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Entercom Communications 10-Q 2009

Documents found in this filing:

  1. 10-Q
  2. Ex-31.01
  3. Ex-31.02
  4. Ex-32.01
  5. Ex-32.02
  6. Ex-32.02

Table of Contents

 

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C.  20549

 

FORM 10-Q

 

(Mark One)

 

x

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the quarterly period ended September 30, 2009

 

or

 

o

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the transition period from            to            

 

Commission File Number:  001-14461

 

Entercom Communications Corp.

(Exact name of registrant as specified in its charter)

 

Pennsylvania

 

23-1701044

(State or other jurisdiction of incorporation or organization)

 

(I.R.S. employer identification no.)

 

401 City Avenue, Suite 809

Bala Cynwyd, Pennsylvania 19004

(Address of principal executive offices and zip code)

 

(610) 660-5610

(Registrant’s telephone number, including area code)

 

 

(Former name, former address and former fiscal year, if changed since last report)

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x  No o

 

Indicate by checkmark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of  Regulation S-T (section 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files.) Yes o No o

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.  See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer o

 

Accelerated filer x

 

 

 

Non-accelerated filer o

 

Smaller reporting company o

(Do not check if a smaller reporting company)

 

 

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o   No x

 

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

 

Class A common stock, $.01 par value – 29,611,036 Shares Outstanding as of October 27, 2009

(Class A Shares Outstanding include 1,925,931 unvested and vested but deferred restricted stock units)

Class B common stock, $.01 par value – 7,607,532 Shares Outstanding as of October 27, 2009

 

 

 



Table of Contents

 

ENTERCOM COMMUNICATIONS CORP.

 

INDEX

 

Part I   Financial Information

 

 

 

 

Item 1.

Financial Statements

1

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

34

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

46

Item 4.

Controls and Procedures

47

 

 

 

Part II   Other Information

 

 

 

 

Item 1.

Legal Proceedings

48

Item 1A.

Risk Factors

48

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

48

Item 3.

Defaults Upon Senior Securities

49

Item 4.

Submission of Matters to a Vote of Security Holders

49

Item 5.

Other Information

49

Item 6.

Exhibits

50

 

 

Signatures

51

 

 

Exhibit Index

52

 

Private Securities Litigation Reform Act Safe Harbor Statement

 

In addition to historical information, this report contains statements by us with regard to our expectations as to financial results and other aspects of our business that involve risks and uncertainties and may constitute 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 are presented for illustrative purposes only and reflect our current expectations concerning future results and events.  All statements other than statements of historical fact are “forward-looking statements” for purposes of federal and state securities laws, including, without limitation, any projections of earnings, revenues or other financial items; any statements of the plans, strategies and objectives of management for future operations; any statements concerning proposed new services or developments; any statements regarding future economic conditions or performance; any statements of belief; and any statements of assumptions underlying any of the foregoing.

 

You can identify forward-looking statements by our use of words such as “anticipates,” “believes,” “continues,” “expects,” “intends,” “likely,” “may,” “opportunity,” “plans,” “potential,” “project,” “will,” and similar expressions which identify forward-looking statements, whether in the negative or the affirmative.  We cannot guarantee that we actually will achieve these plans, intentions or expectations.  These forward-looking statements are subject to risks, uncertainties and other factors, some of which are beyond our control, which could cause actual results to differ materially from those forecasted or anticipated in such forward-looking statements.  You should not place undue reliance on these forward-looking statements, which reflect our view only as of the date of this report.  We undertake no obligation to update these statements or publicly release the result of any revision(s) to these statements to reflect events or circumstances after the date of this report or to reflect the occurrence of unanticipated events.

 

Key risks to our company are described in our Annual Report on Form 10-K filed with the Securities and Exchange Commission on February 26, 2009 and as may be supplemented by the risks described under Part II, Item 1A, of our quarterly reports on Form 10-Q and in our Current Reports on Form 8-K.

 

i



Table of Contents

 

PART I

 

FINANCIAL INFORMATION

 

ITEM 1.      Financial Statements

 

ENTERCOM COMMUNICATIONS CORP.

CONDENSED CONSOLIDATED BALANCE SHEETS

(amounts in thousands)

(unaudited)

 

ASSETS

 

 

 

SEPTEMBER 30,

 

DECEMBER 31,

 

 

 

2009

 

2008

 

CURRENT ASSETS:

 

 

 

 

 

Cash and cash equivalents

 

$

20,109

 

$

4,284

 

Accounts receivable, net of allowance for doubtful accounts

 

74,574

 

75,354

 

Prepaid expenses and deposits

 

4,742

 

4,801

 

Insurance claim receivable

 

16,800

 

 

Prepaid and refundable income taxes

 

513

 

628

 

Short-term investment

 

23

 

23

 

Total current assets

 

116,761

 

85,090

 

 

 

 

 

 

 

INVESTMENTS

 

1,361

 

1,376

 

 

 

 

 

 

 

PROPERTY AND EQUIPMENT:

 

 

 

 

 

Land, land easements and land improvements

 

16,498

 

16,486

 

Buildings

 

21,000

 

20,964

 

Equipment

 

123,501

 

122,986

 

Furniture and fixtures

 

15,476

 

15,029

 

Leasehold improvements

 

21,249

 

21,129

 

 

 

197,724

 

196,594

 

Accumulated depreciation

 

(123,850

)

(113,036

)

 

 

73,874

 

83,558

 

Capital improvements in progress

 

955

 

1,306

 

Net property and equipment

 

74,829

 

84,864

 

 

 

 

 

 

 

RADIO BROADCASTING LICENSES

 

707,852

 

768,646

 

 

 

 

 

 

 

GOODWILL

 

38,168

 

45,050

 

 

 

 

 

 

 

DEFERRED CHARGES AND OTHER ASSETS - Net

 

9,211

 

11,708

 

 

 

 

 

 

 

TOTAL

 

$

948,182

 

$

996,734

 

 

See notes to condensed consolidated financial statements.

 

1



Table of Contents

 

ENTERCOM COMMUNICATIONS CORP.

