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Real Estate Sales and Assets Held For Sale (Notes)
12 Months Ended
Dec. 31, 2016
Assets Held For Sale and Sales of Real Estate [Abstract]  
Real Estate Sales and Assets Held For Sale
NOTE 6: REAL ESTATE SALES AND ASSETS HELD FOR SALE
Real Estate Assets Held for Sale—As of December 31, 2016, the Company had five real estate properties held for sale. As of December 31, 2015, the real estate properties held for sale included Tribune Tower in Chicago, IL (“Tribune Tower”), the north block of the Los Angeles Times Square property in downtown Los Angeles, CA (“LA Times Property”) and the Olympic Printing Plant facility in the Arts District of downtown Los Angeles, CA (“Olympic Facility”), which were sold in 2016 as discussed below. The combined net carrying value of $17 million and $206 million for the real estate properties held for sale is included in non-current assets held for sale in the Company’s Consolidated Balance Sheet at December 31, 2016 and December 31, 2015, respectively.
The Company recorded charges of $15 million, $7 million and $4 million in 2016, 2015 and 2014, respectively, to write down certain properties to their estimated fair value, less the expected selling costs, which were determined based on certain assumptions and judgments that are Level 3 within the fair value hierarchy. These charges are included in SG&A in the Company’s Consolidated Statements of Operations.
Sales of Real Estate—During 2016, the Company sold several properties for net pretax proceeds totaling $506 million and recognized a net pretax gain of $213 million, as further described below. The Company defines net proceeds as pretax cash proceeds on the sale of properties, net of associated selling costs.
On May 2, 2016, the Company sold its Deerfield Beach, FL property for net proceeds of $24 million, and on June 2, 2016, the Company sold its Allentown, PA property for net proceeds of $8 million; the Company recorded a net pretax loss of less than $1 million on the sale of these properties.
On July 7, 2016, the Company sold its Seattle, WA property for net proceeds of $19 million and entered into a lease with a term of 11 years, subject to renewal, retaining the use of more than a minor portion of the property. The Company recorded a deferred pretax gain of $8 million on the sale, which will be amortized over the life of the lease in accordance with sale-leaseback accounting guidance. On July 12, 2016, the Company sold two of its Orlando, FL properties for net proceeds of $34 million and recorded a pretax gain of $2 million. On July 14, 2016, the Company sold its Arlington Heights, IL property for net proceeds of $0.4 million. On September 26, 2016, the Company sold Tribune Tower and the LA Times Property for net proceeds of $199 million and $102 million, respectively, and recognized a pretax gain of $93 million and $59 million, respectively. Pursuant to the terms of the sale agreements, the Company could receive contingent payments of up to an additional $35 million related to the Tribune Tower transaction and an additional $10 million related to the LA Times Property transaction. For both the Tribune Tower and LA Times Property sales, the contingent payments become payable if certain conditions are met pertaining to development rights related to the respective buyer’s plans for development of portions of the two properties. The contingency period for both properties ends five years from the sale date with the possibility of extension in certain circumstances. On September 27, 2016, the Company sold the Olympic Facility for net proceeds of $118 million and recognized a pretax gain of $59 million.
On November 14, 2016, the Company sold its Portsmouth, VA property and on November 28, 2016, the Company sold a property located in Chicago, IL for net proceeds totaling $1 million. On December 22, 2016, the Company sold a Baltimore, MD property for net proceeds of $0.3 million. The Company recorded a net pretax gain of less than $1 million on the sale of these properties in the fourth quarter of 2016.
On January 26, 2017, the Company sold its Denver, CO property for net proceeds of $23 million, which approximated the carrying value, and entered into a lease for the property. On January 31, 2017, the Company sold one of its Chicago, IL properties for net proceeds of $22 million and entered into a lease with a term of 10 years, subject to renewal, retaining the use of more than a minor portion of the property. The Company expects to record a deferred pretax gain of $13 million on the sale, which will be amortized over the life of the lease in accordance with sale-leaseback accounting guidance.
During 2015, the Company sold Bel Air, MD and Newport News, VA properties for net proceeds of $5 million and recorded a net loss of less than $1 million.
On December 19, 2014, the Company sold the production facility in Baltimore, MD leased to tronc for net proceeds of $45 million and recorded a pretax gain of $21 million. Additionally, during 2014, the Company sold two idle properties for net proceeds of $5 million and recorded a net gain of less than $1 million.