Citadel Broadcasting Corporation Reports 2004 Third Quarter Results and The Board of Directors Authorizes An Additional $300 Million Stock Buyback.LAS VEGAS Las Vegas (läs vā`gəs), city (1990 pop. 258,295), seat of Clark co., S Nev.; inc. 1911. It is the largest city in Nevada and the center of one of the fastest-growing urban areas in the United States. -- Citadel Broadcasting
Citadel Broadcasting Corporation NYSE: CDL is a Las Vegas, Nevada based broadcast holding company. Investment house Forstmann Little & Company owns 27% of Citadel. Corporation (NYSE NYSE See: New York Stock Exchange :CDL 1. CDL - Computer Definition anguage. A hardware description language. "Computer Organisation and Microprogramming", Yaohan Chu, P-H 1970. 2. CDL - Command Definition Language. Portion of ICES used to implement commands. Sammet 1969, p.618-620. 3. ): --Third Quarter Net Revenue Up 11% --Third Quarter Station Operating Income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. Up 11% --Third Quarter Operating Income Up 79% --Third Quarter Free Cash Flow Up 36% --Company Completes a $600 Million Revolving Loan Facility --Company Settles Dispute with National Rep (programming) REP - A directive used in IBM object code card decks (and later PTF Tapes) to REPlace fragments of already assembled or compiled object code prior to link edit. Firm Citadel Broadcasting Corporation (NYSE:CDL) today reported its results for the third quarter of 2004. September September: see month. 30, 2004 - Third Quarter Results Net revenues in the third quarter of 2004 were a record $107.5 million compared with $96.7 million in the third quarter of 2003, an increase of $10.8 million, or 11.2%. The increase in revenues was due to higher revenues at the Company's existing stations as well as the acquisitions completed in 2003 and 2004. Excluding the effect of the stations acquired in 2003 and 2004, same station net revenues for the third quarter of 2004 were up approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. 3% compared to the same period in 2003. Operating income for the third quarter of 2004 was $6.1 million compared to $3.4 million in the corresponding 2003 period, an increase of $2.7 million, or 79.4%. The third quarter operating income for 2004 reflects a non-cash charge Non-Cash Charge A charge off, made by a company against earnings, that does not require an initial outlay of cash. Notes: Non-cash charges are typically against the depreciation, amortization, and depletion accounts on a company's balance sheet. of approximately $16.4 million primarily due to the Company's settlement with its previous national rep firm. Under the terms of the settlement, the Company's new rep firm (Katz Katz , Bernard 1911-2003. German-born British physiologist. He shared a 1970 Nobel Prize for the study of nerve impulse transmission. ) settled the Company's obligations under the settlement agreement with the prior rep firm and entered into a new long term contract with the Company. Excluding this non-cash charge, the Company's operating income for the third quarter of 2004 would have been approximately $22.5 million, an increase of $19.1 million over 2003. The increase in operating income for the third quarter of 2004 was primarily due to higher revenues and decreases in depreciation and amortization expense and non-cash stock compensation expense, partially offset by higher station operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. . Operating income includes depreciation and amortization expense of $22.0 million and $35.0 million and non-cash stock compensation expense of $0.9 million and $2.2 million for the three months ended September 30, 2004 and 2003, respectively. Station operating income (as detailed in the attached table is generally defined as operating income plus depreciation and amortization, local marketing agreement fees, corporate general and administrative expenses, other, net, and other non-cash expenses Noun 1. non-cash expense - an expense (such as depreciation) that is not paid for in cash disbursal, disbursement, expense - amounts paid for goods and services that may be currently tax deductible (as opposed to capital expenditures) ) was a record $48.3 million for the third quarter of 2004 compared to $43.6 million for the third quarter of 2003, an increase of $4.7 million, or 10.8%. On a same station basis, as defined above, station operating income was up approximately 7% over the same period in 2003. Same station operating income after corporate general and administrative expenses was up approximately 6%. Income tax benefit for the quarter ended September 30, 2004 was $90.6 million (substantially all non-cash) compared to income tax expense of $7.3 million (substantially all non-cash) for the quarter ended September 30, 2003. The income tax benefit for the quarter ended September 30, 2004 was primarily due to the recognition of the Company's net operating loss operating loss The excess of operating expenses over revenue. As with operating income, operating losses exclude revenues and expenses from operations that are not considered a regular part of the business. Also called deficit. Compare operating income. carry-forward See Loss Carry-Back. for income tax purposes. The income tax expense for the three months ended September 30, 2003 was primarily due to the amortization of indefinite INDEFINITE. That which is undefined; uncertain. INDEFINITE, NUMBER. A number which may be increased or diminished at pleasure. 