CONDENSED CONSOLIDATED BALANCE SHEETS

(amounts in thousands)

(unaudited)

 

LIABILITIES AND SHAREHOLDERS’ EQUITY

 

 

 

SEPTEMBER 30,

 

DECEMBER 31,

 

 

 

2009

 

2008

 

CURRENT LIABILITIES:

 

 

 

 

 

Accounts payable

 

$

608

 

$

352

 

Accrued expenses

 

14,411

 

15,231

 

Accrued liabilities:

 

 

 

 

 

Salaries

 

6,107

 

7,484

 

Interest

 

379

 

2,343

 

Advertiser obligations and other commitments

 

1,184

 

1,197

 

Insurance claim payable

 

16,800

 

 

Other

 

4,759

 

5,684

 

Current portion of long-term debt

 

70,024

 

30,023

 

Total current liabilities

 

114,272

 

62,314

 

 

 

 

 

 

 

LONG-TERM LIABILITIES:

 

 

 

 

 

Senior debt

 

688,155

 

720,174

 

7.625% senior subordinated notes

 

23,867

 

83,500

 

Finance method lease obligations

 

4,531

 

 

Other long-term liabilities

 

30,429

 

30,489

 

Total long-term liabilities

 

746,982

 

834,163

 

Total liabilities

 

861,254

 

896,477

 

 

 

 

 

 

 

CONTINGENCIES AND COMMITMENTS

 

 

 

 

 

 

 

 

 

 

 

SHAREHOLDERS’ EQUITY:

 

 

 

 

 

Preferred stock

 

 

 

Class A, B and C common stock

 

372

 

371

 

Additional paid-in capital

 

587,118

 

582,325

 

Accumulated deficit

 

(485,316

)

(467,177

)

Accumulated other comprehensive loss

 

(15,246

)

(15,262

)

Total shareholders’ equity

 

86,928

 

100,257

 

 

 

 

 

 

 

TOTAL

 

$

948,182

 

$

996,734

 

 

See notes to condensed consolidated financial statements.

 

2



Table of Contents

 

ENTERCOM COMMUNICATIONS CORP.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(amounts in thousands, except share and per share data)

(unaudited)

 

 

 

NINE MONTHS ENDED

 

 

 

SEPTEMBER 30,

 

 

 

2009

 

2008

 

 

 

 

 

 

 

NET REVENUES

 

$

276,436

 

$

334,725

 

 

 

 

 

 

 

OPERATING (INCOME) EXPENSE:

 

 

 

 

 

Station operating expenses, including non-cash compensation expense of $1,460 in 2009 and $1,852 in 2008

 

192,006

 

210,695

 

Depreciation and amortization expense

 

12,660

 

16,009

 

Corporate general and administrative expenses, including non-cash expense of $4,237 in 2009 and $5,959 in 2008

 

17,386

 

21,530

 

Impairment loss

 

67,676

 

184,587

 

Net time brokerage agreement income

 

(2

)

(188

)

Net (gain) loss on sale or disposal of assets

 

149

 

(9,937

)

Total operating expense

 

289,875

 

422,696

 

OPERATING LOSS

 

(13,439

)

(87,971

)

 

 

 

 

 

 

OTHER (INCOME) EXPENSE:

 

 

 

 

 

Interest expense, including amortization of deferred financing expense of $1,147 in 2009 and $1,249 in 2008

 

23,828

 

34,831

 

Interest and dividend income

 

(35

)

(299

)

Net gain on extinguishment of debt

 

(19,260

)

(4,017

)

Net gain on derivative instruments

 

 

(34

)

Net loss on investments

 

 

461

 

Other income

 

(380

)

(3,256

)

TOTAL OTHER EXPENSE

 

4,153

 

27,686

 

 

 

 

 

 

 

LOSS FROM CONTINUING OPERATIONS

 

 

 

 

 

BEFORE INCOME TAXES (BENEFIT)

 

(17,592

)

(115,657

)

 

 

 

 

 

 

INCOME TAXES (BENEFIT)

 

710

 

(32,307

)

LOSS FROM CONTINUING OPERATIONS

 

(18,302

)

(83,350

)

Loss from discontinued operations, net of income tax benefit

 

 

(3,497

)

NET LOSS

 

$

(18,302

)

$

(86,847

)

 

 

 

 

 

 

NET LOSS PER SHARE - BASIC AND DILUTED

 

 

 

 

 

Loss from continuing operations

 

$

(0.52

)

$

(2.25

)

Loss from discontinued operations, net of income tax benefit

 

 

(0.10

)

NET LOSS PER SHARE - BASIC AND DILUTED

 

$

(0.52

)

$

(2.35

)

 

 

 

 

 

 

DIVIDENDS DECLARED AND PAID PER COMMON SHARE

 

$

 

$

0.58

 

 

 

 

 

 

 

WEIGHTED AVERAGE SHARES:

 

 

 

 

 

Basic and Diluted

 

35,327,093

 

36,990,089

 

 

See notes to condensed consolidated financial statements.

 

3



Table of Contents

 

ENTERCOM COMMUNICATIONS CORP.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(amounts in thousands, except share and per share data)

(unaudited)

 

 

 

THREE MONTHS ENDED

 

 

 

SEPTEMBER 30,

 

 

 

2009

 

2008

 

 

 

 

 

 

 

NET REVENUES

 

$

99,765

 

$

115,555

 

 

 

 

 

 

 

OPERATING (INCOME) EXPENSE:

 

 

 

 

 

Station operating expenses, including non-cash compensation expense of $698 in 2009 and $739 in 2008

 

66,273

 

72,080

 

Depreciation and amortization expense

 

4,120

 

4,474

 

Corporate general and administrative expenses, including non-cash expense of $1,300 in 2009 and $1,354 in 2008

 

5,802

 

6,175

 

Net time brokerage agreement income

 

 

(45

)

Net loss on sale or disposal of assets

 

149

 

62

 

Total operating expense

 

76,344

 

82,746

 

OPERATING INCOME

 

23,421

 

32,809

 

 

 

 

 

 

 

OTHER (INCOME) EXPENSE:

 

 

 

 

 

Interest expense, including amortization of deferred financing expense of $371 in 2009 and $407 in 2008

 

7,856

 

10,421

 

Interest and dividend income

 

(18

)

(32

)

Net gain on extinguishment of debt

 

(3,132

)

(1,633

)

Net loss on investments

 

 

250

 

