2. ACQUISITIONS

During the years ended December 31, 2014, 2013 and 2012, we acquired a total of 119 television stations in 63 markets, in the aggregate, for a purchase price of $3,557.7 million plus working capital of $53.7 million (21 stations in 15 markets in 2014 for a purchase price of $1,434.5 million plus working capital of $47.3 million; 65 stations in 33 markets in 2013 for an aggregate purchase price of $1,016.6 million plus working capital of $8.4 million; and 33 stations in 18 markets in 2012 for a purchase price $1,106.6 million less working capital of $2.0 million). All of these acquisitions provide expansion into additional markets and increases value based on the synergies we can achieve.

2014 Acquisitions

Allbritton. Effective August 1, 2014, we completed the acquisition of all of the outstanding common stock of Perpetual Corporation and equity interest of Charleston Television, LLC (together the “Allbritton Companies”) for $985.0 million plus working capital of $50.2 million. The Allbritton Companies owned and operated nine television stations in the following seven markets, all of which were affiliated with ABC: Washington, DC; Birmingham, AL; Harrisburg, PA; Little Rock / Pine Bluff, AR; Tulsa, OK; Roanoke / Lynchburg, VA; and Charleston, SC. Also included in the purchase was NewsChannel 8, a 24-hour cable/satellite news network covering the Washington, D.C. metropolitan area. We financed the total purchase price with proceeds from the issuance of 5.625% senior unsecured notes, a draw on our amended bank credit agreement, and cash on hand. See Note 7. Notes Payable and Commercial Bank Financing. In connection with the acquisition, we sold the acquired assets related to the Harrisburg, PA station effective September 1, 2014. See Note 3. Dispositions of Assets and Discontinued Operations for further discussion.

MEG Stations. Effective December 19, 2014, we completed the acquisition of four television stations in three markets from Media General, Inc (MEG Stations) for a purchase price of $207.5 million less working capital of $1.6 million. The acquired stations are located in the following markets: Providence, RI / New Bedford, MA; Green Bay / Appleton, WI; and Savannah, GA. We financed the purchase price with cash on hand and borrowing under our revolving credit facility. Simultaneously, we sold to Media General, our television stations in Tampa, FL and Colorado Springs, CO. See Note 3. Dispositions of Assets and Discontinued Operations for further discussion. We financed the purchase price, net of the proceeds received from the sale of those stations, with borrowings under our revolving credit facility.

KSNV. Effective November 1, 2014, we completed the acquisition of certain of assets of KSNV (NBC) in Las Vegas, NV from Intermountain West Communications Company (Intermountain West) for $118.5 million less working capital of $0.2 million. In conjunction with the purchase, we assumed the rights under the affiliation agreement with NBC and swapped our KVMY call letters for the KSNV call letters. Intermountain West continues to own and operate the station under the KVMY call letters and we do not provide any programming or sales services to this station. We financed the total purchase price with cash on hand and borrowings under our revolving credit facility.

Other 2014 Acquisitions. During the year ended December 31, 2014, we acquired certain assets related to eight other television stations in the following four markets: Wilkes Barre / Scranton, PA; Tallahassee, FL; Gainesville, FL; and Macon, GA. The purchase price for these stations was $123.5 million less working capital of $1.1 million which was financed with cash on hand and borrowings under our revolving credit facility.

2013 Acquisitions

Barrington. Effective November 22, 2013, we completed the acquisition of certain assets of Barrington Broadcasting Company, LLC (Barrington) for $370.0 million, less working capital of $2.3 million, which related to twenty-four stations in the following fifteen markets: Flint/Saginaw/Bay City/Midland, MI; Toledo, OH; Columbia, SC; Syracuse, NY; Harlingen/Weslaco/Brownsville/McAllen, TX; Colorado Springs, CO; Myrtle Beach/Florence, SC; Peoria/Bloomington, IL; Traverse City/Cadillac, MI; Amarillo, TX; Columbia/Jefferson City, MO; Albany, GA; Quincy, IL/Hannibal, MO/Keokuk, IA; Marquette, MI; and Ottumwa, IA/Kirksville, MO. Concurrent with the purchase, we entered into certain agreements with third parties to provide certain operational services to five of the stations. The purchase price includes $7.5 million paid by third parties for the license related assets these certain stations. We financed the purchase price with borrowings under our bank credit facility.

