NOTE 6: INVESTMENTS

Investments consisted of the following (in thousands):



	December 31, 2018		December 31, 2017
Equity method investments	$	1,238,457	$	1,254,198
Other equity investments	25,980		27,593
Total investments	$	1,264,437	$	1,281,791

Equity Method Investments—The Company’s equity method investments at December 31, 2018 included the following private companies:



Company	% Owned
Dose Media, LLC	23%
Television Food Network, G.P.	31%
TKG Internet Holdings II LLC	43%

Income from equity investments, net reported in the Company’s Consolidated Statements of Operations consisted of the following (in thousands):



	2018			2017			2016
Income from equity investments, net, before amortization of basis difference	$	219,210		$	190,864		$	202,758
Amortization of basis difference	(49,875		)	(53,502		)	(54,602		)
Income from equity investments, net	$	169,335		$	137,362		$	148,156

The carrying value of the Company’s investments was increased by $1.615 billion to an aggregate fair value of $2.224 billion as a result of fresh start reporting adopted on the Effective Date. The fair value of the Company’s investments was estimated based on valuations obtained from third parties primarily using the market approach. Of the $1.615 billion increase, $1.108 billion was attributable to the Company’s share of theoretical increases in the carrying values of the investees’ amortizable intangible assets had the fair value of the investments been allocated to the identifiable intangible assets of the investees’ in accordance with ASC Topic 805 “Business Combinations.” The remaining $507 million of the increase was attributable to goodwill and other identifiable intangibles not subject to amortization, including trade names. The Company amortizes the differences between the fair values and the investees’ carrying values of the identifiable intangible assets subject to amortization and records the amortization (the “amortization of basis difference”) as a reduction of income on equity investments, net in its Consolidated Statements of Operations. The remaining identifiable net intangible assets subject to amortization of basis difference as of December 31, 2018 totaled $636 million and have a weighted average remaining useful life of approximately 15 years.

Cash distributions from the Company’s equity method investments were as follows (in thousands):



	2018		2017		2016
Cash distributions from equity investments (1)	$	171,591	$	201,892	$	170,527


(1)	Certain distributions received from CareerBuilder in 2017 exceeded the Company’s share of CareerBuilder’s cumulative earnings. As a result, the Company determined that these distributions were a return of investment and, therefore, presented such distributions totaling $4 million as an investing activity in the Company’s Consolidated Statements of Cash Flows for 2017.

TV Food Network—The Company’s 31% investment in TV Food Network totaled $1.228 billion and $1.234 billion at December 31, 2018 and December 31, 2017, respectively. The Company recognized equity income from TV Food Network of $160 million in 2018, $141 million in 2017 and $122 million in 2016. The Company received cash distributions from TV Food Network totaling $166 million in 2018, $186 million in 2017 and $158 million in 2016.

TV Food Network owns and operates “The Food Network,” a 24-hour lifestyle cable television channel focusing on food and related topics. TV Food Network also owns and operates “The Cooking Channel,” a cable television channel primarily devoted to cooking instruction, food information and other related topics. TV Food Network’s programming is distributed by cable and satellite television systems.

The partnership agreement governing TV Food Network provides that the partnership shall, unless certain actions are taken by the partners, dissolve and commence winding up and liquidating TV Food Network upon the first to occur of certain enumerated liquidating events, one of which is a specified date of December 31, 2020. The Company would be entitled to its proportionate share of distributions to partners in the event of a liquidation, which the partnership agreement provides would occur as promptly as is consistent with obtaining fair market value for the assets of TV Food Network. The partnership agreement also provides that the partnership may be continued or reconstituted in certain circumstances.

CareerBuilder—On September 13, 2018, the Company sold its remaining 6% investment (on a fully diluted basis, including CareerBuilder employees’ equity awards) (through its investment in Camaro Parent, LLC) in CareerBuilder and received pretax proceeds of $11 million. The Company recognized a pretax loss of $5 million on the sale of its ownership interest in CareerBuilder in the third quarter of 2018.

As of December 31, 2017, the Company’s investment in CareerBuilder totaled $10 million. Through the date of the sale, pursuant to ASC Topic 323, the Company continued to account for CareerBuilder as an equity method investment. The Company recognized equity income from CareerBuilder of $10 million in 2018, an equity loss of $2 million in 2017 and equity income of $27 million in 2016. The Company received cash distributions from CareerBuilder of $6 million in 2018, $16 million in 2017 and $13 million in 2016. The distribution in 2018 included $5 million related to a distribution of proceeds from CareerBuilder’s sale of one its business operations on May 14, 2018. The Company’s share of the gain on sale was approximately $11 million, which is included in equity income on investments, net in 2018.

On September 7, 2016, TEGNA Inc. (“TEGNA”) announced that it began evaluating strategic alternatives for CareerBuilder, including a possible sale. In 2017, the Company recorded non-cash pretax impairment charges totaling $181 million to write down the Company’s investment in CareerBuilder prior to the sale. The impairment charges resulted from a decline in the fair value of the investment that the Company determined to be other than temporary.

