Citadel Broadcasting Corporation Reports 2006 Second Quarter Operating Results.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. ): --Net revenues in the second quarter of 2006 were up 2.4% to a record $112.5 million --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. for the second quarter of 2006 was up 2.7% to a record $52.4 million --Second quarter 2006 net loss reflects a non-cash asset impairment Impairment 1. A reduction in a company's stated capital. 2. The total capital that is less than the par value of the company's capital stock. Notes: 1. This is usually reduced because of poorly estimated losses or gains. 2. of $149.8 million, or $(0.82) per basic share to reduce goodwill and intangible assets Intangible Asset An asset that is not physical in nature. Notes: Examples are things like copyrights, patents, intellectual property, and goodwill. These are the opposite of tangible assets. --Board of Directors declares quarterly dividend of $0.18 per share to be paid on October October: see month. 20, 2006 to shareholders of record on October 5, 2006 Citadel Broadcasting Corporation (NYSE:CDL) today reported its results for the second quarter of 2006. June June: see month. 30, 2006 - Second Quarter Results Net revenues in the second quarter of 2006 were a record $112.5 million compared with $109.9 million in the second quarter of 2005, an increase of $2.6 million, or 2.4%. The increase in revenues was principally due to higher revenues in 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, Birmingham Birmingham, cities, United States Birmingham (bûr`mĭnghăm') 1 City (1990 pop. 265,968), seat of Jefferson co., N central Ala., in the Jones Valley near the southern end of the Appalachian system; founded and inc. , AL, Lafayette Lafayette (lä'fēĕt`, lăf'ēĕt`). 1 City (1990 pop. 23,501), Contra Costa co., NW Calif., a residential suburb in the San Francisco–Oakland area; settled 1848, inc. 1968. , LA and Boise Boise, city, United States Boise (boi`sē, –zē), city (1990 pop. 125,738), state capital and seat of Ada co., SW Idaho, on the Boise River; inc. 1864. , ID, partially offset by lower revenues in 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 , LA, Nashville Nashville, city (1990 pop. 487,969), state capital, coextensive with Davidson co., central Tenn., on the Cumberland River, in a fertile farm area; inc. as a city 1806, merged with Davidson co. 1963. , TN, Buffalo, NY and Wilkes Barre Barre (bă`rē), city (1990 pop. 9,482), Washington co., central Vt., SE of Montpelier; settled late 18th cent., inc. 1894. Granite quarrying, which began in the region in the early 19th cent., is still important. , PA. The Company conducted an interim impairment test for certain markets, resulting in a non-cash impairment charge of $149.8 million on a pre-tax pre-tax adj → anterior al impuesto pre-tax adj → avant impôt(s) pre-tax adj → al lordo d'imposta basis, or $(0.82) per basic share, to reduce the carrying amount of goodwill and intangible assets for certain of these markets to their respective estimated fair values. On a consolidated con·sol·i·date v. con·sol·i·dat·ed, con·sol·i·dat·ing, con·sol·i·dates v.tr. 1. To unite into one system or whole; combine: basis, the Company's goodwill and intangible assets balance after the impairment charge is approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. $1,986.2 million. 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. for the second quarter of 2006 was $109.9 million compared to operating income of $41.5 million in the corresponding 2005 period, a decrease of $151.4 million. The decrease was primarily due to the non-cash asset impairment expense recorded in the second quarter of 2006 of $149.8 million related to goodwill and intangible assets, as well as an increase of approximately $4.0 million of non-cash stock-based compensation expense. Station operating income (as detailed in the attached table, is generally defined as operating (loss) 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 $52.4 million for the second quarter of 2006 compared to $51.0 million for the second quarter of 2005, an increase of $1.4 million, or 2.7%. 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 revenues and station operating income for the quarter in spite of in opposition to all efforts of; in defiance or contempt of; notwithstanding. See also: Spite a continued difficult environment in the radio industry. The Company continues to focus on enhancing shareholder value through stock repurchases Stock repurchase A firm's repurchase of outstanding shares of its common stock. and dividends. To date, the Company has purchased 24.1 million shares, or approximately 43% of its public float, for $317.8 million and has also paid cumulative dividends in 2006 of $62.2 million, or $0.54 per share." Net interest expense increased to $8.4 million for the quarter ended June 30, 2006 from $4.9 million for the quarter ended June 30, 2005, an increase of $3.5 million, or 71.4%. The increase in net interest expense was due to an increase in outstanding borrowings, primarily as a result of the 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. of shares of outstanding common stock of the Company, as well as higher overall interest rates under the Company's senior debt during the quarter ended June 30, 2006 as compared to the same period in 2005. Income tax benefit for the quarter ended June 30, 2006 was $43.5 million (substantially all non-cash) compared to income tax expense of $15.1 million (substantially all non-cash) for the quarter ended June 30, 2005, a decrease of $58.6 million. The deferred tax benefit related to the asset impairment recorded in the second quarter of 2006 was approximately $57.8 