TOTAL OTHER EXPENSE

 

4,706

 

9,006

 

 

 

 

 

 

 

INCOME FROM CONTINUING OPERATIONS

 

 

 

 

 

BEFORE INCOME TAXES

 

18,715

 

23,803

 

 

 

 

 

 

 

INCOME TAXES

 

440

 

20,029

 

INCOME FROM CONTINUING OPERATIONS

 

18,275

 

3,774

 

Income from discontinued operations, net of income taxes

 

 

480

 

NET INCOME

 

$

18,275

 

$

4,254

 

 

 

 

 

 

 

NET INCOME PER SHARE - BASIC

 

 

 

 

 

Income from continuing operations

 

$

0.52

 

$

0.11

 

Income from discontinued operations, net of income taxes

 

 

0.01

 

NET INCOME PER SHARE - BASIC

 

$

0.52

 

$

0.12

 

 

 

 

 

 

 

NET INCOME PER SHARE - DILUTED

 

 

 

 

 

Income from continuing operations

 

$

0.50

 

$

0.11

 

Income from discontinued operations, net of income taxes

 

 

0.01

 

NET INCOME PER SHARE - DILUTED

 

$

0.50

 

$

0.12

 

 

 

 

 

 

 

DIVIDENDS DECLARED AND PAID PER COMMON SHARE

 

$

 

$

0.10

 

 

 

 

 

 

 

WEIGHTED AVERAGE SHARES:

 

 

 

 

 

Basic

 

35,291,969

 

36,366,713

 

Diluted

 

36,620,613

 

36,374,873

 

 

See notes to condensed consolidated financial statements.

 

4



Table of Contents

 

ENTERCOM COMMUNICATIONS CORP.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

(amounts in thousands)

(unaudited)

 

 

 

NINE MONTHS ENDED

 

 

 

SEPTEMBER 30,

 

 

 

2009

 

2008

 

 

 

 

 

 

 

NET LOSS

 

$

(18,302

)

$

(86,847

)

 

 

 

 

 

 

OTHER COMPREHENSIVE INCOME, NET OF TAXES:

 

 

 

 

 

 

 

 

 

 

 

Net unrealized gain on investments, net of taxes of $86 in 2008

 

 

132

 

 

 

 

 

 

 

Net unrealized gain on derivatives, net of taxes of $0 in 2009 and $1,870 in 2008

 

16

 

2,888

 

 

 

 

 

 

 

COMPREHENSIVE LOSS

 

$

(18,286

)

$

(83,827

)

 

See notes to condensed consolidated financial statements.

 

5



Table of Contents

 

ENTERCOM COMMUNICATIONS CORP.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(amounts in thousands)

(unaudited)

 

 

 

THREE MONTHS ENDED

 

 

 

SEPTEMBER 30,

 

 

 

2009

 

2008

 

 

 

 

 

 

 

NET INCOME

 

$

18,275

 

$

4,254

 

 

 

 

 

 

 

OTHER COMPREHENSIVE LOSS, NET OF TAX BENEFIT:

 

 

 

 

 

 

 

 

 

 

 

Net unrealized loss on derivatives, net of a tax benefit of $0 in 2009 and $1,231 in 2008

 

(1,343

)

(1,902

)

 

 

 

 

 

 

COMPREHENSIVE INCOME

 

$

16,932

 

$

2,352

 

 

See notes to condensed consolidated financial statements.

 

6



Table of Contents

 

CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

NINE MONTHS ENDED SEPTEMBER 30, 2009 AND YEAR ENDED DECEMBER 31, 2008

(amounts in thousands, except share data)

(unaudited)

 

 

 

Common Stock

 

Additional

 

 

 

Other

 

 

 

 

 

Class A

 

Class B

 

Paid-in

 

Retained

 

Comprehensive

 

 

 

 

 

Shares

 

Amount

 

Shares

 

Amount

 

Capital

 

Earnings

 

Income (Loss)

 

Total

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance, December 31, 2007

 

31,132,700

 

$

311

 

7,607,532

 

$

76

 

$

595,915

 

$

64,597

 

$

(132

)

$

660,767

 

Net loss

 

 

 

 

 

 

(516,651

)

 

(516,651

)

Compensation expense related to granting of stock options

 

 

 

 

 

425

 

 

 

425

 

Compensation expense related to granting of restricted stock units

 

478,075

 

5

 

 

 

8,236

 

 

 

8,241

 

Issuance of common stock related to an incentive plan

 

72,092

 

1

 

 

 

328

 

 

 

329

 

Common stock repurchase

 

(2,073,518

)

(21

)

 

 

(13,923

)

 

 

(13,944

)

Purchase of vested employee restricted stock units

 

(130,161

)

(1

)

 

 

(1,374

)

 

 

(1,375

)

Payments of dividends

 

 

 

 

 

(7,282

)

(14,301

)

 

(21,583

)

Dividend equivalents on restricted stock units (net of forfeitures and payments)

 

 

 

 

 

 

(822

)

 

(822

)

Net unrealized loss on derivatives

 

 

 

 

 

 

 

(15,262

)

(15,262

)

Net unrealized gain on investments

 

 

 

 

 

 

 

132

 

132

 

Balance, December 31, 2008

 

29,479,188

 

295

 

7,607,532

 

76

 

582,325

 

(467,177

)

(15,262

)

100,257

 

Net loss

 

 

 

 

 

 

(18,302

)

 

(18,302

)

Compensation expense related to granting of stock options

 

 

 

 

 

390

 

 

 

390

 

Compensation expense related to granting of restricted stock units

 

805,875

 

8

 

 

 

5,284

 

 

 

5,292

 

Issuance of common stock related to an incentive plan

 

74,369

 

 

 

 

97

 

 

 

97

 

Common stock repurchase

 

(662,664

)

(7

)

 

 

(882

)

 

 

(889

)

Purchase of vested employee restricted stock units

 

(81,435

)

 

 

 

(96

)

 

 

(96

)

Dividend equivalents on restricted stock units (net of forfeitures and payments)

 

 

 

 

 

 

163

 

 

163

 

Net unrealized gain on derivatives

 

 

 

 

 

 

 

16

 

16

 

Balance, September 30, 2009

 

29,615,333

 

$

296

 

7,607,532

 

$

76

 

$

587,118

 

$

(485,316

)

$

(15,246

)

$

86,928

 

 

See notes to condensed consolidated financial statements.

