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Discontinued Operations | 6 Months Ended
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Jun. 30, 2017
Discontinued Operations and Disposal Groups [Abstract] |
Discontinued Operations | Discontinued Operations Cars.com spin-off On May 31, 2017, we completed the previously announced spin-off of Cars.com creating two publicly traded companies: TEGNA, an innovative media company with the largest broadcast group among major network affiliates in the top 25 markets; and Cars.com, a leading digital automotive marketplace. The spin-off was effected through a pro rata distribution of all outstanding common shares of Cars.com to TEGNA stockholders of record at the close of business on May 18, 2017 (the “Record Date”). Stockholders retained their TEGNA shares and received one share of Cars.com for every three shares of TEGNA stock they owned on the Record Date. Cars.com began “regular way” trading on the New York Stock Exchange on June 1, 2017 under the symbol “CARS”. In connection with the Cars.com spin-off, we received a one time tax-free cash distribution from Cars.com of $650 million. We used the tax-free distribution proceeds to fully pay down outstanding revolving credit agreement borrowings. We have approximately $40 million of remaining proceeds of the tax-free distribution from Cars.com which will be used to pay down historical debt outstanding (see Note 5). Separation Agreement We entered into a separation agreement with Cars.com which sets forth, among other things, the identified assets transferred, the liabilities assumed and the contracts assigned to each of TEGNA and Cars.com as part of the separation and the conditions related to the distribution of Cars.com outstanding stock to TEGNA stockholders. Transition Services Agreement We entered into a transition services agreement with Cars.com prior to the distribution pursuant to which we and our subsidiaries will provide certain services to Cars.com on an interim and transitional basis, not to exceed 24 months. The services to be provided include certain tax, human resource and risk management consulting services, and certain other short term services to complete a limited number of ongoing analysis projects. The agreed upon charges for such services are generally intended to allow us to recover all costs and expenses of providing such services, and such charges are not expected to be material to either us or Cars.com. The transition services agreement will terminate on the expiration of the term of the last service provided under it, with a minimum service period of 60 days and a maximum service period of 24 months, with most services expected to last for less than the maximum service period following the distribution date. Cars.com generally can terminate a particular service prior to the scheduled expiration date, subject generally to the minimum service period and a minimum notice period of 45 days. Tax Matters Agreement Prior to the separation, we entered into a tax matters agreement that governs the parties’ respective rights, responsibilities and obligations with respect to taxes (including taxes arising in the ordinary course of business and taxes, if any, incurred as a result of any failure of the distribution and certain related transactions to qualify as tax-free for U.S. federal income tax purposes), tax attributes, the preparation and filing of tax returns, the control of audits and other tax proceedings and assistance and cooperation in respect of tax matters. Employee Matters Agreement We entered into an employee matters agreement with Cars.com prior to the distribution to allocate liabilities and responsibilities relating to employment matters, employee compensation and benefit plans and programs and other related matters. The employee matters agreement governs certain compensation and employee benefit obligations with respect to the current and former employees and non-employee directors of each company. The employee matters agreement provides that, unless otherwise specified, Cars.com will be responsible for liabilities associated with employees who will be employed by Cars.com following the separation and former employees whose last employment was with the Cars.com businesses, and we will be responsible for all other current and former TEGNA employees. Cars.com will retain sponsorship of 401(k) retirement plans, deferred compensation plans and other incentive plans maintained for the exclusive benefit of Cars.com employees as well as various welfare plans applicable to the Cars.com employees. CareerBuilder Sale On July 31, 2017 we, together with the other owners of CareerBuilder, a global leader in human capital solutions, sold our majority ownership interest in CareerBuilder to an investor group led by investments funds managed by affiliates of Apollo Global Management, LLC, a leading global alternative investment manager, and the Ontario Teachers’ Pension Plan Board. Our share of the pre-tax cash proceeds from the sale were approximately $250 million (comprised of sale proceeds and a final cash dividend from CareerBuilder prior to the sale), which will be used to retire existing debt and