Citadel Broadcasting Corporation Reports 2008 Second Quarter Operating Results.* Net revenues for the quarter ended June June: see month. 30, 2008 were $229.2 million * Segment 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. was $87.3 million for the three months ended June 30, 2008 * Free cash flow was $44.0 million for the quarter ended June 30, 2008 * During the six months ended June 30, 2008, the Company reduced its net long-term debt Long-Term Debt Loans and financial obligations lasting over one year. Notes: For example debts obligations such as bonds and notes which have maturities greater than one year would be considered long-term debt. by approximately $231.8 million, resulting in a gain on extinguishment The destruction or cancellation of a right, a power, a contract, or an estate. Extinguishment is sometimes confused with merger, though there is a clear distinction between them. of debt of $53.2 million 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 second quarter of 2008. [TABLE OMITTED] Net revenues for the second quarter of 2008 were $229.2 million as compared to $141.2 million for the second quarter of 2007. The increase in revenues was the result of the inclusion of the results of operations of the 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. businesses for a full quarter in 2008 versus a partial quarter in 2007. On a pro forma As a matter of form or for the sake of form. Used to describe accounting, financial, and other statements or conclusions based upon assumed or anticipated facts. The phrase pro forma basis, net revenues in the second quarter of 2008 were $229.7 million as compared to $251.0 million for the quarter ended June 30, 2007, a decrease of $21.3 million, or 8.5%. This decline is due principally to lower revenues of $15.8 million from our Radio Markets and $5.5 million at the Radio Network, due primarily to the Paul Harvey <noinclude></noinclude>
Paul Harvey Aurandt (born September 4, 1918), better known as Paul Harvey, is an American radio broadcaster for the ABC Radio Networks. and Reach Media contracts. 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 2008 was $299.5 million as compared to operating income of $29.9 million in the corresponding 2007 period. The decrease in operating income is primarily the result of an increase in the 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. charge of approximately $350.8 million. The asset impairment charge is related to a continued deterioration de·te·ri·o·ra·tion n. The process or condition of becoming worse. in the radio marketplace and to the related decline in the Company's stock price. Operating income was also impacted by an increase in depreciation and amortization of approximately $9.1 million resulting from the operations of the ABC Radio stations The ABC operates 46 local radio stations, in addition to four national networks and international service Radio Australia. In addition, DiG Radio launched on digital platforms in 2002, currently offering three separate stations. and Network acquired on June 12, 2007. Segment operating income (a non-GAAP financial measure generally defined as operating income adjusted to exclude depreciation and amortization, stock-based compensation, corporate general and administrative expenses, non-cash amounts related to contract obligations, local marketing agreement fees, asset impairment charges and other, net) was $87.3 million for the second quarter of 2008, compared to $62.7 million for the second quarter of 2007, an increase of $24.6 million. This increase reflects the acquisition of ABC Radio. On a pro forma basis, segment operating income was $87.8 million in the second quarter of 2008 compared to $101.6 million for the quarter ended June 30, 2007. This decrease of $13.8 million, or 13.6%, resulted from a $10.4 million decline in segment operating income from our Radio Markets and a $3.4 million decline from the Radio Network. Pro forma revenue and segment operating income amounts have been adjusted for the results of ABC Radio as if it had been acquired at the beginning of 2007, any significant station dispositions during 2007 and accounting adjustments related to the acquisition of ABC Radio. Net interest expense increased to $30.2 million for the quarter ended June 30, 2008 from $14.3 million for the quarter ended June 30, 2007, an increase of $15.9 million. The increase in net interest expense was primarily the result of the interest incurred on the borrowings to finance the merger with ABC Radio as well as the payment of approximately $276.5 million for the Special Distribution to pre-merger shareholders, which were both completed in June of 2007. In the second quarter of 2008, the Company repurchased $216.5 million of its debt, comprised of approximately $55.0 million of its convertible subordinated notes as part of a pro rata [Latin, Proportionately.] A phrase that describes a division made according to a certain rate, percentage, or share. In a Bankruptcy case, when the debtor is insolvent, creditors generally agree to accept a pro rata share of what is owed to them. cash tender and exchange offer, an additional $125.5 million of the exchanged convertible subordinated notes and approximately $36.0 million of its senior debt. As a result of these transactions, the Company recognized a total gain on extinguishment of debt, net of costs, of approximately $31.8 million. In addition, subsequent to June 30, 2008 the Company repurchased an additional $40.6 million of its exchanged convertible subordinated notes for approximately $31.7 million resulting in additional gain of approximately $8.9 million. A portion of the above exchanged convertible subordinated notes were repurchased with borrowings under the Company's revolving credit Revolving Credit A line of credit where the customer pays a commitment fee and is then allowed to use the funds when they are needed. It is usually used for operating purposes, fluctuating each month depending on the customers current cash flow needs. facility. The Company had previously repurchased $113.3 million of its senior debt in the first quarter of 2008. As a result of these transactions and based on the current interest rates in effect on its senior debt and convertible subordinated notes, the Company expects interest expense will decrease by approximately $19 million over the next twelve months as compared to the same period in the prior year. Income tax benefit for the quarter ended June 30, 2008 was $49.6 million (substantially all non-cash), compared to income