 

7



Table of Contents

 

ENTERCOM COMMUNICATIONS CORP.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(amounts in thousands)

(unaudited)

 

 

 

NINE MONTHS ENDED

 

 

 

SEPTEMBER 30,

 

 

 

2009

 

2008

 

OPERATING ACTIVITIES:

 

 

 

 

 

Net loss

 

$

(18,302

)

$

(86,847

)

Income from discontinued operations before impairment loss, net of taxes

 

 

(457

)

Impairment loss from discontinued operations

 

 

6,675

 

Deferred tax benefit from discontinued operations

 

 

(2,721

)

Loss from continuing operations

 

(18,302

)

(83,350

)

 

 

 

 

 

 

Adjustments to reconcile loss from continuing operations to net cash provided by continuing operating activities:

 

 

 

 

 

Depreciation and amortization

 

12,660

 

16,009

 

Amortization of deferred financing costs

 

1,147

 

1,249

 

Deferred taxes (benefits)

 

605

 

(32,307

)

Provision for bad debts

 

2,035

 

2,119

 

Net (gain) loss on sale or disposal of assets

 

149

 

(9,937

)

Non-cash stock-based compensation expense

 

5,697

 

7,811

 

Net loss on investments

 

 

461

 

Net gain on derivatives

 

 

(34

)

Deferred rent

 

12

 

582

 

Unearned revenue - long-term

 

(532

)

(30

)

Net gain on extinguishment of debt

 

(19,260

)

(4,017

)

Deferred compensation

 

1,506

 

1,228

 

Tax benefit for vesting of restricted stock unit awards

 

 

(474

)

Impairment loss

 

67,676

 

184,587

 

Other income

 

(380

)

(3,500

)

Changes in assets and liabilities (net of effects of acquisitions and dispositions in all years and the effect of deconsolidation activities in 2008):

 

 

 

 

 

Accounts receivable

 

(1,265

)

(658

)

Prepaid expenses and deposits

 

59

 

244

 

Insurance claim receivable

 

(16,800

)

 

Prepaid and refundable income taxes

 

115

 

14,403

 

Accounts payable and accrued liabilities

 

(3,201

)

(3,141

)

Insurance claim payable

 

16,800

 

 

Accrued interest expense

 

(1,964

)

(3,600

)

Accrued expenses - long-term

 

(577

)

 

Prepaid expenses - long-term

 

(216

)

200

 

 

 

 

 

 

 

Net cash provided by continuing operating activities

 

45,964

 

87,845

 

Net cash provided by discontinued operating activities

 

 

29

 

Net cash provided by operating activities

 

45,964

 

87,874

 

 

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ENTERCOM COMMUNICATIONS CORP.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(amounts in thousands)

(unaudited)

 

 

 

NINE MONTHS ENDED

 

 

 

SEPTEMBER 30,

 

 

 

2009

 

2008

 

INVESTING ACTIVITIES:

 

 

 

 

 

Additions to property and equipment

 

(1,714

)

(5,982

)

Proceeds from sale of property, equipment, intangibles and other assets

 

106

 

32,733

 

Purchases of radio station assets

 

 

(374

)

Deferred charges and other assets

 

(83

)

(991

)

Purchases of investments

 

 

(6

)

Proceeds from investments

 

15

 

201

 

Proceeds from termination of radio station contract

 

380

 

 

Proceeds from insurance recovery

 

 

3,500

 

Station acquisition deposits and costs

 

 

4,094

 

Net cash provided by (used in) investing activities

 

(1,296

)

33,175

 

 

 

 

 

 

 

FINANCING ACTIVITIES:

 

 

 

 

 

Proceeds from issuance of long-term debt

 

37,000

 

56,000

 

Proceeds from the financing method of lease obligations

 

4,531

 

 

Payments of long-term debt

 

(29,017

)

(96,516

)

Retirement of senior subordinated notes

 

(39,703

)

(53,168

)

Purchase of the Company’s common stock

 

(889

)

(13,260

)

Proceeds from issuance of employee stock plan

 

82

 

247

 

Purchase of vested restricted stock units

 

(96

)

(1,361

)

Payment of dividend equivalents on vested restricted stock units

 

(751

)

(915

)

Payment of dividends

 

 

(21,583

)

Tax benefit for vesting of restricted stock awards

 

 

474

 

Net cash used in financing activities

 

(28,843

)

(130,082

)

 

 

 

 

 

 

NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS

 

15,825

 

(9,033

)

CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR

 

4,284

 

10,945

 

CASH AND CASH EQUIVALENTS, END OF PERIOD

 

$

20,109

 

$

1,912

 

 

 

 

 

 

 

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:

 

 

 

 

 

Cash paid during the period for:

 

 

 

 

 

Interest

 

$

24,664

 

$

36,368

 

Income taxes

 

$

192

 

$

22

 

Dividends

 

$

 

$

21,583

 

 

SUPPLEMENTAL DISCLOSURES ON NON-CASH INVESTING AND FINANCING ACTIVITIES:

 

During the nine months ended September 30, 2009, the Company issued 0.2 million restricted stock units, recorded modification expense of $1.4 million and had forfeitures of $2.4 million that will decrease on an aggregate basis its paid-in capital by $0.6 million over the vesting period of the restricted stock units.

 

During the nine months ended 2008, the Company issued 0.5 million restricted stock units (net of forfeitures) and will increase its paid-in-capital by $5.6 million over the vesting period of the restricted stock units.

 

On March 14, 2008, the Company completed an exchange of radio station assets with Bonneville International Corporation and as a result the Company: (1) received $220.0 million in assets, including cash of $1.0 million; (2) provided assets with a basis of $210.0 million (including transaction costs); and (3) recorded a gain of $10.0 million.

 

See notes to condensed consolidated financial statements.

