Delaware
|
52-1166660
|
(State or other jurisdiction of
|
(I.R.S. Employer
|
incorporation or organization)
|
Identification No.)
|
Class
|
Outstanding at July 31, 2012
|
|
Class A Common Stock, $.001 Par Value
|
2,719,860
|
|
Class B Common Stock, $.001 Par Value
|
2,861,843
|
|
Class C Common Stock, $.001 Par Value
|
3,121,048
|
|
Class D Common Stock, $.001 Par Value
|
41,421,667
|
Page
|
||
PART I. FINANCIAL INFORMATION
|
||
Item 1.
|
Consolidated Statements of Operations for the Three Months and Six Months Ended June 30, 2012 and 2011 (Unaudited)
|
4
|
Consolidated Statements of Comprehensive Income (Loss) for the Three Months and Six Months Ended June 30, 2012 and 2011 (Unaudited)
|
5 | |
Consolidated Balance Sheets as of June 30, 2012 (Unaudited) and December 31, 2011
|
6
|
|
Consolidated Statement of Changes in Equity for the Six Months Ended June 30, 2012 (Unaudited)
|
7 | |
Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2012 and 2011 (Unaudited)
|
8 | |
Notes to Consolidated Financial Statements (Unaudited)
|
9 | |
Consolidating Financial Statements
|
35 | |
Consolidating Statement of Operations for the Three Months Ended June 30, 2012 (Unaudited)
|
35 | |
Consolidating Statement of Operations for the Three Months Ended June 30, 2011 (Unaudited)
|
36 | |
Consolidating Statement of Operations for the Six Months Ended June 30, 2012 (Unaudited)
|
37 | |
Consolidating Statement of Operations for the Six Months Ended June 30, 2011 (Unaudited)
|
38 | |
Consolidating Statement of Comprehensive Income (Loss) for the Three Months Ended June 30, 2012 (Unaudited)
|
39 | |
Consolidating Statement of Comprehensive Income (Loss) for the Three Months Ended June 30, 2011 (Unaudited)
|
40 | |
Consolidating Statement of Comprehensive Income (Loss) for the Six Months Ended June 30, 2012 (Unaudited)
|
41 | |
Consolidating Statement of Comprehensive Income (Loss) for the Six Months Ended June 30, 2011 (Unaudited)
|
42 | |
Consolidating Balance Sheet as of June 30, 2012 (Unaudited)
|
43 | |
Consolidating Balance Sheet as of December 31, 2011
|
44 | |
Consolidating Statement of Cash Flows for the Six Months Ended June 30, 2012 (Unaudited)
|
45 | |
Consolidating Statement of Cash Flows for the Six Months Ended June 30, 2011 (Unaudited)
|
46 | |
Item 2.
|
Management’s Discussion and Analysis of Financial Condition and Results of Operations
|
49 |
Item 3.
|
Quantitative and Qualitative Disclosures About Market Risk
|
72 |
Item 4.
|
Controls and Procedures
|
72 |
PART II. OTHER INFORMATION
|
||
Item 1.
|
Legal Proceedings
|
73
|
Item 1A.
|
Risk Factors
|
74 |
Item 2.
|
Unregistered Sales of Equity Securities and Use of Proceeds
|
74 |
Item 3.
|
Defaults Upon Senior Securities
|
74 |
Item 4.
|
Submission of Matters to a Vote of Security Holders
|
74 |
Item 5.
|
Other Information
|
74 |
Item 6.
