Delaware | 52-1166660 |
(State or other jurisdiction of | (I.R.S. Employer |
incorporation or organization) | Identification No.) |
Class | | Outstanding at August 2, 2013 |
Class A Common Stock, $.001 Par Value | | 2,687,191 |
Class B Common Stock, $.001 Par Value | | 2,861,843 |
Class C Common Stock, $.001 Par Value | | 3,121,048 |
Class D Common Stock, $.001 Par Value | | 38,900,738 |
| | Page |
| PART I. FINANCIAL INFORMATION | |
| | |
Item 1. | Consolidated Statements of Operations for the Three Months and Six Months Ended June 30, 2013 and 2012 (Unaudited) | 4 |
| Consolidated Statements of Comprehensive Income (Loss) for the Three Months and Six Months Ended June 30, 2013 and 2012 (Unaudited) | 5 |
| Consolidated Balance Sheets as of June 30, 2013 (Unaudited) and December 31, 2012 | 6 |
| Consolidated Statement of Changes in Equity for the Six Months Ended June 30, 2013 (Unaudited) | 7 |
| Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2013 and 2012 (Unaudited) | 8 |
| Notes to Consolidated Financial Statements (Unaudited) | 9 |
| Consolidating Financial Statements | 31 |
| Consolidating Statement of Operations for the Three Months Ended June 30, 2013 (Unaudited) | 32 |
| Consolidating Statement of Operations for the Three Months Ended June 30, 2012 (Unaudited) | 33 |
| Consolidating Statement of Operations for the Six Months Ended June 30, 2013 (Unaudited) | 34 |
| Consolidating Statement of Operations for the Six Months Ended June 30, 2012 (Unaudited) | 35 |
| Consolidating Statement of Comprehensive Income (Loss) for the Three Months Ended June 30, 2013 (Unaudited) | 36 |
| Consolidating Statement of Comprehensive Income (Loss) for the Three Months Ended June 30, 2012 (Unaudited) | 37 |
| Consolidating Statement of Comprehensive Income (Loss) for the Six Months Ended June 30, 2013 (Unaudited) | 38 |
| Consolidating Statement of Comprehensive Income (Loss) for the Six Months Ended June 30, 2012 (Unaudited) | 39 |
| Consolidating Balance Sheet as of June 30, 2013 (Unaudited) | 40 |
| Consolidating Balance Sheet as of December 31, 2012 | 41 |
| Consolidating Statement of Cash Flows for the Six Months Ended June 30, 2013 (Unaudited) | 42 |
| Consolidating Statement of Cash Flows for the Six Months Ended June 30, 2012 (Unaudited) | 43 |
Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations | 46 |
Item 3. | Quantitative and Qualitative Disclosures About Market Risk | 66 |
Item 4. | Controls and Procedures | 66 |
| | |
| PART II. OTHER INFORMATION | |
| | |
Item 1. | Legal Proceedings | 68 |
Item 1A. | Risk Factors | 68 |
Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds | 68 |
Item 3. | Defaults Upon Senior Securities | 68 |
Item 4. | Submission of Matters to a Vote of Security Holders | 68 |
Item 5. | Other Information | 68 |
Item 6. | Exhibits | 69 |
| SIGNATURES | 70 |
| | |
| Non-Wholly Owned Guarantor Subsidiary Financial Statements Reach Media, Inc. | F-1 |
| | Three Months Ended June 30, | | Six Months Ended June 30, | | ||||||||
| | 2013 | | 2012 | | 2013 | | 2012 | | ||||
| | (Unaudited) | | ||||||||||
| | (In thousands, except share data) | | ||||||||||
| | | | | | | | | | | | | |
NET REVENUE | | $ | 119,602 | | $ | 105,830 | | $ | 218,714 | | $ | 208,794 | |
OPERATING EXPENSES: | | | | | | | | | | | | | |
Programming and technical | | | 32,897 | | | 32,916 | | | 63,370 | | | 64,028 | |
Selling, general and administrative, including stock-based compensation of $10 and $15, and $24 and $32, respectively | | | 41,017 | | | 31,537 | | | 73,740 | | | 70,309 | |
Corporate selling, general and administrative, including stock-based compensation of $37 and $31, and $66 and $58, respectively | | | 8,012 | | | 9,855 | | | 17,489 | | | 19,448 | |
Depreciation and amortization | | | 9,467 | | | 9,742 | | | 19,007 | | | 19,427 | |
Impairment of long-lived assets | | | 9,800 | | | 313 | | | 11,170 | | | 313 | |
Total operating expenses | | | 101,193 | | | 84,363 | | | 184,776 | | | 173,525 | |
Operating income | | | 18,409 | | | 21,467 | | | 33,938 | | | 35,269 | |
INTEREST INCOME | | | 102 | | | 25 | | | 142 | | | 47 | |
INTEREST EXPENSE | | | 22,406 | | | 22,928 | | | 44,652 | | | 46,675 | |
OTHER (INCOME) EXPENSE, net | | | (30) | | | 610 | | | (70) | | | 603 | |
Loss before provision for (benefit from) income taxes, noncontrolling interests in income of subsidiaries and income from discontinued operations | | | (3,865) | | | (2,046) | | | (10,502) | | | (11,962) | |
PROVISION FOR (BENEFIT FROM) INCOME TAXES | | | 4,702 | | | (48,491) | | | 11,383 | | | 16,763 | |
Net (loss) income from continuing operations | | | (8,567) | | | 46,445 | | | (21,885) | | | (28,725) | |
INCOME FROM DISCONTINUED OPERATIONS, net of tax | | | 15 | | | 20 | | | 918 | | | 5 | |
CONSOLIDATED NET (LOSS) INCOME | | | (8,552) | | | 46,465 | | | (20,967) | | | (28,720) | |
NET INCOME ATTRIBUTABLE TO NONCONTROLLING INTERESTS | | | 5,662 | | | 3,797 | | | 11,353 | | | 7,854 | |
CONSOLIDATED NET (LOSS) INCOME ATTRIBUTABLE TO COMMON STOCKHOLDERS | | $ | (14,214) | | $ | 42,668 | | $ | (32,320) | | $ | (36,574) | |
| | | | | | | | | | | | | |
BASIC NET (LOSS) INCOME ATTRIBUTABLE TO COMMON STOCKHOLDERS | | | | | | | | | | | | | |
Continuing operations | | $ | (0.29) | | $ | 0.85 | | $ | (0.67) | | $ | (0.73) | |
Discontinued operations, net of tax | | | 0.00 | | | 0.00 | | | 0.02 | | | 0.00 | |
Net (loss) income attributable to common stockholders | | $ | (0.29) | | $ | 0.85 | | $ | (0.66) | * | $ | (0.73) | |
| | | | | | | | | | | | | |
DILUTED NET (LOSS) INCOME ATTRIBUTABLE TO COMMON STOCKHOLDERS | | | | | | | | | | | | | |
Continuing operations | | $ | (0.29) | | $ | 0.85 | | $ | (0.67) | | $ | (0.73) | |
Discontinued operations, net of tax | | | 0.00 | | | 0.00 | | | 0.02 | | | 0.00 | |
Net (loss) income attributable to common stockholders | | $ | (0.29) | | $ | 0.85 | | $ | (0.66) | * | $ | (0.73) | |
| | | | | | | | | | | | | |
WEIGHTED AVERAGE SHARES OUTSTANDING: | | | | | | | | | | | | | |
Basic | | | 48,737,941 | | | 50,006,085 | | | 49,299,953 | | | 49,997,752 | |
Diluted | | | 48,737,941 | | | 50,124,418 | | | 49,299,953 | | | 49,997,752 | |
| | Three Months Ended June 30, | | Six Months Ended June 30, | | ||||||||
| | 2013 | | 2012 | | 2013 | | 2012 | | ||||
| | (Unaudited) | | ||||||||||
| | (In thousands) | | ||||||||||
| | | | | | | | | | | | | |
CONSOLIDATED NET (LOSS) INCOME | | $ | (8,552) | | $ | 46,465 | | $ | (20,967) | | $ | (28,720) | |
NET CHANGE IN UNREALIZED (LOSS) GAIN ON INVESTMENT ACTIVITIES, NET OF TAX | | | (82) | | | 23 | | | (102) | | | 120 | |
COMPREHENSIVE (LOSS) INCOME | | | (8,634) | | | 46,488 | | | (21,069) | | | (28,600) | |
LESS: COMPREHENSIVE INCOME ATTRIBUTABLE TO NONCONTROLLING INTERESTS | | | 5,662 | | | 3,797 | | | 11,353 | | | 7,854 | |
COMPREHENSIVE (LOSS) INCOME ATTRIBUTABLE TO COMMON STOCKHOLDERS | | $ | (14,296) | | $ | 42,691 | | $ | (32,422) | | $ | (36,454) | |
| | As of | | ||||
| | June 30, 2013 | | December 31, 2012 | | ||
| | (Unaudited) | | | | | |
| | (In thousands, except share data) | | ||||
ASSETS | | | | | | | |
CURRENT ASSETS: | | | | | | | |
Cash and cash equivalents | | $ | 40,223 | | $ | 57,255 | |
Short-term investments | | | 3,193 | | | 1,597 | |
Trade accounts receivable, net of allowance for doubtful accounts of $3,996 and $3,631, respectively | | | 95,173 | | | 81,912 | |
Prepaid expenses | | | 3,114 | | | 5,059 | |
Current portion of content assets | | | 28,823 | | | 27,723 | |
Other current assets | | | 2,404 | | | 2,051 | |
Current assets from discontinued operations | | | 127 | | | 127 | |
Total current assets | | | 173,057 | | | 175,724 | |
CONTENT ASSETS, net | | | 45,512 | | | 38,981 | |
PROPERTY AND EQUIPMENT, net | | | 35,971 | | | 35,282 | |
GOODWILL | | | 272,037 | | | 272,037 | |
RADIO BROADCASTING LICENSES | | | 662,824 | | | 673,994 | |
LAUNCH ASSETS, net | | | 17,547 | | | 22,530 | |
OTHER INTANGIBLE ASSETS, net | | | 218,140 | | | 234,001 | |
OTHER ASSETS | | | 2,330 | | | 3,080 | |
NON-CURRENT ASSETS FROM DISCONTINUED OPERATIONS | | | 1,391 | | | 4,566 | |
Total assets | | $ | 1,428,809 | | $ | 1,460,195 | |
LIABILITIES, REDEEMABLE NONCONTROLLING INTEREST AND EQUITY | | | | | | | |
CURRENT LIABILITIES: | | | | | | | |
Accounts payable | | $ | 8,330 | | $ | 5,410 | |
Accrued interest | | | 5,989 | | | 5,849 | |
Accrued compensation and related benefits | | | 9,457 | | | 11,165 | |
Current portion of content payables | | | 14,294 | | | 17,694 | |
Other current liabilities | | | 14,789 | | | 16,163 | |
Current portion of long-term debt | | | 3,840 | | | 4,587 | |
Current liabilities from discontinued operations | | | 189 | | | 107 | |
Total current liabilities | | | 56,888 | | | 60,975 | |
LONG-TERM DEBT, net of current portion and original issue discount | | | 812,948 | | | 814,131 | |
CONTENT PAYABLES, net of current portion | | | 10,402 | | | 11,163 | |
OTHER LONG-TERM LIABILITIES | | | 18,965 | | | 18,303 | |
DEFERRED TAX LIABILITIES | | | 199,250 | | | 188,249 | |
NON-CURRENT LIABILITIES FROM DISCONTINUED OPERATIONS | | | 13 | | | 23 | |
Total liabilities | | | 1,098,466 | | | 1,092,844 | |
| | | | | | | |
REDEEMABLE NONCONTROLLING INTEREST | | | 11,865 | | | 12,853 | |
| | | | | | | |
STOCKHOLDERS’ EQUITY: | | | | | | | |
Convertible preferred stock, $.001 par value, 1,000,000 shares authorized; no shares outstanding at June 30, 2013 and December 31, 2012, respectively | | | | | | | |
Common stock Class A, $.001 par value, 30,000,000 shares authorized; 2,688,291 and 2,719,860 shares issued and outstanding as of June 30, 2013 and December 31, 2012, respectively | | | 3 | | | 3 | |
Common stock Class B, $.001 par value, 150,000,000 shares authorized; 2,861,843 shares issued and outstanding as of June 30, 2013 and December 31, 2012, respectively | | | 3 | | | 3 | |
Common stock Class C, $.001 par value, 150,000,000 shares authorized; 3,121,048 shares issued and outstanding as of June 30, 2013 and December 31, 2012, respectively | | | 3 | | | 3 | |
Common stock Class D, $.001 par value, 150,000,000 shares authorized; 39,413,038 and 41,421,667 shares issued and outstanding as of June 30, 2013 and December 31, 2012, respectively | | | 39 | | | 41 | |
Accumulated other comprehensive loss | | | (204) | | | (102) | |
Additional paid-in capital | | | 1,003,819 | | | 1,006,873 | |
Accumulated deficit | | | (895,341) | | | (863,021) | |
Total stockholders’ equity | | | 108,322 | | | 143,800 | |
Noncontrolling interest | | | 210,156 | | | 210,698 | |
Total equity | | | 318,478 | | | 354,498 | |
Total liabilities, redeemable noncontrolling interest and equity | | $ | 1,428,809 | | $ | 1,460,195 | |
| | Convertible Preferred Stock | | Common Stock Class A | | Common Stock Class B | | Common Stock Class C | | Common Stock Class D | | Accumulated Other Comprehensive Loss | | Additional Paid-In Capital | | Accumulated Deficit | | Noncontrolling Interest | | Total Equity | | ||||||||||
| | | | | | | | | | | | | | | | | (In Thousands) | | | | | | | | | | | | | | |
BALANCE, as of December 31, 2012 | | $ | | | $ | 3 | | $ | 3 | | $ | 3 | | $ | 41 | | $ | (102) | | $ | 1,006,873 | | $ | (863,021) | | $ | 210,698 | | $ | 354,498 | |
Consolidated net (loss) income | | | | | | | | | | | | | | | | | | | | | | | | (32,320) | | | 11,230 | | | (21,090) | |
Net change in unrealized loss on investment activities, net of tax | | | | | | | | | | | | | | | | | | (102) | | | | | | | | | | | | (102) | |
Repurchase of 31,569 shares of Class A common stock | | | | | | | | | | | | | | | | | | | | | (68) | | | | | | | | | (68) | |
Repurchase of 2,118,274 shares of Class D common stock | | | | | | | | | | | | | | | (2) | | | | | | (4,187) | | | | | | | | | (4,189) | |
Dividends paid to noncontrolling interest | | | | | | | | | | | | | | | | | | | | | | | | | | | (11,772) | | | (11,772) | |
Adjustment of redeemable noncontrolling interests to estimated redemption value | | | | | | | | | | | | | | | | | | | | | 1,111 | | | | | | | | | 1,111 | |
Stock-based compensation expense | | | | | | | | | | | | | | | | | | | | | 90 | | | | | | | | | 90 | |
BALANCE, as of June 30, 2013 | | $ | | | $ | 3 | | $ | 3 | | $ | 3 | | $ | 39 | | $ | (204) | | $ | 1,003,819 | | $ | (895,341) | | $ | 210,156 | | $ | 318,478 | |
| | Six Months Ended June 30, | | ||||
| | 2013 | | 2012 | | ||
| | (Unaudited) | | ||||
| | (In thousands) | | ||||
CASH FLOWS FROM OPERATING ACTIVITIES: | | | | | | | |
Consolidated net loss | | $ | (20,967) | | $ | (28,720) | |
Adjustments to reconcile net loss to net cash from operating activities: | | | | | | | |
Depreciation and amortization | | | 19,007 | | | 19,427 | |
