e8vk
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT PURSUANT TO SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report: February 21, 2008 (Date of earliest event reported)
Commission File No.: 0-25969
RADIO ONE, INC.
(Exact name of registrant as specified in its charter)
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Delaware
(State or other jurisdiction of
incorporation or organization)
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52-1166660
(I.R.S. Employer Identification No.) |
5900 Princess Garden Parkway,
7th Floor
Lanham, Maryland 20706
(Address of principal executive offices)
(301) 306-1111
Registrants telephone number, including area code
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the
filing obligation of the registrant under any of the following provisions:
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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ITEM 2.02. |
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Results of Operations and Financial Condition. |
On February 21, 2008, Radio One, Inc. issued a press release setting forth the results for its
fourth quarter ended December 31, 2007. A copy of the press release is attached as Exhibit 99.1.
The information furnished shall not be deemed filed for purposes of Section 18 of the
Securities Exchange Act of 1934, or incorporated by reference into any filing thereunder or under
the Securities Act of 1933 unless expressly set forth by specific reference in such filing.
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ITEM 9.01. |
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Financial Statements and Exhibits. |
(c) Exhibits
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Exhibit Number |
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Description |
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99.1 |
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Press release dated February 21, 2008: Radio One, Inc.
Reports Fourth Quarter Results |
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused
this report to be signed on its behalf by the undersigned thereunto duly authorized.
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RADIO ONE, INC.
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/s/ Peter D. Thompson
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February 21, 2008 |
Peter D. Thompson |
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Chief Financial Officer and Principal Accounting Officer |
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exv99w1
Exhibit 99.1
NEWS RELEASE
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February 21, 2008
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Contact: Peter D. Thompson, EVP and CFO |
FOR IMMEDIATE RELEASE
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(301) 429-4638 |
Washington, DC |
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RADIO ONE, INC. REPORTS
FOURTH QUARTER RESULTS
Washington, DC: Radio One, Inc. (NASDAQ: ROIAK and ROIA) today reported its results for
the quarter ended December 31, 2007. Net revenue was approximately $78.1 million, a decrease of 5%
from the same period in 2006. Station operating income1 was approximately $27.8
million, a decrease of 26% from the same period in 2006. Operating loss, including approximately
$404.1 million in non-cash impairment charges for intangible assets, was approximately $387.6
million, a significant increase from the loss in the same period in 2006. Pro forma for the
exclusion of non-cash impairment charges, operating income was approximately $16.5 million, a
decrease of 41% from the same period in 2006. Net loss was approximately $386.4 million or $3.91
per basic share, an increase from the reported net loss of approximately $25.5 million in the same
period in 2006.
Alfred C. Liggins, III, Radio Ones CEO and President stated, As predicted, the industry
experienced a soft fourth quarter, with the markets in which we operate down 5% year to year. Of
our same 5% net revenue decline, 300 basis points are attributable to unfavorable political comps.
Los Angeles accounted for only another 27 basis points of the decline, although the advertising
push in Q4 appears to be impacting Q1 beneficially, with low single-digit revenue growth and
positive EBITDA forecast for Q1. The market continues to be challenging, particularly at the
national level; however, we are seeing some good local revenue numbers and are optimistic that
there may be a halt to the overall revenue decline in Q1. Reach Media continues to perform well,
as does TV One, which remains significantly ahead of their original plan. Our Q4 internet revenues
grew by 32% year to year and our Interactive One team recently re-launched the Giant magazine
website, and will release beta versions of our content verticals in Q1. I remain excited about our
diversification strategy and the non-radio assets that we are assembling. At the same time, our
management team is highly focused on improving radio cash-flows, which remain core to our business
and which provide the platform for our future growth.
