2. Acquisitions and Dispositions

During the nine-months ended September 30, 2015, we entered into the transactions described below (collectively, the “2015 Transactions”). The 2015 Transactions are expected to, among other things, increase our revenues and cash flows from operating activities, and allow us to operate more efficiently and effectively, by increasing our scale and providing us with the ability to negotiate more favorable terms in our agreements with third parties.

Cedar Rapids Acquisition

On September 1, 2015, we entered into an asset purchase agreement to acquire KCRG-TV,

which is affiliated with the ABC Network and serves the Cedar Rapids, Iowa television market (the “Cedar Rapids Acquisition”).

On September 1, 2015, we acquired certain non-license operating assets of the station and entered into a local programming and marketing agreement (the “LMA”) with the licensee. Under the terms of the LMA, we operate the station subject to the control of the seller and its obligations under the station’s FCC license. As a result of the terms of the LMA, we have included the operating results of the station in our financial statements beginning on September 1, 2015. The total consideration for the transaction was $100.0 million. On September 1, 2015, we paid $80.0 million to the seller and $20.0 million into an escrow account, pending regulatory approval of the transaction. On October 23, 2015, the FCC consented to the assignment of the station's FCC license and related assets and, on November 1, 2015, we completed the acquisition. The amounts paid were funded with cash on hand. As of September 30, 2015, we recorded $5.8 million of non-license operating assets and a non-current deposit of $94.2 million. Please refer to Note 11. “Subsequent Events” for a discussion of the completion and preliminary valuation of the Cedar Rapids Acquisition.

Odessa

Acquisition

On July 1, 2015, we acquired the assets of KOSA-TV, whose digital channels are affiliated with the CBS and MY Networks and which station serves the Odessa-Midland, Texas television market (the “Odessa Acquisition”). The total consideration paid was $33.6 million. The acquisition was funded with cash on hand.

Twin Falls

Acquisition

On July 1, 2015, we acquired KMVT-TV, whose digital channels are affiliated with the CBS and CW Networks, as well as KSVT-LD, whose digital channel is affiliated jointly with the FOX and MY Networks. These stations serve the Twin Falls, Idaho television market (the “Twin Falls Acquisition”). The total consideration paid was $17.5 million. The acquisition was funded with cash on hand.

Waus

Acquisition

On July 1, 2015, we acquired certain non-license assets of WFXS-TV, which had served as the FOX affiliate for the Wausau-Rhinelander, Wisconsin television market (the “Wausau Acquisition”). On that date WFXS-TV ceased operating, and we began broadcasting its former program streams on our digital low power television station in Wausau, WZAW-LD. The total consideration paid was $14.0 million. The acquisition was funded with cash on hand.

Presque Isle

Acquisition

On July 1, 2015, we acquired WAGM-TV, whose digital channels are affiliated with the CBS and FOX Networks and which station serves the Presque Isle, Maine television market (the Presque Isle Acquisition”). The total consideration paid was $10.3 million. The acquisition was funded with cash on hand.

Laredo

Acquisitio

On July 1, 2015, we acquired certain non-license assets of KVTV-TV, which had served as the CBS affiliate for the Laredo, Texas television market (the “Laredo Acquisition”). On that date KVTV-TV ceased operating, and we began broadcasting its former program streams on our digital low power television station in Laredo, KYLX-LD. The total consideration paid was $9.0 million. The acquisition was funded with cash on hand.

Preliminary Fair Value Estimates:

The preliminary fair value estimates of the acquired assets, assumed liabilities and resulting goodwill from each of the acquisitions are summarized as follows (in thousands):

	Acquisition
	Odessa			Twin Falls			Wausau			Presque Isle			Laredo

Other current assets	$	67		$	94		$	83		$	45		$	22
Property and equipment		4,629			5,172			1,985			2,822			1,411
Goodwill		3,739			2,587			11,610			245			5,154
Broadcast licenses		22,253			6,333			-			6,150			-
Other intangible assets		3,067			3,485			397			1,039			2,435
Other non-current assets		13			32			87			-			13
Current liabilities		(155	)		(140	)		(75	)		(51	)		(22	)
Other long-term liabilities		(13	)		(63	)		(87	)		-			(13	)

Total	$	33,600		$	17,500		$	14,000		$	10,250		$	9,000

Amounts in the table above are based upon management’s estimate of the fair values using valuation techniques including income, cost and market approaches. In estimating the fair value of the acquired assets and assumed liabilities, the fair value estimates are based on, but not limited to, expected future revenue and cash flows, expected future growth rates, and estimated discount rates.

Property and equipment will be depreciated over their estimated useful lives ranging from 3 years to 40 years.

Amounts related to other intangible assets represent the estimated fair values of retransmission agreements of $5.6 million; advertising relationships of $1.0 million; and favorable leases of $3.6 million. These intangible assets are being amortized over their estimated useful lives of approximately 5.8 years for retransmission agreements; approximately 9.6 years for advertising relationships; and approximately 18.1 years for leases.

Goodwill is calculated as the excess of the consideration transferred over the fair value of the identifiable net assets acquired and liabilities assumed, and represents the future economic benefits expected to arise from other intangible assets acquired that do not qualify for separate recognition, including assembled workforce, as well as future synergies that we expect to generate from each acquisition. We have preliminarily recorded $23.3

million of goodwill related to the acquisitions completed in the nine months ended September 30, 2015. The goodwill recognized related to these acquisitions is deductible for income tax purposes.

The preliminary fair value estimates of assets acquired, liabilities assumed and resulting goodwill are based upon management’s estimate of the fair values using valuation techniques including income, cost and market approaches. The amounts presented are preliminary and subject to change. In estimating the fair value of the acquired assets and assumed liabilities, the fair value estimates are based on, but not limited to, expected future revenue and cash flows, expected future growth rates, and estimated discount rates.

The Company’s consolidated results of operations for the nine months ended September 30, 2015 include the results of each of the acquisitions described above from the date of each acquisition listed above. Net revenues and operating income from these acquisitions included in our condensed consolidated statements of operations for the nine months ended September 30, 2015 were $8.3 million and $3.0 million, respectively. In connection with these acquisitions, we incurred a total of $4.5 million of transaction related costs, primarily related to legal, consulting and other professional services.

Disposition

On September 1, 2015, we donated the FCC license and certain other assets of KMTF-TV in Helena, Montana, which formerly simulcast the CW channel broadcast by our KTVH-D2, to Montana State University (“MSU”). This donation allowed MSU to operate a full power PBS affiliated television station in the state’s capital for the first time, augmenting the statewide PBS network that MSU operates. We recorded a loss on disposal of approximately $0.1 million related to this donation in the three and nine-month periods ended September 30, 2015.

Pending Transactions

Please refer to Note 8. “Commitments and Contingencies” for a description of our pending transactions.