2. When a corporation is composed of an indefinite number of persons, any number of them consisting of a majority of those lived intangibles Property that is a "right" such as a patent, Copyright, or trademark, or one that is lacking physical existence, such as good will. for income tax purposes, for which no benefit can be recognized in the financial statements until the assets are disposed dis·pose v. dis·posed, dis·pos·ing, dis·pos·es v.tr. 1. To place or set in a particular order; arrange. 2. of. Net income (loss) per diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share for the quarter ended September 30, 2004 increased $0.82 as the Company reported net income for the quarter of $90.1 million or $0.62 per diluted share as compared to a net loss of $23.2 million or $(0.20) per diluted share for the same period in 2003. The increase in net income over the prior period is primarily due to the income tax benefit/expense discussed above. The diluted shares outstanding for the quarter ended September 30, 2004 include stock options and approximately 12.9 million shares related to the Company's convertible notes, as the computation Computation is a general term for any type of information processing that can be represented mathematically. This includes phenomena ranging from simple calculations to human thinking. of diluted shares assumes the notes are converted into shares as of the beginning of the period. For the three months ended September 30, 2003, basic shares outstanding of approximately 113.9 million are equal to diluted shares outstanding as any increase in shares due to outstanding stock options would be anti-dilutive due to the net loss for the quarter. Free cash flow (as detailed in the attached table is generally defined as operating income (i) plus depreciation and amortization, other, net, and other non-cash expenses (ii) less net interest expense (excluding amortization of debt issuance costs), capital expenditures and cash taxes) was $38.2 million for the three months ended September 30, 2004 compared to $28.2 million for the three months ended September 30, 2003, an increase of $10.0 million, or 35.5%. Farid Suleman Farid Suleman is the current chairman and CEO of Citadel Broadcasting. For years at Infinity Radio, Suleman was the main assistant of Mel Karmazin, who has since made a move to head up Sirius Satellite Radio. , Chairman and Chief Executive Officer of Citadel Broadcasting Corporation, commented: "The Company has continued to deliver record operating results on both a reported basis and same station basis in spite of in opposition to all efforts of; in defiance or contempt of; notwithstanding. See also: Spite a challenging environment." Mr. Suleman added that "the Company has been utilizing its significant free cash flow and availability under its credit facility to repurchase re·pur·chase tr.v. re·pur·chased, re·pur·chas·ing, re·pur·chas·es To buy (something) again. n. The act of buying something that one previously sold or owned. Noun 1. Company shares under the $100 million stock buy back program. As of November November: see month. 2, 2004, the Company has repurchased approximately 6.0 million shares for a total of approximately $82.8 million. While we are fully committed (Law) committed to prison for trial, in distinction from being detained for examination. See also: Fully to investing in our business and making strategic acquisitions, we also intend to increase shareholder value by investing in our stock." Net interest expense decreased to $3.7 million for the quarter ended September 30, 2004 from $11.1 million for the quarter ended September 30, 2003, a decrease of 66.7%. The decrease in net interest expense was primarily due to the repayment Repayment The act of paying back a debt. Notes: Everyone has to repay their debts eventually. See also: Debt, Defeasance, Loan of $500.0 million of 6% subordinated Subordinated A claim ranked lower in priority than other claims. Common stock claims are always subordinated to debt. notes on February February: see month. 18, 2004, partially offset by the concurrent At the same time. It implies that multiple processes are taking place simultaneously. See concurrent operation. issuance of $330.0 million of 1.875% convertible notes. The $500.0 million of 6% subordinated notes were repaid with proceeds from the Company's concurrent offering of its common stock and the issuance of the convertible notes completed in February of 2004. The Company also wrote-off $3.0 million of deferred financing costs in the quarter ended September 30, 2004 due to the Company's repayment of its previous senior credit facility with borrowings under its new senior credit facility. The new senior facility was completed in August 2004 and provides for $600 million in revolving loans through January January: see month. 