-MORE-
PAGE 2 RADIO ONE, INC. REPORTS FOURTH QUARTER RESULTS
RESULTS OF OPERATIONS
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Three Months Ended December 31, |
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Twelve Months Ended December 31, |
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2007 |
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2006 |
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2007 |
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2006 |
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(as adjusted)2 |
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(as adjusted) |
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(unaudited) |
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(in thousands) |
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(in thousands) |
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STATEMENT OF OPERATIONS DATA: |
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NET REVENUE |
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$ |
78,081 |
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$ |
82,271 |
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$ |
330,271 |
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$ |
341,240 |
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OPERATING EXPENSES: |
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Programming and technical |
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20,334 |
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18,006 |
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78,357 |
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73,343 |
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Selling, general and administrative |
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29,923 |
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26,511 |
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112,288 |
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104,629 |
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Corporate |
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7,035 |
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5,307 |
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27,328 |
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26,296 |
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Stock-based compensation |
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501 |
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723 |
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3,037 |
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4,687 |
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Depreciation and amortization |
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3,837 |
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3,727 |
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15,250 |
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14,355 |
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Impairment of intangible assets |
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404,098 |
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49,930 |
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409,604 |
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49,930 |
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Total operating expenses |
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465,728 |
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104,204 |
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645,864 |
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273,240 |
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Operating (loss) income |
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(387,647 |
) |
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(21,933 |
) |
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(315,593 |
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68,000 |
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INTEREST INCOME |
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(390 |
) |
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(360 |
) |
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(1,242 |
) |
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(1,393 |
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INTEREST EXPENSE |
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17,722 |
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18,854 |
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72,770 |
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72,932 |
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EQUITY IN LOSS OF AFFILIATED COMPANY |
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3,902 |
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772 |
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11,453 |
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2,341 |
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OTHER EXPENSE, net |
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325 |
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9 |
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347 |
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278 |
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Loss before (benefit) provision for income taxes,
minority interest in income of subsidiaries and
discontinued operations |
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(409,206 |
) |
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(41,208 |
) |
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(398,921 |
) |
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(6,158 |
) |
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(BENEFIT) PROVISION FOR INCOME TAXES |
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(26,680 |
) |
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(12,891 |
) |
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(23,032 |
) |
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3,520 |
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MINORITY INTEREST IN INCOME OF SUBSIDIARIES |
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810 |
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1,084 |
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3,910 |
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3,004 |
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Net loss from continuing operations |
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(383,336 |
) |
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(29,401 |
) |
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(379,799 |
) |
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(12,682 |
) |
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(LOSS) INCOME FROM DISCONTINUED OPERATIONS, net of tax |
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(3,075 |
) |
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3,941 |
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(7,319 |
) |
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5,952 |
