pressreleaseaugust17.htm

Washington, DC: - Radio One, Inc. (NASDAQ: ROIAK and ROIA) today reported its results for the quarter ended June 30, 2010. Net revenue was approximately $75.2 million, an increase of 7.6% from the same period in 2009. Station operating income1 was approximately $28.4 million, a decrease of 5.0% from the same period in 2009. The Company reported operating income of approximately $13.8 million compared to operating income of approximately $18.8 million for the same period in 2009. Net income was approximately $2.0 million or $0.04 per share, compared to net income of approximately $7.2 million or $0.12 per share for the same period in 2009.

Alfred C. Liggins, III, Radio One’s CEO and President stated, “the recovery in radio revenues continued in the second quarter, led by national business, which was up 17.5%. Our overall radio revenue growth of 8.4% was in line with expectations, however as I previously indicated we had upward pressure on the cost base, driven by a combination of contractual increases, such as in PPM fees, severance costs and non-cash compensation expenses. Reach Media made excellent progress with its in-house sales effort during the second quarter, although revenues and EBITDA were both adversely impacted by the lack of guaranteed revenues. Our internet business is growing strongly, with revenues up 48% from the second quarter of 2009, and we continue to believe that our on-line platform will be a major source of revenue and EBITDA growth for the future.

RESULTS OF OPERATIONS

	Three Months Ended June 30,						Six Months Ended June 30,
	2010			2009			2010			2009
				(as adjusted)2						(as adjusted)2
STATEMENT OF OPERATIONS	(unaudited)						(unaudited)
	(in thousands, except share data)						(in thousands, except share data)


NET REVENUE	$	75,194		$	69,874		$	134,212		$	130,183
OPERATING EXPENSES
Programming and technical, excluding stock-based compensation		19,340			18,848			37,925			38,773
Selling, general and administrative, excluding stock-based compensation		27,487			21,173			50,091			44,578
Corporate selling, general and administrative, excluding stock-based compensation		7,764			5,199			15,049			10,332
Stock-based compensation		1,956			596			3,969			1,079
Depreciation and amortization		4,849			5,235			9,570			10,466
Impairment of long-lived assets		-			-			-			48,953
Total operating expenses		61,396			51,051			116,604			154,181
Operating income (loss)		13,798			18,823			17,608			(23,998	)
INTEREST INCOME		43			47			67			65
INTEREST EXPENSE		9,703			9,033			18,938			19,812
GAIN ON RETIREMENT OF DEBT		-			-			-			1,221
EQUITY IN INCOME OF AFFILIATED COMPANY		1,139			747			2,048			1,897
OTHER EXPENSE, net		2,406			115			2,883			64
Income (loss) before provision for (benefit from) income taxes, noncontrolling interest in income of subsidiaries and loss from discontinued operations		2,871			10,469			(2,098	)		(40,691	)
PROVISION FOR (BENEFIT FROM) INCOME TAXES		233			1,777			(75	)		8,848
Net income (loss) from continuing operations		2,638			8,692			(2,023	)		(49,539	)
LOSS FROM DISCONTINUED OPERATIONS, net of tax		(144	)		(412	)		(80	)		(747	)
CONSOLIDATED NET INCOME (LOSS)		2,494			8,280			(2,103	)		(50,286	)
NONCONTROLLING INTEREST IN INCOME OF SUBSIDIARIES		446			1,067			417			1,938
CONSOLIDATED NET INCOME (LOSS) ATTRIBUTABLE TO COMMON STOCKHOLDERS	$	2,048		$	7,213		$	(2,520	)	$	(52,224	)

AMOUNTS ATTRIBUTABLE TO COMMON STOCKHOLDERS
NET INCOME (LOSS) FROM CONTINUING OPERATIONS	$	2,192		$	7,625		$	(2,440	)	$	(51,477	)
LOSS FROM DISCONTINUED OPERATIONS, net of tax		(144	)		(412	)		(80	)		(747	)
CONSOLIDATED NET INCOME (LOSS) ATTRIBUTABLE TO COMMON STOCKHOLDERS	$	2,048		$	7,213		$	(2,520	)	$	(52,224	)

Weighted average shares outstanding - basic3		51,054,572			59,421,562			50,942,693			64,920,155
Weighted average shares outstanding - diluted4		54,302,885			60,034,168			50,942,693			64,920,155