15, 2010. For the quarter ended September 30, 2003, the Company wrote-off $8.2 million of deferred financing costs as a result of the repayment of senior debt from proceeds of the Company's initial public offering of its common stock on August 1, 2003. Depreciation and amortization expense decreased to $22.0 million for the quarter ended September 30, 2004 from $35.0 million for the same period in 2003, a decrease of 37.1%. The decrease is due to a reduction in amortization expense primarily related to the Company's Advertiser ad·ver·tise v. ad·ver·tised, ad·ver·tis·ing, ad·ver·tis·es v.tr. 1. To make public announcement of, especially to proclaim the qualities or advantages of (a product or business) so as to increase Base asset. Amortization expense for the quarter ended September 30, 2004 and 2003 includes approximately $16.0 million and $28.7 million, respectively, of expense related to the Company's Advertiser Base asset. Amortization of the Advertiser Base should be substantially completed in the fourth quarter of 2004 and is estimated at $10.8 million. September 30, 2004 - Year to Date Results Net revenues for the nine months ended September 30, 2004 were a record $301.7 million compared with $269.3 million for the nine months ended September 30, 2003, an increase of $32.4 million, or 12.0%. The increase in revenues was due to higher revenues at the Company's existing stations as well as the acquisitions completed in 2003 and 2004. Excluding the effect of the stations acquired in 2003 and 2004, same station net revenues for 2004 were up approximately 4% compared to the same period in 2003. Operating income was $14.6 million for the nine months ended September 30, 2004 compared to a loss of $8.9 million for the nine months ended September 30, 2003, an increase of $23.5 million. Operating income for the nine months ended September 30, 2004 reflects a non-cash charge of approximately $16.4 million primarily due to the Company's settlement with its previous national rep firm, as discussed above. Excluding this non-cash charge, the Company's operating income for the nine months ended September 30, 2004 would have been approximately $31.0 million, an increase of $39.9 million over 2003. The increase in operating income for the nine months ended September 30, 2004 was primarily due to higher revenues and decreases in depreciation and amortization expense and non-cash stock compensation expense, partially offset by higher station operating expenses. Operating income includes depreciation and amortization expense of $84.4 million and $105.8 million and non-cash stock compensation expense of $3.5 million and $8.2 million for the nine months ended September 30, 2004 and 2003, respectively. Station operating income (as previously defined) was a record $128.1 million for the nine-month period ended September 30, 2004 compared to $114.1 million for the same period in 2003, an increase of $14.0 million, or 12.3%. On a same station basis, as defined above, station operating income was up approximately 7% over the same period in 2003. Same station operating income after corporate general and administrative expenses was up approximately 6%. Income tax benefit for the nine months ended September 30, 2004 was $73.2 million (substantially all non-cash) compared to income tax expense of $20.2 million (substantially all non-cash) for the nine months ended September 30, 2003. The income tax benefit for the nine months ended September 30, 2004 was primarily due to the recognition of the Company's net operating loss carry-forward for income tax purposes. The income tax expense for the nine months ended September 30, 2003 was primarily due to the amortization of indefinite lived intangibles for income tax purposes, for which no benefit can be recognized in the financial statements until the assets are disposed of. Net income (loss) per diluted share for the nine months ended September 30, 2004 increased $1.18 as the Company reported net income for the nine months of $60.8 million or $0.44 per diluted share as compared to a net loss of $76.0 million or $(0.74) per diluted share for the same period in 2003. The increase in net income over the prior period was primarily due to the income tax benefit/expense discussed above and the reduction in depreciation and amortization expense of approximately $21.4 million. The diluted shares outstanding for the nine months ended September 30, 2004 include stock options and approximately 10.7 million shares related to the Company's convertible notes, as the computation of diluted shares assumes the notes are converted into shares as of the date the convertible notes were issued. For the nine months ended September 30, 2003, basic shares outstanding of approximately 102.1 million are equal to diluted shares outstanding as any increase in shares due to outstanding stock options would be anti-dilutive due to the net loss for the nine months ended September 30, 2003. Free cash flow (as previously defined) was $97.1 million for the nine months ended September 30, 2004 compared to $63.1 million for the nine months ended September 30, 2003, an increase of $34.0 million, or 53.9%. Net interest expense decreased $25.4 million, or 65.5%, to $13.4 million for the nine months ended September 30, 2004 from $38.8 million for the same period in 2003. The decrease in net interest expense was primarily due to a reduction in both average outstanding borrowings under the Company's senior credit facility and lower interest rates for the nine moths This is an incomplete list of species of Lepidoptera that are commonly known as moths. Large and dramatic moth species