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Net loss |
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$ |
(386,411 |
) |
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$ |
(25,460 |
) |
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$ |
(387,118 |
) |
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$ |
(6,730 |
) |
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Weighted average shares outstanding basic3 |
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98,710,633 |
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98,710,633 |
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98,710,633 |
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98,709,311 |
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Weighted average shares outstanding diluted4 |
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98,710,633 |
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98,710,633 |
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98,710,633 |
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98,709,311 |
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-MORE-
PAGE 3 RADIO ONE, INC. REPORTS FOURTH QUARTER RESULTS
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Three Months Ended December 31, |
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Twelve Months Ended December 31, |
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2007 |
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2006 |
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2007 |
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2006 |
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(as adjusted) |
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(as adjusted) |
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(unaudited) |
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(in thousands, except per share data) |
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(in thousands, except per share data) |
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PER SHARE DATA basic and diluted: |
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Loss from continuing operations per share |
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$ |
(3.88 |
) |
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$ |
(0.30 |
) |
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$ |
(3.85 |
) |
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$ |
(0.13 |
) |
(Loss) income from discontinued operations per share |
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$ |
(0.03 |
) |
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$ |
0.04 |
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$ |
(0.07 |
) |
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$ |
0.06 |
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Net loss per share |
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$ |
(3.91 |
) |
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$ |
(0.26 |
) |
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$ |
(3.92 |
) |
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$ |
(0.07 |
) |
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SELECTED OTHER DATA: |
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Station operating income |
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$ |
27,824 |
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$ |
37,754 |
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$ |
139,626 |
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$ |
163,268 |
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Station operating income margin (% of net revenue) |
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35.6 |
% |
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45.9 |
% |
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42.3 |
% |
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47.8 |
% |
Station operating income reconciliation: |
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Net loss |
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$ |
(386,411 |
) |
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$ |
(25,460 |
) |
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(387,118 |
) |
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$ |
(6,730 |
) |
Plus: Depreciation and amortization |
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3,837 |
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3,727 |
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15,250 |
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|
14,355 |
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Plus: Corporate expenses |
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|
7,035 |
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|
5,307 |
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|
27,328 |
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26,296 |
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Plus: Stock-based compensation |
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|
501 |
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|
723 |
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3,037 |
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|
4,687 |
|
Plus: Equity in loss of affiliated company |
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|
3,902 |
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|
772 |
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|
11,453 |
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|
|
2,341 |
|
Plus: (Benefit) provision for income taxes |
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|
(26,680 |
) |
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(12,891 |
) |
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(23,032 |
) |
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|
3,520 |
|
Plus: Minority interest in income of subsidiaries |
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|
810 |
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|
|
1,084 |
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|
|
3,910 |
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|
|
3,004 |
|
Plus: Interest expense |
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|
17,722 |
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|
|
18,854 |
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|
|
72,770 |
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|
72,932 |
|
Plus: Impairment of intangible assets |
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|
404,098 |
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|
49,930 |
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|
409,604 |
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|
49,930 |
|
Plus: Other expense |
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|
325 |
|
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|
9 |
|
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|
347 |
|
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|
278 |
|
Plus: Loss (income) from discontinued operations, net of tax |