Amortization of debt financing costs | | | 2,650 | | | 1,520 | |
Amortization of content assets | | | 19,938 | | | 18,240 | |
Amortization of launch assets | | | 4,983 | | | 4,979 | |
Deferred income taxes | | | 11,001 | | | 17,231 | |
Impairment of long-lived assets | | | 11,170 | | | 313 | |
Stock-based compensation | | | 90 | | | 90 | |
Non-cash interest | | | | | | 14,235 | |
Effect of change in operating assets and liabilities, net of assets acquired: | | | | | | | |
Trade accounts receivable | | | (13,261) | | | (4,191) | |
Prepaid expenses and other assets | | | 1,592 | | | 3,828 | |
Other assets | | | 725 | | | 266 | |
Accounts payable | | | 2,920 | | | 481 | |
Accrued interest | | | 140 | | | (775) | |
Accrued compensation and related benefits | | | (1,708) | | | (46) | |
Income taxes payable | | | | | | (868) | |
Other liabilities | | | (874) | | | 1,345 | |
Payments for content assets | | | (31,730) | | | (29,132) | |
Net cash flows used in operating activities of discontinued operations | | | (753) | | | (41) | |
Net cash flows provided by operating activities | | | 4,923 | | | 18,182 | |
CASH FLOWS FROM INVESTING ACTIVITIES: | | | | | | | |
Purchases of property and equipment | | | (5,858) | | | (6,712) | |
Proceeds from sales of investment securities | | | 753 | | | 5,567 | |
Purchases of investment securities | | | (2,130) | | | (530) | |
Proceeds from sale of discontinued operations | | | 4,000 | | | | |
Net cash flows used in investing activities | | | (3,235) | | | (1,675) | |
CASH FLOWS FROM FINANCING ACTIVITIES: | | | | | | | |
Repayment of senior subordinated notes | | | (747) | | | | |
Repayment of credit facility | | | (1,921) | | | (3,889) | |
Debt refinancing and modification costs | | | (23) | | | (17) | |
Repurchase of common stock | | | (4,257) | | | | |
Payment of dividends to noncontrolling interest members of TV One | | | (11,772) | | | (5,780) | |
Net cash flows used in financing activities | | | (18,720) | | | (9,686) | |
(DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS | | | (17,032) | | | 6,821 | |
CASH AND CASH EQUIVALENTS, beginning of period | | | 57,255 | | | 35,939 | |
CASH AND CASH EQUIVALENTS, end of period | | $ | 40,223 | | $ | 42,760 | |
| | | | | | | |
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: | | | | | | | |
Cash paid for: | | | | | | | |
Interest | | $ | 41,735 | | $ | 31,015 | |
Income taxes, net | | $ | 81 | | $ | 347 | |
| (a) | Organization |
| | Three Months Ended June 30, | | Six Months Ended June 30, | | ||||||||
| | 2013 | | 2012 | | 2013 | | 2012 | | ||||
| | (Unaudited) | | ||||||||||
| | (In Thousands) | | ||||||||||
Numerator: | | | | | | | | | | | | | |
Net (loss) income attributable to common stockholders | | $ | (14,229) | | $ | 42,648 | | $ | (33,238) | | $ | (36,579) | |
Denominator: | | | | | | | | | | | | | |
Denominator for basic net (loss) income per share - weighted average outstanding shares | | | 48,737,941 | | | 50,006,085 | | | 49,299,953 | | | 49,997,752 | |
Effect of dilutive securities: | | | | | | | | | | | | | |
Stock options and restricted stock | | | | | | 118,333 | | | | | | | |
Denominator for diluted net (loss) income per share - weighted-average outstanding shares | | | 48,737,941 | | | 50,124,418 | | | 49,299,953 | | | 49,997,752 | |
| | | | | | | | | | | | | |
Net (loss) income attributable to common stockholders per share - basic | | $ | (0.29) | | $ | 0.85 | | $ | (0.67) | | $ | (0.73) | |
Net (loss) income attributable to common stockholders per share - diluted | | $ | (0.29) | | $ | 0.85 | | $ | (0.67) | | $ | (0.73) | |
| | Three Months Ended | | Six Months Ended | | Six Months Ended | | |||
| | June 30, 2013 | | June 30, 2013 | | June 30, 2012 | | |||
| | (Unaudited) | | |||||||
| | (In Thousands) | | |||||||
| | | | | | | | | | |
Stock options | | | 4,630 | | | 4,630 | | | 4,712 | |
Restricted stock | | | 167 | | | 167 | | | 119 | |
| (h) Fair Value Measurements |
| Level 1: Inputs are unadjusted quoted prices in active markets for identical assets and liabilities that can be accessed at measurement date. |
| Level 2: Observable inputs other than those included in Level 1 (i.e., quoted prices for similar assets or liabilities in active markets or quoted prices for identical assets or liabilities in inactive markets). |
| |
| Level 3: Unobservable inputs reflecting management’s own assumptions about the inputs used in pricing the asset or liability. |
| | Total | | Level 1 | | Level 2 | | Level 3 | | ||||
| | (Unaudited) | | ||||||||||
| | (In thousands) | | ||||||||||
As of June 30, 2013 | | | | | | | | | | | | | |
Assets subject to fair value measurement: | | | | | | | | | | | | | |
Corporate debt securities (a) | | $ | 1,042 | | $ | 1,042 | | $ | | | $ | | |
Mutual funds (a) | | | 2,223 | | | 2,223 | | | | | | | |
Total | | $ | 3,265 | | $ | 3,265 | | $ | | | $ | | |
| | | | | | | | | | | | | |
Liabilities subject to fair value measurement: | | | | | | | | | | | | | |
Incentive award plan (b) | | $ | 4,739 | | $ | | | $ | | | $ | 4,739 | |
Employment agreement award (c) | | | 12,610 | | | | | | | | | 12,610 | |
Total | | $ | 17,349 | | $ | | | $ | | | $ | 17,349 | |
| | | | | | | | | | | | | |
Mezzanine equity subject to fair value measurement: | | | | | | | | | | | | | |
Redeemable noncontrolling interests (d) | | $ | 11,865 | | $ | | | $ | | | $ | 11,865 | |
| | | | | | | | | | | | | |
As of December 31, 2012 | | | | | | | | | | | | | |
Assets subject to fair value measurement: | | | | | | | | | | | | | |
Corporate debt securities (a) | | $ | 192 | | $ | 192 | | $ | | | $ | | |
Mutual funds (a) | | | 1,502 | | | 1,502 | | | | | | | |
Total | | $ | 1,694 | | $ | 1,694 | | $ | | | $ | | |
| | | | | | | | | | | | | |
Liabilities subject to fair value measurement: | | | | | | | | | | | | | |
Incentive award plan (b) | | $ | 5,345 | | $ | | | $ | | | $ | 5,345 | |
Employment agreement award (c) | | | 11,374 | | | | | | | | | 11,374 | |
Total | | $ | 16,719 | | $ | | | $ | | | $ | 16,719 | |
| | | | | | | | | | | | | |
Mezzanine equity subject to fair value measurement: | | | | | | | | | | | | | |
Redeemable noncontrolling interests (d) | | $ | 12,853 | | $ | | | $ | | | $ | 12,853 | |
| | Incentive Award Plan | | Employment Agreement Award | | Redeemable Noncontrolling Interests | | |||
| | (In thousands) | | |||||||
| | | | | | | | | | |
Balance at December 31, 2012 | | $ | 5,345 | | $ | 11,374 | | $ | 12,853 | |
Distribution | | | (594) | | | | | | | |
Net income attributable to noncontrolling interests | | | | | | | | | 123 | |
Change in enterprise fair value | | | (12) | | | 1,236 | | | (1,111) | |
Balance at June 30, 2013 | | $ | 4,739 | | $ | 12,610 | | $ | 11,865 | |
| | | | | | | | | | |
The amount of total losses for the period included in earnings attributable to the change in unrealized losses relating to assets and liabilities still held at the reporting date | | $ | (12) | | $ | (1,236) | | $ | | |
| | Incentive Award Plan | | Employment Agreement Award | | Redeemable Noncontrolling Interests | | |||
| | (In thousands) | | |||||||
| | | | | | | | | | |
Balance at December 31, 2011 | | $ | 5,096 | | $ | 10,346 | | $ | 20,343 | |
Net loss attributable to noncontrolling interests | | | | | | | | | (567) | |
Change in enterprise fair value | | | | | | 693 | | | (1,776) | |
Balance at June 30, 2012 | | $ | 5,096 | | $ | 11,039 | | $ | 18,000 | |
| | | | | | | | | | |
The amount of total losses for the period included in earnings attributable to the change in unrealized losses relating to assets and liabilities still held at the reporting date | | $ | | | $ | (693) | | $ | | |
For Level 3 assets and liabilities measured at fair value on a recurring basis, the significant unobservable inputs used in the fair value measurements were as follows: |
| | | | Significant | | As of June 30, 2013 | | As of December 31, 2012 | | As of June 30, 2012 | | |||
Level 3 liabilities | | Valuation Technique | | Unobservable Inputs | | Significant Unobservable Input Value | | |||||||
| | | | | | | | | | | | | | |
Incentive award plan | | Discounted Cash Flow | | Discount Rate | | | 10.8 | % | | 10.8 | % | | 11.5 | % |
Incentive award plan | | Discounted Cash Flow | | Long-term Growth Rate | | | 3.0 | % | | 3.0 | % | | 3.0 | % |
Employment agreement award | | Discounted Cash Flow | | Discount Rate | | | 10.8 | % | | 10.8 | % | | 11.5 | % |
Employment agreement award | | Discounted Cash Flow | | Long-term Growth Rate | | | 3.0 | % | | 3.0 | % | | 3.0 | % |
Redeemable noncontrolling interest | | Discounted Cash Flow | | Discount Rate | | | 13.5 | % | | 11.5 | % | | 12.5 | % |
Redeemable noncontrolling interest | | Discounted Cash Flow | | Long-term Growth Rate | | | 1.5 | % | | 2.0 | % | | 2.5 | % |
| (i) Impact of Recently Issued Accounting Pronouncements |
| | Liability Derivatives | | ||||||||
| | As of June 30, 2013 | | As of December 31, 2012 | | ||||||
| | (Unaudited) | | | | | | | |||
| | (In thousands) | | ||||||||
| | Balance Sheet Location | | Fair Value | | Balance Sheet Location | | Fair Value | | ||
Derivatives not designated as hedging instruments: | | | | | | | | | | | |
Employment agreement award | | Other Long-Term Liabilities | | $ | 12,610 | | Other Long-Term Liabilities | | $ | 11,374 | |
Total derivatives | | | | $ | 12,610 | | | | $ | 11,374 | |
Derivatives Not Designated as Hedging Instruments | | Location of Gain (Loss) in Income of Derivative | | Amount of Gain (Loss) in Income of Derivative | | ||||
| | | | Three Months Ended June 30, | | ||||
| | | | 2013 | | 2012 | | ||
| | | | (Unaudited) | | ||||
| | | | (In thousands) | | ||||
| | | | | | | | | |
Employment agreement award | | Corporate selling, general and administrative expense | | $ | (774) | | $ | (343) | |
Derivatives Not Designated as Hedging Instruments | | Location of Gain (Loss) in Income of Derivative | | Amount of Gain (Loss) in Income of Derivative | | ||||
| | | | Six Months Ended June 30, | | ||||
| | | | 2013 | | 2012 | | ||
| | | | (Unaudited) | | ||||
| | | | (In thousands) | | ||||
| | | | | | | | | |
Employment agreement award | | Corporate selling, general and administrative expense | | $ | (1,236) | | $ | (693) | |
| | Three Months Ended June 30, | | Six Months Ended June 30, | | ||||||||
| | 2013 | | 2012 | | 2013 | | 2012 | | ||||
| | (Unaudited) | | ||||||||||
| | (In thousands) | | ||||||||||
| | | | | | | | | | | | | |
Net revenue | | $ | | | $ | 85 | | $ | | | $ | 163 | |
Station operating expenses | | | 65 | | | 137 | | | 130 | | | 302 | |
Depreciation and amortization | | | 11 | | | 18 | | | 23 | | | 36 | |
Interest income | | | 91 | | | 90 | | | 178 | | | 180 | |
Gain on sale of assets | | | | | | | | | 893 | | | | |
Income from discontinued operations, net of tax | | $ | 15 | | $ | 20 | | $ | 918 | | $ | 5 | |
| | As of | | ||||
| | June 30, | | December 31, | | ||
| | 2013 | | 2012 | | ||
| | (Unaudited) | | | | | |
| | (In thousands) | | ||||
Currents assets: | | | | | | | |
Accounts receivable, net of allowance for doubtful accounts | | $ | 127 | | $ | 127 | |
Total current assets | | | 127 | | | 127 | |
Intangible assets, net | | | 1,202 | | | 4,302 | |
Property and equipment, net | | | 189 | | | 264 | |
Total assets | | $ | 1,518 | | $ | 4,693 | |
Current liabilities: | | | | | | | |
Other current liabilities | | $ | 189 | | $ | 107 | |
Total current liabilities | | | 189 | | | 107 | |
Long-term liabilities | | | 13 | | | 23 | |
Total liabilities | | $ | 202 | | $ | 130 | |
| | June 30, | | | October 1, | | | March 31, | | | June 30, | | | ||||
Radio Broadcasting Licenses | | 2012 (a) | | | 2012 | | | 2013 (a) | | | 2013 (a) | | | ||||
| | | | | | | | | | | | | | | | | |
Pre-tax impairment charge (in millions) | | $ | 0.3 | | | $ | | | | $ | 1.4 | | | $ | 9.8 | | |
| | | | | | | | | | | | | | | | | |
Discount Rate | | | 10.0 | % | | | 10.0 | % | | | 10.0 | % | | | 10.5 | % | |
Year 1 Market Revenue Growth Rate Range | | | 1.0% -3.0 | % | | | 1.0% -2.0 | % | | | 1.0 | % | | | 2.0 | % | |
Long-term Market Revenue Growth Rate Range (Years 6 10) | | | 1.0% - 2.0 | % | | | 1.0% -2.0 | % | | | 1.5 | % | | | 1.5% -2.0 | % | |
Mature Market Share Range | | | 5.8% - 15.6 | % | | | 0.7% - 27.4 | % | | | 8.6 | % | | | 8.6% - 15.1 | % | |
Operating Profit Margin Range | | | 29.1% - 48.0 | % | | | 19.6% - 47.7 | % | | | 31.4 | % | | | 32.6% - 34.4 | % | |
(a) | Reflects only key assumptions used in the interim testing for certain units of accounting. |
| | Amortized Cost Basis | | Gross Unrealized Losses | | Gross Unrealized Gains | | Fair Value | | ||||
| | (In thousands) | | ||||||||||
June 30, 2013 | | | | | | | | | | | | | |
