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Acquisitions | 6 Months Ended
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Jun. 30, 2019
Business Combinations [Abstract] |
Acquisitions | Acquisitions Television Stations Acquisitions On May 1, 2019, we acquired 15 television stations in 10 markets from Cordillera Communications, LLC ("Cordillera"), for $521 million in cash, plus a working capital adjustment of $23.9 million. We financed the acquisition with a $765 million term loan B, of which $240 million was segregated into a separate account for financing a portion of the pending transaction with Nexstar Media Group, Inc. ("Nexstar"). Refer to Note 9. Long-Term Debt for further information on the $765 million term loan B. From the acquisition date of May 1, 2019 through June 30, 2019, revenues from the Cordillera stations were $25.2 million. Effective January 1, 2019, we acquired television stations owned by Raycom Media ("Raycom") — Waco, Texas ABC affiliate KXXV/KRHD and Tallahassee, Florida ABC affiliate WTXL — for $55 million in cash. These stations were being divested as part of Gray Television's acquisition of Raycom. From the acquisition date of January 1, 2019 through June 30, 2019, revenues from the Raycom stations were $11.7 million. The following table summarizes the preliminary fair values of the Raycom and Cordillera assets acquired and liabilities assumed at the closing dates.
(in thousands) |  | Raycom |  | Cordillera |  | Total
Accounts receivable |  | $ | — |  |  | $ | 26,264 |  |  | $ | 26,264 |
Other current assets |  | — |  |  | 986 |  |  | 986 |
Property and equipment |  | 11,721 |  |  | 53,671 |  |  | 65,392 |
Operating lease right-of-use assets |  | 296 |  |  | 4,667 |  |  | 4,963 |
Goodwill |  | 18,349 |  |  | 253,735 |  |  | 272,084 |
Indefinite-lived intangible assets - FCC licenses |  | 6,800 |  |  | 26,500 |  |  | 33,300 |
Amortizable intangible assets: |  |  |  |  |  |
Television network affiliation relationships |  | 17,400 |  |  | 168,700 |  |  | 186,100 |
Advertiser relationships |  | 700 |  |  | 5,900 |  |  | 6,600 |
Other intangible assets |  | — |  |  | 13,000 |  |  | 13,000 |
Accounts payable |  | — |  |  | (15 | ) |  | (15 | )
Accrued expenses |  | — |  |  | (3,835 | ) |  | (3,835 | )
Other current liabilities |  | — |  |  | (280 | ) |  | (280 | )
Operating lease liabilities |  | (296 | ) |  | (4,387 | ) |  | (4,683 | )
Net purchase price |  | $ | 54,970 |  |  | $ | 544,906 |  |  | $ | 599,876 |
Of the value allocated to amortizable intangible assets, television network affiliation relationships have an estimated amortization period of 20 years, advertiser relationships have estimated amortization periods of 5-10 years and the value allocated to a shared services agreement has an estimated amortization period of 20 years. The goodwill of $272 million arising from the transactions consists largely of synergies, economies of scale and other benefits of a larger broadcast footprint. We allocated the goodwill to our Local Media segment. We treated the transactions as asset acquisitions for income tax purposes resulting in a step-up in the assets acquired. The goodwill is deductible for income tax purposes. Omny Studio On June 10, 2019, we completed the acquisition of Omny Studio ("Omny") for a cash purchase price of $8.5 million. Omny is a Melbourne, Australia-based enterprise podcasting software-as-a-service company operating as a part of Triton in our National Media segment. Omny is an audio-on-demand platform built specifically for professional audio publishers. The platform enables audio publishers to seamlessly record, edit, distribute, monetize and analyze podcast content; replace static ads with dynamically inserted, highly targeted ads; and automates key aspects of campaign management, such as industry separation, frequency capping and volume normalization. Of the $8.5 million purchase price, $5.2 million was allocated to goodwill, $3.8 million was allocated to a developed technology intangible asset and the remainder was allocated to various working capital and deferred tax liability accounts. The developed technology intangible asset has an estimated amortization period of 10 years. The goodwill arising from the transaction consists largely of the fact that the addition of Omny's podcast and on-demand audio publishing platform to Triton's portfolio of streaming, advertising and measurement technologies provides audio publishers around the world with a full-stack enterprise solution to increase reach and revenue. Triton On November 30, 2018, we acquired Triton Digital Canada, Inc. ("Triton") for total cash consideration of $160 million. Assets acquired in the transaction included approximately $10.5 million of cash. The transaction was funded with cash on hand at time of closing. Triton is a leading global digital audio infrastructure and audience measurement services company. Triton's infrastructure and ad-serving solutions deliver live and on-demand audio streams and insert advertisements into those streams. Triton's data and measurement service is recognized as the currency by which publishers sell digital audio advertising. The following table summarizes the preliminary fair values of the Triton assets acquired and liabilities assumed at the closing date.