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|
3,075 |
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|
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(3,941 |
) |
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|
7,319 |
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(5,952 |
) |
Less: Interest income |
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|
(390 |
) |
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|
(360 |
) |
|
|
(1,242 |
) |
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|
(1,393 |
) |
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|
|
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|
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Station operating income |
|
$ |
27,824 |
|
|
$ |
37,754 |
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|
$ |
139,626 |
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|
$ |
163,268 |
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Adjusted EBITDA5 |
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$ |
19,963 |
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$ |
31,715 |
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|
$ |
108,914 |
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$ |
132,007 |
|
Adjusted EBITDA reconciliation: |
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|
|
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|
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|
|
|
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|
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|
Net Loss |
|
$ |
(386,411 |
) |
|
$ |
(25,460 |
) |
|
$ |
(387,118 |
) |
|
$ |
(6,730 |
) |
Plus: Depreciation and amortization |
|
|
3,837 |
|
|
|
3,727 |
|
|
|
15,250 |
|
|
|
14,355 |
|
Plus: (Benefit) provision for income taxes |
|
|
(26,680 |
) |
|
|
(12,891 |
) |
|
|
(23,032 |
) |
|
|
3,520 |
|
Plus: Interest expense |
|
|
17,722 |
|
|
|
18,854 |
|
|
|
72,770 |
|
|
|
72,932 |
|
Less: Interest income |
|
|
(390 |
) |
|
|
(360 |
) |
|
|
(1,242 |
) |
|
|
(1,393 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA |
|
$ |
(391,922 |
) |
|
$ |
(16,130 |
) |
|
$ |
(323,372 |
) |
|
$ |
82,684 |
|
Plus: Equity in loss of affiliated company |
|
|
3,902 |
|
|
|
772 |
|
|
|
11,453 |
|
|
|
2,341 |
|
Plus: Minority interest in income of subsidiaries |
|
|
810 |
|
|
|
1,084 |
|
|
|
3,910 |
|
|
|
3,004 |
|
Plus: Impairment of intangible assets |
|
|
404,098 |
|
|
|
49,930 |
|
|
|
409,604 |
|
|
|
49,930 |
|
Plus: Loss (income) from discontinued operations, net of tax |
|
|
3,075 |
|
|
|
(3,941 |
) |
|
|
7,319 |
|
|
|
(5,952 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA |
|
$ |
19,963 |
|
|
$ |
31,715 |
|
|
$ |
108,914 |
|
|
$ |
132,007 |
|
|
|
|
|
|
|
|
|
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|
-MORE-
PAGE 4 RADIO ONE, INC. REPORTS FOURTH QUARTER RESULTS
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December 31, 2006 |
|
|
December 31, 2007 |
|
(as adjusted) |
|
|
(in thousands) |
SELECTED BALANCE SHEET DATA: |
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
24,247 |
|
|
$ |
32,406 |
|
Intangible assets, net |
|
|
1,450,321 |
|
|
|
1,860,789 |
|
Total assets |
|
|
1,667,725 |
|
|
|
2,195,210 |
|
Total debt (including current portion) |
|
|
815,504 |
|
|
|
937,527 |
|
Total liabilities |
|
|
1,030,736 |
|
|
|
1,176,963 |
|
Total stockholders equity |
|
|
633,100 |
|
|
|
1,018,267 |
|
|
|
|
|
|
Minority interest in subsidiaries |
|
|
3,889 |
|
|
|
(20 |
) |
|
|
|
|
|
|
|
|
|
|
|
Current Amount |
|
Applicable Interest |
|
|
Outstanding |
|
Rate (a) |
|
|
(in thousands) |
|
|
|
|
SELECTED LEVERAGE AND SWAP DATA: |
|
|
|
|
|
|
|
|
Senior bank term debt (swap matures 6/16/2012) |
|
$ |
25,000 |
|
|
|
6.72 |
% |
Senior bank term debt (swap matures 6/16/2010) |
|
|
25,000 |
|
|
|
6.57 |
% |
Senior bank term debt (swap matures 6/16/2008) |
|
|
25,000 |
|
|
|
6.38 |
% |
Senior bank
term debt (at variable rates) (b) |
|
|
120,000 |
|
|
approximately 7.25 |
% |
Senior bank
term debt (at variable rates) (b) |
|
|
119,500 |
|
|
approximately 7.25 |
% |
8-7/8% senior subordinated notes (fixed rate) |
|
|
300,000 |
|
|
|
8.88 |
% |
6-3/8% senior subordinated notes (fixed rate) |
|
|
200,000 |
|
|
|
6.38 |
% |
|
|
|
|
|
|
|
|
|
Seller financed loan |
|
|
1,004 |
|
|
|
5.10 |
% |
|
|
|
(a) |
|
Under its swap agreements, Radio One pays a fixed rate plus a spread based
on the Companys leverage, as defined in its credit agreement. As of December
31, 2007, that spread was 2.25% and is incorporated into the applicable
interest rates set forth above. |
|
(b) |
|
Subject to rolling 90-day LIBOR plus a spread currently at 2.25% and
incorporated into the rate set forth above. This tranche is not covered by swap
agreements described in footnote (a). |
Cautionary Note Regarding Forward-Looking Statements
This press release includes forward-looking statements within the meaning of Section 27A of the
Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking
statements represent managements current expectations and are based upon information available to
Radio One at the time of this release. These forward-looking statements involve known and unknown
risks, uncertainties and other factors, some of which are beyond Radio Ones control, that may
cause the actual results to differ materially from any future results, performance or achievements
expressed or implied by such forward-looking statements. Important factors that could cause actual
results to differ materially are described in Radio Ones reports on Forms 10-K, and 10-Q and other
filings with the Securities and Exchange Commission. Radio One does not undertake any duty to
update any forward-looking statements.
-MORE-
PAGE 5 RADIO ONE, INC. REPORTS FOURTH QUARTER RESULTS
Net revenue decreased to approximately $78.1 million for the quarter ended December 31, 2007, from
approximately $82.3 million for the quarter ended December 31, 2006, a decline of 5%. The decrease
in net revenue was due primarily to a decline in overall radio industry revenue in the markets in
which we operate, as well as declines experienced in our Baltimore, Cleveland, Detroit, Houston and
Philadelphia markets. Demand for national advertising was particularly weak for the markets in
which we operate, which adversely impacted our revenues. In addition, the absence in fourth quarter
2007 of political advertising revenue similar to that generated in fourth quarter 2006 contributed
to a difficult comparison in relation to fourth quarter 2006 results. These declines were
partially offset by net revenue increases from our Atlanta and Raleigh markets, and the
consolidation of the operating results of Giant Magazine. Net revenue is reported net of agency
and outside sales representative commissions of approximately $9.2 million and $10.1 million for
the quarters ended December 31, 2007 and 2006, respectively. Excluding the operating results of
Giant Magazine, which we acquired in December 2006, our net revenue declined 6% for the three
months ended December 31, 2007, compared to the same period in 2006.