Corporate debt securities | | $ | 1,047 | | $ | (14) | | $ | 9 | | $ | 1,042 | |
Mutual funds | | | 2,320 | | | (97) | | | | | | 2,223 | |
Total investments | | $ | 3,367 | | $ | (111) | | $ | 9 | | $ | 3,265 | |
| | Amortized Cost Basis | | Gross Unrealized Losses | | Gross Unrealized Gains | | Fair Value | | ||||
| | (In thousands) | | ||||||||||
December 31, 2012 | | | | | | | | | | | | | |
Corporate debt securities | | $ | 85 | | $ | | | $ | 107 | | $ | 192 | |
Mutual funds | | | 1,512 | | | (11) | | | 1 | | | 1,502 | |
Total investments | | $ | 1,597 | | $ | (11) | | $ | 108 | | $ | 1,694 | |
| | Fair Value < 1 Year | | Unrealized Losses < 1 Year | | Fair Value > 1 Year | | Unrealized Losses > 1 Year | | Total Unrealized Losses | | |||||
| | (In thousands) | | |||||||||||||
June 30, 2013 | | | | | | | | | | | | | | | | |
Corporate debt securities | | $ | 818 | | $ | (14) | | $ | | | $ | | | $ | (14) | |
Mutual funds | | | 2,223 | | | (97) | | | | | | | | | (97) | |
Total investments | | $ | 3,041 | | $ | (111) | | $ | | | $ | | | $ | (111) | |
| | Fair Value < 1 Year | | Unrealized Losses < 1 Year | | Fair Value > 1 Year | | Unrealized Losses > 1 Year | | Total Unrealized Losses | | |||||
| | (In thousands) | | |||||||||||||
December 31, 2012 | | | | | | | | | | | | | | | | |
Mutual funds | | $ | 1,235 | | $ | (11) | | $ | | | $ | | | $ | (11) | |
Total investments | | $ | 1,235 | | $ | (11) | | $ | | | $ | | | $ | (11) | |
| | Amortized Cost Basis | | Fair Value | | ||
| | (In thousands) | | ||||
| | | | | | | |
Within 1 year | | $ | 1,029 | | $ | 1,021 | |
After 1 year through 5 years | | | 18 | | | 21 | |
Total debt securities | | $ | 1,047 | | $ | 1,042 | |
| | Three Months Ended June 30, 2013 | | Six Months Ended June 30, 2013 | | Three Months Ended June 30, 2012 | | Six Months Ended June 30, 2012 | | ||||
| | (In thousands) | | ||||||||||
Proceeds from sales | | $ | 250 | | $ | 753 | | $ | 1,708 | | $ | 5,567 | |
Gross realized gains | | | | | | | | | 6 | | | 19 | |
Gross realized losses | | | | | | | | | (33) | | | (98) | |
| | June 30, 2013 | | December 31, 2012 | | ||
| | (Unaudited) | | | | | |
| | (In thousands) | | ||||
| | | | | | | |
Senior bank term debt | | $ | 375,376 | | $ | 377,297 | |
63/8% Senior Subordinated Notes due February 2013 | | | | | | 747 | |
121/2%/15% Senior Subordinated Notes due May 2016 | | | 327,034 | | | 327,034 | |
10% Senior Secured TV One Notes due March 2016 | | | 119,000 | | | 119,000 | |
Total debt | | | 821,410 | | | 824,078 | |
Less: current portion | | | 3,840 | | | 4,587 | |
Less: original issue discount | | | 4,622 | | | 5,360 | |
Long-term debt, net | | $ | 812,948 | | $ | 814,131 | |
| (a) | maintaining an interest coverage ratio of no less than: |
§ | 1.10 to 1.00 on December 31, 2012, and the last day of each fiscal quarter through December 31, 2013; |
§ | 1.20 to 1.00 on March 31, 2014, and the last day of each fiscal quarter through September 30, 2014; |
§ | 1.25 to 1.00 on December 31, 2014, and the last day of each fiscal quarter through September 30, 2015; and |
§ | 1.50 to 1.00 on December 31, 2015, and the last day of each fiscal quarter thereafter. |
§ | 4.50 to 1.00 on September 30, 2012, and the last day of each fiscal quarter through December 31, 2013; |
§ | 4.25 to 1.00 on March 31, 2014, and the last day of each fiscal quarter through June 30, 2014; |
§ | 4.00 to 1.00 on September 30, 2014; |
§ | 3.75 to 1.00 on December 31, 2014; |
§ | 3.25 to 1.00 on March 31, 2015, and the last day of each fiscal quarter through September 30, 2015; and |
§ | 2.75 to 1.00 on December 31, 2015, and the last day of each fiscal quarter thereafter. |
§ | 8.50 to 1.00 on December 31, 2012, and the last day of each fiscal quarter through December 31, 2013; |
§ | 8.25 to 1.00 on March 31, 2014, and June 30, 2014; |
§ | 8.00 to 1.00 on September 30, 2014; |
§ | 7.50 to 1.00 on December 31, 2014; |
§ | 6.50 to 1.00 on March 31, 2015, and the last day of each fiscal quarter through September 30, 2015; and |
§ | 6.00 to 1.00 on December 31, 2015, and the last day of each fiscal quarter thereafter. |
§ | liens; |
§ | sale of assets; |
§ | payment of dividends; and |
§ | mergers. |
| | As of June 30, 2013 | | | Covenant Limit | | | Excess Coverage | | |
| | | | | | | | | | |
Pro Forma Last Twelve Months Covenant EBITDA (In millions) | | $ | 92.7 | | | | | | | |
| | | | | | | | | | |
Pro Forma Last Twelve Months Interest Expense (In millions) | | $ | 71.4 | | | | | | | |
| | | | | | | | | | |
Senior Debt (In millions) | | $ | 356.1 | | | | | | | |
Total Debt (In millions) | | $ | 683.1 | | | | | | | |
| | | | | | | | | | |
Interest Coverage | | | | | | | | | | |
Covenant EBITDA / Interest Expense | | | 1.30 | x | | 1.10 | x | | 0.20 | x |
| | | | | | | | | | |
Senior Secured Leverage | | | | | | | | | | |
Senior Secured Debt / Covenant EBITDA | | | 3.84 | x | | 4.50 | x | | 0.66 | x |
| | | | | | | | | | |
Total Leverage | | | | | | | | | | |
Total Debt / Covenant EBITDA | | | 7.37 | x | | 8.50 | x | | 1.13 | x |
| | | | | | | | | | |
EBITDA - Earnings before interest, taxes, depreciation and amortization |
| | Credit Facility | | Senior Subordinated Notes | | TV One Senior Secured Notes | | Total | | ||||
| | | | | | | | | | | | | |
July December 2013 | | $ | 1,920 | | $ | | | $ | | | $ | 1,920 | |
2014 | | | 3,840 | | | | | | | | | 3,840 | |
2015 | | | 3,840 | | | | | | | | | 3,840 | |
2016 | | | 365,776 | | | 327,034 | | | 119,000 | | | 811,810 | |
Total Debt | | $ | 375,376 | | $ | 327,034 | | $ | 119,000 | | $ | 821,410 | |
| | Number of Options | | Weighted-Average Exercise Price | | Weighted-Average Remaining Contractual Term (In Years) | | Aggregate Intrinsic Value | | ||||
Outstanding at December 31, 2012 | | | 4,630,000 | | $ | 8.17 | | | | | | | |
Grants | | | | | $ | | | | | | | | |
Exercised | | | | | $ | | | | | | | | |
Forfeited/cancelled/expired | | | | | $ | | | | | | | | |
Balance as of June 30, 2013 | | | 4,630,000 | | $ | 8.17 | | | 3.28 | | $ | 2,092,602 | |
Vested and expected to vest at June 30, 2013 | | | 4,621,000 | | $ | 8.19 | | | 3.27 | | $ | 2,078,928 | |
Unvested at June 30, 2013 | | | 75,000 | | $ | 0.83 | | | 8.93 | | $ | 112,197 | |
Exercisable at June 30, 2013 | | | 4,555,000 | | $ | 8.29 | | | 3.18 | | $ | 1,980,405 | |
| | Shares | | Average Fair Value at Grant Date | | ||
Unvested at December 31, 2012 | | | 82,000 | | $ | 1.11 | |
Grants | | | 110,000 | | $ | 2.28 | |
Vested | | | (25,000) | | $ | 1.04 | |
Forfeited/cancelled/expired | | | | | $ | | |
Unvested at June 30, 2013 | | | 167,000 | | $ | 1.89 | |
| | Three Months Ended June 30, | | ||||
| | 2013 | | 2012 | | ||
| | (Unaudited) | | ||||
| | (In thousands) | | ||||
Net Revenue: | | | | | | | |
Radio Broadcasting | | $ | 58,759 | | $ | 61,673 | |
Reach Media | | | 18,015 | | | 8,546 | |
Internet | | | 6,434 | | | 4,423 | |
Cable Television | | | 37,729 | | | 32,254 | |
Corporate/Eliminations/Other | | | (1,335) | | | (1,066) | |
Consolidated | | $ | 119,602 | | $ | 105,830 | |
| | | | | | | |
Operating Expenses (excluding depreciation, amortization and impairment charges and including stock-based compensation): | | | | | | | |
Radio Broadcasting | | $ | 32,881 | | $ | 35,008 | |
Reach Media | | | 16,099 | | | 8,945 | |
Internet | | | 5,927 | | | 4,898 | |
Cable Television | | | 23,464 | | | 20,592 | |
Corporate/Eliminations/Other | | | 3,555 | | | 4,865 | |
Consolidated | | $ | 81,926 | | $ | 74,308 | |
| | | | | | | |
Depreciation and Amortization: | | | | | | | |
Radio Broadcasting | | $ | 1,511 | | $ | 1,623 | |
Reach Media | | | 352 | | | 293 | |
Internet | | | 605 | | | 823 | |
Cable Television | | | 6,583 | | | 6,762 | |
Corporate/Eliminations/Other | | | 416 | | | 241 | |
Consolidated | | $ | 9,467 | | $ | 9,742 | |
| | | | | | | |
Impairment of Long-Lived Assets: | | | | | | | |
Radio Broadcasting | | $ | 9,800 | | $ | 313 | |
Reach Media | | | | | | | |
Internet | | | | | | | |
Cable Television | | | | | | | |
Corporate/Eliminations/Other | | | | | | | |
Consolidated | | $ | 9,800 | | $ | 313 | |
| | | | | | | |
Operating income (loss): | | | | | | | |
Radio Broadcasting | | $ | 14,567 | | $ | 24,729 | |
Reach Media | | | 1,564 | | | (692) | |
Internet | | | (98) | | | (1,298) | |
Cable Television | | | 7,682 | | | 4,900 | |
Corporate/Eliminations/Other | | | (5,306) | | | (6,172) | |
Consolidated | | $ | 18,409 | | $ | 21,467 | |
| | June 30, 2013 | | December 31, 2012 | | ||
| | (Unaudited) | | | | | |
| | (In thousands) | | ||||
Total Assets: | | | | | | | |
Radio Broadcasting | | $ | 783,312 | | $ | 801,340 | |
Reach Media | | | 34,172 | | | 29,492 | |
Internet | | | 32,150 | | | 32,076 | |
Cable Television | | | 519,189 | | | 535,344 | |
Corporate/Eliminations/Other | | | 59,986 | | | 61,943 | |
Consolidated | | $ | 1,428,809 | | $ | 1,460,195 | |
| | Six Months Ended June 30, | | ||||
| | 2013 | | 2012 | | ||
| | (Unaudited) | | ||||
| | (In thousands) | | ||||
Net Revenue: | | | | | | | |
Radio Broadcasting | | $ | 108,616 | | $ | 114,329 | |
Reach Media | | | 27,556 | | | 22,099 | |
Internet | | | 11,486 | | | 10,207 | |
Cable Television | | | 73,721 | | | 64,490 | |
Corporate/Eliminations/Other | | | (2,665) | | | (2,331) | |
Consolidated | | $ | 218,714 | | $ | 208,794 | |
| | | | | | | |
Operating Expenses (excluding depreciation, amortization and impairment charges and including stock-based compensation): | | | | | | | |
Radio Broadcasting | | $ | 64,501 | | $ | 70,225 | |
Reach Media | | | 26,446 | | | 23,308 | |
Internet | | | 11,480 | | | 10,362 | |
Cable Television | | | 44,230 | | | 40,910 | |
Corporate/Eliminations/Other | | | 7,942 | | | 8,980 | |
Consolidated | | $ | 154,599 | | $ | 153,785 | |
| | | | | | | |
Depreciation and Amortization: | | | | | | | |
Radio Broadcasting | | $ | 3,054 | | $ | 3,227 | |
Reach Media | | | 640 | | | 594 | |
Internet | | | 1,314 | | | 1,637 | |
Cable Television | | | 13,217 | | | 13,511 | |
Corporate/Eliminations/Other | | | 782 | | | 458 | |
Consolidated | | $ | 19,007 | | $ | 19,427 | |
| | | | | | | |
Impairment of Long-Lived Assets: | | | | | | | |
Radio Broadcasting | | $ | 11,170 | | $ | 313 | |
Reach Media | | | | | | | |
Internet | | | | | | | |
Cable Television | | | | | | | |
Corporate/Eliminations/Other | | | | | | | |
Consolidated | | $ | 11,170 | | $ | 313 | |
| | | | | | | |
Operating income (loss): | | | | | | | |
Radio Broadcasting | | $ | 29,891 | | $ | 40,564 | |
Reach Media | | | 470 | | | (1,803) | |
Internet | | | (1,308) | | | (1,792) | |
Cable Television | | | 16,274 | | | 10,069 | |
Corporate/Eliminations/Other | | | (11,389) | | | (11,769) | |
Consolidated | | $ | 33,938 | | $ | 35,269 | |
| | Wholly-Owned | | | | | | | | | | | | | | | |||
| | Guarantor | | Non Wholly-Owned | | Radio | | Non-Guarantor | | Consolidation | | | | | |||||
| | Subsidiaries | | Guarantor Subsidiaries | | One, Inc. | | Subsidiaries | | Adjustments | | Consolidated | | ||||||
| | (Unaudited) | | ||||||||||||||||
| | (In thousands) | | ||||||||||||||||
| | | | | | | | | | | | | | | | | | | |
NET REVENUE | | $ | 35,901 | | $ | 18,015 | | $ | 29,517 | | $ | 37,729 | | $ | (1,560) | | $ | 119,602 | |
OPERATING EXPENSES: | | | | | | | | | | | | | | | | | | | |
Programming and technical | | | 7,524 | | | 7,451 | | | 5,260 | | | 13,960 | | | (1,298) | | | 32,897 | |
Selling, general and administrative, including stock-based compensation | | | 15,186 | | | 7,573 | | | 10,837 | | | 7,683 | | | (262) | | | 41,017 | |
Corporate selling, general and administrative, including stock-based compensation | | | - | | | 1,075 | | | 5,116 | | | 1,821 | | | - | | | 8,012 | |
Depreciation and amortization | | | 1,406 | | | 352 | | | 1,126 | | | 173 | | | 6,410 | | | 9,467 | |
Impairment of long-lived assets | | | 1,200 | | | - | | | 8,600 | | | - | | | - | | | 9,800 | |
Total operating expenses | | | 25,316 | | | 16,451 | | | 30,939 | | | 23,637 | | | 4,850 | | | 101,193 | |
Operating income (loss) | | | 10,585 | | | 1,564 | | | (1,422) | | | 14,092 | | | (6,410) | | | 18,409 | |
INTEREST INCOME | | | - | | | - | | | 85 | | | 17 | | | - | | | 102 | |
INTEREST EXPENSE | | | 400 | | | - | | | 18,967 | | | 3,039 | | | - | | | 22,406 | |
EQUITY IN (LOSS) INCOME OF SUBSIDIARIES | | | (79) | | | - | | | 10,122 | | | - | | | (10,043) | | | - | |
OTHER INCOME, net | | | 1 | | | - | | | 29 | | | - | | | - | | | 30 | |
Income (loss) before provision for income taxes, noncontrolling interests in income of subsidiaries and discontinued operations | | | 10,107 | | | 1,564 | | | (10,153) | | | 11,070 | | | (16,453) | | | (3,865) | |
PROVISION FOR INCOME TAXES | | | - | | | 798 | | | 3,904 | | | - | | | - | | | 4,702 | |
