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Acquisitions and Dispositions | 12 Months Ended
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Dec. 31, 2018
Business Combinations [Abstract] |
Acquisitions and Dispositions |
10. | Acquisitions and Dispositions
We actively seek and explore opportunities for expansion through the acquisition of additional broadcast properties. The consolidated statements of income include the operating results of the acquired stations from their respective dates of acquisition. All acquisitions were accounted for as purchases and, accordingly, the total purchase consideration was allocated to the acquired assets and assumed liabilities based on their estimated fair values as of the acquisition dates. The excess of the consideration paid over the estimated fair value of net assets acquired have been recorded as goodwill. The Company accounts for acquisition under the provisions of FASB ASC Topic 805, Business Combinations . Management assigned fair values to the acquired property and equipment through a combination of cost and market approaches based upon each specific asset’s replacement cost, with a provision for depreciation, and to the acquired intangibles, primarily an FCC license, based on the Greenfield valuation methodology, a discounted cash flow approach. 2018 Acquisitions On October 29, 2018, the Company entered into an agreement to purchase WOGK-FM, WNDT-FM, WNDD-FM and WNDN-FM, from Ocala Broadcasting Corporation, LLC for an aggregate purchase price of $9.3 million, subject to certain purchase price adjustments. The Company closed this transaction effective December 31, 2018 using funds generated from operations of $9.84 million, which included the purchase price of $9.3 million, the purchase of $566 thousand in accounts receivable by certain closing adjustments and transactional costs of approximately $25 thousand , of which $552 thousand was paid in January 2019 . Management attributes the goodwill recognized in the acquisition to the power of the existing brands in the Ocala, Florida market as well as synergies and growth opportunities expected through the combination with the Company’s existing stations. 2017 Acquisitions and Dispositions On May 9, 2017 we entered into a definitive agreement to sell our Joplin, Missouri and Victoria, Texas television stations for approximately $66.6 million, subject to certain adjustments, to Evening Telegram Company d/b/a Morgan Murphy Media. The Television Sale was completed on September 1, 2017 and the Company received net proceeds of $69.5 million which included the sales price of $66.6 million, the sale of accounts receivable of approximately $3.4 million, offset by certain closing adjustments and transactional costs of approximately $500 thousand. On May 9, 2017, the Company entered into an Asset Purchase Agreement with Apex Media Corporation and Pearce Development, LLC f/k/a Apex Real Property, LLC to purchase radio stations principally serving the South Carolina area for approximately $23 million (subject to certain purchase price adjustments) plus the right to air certain radio commercials, substantially all the assets related to the operation of the following radio stations: WCKN(FM), WMXF(FM), WXST(FM), WAVF(FM), WSPO(AM), W261DG, W257BQ, WVSC(FM), WLHH(FM), WOEZ(FM), W256CB, W293BZ. The Company closed this transaction effective September 1, 2017, simultaneously with the closing of the Television Sale using funds generated from the Television Sale of $24.2 million, which included the purchase price of $23 million, the purchase of $1.3 million in accounts receivable offset by certain closing adjustments and transactional costs of approximately $50,000. Management attributes the goodwill recognized in the acquisition to the power of the existing brands in the Charleston, South Carolina and Hilton Head, South Carolina market as well as synergies and growth opportunities expected through the combination with the Company’s existing stations. On January 16, 2017, we entered into an asset purchase agreement to purchase an FM radio station (WCVL) from WUVA, Incorporated, serving the Charlottesville, Virginia market for approximately $1,658,000, which included $8,000 in transactional costs. Simultaneously, we