v3.20.2

BUSINESS COMBINATIONS | 9 Months Ended
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Sep. 30, 2020
Business Combinations [Abstract] |
BUSINESS COMBINATIONS | BUSINESS COMBINATIONS The Company records acquisitions under the acquisition method of accounting, and allocates the purchase price to the assets and liabilities based upon their respective fair values as determined as of the acquisition date. Merger and acquisition costs are excluded from the purchase price as these costs are expensed for book purposes and amortized for tax purposes. 2019 Cadence13 Acquisition On October 16, 2019, the Company completed its acquisition of Cadence13, Inc. ("Cadence13") by purchasing the remaining shares in Cadence13 that it did not already own. The Company initially acquired a 45% interest in Cadence13 in July 2017. The Company acquired the remaining interest in Cadence13 for a purchase price of $24.3 million in cash plus working capital (the "Cadence13 Acquisition"). In connection with this step acquisition of Cadence13, the Company remeasured its previously held equity interest to fair value and recognized a gain of $5.3 million and removed the investment in Cadence13 from its records. Upon completion of the Cadence13 Acquisition, the Company recorded the assets acquired and liabilities assumed at fair value. Based on the timing of the Cadence13 Acquisition, the Company's condensed consolidated financial statements for the nine and three months ended September 30, 2020, reflect the results of Cadence13's operations. The Company's condensed consolidated financial statements for the nine and three months ended September 30, 2019, do not reflect the results of Cadence13's operations. The allocations presented in the table below are based upon management's estimates of the fair values using valuation techniques including income, cost and market approaches.
|  |  | Measurement |  |
| Preliminary Value |  | Period Adjustment |  | As Adjusted
| (amounts in thousands)
Assets |  |  |  |  |
Property, plant and equipment | $ | 654 |  |  | $ | — |  |  | $ | 654 |
Total tangible property | 654 |  |  | — |  |  | 654 |
Operating lease right-of-use asset | 62 |  |  | — |  |  | 62 |
Deferred tax asset | 2,900 |  |  | 28 |  |  | 2,928 |
Cadence13 brand | 5,977 |  |  | — |  |  | 5,977 |
Goodwill | 31,392 |  |  | (28) |  |  | 31,364 |
Total tangible and other assets | 40,331 |  |  | — |  |  | 40,331 |
Operating lease liabilities | (985) |  |  | — |  |  | (985) |
Net working capital | (757) |  |  | — |  |  | (757) |
Preliminary fair value of net assets acquired | $ | 39,243 |  |  | $ | — |  |  | $ | 39,243 |
The aggregate fair value purchase price allocation for the assets acquired in the Cadence13 Acquisition as reported on the Company's Form 10-K filed with the SEC on March 2, 2020, was revised during nine months ended September 30, 2020 due to a change to the deferred tax assets associated with the acquired company which resulted in a decrease to acquired goodwill. 2019 Pineapple Street Media Acquisition On July 19, 2019, the Company completed a transaction to acquire the assets of Pineapple Street Media (“Pineapple”) for a purchase price of $14.0 million in cash plus working capital (the “Pineapple Acquisition”). Upon completion of the Pineapple Acquisition, the Company recorded the assets acquired and liabilities assumed at fair value. Based on this timing, the Company’s condensed consolidated financial statements for the nine and three months ended September 30, 2020 reflect the results of Pineapple’s operations. The Company’s condensed consolidated financial statements for the nine and three months ended September 30, 2019 reflect the results of Pineapple's operations for the portion of the periods after the completion of the Pineapple Acquisition. The allocations presented in the table below are based upon management’s estimate of the fair values using valuation techniques including income, cost and market approaches. The following table reflects the final allocation of the purchase price to the assets acquired and liabilities assumed.