Net income (loss) from continuing operations | | | 10,107 | | | 766 | | | (14,057) | | | 11,070 | | | (16,453) | | | (8,567) | |
INCOME FROM DISCONTINUED OPERATIONS, net of tax | | | 15 | | | - | | | - | | | - | | | - | | | 15 | |
CONSOLIDATED NET INCOME (LOSS) | | | 10,122 | | | 766 | | | (14,057) | | | 11,070 | | | (16,453) | | | (8,552) | |
NET INCOME ATTRIBUTABLE TO NONCONTROLLING INTERESTS | | | - | | | - | | | - | | | - | | | 5,662 | | | 5,662 | |
CONSOLIDATED NET INCOME (LOSS) ATTRIBUTABLE TO COMMON STOCKHOLDERS | | $ | 10,122 | | $ | 766 | | $ | (14,057) | | $ | 11,070 | | $ | (22,115) | | $ | (14,214) | |
| | Wholly-Owned | | | | | | | | | | | | | | | |||
| | Guarantor | | Non Wholly-Owned | | Radio | | Non-Guarantor | | Consolidation | | | | | |||||
| | Subsidiaries | | Guarantor Subsidiaries | | One, Inc. | | Subsidiaries | | Adjustments | | Consolidated | | ||||||
| | (Unaudited) | | ||||||||||||||||
| | (In thousands) | | ||||||||||||||||
| | | | | | | | | | | | | | | | | | | |
NET REVENUE | | $ | 33,387 | | $ | 8,546 | | $ | 33,458 | | $ | 32,254 | | $ | (1,815) | | $ | 105,830 | |
OPERATING EXPENSES: | | | | | | | | | | | | | | | | | | | |
Programming and technical | | | 7,470 | | | 6,004 | | | 7,590 | | | 12,879 | | | (1,027) | | | 32,916 | |
Selling, general and administrative, including stock-based compensation | | | 13,579 | | | 1,226 | | | 11,267 | | | 5,719 | | | (254) | | | 31,537 | |
Corporate selling, general and administrative, including stock-based compensation | | | - | | | 1,715 | | | 6,681 | | | 1,994 | | | (535) | | | 9,855 | |
Depreciation and amortization | | | 1,639 | | | 293 | | | 1,049 | | | 162 | | | 6,599 | | | 9,742 | |
Impairment of long-lived assets | | | 313 | | | - | | | - | | | - | | | - | | | 313 | |
Total operating expenses | | | 23,001 | | | 9,238 | | | 26,587 | | | 20,754 | | | 4,783 | | | 84,363 | |
Operating income (loss) | | | 10,386 | | | (692) | | | 6,871 | | | 11,500 | | | (6,598) | | | 21,467 | |
INTEREST INCOME | | | - | | | 2 | | | 15 | | | 8 | | | - | | | 25 | |
INTEREST EXPENSE | | | 250 | | | - | | | 19,639 | | | 3,039 | | | - | | | 22,928 | |
EQUITY IN (LOSS) INCOME OF SUBSIDIARIES | | | (2,572) | | | - | | | 7,591 | | | - | | | (5,019) | | | - | |
OTHER (INCOME) EXPENSE, net | | | (7) | | | - | | | 617 | | | - | | | - | | | 610 | |
Income (loss) before benefit from income taxes, noncontrolling interests in income of subsidiaries and discontinued operations | | | 7,571 | | | (690) | | | (5,779) | | | 8,469 | | | (11,617) | | | (2,046) | |
BENEFIT FROM INCOME TAXES | | | - | | | 133 | | | 48,358 | | | - | | | - | | | 48,491 | |
Net income (loss) from continuing operations | | | 7,571 | | | (557) | | | 42,579 | | | 8,469 | | | (11,617) | | | 46,445 | |
INCOME FROM DISCONTINUED OPERATIONS, net of tax | | | 20 | | | - | | | - | | | - | | | - | | | 20 | |
CONSOLIDATED NET INCOME (LOSS) | | | 7,591 | | | (557) | | | 42,579 | | | 8,469 | | | (11,617) | | | 46,465 | |
NET INCOME ATTRIBUTABLE TO NONCONTROLLING INTERESTS | | | - | | | - | | | - | | | - | | | 3,797 | | | 3,797 | |
CONSOLIDATED NET INCOME (LOSS) ATTRIBUTABLE TO COMMON STOCKHOLDERS | | $ | 7,591 | | $ | (557) | | $ | 42,579 | | $ | 8,469 | | $ | (15,414) | | $ | 42,668 | |
| | Wholly-Owned Guarantor Subsidiaries | | Non Wholly-Owned Guarantor Subsidiaries | | Radio One, Inc. | | Non-Guarantor Subsidiaries | | Consolidation Adjustments | | Consolidated | | ||||||
| | (Unaudited) | | ||||||||||||||||
| | (In thousands) | | ||||||||||||||||
| | | | | | | | | | | | | | | | | | | |
NET REVENUE | | $ | 66,378 | | $ | 27,556 | | $ | 54,162 | | $ | 73,721 | | $ | (3,103) | | $ | 218,714 | |
OPERATING EXPENSES: | | | | | | | | | | | | | | | | | | | |
Programming and technical | | | 15,075 | | | 14,915 | | | 10,548 | | | 25,333 | | | (2,501) | | | 63,370 | |
Selling, general and administrative, including stock-based compensation | | | 29,317 | | | 9,317 | | | 21,041 | | | 14,667 | | | (602) | | | 73,740 | |
Corporate selling, general and administrative, including stock-based compensation | | | - | | | 2,214 | | | 11,045 | | | 4,230 | | | - | | | 17,489 | |
Depreciation and amortization | | | 2,886 | | | 640 | | | 2,264 | | | 358 | | | 12,859 | | | 19,007 | |
Impairment of long-lived assets | | | 2,570 | | | - | | | 8,600 | | | - | | | - | | | 11,170 | |
Total operating expenses | | | 49,848 | | | 27,086 | | | 53,498 | | | 44,588 | | | 9,756 | | | 184,776 | |
Operating income (loss) | | | 16,530 | | | 470 | | | 664 | | | 29,133 | | | (12,859) | | | 33,938 | |
INTEREST INCOME | | | - | | | - | | | 115 | | | 27 | | | - | | | 142 | |
INTEREST EXPENSE | | | 763 | | | - | | | 37,811 | | | 6,078 | | | - | | | 44,652 | |
EQUITY IN (LOSS) INCOME OF SUBSIDIARIES | | | (1,010) | | | - | | | 15,685 | | | - | | | (14,675) | | | - | |
OTHER INCOME, net | | | 10 | | | - | | | 60 | | | - | | | - | | | 70 | |
Income (loss) before provision for income taxes, noncontrolling interests in income of subsidiaries and discontinued operations | | | 14,767 | | | 470 | | | (21,287) | | | 23,082 | | | (27,534) | | | (10,502) | |
PROVISION FOR INCOME TAXES | | | - | | | 472 | | | 10,911 | | | - | | | - | | | 11,383 | |
Net income (loss) from continuing operations | | | 14,767 | | | (2) | | | (32,198) | | | 23,082 | | | (27,534) | | | (21,885) | |
INCOME FROM DISCONTINUED OPERATIONS, net of tax | | | 918 | | | - | | | - | | | - | | | - | | | 918 | |
CONSOLIDATED NET INCOME (LOSS) | | | 15,685 | | | (2) | | | (32,198) | | | 23,082 | | | (27,534) | | | (20,967) | |
NET INCOME ATTRIBUTABLE TO NONCONTROLLING INTERESTS | | | - | | | - | | | - | | | - | | | 11,353 | | | 11,353 | |
CONSOLIDATED NET INCOME (LOSS) ATTRIBUTABLE TO COMMON STOCKHOLDERS | | $ | 15,685 | | $ | (2) | | $ | (32,198) | | $ | 23,082 | | $ | (38,887) | | $ | (32,320) | |
| | Wholly-Owned Guarantor Subsidiaries | | Non Wholly-Owned Guarantor Subsidiaries | | Radio One, Inc. | | Non-Guarantor Subsidiaries | | Consolidation Adjustments | | Consolidated | | ||||||
| | (Unaudited) | | ||||||||||||||||
| | (In thousands) | | ||||||||||||||||
| | | | | | | | | | | | | | | | | | | |
NET REVENUE | | $ | 62,544 | | $ | 22,099 | | $ | 63,470 | | $ | 64,490 | | $ | (3,809) | | $ | 208,794 | |
OPERATING EXPENSES: | | | | | | | | | | | | | | | | | | | |
Programming and technical | | | 15,295 | | | 11,981 | | | 14,777 | | | 24,101 | | | (2,126) | | | 64,028 | |
Selling, general and administrative, including stock-based compensation | | | 27,023 | | | 7,717 | | | 23,491 | | | 12,691 | | | (613) | | | 70,309 | |
Corporate selling, general and administrative, including stock-based compensation | | | - | | | 3,610 | | | 12,790 | | | 4,118 | | | (1,070) | | | 19,448 | |
Depreciation and amortization | | | 3,282 | | | 594 | | | 2,040 | | | 311 | | | 13,200 | | | 19,427 | |
Impairment of long-lived assets | | | 313 | | | - | | | - | | | - | | | - | | | 313 | |
Total operating expenses | | | 45,913 | | | 23,902 | | | 53,098 | | | 41,221 | | | 9,391 | | | 173,525 | |
Operating income (loss) | | | 16,631 | | | (1,803) | | | 10,372 | | | 23,269 | | | (13,200) | | | 35,269 | |
INTEREST INCOME | | | - | | | 4 | | | 29 | | | 14 | | | - | | | 47 | |
INTEREST EXPENSE | | | 499 | | | - | | | 40,098 | | | 6,078 | | | - | | | 46,675 | |
EQUITY IN (LOSS) INCOME OF SUBSIDIARIES | | | (5,044) | | | - | | | 11,093 | | | - | | | (6,049) | | | - | |
OTHER EXPENSE, NET | | | - | | | - | | | 602 | | | 1 | | | - | | | 603 | |
Income (loss) before (benefit from) provision for income taxes, noncontrolling interests in income of subsidiaries and discontinued operations | | | 11,088 | | | (1,799) | | | (19,206) | | | 17,204 | | | (19,249) | | | (11,962) | |
(BENEFIT FROM) PROVISION FOR INCOME TAXES | | | - | | | (624) | | | 17,387 | | | - | | | - | | | 16,763 | |
Net income (loss) from continuing operations | | | 11,088 | | | (1,175) | | | (36,593) | | | 17,204 | | | (19,249) | | | (28,725) | |
INCOME FROM DISCONTINUED OPERATIONS, net of tax | | | 5 | | | - | | | - | | | - | | | - | | | 5 | |
CONSOLIDATED NET INCOME (LOSS) | | | 11,093 | | | (1,175) | | | (36,593) | | | 17,204 | | | (19,249) | | | (28,720) | |
NET INCOME ATTRIBUTABLE TO NONCONTROLLING INTERESTS | | | - | | | - | | | - | | | - | | | 7,854 | | | 7,854 | |
CONSOLIDATED NET INCOME (LOSS) ATTRIBUTABLE TO COMMON STOCKHOLDERS | | $ | 11,093 | | $ | (1,175) | | $ | (36,593) | | $ | 17,204 | | $ | (27,103) | | $ | (36,574) | |
| | Wholly-Owned | | | | | | | | | | | | | | | | ||
| | Guarantor | | Non Wholly-Owned | | Radio | | Non-Guarantor | | Consolidation | | | | | |||||
| | Subsidiaries | | Subsidiaries Guarantor | | One, Inc. | | Subsidiaries | | Adjustments | | Consolidated | | ||||||
| | (Unaudited) | | ||||||||||||||||
| | (In thousands) | | ||||||||||||||||
CONSOLIDATED NET INCOME (LOSS) | | $ | 10,122 | | $ | 766 | | $ | (14,057) | | $ | 11,070 | | $ | (16,453) | | $ | (8,552) | |
NET CHANGE IN UNREALIZED LOSS ON INVESTMENT ACTIVITIES, NET OF TAX | | | - | | | - | | | - | | | (82) | | | - | | | (82) | |
COMPREHENSIVE INCOME (LOSS) | | | 10,122 | | | 766 | | | (14,057) | | | 10,988 | | | (16,453) | | | (8,634) | |
LESS: COMPREHENSIVE INCOME ATTRIBUTABLE TO NONCONTROLLING INTERESTS | | | - | | | - | | | - | | | - | | | 5,662 | | | 5,662 | |
COMPREHENSIVE INCOME (LOSS) ATTRIBUTABLE TO COMMON STOCKHOLDERS | | $ | 10,122 | | $ | 766 | | $ | (14,057) | | $ | 10,988 | | $ | (22,115) | | $ | (14,296) | |
| | Wholly-Owned | | Non Wholly-Owned | | | | | | | | | | | | | | ||
| | Guarantor | | Guarantor | | Radio | | Non-Guarantor | | Consolidation | | | | | |||||
| | Subsidiaries | | Subsidiaries | | One, Inc. | | Subsidiaries | | Adjustments | | Consolidated | | ||||||
| | (Unaudited) | | ||||||||||||||||
| | (In thousands) | | ||||||||||||||||
CONSOLIDATED NET INCOME (LOSS) | | $ | 7,591 | | $ | (557) | | $ | 42,579 | | $ | 8,469 | | $ | (11,617) | | $ | 46,465 | |
NET CHANGE IN UNREALIZED GAIN ON INVESTMENT ACTIVITIES, NET OF TAX | | | - | | | - | | | - | | | 23 | | | - | | | 23 | |
COMPREHENSIVE INCOME (LOSS) | | | 7,591 | | | (557) | | | 42,579 | | | 8,492 | | | (11,617) | | | 46,488 | |
LESS: COMPREHENSIVE INCOME ATTRIBUTABLE TO NONCONTROLLING INTERESTS | | | - | | | - | | | - | | | - | | | 3,797 | | | 3,797 | |
COMPREHENSIVE INCOME (LOSS) ATTRIBUTABLE TO COMMON STOCKHOLDERS | | $ | 7,591 | | $ | (557) | | $ | 42,579 | | $ | 8,492 | | $ | (15,414) | | $ | 42,691 | |
| | Wholly-Owned | | Non Wholly-Owned | | | | | | | | | | | | | |||
| | Guarantor | | Guarantor | | Radio | | Non-Guarantor | | Consolidation | | | | | |||||
| | Subsidiaries | | Subsidiaries | | One, Inc. | | Subsidiaries | | Adjustments | | Consolidated | | ||||||
| | (Unaudited) | | ||||||||||||||||
| | (In thousands) | | ||||||||||||||||
CONSOLIDATED NET INCOME (LOSS) | | $ | 15,685 | | $ | (2) | | $ | (32,198) | | $ | 23,082 | | $ | (27,534) | | $ | (20,967) | |
NET CHANGE IN UNREALIZED LOSS ON INVESTMENT ACTIVITIES, NET OF TAX | | | - | | | - | | | - | | | (102) | | | - | | | (102) | |
COMPREHENSIVE INCOME (LOSS) | | | 15,685 | | | (2) | | | (32,198) | | | 22,980 | | | (27,534) | | | (21,069) | |
LESS: COMPREHENSIVE INCOME ATTRIBUTABLE TO NONCONTROLLING INTERESTS | | | - | | | - | | | - | | | - | | | 11,353 | | | 11,353 | |
COMPREHENSIVE INCOME (LOSS) ATTRIBUTABLE TO COMMON STOCKHOLDERS | | $ | 15,685 | | $ | (2) | | $ | (32,198) | | $ | 22,980 | | $ | (38,887) | | $ | (32,422) | |
| | Wholly-Owned | | Non Wholly-Owned | | | | | | | | | | | | | |||
| | Guarantor | | Guarantor | | Radio | | Non-Guarantor | | Consolidation | | | | | |||||
| | Subsidiaries | | Subsidiaries | | One, Inc. | | Subsidiaries | | Adjustments | | Consolidated | | ||||||
| | (Unaudited) | | ||||||||||||||||
| | (In thousands) | | ||||||||||||||||
CONSOLIDATED NET INCOME (LOSS) | | $ | 11,093 | | $ | (1,175) | | $ | (36,593) | | $ | 17,204 | | $ | (19,249) | | $ | (28,720) | |
NET CHANGE IN UNREALIZED GAIN ON INVESTMENT ACTIVITIES, NET OF TAX | | | - | | | - | | | - | | | 120 | | | - | | | 120 | |
COMPREHENSIVE INCOME (LOSS) | | | 11,093 | | | (1,175) | | | (36,593) | | | 17,324 | | | (19,249) | | | (28,600) | |
LESS: COMPREHENSIVE INCOME ATTRIBUTABLE TO NONCONTROLLING INTERESTS | | | - | | | - | | | - | | | - | | | 7,854 | | | 7,854 | |
COMPREHENSIVE INCOME (LOSS) ATTRIBUTABLE TO COMMON STOCKHOLDERS | | $ | 11,093 | | $ | (1,175) | | $ | (36,593) | | $ | 17,324 | | $ | (27,103) | | $ | (36,454) | |
| | Wholly-Owned | | Non-Wholly Owned | | | | | | | | | | | | | |||
| | Guarantor | | Guarantor | | Radio One, | | Non-Guarantor | | Consolidation | | | | | |||||
| | Subsidiaries | | Subsidiaries | | Inc. | | Subsidiaries | | Adjustments | | Consolidated | | ||||||