tax expense of $11.8 million (substantially all non-cash) for the quarter ended June 30, 2007. The income tax benefit for the quarter ended June 30, 2008 is primarily related to the $364.4 million asset impairment, which resulted in an income tax benefit of approximately $78.8 million, partially offset by the tax expense on pre-tax income excluding impairment loss and an additional $1.4 million in state tax expense, net of federal benefit resulting from a change in the Company's effective state tax rate. Income tax expense for the quarter ended June 30, 2007 includes approximately $2.3 million of additional state income tax expense, net of federal benefit resulting from an increase in the Company's effective state tax rate upon the completion of the merger with ABC Radio. Net loss for the quarter ended June 30, 2008 was $251.6 million, or $(0.96) per basic share, as compared to net income of $3.8 million, or $0.03 per basic share, for the same period in 2007. Included in net loss for the quarter ended June 30, 2008 was $285.6 million of non-cash asset impairment charges, net of tax, or $(1.09) per basic share, a $14.5 million gain on the extinguishment of debt less write-off Write-Off A reduction in the value of an asset or earnings by the amount of an expense or loss. Companies are able to write off certain expenses that are required to run the business, or have been incurred in the operation of the business and detract from retained revenues. of deferred financing costs and debt discount, net of tax, or $0.06 per basic share, $2.5 million of stock-based compensation expense, net of tax, or $(0.01) per basic share and additional state income tax expense associated with an increase in the Company's effective state tax rate of approximately $1.4 million or $(0.01) per basic share. Included in net income for the quarter ended June 30, 2007 was approximately $8.3 million of non-cash asset impairment charges, net of tax, or $(0.06) per basic share, $4.9 million of stock-based compensation expense, net of tax, or $(0.03) per basic share and additional state income tax expense associated with an increase in the Company's effective state tax rate of approximately $2.3 million or $(0.02) per basic share. Free cash flow (as detailed in the attached table, a non-GAAP financial measure, generally defined as net (loss) income (i) plus depreciation and amortization, stock-based compensation expense, non-cash amounts related to contract obligations, asset impairment charges, other, net, non-cash debt-related amounts, write-off of deferred financing costs and debt discount, and income tax expense (ii) less capital expenditures, gain on extinguishment of debt and cash taxes) was $44.0 million for the three months ended June 30, 2008, compared to $37.3 million for the three months ended June 30, 2007, an increase of $6.7 million. The increase in free cash flow is a result of the operations of the acquired ABC Radio businesses partially offset by increases in interest expense, cash taxes and capital expenditures. For the three months ended June 30, 2008, the basic weighted average common shares outstanding was approximately 262.8 million as compared to 141.4 million for the three months ended June 30, 2007. 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 slowdown For articles with similar titles, see Slow Down (disambiguation). A slowdown is an industrial action in which employees perform their duties but seek to reduce productivity or efficiency in their performance of these duties. in the economic environment continues to take its toll on the Company's revenues; however, the Company remains focused on investing in new programming opportunities while continuing to reduce its costs. In addition, the Company has been able to accelerate its debt repayment and has reduced its long-term debt from $2.465 billion as of December 31, 2007 to approximately $2.233 billion as of June 30, 2008. Subsequent to June 30, 2008, the Company reduced its debt further by $33.6 million to approximately $2.2 billion. The Company will continue to utilize its free cash flow to pay down debt during the rest of 2008 into 2009." Segment Results The table below presents the following information for the Company for the three and six months ended June 30, 2008 and 2007: * revenues as reported and on a pro forma basis * segment operating income, which excludes corporate general and administrative costs administrative costs, n.pl the overhead expenses incurred in the operation of a dental benefits program, excluding costs of dental services provided. , stock-based compensation, local marketing agreement fees, 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. related to contract obligations, asset impairment charges, other, net, and depreciation and amortization expense, as reported and on a pro forma basis Pro forma amounts have been adjusted for the results of ABC Radio as if it had been acquired at the beginning of 2007, any significant station dispositions during 2007 and any accounting adjustments related to the acquisition of ABC Radio. [TABLE OMITTED] Our Station Portfolio Citadel Broadcasting Corporation is 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 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. Citadel is comprised of 165 FM stations and 58 AM stations in the nation's leading markets, in addition to the ABC Radio Network business, which is one of the three largest radio networks in the United States. 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," "continues," "intends," "likely," "may," "plans," "potential," "will," and similar expressions, whether in the negative or the affirmative AFFIRMATIVE. Averring a fact to be true; that which is opposed to negative. (q.v.) 2. It is a general rule of evidence that the affirmative of the issue must be proved. Bull. N. P. 298 ; Peake, Ev. 2. 3. . All statements other than the statements of historical fact are "forward-looking statements" for the purposes of federal and state securities laws, including, without limitation, any projections on pro forma statements Pro forma statement A financial statement showing the forecast or projected operating results and balance sheet, as in pro forma income statements, balance sheets, and statements of cash flows. of earnings, revenues or other financial items; any statements of the plans, strategies and objectives of management for future operations, including the expected effect of the business combination with ABC Radio; any statements concerning proposed new services or developments; any statements regarding future economic conditions or performance; any statements of belief; and any assumptions underlying any of the foregoing. 