Citadel Broadcasting Corporation Reports 2005 Fourth Quarter and Full Year Operating Results; ABC Radio to Merge with Citadel Broadcasting Corporation, Creating Third Largest National Radio Group.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. ) today reported its results for the fourth quarter of 2005. December December: see month. 31, 2005 - Fourth Quarter Results Net revenues for the fourth quarter of 2005 were $108.3 million compared with $109.8 million in the fourth quarter of 2004, a decrease of $1.5 million, or 1.4%. The decrease in revenues was principally due to lower revenue from political advertisers in 2005 compared to 2004, which declined by $2.9 million. Net revenues in the fourth quarter of 2005 were also affected by lower revenues at the Company's stations in the New Orleans New Orleans (ôr`lēənz –lənz, ôrlēnz`), city (2006 pop. 187,525), coextensive with Orleans parish, SE La., between the Mississippi River and Lake Pontchartrain, 107 mi (172 km) by water from the river mouth; founded market as a result of Hurricane Katrina  Editing of this page by unregistered or newly registered users is currently disabled due to vandalism. in August
2005. Revenues were higher in certain of the Company's markets,
including stations in Allentown Allentown, city (1990 pop. 105,090), seat of Lehigh co., E Pa., on the Lehigh River; inc. as a borough 1811, as a city 1867. The largest city in the agricultural and industrial Lehigh Valley, it is a commercial, financial, and government center. , PA, Modesto Modesto (mōdĕs`tō), city (1990 pop. 164,278), seat of Stanislaus co., central Calif., on the Tuolumne River, near the northern end of the San Joaquin valley; inc. 1884. , CA and Tucson Tucson (t `sŏn'), city (1990 pop. 405,390), seat of Pima co., SE Ariz.; inc. 1877. , AZ.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. for the fourth quarter of 2005 was $35.0 million compared to $27.1 million in the corresponding 2004 period, an increase of $7.9 million, or 29.2%. The increase was primarily due to a decrease of $11.4 million in depreciation and amortization expense since 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 was substantially fully amortized as of December 31, 2004. 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 $45.9 million for the fourth quarter of 2005 compared to $48.2 million for the fourth quarter of 2004, a decrease of $2.3 million, or 4.8%. 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 reported record results for the year in spite of in opposition to all efforts of; in defiance or contempt of; notwithstanding. See also: Spite the absence of political revenues and the loss of revenue from our New Orleans stations." Mr. Suleman added that, "pursuant to the Company's stock buy back program initiated in July July: see month. of 2004, the Company has continued to use its free cash flow 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. shares of its common stock. In addition to the continued stock repurchases Stock repurchase A firm's repurchase of outstanding shares of its common stock. , our Board of Directors approved a regular quarterly dividend to common stockholders of $0.18 per share beginning with the fourth quarter of 2005. The repurchase of its stock and the quarterly dividend underscore The underscore character (_) is often used to make file, field and variable names more readable when blank spaces are not allowed. For example, NOVEL_1A.DOC, FIRST_NAME and Start_Routine. (character) underscore - _, ASCII 95. the Company's commitment to enhance shareholder value." Net interest expense increased to $6.1 million for the quarter ended December 31, 2005 from $3.9 million for the quarter ended December 31, 2004, an increase of $2.2 million, or 56.4%. The increase in net interest expense was due to an increase in outstanding borrowings and higher interest rates under the Company's senior debt for the quarter ended December 31, 2005 as compared to the same period in 2004. Income tax expense for the quarter ended December 31, 2005 was $13.0 million (substantially all non-cash) compared to $9.4 million (substantially all non-cash) for the quarter ended December 31, 2004, an increase of $3.6 million, or 38.3%. Net income for the quarter ended December 31, 2005 was $15.8 million, or $0.14 per basic share, as compared to $13.8 million, or $0.11 per basic share, for the same period in 2004. On a fully 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. basis, net income per share was $0.13 in the fourth quarter of 2005 compared to $0.10 in the fourth quarter of 2004. Free cash flow (as detailed in the attached table, is generally defined as operating income (i) plus depreciation and amortization, other, net and non-cash expenses (ii) less net interest expense (excluding amortization of debt issuance costs), capital expenditures and cash taxes) was $34.5 million for the three months ended December 31, 2005 compared to $39.0 million for the three months ended December 31, 2004, a decrease of $4.5 million. The decrease was due to lower station operating income and an increase in interest expense. Pursuant to the Company's stock repurchase program, during 2005, the