| | (Unaudited) | | ||||||||||||||||
| | (In thousands) | | ||||||||||||||||
ASSETS | | ||||||||||||||||||
CURRENT ASSETS: | | | | | | | | | | | | | | | | | | | |
Cash and cash equivalents | | $ | 769 | | $ | 3,414 | | $ | 16,589 | | $ | 19,451 | | $ | - | | $ | 40,223 | |
Short-term investments | | | - | | | - | | | - | | | 3,193 | | | - | | | 3,193 | |
Trade accounts receivable, net of allowance for doubtful accounts | | | 30,953 | | | 13,470 | | | 16,628 | | | 34,122 | | | - | | | 95,173 | |
Prepaid expenses and other current assets | | | 1,574 | | | 1,082 | | | 2,218 | | | 644 | | | - | | | 5,518 | |
Current portion of content assets | | | - | | | - | | | - | | | 28,823 | | | - | | | 28,823 | |
Current assets from discontinued operations | | | 2 | | | - | | | 125 | | | - | | | - | | | 127 | |
Total current assets | | | 33,298 | | | 17,966 | | | 35,560 | | | 86,233 | | | - | | | 173,057 | |
PROPERTY AND EQUIPMENT, net | | | 15,722 | | | 418 | | | 18,156 | | | 1,654 | | | 21 | | | 35,971 | |
INTANGIBLE ASSETS, net | | | 459,075 | | | 15,785 | | | 310,314 | | | 17,523 | | | 367,851 | | | 1,170,548 | |
CONTENT ASSETS, net | | | - | | | - | | | - | | | 45,512 | | | - | | | 45,512 | |
INVESTMENT IN SUBSIDIARIES | | | 149,595 | | | - | | | 663,636 | | | - | | | (813,231) | | | - | |
OTHER ASSETS | | | 115 | | | 3 | | | 1,815 | | | 1,058 | | | (661) | | | 2,330 | |
NON-CURRENT ASSETS FROM DISCONTINUED OPERATIONS | | | 1,391 | | | - | | | - | | | - | | | - | | | 1,391 | |
Total assets | | $ | 659,196 | | $ | 34,172 | | $ | 1,029,481 | | $ | 151,980 | | $ | (446,020) | | $ | 1,428,809 | |
| | | | | | | | | | | | | | | | | | | |
LIABILITIES, REDEEMABLE NONCONTROLLING INTERESTS AND EQUITY | | ||||||||||||||||||
| | | | | | | | | | | | | | | | | | | |
CURRENT LIABILITIES: | | | | | | | | | | | | | | | | | | | |
Accounts payable | | $ | 2,211 | | $ | 968 | | $ | 775 | | $ | 4,376 | | $ | - | | $ | 8,330 | |
Accrued interest | | | - | | | - | | | 5,460 | | | 529 | | | - | | | 5,989 | |
Accrued compensation and related benefits | | | 1,658 | | | 1,074 | | | 4,335 | | | 2,390 | | | - | | | 9,457 | |
Current portion of content payables | | | - | | | - | | | - | | | 14,294 | | | - | | | 14,294 | |
Other current liabilities | | | 3,897 | | | 8,008 | | | (1,516) | | | 4,400 | | | - | | | 14,789 | |
Current portion of long-term debt | | | - | | | - | | | 3,840 | | | - | | | - | | | 3,840 | |
Current liabilities from discontinued operations | | | 163 | | | - | | | 26 | | | - | | | - | | | 189 | |
Total current liabilities | | | 7,929 | | | 10,050 | | | 12,920 | | | 25,989 | | | - | | | 56,888 | |
LONG-TERM DEBT, net of current portion and original issue discount | | | - | | | - | | | 693,948 | | | 119,000 | | | - | | | 812,948 | |
CONTENT PAYABLES, net of current portion | | | - | | | - | | | - | | | 10,402 | | | - | | | 10,402 | |
OTHER LONG-TERM LIABILITIES | | | 797 | | | 79 | | | 15,737 | | | 2,716 | | | (364) | | | 18,965 | |
DEFERRED TAX LIABILITIES | | | - | | | 804 | | | 198,446 | | | - | | | - | | | 199,250 | |
NON-CURRENT LIABILITIES FROM DISCONTINUED OPERATIONS | | | 13 | | | - | | | - | | | - | | | - | | | 13 | |
Total liabilities | | | 8,739 | | | 10,933 | | | 921,051 | | | 158,107 | | | (364) | | | 1,098,466 | |
| | | | | | | | | | | | | | | | | | | |
REDEEMABLE NONCONTROLLING INTERESTS | | | - | | | 11,865 | | | - | | | - | | | - | | | 11,865 | |
| | | | | | | | | | | | | | | | | | | |
STOCKHOLDERS’ EQUITY: | | | | | | | | | | | | | | | | | | | |
Preferred stock | | | - | | | - | | | - | | | 18 | | | (18) | | | - | |
Common stock | | | - | | | 10 | | | 48 | | | 18 | | | (28) | | | 48 | |
Accumulated other comprehensive income | | | - | | | - | | | (96) | | | (108) | | | - | | | (204) | |
Additional paid-in capital | | | 236,732 | | | 42,123 | | | 1,003,819 | | | (2,500) | | | (276,355) | | | 1,003,819 | |
Retained earnings (accumulated deficit) | | | 413,725 | | | (30,759) | | | (895,341) | | | (3,555) | | | (379,411) | | | (895,341) | |
Total stockholders’ equity | | | 650,457 | | | 11,374 | | | 108,430 | | | (6,127) | | | (655,812) | | | 108,322 | |
Noncontrolling interest | | | - | | | - | | | - | | | - | | | 210,156 | | | 210,156 | |
Total Equity | | | 650,457 | | | 11,374 | | | 108,430 | | | (6,127) | | | (445,656) | | | 318,478 | |
Total liabilities, redeemable noncontrolling interests and equity | | $ | 659,196 | | $ | 34,172 | | $ | 1,029,481 | | $ | 151,980 | | $ | (446,020) | | $ | 1,428,809 | |
| | Wholly-Owned | | Non-Wholly Owned | | | | | | | | | | | | | |||
| | Guarantor | | Guarantor | | Radio One, | | Non-Guarantor | | Consolidation | | | | | |||||
| | Subsidiaries | | Subsidiaries | | Inc. | | Subsidiaries | | Adjustments | | Consolidated | | ||||||
| | (In thousands) | | ||||||||||||||||
ASSETS | | ||||||||||||||||||
CURRENT ASSETS: | | | | | | | | | | | | | | | | | | | |
Cash and cash equivalents | | $ | 1,342 | | $ | 2,414 | | $ | 22,512 | | $ | 30,987 | | $ | - | | $ | 57,255 | |
Short-term investments | | | - | | | - | | | - | | | 1,597 | | | - | | | 1,597 | |
Trade accounts receivable, net of allowance for doubtful accounts | | | 27,468 | | | 6,788 | | | 18,494 | | | 29,162 | | | - | | | 81,912 | |
Prepaid expenses and other current assets | | | 834 | | | 3,593 | | | 1,707 | | | 976 | | | - | | | 7,110 | |
Current portion of content assets | | | - | | | - | | | - | | | 27,723 | | | - | | | 27,723 | |
Current assets from discontinued operations | | | 3 | | | - | | | 124 | | | - | | | - | | | 127 | |
Total current assets | | | 29,647 | | | 12,795 | | | 42,837 | | | 90,445 | | | - | | | 175,724 | |
PROPERTY AND EQUIPMENT, net | | | 14,867 | | | 469 | | | 18,035 | | | 1,807 | | | 104 | | | 35,282 | |
INTANGIBLE ASSETS, net | | | 462,399 | | | 16,225 | | | 320,682 | | | 22,501 | | | 380,755 | | | 1,202,562 | |
CONTENT ASSETS, net | | | - | | | - | | | - | | | 38,981 | | | - | | | 38,981 | |
INVESTMENT IN SUBSIDIARIES | | | 163,499 | | | - | | | 678,171 | | | - | | | (841,670) | | | - | |
OTHER ASSETS | | | 231 | | | 3 | | | 2,095 | | | 1,541 | | | (790) | | | 3,080 | |
NON-CURRENT ASSETS FROM DISCONTINUED OPERATIONS | | | 4,566 | | | - | | | - | | | - | | | - | | | 4,566 | |
Total assets | | $ | 675,209 | | $ | 29,492 | | $ | 1,061,820 | | $ | 155,275 | | $ | (461,601) | | $ | 1,460,195 | |
| | | | | | | | | | | | | | | | | | | |
LIABILITIES, REDEEMABLE NONCONTROLLING INTERESTS AND EQUITY | | ||||||||||||||||||
| | | | | | | | | | | | | | | | | | | |
CURRENT LIABILITIES: | | | | | | | | | | | | | | | | | | | |
Accounts payable | | $ | 1,825 | | $ | 314 | | $ | 1,222 | | $ | 2,049 | | $ | - | | $ | 5,410 | |
Accrued interest | | | - | | | - | | | 5,320 | | | 529 | | | - | | | 5,849 | |
Accrued compensation and related benefits | | | 1,760 | | | 925 | | | 6,708 | | | 1,772 | | | - | | | 11,165 | |
Current portion of content payables | | | - | | | - | | | - | | | 17,694 | | | - | | | 17,694 | |
Other current liabilities | | | 4,023 | | | 4,216 | | | 2,625 | | | 5,299 | | | - | | | 16,163 | |
Current portion of long-term debt | | | - | | | - | | | 4,587 | | | - | | | - | | | 4,587 | |
Current liabilities from discontinued operations | | | 94 | | | - | | | 13 | | | - | | | - | | | 107 | |
Total current liabilities | | | 7,702 | | | 5,455 | | | 20,475 | | | 27,343 | | | - | | | 60,975 | |
LONG-TERM DEBT, net of current portion and original issue discount | | | - | | | - | | | 695,131 | | | 119,000 | | | - | | | 814,131 | |
CONTENT PAYABLES, net of current portion | | | - | | | - | | | - | | | 11,163 | | | - | | | 11,163 | |
OTHER LONG-TERM LIABILITIES | | | 884 | | | 122 | | | 14,833 | | | 2,828 | | | (364) | | | 18,303 | |
DEFERRED TAX LIABILITIES | | | - | | | 674 | | | 187,575 | | | - | | | - | | | 188,249 | |
NON-CURRENT LIABILITIES FROM DISCONTINUED OPERATIONS | | | 23 | | | - | | | - | | | - | | | - | | | 23 | |
Total liabilities | | | 8,609 | | | 6,251 | | | 918,014 | | | 160,334 | | | (364) | | | 1,092,844 | |
| | | | | | | | | | | | | | | | | | | |
REDEEMABLE NONCONTROLLING INTERESTS | | | - | | | 12,853 | | | - | | | - | | | - | | | 12,853 | |
| | | | | | | | | | | | | | | | | | | |
STOCKHOLDERS’ EQUITY: | | | | | | | | | | | | | | | | | | | |
Preferred stock | | | - | | | - | | | - | | | 18 | | | (18) | | | - | |
Common stock | | | - | | | 10 | | | 50 | | | 18 | | | (28) | | | 50 | |
Accumulated other comprehensive income | | | - | | | - | | | (96) | | | (6) | | | - | | | (102) | |
Additional paid-in capital | | | 268,560 | | | 41,135 | | | 1,006,873 | | | 21,548 | | | (331,243) | | | 1,006,873 | |
Retained earnings (accumulated deficit) | | | 398,040 | | | (30,757) | | | (863,021) | | | (26,637) | | | (340,646) | | | (863,021) | |
Total stockholders’ equity | | | 666,600 | | | 10,388 | | | 143,806 | | | (5,059) | | | (671,935) | | | 143,800 | |
Noncontrolling interest | | | - | | | - | | | - | | | - | | | 210,698 | | | 210,698 | |
Total Equity | | | 666,600 | | | 10,388 | | | 143,806 | | | (5,059) | | | (461,237) | | | 354,498 | |
Total liabilities, redeemable noncontrolling interests and equity | | $ | 675,209 | | $ | 29,492 | | $ | 1,061,820 | | $ | 155,275 | | $ | (461,601) | | $ | 1,460,195 | |
| | Wholly-Owned | | Non Wholly-Owned | | | | | | | | | | | | | |||
| | Guarantor | | Guarantor | | Radio | | Non-Guarantor | | Consolidation | | | | | |||||
| | Subsidiaries | | Subsidiaries | | One, Inc. | | Subsidiaries | | Adjustments | | Consolidated | | ||||||
| | Unaudited | | ||||||||||||||||
| | (In thousands) | | ||||||||||||||||
NET CASH FLOWS (USED IN) PROVIDED BY OPERATING ACTIVITIES | | $ | (4,573) | | $ | 1,084 | | $ | 6,608 | | $ | 14,080 | | $ | (12,276) | | $ | 4,923 | |
CASH FLOWS FROM INVESTING ACTIVITIES: | | | | | | | | | | | | | | | | | | | |
Purchase of property and equipment | | | - | | | (84) | | | (5,583) | | | (191) | | | - | | | (5,858) | |
Proceeds from sales of investment securities | | | - | | | - | | | - | | | 753 | | | - | | | 753 | |
Purchases of investment securities | | | - | | | - | | | - | | | (2,130) | | | - | | | (2,130) | |
Proceeds from sale of discontinued operations | | | 4,000 | | | - | | | - | | | - | | | - | | | 4,000 | |
Net cash flows provided by (used in) investing activities | | | 4,000 | | | (84) | | | (5,583) | | | (1,568) | | | - | | | (3,235) | |
CASH FLOWS FROM FINANCING ACTIVITIES: | | | | | | | | | | | | | | | | | | | |
Repayment of credit facility | | | - | | | - | | | (1,921) | | | - | | | - | | | (1,921) | |
Repurchase of common stock | | | - | | | - | | | (4,257) | | | - | | | - | | | (4,257) | |
Repayment of senior subordinated notes | | | - | | | - | | | (747) | | | - | | | - | | | (747) | |
Debt refinancing and modification costs | | | - | | | - | | | (23) | | | - | | | - | | | (23) | |
Payment of dividends to noncontrolling interest members of TV One | | | - | | | - | | | - | | | (24,048) | | | 12,276 | | | (11,772) | |
Net cash flows (used in) provided by financing activities | | | - | | | - | | | (6,948) | | | (24,048) | | | 12,276 | | | (18,720) | |
(DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS | | | (573) | | | 1,000 | | | (5,923) | | | (11,536) | | | - | | | (17,032) | |
CASH AND CASH EQUIVALENTS, beginning of period | | | 1,342 | | | 2,414 | | | 22,512 | | | 30,987 | | | - | | | 57,255 | |
CASH AND CASH EQUIVALENTS, end of period | | $ | 769 | | $ | 3,414 | | $ | 16,589 | | $ | 19,451 | | $ | - | | $ | 40,223 | |
| | Wholly-Owned | | Non Wholly-Owned | | | | | | | | | | | | | | ||
| | Guarantor | | Guarantor | | Radio | | Non-Guarantor | | Consolidation | | | | | |||||
| | Subsidiaries | | Subsidiaries | | One, Inc. | | Subsidiaries | | Adjustments | | Consolidated | | ||||||
| | Unaudited | | ||||||||||||||||
| | (In thousands) | | ||||||||||||||||
NET CASH FLOWS PROVIDED BY (USED IN) OPERATING ACTIVITIES | | $ | 800 | | $ | 2,479 | | $ | 11,459 | | $ | 9,652 | | $ | (6,208) | | $ | 18,182 | |
CASH FLOWS FROM INVESTING ACTIVITIES: | | | | | | | | | | | | | | | | | | | |
Purchase of property and equipment | | | - | | | (89) | | | (5,716) | | | (907) | | | - | | | (6,712) | |
Proceeds from sales of investment securities | | | - | | | - | | | - | | | 5,567 | | | - | | | 5,567 | |
Purchases of investment securities | | | - | | | - | | | - | | | (530) | | | - | | | (530) | |
Net cash flows (used in) provided by investing activities | | | - | | | (89) | | | (5,716) | | | 4,130 | | | - | | | (1,675) | |
CASH FLOWS FROM FINANCING ACTIVITIES: | | | | | | | | | | | | | | | | | | | |
Repayment of credit facility | | | - | | | - | | | (3,889) | | | - | | | - | | | (3,889) | |
