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Discontinued Operations | 9 Months Ended
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Sep. 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 $650.0 million. In the second quarter of 2017, we used $609.9 million of the tax-free distribution proceeds to fully pay down outstanding revolving credit agreement borrowings. In October 2017, we used the remainder of the proceeds to pay down a portion of the outstanding principal on unsecured notes due in October 2019 (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 distribution, 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 spin-off 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 sold our majority ownership interest in CareerBuilder to an investor group led by investment 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 net cash proceeds from the sale was $198.3 million. These net proceeds were used in October 2017 to pay down existing debt (see Note 5). Additionally, during the third quarter of 2017 and prior to the closing of the sale, CareerBuilder issued a final dividend to its selling shareholders, of which $25.8 million was retained by TEGNA. As part of the agreement, we remain an ongoing partner in CareerBuilder, reducing our 53% controlling interest to approximately 17% interest (or approximately 12% on a fully-diluted basis) and two seats on CareerBuilder’s 10 person board. As a result, subsequent to the sale, CareerBuilder is no longer consolidated within our reported operating results. Our remaining ownership interest will be accounted for as an equity method investment. Subsequent to the date of sale we recorded $0.5 million of equity earnings during the remainder of the third quarter of 2017 from our remaining interest in CareerBuilder. Financial Statement Presentation of Digital Segment As a result of the Cars.com and CareerBuilder transactions 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 applicable periods presented. The results of discontinued operations for the nine months ended September 2017 include a $342.9 million pre-tax loss related to the sale of CareerBuilder (after noncontrolling interest, $271.7 million of the pre-tax loss is attributable to TEGNA). The pre-tax loss includes a goodwill impairment charge of $332.9 million and costs to sell the business of $10.9 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 December 31, 2016 were as follows (in thousands):
| Dec. 31, 2016
ASSETS |
Cash and cash equivalents | $ | 61,041 |
Accounts receivable, net | 214,171 |
Property and equipment, net | 74,695 |
Goodwill | 1,488,112 |
Other Intangibles, net | 1,718,592 |
Other assets | 71,193 |
Total assets | $ | 3,627,804 |
LIABILITIES |
Accounts payable | $ | 166,853 |
Deferred revenue | 110,071 |
Deferred tax liability | 280,264 |
Other liabilities | 66,969 |
Total liabilities | $ | 624,157 |
The financial results of discontinued operations in the third quarter and the nine months ended September 30, 2017 and 2016 are presented as a loss (income) from discontinued operations, net of tax, on our Consolidated Statements of Income. The following table presents the financial results of discontinued operations (in thousands):
| Quarter ended Sept. 30, |  | Nine months ended Sept. 30,
| 2017 (1) |  | 2016 |  | 2017 (1) |  | 2016 (2)
Operating revenues | $ | 54,874 |  |  | $ | 340,649 |  |  | $ | 647,021 |  |  | $ | 999,929 |
Cost of revenue and SG&A expenses | 60,301 |  |  | 228,152 |  |  | 522,287 |  |  | 708,815 |
Depreciation | — |  |  | 9,421 |  |  | 19,569 |  |  | 24,843 |
Amortization | — |  |  | 23,385 |  |  | 40,300 |  |  | 68,159 |
Loss on sale of CareerBuilder | (1,872 | ) |  | — |  |  | 342,900 |  |  | — |
Total operating expenses | 58,429 |  |  | 260,958 |  |  | 925,056 |  |  | 801,817 |
Total operating (loss) income | (3,555 | ) |  | 79,691 |  |  | (278,035 | ) |  | 198,112 |
Non-operating income (expense) | 647 |  |  | (3,304 | ) |  | (1,078 | ) |  | (8,989 | )
(Loss) income from discontinued operations, before income taxes | (2,908 | ) |  | 76,387 |  |  | (279,113 | ) |  | 189,123 |
Provision for income taxes | (7,895 | ) |  | (19,689 | ) |  | 45,852 |  |  | (56,982 | )
(Loss) income from discontinued operations, net of tax | $ | (10,803 | ) |  | $ | 56,698 |  |  | $ | (233,261 | ) |  | $ | 132,141 |
(1) The quarter and nine months ended September 30, 2017 include CareerBuilder’s operations through the date of sale on July 31, 2017. Cars.com operations are included in the nine months ended September 30, 2017 through the date of spin-off on May 31, 2017.
(2) The nine months ended September 30, 2016 include approximately $7.5 million of net loss from discontinued operations related to the 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 nine months ended September 30, 2017 and 2016 are presented below (in thousands):
| Nine months ended Sept. 30,
| 2017 (1) |  | 2016
Depreciation | $ | 19,569 |  |  | $ | 24,843 |
Amortization | 40,300 |  |  | 68,159 |
Capital expenditures | 37,441 |  |  | 38,825 |
Payments for acquisitions, net of cash acquired | $ | — |  |  | $ | 196,750 |
(1) The nine months ended September 30, 2017 includes Cars.com through the spin-off date of May 31, 2017 and CareerBuilder’s operations through the date of sale on July 31, 2017.

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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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