Operating expenses, excluding depreciation and amortization, stock-based compensation and
impairment of intangible assets increased to approximately $57.3 million from approximately $49.8
million for the quarters ended December 31, 2007 and 2006, respectively, an increase of 15%. The
increase in operating expenses resulted primarily from the consolidation of the October through
December 2007 operating results of Giant Magazine and expenses associated with our internet
initiative. Increased operating expenses were also due to additional spending for music royalties,
research, legal and professional fees, marketing and promotions, on-air talent and compensation and
benefits associated with new corporate office hires. Excluding the operating results of Giant
Magazine, operating expenses increased 10% for the three months ended December 31, 2007, compared
to the same period in 2006. Excluding both the operating results of Giant Magazine and spending on
our internet initiative, operating expenses increased 9% for the three months ended December 31,
2007, compared to the same period in 2006.
Stock-based compensation decreased to $501,000 from $723,000 for the quarters ended December 31,
2007 and 2006, respectively, a decline of 31%. Stock-based compensation consists of expenses
associated with our January 1, 2006 adoption of Statement of Financial Accounting Standards
(SFAS) No. 123(R), Share-Based Payment, and expenses associated with restricted stock grants.
The decrease in stock-based compensation was due to stock option grant forfeitures, cancellations
and the completion of the vesting period for certain stock option grants.
Depreciation and amortization expense increased to approximately $3.8 million for the quarter ended
December 31, 2007 from approximately $3.7 million for the quarter ended December 31, 2006, an
increase of 3%. The increase was primarily due to depreciation for capital expenditures made
subsequent to December 31, 2006.
Impairment of intangible assets increased to approximately $404.1 million from approximately $49.9
million for the quarters ended December 31, 2007 and 2006, respectively. The increase was due to
impairment of radio broadcasting licenses primarily associated with our Los Angeles station and
Houston market, and to a lesser extent, also with our Cincinnati, Cleveland, Columbus, Dallas, and
Philadelphia markets. Our Los Angeles station was impaired during the quarter ended December 31,
2006 as well.
Interest expense decreased to approximately $17.7 million for the quarter ended December 31, 2007
from approximately $18.9 million for the quarter ended December 31, 2006, a decline of 6%. The
decrease in interest expense during the three months ended December 31, 2007 resulted primarily
from interest savings associated with lower net borrowings due to debt pay downs, which was
partially offset by fees associated with the operation of WPRS-FM (formerly WXGG-FM) pursuant to a
local marketing agreement (LMA) that began in April of 2007.
Equity in loss of affiliated company increased to approximately $3.9 million for the quarter ended
December 31, 2007 from $772,000 for the same period in 2006. The increase in the loss is
attributable to an increase in the Companys share of TV Ones losses related to TV Ones current
capital structure and the Companys ownership levels in the equity securities of TV One that are
currently absorbing its net losses.
-MORE-
PAGE 6 RADIO ONE, INC. REPORTS FOURTH QUARTER RESULTS
Benefit for income taxes increased to approximately $26.7 million for the quarter ended December
31, 2007 compared to benefit for income taxes of approximately $12.9 million for the quarter ended
December 31, 2006, an increase of 107%. The increase in the benefit for income taxes was due to
the tax effect of the significant increase in pre-tax loss to approximately $409.2 million for the
quarter ended December 31, 2007, compared to a $41.2 million pre-tax loss for the same period in
2006, which is primarily due to impairment charges. Consistent with the requirements of SFAS No.
109, Accounting for Income Taxes, this benefit was then offset by an approximately $132.1 million
increase in the valuation allowance for certain federal and state deferred tax assets, mainly net
operating loss carryforwards. Excluding the impact of the current year change in the valuation
allowance, our effective tax rate as of December 31, 2007 was 39.0%.