(in thousands) |  |
Cash |  | $ | 10,515 |
Accounts receivable |  | 8,879 |
Other current assets |  | 679 |
Property and equipment |  | 705 |
Goodwill |  | 83,876 |
Other intangible assets |  | 75,000 |
Accounts payable |  | (1,881 | )
Accrued expenses |  | (2,964 | )
Other current liabilities |  | (19 | )
Deferred tax liability |  | (14,577 | )
Net purchase price |  | $ | 160,213 |
Of the $75 million allocated to intangible assets, $39 million was assigned to various developed technologies for audience measurement, content delivery and advertising with lives ranging from 8-12 years, $31 million was assigned to customer relationships with a life of 12 years and $5 million was assigned to trade names with a life of 10 years. The goodwill of $84 million arises from being able to capitalize on the growth of the streaming audio industry and further improve our position in the global digital audio marketplace. The goodwill is allocated to our National Media segment. The transaction is accounted for as a stock acquisition which applies carryover tax basis to the assets and liabilities acquired. The goodwill is not deductible for income tax purposes. Pro forma results of operations Pro forma results of operations, assuming the Cordillera acquisition had taken place at the beginning of 2018, are presented in the following table. The pro forma results do not include Raycom, Omny Studio or Triton, as the impact of these acquisitions, individually or in the aggregate, is not material to prior year results of operations. The pro forma information includes the historical results of operations of Scripps and Cordillera, as well as adjustments for additional depreciation and amortization of the assets acquired, additional interest expense related to the financing of the transaction and other transactional adjustments. 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 June 30, |  | Six Months Ended June 30,
(in thousands, except per share data) (unaudited) |  | 2019 |  | 2018 |  | 2019 |  | 2018
Operating revenues |  | $ | 349,612 |  |  | $ | 324,101 |  |  | $ | 676,423 |  |  | $ | 612,882 |
Income (loss) from continuing operations attributable to the shareholders of The E.W. Scripps Company |  | (2,845 | ) |  | 6,324 |  |  | (17,636 | ) |  | (7,464 | )
Income (loss) per share from operations attributable to the shareholders of The E.W. Scripps Company: |  |  |  |  |  |  |  |
Basic |  | $ | (0.04 | ) |  | $ | 0.08 |  |  | $ | (0.22 | ) |  | $ | (0.09 | )
Diluted |  | (0.04 | ) |  | 0.08 |  |  | (0.22 | ) |  | (0.09 | )
Pending Acquisition On March 20, 2019, we entered into a definitive agreement with Nexstar to acquire eight broadcast television stations in seven markets for consideration of $580 million. Seven of the stations are currently operated by Tribune Media Company ("Tribune"), and its subsidiaries, and one is currently operated by Nexstar. Nexstar is required to divest these stations in order to complete its acquisition of Tribune. The purchase price and other related costs associated with the transaction are expected to be financed from the incremental term loan B proceeds and $500 million of senior unsecured notes issued on July 26, 2019. Additionally, the capacity for our revolving credit facility will be increased to $210 million upon closing. The transaction, pending regulatory and other approvals, is expected to close in the third quarter of 2019, at the same time as the Nexstar-Tribune merger.

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