Fisher. Effective August 8, 2013, we completed the acquisition of all of the outstanding common stock of Fisher Communications, Inc. (Fisher). We paid $373.2 million to the shareholders of the Fisher common stock, representing $41.0 per common share. We financed the total purchase price with cash on hand. Fisher owned and/or operated twenty-two television stations in the following eight markets: Seattle-Tacoma, WA; Portland, OR; Spokane, WA; Boise, ID; Eugene, OR; Yakima/Pasco/Richland/Kennewick, WA; Bakersfield, CA; and Idaho Falls/Pocatello, ID. Also included in the purchase were the assets of four radio stations in the Seattle/Tacoma, WA market.

Other 2013 Acquisitions. During the year ended December 31, 2013, we acquired nineteen other television stations in the following eight markets: Baltimore, MD; Fresno / Visalia, CA; Omaha, NE; Portland, ME; El Paso, TX; Johnstown / Altoona, PA; Reno, NV; Sioux City, IA; and Wheeling, WV / Steubenville, OH. The purchase price of $272.7 million plus working capital of $10.8 million includes $0.7 million paid by certain VIEs for the license assets of certain of these stations owned by VIEs that we consolidate.

2012 Acquisitions

Newport. Effective December 1, 2012, we completed the acquisition of certain broadcast assets of Newport Television (Newport) related to seven stations in the following six markets: Cincinnati, OH; San Antonio, TX; Harrisburg/Lancaster/Lebanon/York, PA; Mobile, AL/Pensacola, FL; Wichita/Hutchinson, KS; and Rochester, NY. We financed the $472.4 million purchase price less working capital of $1.0 million with net proceeds from the 6.125% Notes issued in October 2012. See Note 7. Notes Payable and Commercial Bank Financing for more information.

Freedom. Effective April 1, 2012, we completed the acquisition of the broadcast assets of Freedom Communications, Inc. (Freedom), which consisted of eight stations in the following eight markets: West Palm Beach, FL; Grand Rapids/Kalamazoo/Battle Creek, MI; Albany, NY; Chattanooga, TN; Lansing, MI; Medford-Klamath Falls, OR; and Beaumont/Port Arthur/Orange, TX. We financed the $385.3 million purchase with borrowings under our bank credit facility. See Note 7. Notes Payable and Commercial Bank Financing for more information.

Four Points. Effective January 1, 2012, we completed the acquisition of the broadcast assets of Four Points Media (Four Points), which consisted of seven stations in the following four markets: Salt Lake City / St. George, UT; Austin, TX; West Palm Beach / Fort Pierce / Stuart, FL; and Providence, RI / New Bedford, MA. The $199.1 million purchase price was financed with borrowings under our bank credit facility. See Note 7. Notes Payable and Commercial Bank Financing for more information.

Other 2012 Acquisitions. During the year ended December 31, 2012, we acquired five other television stations in the following three markets: Columbus, OH; Champaign / Springfield / Decatur, IL; and Beaumont/Port Arthur/Orange, TX. The aggregate purchase price of $49.5 million less working capital of $0.7 million includes amounts paid by certain VIEs for the license assets of certain of these stations owned by VIEs that we consolidate.

The following tables summarize the allocated fair value of acquired assets and assumed liabilities, including the net assets of consolidated VIEs (in thousands):

	MEG Stations			KSNV			Allbritton			Other			Total 2014 acquisitions
Accounts receivable	$	—		$	—		$	38,542		$	—		$	38,542
Prepaid expenses and other current assets	476			67			19,890			79			20,512
Program contract costs	1,889			482			1,204			2,561			6,136
Property and equipment	35,963			8,300			46,600			8,400			99,263
Broadcast licenses	4,202			—			13,700			125			18,027
Definite-lived intangible assets	93,156			61,725			564,100			71,025			790,006
Other assets	—			—			20,352			1,500			21,852
Assets held for sale	—			—			83,200			—			83,200
Accounts payable and accrued liabilities	(2,085		)	(277		)	(8,351		)	(1,143		)	(11,856		)
Program contracts payable	(1,889		)	(481		)	(1,140		)	(2,554		)	(6,064		)
Deferred tax liability	—			—			(261,393		)	—			(261,393		)
Other long term liabilities	—			(1,200		)	(17,025		)	—			(18,225		)
Fair value of identifiable net assets acquired	131,712			68,616			499,679			79,993			780,000
Goodwill	74,179			49,674			535,558			42,443			701,854
Total	$	205,891		$	118,290		$	1,035,237		$	122,436		$	1,481,854