Loss from discontinued operations, net of tax, was approximately $3.1 million for the quarter ended
December 31, 2007, compared to income of $3.9 million for the same period in 2006. Loss from
discontinued operations, net of tax, includes the gain or loss and results of operations for sold
radio station assets associated with our Augusta, Louisville and Dayton markets, radio station
KTTB-FM in Minneapolis, and radio station WILD-FM in Boston, for total proceeds of approximately
$138.1 million in cash. Income from discontinued operations also includes the results of
operations of our radio station WMCU-AM (formerly WTPS-AM) in Miami, for which we have a definitive
agreement to sell for approximately $12.3 million in cash, and is expected to close in the first
quarter of 2008, subject to the necessary regulatory approvals. The loss from discontinued
operations, net of tax was due primarily to impairment charges associated with the Augusta and
Louisville market sales, and to a lesser extent, the KTTB-FM sale.
Other pertinent financial information includes capital expenditures of approximately $4.8 million
for both quarters ended December 31, 2007 and 2006. Additionally, as of December 31, 2007, Radio
One had total debt (net of cash balances) of approximately $791.3 million.
In December 2007, the Company closed on the sale of the assets of all of its radio stations in the
Augusta metropolitan area to Perry Broadcasting Company for approximately $3.1 million in cash.
In November 2007, the Company closed on the sale of the assets of WLRX-FM, its remaining radio
station in the Louisville metropolitan area to WAY FM Media Group, Inc. for approximately
$1.0 million in cash.
In October 2007, the Company entered into an agreement to sell the assets of its radio station
WMCU-AM (formerly WTPS-AM), located in the Miami metropolitan area, to Salem Communications Holding
Corporation (Salem) for approximately $12.3 million in cash. Salem began operating the station
under an LMA effective October 18, 2007. Subject to the necessary regulatory approvals, the
transaction is expected to close in the first quarter of 2008.
In September 2007, we closed on the sale of the assets of all of our radio stations located in the
Dayton market and five of our six radio stations located in the Louisville market to Main Line
Broadcasting, LLC for approximately $76.0 million in cash.
In August 2007, the Company closed on the sale of the assets of radio station KTTB-FM in the
Minneapolis metropolitan area to Northern Lights Broadcasting, LLC for approximately $28.0 million
in cash.
In July 2007, the Company purchased the assets of WDBZ-AM, a radio station located in the
Cincinnati metropolitan area for approximately $2.6 million in seller financing. Since August 2001
and up until closing, the station had been operated under an LMA, and the results of its operations
had been included in the Companys consolidated financial statements since the LMA commenced.
-MORE-
PAGE 7 RADIO ONE, INC. REPORTS FOURTH QUARTER RESULTS
In April 2007, the Company signed an agreement and made a deposit of $3.0 million to acquire the
assets of WPRS-FM (formerly WXGG-FM), a radio station located in the Washington, DC metropolitan
area for approximately $38.0 million in cash. The Company began operating the station under an LMA
in April 2007 and the financial results since inception of the LMA have been included in the
Companys consolidated financial statements. The station has been consolidated with the existing
Washington, DC operations. The Company expects to complete this acquisition in the second quarter
of 2008.
In December 2006, the Company closed on the sale of the assets of its radio station WILD-FM in the
Boston metropolitan area to Entercom Boston, LLC (Entercom) for approximately $30.0 million in
cash. Entercom began operating the station under an LMA effective August 18, 2006.
Radio One will hold a conference call to discuss its results for the fourth quarter of 2007. This
conference call is scheduled for Thursday February 21, 2008 at 10:00 a.m. Eastern Time. Interested
parties should call 612-288-0340 at least five minutes prior to the scheduled time of the call.
The conference call will be recorded and made available for replay from 1:30 p.m. Eastern Time the
day of the call, until 11:59 p.m. Eastern Time the following day. Interested parties may listen to
the replay by calling 320-365-3844; access code 909227. Access to live audio and replay of the
conference call will also be available on Radio Ones corporate website at www.radio-one.com. The
replay will be made available on the website for seven calendar days following the call.