 

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ENTERCOM COMMUNICATIONS CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NINE MONTHS ENDED SEPTEMBER 30, 2009 AND 2008

 

1.                                      BASIS OF PRESENTATION

 

The condensed consolidated interim unaudited financial statements included herein have been prepared by Entercom Communications Corp. and its subsidiaries (collectively, the “Company”) in accordance with: (i) generally accepted accounting principles (“U.S. GAAP”) for interim financial information; and (ii) the instructions of the Securities and Exchange Commission (the “SEC”) for Form 10-Q and Article 10 of Regulation S-X.  Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for annual financial statements.  In the opinion of management, the financial statements reflect all adjustments considered necessary for a fair statement of the results of operations and financial position for the interim periods presented.  All such adjustments are of a normal and recurring nature. The Company’s results are subject to seasonal fluctuations and, therefore, the results shown on an interim basis are not necessarily indicative of results for a full year.

 

This Form 10-Q should be read in conjunction with the financial statements and related notes included in the Company’s audited financial statements as of and for the year ended December 31, 2008 and filed with the SEC on February 26, 2009, as part of the Company’s Annual Report on Form 10-K.  Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations.

 

Recent Accounting Pronouncements

 

Subsequent Events

 

In May 2009, an accounting standard on subsequent events was approved, which sets forth the period, circumstances and disclosure after the balance sheet date during which management shall evaluate events or transactions that may occur for potential recognition or disclosure in the financial statements. This standard, which was effective for the Company for the period ended June 30, 2009, did not have an effect on the Company’s result of operations, cash flows or financial position.

 

Interim Disclosures About Fair Value Financial Instruments

 

In April 2009, an accounting standard was issued which requires disclosures about the fair value of financial instruments in interim reporting periods that were previously only required in annual financial statements.  The Company’s adoption of this accounting standard, which was effective for the Company for the period ended June 30, 2009, did not have an effect on the Company’s result of operations, cash flows or financial position.

 

Accounting Standards Codification

 

In June 2008, an accounting standards codification was approved as a single source of authoritative nongovernmental U.S. GAAP that was effective for the Company in the third quarter of 2009. The codification does not change current U.S. GAAP, but is intended to simplify user access to all authoritative literature related to a particular topic in one place. The Company’s adoption of this codification did not have an impact on the Company’s results of operations, cash flows or financial position.

 

Determination Of The Useful Life Of Intangible Assets

 

In April 2008, an accounting standard was issued regarding the determination of the useful life of intangible assets. This standard amends the factors that should be considered in developing the renewal or extension assumptions used to determine the useful life of recognized intangible assets. This standard requires expanded disclosure regarding the determination of intangible asset useful lives and also improves the consistency between the useful life of a recognized intangible asset and the period of expected cash flows used to measure the fair value of the asset. This standard was effective for the Company on January 1, 2009. The impact to the Company will be limited to the application of this standard to future acquisitions.

 

Disclosures About Derivative Instruments And Hedging Activities

 

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In March 2008, the disclosure requirements for derivative instruments and hedging activities were changed. Entities are required to provide enhanced disclosures about: (1) how and why an entity uses derivative instruments; (2) how derivative instruments and related hedged items are accounted for under U.S. GAAP and its related interpretations; and (3) how derivative instruments and related hedged items affect an entity’s financial position, financial performance and cash flows. The Company has included the relevant disclosures effective in its first quarter 2009 financial statements under Note 8, Derivatives And Hedging Activities.

 

Modifications To Business Combinations

 

In December 2007, an accounting standard was modified that will significantly change how business combinations are accounted for through the use of fair values in financial reporting and will impact financial statements both on the acquisition date and in subsequent periods.  In February 2009, this accounting standard was again modified to allow an exception to the recognition and fair value measurement principles of contingencies in a business combination. This exception requires that acquired contingencies be recognized at fair value on the acquisition date if fair value can be reasonably estimated during the allocation period.  These modifications were effective for the Company as of January 1, 2009 for all business combinations that close on or after January 1, 2009.

 

2.                                      SHARE-BASED COMPENSATION

 

Restricted Stock Units or (“RSUs”)

 

A summary of the Company’s outstanding RSUs as of September 30, 2009, and changes in RSUs during the nine months ended September 30, 2009, is as follows:

 

 

 

 

 

 

 

 

 

Weighted-

 

Aggregate

 

 

 

 

 

 

 

Weighted-

 

Average

 

Intrinsic

 

 

 

 

 

 

 

Average

 

Remaining

 

Value As Of

 

 

 

 

 

Number of

 

Purchase

 

Contractual

 

September 30,

 

 

 

Period Ended

 

RSUs

 

Price

 

Term

 

2009

 

 

 

 

 

 

 

 

 

 

 

 

 

RSUs outstanding as of:

 

December 31, 2008

 

1,421,985

 

 

 

 

 

 

 

RSUs awarded

 

 

 

356,596

 

 

 

 

 

 

 

RSUs issued in exchange for options

 

 

 

711,985

 

 

 

 

 

 

 

RSUs released

 

 

 

(296,964

)

 

 

 

 

 

 

RSUs forfeited

 

 

 

(262,706

)

 

 

 

 

 

 

RSUs outstanding as of:

 

September 30, 2009

 

1,930,896

 

$

 

1.6

 

$

9,847,570

 

 

 

 

 

 

 

 

 

 

 

 

 

RSUs vested and expected to vest

 

 

 

1,789,354

 

$

 

1.5

 

$

8,785,208

 

RSUs exercisable (vested and deferred)

 

 

 

66,764

 

$

 

 

$

340,496

 

Weighted average remaining recognition period in years

 

 

 

2.5

 

 

 

 

 

 

 

 

Options

 

No options were exercised during the nine months ended September 30, 2009 and 2008.

