10. Acquisitions and Dispositions

We actively seek and explore opportunities for expansion through the acquisition of additional broadcast properties. The consolidated statements of income include the operating results of the acquired stations from their respective dates of acquisition. All acquisitions were accounted for as purchases and, accordingly, the total purchase consideration was allocated to the acquired assets and assumed liabilities based on their estimated fair values as of the acquisition dates. The excess of the consideration paid over the estimated fair value of net assets acquired have been recorded as goodwill. The Company accounts for acquisition under the provisions of FASB ASC Topic 805, Business Combinations.

Management assigned fair values to the acquired property and equipment through a combination of cost and market approaches based upon each specific asset’s replacement cost, with a provision for depreciation, and to the acquired intangibles, primarily an FCC license, based on the Greenfield valuation methodology, a discounted cash flow approach.

2019 Acquisitions

On January 9, 2019, we closed on an agreement to purchase WPVQ-AM and W222CH from County Broadcasting Company, LLC for an aggregate purchase price of $210 thousand. Management attributes the goodwill recognized in the acquisition to the power of the existing brands in the Greenfield, Massachusetts market as well as synergies and growth opportunities expected through the combination with our existing stations.

2018 Acquisitions

On October 29, 2018, we entered into an agreement to purchase WOGK-FM, WNDT-FM, WNDD-FM and WNDN-FM, from Ocala Broadcasting Corporation, LLC for an aggregate purchase price of $9.3 million, subject to certain purchase price adjustments. We closed this transaction effective December 31, 2018 using funds generated from operations of $9.84 million, which included the purchase price of $9.3 million, the purchase of $566 thousand in accounts receivable by certain closing adjustments and transactional costs of approximately $25 thousand, of which $553 thousand was paid in January 2019. Management attributes the goodwill recognized in the acquisition to the power of the existing brands in the Ocala, Florida market as well as synergies and growth opportunities expected through the combination with our existing stations.

Condensed Consolidated Balance Sheet of 2019 and 2018 Acquisitions:

The following condensed balance sheets represent the estimated fair value assigned to the related assets and liabilities of the 2019 and 2018 acquisitions at their respective acquisition dates.

Condensed Consolidated Balance Sheet of 2019 and 2018 Acquisitions


	Acquisitions in
	2019		2018
	(In thousands)
Assets Acquired:
Current assets	$	—	$	559
Property and equipment		25		3,007
Other assets:
Broadcast licenses		61		1,991
Goodwill		124		3,281
Other intangibles, deferred costs and investments		—		1,123
Total other assets		185		6,395
Total assets acquired		210		9,961
Liabilities Assumed:
Current liabilities		—		120
Total liabilities assumed		—		120
Net assets acquired	$	210	$	9,841

Pro Forma Results of Operations for Acquisitions (Unaudited)

The following unaudited pro forma results of our operations for the years ended December 31, 2019 and 2018 assume the 2019 and 2018 acquisitions occurred as of January 1, 2018. The translators are start-up stations and therefore, have no pro forma revenue and expenses. The pro forma results give effect to certain adjustments, including depreciation, amortization of intangible assets, increased interest expense on acquisition debt and related income tax effects. The pro forma results have been prepared for comparative purposes only and do not purport to indicate the results of operations which would actually have occurred had the combinations been in effect on the dates indicated or which may occur in the future.


	Years Ended December 31,
	2019		2018
	(In thousands, except per share data)
Pro forma Consolidated Results of Operations
Net operating revenue	$	123,072	$	129,228
Station operating expense		92,692		97,314
Corporate general and administrative		11,460		11,359
Other operating expenses		112		61
Operating income		18,808		20,494
Interest expense		735		946
Interest income		(610)		(631)
Other income		(16)		(23)
Income before income tax expense		18,699		20,202
Income tax expense (benefit) expense		5,420		5,944
Net income	$	13,279	$	14,258

Basic earnings per share	$	2.23	$	2.40
Diluted earnings per share	$	2.23	$	2.40