Company purchased approximately 12.1 million shares of its common stock for an aggregate amount of $158.8 million. Since the inception of the repurchase program, the Company purchased approximately 19.8 million shares of its common stock, or approximately 15% of its outstanding stock. Accordingly, shares outstanding as of December 31, 2005 were down to 114.0 million, a reduction of 8.7% when compared to 124.9 million shares outstanding as of December 31, 2004. December 31, 2005 - Year to Date Results Net revenues for the year ended December 31, 2005 were a record $419.9 million compared with $411.5 million for the year ended December 31, 2004, an increase of $8.4 million, or 2.0%. The increase in revenues was primarily due to higher revenues at the Company's stations, including stations in Allentown, PA, Buffalo, NY, Oklahoma City Oklahoma City (1990 pop. 444,719), state capital, and seat of Oklahoma co., central Okla., on the North Canadian River; inc. 1890. The state's largest city, it is an important livestock market, a wholesale, distribution, industrial, and financial center, and a farm , OK and Modesto, CA, offset by lower revenues in Colorado Springs Colorado Springs, city (1990 pop. 281,140), seat of El Paso co., central Colo., on Monument and Fountain creeks, at the foot of Pikes Peak; inc. 1886. It is a year-round resort and a booming military, technological, and commercial city. , CO, Lansing Lansing. 1 Village (1990 pop. 28,086), Cook co., NE Ill., a suburb of Chicago, near the Ind. line; inc. 1893. Among the city's industries are meatpacking, food processing, and the manufacture of metal products. 2 City (1990 pop. , MI, and Portland Portland, town, England Portland, town (1991 pop. 12,945), Dorset, S England. It is on the Isle of Portland, a small rocky peninsula. Portland stone has been used in St. Paul's Cathedral and other important London buildings. Lobsters and crabs are harvested. , ME. In 2005, the Company had a decrease in political revenue of $4.4 million, and net revenues in the current year were affected by lower revenues at the Company's stations in the New Orleans market as a result of Hurricane Katrina in August 2005. Additionally, the Company benefited from acquisitions in Springfield Springfield. 1 City (1990 pop. 105,227), state capital and seat of Sangamon co., central Ill., on the Sangamon River; settled 1818, inc. as a city 1840. , MA and Tuscaloosa Tuscaloosa (təskəl `sə), city (1990 pop. 77,759), seat of Tuscaloosa co., W central Ala., on the Black Warrior River; inc. 1819. , AL, offset by stations sold, as well as lower revenues
associated with certain programming terminated ter·mi·nate v. ter·mi·nat·ed, ter·mi·nat·ing, ter·mi·nates v.tr. 1. To bring to an end or halt: at the beginning of the year. Operating income was $143.4 million for the year ended December 31, 2005 compared to $41.7 million for the year ended December 31, 2004, an increase of $101.7 million. The increase was primarily due to higher revenues and a decrease in depreciation and amortization expense of $79.0 million, partially offset by higher 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 for the year ended December 31, 2004 reflected 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. Excluding this non-cash charge, the Company's operating income for 2004 would have been approximately $58.1 million, resulting in an increase in the 2005 period of $85.3 million. 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) was a record $182.5 million for the year ended December 31, 2005 compared to $176.3 million for the same period in 2004, an increase of $6.2 million, or 3.5%. Net interest expense increased $3.8 million, or 22.0%, to $21.1 million for the year ended December 31, 2005 from $17.3 million for the same period in 2004. The increase in net interest expense was primarily due to the Company's overall increase in outstanding borrowings under the senior debt and higher interest rates for 2005 as compared to 2004. This increase was partially offset by the net effect of 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 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 subordinated notes. For the year ended December 31, 2004, the Company wrote off $3.0 million of deferred financing costs due to the Company's repayment of its previous senior debt and $10.6 million of deferred financing costs as a result of the repayment of $500.0 million in 6% subordinated notes. Income tax expense for the year ended December 31, 2005 was $52.5 million (of which $49.4 million was non-cash) compared to an income tax benefit of $63.8 million (substantially all non-cash) for the year ended December 31, 2004, an increase of $116.3 million. The income tax benefit for the year ended December 31, 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. carryforward carryforward 1. A business operating loss that, for tax purposes, may be claimed a certain number of years in the future, often up to 15 years. for financial statement purposes. Net income for the year ended December 31, 2005 was $69.8 million, or $0.59 per basic share, as compared to $74.6 million, or $0.58 per basic share, for the same period in 