For the nine months ended September 30, 2004, the Company wrote-off $3.0 million of deferred financing costs due to the Company's repayment of its previous senior credit facility and $10.6 million of deferred financing costs as a result of the repayment of $500.0 million in senior subordinated notes. For the nine months ended September 30, 2003, the Company wrote-off $8.2 million of deferred financing costs as a result of the repayment of senior debt from proceeds of the Company's initial public offering of its common stock on August 1, 2003. Depreciation and amortization expense decreased to $84.4 million for the nine months ended September 30, 2004 from $105.8 million for the same period in 2003, a decrease of $21.4 million, or 20.2%. The decrease is due to a reduction in amortization expense primarily related to the Company's Advertiser Base asset. Amortization expense for the nine months ended September 30, 2004 and 2003 includes approximately $64.9 million and $86.4 million, respectively, of expense related to the Company's Advertiser Base asset. For the twelve months ended September 30, 2004, station operating income was approximately $173.6 million. Outlook for 2004 While the economic environment continues to make it difficult to predict future results, the Company estimates that for the fourth quarter of 2004, the Company's same station revenue and same station operating income growth rates Growth Rates The compounded annualized rate of growth of a company's revenues, earnings, dividends, or other figures. Notes: Remember, historically high growth rates don't always mean a high rate of growth looking into the future. will be comparable to the third quarter. Citadel Broadcasting Corporation is a radio broadcaster focused primarily on acquiring, developing and operating radio stations throughout the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. . The Company owns and operates 155 FM and 58 AM radio stations in 46 markets located in 24 states across the country. For more information visit www.citadelbroadcasting.com. Forward-Looking Statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. This news release contains both historical and forward-looking statements. All statements, other than statements of historical fact are, or may be deemed to be, forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities and Exchange Act of 1934. Such forward-looking statements involve known and unknown risks, uncertainties and other factors, which may cause the actual results or performance of the Company to be materially different from any future results or performance expressed or implied Inferred from circumstances; known indirectly. In its legal application, the term implied is used in contrast with express, where the intention regarding the subject matter is explicitly and directly indicated. by such forward-looking statements. Various risks that could cause future results to differ from those expressed by the forward-looking statements included in this release include, but are not limited to: changes in economic conditions in the U.S.; fluctuations in interest rates; changes in industry conditions; changes in operating performance; shifts in population and other demographics The attributes of people in a particular geographic area. Used for marketing purposes, population, ethnic origins, religion, spoken language, income and age range are examples of demographic data. ; changes in the level of competition for advertising dollars; technological changes and innovations; changes in governmental regulations and policies and actions of regulatory reg·u·late tr.v. reg·u·lat·ed, reg·u·lat·ing, reg·u·lates 1. To control or direct according to rule, principle, or law. 2. bodies; changes in tax rates; and changes in capital expenditure requirements. Other key risks are described in the Company's reports filed with the U.S. Securities and Exchange Commission. The Company assumes no obligation to publicly update or revise any forward-looking statements.
CITADEL BROADCASTING CORPORATION
Condensed Consolidated Financial Data
(Amounts in Thousands, except per share data)
(Unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
--------------------- -------------------
Condensed Statements of 2004 2003 2004 2003
Operations
Net Revenues $107,524 $96,707 $301,726 $269,308
Cost of Revenues 29,584 24,901 83,500 72,071
Selling, General and
Administrative 29,617 28,171 90,103 83,133
Corporate General and
Administrative 3,094 2,456 8,629 7,399
