pressreleasenovember072013.htm

Washington, DC: - Radio One, Inc. (NASDAQ: ROIAK and ROIA) today reported its results for the quarter ended September 30, 2013. Net revenue was approximately $118.4 million, an increase of 7.7% from the same period in 2012. Station operating income1 was approximately $44.8 million, an increase of 9.7% from the same period in 2012. The Company reported operating income of approximately $21.8 million for the three months ended September 30, 2013, compared to operating income of $21.5 million for the same period in 2012. Net loss was approximately $13.2 million or $0.28 per share compared to a net loss of $13.1 million or $0.26 per share, for the same period in 2012.

Alfred C. Liggins, III, Radio One’s CEO and President stated, “Overall I am pleased with our 12.5% increase in adjusted EBITDA2. Our radio business, including Reach Media, grew revenues by 3.4% year-to-year despite the toughening political comparatives. Propelled by strong summer ratings, TV One posted revenue and adjusted EBITDA growth of 13.7% and 37.2% respectively, and our internet division showed solid progress. Excluding political, our Q4 radio revenues are currently pacing up mid-single digits. Despite the $6.1 million of cyclical political revenue that we booked in Q4 2012, we expect Q4 radio revenues to finish approximately flat, which will be quite an achievement given that 2012 was a record year for our political revenues. As a result of our EBITDA growth, we have steadily been improving our leverage profile, and for the first time since Q1 2009, our total leverage ratio as measured by our credit agreement has dropped below 7.0x; our focus remains to continue this positive trend.”

RESULTS OF OPERATIONS

	Three Months Ended September 30,						Nine Months Ended September 30,
	2013			2012			2013			2012
				(as adjusted)3						(as adjusted)3
STATEMENT OF OPERATIONS	(unaudited)						(unaudited)
	(in thousands, except share data)						(in thousands, except share data)

NET REVENUE	$	118,391		$	109,894		$	337,105		$	318,688
OPERATING EXPENSES
Programming and technical, excluding stock-based compensation		37,176			32,454			100,649			96,582
Selling, general and administrative, excluding stock-based compensation		36,400			36,593			110,143			106,894
Corporate selling, general and administrative, excluding stock-based compensation		9,684			9,613			27,107			29,003
Stock-based compensation		55			37			145			127
Depreciation and amortization		9,571			9,699			28,600			29,161
Impairment of long-lived assets		3,710			-			14,880			313
Total operating expenses		96,596			88,396			281,524			262,080
Operating income		21,795			21,498			55,581			56,608
INTEREST INCOME		23			108			165			155
INTEREST EXPENSE		22,336			22,089			66,811			68,584
OTHER (INCOME) EXPENSE, net		(29	)		681			(99	)		1,284
Loss before provision for income taxes, noncontrolling interest in income of subsidiaries and income (loss) from discontinued operations		(489	)		(1,164	)		(10,966	)		(13,105	)
PROVISION FOR INCOME TAXES		8,415			9,051			19,798			25,814
Net loss from continuing operations		(8,904	)		(10,215	)		(30,764	)		(38,919	)
INCOME (LOSS) FROM DISCONTINUED OPERATIONS, net of tax		-			(40	)		893			(56	)
CONSOLIDATED NET LOSS		(8,904	)		(10,255	)		(29,871	)		(38,975	)
NET INCOME ATTRIBUTABLE TO NONCONTROLLING INTERESTS		4,317			2,809			15,670			10,663
CONSOLIDATED NET LOSS ATTRIBUTABLE TO COMMON STOCKHOLDERS	$	(13,221	)	$	(13,064	)	$	(45,541	)	$	(49,638	)

AMOUNTS ATTRIBUTABLE TO COMMON STOCKHOLDERS
NET LOSS FROM CONTINUING OPERATIONS	$	(13,221	)	$	(13,024	)	$	(46,434	)	$	(49,582	)
INCOME (LOSS) FROM DISCONTINUED OPERATIONS, net of tax		-			(40	)		893			(56	)
CONSOLIDATED NET LOSS ATTRIBUTABLE TO COMMON STOCKHOLDERS	$	(13,221	)	$	(13,064	)	$	(45,541	)	$	(49,638	)

Weighted average shares outstanding - basic4		47,443,031			50,019,048			48,680,979			50,010,406
Weighted average shares outstanding - diluted5		47,443,031			50,019,048			48,680,979			50,010,406