	Three Months Ended June 30,						Six Months Ended June 30,
	2010			2009			2010			2009
				(as adjusted)2						(as adjusted)2
	(unaudited)						(unaudited)
	(in thousands, except per share data)						(in thousands, except per share data)
PER SHARE DATA - basic and diluted:

Net income (loss) from continuing operations (basic)	$	0.04		$	0.13		$	(0.05	)	$	(0.79	)
Income (loss) from discontinued operations, net of tax (basic)		(0.00	)		(0.01	)		(0.00	)		(0.01	)
Consolidated net income (loss) attributable to common stockholders (basic)	$	0.04		$	0.12		$	(0.05	)	$	(0.80	)

Net income (loss) from continuing operations (diluted)	$	0.04		$	0.13		$	(0.05	)	$	(0.79	)
Income (loss) from discontinued operations, net of tax (diluted)		(0.00	)		(0.01	)		(0.00	)		(0.01	)
Consolidated net income (loss) attributable to common stockholders (diluted)	$	0.04		$	0.12		$	(0.05	)	$	(0.80	)

SELECTED OTHER DATA
Station operating income 1	$	28,367		$	29,853		$	46,196		$	46,832
Station operating income margin (% of net revenue)		37.7	%		42.7	%		34.4	%		36.0	%

Station operating income reconciliation:

Consolidated net income (loss) attributable to common stockholders	$	2,048		$	7,213		$	(2,520	)	$	(52,224	)

Add back non-station operating income items included in consolidated net income (loss):
Interest income		(43	)		(47	)		(67	)		(65	)
Interest expense		9,703			9,033			18,938			19,812
Provision for (benefit from) income taxes		233			1,777			(75	)		8,848
Corporate selling, general and administrative expenses		7,764			5,199			15,049			10,332
Stock-based compensation		1,956			596			3,969			1,079
Gain on retirement of debt		-			-			-			(1,221	)
Equity in income of affiliated company		(1,139	)		(747	)		(2,048	)		(1,897	)
Other expense, net		2,406			115			2,883			64
Depreciation and amortization		4,849			5,235			9,570			10,466
Noncontrolling interest in income of subsidiaries		446			1,067			417			1,938
Impairment of long-lived assets		-			-			-			48,953
Loss from discontinued operations, net of tax		144			412			80			747
Station operating income	$	28,367		$	29,853		$	46,196		$	46,832

Adjusted EBITDA5	$	20,603		$	24,654		$	31,147		$	36,500

Adjusted EBITDA reconciliation:

Net income (loss) attributable to common stockholders	$	2,048		$	7,213		$	(2,520	)	$	(52,224	)
Interest income		(43	)		(47	)		(67	)		(65	)
Interest expense		9,703			9,033			18,938			19,812
Provision for (benefit from) income taxes		233			1,777			(75	)		8,848
Depreciation and amortization		4,849			5,235			9,570			10,466
EBITDA	$	16,790		$	23,211		$	25,846		$	(13,163	)
Stock-based compensation		1,956			596			3,969			1,079
Gain on retirement of debt		-			-			-			(1,221	)
Equity in income of affiliated company		(1,139	)		(747	)		(2,048	)		(1,897	)
Other expense, net		2,406			115			2,883			64
Noncontrolling interest in income of subsidiaries		446			1,067			417			1,938
Impairment of long-lived assets		-			-			-			48,953
Loss from discontinued operations, net of tax		144			412			80			747
Adjusted EBITDA	$	20,603		$	24,654		$	31,147		$	36,500

This press release includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements represent management's current expectations and are based upon information available to Radio One at the time of this release. These forward-looking statements involve known and unknown risks, uncertainties and other factors, some of which are beyond Radio One's control, that may cause the actual results to differ materially from any future results, performance or achievements expressed or implied by such forward-looking statements. Important factors that could cause actual results to differ materially are described in Radio One’s reports on Form 10-K and other filings with the United States Securities and Exchange Commission (the “SEC”). Radio One does not undertake any duty to update any forward-looking statements.