 

The following table presents the option activity for the nine months ended September 30, 2009:

 

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Weighted-

 

Intrinsic

 

 

 

 

 

 

 

Weighted-

 

Average

 

Value

 

 

 

 

 

 

 

Average

 

Remaining

 

As of

 

 

 

 

 

Number of

 

Exercise

 

Contractual

 

September 30,

 

 

 

Period Ended

 

Options

 

Price

 

Term

 

2009

 

 

 

 

 

 

 

 

 

 

 

 

 

Options outstanding as of:

 

December 31, 2008

 

2,493,930

 

$

28.33

 

 

 

 

 

Options granted

 

 

 

1,075,250

 

$

1.38

 

 

 

 

 

Options forfeited

 

 

 

(57,312

)

$

2.58

 

 

 

 

 

Options exchanged for RSUS

 

 

 

(2,084,518

)

$

29.02

 

 

 

 

 

Options expired

 

 

 

(315,475

)

$

24.51

 

 

 

 

 

Outstanding as of:

 

September 30, 2009

 

1,111,875

 

$

3.37

 

9.0

 

$

3,825,360

 

 

 

 

 

 

 

 

 

 

 

 

 

Options vested and expected to vest as of:

 

September 30, 2009

 

1,017,727

 

$

3.54

 

9.0

 

$

3,482,837

 

Options vested and exercisable as of:

 

September 30, 2009

 

56,417

 

$

35.91

 

3.4

 

$

 

Weighted average remaining recognition period in years

 

 

 

3.3

 

 

 

 

 

 

 

 

As of September 30, 2009, $1.2 million of accumulated unrecognized compensation costs related to unvested stock options, net of estimated forfeitures, is expected to be recognized in future periods over a weighted average period of 3.3 years.

 

The fair value of each option grant was estimated on the date of grant using the following weighted average assumptions:

 

 

 

Nine Months Ended

 

 

 

September 30,

 

 

 

2009

 

2008

 

Expected life (years)

 

6.3

 

6.3

 

Expected volatility factor (%)

 

54.9% to 66.6%

 

30.9% to 32.3%

 

Risk-free interest rate (%)

 

2.2% to 2.9%

 

2.7% to 3.3%

 

Expected dividend yield (%)

 

0.0%

 

3.7% to 14.6%

 

 

The following table summarizes significant ranges of outstanding and exercisable options as of September 30, 2009:

 

 

 

Options Outstanding

 

Options Exercisable

 

 

 

Number Of

 

Weighted

 

 

 

Number Of

 

 

 

 

 

Options

 

Average

 

Weighted

 

Options

 

Weighted

 

 

 

Outstanding

 

Remaining

 

Average

 

Exercisable

 

Average

 

 

 

September 30,

 

Contractual

 

Exercise

 

September 30,

 

Exercise

 

Exercise Prices

 

2009

 

Life

 

Price

 

2009

 

Price

 

$

1.34

 

$

1.34

 

1,006,750

 

9.4

 

$

1.34

 

 

$

 

$

1.57

 

$

11.69

 

48,125

 

9.0

 

$

7.57

 

6,167

 

$

11.50

 

$

11.78

 

$

11.78

 

9,000

 

8.4

 

$

11.78

 

2,250

 

$

11.78

 

$

27.75

 

$

40.00

 

24,500

 

3.1

 

$

34.11

 

24,500

 

$

34.11

 

$

42.88

 

$

48.21

 

23,500

 

2.0

 

$

46.51

 

23,500

 

$

46.51

 

$

1.34

 

$

48.21

 

1,111,875

 

9.0

 

$

3.37

 

56,417

 

$

35.91

 

 

Recognized Non-Cash Compensation Expense

 

The following table summarizes stock-based compensation expense related to awards of RSUs, employee stock options and purchases under the employee stock purchase plan for the nine and three months ended September 30, 2009 and 2008:

 

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Nine Months Ended

 

Three Months Ended

 

 

 

September 30,

 

 

 

2009

 

2008

 

2009

 

2008

 

 

 

(amounts in thousands)

 

Station operating expenses

 

$

1,460

 

$

1,852

 

$

698

 

$

739

 

Corporate general and administrative expenses

 

4,237

 

5,959

 

1,300

 

1,354

 

Stock-based compensation expense included in operating expenses

 

5,697

 

7,811

 

1,998

 

2,093

 

Income tax benefit (net of a fully reserved valuation allowance)

 

 

(2,560

)

 

(595

)

Total

 

$

5,697

 

$

5,251

 

$

1,998

 

$

1,498

 

 

2009 Option Exchange Program

 

In February 2009, the Company’s Board of Directors approved an amendment to the Entercom Equity Compensation Plan (the “Plan”) to permit a one-time Option Exchange Program (“2009 OEP”), which amendment was approved at the May 2009 shareholders’ meeting. On April 13, 2009, the Company commenced the 2009 OEP, which was subject to shareholder approval, by making an offer to exchange to the Company’s eligible employees and non-employee directors. The Company offered such persons the opportunity to make an election to exchange all of their outstanding stock options with exercise prices equal to or greater than $11.80 per share for a lesser number of RSUs. The exchange ratios were as follows:

 

Option

 

Exchange Ratio

 

Strike Price

 

(Options For RSUs)

 

At least $11.80, but less than $30.00

 

2.25 for 1

 

$30.00 or more

 

4.5 for 1

 

 

On May 15, 2009, following the May 14, 2009 expiration of the Company’s 2009 OEP, the Company granted 0.7 million RSUs in exchange for 2.1 million options. As a result of the 2009 OEP, the number of RSUs that can be issued under the Plan was effectively increased by 0.7 million as all RSUs granted did not count against the restricted stock sublimit in the Plan.  In addition, the number of awards that can be issued under the Plan was effectively reduced by 2.1 million as all options that were exchanged will not be available for re-grant under the Plan.

 

The Company applied modification accounting for the 2009 OEP and will recognize share-based compensation expense of $1.2 million on a straight-line basis over the four-year vesting period of the RSUs. Under modification accounting, the fair value of the new shares immediately prior to the exchange was greater by $1.2 million than the fair value of the surrendered options. In addition, under the bifurcated method, share-based compensation expense of $0.9 million associated with any unvested options exchanged and cancelled as of the modification date will be recognized over the remaining original option term, and the expense will only be reversed if the original service period is not met.

 

3.                                      INTANGIBLE ASSETS AND GOODWILL

 

(A) Indefinite-Lived Intangibles

 

Under the accounting standards for goodwill and certain intangible assets, these assets are not amortized.  The Company has concluded that its acquired broadcasting licenses are treated as an indefinite-lived intangible asset and, similar to goodwill, these assets are reviewed at least annually for impairment. At the time of each review, if the recorded value of goodwill and certain intangibles (such as broadcasting licenses) is more than their fair value, then a charge is recorded to the results of operations.

 

Under accounting guidance, the Company may only write down the carrying value of its indefinite-lived intangibles, but is not permitted to increase the carrying value if the fair value of these assets subsequently increases.