|
Exhibits
|
74 |
SIGNATURES
|
75 |
1 |
•
|
we are currently not in compliance with NASDAQ rules for continued listing of our Class A and Class D common shares;
|
•
|
the effects of continued global economic weakness, credit and equity market volatility, high unemployment and continued fluctuations in the U.S. and other world economies may have on our business and financial condition and the business and financial conditions of our advertisers;
|
•
|
our high degree of leverage and potential inability to refinance certain portions of our debt or finance other strategic transactions given fluctuations in market conditions;
|
•
|
continued fluctuations in the U.S. economy and the local economies of the markets in which we operate could negatively impact our ability to meet our cash needs and our ability to maintain compliance with our debt covenants;
|
•
|
fluctuations in the demand for advertising across our various media given the current economic environment;
|
•
|
risks associated with the implementation and execution of our business diversification strategy;
|
•
|
increased competition in our markets and in the radio broadcasting and media industries;
|
•
|
changes in media audience ratings and measurement technologies and methodologies;
|
•
|
regulation by the Federal Communications Commission (“FCC”) relative to maintaining our broadcasting licenses, enacting media ownership rules and enforcing of indecency rules;
|
•
|
changes in our key personnel and on-air talent;
|
•
|
increases in the costs of our programming, including on-air talent and content acquisitions costs;
|
•
|
financial losses that may be incurred due to impairment charges against our broadcasting licenses, goodwill and other intangible assets, particularly in light of the current economic environment;
|
•
|
increased competition from new media and technologies;
|
•
|
the impact of our acquisitions, dispositions and similar transactions; and
|
•
|
other factors mentioned in our filings with the Securities and Exchange Commission (“SEC”) including the factors discussed in detail in Part I, “Item 1A. Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2011.
|
2 |
EXPLANATORY NOTE
Radio One, Inc. (“Radio One” or the “Company”) is filing this Amendment to its Quarterly Report on Form 10-Q for the period ended June 30, 2012, which was previously filed with the Securities and Exchange Commission on August 9, 2012 for the sole purpose to furnish Exhibit 101 to the Form 10-Q in accordance with Rule 405 of Regulation S-T. Exhibit 101 to this report provides the consolidated financial statements and related notes from the Form 10-Q formatted in XBRL (eXtensible Business Reporting Language).
No other changes have been made to the Form 10-Q. This Form 10-Q/A does not reflect events that may have occurred subsequent to the original filing date and does not modify or update in any way disclosures made in the Form 10-Q.
In accordance with Rule 406T of Regulation S-T, the interactive data files includes Exhibit 101 hereto are deemed not filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, are deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and otherwise are not subject to liability under those sections.
3 |
Three Months Ended June 30,
|
Six Months Ended June 30,
|
||||||||||||||
2012
|
2011
|
2012
|
2011
|
||||||||||||
(Unaudited)
|
|||||||||||||||
(In thousands, except share data)
|
|||||||||||||||