Net revenue increased to approximately $75.2 million for the quarter ended June 30, 2010, from approximately $69.9 million for the same period in 2009, an increase of 7.6%. Improvement in the radio industry continued relative to last year, with the markets that we operate in growing 6.8% for the quarter, and the same for the first half of the year. National revenue continued to lead the recovery in our radio marketplaces for the quarter, with growth of 17.5%, while local revenue decreased 1.2%. On average, our radio clusters underperformed their marketplaces by 240 basis points this quarter, with a slight decline in local revenue and a modest underperformance in national revenue as well. More specifically, our Houston, Atlanta, Dallas, St. Louis and Detroit markets posted strong quarterly growth, while our Cleveland, Washington, DC and Baltimore markets declined. Total core radio revenue (radio stations and syndicated programs excluding Reach Media) grew 8.4% during the quarter, and was positively impacted by the Company’s annual Gospel Cruise event being held in April of 2010 versus in March of 2009. While Reach Media’s revenue declined 5.4% in the quarter, the decline was an improvement from the significant decline experienced during the first quarter of 2010. Reach Media revenues declined following the December 31, 2009 expiration of a sales representation agreement with Citadel Broadcasting Corporation (“Citadel”) whereby a minimum level of revenue was guaranteed over the term of the agreement. Effective January 1, 2010, Reach Media’s newly established sales organization began selling its inventory on the Tom Joyner Morning Show and under a new commission-based sales representation agreement with Citadel. Citadel sells certain inventory owned by Reach Media in connection with its 108 radio station affiliate agreements. We delivered very strong growth from our internet business, including Community Connect LLC (“CCI”), which posted over 48% growth for the quarter.

Operating expenses, excluding depreciation and amortization and stock-based compensation, increased to approximately $54.6 million for the quarter ended June 30, 2010, up 20.7% from the approximately $45.2 million incurred for the comparable quarter in 2009. Most of the spending increase occurred in selling, general and administrative and corporate departments. Specifically, approximately $2.2 million of the increase was associated with expenses being incurred in the second quarter 2010 versus the first quarter 2009 due to a change in the date of the Company’s annual Gospel Cruise to April of 2010 from March of 2009. Other major reasons for the increase were the non-recurrence of vacation expense savings from mandatory office closings and changes to the Company’s vacation plan in 2009, and the accrual of bonuses during 2010. In addition, increased spending occurred as a part of salary expense with the restoration of salaries from the 2009 reduced levels, additional commissions, bonuses and representative fees from higher revenues and additional spending for research, promotional activity and travel and entertainment. Lower music royalties partially offset the normalized and increased spending.

Other expense increased to approximately $2.4 million for the quarter ended June 30, 2010, compared to $115,000 for the comparable quarter in 2009. Increased other expense was principally due to a write off of a pro-rata portion of debt financing and modification costs in connection with the offering of Second-Priority Senior Secured Grid Notes (“Second Lien Notes”). The majority of the net proceeds from the Second Lien Notes were expected to fund the acquisition of additional equity interests in TV One, LLC (“TV One”). The subscription offer to holders for the Second Lien Notes ended in July 2010 and the Company made the determination not to further extend this subscription offer.

Income tax expense decreased to approximately $233,000 for the quarter ended June 30, 2010, compared to $1.8 million for the same quarter in 2009. Approximately $640,000 of the decrease is due to reduced pre-tax book income for Reach Media, and approximately $589,000 of the decrease is related to the change in the deferred tax liability (“DTL”) for indefinite-lived intangibles. The Company continues to maintain a full valuation allowance for entities other than Reach Media for its deferred tax assets (“DTAs”), including the DTA associated with its net operating loss carryforward. The consolidated effective tax rate for the three months ended June 30, 2010 and 2009 was 8.1% and 17.0%, respectively.

Loss from discontinued operations, net of tax, includes the results of operations for our sold radio stations and Giant Magazine, which ceased publication in December 2009. The loss from discontinued operations, net of tax, for the quarter ended June 30, 2010 of $144,000 resulted from legal and litigation expenses incurred as a result of ongoing legal activity related to certain previously sold stations. Loss from discontinued operations, net of tax, for the comparable quarter in 2009 resulted primarily from operating losses incurred by Giant Magazine. The loss from discontinued operations, net of tax, also includes a tax provision of zero and $4,000 for the three months ended June 30, 2010 and 2009, respectively.