Non-Cash Stock Compensation 863 2,158 3,463 8,181
Local Marketing Agreement
Fees 516 601 1,539 1,582
Depreciation and
Amortization 22,044 34,959 84,408 105,770
Non-cash Charge Related to
Contract Obligations 16,449 - 16,449 -
Other, Net (781) 31 (953) 67
---------- ---------- --------- ---------
Operating Income (Loss) 6,138 3,430 14,588 (8,895)
---------- ---------- --------- ---------
Non-Operating Expenses:
Net Interest Expense
(Including Amortization of
Debt Issuance Costs
of $482 and $666 for the
Three Months Ended
September 30, 2004
and 2003, Respectively,
and $1,517 and $2,495 for
the Nine Months Ended
September 30, 2004 and
2003, Respectively) 3,688 11,091 13,406 38,750
Write-off of Deferred
Financing Costs Due to
Extinguishment of Debt 2,966 8,154 13,615 8,154
---------- ---------- --------- ---------
Total Non-Operating Expenses 6,654 19,245 27,021 46,904
---------- ---------- --------- ---------
Loss before Income Taxes (516) (15,815) (12,433) (55,799)
Income Tax (Benefit)/Expense (90,582) 7,338 (73,246) 20,151
---------- ---------- --------- ---------
Net Income (Loss) $90,066 $(23,153) $60,813 $(75,950)
========== ========== ========= =========
Basic Net Income (Loss) Per
Common Share $0.69 $(0.20) $0.47 $(0.74)
========== ========== ========= =========
Diluted Net Income (Loss)
Per Common Share $0.62 $(0.20) $0.44 $(0.74)
========== ========== ========= =========
Weighted Average Common
Shares Outstanding:
Basic 130,672 113,889 130,202 102,118
========== ========== ========= =========
Diluted 146,473 113,889 143,758 102,118
========== ========== ========= =========
September December
30, 2004 31, 2003
---------- ----------
(Unaudited)
(Amounts in Thousands)
Selected Balance Sheet Data:
Cash and Cash Equivalents $3,391 $3,467
Working Capital 55,932 52,181
Total Assets 2,315,496 2,249,333
Senior Debt (Including
Current Portion) 284,000 168,111
Subordinated Debt - 500,000
Convertible Subordinated
Notes 330,000 -
Total Shareholders' Equity 1,410,681 1,232,444
CITADEL BROADCASTING CORPORATION AND SUBSIDIARIES SUPPLEMENTAL DISCLOSURES REGARDING NON-GAAP FINANCIAL INFORMATION (Unaudited; Amounts in thousands) The following tables set forth Station Operating Income for the three and nine months ended September 30, 2004 and 2003. Station Operating Income is defined as net income (loss) adjusted to exclude the following line items presented in the Statement of Operations See Income statement. : income tax expense/(benefit), write off of deferred financing costs, net interest expense, other, net, non-cash charge related to contract obligations, depreciation and amortization, local marketing agreement fees, non-cash stock compensation and corporate general and administrative expenses. Station Operating Income, among other things, is used by the Company's management to evaluate the Company's operating performance, to value prospective acquisitions, as the basis of incentive compensation targets for certain management personnel, and this measure is among the primary measures used by management for the planning and forecasting of future periods. The Company believes the presentation of this measure is relevant and useful for investors because it allows investors to view performance in a manner similar to the method used by the Company's management, helps improve their ability to understand the Company's operating performance and makes it easier to compare the Company's results with other companies that have different financing and capital structures or tax rates. In addition, this measure is also among the primary measures used externally by the Company's investors, analysts and peers in its industry for purposes of valuation and comparing the operating performance of the Company to other companies in its industry. Since Station Operating Income is not a measure of performance calculated in accordance Accordance is Bible Study Software for Macintosh developed by OakTree Software, Inc.[] As well as a standalone program, it is the base software packaged by Zondervan in their Bible Study suites for Macintosh. with GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). , it should not be considered in isolation of, or as a substitute for, operating income or loss, net income or loss, cash flows provided by operating, investing and financing activities, or other income or cash flow statement data prepared in accordance with GAAP. Station Operating Income, as the Company calculates it, may not be comparable to similarly titled measures employed by other companies. In addition, this measure does not necessarily represent funds available for discretionary use, and is not necessarily a measure of the Company's ability to fund its cash needs. As Station Operating Income excludes certain financial information compared with net income (loss), the most directly comparable GAAP financial measure, users of this financial information should consider the types of events and transactions that are excluded. As required by the SEC, the Company provides below a reconciliation of Station Operating Income to net income (loss), the most directly comparable amount reported under GAAP.