entered into a LMA to begin operating the station on February 1, 2017. We completed this acquisition on April 18, 2017. This acquisition was financed through funds generated from operations. Unaudited proforma results of operations for this acquisition are not required, as such information is not material to our financial statements and therefore is not presented in the pro forma tables in the following pages. Condensed Consolidated Balance Sheet of 2018 and 2017 Acquisitions: The following condensed balance sheets represent the estimated fair value assigned to the related assets and liabilities of the 2018 and 2017 acquisitions at their respective acquisition dates. Condensed Consolidated Balance Sheet of 2018 and 2017 Acquisitions
|  | Acquisitions in |
|  | 2018 |  |  | 2017 |
|  | (In thousands) |
Assets Acquired: |  |  |  |  |  |  |  |
Current assets |  | $ | 559 |  |  | $ | 1,390 |
Property and equipment |  |  | 3,007 |  |  |  | 6,678 |
Other assets: |  |  |  |  |  |  |  |
Broadcast licenses |  |  | 1,991 |  |  |  | 8,086 |
Goodwill |  |  | 3,281 |  |  |  | 8,151 |
Other intangibles, deferred costs and investments |  |  | 1,123 |  |  |  | 2,019 |
Total other assets |  |  | 6,395 |  |  |  | 18,256 |
Total assets acquired |  |  | 9,961 |  |  |  | 26,324 |
Liabilities Assumed: |  |  |  |  |  |  |  |
Current liabilities |  |  | 120 |  |  |  | 468 |
Total liabilities assumed |  |  | 120 |  |  |  | 468 |
Net assets acquired |  | $ | 9,841 |  |  | $ | 25,856 |
Pro Forma Results of Operations for Acquisitions (Unaudited) The following unaudited pro forma results of our operations for the years ended December 31, 2018 and 2017 assume the 2018 and 2017 acquisitions occurred as of January 1, 2017. The translators are start-up stations and therefore, have no pro forma revenue and expenses. The pro forma results give effect to certain adjustments, including depreciation, amortization of intangible assets, increased interest expense on acquisition debt and related income tax effects. The pro forma results have been prepared for comparative purposes only and do not purport to indicate the results of operations which would actually have occurred had the combinations been in effect on the dates indicated or which may occur in the future.
|  | Years Ended December 31, |
|  | 2018 |  |  | 2017 |
|  | (In thousands, except per share data) |
Pro forma Consolidated Results of Operations |  |  |  |  |  |  |  |
Net operating revenue |  | $ | 129,228 |  |  | $ | 128,180 |
Station operating expense |  |  | 97,314 |  |  |  | 96,218 |
Corporate general and administrative |  |  | 11,359 |  |  |  | 11,657 |
Other operating expenses |  |  | 61 |  |  |  | 55 |
Impairment of intangible assets |  |  | — |  |  |  | 1,449 |
Operating income |  |  | 20,494 |  |  |  | 18,801 |
Interest expense |  |  | 946 |  |  |  | 903 |
Interest income |  |  | (631 | ) |  |  | — |
Other income |  |  | (23 | ) |  |  | — |
Income from continuing operations before income tax expense |  |  | 20,202 |  |  |  | 17,898 |
Income tax expense (benefit) expense |  |  | 5,944 |  |  |  | (5,276 | )
Income from continuing operations, net of tax |  |  | 14,258 |  |  |  | 23,174 |
Income from discontinued operations, net of tax |  |  | — |  |  |  | 32,471 |
Net income |  | $ | 14,258 |  |  | $ | 55,645 |
Basic earnings per share: |  |  |  |  |  |  |  |
From continuing operations |  | $ | 2.40 |  |  | $ | 3.93 |
From discontinued operations |  |  | — |  |  |  | 5.50 |
Basic earnings per share |  | $ | 2.40 |  |  | $ | 9.43 |
Diluted earnings per share: |  |  |  |  |  |  |  |
From continuing operations |  | $ | 2.40 |  |  | $ | 3.93 |
From discontinued operations |  |  | — |  |  |  | 5.50 |
Diluted earnings per share |  | $ | 2.40 |  |  | $ | 9.43 |

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- Definition The entire disclosure for a business combination (or series of individually immaterial business combinations) completed during the period, including background, timing, and recognized assets and liabilities. The disclosure may include leverage buyout transactions (as applicable). + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -URI http://asc.fasb.org/topic&trid=2303972 + Details
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