As of each of June 30, 2010 and July 1, 2010, we were not in compliance with the terms of our senior credit facility (the “Senior Credit Facility”). More specifically, (i) as of June 30, 2010, we failed to maintain a total leverage ratio of 7.25 to 1.00 and (ii) as of July 1, 2010, as a result of a step down of the total leverage ratio from no greater than 7.25 to 1.00 to no greater than 6.50 to 1.00 effective for the period July 1, 2010 to September 30, 2011, we also failed to maintain the requisite total leverage ratio. As previously disclosed in the Company’s Current Report on Form 8-K, filed with the SEC on July 16, 2010, on July 15, 2010, the Company and its subsidiaries executed a forbearance agreement (the “Forbearance Agreement”) with Wells Fargo Bank, N.A. (successor by merger to Wachovia Bank, National Association), as administrative agent (the “Agent”), and financial institutions constituting the majority of outstanding loans and commitments (the “Required Lenders”) under our Senior Credit Facility, relating to the above noted existing defaults and events of default. On August 13, 2010, we entered into an amendment to the Forbearance Agreement (the “Forbearance Agreement Amendment”) that, among other things, extended the termination date of the Forbearance Agreement to September 10, 2010, unless terminated earlier by its terms, and provided additional forbearance related to an anticipated default that may be caused by an opinion of Ernst & Young LLP that may raise substantial doubt about the Company’s ability to continue as a going concern that may be issued in connection with the restatement of our financial statements (see below discussion). Under the Forbearance Agreement and the Forbearance Agreement Amendment, the Agent and the Required Lenders maintained the right to deliver “payment blockage notices” to the trustees for the holders of the 87/8% Senior Subordinated Notes due 2011 (“2011 Notes”) and/or the 63/8% Senior Subordinated Notes due 2013 (“2013 Notes”).

On August 5, 2010, the Agent delivered a payment blockage notice to The Bank of New York Mellon Trust Company, N.A., as trustee (the “Trustee”) under the indenture (the “Indenture”) governing our 2013 Notes. Under the terms of the Indenture, neither the Company nor any of its guaranteeing subsidiaries may make any payment or distribution of any kind or character in respect of obligations under the 2013 Notes, including, without limitation, the interest payment to the noteholders scheduled for August 15, 2010. The Indenture permits a 30-day grace period for the nonpayment of interest before such nonpayment constitutes an event of default, in which case the Trustee or holders of at least 25% in principal amount of the then outstanding 2013 Notes may declare the principal amount, and accrued and unpaid interest on all outstanding 2013 Notes to be due and payable immediately.

Today, we also filed a Notification of Late Filing on Form 12b-25 with respect to our Quarterly Report on Form 10-Q for the period ended June 30, 2010. As previously described in our Current Report on Form 8-K filed July 28, 2010, the Company is in the process of restating its consolidated financial statements for the years ended December 31, 2009, 2008 and 2007 (the “Annual Restatement Periods”) and for each quarterly financial reporting period from January 1, 2009 through March 31, 2010 (the “Quarterly Restatement Periods”). The restatement is solely the result of an error of measurement and classification of a noncontrolling interest in Reach Media, Inc. as presented on the consolidated balance sheet and on the consolidated statement of changes in stockholders’ equity. The effects of this error overstated consolidated stockholders’ equity and understated mezzanine equity at the end of each reporting period by equal amounts. The adjustment did not affect any previously reported financial results in our consolidated statements of operations or consolidated statements of cash flows, and, hence, will not affect previously reported net income or earnings per share. The Company is working diligently to complete the restatement and its consolidated financial statements for the Annual Restatement Periods and for the Quarterly Restatement Periods. However, the Company was unable to complete this process and file its Form 10-Q for the quarter ended June 30, 2010 on or before the prescribed due date of August 16, 2010. The Company anticipates filing the Form 10-Q for the period ending June 30, 2010 by the extended deadline of August 23, 2010 (the five day extension would fall on Saturday August 21, 2010, a day on which the SEC is closed, thus, the extended deadline becomes August 23, 2010, the next business day that the SEC is open).

