Acquisitions

3 Months Ended

Mar. 31, 2020

Television Stations Acquisitions

On September 19, 2019, we closed on the acquisition of eight television stations in seven markets from the Nexstar Media Group, Inc. ("Nexstar") transaction with Tribune Media Company ("Tribune"). Cash consideration for the transaction totaled $582 million. Seven of the stations were operated by Tribune, and its subsidiaries, and one was operated by Nexstar. Nexstar was required to divest these stations in order to complete its acquisition of Tribune.

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.

Effective January 1, 2019, we acquired three 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 divested as part of Gray Television's acquisition of Raycom.

The following table summarizes the fair values of the Raycom, Cordillera and Nexstar-Tribune assets acquired and liabilities assumed at the closing dates. The allocation of purchase price for the Cordillera and Nexstar-Tribune acquisitions reflect preliminary fair values.



(in thousands)	Raycom			Cordillera			Nexstar- Tribune			Total

Accounts receivable	$	—		$	26,264		$	—		$	26,264
Current portion of programming	—			—			11,997			11,997
Other current assets	—			986			3,541			4,527
Property and equipment	11,721			53,734			61,909			127,364
Operating lease right-of-use assets	296			4,667			82,447			87,410
Programming (less current portion)	—			—			9,830			9,830
Goodwill	18,349			254,176			167,322			439,847
Indefinite-lived intangible assets - FCC licenses	6,800			26,700			176,000			209,500
Amortizable intangible assets:
Television network affiliation relationships	17,400			169,400			181,000			367,800
Advertiser relationships	700			5,900			7,100			13,700
Other intangible assets	—			13,000			—			13,000
Accounts payable	—			(15		)	—			(15		)
Accrued expenses	—			(5,239		)	(4,580		)	(9,819		)
Current portion of programming liabilities	—			—			(16,211		)	(16,211		)
Other current liabilities	—			(280		)	(3,185		)	(3,465		)
Operating lease liabilities	(296		)	(4,387		)	(79,766		)	(84,449		)
Programming liabilities	—			—			(15,079		)	(15,079		)
Net purchase price	$	54,970		$	544,906		$	582,325		$	1,182,201

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 $440 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 $8.3 million. Omny is a Melbourne, Australia-based 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.

The preliminary purchase price allocation assigned $5.3 million to goodwill, $3.8 million 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.

Pro forma results of operations

Pro forma results of operations, assuming the Cordillera and Nexstar-Tribune acquisitions had taken place at the beginning of 2019, are presented in the following table. The pro forma results do not include Raycom or Omny Studio, 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, Cordillera and Nexstar-Tribune, 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 results exclude the $1.2 million of transaction related costs that were expensed in conjunction with the acquisitions and do not include efficiencies, cost reductions or synergies expected to result from the acquisitions. The unaudited pro forma financial information is not necessarily indicative of the results that actually would have occurred had the acquisitions been completed at the beginning of the period.



(in thousands, except per share data) (unaudited)	Three Months Ended March 31, 2019

Operating revenues	$	384,304
Net loss	(19,930		)
Net loss per share:
Basic	$	(0.25	)
Diluted	(0.25		)