for other general corporate purposes. As part of the agreement, we will remain an ongoing partner in CareerBuilder, reducing our current 53% controlling interest to approximately 17% (or approximately 12% on a fully-diluted basis). As a result, CareerBuilder will no longer be consolidated within our reported operating results. Our remaining ownership interest will be accounted for as an equity method investment. Financial Statement Presentation of Digital Segment As a result of the Cars.com and CareerBuilder strategic actions described above, the operating results and financial position of our former Digital Segment have been included in discontinued operations in the Condensed Consolidated Balance Sheet and Consolidated Statements of Income for all periods presented. CareerBuilder’s assets and liabilities are classified as held for sale on the Consolidated Balance Sheet as of June 30, 2017. The Consolidated Balance Sheet as of December 31, 2016 includes both Cars.com and CareerBuilder. The results of discontinued operations for the quarter and six months ended June 30, 2017 include a $344.8 million pre-tax loss related to writing down CareerBuilder’s net assets to fair value (after noncontrolling interest, $273.5 million of the pre-tax loss is attributable to TEGNA). The pre-tax loss includes a goodwill impairment charge of $333 million and estimated costs to sell the business of $11.8 million. Fair value used for the pre-tax loss was based on the enterprise value of CareerBuilder as determined in the definitive purchase agreement. The carrying value of the assets and liabilities of our former Digital Segment’s discontinued operations as of June 30, 2017 and December 31, 2016 were as follows (in thousands):
| June 30, |  | Dec. 31,
| 2017 |  | 2016
ASSETS |  |  |
Cash and cash equivalents | $ | 78,762 |  |  | $ | 61,042 |
Accounts receivable, net | 95,500 |  |  | 214,170 |
Property and equipment, net | 57,440 |  |  | 74,695 |
Goodwill | 358,645 |  |  | 1,488,112 |
Other Intangibles, net | 104,315 |  |  | 1,718,592 |
Other assets | 55,063 |  |  | 71,193 |
Total assets | $ | 749,725 |  |  | $ | 3,627,804 |
LIABILITIES |  |  |
Accounts payable | $ | 99,679 |  |  | $ | 166,853 |
Deferred revenue | 103,730 |  |  | 110,071 |
Deferred tax liability | 2,731 |  |  | 280,264 |
Other liabilities | 13,203 |  |  | 66,969 |
Total liabilities | $ | 219,343 |  |  | $ | 624,157 |
The financial results of discontinued operations in the second quarter and the six months ended June 30, 2017 and 2016 are presented as a profit (loss) from discontinued operations, net of income taxes, on our Condensed Consolidated Statements of Income. The following table presents the financial results of discontinued operations (in thousands):
| Quarter ended June 30, |  | Six months ended June 30,
| 2017 |  | 2016 |  | 2017 |  | 2016 (1)
Operating revenues | $ | 272,746 |  |  | $ | 334,807 |  |  | $ | 592,147 |  |  | $ | 659,280 |
Cost of revenue and SG&A expenses | 206,350 |  |  | 234,737 |  |  | 461,984 |  |  | 480,556 |
Depreciation | 9,700 |  |  | 8,149 |  |  | 19,570 |  |  | 15,531 |
Amortization | 16,670 |  |  | 22,476 |  |  | 40,300 |  |  | 44,773 |
Asset impairment and facility consolidation charges | 344,772 |  |  | — |  |  | 344,772 |  |  | — |
Total operating expenses | 577,492 |  |  | 265,362 |  |  | 866,626 |  |  | 540,860 |
Total operating (loss) income | (304,746 | ) |  | 69,445 |  |  | (274,479 | ) |  | 118,420 |
Non-operating income (expense) | 211 |  |  | (1,490 | ) |  | (1,726 | ) |  | (5,685 | )
(Loss) income from discontinued operations, before income taxes | (304,535 | ) |  | 67,955 |  |  | (276,205 | ) |  | 112,735 |
Provision for income taxes | 62,836 |  |  | (20,568 | ) |  | 53,747 |  |  | (37,292 | )
Net (loss) income from discontinued operations | $ | (241,699 | ) |  | $ | 47,387 |  |  | $ | (222,458 | ) |  | $ | 75,443 |
(1) The six months ended June 30, 2016 include approximately $7.5 million of net loss from discontinued operations related to our operations of our former Sightline business through the date of sale on March 18, 2016.
In our Consolidated Statements of Cash Flows, the cash flows from discontinued operations are not separately classified. As such, major categories of discontinued operation cash flows for the six months ended June 30, 2017 and 2016 are presented below (in thousands):
| Six months ended June 30,
| 2017 |  | 2016
Depreciation | $ | 19,570 |  |  | $ | 15,531 |
Amortization | 40,300 |  |  | 44,773 |
Capital expenditures | 34,482 |  |  | 23,138 |
Payments for acquisitions, net of cash acquired | $ | — |  |  | $ | 53,552 |

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- Definition The entire disclosure related to a disposal group. Includes, but is not limited to, a discontinued operation, disposal classified as held-for-sale or disposed of by means other than sale or disposal of an individually significant component. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 360 -URI http://asc.fasb.org/topic&trid=2155823 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 205 -SubTopic 20 -URI http://asc.fasb.org/subtopic&trid=2122178 + Details
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