	Three Months Ended September 30,						Nine Months Ended September 30,
	2013			2012			2013			2012
				(as adjusted)3						(as adjusted)3
PER SHARE DATA - basic and diluted:	(unaudited)						(unaudited)
	(in thousands, except per share data)						(in thousands, except per share data)

Net loss from continuing operations (basic)	$	(0.28	)	$	(0.26	)	$	(0.95	)	$	(0.99	)
Income (loss) from discontinued operations, net of tax (basic)		0.00			(0.00	)		0.02			(0.00	)
Consolidated net loss attributable to common stockholders (basic)	$	(0.28	)	$	(0.26	)	$	(0.94	) *	$	(0.99	)

Net loss from continuing operations (diluted)	$	(0.28	)	$	(0.26	)	$	(0.95	)	$	(0.99	)
Income (loss) from discontinued operations, net of tax (diluted)		0.00			(0.00	)		0.02			(0.00	)
Consolidated net loss attributable to common stockholders (diluted)	$	(0.28	)	$	(0.26	)	$	(0.94	) *	$	(0.99	)

SELECTED OTHER DATA
Station operating income 1	$	44,815		$	40,847		$	126,313		$	115,212
Station operating income margin (% of net revenue)		37.9	%		37.2	%		37.5	%		36.2	%

Station operating income reconciliation:

Consolidated net loss attributable to common stockholders	$	(13,221	)	$	(13,064	)	$	(45,541	)	$	(49,638	)
Add back non-station operating income items included in consolidated net loss:
Interest income		(23	)		(108	)		(165	)		(155	)
Interest expense		22,336			22,089			66,811			68,584
Provision for income taxes		8,415			9,051			19,798			25,814
Corporate selling, general and administrative expenses		9,684			9,613			27,107			29,003
Stock-based compensation		55			37			145			127
Other (income) expense, net		(29	)		681			(99	)		1,284
Depreciation and amortization		9,571			9,699			28,600			29,161
Noncontrolling interest in income of subsidiaries		4,317			2,809			15,670			10,663
Impairment of long-lived assets		3,710			-			14,880			313
Loss (income) from discontinued operations, net of tax		-			40			(893	)		56
Station operating income	$	44,815		$	40,847		$	126,313		$	115,212

Adjusted EBITDA2	$	35,131		$	31,234		$	99,206		$	86,209

Adjusted EBITDA reconciliation:

Consolidated net loss attributable to common stockholders	$	(13,221	)	$	(13,064	)	$	(45,541	)	$	(49,638	)
Interest income		(23	)		(108	)		(165	)		(155	)
Interest expense		22,336			22,089			66,811			68,584
Provision for income taxes		8,415			9,051			19,798			25,814
Depreciation and amortization		9,571			9,699			28,600			29,161
EBITDA	$	27,078		$	27,667		$	69,503		$	73,766
Stock-based compensation		55			37			145			127
Other (income) expense, net		(29	)		681			(99	)		1,284
Noncontrolling interest in income of subsidiaries		4,317			2,809			15,670			10,663
Impairment of long-lived assets		3,710			-			14,880			313
Loss (income) from discontinued operations, net of tax		-			40			(893	)		56
Adjusted EBITDA	$	35,131		$	31,234		$	99,206		$	86,209

*Per share amounts do not add due to rounding

	September 30, 2013		December 31, 2012
	(unaudited)
	(in thousands)
SELECTED BALANCE SHEET DATA:
Cash and cash equivalents	$	48,317	$	57,255
Intangible assets, net		1,157,126		1,202,562
Total assets		1,420,031		1,460,195
Total debt (including current portion)		816,208		818,718
Total liabilities		1,105,715		1,092,844
Total equity		301,670		354,498
Redeemable noncontrolling interest		12,646		12,853
Noncontrolling interest		208,188		210,698

	Current Amount Outstanding		Applicable Interest Rate
	(in thousands)
SELECTED LEVERAGE DATA:
Senior bank term debt, net of original issue discount of approximately $4.2 million (subject to variable rates) (a)	$	370,174		7.50	%
12 1/2%/15% senior subordinated notes (fixed rate)		327,034		12.50	%
10% Senior Secured TV One Notes due March 2016 (fixed rate)		119,000		10.00	%

This press release includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements represent management's current expectations and are based upon information available to Radio One at the time of this release. These forward-looking statements involve known and unknown risks, uncertainties and other factors, some of which are beyond Radio One's control, that may cause the actual results to differ materially from any future results, performance or achievements expressed or implied by such forward-looking statements. Important factors that could cause actual results to differ materially are described in Radio One’s reports on Forms 10-K/A, 10-K, 10-Q/A, 10-Q, 8-K and other filings with the Securities and Exchange Commission (the “SEC”). Radio One does not undertake any duty to update any forward-looking statements.

