CONTINGENCIES AND COMMITMENTS |
9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2019 | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Commitments And Contingencies Disclosure Abstract | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Commitments And Contingencies Disclosure Text Block | 15.CONTINGENCIES AND COMMITMENTS Contingencies
The Company is subject to various outstanding claims which arise in the ordinary course of business and to other legal proceedings. Management anticipates that any potential liability of the Company, which may arise out of or with respect to these matters, will not materially affect the Company’s financial position, results of operations or cash flows. There were no material changes from the contingencies listed in the Company’s Form 10-K, filed with the SEC on February 27, 2019, except as described below.
FCC Matter
In January 2019, the Company received the first of three letters of inquiry from the FCC staff in response to a complaint from an individual who claimed to have purchased time on three Company stations in Buffalo but was not charged the lowest unit rate. The Company cooperated with the FCC in this matter and timely responded to these letters of inquiry, which also addressed the timeliness of the Company’s compliance with respect to the political file record keeping obligations for its Buffalo stations. On October 10, 2019, the Company met with the FCC staff and was advised that the lowest unit rate inquiry was concluded. At the same meeting, however, the FCC staff advised the Company that it had separately conducted a more extensive investigation into the timeliness of the Company’s compliance with respect to the political file record keeping obligations for all of the Company’s stations. The Company is in discussions with the FCC staff with respect to this investigation. The Company has assessed the FCC staff’s allegations with respect to the Company’s compliance with these filing obligations and the underlying facts and will continue to cooperate with the FCC and engage in discussions as to a potential conclusion or settlement of the matter. Given its preliminary nature, the Company is unable to reasonably estimate the ultimate outcome that will result from this matter at this time. The Company does not currently expect that the final resolution of this matter in future periods will have a material effect on the financial position of the Company and also has an immaterial impact on the current period. However, it is reasonably possible that such a resolution could have a material effect on the Company’s results of operations for a given reporting period.
Like-Kind Exchange Proceeds
During the third quarter of 2018, the Company disposed of certain property that the Company considered as surplus to its operations and that resulted in significant gains reportable for tax purposes. In order to minimize the tax impact on a certain portion of these taxable gains, the Company created an entity that serves as a QI for tax purposes and that held the net sales proceeds of $70.2 million. The net sales proceeds were deposited into the account of the QI to comply with requirements under Section 1031 of the Code to execute a like-kind exchange and were reflected as restricted cash on the Company consolidated balance sheet at December 31, 2018.
The Company used a portion of these funds in a tax-free exchange by using the net sales proceeds from relinquished property for the purchase of replacement property. This QI was treated as a VIE and was included in the Company’s prior year consolidated financial statements as the Company was considered the primary beneficiary.
Under Section 1031 of the Code, the property to be exchanged in the like-kind exchange was required to be received by the Company within 180 days. This period of time lapsed during the first quarter of 2019, at which point, the restrictions on the cash balances were released. As a result, the Company does not present restricted cash on its balance sheet at September 30, 2019.
The following table provides a reconciliation of cash and cash equivalents and restricted cash reported within the consolidated balance sheet that aggregate to the total of the same such amounts shown in the consolidated statement of cash flows:
|
|||||||||||||||||||||||||||||||||||||||||||||||||