million. Net loss for the quarter ended June 30, 2006 was $74.8 million, or $(0.67) per basic share, as compared to net income of $21.5 million, or $0.18 per basic share, for the same period in 2005. Included in net loss for the quarter ended June 30, 2006 was a non-cash asset impairment of $92.0 million, net of tax, or $(0.82) per basic share, related to the valuation of goodwill and intangible assets and approximately $3.9 million of non-cash stock-based compensation expense, net of tax, or $(0.04) per basic share. Free cash flow (as detailed in the attached table, is generally defined as operating (loss) 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 $37.6 million for the three months ended June 30, 2006 compared to $39.8 million for the three months ended June 30, 2005, a decrease of $2.2 million, or 5.5%. Higher station operating income was offset primarily by increased interest expense as a result of higher average borrowings due to the Company's stock repurchase programs. The Company's basic weighted average common shares outstanding decreased by 8.2% for the three months ended June 30, 2006 as compared to the comparable prior year period. During the quarter ended June 30, 2006, the Company purchased approximately 1.1 million shares of its common stock for an aggregate amount of $10.8 million. June 30, 2006 - Year to Date Results Net revenues for the six months ended June 30, 2006 were a record $206.5 million compared with $201.9 million for the six months ended June 30, 2005, an increase of $4.6 million, or 2.3%. The increase in revenues was primarily due to higher revenues at the Company's stations, including stations in Modesto, CA, Boise, ID, Lafayette, LA, Tucson Tucson (t  `sŏn'), city (1990 pop. 405,390), seat of Pima co., SE Ariz.; inc. 1877. , AZ and Birmingham, AL, offset by lower revenues in New Orleans,
LA, Nashville, TN, Wilkes Barre, PA and 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.The Company conducted an interim impairment test for certain markets, resulting in a non-cash impairment charge of $149.8 million on a pre-tax basis, or $(0.82) per basic share, to reduce the carrying amount of goodwill and intangible assets for certain of these markets to their respective estimated fair values. Operating loss was $86.4 million for the six months ended June 30, 2006 compared to operating income of $67.6 million for the six months ended June 30, 2005, a decrease of $154.0 million. The decrease was primarily due to a non-cash asset impairment recorded in the second quarter of 2006 of $149.8 million related to goodwill and intangible assets, as well as an increase of approximately $7.6 million of non-cash stock-based compensation expense. Station operating income (as detailed in the attached table, is generally defined as operating (loss) income plus depreciation and amortization, local marketing agreement fees, corporate general and administrative expenses, other, net and other non-cash expenses) was $89.2 million for the six-month period ended June 30, 2006 compared to $86.5 million for the same period in 2005, an increase of $2.7 million, or 3.1%. Net interest expense increased $5.9 million, or 62.8%, to $15.3 million for the six months ended June 30, 2006 from $9.4 million for the same period in 2005. The increase in net interest expense was due to higher overall interest rates under the Company's senior debt during the six months ended June 30, 2006 as compared to the same period in 2005, as well as an increase in outstanding borrowings, primarily as a result of the repurchase of shares of outstanding common stock of the Company. Income tax benefit for the six months ended June 30, 2006 was $36.4 million (substantially all non-cash) compared to income tax expense of $24.8 million (substantially all non-cash) for the six months ended June 30, 2005, a decrease of $61.2 million. The deferred tax benefit related to the asset impairment recorded in the second quarter of 2006 was approximately $57.8 million. Net loss for the first six months of 2006 was $65.3 million, or $(0.58) per basic share, as compared to net income of $33.4 million, or $0.27 per basic share, for the same period in 2005, a decrease of $98.7 million. Included in net loss for the six months ended June 30, 2006 was a non-cash asset impairment of $92.0 million, net of tax, or $(0.82) per basic share, related to the valuation of goodwill and intangible assets and approximately $6.5 million of non-cash stock-based compensation expense, net of tax, or $(0.06) per basic share. Included in net income for the six months ended June 30, 2005 was approximately $0.4 million of non-cash stock-based compensation expense, net of tax, or $(0.01) per basic share. Free cash flow (as detailed in the attached table, is generally defined as operating (loss) 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 $62.1 million for the six months ended June 30, 2006 compared to $65.4 million for the six months ended June 30, 2005, a decrease of $3.3 million, or 5.0%. Higher station operating income was offset by increased interest expense primarily as a result of higher overall interest rates under the Company's senior debt during the current year period compared to the prior year period, as well as higher average borrowings due to the Company's stock repurchase programs. The Company's basic weighted average common shares outstanding decreased by 8.8% for the six months ended June 30, 2006 as compared to the comparable prior year period. During the six months ended June 30, 2006, the Company purchased approximately 4.3 million shares of its common stock for an aggregate amount of $50.7 million. 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 February: see month. 