Net revenue increased to approximately $118.4 million for the quarter ended September 30, 2013, from approximately $109.9 million for the same period in 2012, an increase of 7.7%. Net revenue from the radio business, including Reach Media, increased 3.4% for the quarter ended September 30, 2013 compared to the same period in 2012. Within our Cable Television segment, we recognized approximately $37.8 million of revenue during the three months ended September 30, 2013, versus approximately $33.2 million of revenue during the comparable period in 2012. Finally, net revenues for our internet business increased 37.6% for the three months ended September 30, 2013, compared to the same period in 2012 due to growth in advertising and studio services, where Interactive One provides services to other publishers.

Interest expense increased to approximately $22.3 million for the quarter ended September 30, 2013, from approximately $22.1 million for the same period in 2012, an increase of 1.1%. The Company made cash interest payments of approximately $20.9 million for the quarter ended September 30, 2013, compared to cash interest payments of approximately $21.0 million for the quarter ended September 30, 2012. Through May 14, 2012, interest on the Company’s 12½%/15% Senior Subordinated Notes (“Senior Subordinated Notes”) was payable, at our election, at an all-inclusive rate of 15%, partially in cash and partially through the issuance of additional Senior Subordinated Notes (a “PIK Election”) on a quarterly basis. The PIK Election expired on May 14, 2012, and interest accruing on the Senior Subordinated Notes from and after May 15, 2012, accrued at a lower rate of 12½% and was payable in cash. We continually evaluate opportunities based upon market conditions to refinance our outstanding indebtedness in order to reduce our borrowing costs, extend maturities and/or increase our operating flexibility. There can be no guarantee that any such refinancing opportunities will be available on acceptable terms or at all.

The provision for income taxes for the quarter ended September 30, 2013, was approximately $8.4 million compared to approximately $9.1 million for the comparable period in 2012, primarily attributable to the deferred tax liability (“DTL”) for indefinite-lived intangible assets. Because our income tax expense does not have a correlation to our pre-tax earnings, changes in those earnings can have a significant impact on the income tax expense we recognize. As a result, we believe the actual effective tax rate best represents the estimated effective rate for the three month periods ended September 30, 2013 and 2012. The Company paid $221,000 and $271,000 in taxes for the quarters ended September 30, 2013 and 2012, respectively.

Other pertinent financial information includes capital expenditures of approximately $1.3 million and $2.8 million for the quarters ended September 30, 2013 and 2012, respectively. The Company received dividends from TV One in the amount of approximately $6.2 million and $2.0 million for the quarters ended September 30, 2013 and 2012, respectively. As of September 30, 2013, the Company had total debt (net of cash balances) of approximately $767.9 million. The Company’s cash and cash equivalents by segment are as follows: Radio and Internet, approximately $24.8 million; Reach Media, approximately $4.8 million; and Cable Television, approximately $18.7 million. In addition to cash and cash equivalents, the Cable Television segment also has short-term investments of approximately $3.2 million and long-term investments of $72,000. During the three months ended September 30, 2013, the Company repurchased 512,300 shares of Class D common stock in the amount of $1,209,108 and 1,100 shares of Class A common stock in the amount of $2,655. There were no stock repurchases made during the three months ended September 30, 2012.

Effective January 1, 2013, the Radio Broadcasting segment contributed the assets and operations of its Syndication One urban programming line-up to the Reach Media segment. We consolidated our syndication operations within Reach Media to leverage that platform to create the leading syndicated radio network targeted to the African-American audience. In connection with the consolidation, we shifted our syndicated programming sales to an internal sales force operating out of Reach Media. Segment data for the three and nine months ended September 30, 2012, has been reclassified to conform to the current period presentation.