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, some of which are beyond our control, 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 by such forward-looking statements. Such factors include, among other things, the impact of current or pending legislation and regulation, 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. 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 market conditions that could impair im·pair tr.v. im·paired, im·pair·ing, im·pairs To cause to diminish, as in strength, value, or quality: an injury that impaired my hearing; a severe storm impairing communications. the Company's goodwill or 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. ; changes in industry conditions; changes in governmental regulations; changes in policies or actions or in regulatory bodies; changes in uncertain tax positions, tax rates and limitations on the utilization of net operating losses Net operating losses Losses that a firm can take advantage of to reduce taxes. ; changes in dividend policy; changes in capital expenditure requirements; or the risk that the business combination with ABC Radio may be less favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. for the Company than originally expected. All forward-looking statements in this news release are qualified by these cautionary statements. The Company undertakes no obligation, other than as required by law, to publicly update or revise these forward-looking statements because of new information, future events or otherwise. [TABLE OMITTED] [TABLE OMITTED] The following tables set forth the Company's segment operating income and Segment OIBDA OIBDA Operating Income Before Depreciation & Amortization for the three and six months ended June 30, 2008 and 2007. The Company defines "segment operating income" as operating income adjusted to exclude the following line items included in its statement of operations See Income statement. : depreciation and amortization, stock-based compensation, corporate general and administrative expenses, non-cash charge related to contract obligations, asset impairment charges, local marketing agreement fees, other, net. The Company defines "Segment OIBDA" as operating income adjusted to exclude depreciation and amortization, corporate general and administrative, and other, net. Segment operating income and Segment OIBDA, among other things, are used by the Company's management to evaluate the Company's operating performance, to value prospective acquisitions, and as the basis of incentive compensation targets for certain management personnel. In addition, these measures are among the primary measures used by management for the planning and forecasting of future periods. The Company believes the presentation of these measures 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, these measures are 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 segment operating income and Segment OIBDA are not measures 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 accounting principles generally accepted in the United States of America UNITED STATES OF AMERICA. The name of this country. The United States, now thirty-one in number, are Alabama, Arkansas, Connecticut, Delaware, Florida, Georgia, Illinois, Indiana, Iowa, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan, Mississippi, Missouri, New Hampshire, ("GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). "), they 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. Segment operating income and Segment OIBDA, as the Company calculates them, may not be comparable to similarly titled measures employed by other companies. In addition, segment operating income and Segment OIBDA do 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, segment operating income and Segment OIBDA are not necessarily measures of the Company's liquidity or its ability to fund its cash needs. Segment operating income and Segment OIBDA do not reflect the periodic costs of certain capitalized Capitalized Recorded in asset accounts and then depreciated or amortized, as is appropriate for expenditures for items with useful lives longer than one year. tangible and intangible assets used in generating revenues in the Company's business. As segment operating income and Segment OIBDA exclude certain financial information compared with operating 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 Securities and Exchange Commission ("SEC"), the Company provides below a reconciliation of segment operating income and Segment OIBDA to operating income, the most directly comparable amount reported under GAAP. [TABLE OMITTED] [TABLE OMITTED] Free cash flow is defined as net (loss) income (i) plus depreciation, amortization, stock-based compensation expense, non-cash amounts related to contract obligations, asset impairment charges, other, net, non-cash debt-related amounts, write-off of deferred financing costs and debt discount and income tax expense (ii) less capital expenditures, gain on extinguishment of debt 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, including the payment of dividends and 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 common stock of the Company. 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. 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 net 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 net income or loss, the most directly comparable amount reported under GAAP. [TABLE OMITTED] [TABLE OMITTED] The following table presents the components of the statements of operations that are impacted by stock-based compensation as reported. The Company believes this summary assists investors in understanding the operating performance of the Company and the effects of stock-based compensation recognized pursuant to Statement of Financial Accounting Standards No. 123(R), Share-Based Payment. [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] The following tables reconcile financial measures before the impact of stock-based compensation expense, asset impairment charges, non-cash charge related to contract obligations, gain on sale of certain assets, and gain on extinguishment of debt to reported financial measures. The Company believes that adjusting its financial results for these items assists investors in understanding the operating performance of the Company. [TABLE OMITTED] |
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