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 ("TWDC TWDC The Walt 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 Network, with the Company. Upon consummation CONSUMMATION. The completion of a thing; as the consummation of marriage; (q.v.) the consummation of a contract, and the like. 2. A contract is said to be consummated, when everything to be done in relation to it, has been accomplished. of the merger, the Company is expected 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 significant 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 approximately 55 markets. Closing of the merger is subject to the satisfaction or waiver The voluntary surrender of a known right; conduct supporting an inference that a particular right has been relinquished. The term waiver is used in many legal contexts. of several conditions specified spec·i·fy tr.v. spec·i·fied, spec·i·fy·ing, spec·i·fies 1. To state explicitly or in detail: specified the amount needed. 2. To include in a specification. 3. in the merger agreement, including receipt of federal antitrust Antitrust The antitrust laws apply to virtually all industries and to every level of business, including manufacturing, transportation, distribution, and marketing. They prohibit a variety of practices that restrain trade. , communications and tax 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. approvals. On March 31, 2006, the parties received the first of such consents from the Federal Trade Commission. 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 164 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. Certain matters in this news release constitute "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended a·mend v. a·mend·ed, a·mend·ing, a·mends v.tr. 1. To change for the better; improve: amended the earlier proposal so as to make it more comprehensive. 2. , and Section 21E of the Securities Exchange Act of 1934, as amended. Those statements include statements regarding the intent, belief or current expectations of Citadel Broadcasting Corporation and its subsidiaries (collectively the "Company"), its directors or its officers with respect to, among other things, future events and financial trends affecting the Company. Forward-looking statements are typically identified by the words "believes," "expects," "anticipates," and similar expressions. In addition, any statements that refer to expectations or other characterizations of future events or circumstances CIRCUMSTANCES, evidence. The particulars which accompany a fact. 2. The facts proved are either possible or impossible, ordinary and probable, or extraordinary and improbable, recent or ancient; they may have happened near us, or afar off; they are public or are forward-looking statements. Readers are cautioned that any such forward-looking statements are not guarantees of future performance and that matters referred to in such forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements 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. Such factors include, among other things, the impact of current or pending legislation and regulation, antitrust considerations, the impact of pending or future litigation An action brought in court to enforce a particular right. The act or process of bringing a lawsuit in and of itself; a judicial contest; any dispute. When a person begins a civil lawsuit, the person enters into a process called litigation. or claims, and other risks and uncertainties, including, but not limited to: changes in economic conditions in the U.S.; fluctuations in interest rates; changes in industry conditions; changes in operating performance; changes in the Company's dividend policy or stock repurchase programs; 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 bodies; changes in tax rates; changes in capital expenditure requirements; the risk that the proposed business combination with ABC Radio may be delayed or not close; as well as those matters discussed under the captions "Forward-Looking Statements" and "Risk Factors" in Citadel Broadcasting Corporation's Annual Report on Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. for the year ended December December: see month. 31, 2005. The Company undertakes no obligation to publicly update or revise these forward-looking statements because of new information, future events or otherwise. Additional Information about the Transaction with ABC Radio and Where to Find It In connection with the Company's proposed business combination with a subsidiary of TWDC, 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 A document, notice, circular, advertisement, letter, or communication in written form or by radio or television that offers any security for sale, or confirms the sale of any security. 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. No Offer or Solicitation solicitation In criminal law, the act of asking, inducing, or directing someone to commit a crime. The person soliciting another becomes an accomplice to the crime. The term also refers to the act of obtaining bribes, as well as to the crime of a prostitute who offers sexual This communication shall not constitute an offer to sell or the solicitation of an offer to buy any securities, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful Contrary to or unauthorized by law; illegal. When applied to promises, agreements, or contracts, the term denotes that such agreements have no legal effect. The law disapproves of such conduct because it is immoral or contrary to public policy. prior to registration or qualification under the securities laws of any such jurisdiction. No offering of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the Securities Act of 1933, as amended.