	Three Months Ended September 30, 2013
	(in thousands, unaudited)

													Corporate/
				Radio		Reach					Cable		Eliminations/
	Consolidated			Broadcasting		Media		Internet			Television		Other

STATEMENT OF OPERATIONS:

NET REVENUE	$	118,391		$	59,281	$	16,872	$	6,125		$	37,786	$	(1,673	)
OPERATING EXPENSES:
Programming and technical		37,176			10,946		8,088		2,160			17,541		(1,559	)
Selling, general and administrative		36,400			21,074		4,445		3,948			7,260		(327	)
Corporate selling, general and administrative		9,684			-		1,168		-			1,669		6,847
Stock-based compensation		55			14		-		-			-		41
Depreciation and amortization		9,571			1,645		310		588			6,555		473
Impairment of long-lived assets		3,710			3,710		-		-			-		-
Total operating expenses		96,596			37,389		14,011		6,696			33,025		5,475
Operating income (loss)		21,795			21,892		2,861		(571	)		4,761		(7,148	)
INTEREST INCOME		23			-		-		-			17		6
INTEREST EXPENSE		22,336			303		-		-			3,039		18,994
OTHER INCOME, net		(29	)		-		-		-			-		(29	)
(Loss) income before provision for income taxes, noncontrolling interest in income of subsidiaries and income from discontinued operations		(489	)		21,589		2,861		(571	)		1,739		(26,107	)
PROVISION FOR INCOME TAXES		8,415			7,387		1,028		-			-		-
Net (loss) income from continuing operations		(8,904	)		14,202		1,833		(571	)		1,739		(26,107	)
INCOME FROM DISCONTINUED OPERATIONS, net of tax		-			-		-		-			-		-
CONSOLIDATED NET (LOSS) INCOME		(8,904	)		14,202		1,833		(571	)		1,739		(26,107	)
NET INCOME ATTRIBUTABLE TO NONCONTROLLING INTERESTS		4,317			-		-		-			-		4,317
NET (LOSS) INCOME ATTRIBUTABLE TO COMMON STOCKHOLDERS	$	(13,221	)	$	14,202	$	1,833	$	(571	)	$	1,739	$	(30,424	)

Adjusted EBITDA2	$	35,131		$	27,261	$	3,171	$	17		$	11,316	$	(6,634	)

	Three Months Ended September 30, 2012
	(in thousands, unaudited, as adjusted)3

															Corporate/
				Radio			Reach					Cable			Eliminations/
	Consolidated			Broadcasting			Media		Internet			Television			Other

STATEMENT OF OPERATIONS:

NET REVENUE	$	109,894		$	58,353		$	15,321	$	4,452		$	33,232		$	(1,464	)
OPERATING EXPENSES:
Programming and technical		32,454			10,510			7,683		2,104			13,168			(1,011	)
Selling, general and administrative		36,593			21,097			4,175		2,784			9,263			(726	)
Corporate selling, general and administrative		9,613			-			1,875		-			2,552			5,186
Stock-based compensation		37			20			-		-			-			17
Depreciation and amortization		9,699			1,574			323		795			6,707			300
Impairment of long-lived assets		-			-			-		-			-			-
Total operating expenses		88,396			33,201			14,056		5,683			31,690			3,766
Operating income (loss)		21,498			25,152			1,265		(1,231	)		1,542			(5,230	)
INTEREST INCOME		108			-			1		-			34			73
INTEREST EXPENSE		22,089			218			-		-			3,039			18,832
OTHER EXPENSE (INCOME), net		681			5			-		-			604			72
(Loss) income before provision for income taxes, noncontrolling interest in income of subsidiaries and loss from discontinued operations		(1,164	)		24,929			1,266		(1,231	)		(2,067	)		(24,061	)
PROVISION FOR INCOME TAXES		9,051			8,809			242		-			-			-
Net (loss) income from continuing operations		(10,215	)		16,120			1,024		(1,231	)		(2,067	)		(24,061	)
LOSS FROM DISCONTINUED OPERATIONS, net of tax		(40	)		(40	)		-		-			-			-
CONSOLIDATED NET (LOSS) INCOME		(10,255	)		16,080			1,024		(1,231	)		(2,067	)		(24,061	)
NET INCOME ATTRIBUTABLE TO NONCONTROLLING INTERESTS		2,809			-			-		-			-			2,809
NET (LOSS) INCOME ATTRIBUTABLE TO COMMON STOCKHOLDERS	$	(13,064	)	$	16,080		$	1,024	$	(1,231	)	$	(2,067	)	$	(26,870	)

Adjusted EBITDA2	$	31,234		$	26,746		$	1,588	$	(436	)	$	8,249		$	(4,913	)

	Nine Months Ended September 30, 2013
	(in thousands, unaudited)

														Corporate/
				Radio			Reach					Cable		Eliminations/
	Consolidated			Broadcasting			Media		Internet			Television		Other

STATEMENT OF OPERATIONS:

NET REVENUE	$	337,105		$	167,898		$	44,428	$	17,612		$	111,506	$	(4,339	)
OPERATING EXPENSES:
Programming and technical		100,649			32,690			23,003		6,142			42,873		(4,059	)
Selling, general and administrative		110,143			63,938			13,762		11,445			21,927		(929	)
Corporate selling, general and administrative		27,107			-			3,382		-			5,899		17,826
Stock-based compensation		145			38			-		-			-		107
Depreciation and amortization		28,600			4,720			950		1,902			19,773		1,255
Impairment of long-lived assets		14,880			14,880			-		-			-		-
Total operating expenses		281,524			116,266			41,097		19,489			90,472		14,200
Operating income (loss)		55,581			51,632			3,331		(1,877	)		21,034		(18,539	)
INTEREST INCOME		165			-			-		-			44		121
INTEREST EXPENSE		66,811			888			-		-			9,117		56,806
OTHER INCOME, net		(99	)		(11	)		-		-			-		(88	)
(Loss) income before provision for income taxes, noncontrolling interest in income of subsidiaries and income from discontinued operations		(10,966	)		50,755			3,331		(1,877	)		11,961		(75,136	)
PROVISION FOR INCOME TAXES		19,798			18,298			1,500		-			-		-
Net (loss) income from continuing operations		(30,764	)		32,457			1,831		(1,877	)		11,961		(75,136	)
INCOME FROM DISCONTINUED OPERATIONS, net of tax		893			893			-		-			-		-
CONSOLIDATED NET (LOSS) INCOME		(29,871	)		33,350			1,831		(1,877	)		11,961		(75,136	)
NET INCOME ATTRIBUTABLE TO NONCONTROLLING INTERESTS		15,670			-			-		-			-		15,670
NET (LOSS) INCOME ATTRIBUTABLE TO COMMON STOCKHOLDERS	$	(45,541	)	$	33,350		$	1,831	$	(1,877	)	$	11,961	$	(90,806	)

Adjusted EBITDA2	$	99,206		$	71,270		$	4,281	$	25		$	40,807	$	(17,177	)

	Nine Months Ended September 30, 2012
	(in thousands, unaudited, as adjusted)3

															Corporate/
				Radio			Reach						Cable		Eliminations/
	Consolidated			Broadcasting			Media			Internet			Television		Other

STATEMENT OF OPERATIONS:

NET REVENUE	$	318,688		$	166,064		$	44,038		$	14,659		$	97,722	$	(3,795	)
OPERATING EXPENSES:
Programming and technical		96,582			32,964			23,303			6,183			37,269		(3,137	)
Selling, general and administrative		106,894			64,376			12,836			9,067			21,954		(1,339	)
Corporate selling, general and administrative		29,003			-			6,228			-			6,670		16,105
Stock-based compensation		127			52			-			-			-		75
Depreciation and amortization		29,161			4,774			979			2,432			20,219		757
Impairment of long-lived assets		313			313			-			-			-		-
Total operating expenses		262,080			102,479			43,346			17,682			86,112		12,461
Operating income (loss)		56,608			63,585			692			(3,023	)		11,610		(16,256	)
INTEREST INCOME		155			-			5			-			48		102
INTEREST EXPENSE		68,584			537			-			-			9,117		58,930
OTHER EXPENSE (INCOME), net		1,284			(10	)		-			-			605		689
(Loss) income before provision for (benefit from) income taxes, noncontrolling interest in income of subsidiaries and loss from discontinued operations		(13,105	)		63,058			697			(3,023	)		1,936		(75,773	)
PROVISION FOR (BENEFIT FROM) INCOME TAXES		25,814			26,196			(382	)		-			-		-
Net (loss) income from continuing operations		(38,919	)		36,862			1,079			(3,023	)		1,936		(75,773	)
LOSS FROM DISCONTINUED OPERATIONS, net of tax		(56	)		(56	)		-			-			-		-
CONSOLIDATED NET (LOSS) INCOME		(38,975	)		36,806			1,079			(3,023	)		1,936		(75,773	)
NET INCOME ATTRIBUTABLE TO NONCONTROLLING INTERESTS		10,663			-			-			-			-		10,663
NET (LOSS) INCOME ATTRIBUTABLE TO COMMON STOCKHOLDERS	$	(49,638	)	$	36,806		$	1,079		$	(3,023	)	$	1,936	$	(86,436	)

Adjusted EBITDA2	$	86,209		$	68,724		$	1,671		$	(591	)	$	31,829	$	(15,424	)

