distribution of proceeds from CareerBuilder’s sale of one of its business operations on May 14, 2018. The Company’s share of the gain on sale was approximately $11 million, which is included in income on equity investments, net for the nine months ended September 30, 2018.

On September 7, 2016, TEGNA Inc. (“TEGNA”) announced that it began evaluating strategic alternatives for CareerBuilder, including a possible sale. In the nine months ended September 30, 2017, the Company recorded total non-cash pretax impairment charges of $181 million to write-down the Company’s investment in CareerBuilder prior to the sale. The impairment charges 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. 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 net gain on sale of $4 million in 2017, of which $6 million was recognized in the third quarter of 2017.

The CareerBuilder investment constituted a nonfinancial asset measured at fair value on a nonrecurring basis in the Company’s unaudited Condensed Consolidated Balance Sheets and was classified as a Level 3 asset in the fair value hierarchy. See Note 7 for a description of the fair value hierarchy’s three levels.

Dose Media—As of September 30, 2018, the Company’s 25% investment in Dose Media, LLC (“Dose Media”) has a carrying value of zero as it was fully impaired as of December 31, 2017.

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



	Three Months Ended				Nine Months Ended
	September 30, 2018		September 30, 2017		September 30, 2018		September 30, 2017
Revenues, net	$	294,308	$	274,754	$	924,407	$	880,868
Operating income	$	139,679	$	157,207	$	474,223	$	547,363
Net income	$	142,903	$	123,009	$	484,781	$	447,348

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



	Three Months Ended					Nine Months Ended
	September 30, 2018 (1)		September 30, 2017			September 30, 2018 (1)		September 30, 2017
Revenues, net	$	119,502	$	165,961		$	432,330	$	505,383
Operating income (loss)	$	10,698	$	(9,661	)	$	26,759	$	373
Net income (loss)	$	3,884	$	(14,090	)	$	102,541	$	(842	)


(1)	Revenues, operating income (loss) and net income (loss) that relate to CareerBuilder include results through September 13, 2018.

Other Equity Investments—Other equity investments are investments without readily determinable fair values. All of the Company’s other equity investments are in private companies and have historically been recorded at cost, net of write-downs resulting from periodic evaluations of the carrying value of the investments. Upon adoption of ASU 2016-01 and ASU 2018-03, as further described in Note 1, the Company elected to use a measurement alternative for all investments without readily determinable fair values which allows the Company to measure the value of such equity investments at cost less impairments, if any, plus or minus changes resulting from observable price changes in orderly transactions for the identical or a similar investment. Fair values associated with these investments will be remeasured either upon occurrence of an observable price change or upon identification of an impairment. Changes in the carrying value of these equity investments will be reflected in current earnings.

During the first quarter of 2018, the Company sold one of its other equity investments for $4 million and recognized a pretax gain of $4 million.

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, 2017, 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) (“CEV LLC”), and its subsidiaries (collectively, “New Cubs LLC”). As of December 31, 2017, the guarantees were capped at $699 million plus unpaid interest. In the first quarter of 2018, New Cubs LLC refinanced a portion of the debt which was guaranteed by the Company and the Company ceased being a guarantor of the refinanced debt. As of September 30, 2018, the remaining guarantees were capped at $249 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.

On August 21, 2018, Northside Entertainment Holdings LLC (f/k/a Ricketts Acquisition LLC) (“NEH”) provided a written notice (the “Call Notice”) to the Company that NEH was exercising its right pursuant to the Amended and Restated Limited Liability Company Agreement (the “CEV LLC Agreement”) of CEV LLC to purchase the Company’s 5% membership interest in CEV LLC. The parties are engaged in the valuation process provided for in the CEV LLC Agreement and there can be no assurance that the purchase will be completed in a timely manner or at all, or at a favorable valuation to the Company.

Marketable Equity Securities—On August 4, 2014, the Company completed a spin-off of its publishing operations and retained 381,354 shares of Tribune Publishing Company (“Tribune Publishing”) (formerly tronc, Inc.) common stock, representing at that time 1.5% of the outstanding common stock of Tribune Publishing. On January 31, 2017, the Company sold its Tribune Publishing shares for net proceeds of $5 million and recognized a pretax gain of $5 million.

Variable Interests—At September 30, 2018 and December 31, 2017, 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, 2017 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 $6 million at both September 30, 2018 and December 31, 2017.

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, 2018 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.