NET REVENUE
|
$
|
105,916
|
$
|
97,062
|
$
|
208,958
|
$
|
162,070
|
|||||||
OPERATING EXPENSES:
|
|||||||||||||||
Programming and technical
|
32,958
|
30,718
|
64,123
|
49,549
|
|||||||||||
Selling, general and administrative, including stock-based compensation of $15 and $212, and $32 and $376, respectively
|
31,568
|
31,806
|
70,394
|
60,301
|
|||||||||||
Corporate selling, general and administrative, including stock-based compensation of $31 and $987, and $58 and $1,760, respectively
|
9,855
|
8,510
|
19,448
|
16,532
|
|||||||||||
Depreciation and amortization
|
9,742
|
10,238
|
19,427
|
14,321
|
|||||||||||
Impairment of long-lived assets
|
313
|
—
|
313
|
—
|
|||||||||||
Total operating expenses
|
84,436
|
81,272
|
173,705
|
140,703
|
|||||||||||
Operating income
|
21,480
|
15,790
|
35,253
|
21,367
|
|||||||||||
INTEREST INCOME
|
25
|
9
|
47
|
17
|
|||||||||||
INTEREST EXPENSE
|
22,928
|
22,916
|
46,675
|
42,249
|
|||||||||||
LOSS ON RETIREMENT OF DEBT
|
—
|
—
|
—
|
7,743
|
|||||||||||
GAIN ON INVESTMENT IN AFFILIATED COMPANY
|
—
|
146,879
|
—
|
146,879
|
|||||||||||
EQUITY IN INCOME OF AFFILIATED COMPANY
|
—
|
208
|
—
|
3,287
|
|||||||||||
OTHER EXPENSE, net
|
610
|
47
|
603
|
22
|
|||||||||||
(Loss) income before (benefit from) provision for income taxes, noncontrolling interests in income of subsidiaries and income (loss) from discontinued operations
|
(2,033
|
)
|
139,923
|
(11,978
|
)
|
121,536
|
|||||||||
(BENEFIT FROM) PROVISION FOR INCOME TAXES
|
(48,491
|
)
|
38,611
|
16,763
|
84,230
|
||||||||||
Net income (loss) from continuing operations
|
46,458
|
101,312
|
(28,741
|
)
|
37,306
|
||||||||||
INCOME (LOSS) FROM DISCONTINUED OPERATIONS, net of tax
|
7
|
(45
|
)
|
21
|
(81
|
)
|
|||||||||
CONSOLIDATED NET INCOME (LOSS)
|
46,465
|
101,267
|
(28,720
|
)
|
37,225
|
||||||||||
NET INCOME ATTRIBUTABLE TO NONCONTROLLING INTERESTS
|
3,797
|
2,717
|
7,854
|
2,920
|
|||||||||||
CONSOLIDATED NET INCOME (LOSS) ATTRIBUTABLE TO COMMON STOCKHOLDERS
|
$
|
42,668
|
$
|
98,550
|
$
|
(36,574
|
)
|
$
|
34,305
|
||||||
BASIC NET INCOME (LOSS) ATTRIBUTABLE TO COMMON STOCKHOLDERS
|
|||||||||||||||
Continuing operations
|
$
|
0.85
|
$
|
1.94
|
$
|
(0.73
|
)
|
$
|
0.67
|
||||||
Discontinued operations, net of tax
|
0.00
|
(0.00
|
)
|
0.00
|
(0.00
|
)
|
|||||||||
Net income (loss) attributable to common stockholders
|
$
|
0.85
|
$
|
1.94
|
$
|
(0.73
|
$
|
0.67
|
|||||||
DILUTED NET INCOME (LOSS) ATTRIBUTABLE TO COMMON STOCKHOLDERS
|
|||||||||||||||
Continuing operations
|
$
|
0.85
|
$
|
1.86
|
$
|
(0.73
|
)
|
$
|
0.64
|
||||||
Discontinued operations, net of tax
|
0.00
|
(0.00
|
)
|
0.00
|
(0.00
|
)
|
|||||||||
Net income (loss) attributable to common stockholders
|
$
|
0.85
|
$
|
1.86
|
$
|
(0.73
|
)
|
$
|
0.64
|
||||||
WEIGHTED AVERAGE SHARES OUTSTANDING:
|
|||||||||||||||
Basic
|
50,006,085
|
50,831,560
|
49,997,752
|
51,474,556
|
|||||||||||
Diluted
|
50,124,418
|
52,905,060
|
49,997,752
|
53,646,473
|
4 |
Three Months Ended June 30,
|
Six Months Ended June 30,
|
||||||||||||
2012
|
2011
|
2012
|
2011
|
||||||||||
(Unaudited)
|
|||||||||||||
(In thousands)
|
|||||||||||||
CONSOLIDATED NET INCOME (LOSS)
|
$ | 46,465 | $ | 101,267 | $ | (28,720 | ) | $ | 37,225 | ||||
NET CHANGE IN UNREALIZED LOSS ON INVESTMENT ACTIVITIES
|
23 | 56 | 120 | 56 | |||||||||
COMPREHENSIVE INCOME (LOSS)
|
46,488 | 101,323 | (28,600 | ) | 37,281 | ||||||||
