INCOME TAXES:	9 Months Ended
Sep. 30, 2011
INCOME TAXES:	9. INCOME TAXES: The effective tax rate from continuing operations for the nine months ended September 30, 2011 was 73.3%, when combined with the recognition of $882,000 of tax expense for certain discrete items. This rate is principally due to an estimated annual effective tax rate of 73.4% for Radio One, which has a full valuation allowance for its deferred tax assets (“DTAs”). This rate is blended with an estimated annual effective tax rate of 33.4% for Reach Media, which does not have a valuation allowance. For the nine months ended September 30, 2010, the effective tax rate was 94.7%. This rate is based on the blending of an estimated annual effective tax rate of 136.5% for Radio One, which has a full valuation allowance for its deferred tax assets (“DTAs”), with an estimated annual effective tax rate of 36.3% for Reach Media, which does not have a valuation allowance. The Radio One annual effective tax rate calculation for 2010 is due primarily to the increase in the deferred tax liability (“DTL”) of approximately $3.8 million associated with the amortization for tax purposes of certain of the Company’s radio broadcasting licenses. A tax expense of $759,000 was recognized for Reach Media and $83,000 was recognized for discrete items for Radio One, which resulted in a consolidated net tax expense of $4.8 million for the nine months ended September 30, 2010. The Company maintains a full valuation allowance on its deferred tax assets, except as it relates to the deferred tax assets attributable to Reach Media. As part of its assessment of realizability, the Company also determined that it was not appropriate under generally accepted accounting principles to benefit its DTAs based on DTLs related to indefinite-lived intangibles, consisting principally of certain of the Company’s radio broadcasting licenses, which cannot be scheduled to reverse in the same period. Because the DTL in this case would not reverse until some future indefinite period when the intangibles are either sold or impaired, any resulting temporary differences cannot be considered a source of future taxable income to support realization of the DTAs. For the nine months ended September 30, 2011, an additional valuation allowance for the current year anticipated increase to DTAs related to net operating loss carryforwards from the amortization of indefinite-lived intangibles was included in the annual effective tax rate calculation. The Company recorded a non-cash pre-tax gain of approximately $146.9 million resulting from its increased ownership and controlling interest in TV One during the nine months ended September 30, 2011. The consolidation of TV One included an adjustment to the DTL related to the partnership investment in TV One. The Company evaluated the DTL and concluded that a portion will not reverse within the requisite period since it relates to indefinite-lived assets and cannot be offset against the DTAs. This item generated a tax expense of approximately $41.9 million for the nine months ended September 30, 2011 and contributed 37.4% to the effective tax rate. The DTL on the indefinite-lived intangibles of Radio One generated a tax expense of approximately $38.2 million for the nine months ended September 30, 2011 and contributed 34.2% to the effective tax rate. The remaining portion of the tax expense of approximately $1.8 million for the nine months ended September 30, 2011 consisted principally of discrete items of $882,000, certain state taxes for Radio One which are based on gross receipts of $342,000 and the provision for Reach Media of $586,000. The Company recognizes the impact of a tax position in the financial statements if it is more likely than not that the position would be sustained on audit based on the technical merits of the position. The nature of any uncertainties pertaining to our income tax position is primarily due to various state tax positions. As of September 30, 2011, we had approximately $5.8 million in unrecognized tax benefits. Accrued interest and penalties related to unrecognized tax benefits is recognized as a component of tax expense. During the nine months ended September 30, 2011, the Company recorded an expense for interest and penalties of $40,000. As of September 30, 2011, the Company had a liability of $305,000 for unrecognized tax benefits for interest and penalties. The Company estimates the possible change in unrecognized tax benefits prior to September 30, 2012 which could range from $0 to a reduction of $16,000, due to expiring statutes.

9. INCOME TAXES:

The effective tax rate from continuing operations for the nine months ended September 30, 2011 was 73.3%, when combined with the recognition of $882,000 of tax expense for certain discrete items. This rate is principally due to an estimated annual effective tax rate of 73.4% for Radio One, which has a full valuation allowance for its deferred tax assets (“DTAs”). This rate is blended with an estimated annual effective tax rate of 33.4% for Reach Media, which does not have a valuation allowance.

For the nine months ended September 30, 2010, the effective tax rate was 94.7%. This rate is based on the blending of an estimated annual effective tax rate of 136.5% for Radio One, which has a full valuation allowance for its deferred tax assets (“DTAs”), with an estimated annual effective tax rate of 36.3% for Reach Media, which does not have a valuation allowance. The Radio One annual effective tax rate calculation for 2010 is due primarily to the increase in the deferred tax liability (“DTL”) of approximately $3.8 million associated with the amortization for tax purposes of certain of the Company’s radio broadcasting licenses. A tax expense of $759,000 was recognized for Reach Media and $83,000 was recognized for discrete items for Radio One, which resulted in a consolidated net tax expense of $4.8 million for the nine months ended September 30, 2010.

The Company maintains a full valuation allowance on its deferred tax assets, except as it relates to the deferred tax assets attributable to Reach Media. As part of its assessment of realizability, the Company also determined that it was not appropriate under generally accepted accounting principles to benefit its DTAs based on DTLs related to indefinite-lived intangibles, consisting principally of certain of the Company’s radio broadcasting licenses, which cannot be scheduled to reverse in the same period. Because the DTL in this case would not reverse until some future indefinite period when the intangibles are either sold or impaired, any resulting temporary differences cannot be considered a source of future taxable income to support realization of the DTAs. For the nine months ended September 30, 2011, an additional valuation allowance for the current year anticipated increase to DTAs related to net operating loss carryforwards from the amortization of indefinite-lived intangibles was included in the annual effective tax rate calculation.

The Company recorded a non-cash pre-tax gain of approximately $146.9 million resulting from its increased ownership and controlling interest in TV One during the nine months ended September 30, 2011. The consolidation of TV One included an adjustment to the DTL related to the partnership investment in TV One. The Company evaluated the DTL and concluded that a portion will not reverse within the requisite period since it relates to indefinite-lived assets and cannot be offset against the DTAs. This item generated a tax expense of approximately $41.9 million for the nine months ended September 30, 2011 and contributed 37.4% to the effective tax rate. The DTL on the indefinite-lived intangibles of Radio One generated a tax expense of approximately $38.2 million for the nine months ended September 30, 2011 and contributed 34.2% to the effective tax rate. The remaining portion of the tax expense of approximately $1.8 million for the nine months ended September 30, 2011 consisted principally of discrete items of $882,000, certain state taxes for Radio One which are based on gross receipts of $342,000 and the provision for Reach Media of $586,000.

The Company recognizes the impact of a tax position in the financial statements if it is more likely than not that the position would be sustained on audit based on the technical merits of the position. The nature of any uncertainties pertaining to our income tax position is primarily due to various state tax positions. As of September 30, 2011, we had approximately $5.8 million in unrecognized tax benefits. Accrued interest and penalties related to unrecognized tax benefits is recognized as a component of tax expense. During the nine months ended September 30, 2011, the Company recorded an expense for interest and penalties of $40,000. As of September 30, 2011, the Company had a liability of $305,000 for unrecognized tax benefits for interest and penalties. The Company estimates the possible change in unrecognized tax benefits prior to September 30, 2012 which could range from $0 to a reduction of $16,000, due to expiring statutes.