Discontinued Operations (Tables) - Gracenote Companies

12 Months Ended

Dec. 31, 2018

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
Operating revenues	$	18,168		$	225,903
Direct operating expenses	7,292			75,457
Selling, general and administrative	15,349			110,713
Depreciation (2)	—			13,584
Amortization (2)	—			29,999
Operating loss	(4,473		)	(3,850		)
Interest income	16			96
Interest expense (3)	(1,261		)	(15,317		)
Loss before income taxes	(5,718		)	(19,071		)
Pretax gain on the disposal of discontinued operations	33,492			—
Total pretax income (loss) on discontinued operations	27,774			(19,071		)
Income tax expense (4)	13,354			53,723
Income (loss) from discontinued operations, net of taxes	$	14,420		$	(72,794	)

(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 7). 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% and 45.0% for the years ended December 31, 2017 and December 31, 2016, 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.

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
Significant operating non-cash items:
Stock-based compensation	$	1,992	$	4,196
Depreciation (2)	—		13,584
Amortization (2)	—		29,999
Significant investing items (3):
Capital expenditures	1,578		23,548
Net proceeds from sale of business (4)	554,487		—
Significant financing items (3):
Settlements of contingent consideration, net	—		(3,636		)

(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 $20 million of the Gracenote Companies’ cash, cash equivalents and restricted cash included in the sale and $9 million of selling costs.