LESS: COMPREHENSIVE INCOME ATTRIBUTABLE TO NONCONTROLLING INTERESTS
|
3,797 | 2,717 | 7,854 | 2,920 | |||||||||
COMPREHENSIVE INCOME (LOSS) ATTRIBUTABLE TO COMMON STOCKHOLDERS
|
$ | 42,691 | 98,606 | (36,454 | ) | 34,361 |
5 |
|
As of
|
||||||
June 30, 2012
|
December 31, 2011
|
||||||
(Unaudited)
|
|||||||
ASSETS |
(In thousands, except share data)
|
||||||
CURRENT ASSETS:
|
|||||||
Cash and cash equivalents
|
$
|
42,760
|
$
|
35,939
|
|||
Short-term investments
|
232
|
761
|
|||||
Trade accounts receivable, net of allowance for doubtful accounts of $2,679 and $3,719, respectively
|
88,089
|
83,876
|
|||||
Prepaid expenses
|
3,499
|
6,934
|
|||||
Current portion of content assets
|
27,820
|
27,383
|
|||||
Other current assets
|
1,086
|
1,487
|
|||||
Current assets from discontinued operations
|
89
|
90
|
|||||
Total current assets
|
163,575
|
156,470
|
|||||
CONTENT ASSETS, net
|
44,857
|
38,934
|
|||||
PROPERTY AND EQUIPMENT, net
|
34,718
|
33,988
|
|||||
GOODWILL
|
272,037
|
272,037
|
|||||
RADIO BROADCASTING LICENSES
|
677,094
|
677,407
|
|||||
LAUNCH ASSETS, net
|
27,458
|
32,437
|
|||||
OTHER INTANGIBLE ASSETS, net
|
247,231
|
262,980
|
|||||
LONG-TERM INVESTMENTS
|
2,920
|
7,428
|
|||||
OTHER ASSETS
|
3,057
|
3,325
|
|||||
NON-CURRENT ASSETS FROM DISCONTINUED OPERATIONS
|
1,440
|
1,476
|
|||||
Total assets
|
$
|
1,474,387
|
$
|
1,486,482
|
|||
LIABILITIES, REDEEMABLE NONCONTROLLING INTEREST AND EQUITY
|
|||||||
CURRENT LIABILITIES:
|
|||||||
Accounts payable
|
$
|
6,107
|
$
|
5,626
|
|||
Accrued interest
|
5,928
|
6,703
|
|||||
Accrued compensation and related benefits
|
10,935
|
10,981
|
|||||
Current portion of content payables
|
18,680
|
20,807
|
|||||
Income taxes payable
|
926
|
1,794
|
|||||
Other current liabilities
|
11,284
|
12,227
|
|||||
Current portion of long-term debt
|
4,587
|
3,860
|
|||||
Current liabilities from discontinued operations
|
283
|
260
|
|||||
Total current liabilities
|
58,730
|
62,258
|
|||||
LONG-TERM DEBT, net of current portion and original issue discount
|
815,343
|
805,044
|
|||||
CONTENT PAYABLES, net of current portion
|
13,536
|
16,168
|
|||||
OTHER LONG-TERM LIABILITIES
|
19,351
|
18,521
|
|||||
DEFERRED TAX LIABILITIES
|
170,752
|
153,521
|
|||||
NON-CURRENT LIABILITIES FROM DISCONTINUED OPERATIONS
|
24
|
29
|
|||||
Total liabilities
|
1,077,736
|
1,055,541
|
|||||
REDEEMABLE NONCONTROLLING INTEREST
|
18,000
|
20,343
|
|||||
STOCKHOLDERS’ EQUITY:
|
|||||||
Convertible preferred stock, $.001 par value, 1,000,000 shares authorized; no shares outstanding at June 30, 2012 and December 31, 2011, respectively
|
—
|
—
|
|||||
Common stock — Class A, $.001 par value, 30,000,000 shares authorized; 2,719,860 and 2,731,860 shares issued and outstanding as of June 30, 2012 and December 31, 2011, respectively
|
3
|
3
|
|||||
Common stock — Class B, $.001 par value, 150,000,000 shares authorized; 2,861,843 shares issued and outstanding as of June 30, 2012 and December 31, 2011, respectively
|
3
|
3
|
|||||
Common stock — Class C, $.001 par value, 150,000,000 shares authorized; 3,121,048 shares issued and outstanding as of June 30, 2012 and December 31, 2011, respectively
|
3
|
3
|
|||||
Common stock — Class D, $.001 par value, 150,000,000 shares authorized; 41,421,667 and 41,409,667 shares issued and outstanding as of June 30, 2012 and December 31, 2011, respectively
|
41
|
41
|
|||||
Accumulated other comprehensive loss
|
(79
|
)
|
(199
|
)
|
|||