	Fisher			Barrington			Other			Total 2013 acquisitions
Cash	$	13,531		$	—		$	—		$	13,531
Accounts receivable	29,485			—			8,226			37,711
Prepaid expenses and other current assets	19,133			681			5,217			25,031
Program contract costs	11,427			4,011			6,050			21,488
Property and equipment	73,968			73,621			67,034			214,623
Broadcast licenses	29,771			719			4,395			34,885
Definite-lived intangible assets	166,034			220,253			169,438			555,725
Other assets	9,284			—			1,394			10,678
Assets held for sale	6,339			—			—			6,339
Accounts payable and accrued liabilities	(20,127		)	(2,725		)	(3,926		)	(26,778		)
Program contracts payable	(10,977		)	(3,813		)	(6,331		)	(21,121		)
Deferred tax liability	(74,177		)	—			(2,304		)	(76,481		)
Other long term liabilities	(23,384		)	(65		)	(10,550		)	(33,999		)
Fair value of identifiable net assets acquired	230,307			292,682			238,643			761,632
Goodwill	143,942			75,004			45,538			264,484
Less: fair value of non-controlling interest	(1,053		)	—			—			(1,053		)
Total	$	373,196		$	367,686		$	284,181		$	1,025,063

	Four Points			Freedom			Newport			Other			Total 2012 acquisitions
Prepaid expenses and other current assets	$	456		$	373		$	1,390		$	160		$	2,379
Program contract costs	3,731			3,520			10,378			1,638			19,267
Property and equipment	34,578			54,109			53,883			16,545			159,115
Broadcast licenses	10,658			10,424			15,581			2,679			39,342
Definite-lived intangible assets	93,800			140,963			240,013			22,546			497,322
Other assets	548			278			1,097			—			1,923
Accounts payable and accrued liabilities	(381		)	(589		)	(3,928		)	(1,178		)	(6,076		)
Program contracts payable	(5,157		)	(3,404		)	(11,634		)	(4,252		)	(24,447		)
Fair value of identifiable net assets acquired	138,233			205,674			306,780			38,138			688,825
Goodwill	60,843			179,609			164,621			10,661			415,734
Total	$	199,076		$	385,283		$	471,401		$	48,799		$	1,104,559

The allocations presented 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. The purchase prices have been allocated to the acquired assets and assumed liabilities based on estimated fair values. The allocations related to the 2014 acquisitions are preliminary pending a final determination of the fair values of the assets and liabilities.

During the year ended December 31, 2014, we made certain measurement period adjustments to the initial purchase accounting for the acquisitions in 2013, resulting in reclassifications between certain noncurrent assets and noncurrent liabilities, including an increase to property and equipment of approximately $44.3 million, an increase to broadcast licenses of $19.4 million, an increase to noncurrent deferred tax liabilities of $29.3 million, and a decrease to goodwill of $66.3 million, as well as a corresponding increase to depreciation and amortization of $2.5 million during the year ended December 31, 2014.

These intangible assets will be amortized over the estimated remaining useful lives of 15 years for network affiliations and 10 years for the decaying advertiser base. Acquired property and equipment will be depreciated on a straight-line basis over the respective estimated remaining useful lives. Goodwill is calculated as the excess of the consideration transferred over the fair value of the identifiable net assets acquired and represents the future economic benefits expected to arise from other intangible assets acquired that do not qualify for separate recognition, including assembled workforce and noncontractual relationships, as well as expected future synergies. Other intangible assets will be amortized over the respective weighted average useful lives ranging from 14 to 16 years. The following tables summarize the amounts allocated to definite-lived intangible assets representing the estimated fair values and estimated goodwill deductible for tax purposes (in thousands):

	MEG Stations		KSNV		Allbritton		Other		Total 2014 acquisitions
Network affiliations	$	63,462	$	43,800	$	356,900	$	42,625	$	506,787
Decaying advertiser base	9,280		12,100		38,500		9,100		68,980
Other intangible assets	20,414		5,825		168,700		19,300		214,239
Fair value of identifiable definite-lived intangible assets acquired	$	93,156	$	61,725	$	564,100	$	71,025	$	790,006
Estimated goodwill deductible for tax purposes	$	74,179	$	49,674	$	—	$	42,443	$	166,296

	Fisher		Barrington		Other		Total 2013 acquisitions
Network affiliations	$	117,499	$	103,245	$	99,805	$	320,549
Decaying advertiser base	18,110		41,939		19,992		80,041
Other intangible assets	30,425		75,069		49,641		155,135
Fair value of identifiable definite-lived intangible assets acquired	$	166,034	$	220,253	$	169,438	$	555,725
Estimated goodwill deductible for tax purposes	$	10,765	$	75,004	$	111,208	$	196,977