CITADEL BROADCASTING CORPORATION AND SUBSIDIARIES
Consolidated Condensed Statements of Operations
(in thousands, except per share amounts)
(unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
------------------- -------------------
2006 2005 2006 2005
--------- --------- --------- ---------
Net broadcasting revenue $112,454 $109,913 $206,453 $201,948
Operating Expenses:
Cost of revenues 29,356 28,094 57,875 55,766
Selling, general and
administrative 31,646 30,854 61,707 59,646
Corporate general and
administrative 6,425 3,317 12,500 7,153
Local marketing agreement
fees 314 565 627 1,031
Asset impairment 149,769 - 149,769 -
Depreciation and
amortization 5,476 5,615 11,009 11,287
Other, net (648) (41) (638) (536)
--------- --------- --------- ---------
Operating expenses 222,338 68,404 292,849 134,347
--------- --------- --------- ---------
Operating (loss) income (109,884) 41,509 (86,396) 67,601
--------- --------- --------- ---------
Interest expense, net, including
amortization of debt issuance
costs of $460, $459, $918
and $919, respectively 8,441 4,871 15,298 9,389
--------- --------- --------- ---------
(Loss) income before income
taxes (118,325) 36,638 (101,694) 58,212
Income tax (benefit) expense (43,499) 15,120 (36,393) 24,809
--------- --------- --------- ---------
Net (loss) income $(74,826) $21,518 $(65,301) $33,403
========= ========= ========= =========
Net (loss) income per share -
basic $(0.67) $0.18 $(0.58) $0.27
========= ========= ========= =========
Net (loss) income per share -
diluted $(0.67) $0.16 $(0.58) $0.25
========= ========= ========= =========
Weighted average common shares
outstanding:
Basic 111,668 121,688 111,632 122,442
========= ========= ========= =========
Diluted 111,668 137,612 111,632 138,395
========= ========= ========= =========
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 six months ended June 30, 2006 and 2005. The
Company defines station operating income as net (loss) income adjusted
to exclude the following line items included in its Statement of
Operations: income tax (benefit) expense, net interest expense, other,
net, depreciation and amortization, local marketing agreement fees,
non-cash stock compensation, corporate general and administrative
expenses and other non-cash 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 with accounting principles generally accepted
in the United States of America ("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, station operating
income does not necessarily represent the residual cash flow that is
available for discretionary expenditures and excludes other
non-discretionary expenditures, including among others mandatory debt
service requirements. As a result, station operating income is not
necessarily a measure of the Company's liquidity or its ability to
fund its cash needs. Station operating income does not reflect the
periodic costs, including non-cash impairment charges, of certain
capitalized tangible and intangible assets used in generating revenues
in the Company's business. 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 Ended Six Months Ended
June 30, June 30,
------------------ ------------------
2006 2005 2006 2005
------- ------- ------- -------
Station operating income $52,395 $50,965 $89,169 $86,536
Less:
Corporate general and
administrative, excluding
related portion of
non-cash stock
compensation 3,321 3,317 6,556 6,552
Non-cash stock
compensation 4,047 - 8,242 601
Local marketing agreement
fees 314 565 627 1,031
Other, net (648) (41) (638) (536)
------- ------- ------- -------
Adjusted operating income
before asset impairment
and depreciation and
amortization 45,361 47,124 74,382 78,888
Less:
Asset impairment 149,769 - 149,769 -
Depreciation and
amortization 5,476 5,615 11,009 11,287
------- ------- ------- -------
Operating (loss) income (109,884) 41,509 (86,396) 67,601
Less:
Net interest expense 8,441 4,871 15,298 9,389
------- ------- ------- -------
(Loss) income before
income taxes (118,325) 36,638 (101,694) 58,212
Income tax (benefit)
expense (43,499) 15,120 (36,393) 24,809
------- ------- ------- -------
Net (loss) income $(74,826) $21,518 $(65,301) $33,403
======= ======= ======= =======
Free cash flow is defined as operating (loss) 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, cash taxes and other
non-cash expenses. 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 and fund ongoing operations and
working capital needs, including the payment of dividends and the
repurchase of shares of common stock of the Company. As a result, free
cash flow is a significant measure of the Company's ability to
generate long-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 the
residual cash flow that is available for discretionary expenditures
and excludes other non-discretionary expenditures, including among
others mandatory debt service requirements. As a result, free cash
flow is not necessarily a measure of the Company's liquidity or its
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 Ended Six Months Ended
June 30, June 30,
------------------ -----------------
2006 2005 2006 2005
------ ------ ----- -----
Operating (loss) income $(109,884) $41,509 $(86,396) $67,601
Adjustments
Depreciation and
amortization 5,476 5,615 11,009 11,287
Non-cash stock
compensation 4,047 - 8,242 601
Asset impairment 149,769 - 149,769 -
Other, net (648) (41) (638) (536)
Net interest expense (8,441) (4,871) (15,298) (9,389)
Amortization of debt
issuance costs 460 459 918 919
Capital expenditures (2,051) (2,223) (4,213) (3,733)
Cash taxes (1,081) (674) (1,300) (1,353)
-------- ------- -------- -------
Free cash flow $37,647 $39,774 $62,093 $65,397
======== ======= ======== =======
CITADEL BROADCASTING CORPORATION AND SUBSIDIARIES
SUPPLEMENTAL DISCLOSURES REGARDING NON-GAAP FINANCIAL INFORMATION
-----------------------------------------------------------------
(Unaudited; In thousands, except per share amounts)
The following table presents non-cash stock-based compensation as
reported. The Company believes this summary assists investors'
understanding of the operating performance of the Company and the
effects of non-cash stock-based compensation recognized pursuant to
Statement of Financial Accounting Standards No. 123R, Share-Based
Payment.