 

Change In Annual Testing Period For Broadcasting Licenses

 

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Table of Contents

 

In 2009, the Company changed the period when it performs its annual impairment test for broadcasting licenses from the first quarter to the second quarter of each year, in line with its annual impairment test for goodwill.  An interim impairment test for broadcasting licenses was performed during the fourth quarter of 2008.

 

Broadcasting Licenses

 

The Company performs its broadcasting license impairment test by evaluating its broadcasting licenses for impairment at the market level using the direct method. Accounting guidance states that separately recorded indefinite-lived intangible assets should be combined into a single unit of accounting for purposes of testing impairment if they are operated as a single asset.  The Company determines the fair value of the broadcasting licenses in each of its markets by relying on a discounted cash flow approach (a 10-year income model) assuming a start-up scenario in which the only assets held by an investor are broadcasting licenses. The Company’s fair value analysis contains assumptions incorporating variables that are based on past experiences and judgments about future performance using industry normalized information for an average station within a certain market. These variables include, but are not limited to: (1) the forecast growth rate of each radio market, including assumptions regarding each market’s population, household income, retail sales and other factors that would influence advertising expenditures; (2) market share and profit margin of an average station based upon market size and station type; (3) estimated capital start-up costs and losses incurred during the early years; (4) risk-adjusted discount rate; (5) the likely media competition within the market area; (6) an effective tax rate assumption; and (7) future terminal values.

 

During the second quarter of 2009, the Company completed the impairment test for broadcasting licenses and determined that the fair value of the broadcasting licenses was less than the amount reflected in the balance sheet for each of the Company’s markets, other than Seattle, and recorded an impairment loss of $60.8 million. The prolonged economic downturn negatively impacted the radio broadcasting industry as advertising revenues continued to decline and expectations for growth over the next year were reduced. The projected growth levels for the industry and the Company were less than those originally forecasted for 2009, which was the primary reason for further impairment to broadcasting licenses in the second quarter.  As revenues decline, profitability levels are also negatively impacted as fixed costs represent a large component of a radio station’s operating expenses. As a result, the asset base is particularly sensitive to the impact of continued declining revenues.

 

The following table reflects certain key estimates and assumptions since the most recent impairment test in the fourth quarter of 2008.  The ranges for operating profit margin and market long-term revenue growth rates are for each of the Company’s markets. In general, when comparing between the second quarter of 2009 and the fourth quarter of 2008: (1) the market specific operating profit margin range declined; and (2) the market long-term revenue growth rates were consistent; however, current period revenues were less than previously projected for 2009.

 

 

 

Second

 

Fourth

 

 

 

Quarter

 

Quarter

 

 

 

2009

 

2008

 

Discount rates

 

10.6%

 

10.6%

 

Operating profit margin ranges

 

21.0% to 44.0%

 

21.0% to 46.7%

 

Market long-term revenue growth rates

 

1.0% to 2.5%

 

1.0% to 2.0%

 

 

The following table presents, in thousands, the changes in broadcasting licenses for the nine months ended September 30, 2009 and 2008:

 

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Table of Contents

 

 

 

Carrying

 

 

 

Amount

 

Balance as of December 31, 2008

 

$

768,646

 

Loss on impairment

 

(60,794

)

Balance as of September 30, 2009

 

$

707,852

 

 

 

 

Carrying

 

 

 

Amount

 

Balance as of December 31, 2007

 

$

1,316,983

 

Acquisition

 

210,358

 

Loss on impairment

 

(117,000

)

Reversal of assets held for sale

 

3,650

 

Balance as of September 30, 2008

 

$

1,413,991

 

 

The amount of unamortized broadcasting licenses reflected in the balance sheet as of September 30, 2009 and December 31, 2008 was $707.9 million and $768.6 million, respectively. If actual market conditions are less favorable than those projected by the industry or the Company, or if events occur or circumstances change that would reduce the fair value of the Company’s broadcasting licenses below the amount reflected in the balance sheet, the Company may be required to recognize impairment charges, which may be material, in future periods.

 

In connection with the Company’s annual review of its goodwill during the second quarter of 2008, the Company determined that the fair value of several of its markets’ broadcasting licenses was impaired under the second step of its goodwill analysis.  As a result, for the nine months ended September 30, 2008, the Company recorded an impairment loss in the Denver, Greenville, Indianapolis and Memphis markets on an aggregate basis of $117.0 million and reduced its carrying value of broadcasting licenses.  Contributing factors to the impairment were a decline in the advertising dollars in these markets and its effect on the Company’s operations, coupled with changes in the anticipated growth of these markets.

 

Please refer to Note 15, Discontinued Operations, for a discussion of an impairment to broadcasting licenses in Rochester, New York, during the first quarter of 2008.

 

Goodwill

 

The Company performs its annual impairment test on its goodwill during the second quarter of each year by comparing the fair value for each reporting unit with the amount reflected on the balance sheet. The Company has determined that a radio market is a reporting unit and in total, the Company assesses goodwill at 22 separate reporting units. If the fair value for any reporting unit is less than the amount reflected in the balance sheet, an indication exists that the amount of goodwill attributed to a reporting unit may be impaired, and the Company is required to perform a second step of the impairment test. In the second step, the Company compares to the amount reflected in the balance sheet, the implied fair value of the reporting unit’s goodwill, determined by allocating the reporting unit’s fair value to all of its assets and liabilities in a manner similar to a purchase price allocation.

 

To determine the fair value, the Company uses an income and market approach for each reporting unit. The market approach compares recent sales and offering prices of similar properties. The income approach uses the subject property’s income generated over a specified time and capitalized at an appropriate market rate to arrive at an indication of the most probable selling price.

 

In step one of the Company’s goodwill analysis, the Company considered the results of the market approach and the income approach in computing the fair value of the Company’s reporting units. In the market approach, the Company applied an estimated market multiple of six times (consistent with the multiple used in the fourth quarter of 2008) to each reporting unit’s operating performance to calculate the fair value. The Company applied the same market multiple consistently across all reporting units. In the income approach, the Company utilized the discounted cash flow method to calculate the fair value of the reporting unit (the key estimates and assumptions are included in the table below). The results of step one indicated that it was necessary to perform the second step analysis in seven of the 22 markets (each market is a reporting unit). The fair values for two of the seven markets were marginally above book value. Management believes that these approaches are commonly used methodologies for valuing broadcast radio stations and that a six times multiple is an appropriate measurement given the recent fall in market

 

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valuations of broadcast radio stations together with a historically low level of market transactions in recent months. The marginal stations were included in the Company’s step one impairment testing due to the subjective nature of the step one analysis and the sensitivities inherent in these calculations. Factors contributing to the determination of the reporting unit’s operating performance were historical performance and/or management’s estimates of future performance.