	Three Months Ended June 30, 2010
	(in thousands, unaudited)

												Corporate/
							Reach					Eliminations/
	Consolidated			Radio One			Media		Internet			Other

STATEMENT OF OPERATIONS:

NET REVENUE	$	75,194		$	62,390		$	10,418	$	4,469		$	(2,083	)
OPERATING EXPENSES:
Programming and technical		19,340			13,482			5,038		2,421			(1,601	)
Selling, general and administrative		27,487			22,375			1,988		4,037			(913	)
Corporate selling, general and administrative		7,764			-			1,762		-			6,002
Stock-based compensation		1,956			222			-		58			1,676
Depreciation and amortization		4,849			2,117			1,091		1,360			281
Total operating expenses		61,396			38,196			9,879		7,876			5,445
Operating income (loss)		13,798			24,194			539		(3,407	)		(7,528	)
INTEREST INCOME		43			-			12		-			31
INTEREST EXPENSE		9,703			-			17		-			9,686
EQUITY IN INCOME OF AFFILIATED COMPANY		1,139			-			-		-			1,139
OTHER EXPENSE (INCOME), net		2,406			(1	)		-		(3	)		2,410
Income (loss) before provision for income taxes, noncontrolling interest in income of subsidiaries and loss from discontinued operations		2,871			24,195			534		(3,404	)		(18,454	)
PROVISION FOR INCOME TAXES		233			33			200		-			-
Net income (loss) from continuing operations		2,638			24,162			334		(3,404	)		(18,454	)
LOSS FROM DISCONTINUED OPERATIONS, net of tax		(144	)		(140	)		-		(4	)		-
CONSOLIDATED NET INCOME (LOSS)		2,494			24,022			334		(3,408	)		(18,454	)
NONCONTROLLING INTEREST IN INCOME OF SUBSIDIARIES		446			-			-		-			446
CONSOLIDATED NET INCOME (LOSS) ATTRIBUTABLE TO COMMON STOCKHOLDERS	$	2,048		$	24,022		$	334	$	(3,408	)	$	(18,900	)

	Three Months Ended June 30, 2009
	(in thousands, unaudited, as adjusted2)

												Corporate/
							Reach					Eliminations/
	Consolidated			Radio One			Media		Internet			Other

STATEMENT OF OPERATIONS:

NET REVENUE	$	69,874		$	57,467		$	11,011	$	3,016		$	(1,620	)
OPERATING EXPENSES:
Programming and technical		18,848			13,065			4,516		2,225			(958	)
Selling, general and administrative		21,173			17,493			1,351		3,289			(960	)
Corporate selling, general and administrative		5,199			-			1,677		-			3,522
Stock-based compensation		596			187			-		-			409
Depreciation and amortization		5,235			2,348			981		1,601			305
Total operating expenses		51,051			33,093			8,525		7,115			2,318
Operating income (loss)		18,823			24,374			2,486		(4,099	)		(3,938	)
INTEREST INCOME		47			-			12		-			35
INTEREST EXPENSE		9,033			-			1		1			9,031
EQUITY IN INCOME OF AFFILIATED COMPANY		747			-			-		-			747
OTHER EXPENSE, net		115			110			-		5			-
Income (loss) before provision for income taxes, noncontrolling interest in income of subsidiaries and (loss) income from discontinued operations		10,469			24,264			2,497		(4,105	)		(12,187	)
PROVISION FOR INCOME TAXES		1,777			899			878		-			-
Net income (loss) from continuing operations		8,692			23,365			1,619		(4,105	)		(12,187	)
(LOSS) INCOME FROM DISCONTINUED OPERATIONS, net of tax		(412	)		(86	)		-		(462	)		136
CONSOLIDATED NET INCOME (LOSS)		8,280			23,279			1,619		(4,567	)		(12,051	)
NONCONTROLLING INTEREST IN INCOME OF SUBSIDIARIES		1,067			-			-		-			1,067
CONSOLIDATED NET INCOME (LOSS) ATTRIBUTABLE TO COMMON STOCKHOLDERS	$	7,213		$	23,279		$	1,619	$	(4,567	)	$	(13,118	)

	Six Months Ended June 30, 2010
	(in thousands, unaudited)

													Corporate/
							Reach						Eliminations/
	Consolidated			Radio One			Media			Internet			Other

STATEMENT OF OPERATIONS:

NET REVENUE	$	134,212		$	111,609		$	18,432		$	7,948		$	(3,777	)
OPERATING EXPENSES:
Programming and technical		37,925			26,176			10,030			4,786			(3,067	)
Selling, general and administrative		50,091			41,192			3,249			7,240			(1,590	)
Corporate selling, general and administrative		15,049			-			3,514			-			11,535
Stock-based compensation		3,969			570			-			112			3,287
Depreciation and amortization		9,570			4,288			2,071			2,631			580
Total operating expenses		116,604			72,226			18,864			14,769			10,745
Operating income (loss)		17,608			39,383			(432	)		(6,821	)		(14,522	)
INTEREST INCOME		67			-			35			-			32
INTEREST EXPENSE		18,938			-			37			-			18,901
EQUITY IN INCOME OF AFFILIATED COMPANY		2,048			-			-			-			2,048
OTHER EXPENSE (INCOME), net		2,883			(231	)		-			112			3,002
(Loss) income before (benefit from) provision for income taxes, noncontrolling interest in income of subsidiaries and (loss) income from discontinued operations		(2,098	)		39,614			(434	)		(6,933	)		(34,345	)
(BENEFIT FROM) PROVISION FOR INCOME TAXES		(75	)		66			(141	)		-			-
Net (loss) income from continuing operations		(2,023	)		39,548			(293	)		(6,933	)		(34,345	)
(LOSS) INCOME FROM DISCONTINUED OPERATIONS, net of tax		(80	)		(321	)		-			241			-
CONSOLIDATED NET (LOSS) INCOME		(2,103	)		39,227			(293	)		(6,692	)		(34,345	)
NONCONTROLLING INTEREST IN INCOME OF SUBSIDIARIES		417			-			-			-			417
NET (LOSS) INCOME ATTRIBUTABLE TO COMMON STOCKHOLDERS	$	(2,520	)	$	39,227		$	(293	)	$	(6,692	)	$	(34,762	)

	Six Months Ended June 30, 2009
	(in thousands, unaudited, as adjusted2)

												Corporate/
							Reach					Eliminations/
	Consolidated			Radio One			Media		Internet			Other

STATEMENT OF OPERATIONS:

NET REVENUE	$	130,183		$	104,809		$	21,503	$	6,478		$	(2,607	)
OPERATING EXPENSES:
Programming and technical		38,773			26,576			9,378		4,742			(1,923	)
Selling, general and administrative		44,578			37,040			2,311		6,599			(1,372	)
Corporate selling, general and administrative		10,332			-			3,522		-			6,810
Stock-based compensation		1,079			313			-		-			766
Depreciation and amortization		10,466			4,737			1,962		3,169			598
Impairment of long-lived assets		48,953			48,953			-		-			-
Total operating expenses		154,181			117,619			17,173		14,510			4,879
Operating (loss) income		(23,998	)		(12,810	)		4,330		(8,032	)		(7,486	)
INTEREST INCOME		65			-			22		-			43
INTEREST EXPENSE		19,812			-			1		3			19,808
GAIN ON RETIREMENT OF DEBT		1,221			-			-		-			1,221
EQUITY IN INCOME OF AFFILIATED COMPANY		1,897			-			-		-			1,897
OTHER EXPENSE (INCOME), net		64			109			-		(71	)		26
(Loss) income before provision for income taxes, noncontrolling interest in income of subsidiaries and (loss) income from discontinued operations		(40,691	)		(12,919	)		4,351		(7,964	)		(24,159	)
PROVISION FOR INCOME TAXES		8,848			7,314			1,534		-			-
Net (loss) income from continuing operations		(49,539	)		(20,233	)		2,817		(7,964	)		(24,159	)
(LOSS) INCOME FROM DISCONTINUED OPERATIONS, net of tax		(747	)		160			-		(1,033	)		126
CONSOLIDATED NET (LOSS) INCOME		(50,286	)		(20,073	)		2,817		(8,997	)		(24,033	)
NONCONTROLLING INTEREST IN INCOME OF SUBSIDIARIES		1,938			-			-		-			1,938
NET (LOSS) INCOME ATTRIBUTABLE TO COMMON STOCKHOLDERS	$	(52,224	)	$	(20,073	)	$	2,817	$	(8,997	)	$	(25,971	)