Debt refinancing and modification costs | | | - | | | - | | | (17) | | | - | | | - | | | (17) | |
Payment of dividends to noncontrolling interest members of TV One | | | - | | | - | | | - | | | (11,988) | | | 6,208 | | | (5,780) | |
Net cash flows used in financing activities | | | - | | | - | | | (3,906) | | | (11,988) | | | 6,208 | | | (9,686) | |
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | | | 800 | | | 2,390 | | | 1,837 | | | 1,794 | | | - | | | 6,821 | |
CASH AND CASH EQUIVALENTS, beginning of period | | | 33 | | | 1,683 | | | 19,361 | | | 14,862 | | | | | | 35,939 | |
CASH AND CASH EQUIVALENTS, end of period | | $ | 833 | | $ | 4,073 | | $ | 21,198 | | $ | 16,656 | | $ | - | | $ | 42,760 | |
| | Three Months Ended June 30, | | | Six Months Ended June 30, | | ||||||||||
| | 2013 | | | 2012 | | | 2013 | | | 2012 | | ||||
| | (In thousands, except margin data) | | |||||||||||||
| | | | | | | | | | | | | ||||
Net revenue | | $ | 119,602 | | | $ | 105,830 | | | $ | 218,714 | | | $ | 208,794 | |
Station operating income | | | 45,698 | | | | 41,392 | | | | 81,628 | | | | 74,489 | |
Station operating income margin | | | 38.2 | % | | | 39.1 | % | | | 37.3 | % | | | 35.7 | % |
Consolidated net (loss) income attributable to common stockholders | | $ | (14,214) | | | $ | 42,668 | | | $ | (32,320) | | | $ | (36,574) | |
| | Three Months Ended June 30, | | | Six Months Ended June 30, | | ||||||||||
| | 2013 | | | 2012 | | | 2013 | | | 2012 | | ||||
| | (In thousands) | | |||||||||||||
Consolidated net (loss) income attributable to common stockholders | | $ | (14,214) | | | $ | 42,668 | | | $ | (32,320) | | | $ | (36,574) | |
Add back non-station operating income items included in consolidated net (loss) income: | | | | | | | | | | | | | | | | |
Interest income | | | (102) | | | | (25) | | | | (142) | | | | (47) | |
Interest expense | | | 22,406 | | | | 22,928 | | | | 44,652 | | | | 46,675 | |
Provision for (benefit from) income taxes | | | 4,702 | | | | (48,491) | | | | 11,383 | | | | 16,763 | |
Corporate selling, general and administrative, excluding stock-based compensation | | | 7,975 | | | | 9,824 | | | | 17,423 | | | | 19,390 | |
Stock-based compensation | | | 47 | | | | 46 | | | | 90 | | | | 90 | |
Other (income) expense, net | | | (30) | | | | 610 | | | | (70) | | | | 603 | |
Depreciation and amortization | | | 9,467 | | | | 9,742 | | | | 19,007 | | | | 19,427 | |
Noncontrolling interests in income of subsidiaries | | | 5,662 | | | | 3,797 | | | | 11,353 | | | | 7,854 | |
Impairment of long-lived assets | | | 9,800 | | | | 313 | | | | 11,170 | | | | 313 | |
Income from discontinued operations, net of tax | | | (15) | | | | (20) | | | | (918) | | | | (5) | |
Station operating income | | $ | 45,698 | | | $ | 41,392 | | | $ | 81,628 | | | $ | 74,489 | |
| | Three Months Ended June 30, | | | Six Months Ended June 30, | | ||||||||||
| | 2013 | | | 2012 | | | 2013 | | | 2012 | | ||||
| | (In thousands) | | |||||||||||||
Adjusted EBITDA reconciliation: | | | | | | | | | | | | | | | | |
Consolidated net (loss) income attributable to common stockholders, as reported | | $ | (14,214) | | | $ | 42,668 | | | $ | (32,320) | | | $ | (36,574) | |
Add back non-station operating income items included in consolidated net loss: | | | | | | | | | | | | | | | | |
Interest income | | | (102) | | | | (25) | | | | (142) | | | | (47) | |
Interest expense | | | 22,406 | | | | 22,928 | | | | 44,652 | | | | 46,675 | |
Provision for (benefit from) income taxes | | | 4,702 | | | | (48,491) | | | | 11,383 | | | | 16,763 | |
Depreciation and amortization | | | 9,467 | | | | 9,742 | | | | 19,007 | | | | 19,427 | |
EBITDA | | $ | 22,259 | | | $ | 26,822 | | | $ | 42,580 | | | $ | 46,244 | |
Stock-based compensation | | | 47 | | | | 46 | | | | 90 | | | | 90 | |
Other (income) expense, net | | | (30) | | | | 610 | | | | (70) | | | | 603 | |
Noncontrolling interests in income of subsidiaries | | | 5,662 | | | | 3,797 | | | | 11,353 | | | | 7,854 | |
Impairment of long-lived assets | | | 9,800 | | | | 313 | | | | 11,170 | | | | 313 | |
Income from discontinued operations, net of tax | | | (15) | | | | (20) | | | | (918) | | | | (5) | |
Adjusted EBITDA | | $ | 37,723 | | | $ | 31,568 | | | $ | 64,205 | | | $ | 55,099 | |
| | Three Months Ended June 30, | | | | | ||||||||||
| | 2013 | | | 2012 | | | Increase/(Decrease) | | |||||||
| | (Unaudited) | | | | | | | | |||||||
| | | | | | | | | | | | | ||||
Statements of Operations: | | | | | | | | | | | | | | | | |
Net revenue | | $ | 119,602 | | | $ | 105,830 | | | $ | 13,772 | | | | 13.0 | % |
Operating expenses: | | | | | | | | | | | | | | | | |
Programming and technical, excluding stock-based compensation | | | 32,897 | | | | 32,916 | | | | (19) | | | | (0.1) | |
Selling, general and administrative, excluding stock-based compensation | | | 41,007 | | | | 31,522 | | | | 9,485 | | | | 30.1 | |
Corporate selling, general and administrative, excluding stock-based compensation | | | 7,975 | | | | 9,824 | | | | (1,849) | | | | (18.8) | |
Stock-based compensation | | | 47 | | | | 46 | | | | 1 | | | | 2.2 | |
Depreciation and amortization | | | 9,467 | | | | 9,742 | | | | (275) | | | | (2.8) | |
Impairment of long-lived assets | | | 9,800 | | | | 313 | | | | 9,487 | | | | 3,031.0 | |
Total operating expenses | | | 101,193 | | | | 84,363 | | | | 16,830 | | | | 19.9 | |
Operating income | | | 18,409 | | | | 21,467 | | | | (3,058) | | | | (14.2) | |
Interest income | | | 102 | | | | 25 | | | | 77 | | | | 308.0 | |
Interest expense | | | 22,406 | | | | 22,928 | | | | (522) | | | | (2.3) | |
Other (income) expense, net | | | (30) | | | | 610 | | | | 640 | | | | 104.9 | |
Loss before provision for (benefit from) income taxes, noncontrolling interests in income of subsidiaries and discontinued operations | | | (3,865) | | | | (2,046) | | | | (1,819) | | | | (88.9) | |
Provision for (benefit from) income taxes | | | 4,702 | | | | (48,491) | | | | (53,193) | | | | (109.7) | |
Net (loss) income from continuing operations | | | (8,567) | | | | 46,445 | | | | (55,012) | | | | (118.4) | |
Income from discontinued operations, net of tax | | | 15 | | | | 20 | | | | (5) | | | | (25.0) | |
Consolidated net (loss) income | | | (8,552) | | | | 46,465 | | | | (55,017) | | | | (118.4) | |
Net income attributable to noncontrolling interests | | | 5,662 | | | | 3,797 | | | | 1,865 | | | | 49.1 | |
Net (loss) income attributable to common stockholders | | $ | (14,214) | | | $ | 42,668 | | | $ | (56,882) | | | | (133.3) | % |
Three Months Ended June 30, | | | Increase/(Decrease) | | ||||||||||
2013 | | | 2012 | | | | | |||||||
$ | 119,602 | | | $ | 105,830 | | | $ | 13,772 | | | | 13.0 | % |
Three Months Ended June 30, | | | Increase/(Decrease) | | ||||||||||
2013 | | | 2012 | | | | | |||||||
$ | 32,897 | | | $ | 32,916 | | | $ | (19) | | | | (0.1) | % |
Three Months Ended June 30, | | | Increase/(Decrease) | | ||||||||||
2013 | | | 2012 | | | | | |||||||
$ | 41,007 | | | $ | 31,522 | | | $ | 9,485 | | | | 30.1 | % |
Three Months Ended June 30, | | | Increase/(Decrease) | | ||||||||||
2013 | | | 2012 | | | | | |||||||
$ | 7,975 | | | $ | 9,824 | | | $ | (1,849) | | | | (18.8) | % |
Three Months Ended June 30, | | | Increase/(Decrease) | | ||||||||||
2013 | | | 2012 | | | | | |||||||
$ | 9,467 | | | $ | 9,742 | | | $ | (275) | | | | (2.8) | % |
Three Months Ended June 30, | | | Increase/(Decrease) | | ||||||||||
2013 | | | 2012 | | | | | |||||||
$ | 9,800 | | | $ | 313 | | | $ | 9,487 | | | | 3,031.0 | % |
Three Months Ended June 30, | | | Increase/(Decrease) | | ||||||||||
2013 | | | 2012 | | | | | |||||||
$ | 22,406 | | | $ | 22,928 | | | $ | (522) | | | | (2.3) | % |
Three Months Ended June 30, | | | Increase/(Decrease) | | ||||||||||
2013 | | | 2012 | | | | | |||||||
$ | (30) | | | $ | 610 | | | $ | 640 | | | | 104.9 | % |
Three Months Ended June 30, | | | Increase/(Decrease) | | ||||||||||
2013 | | | 2012 | | | | | |||||||
$ | 4,702 | | | $ | (48,491) | | | $ | (53,193) | | | | (109.7) | % |
Three Months Ended June 30, | | | Increase/(Decrease) | | ||||||||||
2013 | | | 2012 | | | | | |||||||
$ | 15 | | | $ | 20 | | | $ | (5) | | | | (25.0) | % |
Three Months Ended June 30, | | | Increase/(Decrease) | | ||||||||||
2013 | | | 2012 | | | | | |||||||
$ | 5,662 | | | $ | 3,797 | | | $ | 1,865 | | | | 49.1 | % |
| | Six Months Ended June 30, | | | | | ||||||||||
| | 2013 | | | 2012 | | | Increase/(Decrease) | | |||||||
| | (Unaudited) | | | | | | | | |||||||
| | | | | | | | | | | | | ||||
Statements of Operations: | | | | | | | | | | | | | | | | |
Net revenue | | $ | 218,714 | | | $ | 208,794 | | | $ | 9,920 | | | | 4.8 | % |
Operating expenses: | | | | | | | | | | | | | | | | |
Programming and technical, excluding stock-based compensation | | | 63,370 | | | | 64,028 | | | | (658) | | | | (1.0) | |
Selling, general and administrative, excluding stock-based compensation | | | 73,716 | | | | 70,277 | | | | 3,439 | | | | 4.9 | |
Corporate selling, general and administrative, excluding stock-based compensation | | | 17,423 | | | | 19,390 | | | | (1,967) | | | | (10.1) | |
Stock-based compensation | | | 90 | | | | 90 | | | | | | | | 0.0 | |
Depreciation and amortization | | | 19,007 | | | | 19,427 | | | | (420) | | | | (2.2) | |
Impairment of long-lived assets | | | 11,170 | | | | 313 | | | | 10,857 | | | | 3,468.7 | |
Total operating expenses | | | 184,776 | | | | 173,525 | | | | 11,251 | | | | 6.5 | |
Operating income | | | 33,938 | | | | 35,269 | | | | (1,331) | | | | (3.8) | |
Interest income | | | 142 | | | | 47 | | | | 95 | | | | 202.1 | |
Interest expense | | | 44,652 | | | | 46,675 | | | | (2,023) | | | | (4.3) | |
Other (income) expense, net | | | (70) | | | | 603 | | | | 673 | | | | 111.6 | |
Loss (income) before provision for income taxes, noncontrolling interests in income of subsidiaries and discontinued operations | | | (10,502) | | | | (11,962) | | | | 1,460 | | | | 12.2 | |
Provision for income taxes | | | 11,383 | | | | 16,763 | | | | (5,380) | | | | (32.1) | |
Net (loss) income from continuing operations | | | (21,885) | | | | (28,725) | | | | 6,840 | | | | 23.8 | |
Income from discontinued operations, net of tax | | | 918 | | | | 5 | | | | 913 | | | | 18,260.0 | |
Consolidated net (loss) income | | | (20,967) | | | | (28,720) | | | | 7,753 | | | | 27.0 | |
Net income attributable to noncontrolling interests | | | 11,353 | | | | 7,854 | | | | 3,499 | | | | 44.6 | |
Net income (loss) attributable to common stockholders | | $ | (32,320) | | | $ | (36,574) | | | $ | 4,254 | | | | 11.6 | % |
Six Months Ended June 30, | Increase/(Decrease) | |||||||||||||
2013 | 2012 | |||||||||||||
$ | 218,714 | $ | 208,794 | $ | 9,920 | 4.8 | % |
Six Months Ended June 30, | Increase/(Decrease) | |||||||||||||
2013 | 2012 | |||||||||||||
$ | 63,370 | $ | 64,028 | $ | (658) | (1.0) | % |
Six Months Ended June 30, | Increase/(Decrease) | |||||||||||||
2013 | 2012 | |||||||||||||
$ | 73,716 | $ | 70,277 | $ | 3,439 | 4.9 | % |
Six Months Ended June 30, | Increase/(Decrease) | |||||||||||||
2013 | 2012 | |||||||||||||
$ | 17,423 | $ | 19,390 | $ | (1,967) | (10.1) | % |
Six Months Ended June 30, | Increase/(Decrease) | |||||||||||||
2013 | 2012 | |||||||||||||
$ | 19,007 | $ | 19,427 | $ | (420) | (2.2) | % |
Six Months Ended June 30, | Increase/(Decrease) | |||||||||||||
2013 | 2012 | |||||||||||||
$ | 11,170 | $ | 313 | $ | 10,857 | 3,468.7 | % |
Six Months Ended June 30, | Increase/(Decrease) | |||||||||||||
2013 | 2012 | |||||||||||||
$ | 44,652 | $ | 46,675 | $ | (2,023) | (4.3) | % |
Six Months Ended June 30, | Increase/(Decrease) | |||||||||||||
2013 | 2012 | |||||||||||||
$ | (70) | $ | 603 | $ | 673 | 111.6 | % |
Six Months Ended June 30, | Increase/(Decrease) | |||||||||||||
2013 | 2012 | |||||||||||||
$ | 11,383 | $ | 16,763 | $ | (5,380) | (32.1) | % |
Six Months Ended June 30, | Increase/(Decrease) | |||||||||||||
2013 | 2012 | |||||||||||||
$ | 918 | $ | 5 | $ | 913 | 18,260.0 | % |
Six Months Ended June 30, | Increase/(Decrease) | |||||||||||||
2013 | 2012 | |||||||||||||
$ | 11,353 | $ | 7,854 | $ | 3,499 | 44.6 | % |
(a) | maintaining an interest coverage ratio of no less than: |
§ | 1.10 to 1.00 on December 31, 2012, and the last day of each fiscal quarter through December 31, 2013; |
§ | 1.20 to 1.00 on March 31, 2014, and the last day of each fiscal quarter through September 30, 2014; |
§ | 1.25 to 1.00 on December 31, 2014, and the last day of each fiscal quarter through September 30, 2015; and |
§ | 1.50 to 1.00 on December 31, 2015, and the last day of each fiscal quarter thereafter. |
§ | 4.50 to 1.00 on September 30, 2012, and the last day of each fiscal quarter through December 31, 2013; |