	Four Points		Freedom		Newport		Other		Total 2012 acquisitions
Network affiliations	$	66,928	$	93,067	$	175,978	$	12,858	$	348,831
Decaying advertiser base	9,766		25,059		23,662		1,843		60,330
Other intangible assets	17,106		22,837		40,373		7,845		88,161
Fair value of identifiable definite-lived intangible assets acquired	$	93,800	$	140,963	$	240,013	$	22,546	$	497,322
Estimated goodwill deductible for tax purposes	$	60,843	$	179,609	$	164,621	$	10,661	$	415,734

The following tables summarize the results of the acquired operations included in the financial statements of the Company beginning on the acquisition date of each acquisition as listing above (in thousands):

Revenues	2014		2013		2012
MEG Stations	$	2,299	$	—	$	—
KSNV	5,972		—		—
Allbritton	106,258		—		—
Barrington	173,013		16,927		—
Fisher	184,534		79,078		—
Newport	162,824		149,044		11,674
Freedom (b)	127,916		108,585		91,046
Four Points (a)	75,058		73,673		69,964
Other stations acquired in:
2014	9,172		—		—
2013	139,521		52,440		—
2012	21,196		21,515		4,485
Total net broadcast revenues	$	1,007,763	$	501,262	$	177,169

Operating Income	2014		2013		2012
MEG Stations	$	1,010	$	—	$	—
KSNV	2,108		—		—
Allbritton	26,914		—		—
Barrington	34,875		4,096		—
Fisher	26,940		19,019		—
Newport	53,457		35,779		2,860
Freedom (b)	43,882		29,439		32,488
Four Points (a)	22,441		19,754		17,287
Other stations acquired in:
2014	1,569		—		—
2013	26,487		12,007		—
2012	2,091		946		(1,589		)
Total operating income	$	241,774	$	121,040	$	51,046

(a) These amounts exclude the operations of WLWC-TV which are classified as discontinued operations in the consolidated statements of operations. See Note 3. Disposition of Assets and Discontinued Operations.

(b) These amounts exclude the operations of WLAJ-TV which are classified as discontinued operations in the consolidated statements of operations. See Note 3. Disposition of Assets and Discontinued Operations.

In connection with the acquisitions, for the years ended December 31, 2014, 2013, and 2012, we incurred a total of $5.7 million, $2.8 million, and $1.2 million, respectively, of costs primarily related to legal and other professional services, which we expensed as incurred and classified as corporate general and administrative expenses in the consolidated statements of operations.

Pro Forma Information

The following table sets forth unaudited pro forma results of operations, assuming that the above acquisitions, along with transactions necessary to finance the acquisitions, occurred at the beginning of the year preceding the year of acquisition. The pro forma results exclude acquisitions presented under Other above, as they were deemed not material both individually and in the aggregate. The 2012 period does not include the pro forma effects of the 2014 acquisitions, and as such will not provide comparability to the 2013 and 2014 pro forma periods presented in the following table (in thousands, except per share data):

	(Unaudited)
	2014		2013		2012
Total revenues	$	2,150,124	$	1,838,167	$	1,513,975
Net Income	$	189,174	$	41,323	$	153,807
Net Income attributable to Sinclair Broadcast Group	$	186,338	$	38,974	$	153,370
Basic earnings per share attributable to Sinclair Broadcast Group	$	1.92	$	0.42	$	1.89
Diluted earnings per share attributable to Sinclair Broadcast Group	$	1.90	$	0.42	$	1.89

This pro forma financial information is based on historical results of operations, adjusted for the allocation of the purchase price and other acquisition accounting adjustments, and is not indicative of what our results would have been had we operated the businesses since the beginning of the annual period presented because the pro forma results do not reflect expected synergies. The pro forma adjustments reflect depreciation expense, amortization of intangibles and amortization of program contract costs related to the fair value adjustments of the assets acquired, additional interest expense related to the financing of the transactions, and exclusion of nonrecurring financing and transaction related costs. Depreciation and amortization expense are higher than amounts recorded in the historical financial statements of the acquirees due to the fair value adjustments recorded for long-lived tangibles and intangible assets in purchase accounting. The pro forma revenues exclude the revenues of WLAJ-TV and WLWC-TV which are classified as discontinued operations in the consolidated statements of operations and KIDK-TV, KXPI-TV, WHTM-TV, WTTA-TV, KXRM-TV, and KXTU-TV which were sold subsequent to acquisition.