On June 19, 2017, TEGNA announced that it entered into an agreement (the “CareerBuilder Sale Agreement”), together with the other owners of CareerBuilder, including Tribune Media Company, to sell a majority interest in CareerBuilder to an investor group led by investment funds managed by affiliates of Apollo Global Management, LLC and the Ontario Teachers’ Pension Plan Board. The transaction closed on July 31, 2017 and the Company received cash of $158 million, which included an excess cash distribution of $16 million. The Company recognized a gain on sale of $4 million in 2017. As a result of the sale, the Company’s ownership in CareerBuilder declined from 32% to approximately 7%, on a fully diluted basis. As of December 31, 2017, the Company’s ownership in CareerBuilder was approximately 6%, on a fully diluted basis (including CareerBuilder employees unvested equity awards).

The CareerBuilder investment constituted a nonfinancial asset measured at fair value on a nonrecurring basis in the Company’s Consolidated Balance Sheets and was classified as a Level 3 asset in the fair value hierarchy. See Note 8 for a description of the fair value hierarchy’s three levels.

Dose Media, LLC—As of December 31, 2018, the Company’s 23% investment in Dose Media has a carrying value of zero as it was fully impaired as of December 31, 2017. The Company recognized equity losses from Dose Media of $2 million in 2017 and $3 million in 2016. Dose Media is a social media content company that creates and distributes content to help brands detect, optimize and publish stories for digital-first audiences.

In the fourth quarter of 2017, the Company recorded a non-cash pretax impairment charge of $10 million to write down its entire investment in Dose Media. The impairment charge resulted in a decline in the fair value of the investment that the Company determined to be other than temporary.

Summarized Financial Information—Summarized financial information for TV Food Network is as follows (in thousands):



	Fiscal Year
	2018		2017		2016
Revenues, net	$	1,263,279	$	1,208,357	$	1,160,716
Operating income	$	654,296	$	593,409	$	535,131
Net income	$	670,738	$	608,327	$	552,146



	December 31, 2018		December 31, 2017
Current assets	$	800,990	$	840,763
Non-current assets	$	347,688	$	150,277
Current liabilities	$	108,568	$	92,193
Non-current liabilities	$	109	$	—

Summarized financial information for CareerBuilder and Dose Media is as follows (in thousands):



	Fiscal Year
	2018		2017			2016
Revenues, net (1)	$	433,757	$	645,790		$	719,994
Operating income (loss) (1)	$	25,791	$	(10,457	)	$	93,619
Net income (loss) (1)	$	101,573	$	(19,125	)	$	89,249


(1)	Revenues, net, operating income (loss) and net income (loss) that relate to CareerBuilder include results through September 13, 2018.



	December 31, 2018 (1)		December 31, 2017
Current assets	$	1,653	$	180,828
Non-current assets	$	246	$	503,688
Current liabilities	$	566	$	196,101
Non-current liabilities	$	—	$	319,037


(1)	Summarized balance sheet information at December 31, 2018 excludes CareerBuilder as the investment was sold on September 13, 2018.

Other—Write-downs of investments, gains and losses on investment sales, and gains and losses from other investment transactions are included as non-operating items in the Company’s Consolidated Statements of Operations. In 2017, the Company recorded non-cash pretax impairment charges of $191 million to write down the Company’s investments in CareerBuilder and Dose Media, as discussed above. There were no impairments recorded in 2018 and 2016. These investments constitute nonfinancial assets measured at fair value on a nonrecurring basis in the Company’s Consolidated Balance Sheet and are classified as Level 3 assets in the fair value hierarchy established under ASC Topic 820. See Note 8 for a description of the hierarchy’s three levels.

The Company does not guarantee any indebtedness or other obligations for any of its equity method investees.

Marketable Equity Securities—On August 4, 2014, the Company completed the spin-off of its principal publishing operations into an independent company, Tribune Publishing. The Company retained 381,354 shares of Tribune Publishing common stock, representing at that time 1.5% of the outstanding common stock of Tribune Publishing. The Company classified the shares of Tribune Publishing common stock as available-for-sale securities. On January 31, 2017, the Company sold its Tribune Publishing shares for net proceeds of $5 million and recognized a pretax gain of $5 million.

Other Equity Investments—Other equity investments are investments without readily determinable fair values. All of the Company’s other equity investments are in private companies and have historically been recorded at cost, net of write-downs resulting from periodic evaluations of the carrying value of the investments. Upon adoption of ASU 2016-01 and ASU 2018-03, as further described in Note 1, the Company elected to use a measurement alternative for all investments without readily determinable fair values which allows the Company to measure the value of such equity investments at cost less impairments, if any, plus or minus changes resulting from observable price changes in orderly transaction for the identical or similar investment. Fair values associated with these investments will be remeasured either upon occurrence of an observable price change or upon identification of an impairment. Changes in the carrying value of these equity investments will be reflected in current earnings. In 2017, the Company recorded a non-cash pretax impairment charge of $3 million to write down one of the its other equity investments. The impairment charge resulted from a decline in the fair value of the investment that the Company determined to be other than temporary. As of December 31, 2018, the Company’s other equity investments primarily include investments in CEV LLC (as defined and described below) and Taboola.com LTD (“Taboola”).