§ | 4.25 to 1.00 on March 31, 2014, and the last day of each fiscal quarter through June 30, 2014; |
§ | 4.00 to 1.00 on September 30, 2014; |
§ | 3.75 to 1.00 on December 31, 2014; |
§ | 3.25 to 1.00 on March 31, 2015, and the last day of each fiscal quarter through September 30, 2015; and |
§ | 2.75 to 1.00 on December 31, 2015, and the last day of each fiscal quarter thereafter. |
§ | 8.50 to 1.00 on December 31, 2012, and the last day of each fiscal quarter through December 31, 2013; |
§ | 8.25 to 1.00 on March 31, 2014, and June 30, 2014; |
§ | 8.00 to 1.00 on September 30, 2014; |
§ | 7.50 to 1.00 on December 31, 2014; |
§ | 6.50 to 1.00 on March 31, 2015, and the last day of each fiscal quarter through September 30, 2015; and |
§ | 6.00 to 1.00 on December 31, 2015, and the last day of each fiscal quarter thereafter. |
§ | liens; |
§ | sale of assets; |
§ | payment of dividends; and |
§ | mergers. |
| | As of June 30, 2013 | | | Covenant Limit | | | Excess Coverage | | |||
| | | | | | | | | | |||
Pro Forma Last Twelve Months Covenant EBITDA (In millions) | | $ | 92.7 | | | | | | | | ||
| | | | | | | | | | | ||
Pro Forma Last Twelve Months Interest Expense (In millions) | | $ | 71.4 | | | | | | | | ||
| | | | | | | | | | | ||
Senior Debt (In millions) | | $ | 356.1 | | | | | | | | ||
Total Debt (In millions) | | $ | 683.1 | | | | | | | | ||
| | | | | | | | | | | ||
Interest Coverage | | | | | | | | | | | ||
Covenant EBITDA / Interest Expense | | | 1.30 | x | | 1.10 | x | | 0.20 | x | ||
| | | | | | | | | | | ||
Senior Secured Leverage | | | | | | | | | | | ||
Senior Secured Debt / Covenant EBITDA | | | 3.84 | x | | 4.50 | x | | 0.66 | x | ||
| | | | | | | | | | | ||
Total Leverage | | | | | | | | | | | ||
Total Debt / Covenant EBITDA | | | 7.37 | x | | | 8.50 | x | | | 1.13 | x |
| | | | | | | | | | | | |
EBITDA - Earnings before interest, taxes, depreciation and amortization |
The following table summarizes the interest rates in effect with respect to our debt as of June 30, 2013: |
Type of Debt | Amount Outstanding | Applicable Interest Rate | ||||||
(In millions) | ||||||||
Senior bank term debt, net of original issue discount (at variable rates)(1) | $ | 370.8 | 7.50 | % | ||||
121/2 %/15% Senior Subordinated Notes (fixed rate) | $ | 327.0 | 12.50 | % | ||||
10% Senior Secured TV One Notes due March 2016 (fixed rate) | $ | 119.0 | 10.00 | % |
(1) | Subject to variable Libor plus a spread that is incorporated into the applicable interest rate set forth above. |
2013 | 2012 | |||||||
(In thousands) | ||||||||
Net cash flows provided by operating activities | $ | 4,923 | $ | 18,182 | ||||
Net cash flows used in investing activities | $ | (3,235) | $ | (1,675) | ||||
Net cash flows used in by financing activities | $ | (18,720) | $ | (9,686) |
June 30, | October 1, | March 31, | June 30, | |||||||||||||
Radio Broadcasting Licenses | 2012 (a) | 2012 | 2013 (a) | 2013 (a) | ||||||||||||
Pre-tax impairment charge (in millions) | $ | 0.3 | $ | | $ | 1.4 | $ | 9.8 | ||||||||
Discount Rate | 10.0 | % | 10.0 | % | 10.0 | % | 10.5 | % | ||||||||
Year 1 Market Revenue Growth Rate Range | 1.0% -3.0 | % | 1.0% -2.0 | % | 1.0 | % | 2.0 | % | ||||||||
Long-term Market Revenue Growth Rate Range (Years 6 10) | 1.0% - 2.0 | % | 1.0% -2.0 | % | 1.5 | % | 1.5% -2.0 | % | ||||||||
Mature Market Share Range | 5.8% - 15.6 | % | 0.7% - 27.4 | % | 8.6 | % | 8.6% - 15.1 | % | ||||||||
Operating Profit Margin Range | 29.1% - 48.0 | % | 19.6% - 47.7 | % | 31.4 | % | 32.6% - 34.4 | % |
(a) | Reflects only key assumptions used in the interim testing for certain units of accounting. |
Payments Due by Period | ||||||||||||||||||||||||||||
Contractual Obligations | Remainder of 2013 | 2014 | 2015 | 2016 | 2017 | 2018 and Beyond | Total | |||||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||||||
121/2%/15% Senior Subordinated Notes(1) | $ | 30,659 | $ | 40,879 | $ | 40,879 | $ | 339,980 | $ | | $ | | $ | 452,397 | ||||||||||||||
Credit facilities(2) | 16,414 | 31,982 | 31,694 | 372,770 | | | 452,860 | |||||||||||||||||||||
Other operating contracts / agreements(3) | 35,677 | 47,937 | 19,726 | 5,665 | 727 | 426 | 110,158 | |||||||||||||||||||||
Operating lease obligations | 5,373 | 9,131 | 7,774 | 6,917 | 6,184 | 15,508 | 50,887 | |||||||||||||||||||||
Senior Secured Notes(4) | 8,925 | 11,900 | 11,900 | 121,777 | | | 154,502 | |||||||||||||||||||||
Total | $ | 97,048 | $ | 141,829 | $ | 111,973 | $ | 847,109 | $ | 6,911 | $ | 15,934 | $ | 1,220,804 |
(1) | Includes interest obligations based on current effective interest rate on senior subordinated notes outstanding as of June 30, 2013. |
(2) | Includes interest obligations based on current effective interest rate and projected interest expense on credit facilities outstanding as of June 30, 2013. |
(3) | Includes employment contracts, severance obligations, on-air talent contracts, consulting agreements, equipment rental agreements, programming related agreements, and other general operating agreements. Also includes contracts that TV One has entered into to acquire entertainment programming rights and programs from distributors and producers. These contracts relate to their content assets as well as prepaid programming related agreements. |
(4) | Represents $119.0 million issued by TV One in senior secured notes on February 25, 2011. The notes were issued in connection with the repurchase of equity interests from certain financial investors and TV One management. The notes bear interest at 10.0% per annum, which is payable monthly, and the entire principal amount is due on March 15, 2016. |
| ⋅ | The Company did not maintain internal controls with regard to preparation and review of the condensed consolidating financial statements of guarantors in the footnotes to its previously filed financial statements in its quarterly report on Form 10-Q for the quarter ended March 31, 2013 and in its annual report on Form 10-K for the year ended December 31, 2012. |
| ⋅ | Restructured the Finance and Accounting functions and engaged additional resources with the appropriate depth of experience for our Finance and Accounting departments |
| ⋅ | Updated accounting policies and procedures to ensure that accounting personnel have sufficient guidance to remediate the previously communicated weakness and to appropriately account for transactions |
| ⋅ | Implemented a required senior management, legal and accounting review to specifically address all new disclosures and related financial information |
Exhibit Number | Description | |
31.1 | Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | |
31.2 | Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | |
32.1 | Certification of Chief Executive Officer pursuant to 18 U.S.C. § 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | |
32.2 | Certification of Chief Financial Officer pursuant to 18 U.S.C. § 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | |
101 | Financial information from the Quarterly Report on Form 10-Q for the quarter ended June 30, 2013, formatted in XBRL. |
RADIO ONE, INC. | |
/s/ PETER D. THOMPSON | |
Peter D. Thompson | |
Executive Vice President and | |
Chief Financial Officer | |
(Principal Accounting Officer) |
| Page |
| |
Statements of Operations for the Three Months and Six Months Ended June 30, 2013 and 2012 (Unaudited) | F-3 |
Balance Sheets as of June 30, 2013 and December 31, 2012 (Unaudited) | F-4 |
Statement of Changes in Stockholders’ Equity for the Six Months Ended June 30, 2013 (Unaudited) | F-5 |
Statements of Cash Flows for the Six Months Ended June 30, 2013 and 2012 (Unaudited) | F-6 |
Notes to Consolidated Financial Statements (Unaudited) | F-7 |
Management’s Discussion and Analysis of Financial Condition and Results of Operations | F-11 |
| | Three Months Ended June 30, | | Six Months Ended June 30, | | ||||||||
| | 2013 | | 2012 | | 2013 | | 2012 | | ||||
| | (In thousands, except share data) | | ||||||||||
NET REVENUE (includes revenue from the Tom Joyner Fantastic Voyage See Note 4) | | $ | 18,015 | | $ | 8,546 | | $ | 27,556 | | $ | 22,099 | |
OPERATING EXPENSES: | | | | | | | | | | | | | |
Programming and technical | | | 7,451 | | | 6,004 | | | 14,915 | | | 11,981 | |
Selling, general and administrative (includes expenses from the Tom Joyner Fantastic Voyage See Note 4) | | | 7,573 | | | 1,226 | | | 9,317 | | | 7,717 | |
Corporate selling, general and administrative | | | 1,075 | | | 1,715 | | | 2,214 | | | 3,610 | |
Depreciation and amortization | | | 352 | | | 293 | | | 640 | | | 594 | |
Total operating expenses | | | 16,451 | | | 9,238 | | | 27,086 | | | 23,902 | |
Operating income (loss) | | | 1,564 | | | (692) | | | 470 | | | (1,803) | |
INTEREST INCOME | | | | | | 2 | | | | | | 4 | |
Income (loss) before provision for (benefit from) income taxes, | | | 1,564 | | | (690) | | | 470 | | | (1,799) | |
PROVISION FOR (BENEFIT FROM) INCOME TAXES | | | 798 | | | (133) | | | 472 | | | (624) | |
NET INCOME (LOSS) | | $ | 766 | | $ | (557) | | $ | (2) | | $ | (1,175) | |
| | | | | | | | | | | | | |
BASIC NET INCOME (LOSS) ATTRIBUTABLE TO COMMON STOCKHOLDERS | | | | | | | | | | | | | |
Net income (loss) attributable to common stockholders | | $ | 0.01 | | $ | (0.01) | | $ | (0.00) | | $ | (0.01) | |
| | | | | | | | | | | | | |
WEIGHTED AVERAGE SHARES OUTSTANDING: | | | | | | | | | | | | | |
Basic | | | 101,882,000 | | | 101,882,000 | | | 101,882,000 | | | 101,882,000 | |
| | As of | | ||||
| | June 30, 2013 | | December 31, 2012 | | ||
| | (In thousands, except share data) | | ||||
ASSETS | | | | | | | |
CURRENT ASSETS: | | | | | | | |
Cash and cash equivalents | | $ | 3,414 | | $ | 2,414 | |
Trade accounts receivable, net of allowance for doubtful accounts of $195 and $108, respectively | | | 13,470 | | | 6,788 | |
Prepaid expenses and other current assets | | | 1,082 | | | 3,593 | |
Total current assets | | | 17,966 | | | 12,795 | |
PROPERTY AND EQUIPMENT, net | | | 418 | | | 469 | |
GOODWILL | | | 14,354 | | | 14,354 | |
OTHER INTANGIBLE ASSETS, net | | | 1,431 | | | 1,871 | |
OTHER ASSETS | | | 3 | | | 3 | |
Total assets | | $ | 34,172 | | $ | 29,492 | |
LIABILITIES, REDEEMABLE NONCONTROLLING INTEREST AND STOCKHOLDERS’ EQUITY | | | | | | | |
CURRENT LIABILITIES: | | | | | | | |
Accounts payable | | $ | 968 | | $ | 314 | |
Accrued compensation and related benefits | | | 1,074 | | | 925 | |
Due to related parties | | | 5,921 | | | 1,279 | |
Deferred income | | | 1,963 | | | 2,864 | |
Other current liabilities | | | 124 | | | 73 | |
Total current liabilities | | | 10,050 | | | 5,455 | |
OTHER LONG-TERM LIABILITIES | | | 79 | | | 122 | |
DEFERRED TAX LIABILITIES | | | 804 | | | 674 | |
Total liabilities | | | 10,933 | | | 6,251 | |
| | | | | | | |
REDEEMABLE NONCONTROLLING INTEREST | | | 11,865 | | | 12,853 | |
| | | | | | | |
STOCKHOLDERS’ EQUITY: | | | | | | | |
Common stock $.0001 par value, 25,000,000, shares authorized; 1,018,820 shares issued and outstanding as of June 30, 2013 and December 31, 2012, respectively | | | | | | | |
Non-voting common stock $.0001 par value, 116,000,000 shares authorized; 100,863,180 shares issued and outstanding as of June 30, 2013 and December 31, 2012, respectively | | | 10 | | | 10 | |
Additional paid-in capital | | | 42,123 | | | 41,135 | |
Accumulated deficit | | | (30,759) | | | (30,757) | |
Total stockholders’ equity | | | 11,374 | | | 10,388 | |
Total liabilities, redeemable noncontrolling interest and stockholders’ equity | | $ | 34,172 | | $ | 29,492 | |
| | Common Stock | | Non- Voting Common Stock | | Additional Paid-In Capital | | Accumulated Deficit | | Total Equity | | |||||
BALANCE, as of December 31, 2012 | | $ | | | $ | 10 | | $ | 41,135 | | $ | (30,757) | | $ | 10,388 | |
Net loss | | | | | | | | | | | | (2) | | | (2) | |
Adjustment of redeemable noncontrolling interest to estimated redemption value | | | | | | | | | 988 | | | | | | 988 | |
BALANCE, as of June 30, 2013 | | $ | | | $ | 10 | | $ | 42,123 | | $ | (30,759) | | $ | 11,374 | |
| | Six Months Ended June 30, | | ||||
| | 2013 | | 2012 | | ||
| | (In thousands) | | ||||
CASH FLOWS FROM OPERATING ACTIVITIES: | | | | | | | |
Net loss | | $ | (2) | | $ | (1,175) | |
Adjustments to reconcile net loss to net cash from operating activities: | | | | | | | |
Depreciation and amortization | | | 640 | | | 594 | |
Effect of change in operating assets and liabilities, net of assets acquired: | | | | | | | |
Trade accounts receivable | | | (6,682) | | | 240 | |
Prepaid expenses and other assets | | | 2,511 | | | 1,878 | |
Other assets | | | | | | 3 | |
Accounts payable | | | 654 | | | 179 | |