Additional paid-in capital
|
1,003,706
|
1,001,840
|
|||||
Accumulated deficit
|
(832,730
|
)
|
(796,156
|
)
|
|||
Total stockholders’ equity
|
170,947
|
205,535
|
|||||
Noncontrolling interest
|
207,704
|
205,063
|
|||||
Total equity
|
378,651
|
410,598
|
|||||
Total liabilities, redeemable noncontrolling interest and equity
|
$
|
1,474,387
|
$
|
1,486,482
|
6 |
Convertible Preferred Stock
|
Common Stock
Class A
|
Common Stock
Class B
|
Common
Stock
Class C
|
Common Stock
Class D
|
Accumulated Other Comprehensive (Loss) Income
|
Additional Paid-In Capital
|
Accumulated Deficit
|
Noncontrolling
Interest
|
Total Equity
|
|||||||||||||||||||||||||||||||
(In thousands)
|
||||||||||||||||||||||||||||||||||||||||
BALANCE, as of December 31, 2011
|
$ | — | $ | 3 | $ | 3 | $ | 3 | $ | 41 | $ | (199 | ) | $ | 1,001,840 | $ | (796,156 | ) | $ | 205,063 | $ | 410,598 | ||||||||||||||||||
Consolidated net (loss) income
|
— | — | — | — | — | — | — | (36,574 | ) | 8,421 | (28,153 | ) | ||||||||||||||||||||||||||||
Net change in unrealized loss on investment activities
|
— | — | — | — | — | 120 | — | — | — | 120 | ||||||||||||||||||||||||||||||
Dividends paid to noncontrolling interest
|
— | — | — | — | — | — | — | — | (5,780 | ) | (5,780 | ) | ||||||||||||||||||||||||||||
Conversion of 12,000 shares of Class A common stock to Class D common stock
|
— | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||
Adjustment of redeemable noncontrolling interest to estimated redemption value
|
— | — | — | — | — | — | 1,776 | — | — | 1,776 | ||||||||||||||||||||||||||||||
Stock-based compensation expense
|
— | — | — | — | — | — | 90 | — | — | 90 | ||||||||||||||||||||||||||||||
BALANCE, as of
June 30, 2012
|
$ | — | $ | 3 | $ | 3 | $ | 3 | $ | 41 | $ | (79 | ) | $ | 1,003,706 | $ | (832,730 | ) | $ | 207,704 | $ | 378,651 |
7 |
Six Months Ended June 30,
|
||||||||
2012
|
2011
|
|||||||
(Unaudited)
|
||||||||
(In thousands)
|
||||||||
CASH FLOWS FROM OPERATING ACTIVITIES:
|
||||||||
Consolidated net (loss) income
|
$
|
(28,720
|
)
|
$
|
37,225
|
|||
Adjustments to reconcile net (loss) income to net cash from operating activities:
|
||||||||
Depreciation and amortization
|
19,427
|
14,321
|
||||||
Amortization of debt financing costs
|
1,520
|
2,339
|
||||||
Amortization of content assets
|
18,240
|
9,406
|
||||||
Amortization of launch assets
|
4,979
|
—
|
||||||
Deferred income taxes
|
17,231
|
84,230
|
||||||
Impairment of long-lived assets
|
313
|
—
|
||||||
Gain on investment in affiliated company
|
—
|
(146,879
|
)
|
|||||
Equity in income of affiliated company
|
—
|
(3,287
|
)
|
|||||
Stock-based compensation
|
90
|
2,136
|
||||||
Non-cash interest
|
14,235
|
12,391
|
||||||
Loss on retirement of debt
|
—
|
7,743
|
||||||
Effect of change in operating assets and liabilities, net of assets acquired:
|
||||||||
Trade accounts receivable
|
(4,213
|
)
|
(24,754
|
)
|
||||
Prepaid expenses and other assets
|
3,835
|
|
2,713
|
|||||
Other assets
|
268
|
1,925
|
||||||
Accounts payable
|
481
|
|
1,639
|
|||||
Accrued interest
|
(775
|
)
|
1,804
|
|||||
Accrued compensation and related benefits
|
(46
|
)
|
(128
|
)
|
||||
Income taxes payable
|
(868
|
)
|
243
|
|||||
Other liabilities
|
1,336
|
|
(1,547
|
)
|
||||
Payments for content assets | (29,132 | ) | (2,345 | ) | ||||
Net cash flows (used in) provided by operating activities of discontinued operations
|
(19
|
) |
616
|
|||||