2004, a decrease of $4.8 million, or 6.4%. On a fully diluted basis, net income per share was $0.55 for the year ended December 31, 2005, as compared to $0.54 for the year ended December 31, 2004. The prior year net income amount is primarily due to the income tax benefit discussed above. Excluding the tax benefit associated with the Company's net operating loss carryforward, net income for the year ended December 31, 2004 would have been approximately $10.7 million, resulting in an improvement from 2004 to 2005 of $59.1 million. The improvement was primarily due to a decrease of $79.0 million in depreciation and amortization expense since the Company's advertiser base asset was substantially fully amortized as of December 31, 2004. Free cash flow (as detailed in the attached table, is generally defined as operating income (i) plus depreciation and amortization, other, net and non-cash expenses (ii) less net interest expense (excluding amortization of debt issuance costs), capital expenditures and cash taxes) was $138.3 million for the year ended December 31, 2005 compared to $136.1 million for the year ended December 31, 2004, an increase of $2.2 million, or 1.6%. Due to the purchase of common stock outstanding pursuant to the Company's stock repurchase program, shares outstanding as of December 31, 2005 were down to 114.0 million, a reduction of 8.7% when compared to 124.9 million shares outstanding as of December 31, 2004. Transaction with ABC Radio ABC Radio is a broadcasting unit of Citadel Broadcasting Corporation.[1] ABC Radio was, from 1945 until 2007, the division of the American Broadcasting Company (ABC) focused on AM radio and FM radio broadcasting. On February 6, 2006, the Company and The Walt Disney Noun 1. Walt Disney - United States film maker who pioneered animated cartoons and created such characters as Mickey Mouse and Donald Duck; founded Disneyland (1901-1966) Disney, Walter Elias Disney Company announced that the Board of Directors of both companies approved a definitive agreement to combine ABC Radio, which includes 22 radio stations and the ABC Radio Networks, with the Company. The newly combined company, to be named Citadel Communications
Citadel Communications is a Bronxville, NY-based broadcaster that owns 4 television stations, including: DMA Rank Market Station ... , will be the third largest radio group in 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. , with a strong national footprint The amount of geographic space covered by an object. A computer footprint is the desk or floor surface it occupies. A satellite's footprint is the earth area covered by its downlink. See form factor. 1. reaching more than 50 markets. Our Station Portfolio Citadel Broadcasting Corporation is a radio broadcaster focused primarily on acquiring, developing and operating radio stations throughout the United States. The Company owns and operates 163 FM and 58 AM radio stations in 49 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 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; changes in capital expenditure requirements; and the risk that the proposed business combination with The Walt Disney Company may be delayed or not close. 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. Additional Information and Where to Find It In connection with the Company's proposed business combination with a subsidiary of The Walt Disney Company ("TWDC TWDC The Walt Disney Company "), the Company intends to file relevant materials with the Securities and Exchange Commission ("SEC"), including a registration statement on Form S-4 that will contain a prospectus and an information statement. Investors and security holders are urged to read these when they become available because they will contain important information about the Company, certain subsidiaries of TWDC and the combination. The information statement, prospectus and other relevant materials (when they become available), and any other documents filed by the Company or TWDC with the SEC, may be obtained free of charge at the SEC's web site at www.sec.gov See .gov and GovNet. (networking) gov - The top-level domain for US government bodies. . In addition, investors and security holders may obtain free copies of the documents filed with the SEC by contacting the Company by directing a written request to: Citadel Broadcasting Corporation, City Center West, Suite 400, 7201 West Lake Mead mead (mēd), wine made of fermented honey and water, sometimes flavored with spices. It is highly intoxicating. Mead was known in classical Greece and Rome and was the favorite drink of the tribes of N and W Europe. Blvd Blvd abbr (= boulevard) → Bd ., Las Vegas, Nevada Nevada (nəvăd`ə, –vä–), far western state of the United States. It is bordered by Utah (E), Arizona (SE), California (SW, W), and Oregon and Idaho (N). 89128, Attention: Investor Relations Investor relations The process by which the corporation communicates with its investors. . Investors and security holders are urged to read the information statement, prospectus and the other relevant materials when they become available before making any investment decision with respect to the combination.