Radio One, Inc., together with its subsidiaries (http://www.radio-one.com/), is a diversified media company that primarily targets African-American and urban consumers. The Company is one of the nation's largest radio broadcasting companies, currently owning and/or operating 54 broadcast stations located in 16 urban markets in the United States. Through its controlling interest in Reach Media, Inc. (http://www.blackamericaweb.com/), the Company also operates syndicated programming including the Tom Joyner Morning Show, the Russ Parr Morning Show, the Yolanda Adams Morning Show, the Rickey Smiley Morning Show, Bishop T.D. Jakes' "Empowering Moments", and the Reverend Al Sharpton Show. Beyond its core radio broadcasting franchise, Radio One owns Interactive One (http://www.interactiveone.com/), an online platform serving the African-American community through social content, news, information, and entertainment. Interactive One operates a number of branded sites, including News One, UrbanDaily, HelloBeautiful and social networking websites, including BlackPlanet and MiGente. In addition, the Company owns a controlling interest in TV One, LLC (http://www.tvoneonline.com/), a cable/satellite network programming primarily to African-Americans.

1 “Station operating income” consists of net loss before depreciation and amortization, corporate expenses, stock-based compensation, equity in income of affiliated company, income taxes, noncontrolling interest in income (loss) of subsidiaries, interest expense, impairment of long-lived assets, other (income) expense, loss (gain) on retirement of debt, (income) loss from discontinued operations, net of tax, interest income and gain on purchase of affiliated company. Station operating income is not a measure of financial performance under generally accepted accounting principles. Nevertheless station operating income is a significant basis used by our management to measure the operating performance of our stations within the various markets because station operating income provides helpful information about our results of operations apart from expenses associated with our fixed assets and long-lived intangible assets, income taxes, investments, debt financings and retirements, overhead, stock-based compensation, impairment charges, and asset sales. Our measure of station operating income may not be comparable to similarly titled measures of other companies as our definition includes the results of all four segments (Radio Broadcasting, Reach Media, Internet and Cable Television). Station operating income does not purport to represent operating income or cash flow from operating activities, as those terms are defined under generally accepted accounting principles, and should not be considered as an alternative to those measurements as an indicator of our performance. A reconciliation of net income (loss) to station operating income has been provided in this release.

2 “Adjusted EBITDA” consists of net loss plus (1) depreciation, amortization, income taxes, interest expense, noncontrolling interest in income of subsidiaries, impairment of long-lived assets, stock-based compensation, loss on retirement of debt, loss from discontinued operations, net of tax, less (2) equity in income of affiliated company, other income, interest income, gain on retirement of debt and gain on purchase of affiliated company. Net income before interest income, interest expense, income taxes, depreciation and amortization is commonly referred to in our business as “EBITDA.” Adjusted EBITDA and EBITDA are not measures of financial performance under generally accepted accounting principles. However, we believe Adjusted EBITDA is often a useful measure of a company’s operating performance and is a significant basis used by our management to measure the operating performance of our business because Adjusted EBITDA excludes charges for depreciation, amortization and interest expense that have resulted from our acquisitions and debt financing, our taxes, impairment charges, as well as our equity in (income) loss of our affiliated company, gain on retirements of debt, and any discontinued operations. Accordingly, we believe that Adjusted EBITDA provides useful information about the operating performance of our business, apart from the expenses associated with our fixed assets and long-lived intangible assets, capital structure or the results of our affiliated company. Adjusted EBITDA is frequently used as one of the bases for comparing businesses in our industry, although our measure of Adjusted EBITDA may not be comparable to similarly titled measures of other companies as our definition includes the results of all four segments (Radio Broadcasting, Reach Media, Internet and Cable Television). Adjusted EBITDA and EBITDA do not purport to represent operating income or cash flow from operating activities, as those terms are defined under generally accepted accounting principles, and should not be considered as alternatives to those measurements as an indicator of our performance. A reconciliation of net income (loss) to EBITDA and Adjusted EBITDA has been provided in this release.

3 Certain reclassifications associated with accounting for discontinued operations have been made to prior period balances to conform to the current presentation. These reclassifications had no effect on any other previously reported or consolidated net income or loss or any other statement of operations, balance sheet or cash flow amounts. Where applicable, these financial statements have been identified as “as adjusted.” In addition, certain reclassifications have been made associated with the transfer and consolidation of our syndication operations within Reach Media. These reclassifications occurred between the Radio Broadcasting segment, the Reach Media segment and Corporate/Eliminations/Other.