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DISCONTINUED OPERATIONS (Note) | 6 Months Ended
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Jun. 30, 2019
Discontinued Operations and Disposal Groups [Abstract] |
DISCONTINUED OPERATIONS | ASSETS HELD FOR SALE In December 2016, the Company acquired two office buildings in Charlotte, North Carolina for $23.5 million in cash, which included $0.1 million in acquisition-related costs which were capitalized. The buildings were acquired with the intent to use such buildings as the Company's corporate headquarters and rent any unused space. In November 2018, the Company's Board of Directors approved a plan to sell the two office buildings. The properties were classified as current assets held for sale in the consolidated balance sheet for December 31, 2018. In February 2019, the Company agreed to sell these buildings to an unrelated third party, which agreement was amended in March 2019. The sale was finalized in the second quarter of 2019 for a sale price of $24.4 million, and the Company incurred closing fees of $0.3 million. The Company recognized a gain of $2.7 million on the sale within general and administrative expense in the consolidated statement of operations and comprehensive income. The properties were associated with the Company's one reportable segment. Property and equipment classified as held for sale at December 31, 2018 is as follows (in thousands):
| Amount
Land | $ | 5,818 |
Building | 14,984 |
Site improvements | 950 |
Computer equipment and capitalized software | 166 |
Furniture and other equipment | 145 |
Total gross property and equipment | 22,063 |
Accumulated depreciation | (1,278 | )
Total property and equipment, net | $ | 20,785 |
Intangible assets classified as held for sale at December 31, 2018 is as follows (in thousands):
| Amount
Tenant leases | $ | 961 |
Total gross intangible assets | 961 |
Accumulated amortization | (468 | )
Total intangible assets, net | $ | 493 |
DISCONTINUED OPERATIONS The revenue and net loss reported as discontinued operations in the accompanying consolidated statements of operations and comprehensive income are as follows (in thousands):
| Three Months Ended June 30, |  | Six Months Ended June 30,
| 2019 |  | 2018 |  | 2019 |  | 2018
Revenue | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |
Loss before income taxes | $ | (966 | ) |  | $ | (2,914 | ) |  | $ | (2,310 | ) |  | $ | (8,399 | )
Income tax benefit | 203 |  |  | 612 |  |  | 485 |  |  | 1,764 |
Net loss | $ | (763 | ) |  | $ | (2,302 | ) |  | $ | (1,825 | ) |  | $ | (6,635 | )
During the second quarters and first six months of 2019 and 2018, loss from discontinued operations was primarily due to litigation settlements and contingencies and legal fees associated with ongoing legal proceedings. LendingTree Loans On June 6, 2012, the Company sold substantially all of the operating assets of its LendingTree Loans business for $55.9 million in cash to a wholly-owned subsidiary of Discover Financial Services ("Discover"). Discover generally did not assume liabilities of the LendingTree Loans business that arose before the closing date, except for certain liabilities directly related to assets Discover acquired. Of the purchase price received, a portion was deposited in escrow in accordance with the agreement with Discover for certain loan loss obligations that remain with the Company following the sale. During the second quarter of 2018, the remaining funds in escrow were released to the Company in accordance with the terms of the agreement with Discover. Significant Assets and Liabilities of LendingTree Loans Upon closing of the sale of substantially all of the operating assets of the LendingTree Loans business on June 6, 2012, LendingTree Loans ceased to originate consumer loans. Liability for losses on previously sold loans will remain with LendingTree Loans and are discussed below. Loan Loss Obligations LendingTree Loans sold loans it originated to investors on a servicing-released basis, so the risk of loss or default by the borrower was generally transferred to the investor. However, LendingTree Loans was required by these investors to make certain representations and warranties relating to credit information, loan documentation and collateral. These representations and warranties may extend through the contractual life of the loan. Subsequent to the loan sale, if underwriting deficiencies, borrower fraud or documentation defects are discovered in individual loans, LendingTree Loans may be obligated to repurchase the respective loan or indemnify the investors for any losses from borrower defaults if such deficiency or defect cannot be cured within the specified period following discovery. HLC, a subsidiary of the Company, continues to be liable for these indemnification obligations, repurchase obligations and premium repayment obligations following the sale of substantially all of the operating assets of its LendingTree Loans business in the second quarter of 2012. The following table represents the aggregate loans sold, subsequent settlements and remaining unsettled loans.
