Acquisitions

Katz

On October 2, 2017, we acquired the Katz networks for $292 million, which is net of a 5.33% noncontrolling interest we owned prior to the acquisition date. Katz owns and operates four national television networks — Bounce, Grit, Escape and Laff. The acquisition was funded through the issuance of a new term loan B. Katz is included as part of our National Media segment.

Pending the finalization of asset valuations, the following table summarizes the preliminary fair values of the assets acquired and the liabilities assumed:



(in thousands)

Assets:
Cash	$	21,372
Accounts receivable	44,306
Current portion of programming	47,120
Intangible assets	32,300
Goodwill	209,572
Programming (less current portion)	74,998
Other assets	1,395
Total assets acquired	431,063
Accounts payable and accrued liabilities	29,339
Current portion of programming liabilities	46,376
Programming liabilities	53,036
Net purchase price	$	302,312

Of the $32 million allocated to intangible assets, $8 million was assigned to trade names with a life of 10 years and $24 million was assigned to advertiser relationships with a life of 5 years.

The goodwill of $210 million arises from being able to enter into the market for established over-the-air networks. The goodwill was allocated to our National Media segment. We treated the transaction as an asset acquisition for income tax purposes with a step-up in the assets acquired. The goodwill is deductible for income tax purposes.

Pro forma results of operations

Pro forma results of operations, assuming the Katz acquisition had taken place at the beginning of 2017, are presented in the following table. The pro forma information includes the historical results of operations of Scripps and Katz, as well as adjustments for additional depreciation and amortization of the assets acquired and additional interest expense related to the financing of the transaction. The pro forma information does not include efficiencies, cost reductions or synergies expected to result from the acquisition. The unaudited pro forma financial information is not necessarily indicative of the results that actually would have occurred had the acquisition been completed at the beginning of the period.



	Three Months Ended March 31,
(in thousands, except per share data) (unaudited)	2017

Operating revenues	$	233,288
Income (loss) from continuing operations, net of tax	(2,538		)
Income (loss) per share from continuing operations attributable to the shareholders of The E.W. Scripps Company
Basic	$	(0.03	)
Diluted	(0.03		)