Three Months
Ended Nine Months Ended
September 30, September 30,
------------------ -------------------
2004 2003 2004 2003
Station Operating Income $48,323 $43,635 $128,123 $114,104
Corporate General and
Administrative 3,094 2,456 8,629 7,399
Non-Cash Stock Compensation 863 2,158 3,463 8,181
Local Marketing Agreement Fees 516 601 1,539 1,582
Other, Net ( 781) 31 ( 953) 67
Non-Cash Charge Related to
Contract Obligations 16,449 - 16,449 -
-------- --------- --------- ---------
Operating Income Before
Depreciation and Amortization 28,182 38,389 98,996 96,875
Depreciation and Amortization 22,044 34,959 84,408 105,770
-------- --------- --------- ---------
Operating Income (Loss) 6,138 3,430 14,588 (8,895)
Net Interest Expense 3,688 11,091 13,406 38,750
Write-off of Deferred Financing
Costs Due to Extinguishment of
Debt 2,966 8,154 13,615 8,154
-------- --------- --------- ---------
Income/(Loss) before Income
Taxes (516) (15,815) (12,433) (55,799)
Income Tax (Benefit)/Expense (90,582) 7,338 (73,246) 20,151
-------- --------- --------- ---------
Net Income/(Loss) $90,066 $(23,153) $60,813 $(75,950)
======== ========= ========= =========
OTHER FINANCIAL DATA
Three Months
Ended Nine Months Ended
September 30, September 30,
------------------ -------------------
2004 2003 2004 2003
Same Station Computations:
Net Revenues - Reconciliation
of Same Station Net Revenues
to GAAP:
Net Revenues as Reported $107,524 $96,707 $301,726 $269,308
Adjustments for Radio
Station Acquisitions and
Divestitures (9,627) (1,843) (33,860) (12,643)
--------- -------- --------- ---------
Same Station Net Revenues $97,897 $94,864 $267,866 $256,665
Station Operating Income - Same
Station:
Station Operating Income $48,323 $43,635 $128,123 $114,104
Adjustments for Radio
Station Acquisitions and
Divestitures (2,959) (1,275) (11,472) (5,166)
--------- -------- --------- ---------
Same Station Operating Income $45,364 $42,360 $116,651 $108,938
Free cash flow is defined as operating income (loss) (i) plus depreciation, amortization, non-cash charge related to contract obligations, non-cash stock compensation expense and other, net (ii) less net interest expense (excluding amortization of debt issuance costs), capital expenditures and cash taxes. The Company uses free cash flow, among other measures, to evaluate its operating performance. Management believes free cash flow provides investors with an important perspective on the cash available to service debt, make strategic acquisitions and investments, maintain capital assets capital assets n. equipment, property, and funds owned by a business. (See: capital, capital account) and fund ongoing operations and working capital needs. The Company believes the presentation of free cash flow is relevant and useful for investors because it allows investors to view performance in a manner similar to the method used by management. In addition, free cash flow is also a primary measure used externally by the Company's investors, analysts and peers in its industry for purposes of valuation and comparing the operating performance of the Company to other companies in its industry. As free cash flow is not a measure of performance calculated in accordance with GAAP, it should not be considered in isolation of, or as a substitute for, operating income or loss, net income or loss, cash flows provided by operating, investing and financing activities, or other income or cash flow statement data prepared in accordance with GAAP. Free cash flow, as the Company calculates it, may not be comparable to similarly titled measures employed by other companies. In addition, free cash flow does not necessarily represent funds available for discretionary use, and is not necessarily a measure of the Company's ability to fund its cash needs. Free cash flow, as defined by the Company, excludes certain financial information when compared with operating income or loss, the most directly comparable GAAP financial measure, and users of this financial information should consider the types of events and transactions that are excluded. As required by the SEC, the Company provides below a reconciliation of free cash flow to operating income or loss, the most directly comparable amount reported under GAAP.
Three Months Nine Months
Ended Ended
September 30, September 30,
----------------- -----------------
2004 2003 2004 2003
Operating Income/ (Loss) $6,138 $3,430 $14,588 $(8,895)
Plus (Minus)
Depreciation and Amortization 22,044 34,959 84,408 105,770
Non-Cash Charge Related to
Contract Obligations 16,449 - 16,449 -
Non-Cash Stock Compensation 863 2,158 3,463 8,181
Other, Net (781) 31 ( 953) 67
Interest Expense, Net (3,688) (11,091) (13,406) (38,750)
Amortization of Debt Issuance
Costs 482 666 1,517 2,495
Capital Expenditures (2,686) (1,535) (6,981) (4,697)
Cash Taxes (619) (400) (1,956) (1,030)
-------- -------- -------- --------
Free Cash Flow $38,202 $28,218 $97,129 $63,141
======== ======== ======== ========
The following table reconciles station operating income for the twelve months ended September 30, 2004, a non-GAAP financial measure, to net loss for the twelve months ended September 30, 2004, from the Company's financial statements presented in accordance with GAAP.
Twelve Months Ended
September 30, 2004
---------------------
Station Operating Income $173,606
Corporate general and administrative 11,324
Non-Cash Stock Compensation 5,621
Other, net (967)
Non-Cash Charge Related to Contract Obligations 16,449
Local Marketing Agreement Fees 2,362
-------------------
Operating Income Before Depreciation and
Amortization 138,817
Depreciation and Amortization 119,297
-------------------
Operating Income 19,520
Net Interest Expense 22,910
Write off of Deferred Financing Costs due to
Extinguishment of Debt 14,806
-------------------
Loss before Income Taxes (18,196)
Income Tax Benefit (65,389)
-------------------
Net Income $47,193
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