During 2018, the Company sold one of its other equity investments for $4 million and recognized a pretax gain of $4 million.

Chicago Cubs Transactions—On August 21, 2009, the Company and a newly-formed limited liability company, Chicago Entertainment Ventures, LLC (formerly Chicago Baseball Holdings, LLC) (“CEV LLC”), and its subsidiaries (collectively, “New Cubs LLC”), among other parties, entered into an agreement (the “Cubs Formation Agreement”) governing the contribution of certain assets and liabilities related to the businesses of the Chicago Cubs Major League Baseball franchise (the “Chicago Cubs”) owned by the Company and its subsidiaries to New Cubs LLC. The contributed assets included, but were not limited to, the Chicago Cubs Major League, spring training and Dominican Republic baseball operations, Wrigley Field, certain other real estate used in the business, and the 25.34% interest in Comcast SportsNet Chicago, LLC, which operates a local sports programming network in the Chicago area (collectively, the “Chicago Cubs Business”). On August 24, 2009, the Debtors filed a motion in the Bankruptcy Court seeking approval for the Company’s entry into the Cubs Formation Agreement and to perform all transactions necessary to effect the contribution of the Chicago Cubs Business to New Cubs LLC. On the same day, the Debtors announced that Tribune CNLBC, the principal entity holding the assets and liabilities of the Chicago Cubs, would commence a Chapter 11 case at a future date as a means of implementing the transactions contemplated by the Cubs Formation Agreement. On September 24, 2009, the Bankruptcy Court authorized the Debtors to perform the transactions contemplated by the Cubs Formation Agreement. On October 6, 2009, Major League Baseball announced unanimous approval of the transactions by the 29 other Major League Baseball franchises. Tribune CNLBC filed the CNLBC Petition on October 12, 2009, and the Bankruptcy Court granted Tribune CNLBC’s motion to approve the proposed contribution of the Chicago Cubs Business and related assets and liabilities to New Cubs LLC by an order entered on October 14, 2009. The transactions contemplated by the Cubs Formation Agreement and the related agreements thereto (the “Chicago Cubs Transactions”) closed on October 27, 2009. The Company and its contributing subsidiaries and affiliates received a special cash distribution of $705 million, retained certain accounts receivable and certain deferred revenue payments and had certain transaction fees paid on their behalf by New Cubs LLC. In total, these amounts were valued at approximately $740 million. The full amount of the special cash distribution, as well as collections on certain accounts receivable that Tribune CNLBC retained after the transaction, were deposited with Tribune CNLBC. Tribune CNLBC held the funds pending their distribution under a confirmed and effective Chapter 11 plan for the Company, Tribune CNLBC and their affiliates, or further order of the Bankruptcy Court. These funds were fully distributed to the Company’s creditors on the Effective Date.

As a result of these transactions, as of December 31, 2018, Northside Entertainment Holdings LLC (f/k/a Ricketts Acquisition LLC) (“NEH”) owned approximately 95% and the Company owned approximately 5% of the membership interests in CEV LLC. NEH has operational control of CEV LLC. The Company’s equity interest in CEV LLC is accounted for as an other equity investment and was recorded at fair value as of October 27, 2009 based on the cash contributed to CEV LLC at closing. During 2017 and 2016, the Company made capital contributions to CEV LLC totaling $5 million and $3 million, respectively, and continued to maintain its membership interest of approximately 5%. The carrying value of this investment was $20 million at December 31, 2018 and $22 million at December 31, 2017.

The fair market value of the contributed Chicago Cubs Business exceeded its tax basis. The transaction was structured to comply with the partnership provisions of the IRC and related regulations. Accordingly, the distribution of the portion of the special distribution equal to the net proceeds of the debt facilities entered into by New Cubs LLC concurrent with the closing of these transactions did not result in an immediate taxable gain. The portion of the special distribution in excess of the net proceeds of such debt facilities is treated as taxable sales proceeds with respect to a portion of the contributed Chicago Cubs Business (see Note 11).

Concurrent with the closing of the transaction, the Company executed guarantees of collection of certain debt facilities entered into by New Cubs LLC. As of December 31, 2017, the guarantees were capped at $699 million plus unpaid interest. In the first quarter of 2018, New Cubs LLC refinanced a portion of the debt which was guaranteed by the Company and the Company ceased being a guarantor of the refinanced debt. As of December 31, 2018, the remaining guarantees were capped at $249 million plus unpaid interest.

On August 21, 2018, NEH provided a written notice (the “Call Notice”) to the Company that NEH was exercising its right pursuant to the Amended and Restated Limited Liability Company Agreement (the “CEV LLC Agreement”) of CEV LLC to purchase the Company’s 5% membership interest in CEV LLC. The Company sold its 5% ownership interest in CEV LLC on January 22, 2019 for pretax proceeds of $107.5 million. The Company expects to recognize a pretax gain of $86 million in the first quarter of 2019. As a result of the sale, the total remaining deferred tax liability of $69 million will become currently payable in 2019, as further described in Note 11. Concurrently with the sale, the Company ceased being a guarantor of all debt facilities held by New Cubs LLC.