| Final Value |  |  |  |
| (amounts in thousands) |  |  |  |
Assets |  |  |  |  |
Accounts receivable | $ | 997 |  |  |  |  |
Pineapple Street Media brand | 1,793 |  |  |
Goodwill | 12,445 |  |  |
Total assets | $ | 15,235 |  |  |  |  |
Unearned revenue | 238 |  |  |  |  |
Accounts payable | 30 |  |  |  |  |
Total liabilities | $ | 268 |  |  |  |  |
Final fair value of net assets acquired | $ | 14,967 |  |  |  |  |
2019 Cumulus Exchange On February 13, 2019, the Company entered into an agreement with Cumulus Media Inc. (“Cumulus”) under which the Company exchanged three of its stations in Indianapolis, Indiana for two Cumulus stations in Springfield, Massachusetts, and one Cumulus station in New York City, New York (the “Cumulus Exchange”). The Company and Cumulus began programming the respective stations under local marketing agreements (“LMAs”) on March 1, 2019. Upon completion of the Cumulus Exchange on May 9, 2019, the Company: (i) removed from its records the assets of the divested stations, which were previously classified as assets held for sale; (ii) recorded the assets of the acquired stations at fair value; and (iii) recognized a loss on the exchange transaction of approximately $1.8 million. Based on the timing of the Cumulus Exchange, the Company’s condensed consolidated financial statements for the nine and three months ended September 30, 2020: (i) reflect the results of the acquired stations; and (ii) do not reflect the results of the divested stations. The Company’s condensed consolidated financial statements for the nine months ended September 30, 2019: (i) reflect the results of the acquired stations for the portion of the period in which the LMAs were in effect and after the completion of the Cumulus Exchange; and (ii) reflect the results of the divested stations for the portion of the period until the commencement date of the LMAs. The Company's condensed consolidated financial statements for the three months ended September 30, 2019: (i) reflect the results of the stations acquired in the Cumulus Exchange; and (ii) do not reflect the results of the divested stations. The following table reflects the final allocation of the purchase price to the assets acquired.
| Final Value |  |  |  |
| (amounts in thousands) |  |  |  |
Assets |  |  |  |  |
Equipment | $ | 844 |  |  |  |  |
Total tangible property | 844 |  |  |  |  |
Radio broadcasting licenses | 19,576 |  |  |
Goodwill | 2,080 |  |  |
Total intangible and other assets | 21,656 |  |  |  |  |
Total assets | $ | 22,500 |  |  |  |  |
Final fair value of net assets acquired | $ | 22,500 |  |  |  |  |
Integration Costs The Company incurred integration costs of $0.5 million and $3.3 million during the nine months ended September 30, 2020 and September 30, 2019, respectively. Integration costs were expensed as a separate line item in the condensed consolidated statements of operations. These costs primarily relate to change management consultants and technology-related costs incurred subsequent to the CBS Radio business acquisition in November 2017 (the "Merger"). Unaudited Pro Forma Summary of Financial Information The following unaudited pro forma information for the nine and three months ended September 30, 2020 and September 30, 2019 assumes that the acquisitions in 2019 had occurred as of January 1, 2019. Refer to information within this Note 2, Business Combinations, and to the consolidated financial statements and related notes included in the Company’s audited consolidated financial statements as of and for the year ended December 31, 2019, and filed with the SEC on March 2, 2020, for a description of the Company’s acquisition and disposition activities. The unaudited pro forma information presented gives effect to certain adjustments, including: (i) depreciation and amortization of assets; (ii) change in the effective tax rate; (iii) merger and acquisition costs; and (iv) interest expense on any debt incurred to fund the acquisitions which would have been incurred had such acquisitions been consummated at an earlier time. This unaudited pro forma information has been prepared based on estimates and assumptions, which management believes are reasonable. These unaudited pro forma results have been prepared for comparative purposes only and do not purport to be indicative of what would have occurred had the acquisitions been made as of that date or results which may occur in the future.
| Three Months Ended September 30, |  | Nine Months Ended September 30,
| 2020 |  | 2019 |  | 2020 |  | 2019
| (amounts in thousands except share and per share data)
| Actual |  | Pro Forma |  | Actual |  | Pro Forma
Net revenues | $ | 268,505 |  |  | $ | 398,182 |  |  | $ | 741,403 |  |  | $ | 1,112,202 |
Net income (loss) | $ | (16,878) |  |  | $ | 40,199 |  |  | $ | (79,827) |  |  | $ | 66,596 |
Net income (loss) per common share - basic | $ | (0.13) |  |  | $ | 0.29 |  |  | $ | (0.59) |  |  | $ | 0.48 |
Net income (loss) per common share - diluted | $ | (0.13) |  |  | $ | 0.29 |  |  | $ | (0.59) |  |  | $ | 0.48 |
Weighted shares outstanding basic | 134,735,075 |  |  | 136,449,453 |  |  | 134,753,276 |  |  | 137,944,486 |
Weighted shares outstanding diluted | 134,735,075 |  |  | 136,452,995 |  |  | 134,753,276 |  |  | 138,295,091 |

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- Definition The entire disclosure for business combinations, including leverage buyout transactions (as applicable), and divestitures. This may include a description of a business combination or divestiture (or series of individually immaterial business combinations or divestitures) completed during the period, including background, timing, and assets and liabilities recognized and reclassified or sold. This element does not include fixed asset sales and plant closings. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 205 -SubTopic 20 -URI http://asc.fasb.org/subtopic&trid=2122178 Reference 2: 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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