Three Months Ended Six Months Ended
June 30, June 30,
------------------ ----------------
2006 2005 2006 2005
-------- ------ ------ ------
Net broadcasting revenue $ - $ - $ - $ -
Operating Expenses:
Cost of revenues 426 - 1,038 -
Selling, general and
administrative 517 - 1,260 -
Corporate general and
administrative 3,104 - 5,944 601
Local marketing
agreement fees - - - -
Asset impairment - - - -
Depreciation and amortization - - - -
Other, net - - - -
-------- ------ ------ ------
Operating expenses 4,047 - 8,242 601
-------- ------ ------ ------
Operating (loss) income (4,047) - (8,242) (601)
-------- ------ ------ ------
Interest expense, net,
including amortization of
debt issuance costs
of $460 and $918,
respectively - - - -
-------- ------ ------ ------
(Loss) income before income
taxes (4,047) - (8,242) (601)
Income tax (benefit) expense (118) - (1,767) (236)
-------- ------ ------ ------
Net (loss) income $ (3,929) $ - $(6,475) $ (365)
======== ====== ====== ======
Net loss per share - basic $ (0.04) $ - $ (0.06) $(0.01)
======== ====== ====== ======
Net loss per share - diluted $ (0.04) $ - $ (0.06) $(0.01)
======== ====== ====== ======
Weighted average common shares
outstanding:
Basic 111,668 121,688 111,632 122,442
======== ======= ======= =======
Diluted 111,668 137,612 111,632 138,395
======== ======= ======= =======
CITADEL BROADCASTING CORPORATION AND SUBSIDIARIES
SUPPLEMENTAL DISCLOSURES REGARDING NON-GAAP FINANCIAL INFORMATION
-----------------------------------------------------------------
(Unaudited; In thousands, except per share amounts)
The following tables reconcile financial measures before the
impact of non-cash asset impairment and non-cash stock-based
compensation expense to reported financial measures. The Company
believes that adjusting its financial results for these items assists
investors' understanding of the operating performance of the Company.
Three Six Six
Months Months Months
Ended Ended Ended
June 30, June 30, June 30,
2006 2006 2005
---------- --------- --------
Reconciliation of adjusted
operating income to
operating (loss) income:
Adjusted operating income before
share-based compensation
and asset impairment $43,932 $71,615 $68,202
Adjustments to reconcile to operating
(loss) income:
Asset impairment (149,769) (149,769) -
Non-cash stock-based compensation
expense (4,047) (8,242) (601)
---------- --------- --------
Operating (loss) income $(109,884) $(86,396) $67,601
========== ========= ========
Reconciliation of adjusted net
income to net (loss)
income:
Adjusted net income before
share-based compensation
and asset impairment $21,074 $33,145 $33,768
Adjustments to reconcile to
net (loss) income:
Asset impairment, net of tax (91,971) (91,971) -
Non-cash stock-based compensation
expense, net of tax (3,929) (6,475) (365)
---------- --------- --------
Net (loss) income $(74,826) $(65,301) $33,403
========== ========= ========
Reconciliation of adjusted net income
per share to net (loss)
income per share:
Adjusted net income per basic share
before share-based compensation and
asset impairment $ 0.19 $ 0.30 $ 0.28
Asset impairment, net of tax (0.82) (0.82) -
Non-cash stock-based compensation
expense, net of tax (0.04) (0.06) (0.01)
---------- --------- --------
Net (loss) income per basic share $(0.67) $(0.58) $0.27
========== ========= ========
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