Investments

6 Months Ended

Jun. 30, 2019

NOTE 5: INVESTMENTS

Investments consisted of the following (in thousands):



	June 30, 2019		December 31, 2018
Equity method investments	$	1,149,197	$	1,238,457
Other equity investments	5,503		25,980
Total investments	$	1,154,700	$	1,264,437

Equity Method Investments—Income on equity investments, net reported in the Company’s unaudited Condensed Consolidated Statements of Operations consisted of the following (in thousands):



	Three Months Ended						Six Months Ended
	June 30, 2019			June 30, 2018			June 30, 2019			June 30, 2018
Income on equity investments, net, before amortization of basis difference	$	58,996		$	65,037		$	117,150		$	116,643
Amortization of basis difference	(12,469		)	(12,469		)	(24,938		)	(24,938		)
Income on equity investments, net	$	46,527		$	52,568		$	92,212		$	91,705

As discussed in Note 6 to the Company’s audited consolidated financial statements for the year ended December 31, 2018, 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 (as defined in Note 8). 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 unaudited Condensed Consolidated Statements of Operations. The remaining identifiable net intangible assets subject to amortization of basis difference as of June 30, 2019 totaled $611 million and have a weighted average remaining useful life of approximately 14 years.

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



	Three Months Ended				Six Months Ended
	June 30, 2019		June 30, 2018		June 30, 2019		June 30, 2018
Cash distributions from equity investments	$	28,379	$	43,789	$	181,461	$	158,926

TV Food Network—The Company’s 31% investment in Television Food Network, G.P. (“TV Food Network”) totaled $1.140 billion and $1.228 billion at June 30, 2019 and December 31, 2018, respectively. The Company recognized equity income from TV Food Network of $47 million and $43 million for the three months ended June 30, 2019 and June 30, 2018, respectively, and $94 million and $82 million for the six months ended June 30, 2019

and June 30, 2018, respectively. The Company received cash distributions from TV Food Network of $28 million and $38 million in the three months ended June 30, 2019 and June 30, 2018, respectively, and $181 million and $153 million in the six months ended June 30, 2019 and June 30, 2018, respectively.

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



	Three Months Ended				Six Months Ended
	June 30, 2019		June 30, 2018		June 30, 2019		June 30, 2018
Revenues, net	$	336,200	$	322,154	$	655,915	$	630,099
Operating income	$	190,888	$	171,788	$	368,920	$	334,544
Net income	$	190,604	$	176,289	$	378,054	$	341,878

CareerBuilder—On September 13, 2018, the Company sold its 6% investment (on a fully diluted basis, including CareerBuilder, LLC (“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. Pursuant to ASC Topic 323 “Investments - Equity Method and Joint Ventures,” the Company accounted for CareerBuilder as an equity method investment. The Company recognized equity income from CareerBuilder of $10 million for each of the three and six months ended June 30, 2018. In 2018, through the date of the sale, the Company recognized equity income from CareerBuilder of $10 million and received cash distributions of $6 million, of which $5 million related to a distribution of proceeds from CareerBuilder’s sale of one of its business operations on May 14, 2018.

Other Equity Investments—Other equity investments are investments without readily determinable fair values.

Chicago Cubs Transactions—As defined and further described in Note 6 to the Company’s audited consolidated financial statements for the year ended December 31, 2018, the Company consummated the closing of the Chicago Cubs Transactions on October 27, 2009. Concurrent with the closing of the transactions, the Company executed guarantees of collection of certain debt facilities entered into by Chicago Entertainment Ventures, LLC (formerly Chicago Baseball Holdings, LLC) (“CEV LLC”), and its subsidiaries (collectively, “New Cubs LLC”). As of December 31, 2018, the guarantees were capped at $249 million plus unpaid interest.

On August 21, 2018, Northside Entertainment Holdings LLC (f/k/a Ricketts Acquisition LLC) (“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 and recognized a gain of $86 million before taxes ($66 million after taxes) in the first quarter of 2019. As a result of the sale, the previously recorded deferred tax liability of $69 million became currently payable in 2019. Concurrently with the sale, the Company ceased being a guarantor of all debt facilities held by New Cubs LLC.

Other—All of the Company’s other equity investments are in private companies. During the first quarter of 2018, the Company sold one of its other equity investments for $4 million and recognized a pretax gain of $4 million.