Net cash flows provided by (used in) operating activities
|
18,182
|
|
(209
|
)
|
||||
CASH FLOWS FROM INVESTING ACTIVITIES:
|
||||||||
Purchases of property and equipment
|
(6,712
|
)
|
(3,610
|
)
|
||||
Net cash and investments acquired in connection with TV One consolidation
|
—
|
65,245
|
||||||
Proceeds from sales of investment securities
|
5,567
|
—
|
||||||
Purchases of investment securities
|
(530
|
)
|
—
|
|
||||
Net cash flows (used in) provided by investing activities
|
(1,675
|
)
|
61,635
|
|||||
CASH FLOWS FROM FINANCING ACTIVITIES:
|
||||||||
Proceeds from credit facility
|
—
|
378,280
|
||||||
Repayment of credit facility
|
(3,889
|
)
|
(353,681
|
)
|
||||
Debt refinancing and modification costs
|
(17
|
)
|
(5,999
|
)
|
||||
Repurchase of noncontrolling interests
|
—
|
(54,595
|
)
|
|||||
Proceeds from noncontrolling interest member
|
—
|
2,776
|
||||||
Repurchase of common stock
|
—
|
(7,510
|
)
|
|||||
Payment of dividends to noncontrolling interest members of TV One
|
(5,780
|
)
|
—
|
|||||
Net cash flows used in financing activities
|
(9,686
|
)
|
(40,729
|
)
|
||||
INCREASE IN CASH AND CASH EQUIVALENTS
|
6,821
|
20,697
|
|
|||||
CASH AND CASH EQUIVALENTS, beginning of period
|
35,939
|
|
9,192
|
|||||
CASH AND CASH EQUIVALENTS, end of period
|
$
|
42,760
|
$
|
29,889
|
||||
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
|
||||||||
Cash paid for:
|
||||||||
Interest
|
$
|
31,015
|
$
|
25,330
|
||||
Income taxes, net
|
$
|
347
|
$
|
863
|
8 |
(a)
|
Organization
|
Results for interim periods are not necessarily indicative of results to be expected for the full year. This Form 10-Q/A should be read in conjunction with the financial statements and notes thereto included in the Company’s 2011 Annual Report on Form 10-K.
9 |
10 |
Three Months Ended
June 30,
|
|
Six Months Ended
June 30,
|
||||||||||||||
2012
|
2011
|
2012
|
2011
|
|||||||||||||
(Unaudited)
|
||||||||||||||||
Numerator:
|
||||||||||||||||
Consolidated net income (loss) attributable to common stockholders
|
$
|
42,668
|
$
|
98,550
|
$
|
(36,574
|
)
|
$
|
34,305
|
|||||||
Denominator:
|
||||||||||||||||
Denominator for basic net income (loss) per share - weighted average outstanding shares
|
50,006,085
|
50,831,560
|
49,997,752
|
51,474,556
|
||||||||||||
Effect of dilutive securities:
|
||||||||||||||||
Stock options and restricted stock
|
118,333
|
2,073,500
|
—
|
2,171,917
|
||||||||||||
Denominator for diluted net income (loss) per share - weighted-average outstanding shares
|
50,124,418
|
52,905,060
|
49,997,752
|
53,646,473
|
||||||||||||
Net income (loss) attributable to common stockholders per share - basic
|
$
|
0.85
|
$
|
1.94
|
$
|
(0.73
|
)
|
$
|
0.67
|
|||||||
Net income (loss) attributable to common stockholders per share - diluted
|
$
|
0.85
|
$
|
1.86
|
$
|
(0.73
|
)
|
$
|
0.64
|
Six Months Ended
June 30, 2012
|
||
(Unaudited)
|
||
(In Thousands)
|
||
Stock options
|
4,712
|
|
Restricted stock
|
119
|
(g) Fair Value Measurements
|
Level 1: Inputs are unadjusted quoted prices in active markets for identical assets and liabilities that can be accessed at measurement date.
|
Level 2: Observable inputs other than those included in Level 1. The fair value of Level 2 assets are based on quoted market prices for similar assets in active markets.
|
|
Level 3: Unobservable inputs reflecting management’s own assumptions about the inputs used in pricing the asset or liability.