Radio One, Inc. (www.radio-one.com) is a diversified media company that primarily targets African-American and urban consumers. The Company is one of the nation's largest radio broadcasting companies, currently owning 53 broadcast stations located in 16 urban markets in the United States. As a part of its core broadcasting business, Radio One operates syndicated programming including the Russ Parr Morning Show, the Yolanda Adams Morning Show, the Rickey Smiley Morning Show, CoCo Brother Live, CoCo Brother's "Spirit" program, Bishop T.D. Jakes’ “Empowering Moments”, the Reverend Al Sharpton Show, and the Warren Ballentine Show. The Company also owns a controlling interest in Reach Media, Inc. (www.blackamericaweb.com), owner of the Tom Joyner Morning Show and other businesses associated with Tom Joyner. Beyond its core radio broadcasting business, Radio One owns Interactive One (www.interactiveone.com), an online platform serving the African-American community through social content, news, information, and entertainment, which operates a number of branded sites, including News One, UrbanDaily, HelloBeautiful, Community Connect Inc. (www.communityconnect.com), an online social networking company, which operates a number of branded websites, including BlackPlanet, MiGente, and Asian Avenue and an interest in TV One, LLC (www.tvoneonline.com), a cable/satellite network programming primarily to African-Americans.

1 “Station operating income” consists of net loss before depreciation and amortization, corporate expenses, stock-based compensation, equity in income of affiliated company, income taxes, noncontrolling interest in income (loss) of subsidiaries, interest expense, impairment of long-lived assets, other (income) expense, gain on retirement of debt, (income) loss from discontinued operations, net of tax, and interest income. Station operating income is not a measure of financial performance under generally accepted accounting principles. Nevertheless we believe station operating income is often a useful measure of a broadcasting company’s operating performance and is a significant basis used by our management to measure the operating performance of our stations within the various markets because station operating income provides helpful information about our results of operations apart from expenses associated with our physical plant, income taxes, investments, debt financings and retirements, overhead, stock-based compensation, impairment charges, and asset sales. Station operating income is frequently used as one of the bases for comparing businesses in our industry, although our measure of station operating income may not be comparable to similarly titled measures of other companies. Station operating income does not purport to represent operating income or cash flow from operating activities, as those terms are defined under generally accepted accounting principles, and should not be considered as an alternative to those measurements as an indicator of our performance. A reconciliation of net loss to station operating income has been provided in this release.

5 “Adjusted EBITDA” consists of net loss plus (1) depreciation, amortization, income taxes, interest expense, equity in income of affiliated company, noncontrolling interest in income (loss) of subsidiaries, impairment of long-lived assets, stock-based compensation, other (income) expense, (income) loss from discontinued operations, net of tax, less (2) interest income and gain on retirement of debt. Net income before interest income, interest expense, income taxes, depreciation and amortization is commonly referred to in our business as “EBITDA.” Adjusted EBITDA and EBITDA are not measures of financial performance under generally accepted accounting principles. We believe Adjusted EBITDA is often a useful measure of a company’s operating performance and is a significant basis used by our management to measure the operating performance of our business because Adjusted EBITDA excludes charges for depreciation, amortization and interest expense that have resulted from our acquisitions and debt financing, our taxes, impairment charges, as well as our equity in (income) loss of our affiliated company, gain on retirements of debt, and any discontinued operations. Accordingly, we believe that Adjusted EBITDA provides useful information about the operating performance of our business, apart from the expenses associated with our physical plant, capital structure or the results of our affiliated company. Adjusted EBITDA is frequently used as one of the bases for comparing businesses in our industry, although our measure of Adjusted EBITDA may not be comparable to similarly titled measures of other companies. Adjusted EBITDA and EBITDA do not purport to represent operating income or cash flow from operating activities, as those terms are defined under generally accepted accounting principles, and should not be considered as alternatives to those measurements as an indicator of our performance. A reconciliation of net loss to EBITDA and Adjusted EBITDA has been provided in this release.

	Current Amount Outstanding		Applicable Interest Rate (a)
	(in thousands)
SELECTED LEVERAGE AND SWAP DATA:
Senior bank term debt (swap matures June 16, 2012) (a)	$	25,000		6.72	%
Senior bank revolving debt (subject to variable rates) (b)		329,575		3.33	%
8-7/8% senior subordinated notes (fixed rate)		101,510		8.88	%
6-3/8% senior subordinated notes (fixed rate)		200,000		6.38	%
Note payable (fixed rate)		1,000		7.00	%