Due to/from related parties | | | 4,707 | | | (150) | |
Accrued compensation and related benefits | | | 149 | | | 503 | |
Other liabilities | | | (893) | | | 407 | |
Net cash flows provided by operating activities | | | 1,084 | | | 2,479 | |
CASH FLOWS FROM INVESTING ACTIVITIES: | | | | | | | |
Purchases of property and equipment | | | (84) | | | (89) | |
Net cash flows used in investing activities | | | (84) | | | (89) | |
CASH FLOWS FROM FINANCING ACTIVITIES: | | | | | | | |
| | | | | | | |
Net cash flows used in financing activities | | | | | | | |
INCREASE IN CASH AND CASH EQUIVALENTS | | | 1,000 | | | 2,390 | |
CASH AND CASH EQUIVALENTS, beginning of period | | | 2,414 | | | 1,683 | |
CASH AND CASH EQUIVALENTS, end of period | | $ | 3,414 | | $ | 4,073 | |
| | | | | | | |
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: | | | | | | | |
Cash paid for: | | | | | | | |
Income taxes | | $ | | | $ | 58 | |
| (a) | Organization |
| (b) | Interim Financial Statements |
| (c) | Revenue Recognition |
| (d) | Impact of Recently Issued Accounting Pronouncements |
| (e) | Fair Value Measurements |
| | Total | | Level 1 | | Level 2 | | Level 3 | | ||||
| | (Unaudited) | | ||||||||||
| | (In thousands) | | ||||||||||
As of June 30, 2013 | | | | | | | | | | | | | |
Mezzanine equity subject to fair value measurement: | | | | | | | | | | | | | |
Redeemable noncontrolling interests (a) | | $ | 11,865 | | $ | | | $ | | | $ | 11,865 | |
| | | | | | | | | | | | | |
As of December 31, 2012 | | | | | | | | | | | | | |
Mezzanine equity subject to fair value measurement: | | | | | | | | | | | | | |
Redeemable noncontrolling interests (a) | | $ | 12,853 | | $ | | | $ | | | $ | 12,853 | |
| | Redeemable Noncontrolling Interests | | |
| | | | |
Balance at December 31, 2012 | | $ | 12,853 | |
Change in enterprise fair value | | | (988) | |
Balance at June 30, 2013 | | $ | 11,865 | |
| | | | |
The amount of total losses for the period included in earnings attributable to the change in unrealized losses relating to assets and liabilities still held at the reporting date | | $ | | |
| | | | | | As of June 30, 2013 | | | As of December 31, 2012 | | | As of June 30, 2012 | | |||
Level 3 liabilities | | Valuation Technique | | Significant Unobservable Inputs | | Significant Unobservable Input Value | | |||||||||
Redeemable noncontrolling interest | | Discounted Cash Flow | | Discount Rate | | | 13.5 | % | | | 11.5 | % | | | 12.5 | % |
Redeemable noncontrolling interest | | Discounted Cash Flow | | Long-term Growth Rate | | | 1.5 | % | | | 2.0 | % | | | 2.5 | % |
| | Three Months Ended June 30, | | Six Months Ended June 30, | | ||||||||
| | 2013 | | 2012 | | 2013 | | 2012 | | ||||
| | (In thousands, except margin data) | | ||||||||||
| | | | | | | | | | | | | |
Net revenue | | $ | 18,015 | | $ | 8,546 | | $ | 27,556 | | $ | 22,099 | |
Station operating income | | | 2,991 | | | 1,316 | | | 3,324 | | | 2,401 | |
Station operating income margin | | | 16.6 | % | | 15.4 | % | | 12.1 | % | | 10.9 | % |
Net income (loss) | | $ | 766 | | $ | (557) | | $ | (2) | | $ | (1,175) | |
| | Three Months Ended June 30, | | Six Months Ended June 30, | | ||||||||
| | 2013 | | 2012 | | 2013 | | 2012 | | ||||
| | (In thousands) | | ||||||||||
Net income (loss) | | $ | 766 | | $ | (557) | | $ | (2) | | $ | (1,175) | |
Add back non-station operating income items included in net income (loss): | | | | | | | | | | | | | |
Interest income | | | | | | (2) | | | | | | (4) | |
Provision for (benefit from) income taxes | | | 798 | | | (133) | | | 472 | | | (624) | |
Corporate selling, general and administrative, excluding stock-based compensation | | | 1,075 | | | 1,715 | | | 2,214 | | | 3,610 | |
Depreciation and amortization | | | 352 | | | 293 | | | 640 | | | 594 | |
Station operating income | | $ | 2,991 | | $ | 1,316 | | $ | 3,324 | | $ | 2,401 | |
| | Three Months Ended June 30, | | Six Months Ended June 30, | | ||||||||
| | 2013 | | 2012 | | 2013 | | 2012 | | ||||
| | (In thousands) | | ||||||||||
EBITDA reconciliation: | | | | | | | | | | | | | |
Net income (loss) | | $ | 766 | | $ | (557) | | $ | (2) | | $ | (1,175) | |
Add back non-station operating income items included in net income (loss): | | | | | | | | | | | | | |
Interest income | | | | | | (2) | | | | | | (4) | |
Provision for (benefit from) income taxes | | | 798 | | | (133) | | | 472 | | | (624) | |
Depreciation and amortization | | | 352 | | | 293 | | | 640 | | | 594 | |
EBITDA | | $ | 1,916 | | $ | (399) | | $ | 1,110 | | $ | (1,209) | |
| | Three Months Ended June 30, | | | | | | | ||||
| | 2013 | | 2012 | | Increase/(Decrease) | | |||||
| | (Unaudited) | | | | | | | ||||
| | | | | | | | | | | | |
Statements of Operations: | | | | | | | | | | | | |
Net revenue | | $ | 18,015 | | $ | 8,546 | | $ | 9,469 | | 110.8 | % |
Operating expenses: | | | | | | | | | | | | |
Programming and technical | | | 7,451 | | | 6,004 | | | 1,447 | | 24.1 | |
Selling, general and administrative | | | 7,573 | | | 1,226 | | | 6,347 | | 517.7 | |
Corporate selling, general and administrative | | | 1,075 | | | 1,715 | | | (640) | | (37.3) | |
Depreciation and amortization | | | 352 | | | 293 | | | 59 | | 20.1 | |
Total operating expenses | | | 16,451 | | | 9,238 | | | 7,213 | | 78.1 | |
Operating income (loss) | | | 1,564 | | | (692) | | | 2,256 | | 326.0 | |
Interest income | | | | | | 2 | | | (2) | | (100.0) | |
Income (loss) before provision for (benefit from) income taxes | | | 1,564 | | | (690) | | | 2,254 | | 326.7 | |
Provision for (benefit from) income taxes | | | 798 | | | (133) | | | 931 | | 700.0 | |
Net income (loss) | | $ | 766 | | $ | (557) | | $ | 1,323 | | 237.5 | % |
Three Months Ended June 30, | | Increase/(Decrease) | | |||||||
2013 | | 2012 | | | | | | |||
$ | 18,015 | | $ | 8,546 | | $ | 9,469 | | 110.8 | % |
| Programming and technical |
Three Months Ended June 30, | | Increase/(Decrease) | | |||||||
2013 | | 2012 | | | | | | |||
$ | 7,451 | | $ | 6,004 | | $ | 1,447 | | 24.1 | % |
Three Months Ended June 30, | | Increase/(Decrease) | | |||||||
2013 | | 2012 | | | | | | | ||
$ | 7,573 | | $ | 1,226 | | $ | 6,347 | | 517.7 | % |
Three Months Ended June 30, | | | Increase/(Decrease) | | ||||||
2013 | | 2012 | | | | | | |||
$ | 1,075 | | $ | 1,715 | | $ | (640) | | (37.3) | % |
Three Months Ended June 30, | | Increase/(Decrease) | | |||||||
2013 | | 2012 | | | | | | | ||
$ | 352 | | $ | 293 | | $ | 59 | | 20.1 | % |
Three Months Ended June 30, | | Increase/(Decrease) | | |||||||
2013 | | 2012 | | | | | | | ||
$ | 798 | | $ | (133) | | $ | 931 | | 700.0 | % |
| | Six Months Ended June 30, | | | | | | | ||||
| | 2013 | | 2012 | | Increase/(Decrease) | ||||||
| | (Unaudited) | | | | | | | ||||
| | | | | | | | | | | | |
Statements of Operations: | | | | | | | | | | | | |
Net revenue | | $ | 27,556 | | $ | 22,099 | | $ | 5,457 | | 24.7 | % |
Operating expenses: | | | | | | | | | | | | |
Programming and technical | | | 14,915 | | | 11,981 | | | 2,934 | | 24.5 | |
Selling, general and administrative | | | 9,317 | | | 7,717 | | | 1,600 | | 20.7 | |
Corporate selling, general and administrative | | | 2,214 | | | 3,610 | | | (1,396) | | (38.7) | |
Depreciation and amortization | | | 640 | | | 594 | | | 46 | | 7.7 | |
Total operating expenses | | | 27,086 | | | 23,902 | | | 3,184 | | 13.3 | |
Operating income (loss) | | | 470 | | | (1,803) | | | 2,273 | | 126.1 | |
Interest income | | | | | | (4) | | | (4) | | (100.0) | |
Income (loss) before provision for income taxes | | | 470 | | | (1,799) | | | 2,269 | | 126.1 | |
Provision for (benefit from) income taxes | | | 472 | | | (624) | | | 1,096 | | 175.6 | |
Net loss | | $ | (2) | | $ | (1,175) | | $ | 1,173 | | 99.8 | % |
Six Months Ended June 30, | | Increase/(Decrease) | | ||||||||
2013 | | 2012 | | | | | | | | ||
$ | 27,556 | | $ | 22,099 | | $ | 5,457 | | | 24.7 | % |
Six Months Ended June 30, | | Increase/(Decrease) | | ||||||||
2013 | | 2012 | | | | | | | | ||
$ | 14,915 | | $ | 11,981 | | $ | 2,934 | | | 24.5 | % |
Six Months Ended June 30, | | Increase/(Decrease) | | ||||||||
2013 | | 2012 | | | | | | | | ||
$ | 9,317 | | $ | 7,717 | | $ | 1,600 | | | 20.7 | % |
Six Months Ended June 30, | | Increase/(Decrease) | | ||||||||
2013 | | 2012 | | | | | | | | ||
$ | 2,214 | | $ | 3,610 | | $ | (1,396) | | | (38.7) | % |
Six Months Ended June 30, | | Increase/(Decrease) | | ||||||||
2013 | | 2012 | | | | | | | | ||
$ | 640 | | $ | 594 | | $ | 46 | | | 7.7 | % |
Six Months Ended June 30, | | Increase/(Decrease) | | ||||||||
2013 | | 2012 | | | | | | | | ||
$ | 472 | | $ | (624) | | $ | 1,096 | | | 175.6 | % |
| | 2013 | | 2012 | | ||
| | (In thousands) | | ||||
| | | | | | | |
Net cash flows provided by operating activities | | $ | 1,084 | | $ | 2,479 | |
Net cash flows used in investing activities | | $ | (84) | | $ | (89) | |
Net cash flows used in by financing activities | | $ | | | $ | | |
| | Payments Due by Period | | |||||||||||||||||||
Contractual Obligations | | Remainder of 2013 | | 2014 | | 2015 | | 2016 | | 2017 | | 2018 and Beyond | | Total | | |||||||
| | (In thousands) | | |||||||||||||||||||
Other operating contracts / agreements(1) | | $ | 13,889 | | $ | 18,683 | | $ | 400 | | $ | 67 | | $ | | | $ | | | $ | 33,039 | |
Operating lease obligations | | | 697 | | | 1,354 | | | 474 | | | 68 | | | 70 | | | 81 | | | 2,744 | |
Total | | $ | 14,586 | | $ | 20,037 | | $ | 874 | | $ | 135 | | $ | 70 | | $ | 81 | | $ | 35,783 | |
(1) | Includes employment contracts, on-air talent contracts and other general operating agreements. |
| 1. | | I have reviewed this quarterly report on Form 10-Q of Radio One, Inc.; |
| | | |
| 2. | | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
| | | |
| 3. | | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
| | | |
| 4. | | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f) for the registrant and have: |
| a) | designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
| | |
| b) | designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
| | |
| c) | evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
| | |
| d) | disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s second fiscal quarter in the case of this report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
| 5. | | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
| a) | all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
| | |
| b) | any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
| | By: | /s/ Alfred C. Liggins, III |
| | | Alfred C. Liggins, III |
| | | President and Chief Executive Officer |
| Date: August 19, 2013 | | |
| 1. | | I have reviewed this quarterly report on Form 10-Q of Radio One, Inc.; |
| | | |
| 2. | | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
| | | |
| 3. | | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
| | | |
| 4. | | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(i) for the registrant and have: |
| a) | designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
| | |
| b) | designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
| | |
| c) | evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
| | |
| d) | disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s second fiscal quarter in the case of this report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
| 5. | | The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
| a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
| | |
| b) | any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
| | By: | /s/ Peter D. Thompson |
| | | Peter D. Thompson |
| | | Executive Vice President, |
| | | Chief Financial Officer and Principal Accounting Officer |
| Date: August 19, 2013 | | |
(i) | | the accompanying Quarterly Report on Form 10-Q of the Company for the quarter ended June 30, 2013 (the “Report”) fully complies with the requirements of Section 13(a) or Section 15(d), as applicable, of the Securities Exchange Act of 1934, as amended; and |
| | |
(ii) | | the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
| | By: | /s/ Alfred C. Liggins, III |
| | | Name: Alfred C. Liggins, III |
| | | Title: President and Chief Executive Officer |
| Date: August 19, 2013 | | |
(i) | | The accompanying Quarterly Report on Form 10-Q of the Company for the quarter ended June 30, 2013 (the “Report”) fully complies with the requirements of Section 13(a) or Section 15(d), as applicable, of the Securities Exchange Act of 1934, as amended; and |
| | |
(ii) | | the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
| | By: | /s/ Peter D. Thompson |
| | | Name: Peter D. Thompson |
| | | Title: Executive Vice President and Chief Financial Officer |
| Date: August 19, 2013 | | |