VARIABLE INTEREST ENTITIES

12 Months Ended

Dec. 31, 2018

Organization, Consolidation and Presentation of Financial Statements [Abstract]

VARIABLE INTEREST ENTITIES:

Certain of our stations provide services to other station owners within the same respective market through agreements, such as LMAs, where we provide programming, sales, operational, and administrative services, and JSAs and SSAs, where we provide non-programming, sales, operational, and administrative services. In certain cases, we have also entered into purchase agreements or options to purchase the license related assets of the licensee. We typically own the majority of the non-license assets of the stations, and in some cases where the licensee acquired the license assets concurrent with our acquisition of the non-license assets of the station, we have provided guarantees to the bank for the licensee’s acquisition financing. The terms of the agreements vary, but generally have initial terms of over five years with several optional renewal terms. Based on the terms of the agreements and the significance of our investment in the stations, we are the primary beneficiary when, subject to the ultimate control of the licensees, we have the power to direct the activities which significantly impact the economic performance of the VIE through the services we provide and we absorb losses and returns that would be considered significant to the VIEs. The fees paid between us and the licensees pursuant to these arrangements are eliminated in consolidation. Several of these VIEs are owned by a related party, Cunningham.

The carrying amounts and classification of the assets and liabilities of the VIEs mentioned above which have been included in our consolidated balance sheets as of December 31, 2018 and 2017 were as follows (in thousands):



	2018		2017
ASSETS
Current assets:
Accounts receivable	$	28,276	$	19,566
Other current assets	6,773		8,937
Total current asset	35,049		28,503

Program contract costs, less current portion	2,058		822
Property and equipment, net	5,346		6,215
Goodwill and indefinite-lived intangible assets	15,064		15,064
Definite-lived intangible assets, net	67,680		74,442
Other assets	2,374		5,601
Total assets	$	127,571	$	130,647
LIABILITIES
Current liabilities:
Other current liabilities	$	18,298	$	23,564

Notes payable, capital leases and commercial bank financing, less current portion	19,278		23,217
Program contracts payable, less current portion	8,474		11,213
Other long term liabilities	650		650
Total liabilities	$	46,700	$	58,644

The amounts above represent the consolidated assets and liabilities of the VIEs described above, for which we are the primary beneficiary, and have been aggregated as they all relate to our broadcast business. The total capital lease liabilities, net of capital lease assets, which are excluded from the above, were $4.5 million, for both years ended December 31, 2018 and 2017. Total liabilities associated with certain outsourcing agreements and purchase options with certain VIEs, which are excluded from above, were $124.5 million and $116.5 million as of December 31, 2018 and December 31, 2017, respectively, as these amounts are eliminated in consolidation. The assets of each of these consolidated VIEs can only be used to settle the obligations of the VIE. As of December 31, 2018, all of the liabilities are non-recourse to us except for the debt of certain VIEs. See Debt of variable interest entities and guarantees of third-party debt under Note 7. Notes Payable and Commercial Bank Financing for further discussion. The risk and reward characteristics of the VIEs are similar.

Other VIEs

We have several investments in entities which are considered VIEs. However, we do not participate in the management of these entities, including the day-to-day operating decisions or other decisions which would allow us to control the entity, and therefore, we are not considered the primary beneficiary of these VIEs.

The carrying amounts of our investments in these VIEs for which we are not the primary beneficiary as of December 31, 2018 and 2017 was $71.3 million and $115.7 million, respectively, and are included in other assets in our consolidated balance sheets. See Note 6. Other Assets for more information related to our equity investments. Our maximum exposure is equal to the carrying value of our investments. The income and loss related to equity method investments and other equity investments are recorded in (loss) income from equity method investments and other income, net, respectively, in our consolidated statements of operations. We recorded losses of $45.1 million and $5.3 million for the years ended December 31, 2018 and 2017, respectively, and income of $2.5 million for the year ended December 31, 2016, related to these investments.