CITADEL BROADCASTING CORPORATION AND SUBSIDIARIES
Consolidated Condensed Statements of Operations
(in thousands, except per share data)
(unaudited)
Three Months Ended Year Ended
December 31, December 31,
------------------------- -------------------------
2005 2004 2005 2004
------------ ------------ ------------ ------------
Net broadcasting
revenue $108,327 $109,769 $419,907 $411,495
Operating Expenses:
Cost of revenues 33,189 33,079 118,949 116,579
Selling, general
and administrative 29,250 28,508 118,489 118,611
Corporate general
and administrative 2,499 2,610 11,919 11,239
Non-cash stock
compensation 2,564 864 3,444 4,327
Local marketing
agreement fees 321 542 1,723 2,081
Depreciation and
amortization 5,529 16,862 22,346 101,270
Non-cash charge
related to
contract
obligations - - - 16,449
Other, net 25 177 (353) (776)
------------ ------------ ------------ ------------
Operating
expenses 73,377 82,642 276,517 369,780
------------ ------------ ------------ ------------
Operating income 34,950 27,127 143,390 41,715
------------ ------------ ------------ ------------
Non-operating
expenses:
Interest expense,
net, including
amortization of
debt issuance
costs of $459,
$459, $1,839
and $1,976,
respectively 6,072 3,939 21,137 17,345
Write off of
deferred financing
costs due to
extinguishment
of debt - - - 13,615
------------ ------------ ------------ ------------
Non-operating
expenses, net 6,072 3,939 21,137 30,960
------------ ------------ ------------ ------------
Income before
income taxes 28,878 23,188 122,253 10,755
Income tax expense
(benefit) 13,033 9,433 52,496 (63,813)
------------ ------------ ------------ ------------
Net income $15,845 $13,755 $69,757 $74,568
============ ============ ============ ============
Net income per
share - basic $0.14 $0.11 $0.59 $0.58
============ ============ ============ ============
Net income per
share - diluted $0.13 $0.10 $0.55 $0.54
============ ============ ============ ============
Weighted average
common shares
outstanding:
Basic 114,722,936 126,182,447 119,233,824 129,191,384
============ ============ ============ ============
Diluted 130,975,305 142,046,291 134,534,213 143,378,684
============ ============ ============ ============
CITADEL BROADCASTING CORPORATION AND SUBSIDIARIES SUPPLEMENTAL DISCLOSURES REGARDING NON-GAAP FINANCIAL INFORMATION (Unaudited; Amounts in thousands) The following tables set forth the Company's Station Operating Income for the three and twelve months ended December 31, 2005 and 2004. The Company defines Station Operating Income as net income adjusted to exclude the following line items presented in its Statement of Operations See Income statement. : income tax expense, write off of deferred financing costs, net interest expense, other, net, depreciation and amortization, local marketing agreement fees, non-cash stock compensation, non-cash charge related to contract obligations 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 the 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, 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, the most directly comparable amount reported under GAAP.
CITADEL BROADCASTING CORPORATION AND SUBSIDIARIES
SUPPLEMENTAL DISCLOSURES REGARDING NON-GAAP FINANCIAL INFORMATION
-----------------------------------------------------------------
(Unaudited; Amounts in thousands)
Three Months Year
Ended Ended
December 31, December 31,
----------------- -------------------
2005 2004 2005 2004
-------- -------- --------- ---------
Station operating income $45,888 $48,182 $182,469 $176,305
Corporate general and
administrative 2,499 2,610 11,919 11,239
Non-cash stock compensation 2,564 864 3,444 4,327
Local marketing agreement
fees 321 542 1,723 2,081
Other, net 25 177 (353) (776)
Non-cash charge related to
contract obligations - - - 16,449
-------- -------- --------- ---------
Operating income before
depreciation & amortization 40,479 43,989 165,736 142,985
Depreciation and amortization 5,529 16,862 22,346 101,270
-------- -------- --------- ---------
Operating income 34,950 27,127 143,390 41,715
Net interest expense 6,072 3,939 21,137 17,345
Write off of deferred
financing costs due to
extinguishment of debt - - - 13,615
-------- -------- --------- ---------
Income before income taxes 28,878 23,188 122,253 10,755
Income tax expense (benefit) 13,033 9,433 52,496 (63,813)
-------- -------- --------- ---------
Net income $15,845 $13,755 $69,757 $74,568
======== ======== ========= =========
Free cash flow is defined as operating income (i) plus depreciation, amortization and 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. As a result, free cash flow is a significant measure of the Company's ability to generate long-term Long-term Three or more years. In the context of accounting, more than 1 year. long-term 1. Of or relating to a gain or loss in the value of a security that has been held over a specific length of time. Compare short-term. value. 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. CITADEL BROADCASTING CORPORATION AND SUBSIDIARIES SUPPLEMENTAL DISCLOSURES REGARDING NON-GAAP FINANCIAL INFORMATION (Unaudited; Amounts in thousands) 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 Year
Ended Ended
December 31, December 31,
----------------- -------------------
2005 2004 2005 2004
-------- -------- --------- ---------
Operating income $34,950 $27,127 $143,390 $41,715
Plus
Depreciation and amortization 5,529 16,862 22,346 101,270
Non-cash charge related to
contract obligations - - - 16,449
Non-cash stock compensation 2,564 864 3,444 4,327
Other, net 25 177 (353) (776)
Minus
Net interest expense (6,072) (3,939) (21,137) (17,345)
Amortization of debt
issuance costs 459 459 1,839 1,976
Capital expenditures (2,042) (1,967) (8,112) (8,948)
Cash taxes (883) (600) (3,079) (2,556)
-------- -------- --------- ---------
Free cash flow $34,530 $38,983 $138,338 $136,112
======== ======== ========= =========
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