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Asset Exchange
12 Months Ended
Dec. 31, 2015
Business Combinations [Abstract]  
Asset Exchange
(3) Asset Exchange

On December 1, 2014, the Company completed an asset exchange with CBS Radio Stations, Inc. (“CBS Radio”) under which the Company agreed to exchange all of the assets used or useful in the operations of WRDW-FM and WXTU-FM in Philadelphia, PA and WKIS-FM, WPOW-FM and WQAM-AM in Miami, FL previously owned and operated by the Company for all of the assets used or useful in the operations of WIP-AM in Philadelphia, PA, WHFS-AM, WHFS-FM, WLLD-FM, WQYK-FM, WRBQ-FM and WYUU-FM in Tampa, FL and WBAV-FM, WBCN-AM, WFNZ-AM, WKQC-FM, WNKS-FM, WPEG-FM and WSOC-FM in Charlotte, NC previously owned and operated by CBS Radio. The asset exchange substantially broadened and diversified the Company’s local radio broadcasting platform and revenue base with fourteen new stations that are geographically complementary to the Company’s ongoing operations, while also presenting financial and operating synergies with the Company’s ongoing station portfolio and digital operations.

The following pro forma information for the year ended December 31, 2014 assumes that the asset exchange had occurred on January 1, 2014. This pro forma information has been prepared based on estimates and assumptions, which management believes are reasonable, and is not necessarily indicative of what would have occurred had the asset exchange actually been completed on January 1, 2014 or of results that may occur in the future.

 

Net revenue

   $ 112,173,985   

Operating income

     19,589,159   

Net income

     9,501,522   

Basic net income per share

     0.42   

Diluted net income per share

     0.41   

Discontinued Operations

After completion of the asset exchange, the Company has significantly decreased operations in the Philadelphia, PA radio market and no longer has any operations in the Miami-Fort Lauderdale, FL radio market. Therefore, the results of operations of WRDW-FM, WXTU-FM, WKIS-FM, WPOW-FM and WQAM-AM have been reported as discontinued operations for the year ended December 31, 2014.

 

A summary of discontinued operations is as follows:

 

Net revenue

   $ 42,621,758   
  

 

 

 

Station operating expenses

     27,732,682   

Employee termination expenses

     62,500   

Depreciation and amortization

     374,002   

Gain on exchange of radio stations

     (54,306,974

Other (income) expense, net

     330,416   
  

 

 

 

Income from discontinued operations before income taxes

     68,429,132   

Income tax expense

     29,395,750   
  

 

 

 

Income from discontinued operations

   $ 39,033,382   
  

 

 

 

A summary of operating and investing cash flows of discontinued operations is as follows:

 

Cash flows from operating activities:

  

Income from discontinued operations

   $ 39,033,382   
  

 

 

 

Adjustments to reconcile income from discontinued operations to net cash provided by (used in) operating activities:

  

Provision for bad debts

     171,414   

Depreciation and amortization

     374,002   

Gain on exchange of radio stations

     (54,306,974

Loss on notes receivable from related party

     332,034   

Change in operating assets and liabilities

  

Accounts receivable

     2,432,650   

Prepaid expenses

     732,113   

Other assets

     (846,870

Accounts payable

     (119,044

Other liabilities

     27,766,919   

Other operating activities

     (15,760,304
  

 

 

 

Net cash used in operating activities

   $ (190,678
  

 

 

 

Cash flows from investing activities:

  

Capital expenditures

   $ (324,847

Repayment of notes receivable from related parties

     11,003   
  

 

 

 

Net cash used in investing activities

   $ (313,844