Radio One, Inc. (www.radio-one.com) is one of the nations largest radio broadcasting companies and
the largest radio broadcasting company that primarily targets African-American and urban listeners.
On a pro forma basis, after closing the sale of our Miami station, Radio One will own and/or
operates 54 radio stations located in 17 urban markets in the United States. Additionally, Radio
One owns Magazine One, Inc. (d/b/a Giant Magazine) (www.giantmag.com), interests in TV One, LLC
(www.tvoneonline.com), a cable/satellite network programming primarily to African-Americans and
Reach Media, Inc. (www.blackamericaweb.com), owner of the Tom Joyner Morning Show and other
businesses associated with Tom Joyner.
-MORE-
PAGE 8 RADIO ONE, INC. REPORTS FOURTH QUARTER RESULTS
Notes:
1 Station operating income consists of net loss before depreciation and amortization, income
taxes, interest income, interest expense, equity in loss of affiliated company, minority interest
in income of subsidiaries, impairment of intangible assets, other expense, corporate expenses,
stock-based compensation expenses and (loss) income from discontinued operations, net of tax.
Station operating income is not a measure of financial performance under generally accepted
accounting principles. Nevertheless we believe station operating income is often a useful measure
of a broadcasting companys operating performance and is a significant basis used by our management
to measure the operating performance of our stations within the various markets because station
operating income provides helpful information about our results of operations apart from expenses
associated with our physical plant, income taxes, investments, debt financings, overhead,
stock-based compensation, impairment charges and results of operations and income (losses) from
asset sales. Station operating income is frequently used as one of the bases for comparing
businesses in our industry, although our measure of station operating income may not be comparable
to similarly titled measures of other companies. Station operating income does not purport to
represent operating income (loss) or cash flow from operating activities, as those terms are
defined under generally accepted accounting principles, and should not be considered as an
alternative to those measurements as an indicator of our performance. A reconciliation of operating
income to station operating income has been provided in this release.
2 Certain reclassifications associated with accounting for discontinued operations have been made
to prior quarter and prior year balances to conform to the current presentation. These
reclassifications had no effect on any other previously reported net income or loss or any other
statement of operations, balance sheet or cash flow amounts. Where applicable, these financial
statements have been identified as as adjusted.
3 For both the three months ended December 31, 2007 and 2006, Radio One had 98,710,633 shares of
common stock outstanding on a weighted average basis, diluted for outstanding stock options.
4 For the year ended December 31, 2007 and 2006, Radio One had 98,710,633 and 98,709,311 shares of
common stock outstanding on a weighted average basis, diluted for outstanding stock options,
respectively.
5 Adjusted EBITDA consists of net loss plus (1) depreciation, amortization, income taxes,
interest expense, equity in loss of affiliated company, impairment of intangible assets, and
minority interest in income of subsidiaries less (2) (loss) income from discontinued operations,
net of tax, and interest income. Net income before interest income, interest expense, provision
for income taxes, depreciation and amortization is commonly referred to in our business as
EBITDA. Adjusted EBITDA and EBITDA are not measures of financial performance under generally
accepted accounting principles. We believe Adjusted EBITDA is often a useful measure of a companys
operating performance and is a significant basis used by our management to measure the operating
performance of our business because Adjusted EBITDA excludes charges for depreciation, amortization
and interest expense that have resulted from our acquisitions and debt financing, our taxes, any
impairment charges, as well as our equity in loss of our affiliated company and any discontinued
operations. Accordingly, we believe that Adjusted EBITDA provides helpful information about the
operating performance of our business, apart from the expenses associated with our physical plant,
capital structure or the results of our affiliated company. Adjusted EBITDA is frequently used as
one of the bases for comparing businesses in our industry, although our measure of Adjusted EBITDA
may not be comparable to similarly titled measures of other companies. Adjusted EBITDA and EBITDA
do not purport to represent operating income or cash flow from operating activities, as those terms
are defined under generally accepted accounting principles, and should not be considered as
alternatives to those measurements as an indicator of our performance. A reconciliation of net
income to EBITDA and Adjusted EBITDA has been provided in this release.
# # #