|
11 |
Total | Level 1 | Level 2 | Level 3 | ||||||||
(Unaudited)
|
|||||||||||
(In thousands)
|
|||||||||||
As of June 30, 2012
|
|||||||||||
Assets subject to fair value measurement:
|
|||||||||||
Fixed maturity securities – available for sale:
|
|||||||||||
Corporate debt securities
|
$ | 2,951 | $ | 2,951 | $ | — | $ | — | |||
Government sponsored enterprise mortgage-backed securities
|
201 | — | 201 | — | |||||||
Total fixed maturity securities (a)
|
3,152 | 2,951 | 201 | — | |||||||
Total
|
$ | 3,152 | $ | 2,951 | $ | 201 | $ | — | |||
Liabilities subject to fair value measurement:
|
|||||||||||
Incentive award plan (b)
|
$ | 5,096 | $ | — | $ | — | $ | 5,096 | |||
Employment agreement award (c)
|
11,039 | — | — | 11,039 | |||||||
Total
|
$ | 16,135 | $ | — | $ | — | $ | 16,135 | |||
Mezzanine equity subject to fair value measurement:
|
|||||||||||
Redeemable noncontrolling interest (d)
|
$ | 18,000 | $ | — | $ | — | $ | 18,000 | |||
As of December 31, 2011
|
|||||||||||
Assets subject to fair value measurement:
|
|||||||||||
Fixed maturity securities – available for sale:
|
|||||||||||
Corporate debt securities
|
$ | 7,178 | $ | 7,178 | $ | — | $ | — | |||
Government sponsored enterprise mortgage-backed securities
|
1,011 | — | 1,011 | — | |||||||
Total fixed maturity securities (a)
|
8,189 | 7,178 | 1,011 | — | |||||||
Total
|
$ | 8,189 | $ | 7,178 | $ | 1,011 | $ | — | |||
Liabilities subject to fair value measurement:
|
|||||||||||
Incentive award plan (b)
|
$ | 5,096 | $ | — | $ | — | $ | 5,096 | |||
Employment agreement award (c)
|
10,346 | — | — | 10,346 | |||||||
Total
|
$ | 15,442 | $ | — | $ | — | $ | 15,442 | |||
Mezzanine equity subject to fair value measurement:
|
|||||||||||
Redeemable noncontrolling interest (d)
|
$ | 20,343 | $ | — | $ | — | $ | 20,343 | |||
(a) Where quoted market prices are available in an active market, securities are classified within Level 1 of the valuation hierarchy. If quoted market prices are not available, fair values are estimated using pricing models, quoted prices of securities with similar characteristics or discounted cash flows.
|
|||||||||||
(b) These balances are measured based on the estimated enterprise fair value of TV One. For the period ended June 30, 2012, the Company determined that there was no change in TV One’s fair market value since the December 31, 2011 valuation.
|
|||||||||||
(c) Pursuant to an employment agreement (the “Employment Agreement”) executed in April 2008, the Chief Executive Officer (“CEO”) is eligible to receive an award amount equal to 8% of any proceeds from distributions or other liquidity events in excess of the return of the Company’s aggregate investment in TV One. The Company reviews the factors underlying this award at the end of each quarter including the valuation of TV One and an assessment of the probability that the employment agreement will be renewed and contain this provision. The Company’s obligation to pay the award will be triggered only after the Company’s recovery of the aggregate amount of its capital contribution in TV One and only upon actual receipt of distributions of cash or marketable securities or proceeds from a liquidity event with respect to the Company’s membership interest in TV One. The CEO was fully vested in the award upon execution of the Employment Agreement, and the award lapses if the CEO voluntarily leaves the Company or is terminated for cause. In calculating the fair value of the award, the Company determined that there was no change in TV One’s fair market value since the December 31, 2011 valuation (See Note 8 – Derivative Instruments and Hedging Activities.) The Company is currently in negotiations with the Company’s CEO for a new employment agreement. Until such time as his new employment agreement is executed, the terms of his April 2008 employment agreement remain in effect including eligibility for the TV One award.