 

Under the second step, the Company determined that the fair value of the Company’s goodwill was less than the amount reflected in the balance sheet for the seven markets tested, which were Austin, Greensboro, Greenville, Indianapolis, Kansas City, Memphis and Wichita, and recorded an impairment loss of $6.9 million during the second quarter of 2009. Contributing factors to the impairment were a decline in the advertising dollars in these markets and its effect on the Company’s operations, coupled with changes in the anticipated growth and profitability of these markets.

 

The prolonged economic downturn negatively impacted the radio broadcasting industry as advertising revenues continued to decline and expectations for growth over the next year also declined. The projected revenue growth levels for the industry and the Company were less than those originally forecasted for 2009, which caused further goodwill impairment in the second quarter of 2009.  As revenues decline, profitability levels are also negatively impacted as fixed costs represent a large component of a radio station’s operating expenses. As a result, the asset base is particularly sensitive to the impact of declining revenues.

 

The following table reflects certain key estimates and assumptions since the most recent impairment test in the fourth quarter of 2008.  The ranges for operating profit margin and revenue growth rates are for each of the Company’s markets.  In general, when comparing between the second quarter of 2009 and the fourth quarter of 2008: (1) the market specific operating profit margin range declined; and (2) the market long-term revenue growth rates were consistent; however, current period revenues were less than previously projected for 2009.

 

 

 

Second

 

Fourth

 

 

 

Quarter

 

Quarter

 

 

 

2009

 

2008

 

Discount rates

 

10.6%

 

10.6%

 

Operating profit margin ranges

 

21.0% to 41.0%

 

21.0% to 44.0%

 

Market long-term revenue growth rates

 

1.0% to 2.5%

 

1.0% to 2.0%

 

 

The following table presents, in thousands, the change in goodwill for the nine months September 30, 2009 and 2008:

 

 

 

Goodwill

 

 

 

Carrying Amount

 

 

 

2009

 

2008

 

 

 

(amounts in thousands)

 

Goodwill before cumulative loss on impairment as of January 1,

 

$

163,783

 

$

160,976

 

Accumulated loss on impairment

 

(118,733

)

(45,362

)

Goodwill after cumulative loss on impairment

 

45,050

 

115,614

 

Loss on impairment during the year

 

(6,882

)

(67,587

)

Acquisitions during the year

 

 

2,807

 

Ending balance as of September 30,

 

$

38,168

 

$

50,834

 

 

During the second quarter of 2008, the Company recorded an impairment loss of $67.6 million on an aggregate basis for the Denver and Indianapolis markets. Contributing factors to the impairment were a decline in the available advertising dollars in these markets and its effect on the Company’s operations, coupled with changes in the anticipated growth of the broadcasting industry and its impact on prices paid for radio stations.

 

Please refer to Note 15, Discontinued Operations, for a discussion of an impairment to goodwill during the nine months ended September 30, 2008 related to the disposition of radio station assets in Rochester, New York.

 

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The amount of goodwill reflected in the Company’s balance sheet as of September 30, 2009 and December 31, 2008 was $38.2 million and $45.1 million, respectively.  If actual market conditions are less favorable than those projected by the industry or the Company, or if events occur or circumstances change that would reduce the fair value of the Company’s goodwill below the amount reflected in the balance sheet, the Company may be required to recognize impairment charges, which may be material, in future periods.

 

(B) Definite-Lived Intangibles

 

The Company has definite-lived intangible assets that consist of advertiser lists and customer relationships, acquired advertising contracts and income leases. These assets are amortized over the period for which the assets are expected to contribute to the Company’s future cash flows and are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. The amount of the amortization expense for definite-lived intangible assets was $0.1 million and $2.8 million for the nine months ended September 30, 2009 and 2008, respectively.  As of September 30, 2009, the Company reflected $0.8 million in unamortized definite-lived assets, which is included in deferred charges and other assets on the balance sheet.

 

The following is an estimate of the amortization expense for definite-lived assets, in thousands, for each of the succeeding years ending December 31:

 

 

 

Definite-

 

 

 

Lived

 

 

 

Assets

 

Year ending December 31,:

 

 

 

2009 (Excludes year-to-date ended September 30, 2009)

 

$

36

 

2010

 

124

 

2011

 

84

 

2012

 

81

 

2013

 

53

 

Thereafter

 

445

 

Total

 

$

823

 

 

4.                                      ACQUISITIONS, DISPOSITIONS AND UNAUDITED PRO FORMA SUMMARY

 

Acquisitions And Dispositions For The Nine Months Ended September 30, 2009

 

There were no acquisitions or dispositions (other than as disclosed under Note 7, Financing Method Lease Obligations and Note 9, Contingencies, Guarantor Arrangements and Commitments), during the nine months ended September 30, 2009.

 

Unaudited Pro Forma Summary Of Financial Information

 

The following pro forma information presents the consolidated results of operations as if any acquisitions which occurred had all occurred as of the beginning of each period presented, after giving effect to certain adjustments, including depreciation and amortization of assets and interest expense on any debt incurred to fund the acquisitions which would have been incurred had such acquisitions occurred as of the beginning of the periods presented. For purposes of this presentation, the data does not reflect on a pro forma basis dispositions of radio stations (other than the disposition of: (1) a radio station in Cincinnati as the Company has never operated this station; and (2) the disposition of radio stations in Seattle and Cincinnati as this disposition was in exchange for the assets as described under Note 4).  In addition, the tables reflect on a pro forma basis as if the discontinued operations in Rochester were not discontinued. These unaudited pro forma results have been prepared for comparative purposes only and do not purport to be indicative of what would have occurred had the acquisitions been made as of that date or results which may occur in the future.

 

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Nine Months Ended

 

Three Months Ended