| Number of Loans |  | Original Issue Balance
| (in thousands) |  | (in billions)
Loans sold by HLC | 234 |  |  | $ | 38.9 |
Subsequent settlements | (172 | ) |  | (28.8 | )
Remaining unsettled balance as of June 30, 2019 | 62 |  |  | $ | 10.1 |
During the fourth quarter of 2015, LendingTree Loans completed a settlement agreement for $0.6 million with one of the investors to which it had sold loans. This investor accounted for approximately 10% of the total number of loans sold and 12% of the original issue balance. This settlement related to all existing and future losses on loans sold to this investor. During the fourth quarter of 2014, LendingTree Loans completed a settlement agreement for $5.4 million with the largest investor to which it had sold loans. This investor accounted for approximately 40% of both the total number of loans sold and the original issue balance. This settlement related to all existing and future losses on loans sold to this investor. In the second quarter of 2014, LendingTree Loans completed settlements with two buyers of previously purchased loans. The Company has been negotiating with certain of the remaining secondary market purchasers to settle any existing and future contingent liabilities, but it may not be able to complete such negotiations on acceptable terms, or at all. Because LendingTree Loans does not service the loans it sold, it does not maintain nor generally have access to the current balances and loan performance data with respect to the individual loans previously sold to investors. Accordingly, LendingTree Loans is unable to determine, with precision, its maximum exposure for breaches of the representations and warranties it made to the investors that purchased such loans. The Company uses a settlement discount framework for evaluating the adequacy of the reserve for loan losses. This model estimates lifetime losses on the population of remaining loans originated and sold by LendingTree Loans using actual defaults for loans with similar characteristics and projected future defaults. It also considers the likelihood of claims expected due to alleged breaches of representations and warranties made by LendingTree Loans and the percentage of those claims investors estimate LendingTree Loans may agree to repurchase. A settlement discount factor is then applied to the result of the foregoing to reflect publicly-announced bulk settlements for similar loan types and vintages, the Company's own settlement experience, as well as LendingTree Loans' non-operating status, in order to estimate a range of potential obligation. The estimated range of remaining loan losses using this settlement discount framework was determined to be $4.3 million to $7.9 million at June 30, 2019. The reserve balance recorded as of June 30, 2019 was $7.6 million. Management has considered both objective and subjective factors in the estimation process, but given current general industry trends in mortgage loans as well as housing prices and market expectations, actual losses related to LendingTree Loans' obligations could vary significantly from the obligation recorded as of the balance sheet date or the range estimated above. Additionally, LendingTree has guaranteed certain loans sold to two investors in the event that LendingTree Loans is unable to satisfy its repurchase and warranty obligations related to such loans. Based on historical experience, it is anticipated that LendingTree Loans will continue to receive repurchase requests and incur losses on loans sold in prior years. The activity related to loss reserves on previously sold loans is as follows (in thousands):
| Three Months Ended June 30, |  | Six Months Ended June 30,
| 2019 |  | 2018 |  | 2019 |  | 2018
Loan loss reserve, beginning of period | $ | 7,554 |  |  | $ | 7,554 |  |  | $ | 7,554 |  |  | $ | 7,554 |
Provisions | — |  |  | — |  |  | — |  |  | — |
Charge-offs to reserves | — |  |  | — |  |  | — |  |  | — |
Loan loss reserve, end of period | $ | 7,554 |  |  | $ | 7,554 |  |  | $ | 7,554 |  |  | $ | 7,554 |
The liability for losses on previously sold loans is presented as current liabilities of discontinued operations in the accompanying consolidated balance sheets as of June 30, 2019 and December 31, 2018. See Note 18—Subsequent Event for additional information.

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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://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 360 -URI http://asc.fasb.org/topic&trid=2155823 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 205 -SubTopic 20 -URI http://asc.fasb.org/subtopic&trid=2122178 + Details
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