|
|||||||||||
(d) Redeemable noncontrolling interest in Reach Media is measured at fair value using a discounted cash flow methodology. A third-party valuation firm assisted the Company in calculating the fair value. Inputs to the discounted cash flow analysis include forecasted operating results, discount rate and a terminal value.
|
|||||||||||
12 |
Incentive Award Plan
|
Employment Agreement Award
|
Redeemable Noncontrolling Interests
|
|||||||
(In thousands)
|
|||||||||
Balance at December 31, 2011
|
$
|
5,096
|
$
|
10,346
|
$
|
20,343
|
|||
Losses included in earnings (unrealized)
|
—
|
693
|
—
|
||||||
Net loss attributable to noncontrolling interests
|
—
|
—
|
(567
|
)
|
|||||
Change in fair value
|
—
|
—
|
(1,776
|
)
|
|||||
Balance at June 30, 2012
|
$
|
5,096
|
$
|
11,039
|
$
|
18,000
|
|||
The amount of total losses for the period included in earnings attributable to the change in unrealized losses relating to assets and liabilities still held at the reporting date
|
$
|
—
|
$
|
(693
|
)
|
$
|
—
|
Incentive Award Plan
|
Employment Agreement Award
|
Redeemable Noncontrolling Interests
|
|||||||
(In thousands)
|
|||||||||
Balance at December 31, 2010
|
$
|
—
|
$
|
6,824
|
$
|
30,635
|
|||
Losses included in earnings (unrealized)
|
—
|
470
|
—
|
||||||
Net income attributable to noncontrolling interests
|
—
|
—
|
606
|
||||||
Recognition of TV One management incentive award plan in connection with the consolidation of TV One
|
6,428
|
—
|
—
|
||||||
Change in fair value
|
—
|
—
|
(2,505
|
)
|
|||||
Balance at June 30, 2011
|
$
|
6,428
|
$
|
7,294
|
$
|
28,736
|
|||
The amount of total losses for the period included in earnings attributable to the change in unrealized losses relating to assets and liabilities still held at the reporting date
|
$
|
—
|
$
|
(470
|
)
|
$
|
—
|
Level 3 liabilities
|
Valuation Technique
|
Significant Unobservable Inputs
|
Significant Unobservable Input Value
|
|||
Incentive Award Plan
|
Discounted Cash Flow
|
Discount Rate
|
11.5%
|
|||
Incentive Award Plan
|
Discounted Cash Flow
|
Long-term Growth Rate
|
3.0%
|
|||
Employment Agreement Award
|
Discounted Cash Flow
|
Discount Rate
|
11.5%
|
|||
Employment Agreement Award
|
Discounted Cash Flow
|
Long-term Growth Rate
|
3.0%
|
|||
Redeemable Noncontrolling Interest
|
Discounted Cash Flow
|
Discount Rate
|
12.5%
|
|||
Redeemable Noncontrolling Interest
|
Discounted Cash Flow
|
Long-term Growth Rate
|
2.5%
|
13 |
(h) Impact of Recently Issued Accounting Pronouncements
|
14 |
15 |
Three Months Ended March 31, 2012
|
Year Ended December 31, 2011
|
Six Months Ended June 30, 2011
|
|||||||||||||||||||||||||||||||||
As Previously Reported
|
Adjustments
|
As Restated
|
As Previously Reported
|
Adjustments
|
As Restated
|
As Previously Reported
|
Adjustments
|
As Restated
|
|||||||||||||||||||||||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | |||||||||||||||||||||||||||||||||||
Payments for content assets
|
$ | - | $ | (10,714 | ) | $ | (10,714 | ) | $ | - | $ | (23,412 | ) | $ | (23,412 | ) | $ | - | $ | (2,345 | ) | $ | (2,345 | ) | |||||||||||
Net cash flows provided by (used in) operating activities
|
23,199 | (10,714 | ) | 12,485 | 55,018 | (23,412 | ) | 31,606 | 2,136 | (2,345 | ) | (209 | ) | ||||||||||||||||||||||
CASH FLOWS FROM INVESTING ACTIVITIES: | |||||||||||||||||||||||||||||||||||
Payments for content assets
|
10,714 | 10,714 | (23,412 | ) | 23,412 | - | (2,345 | ) | 2,345 | - | |||||||||||||||||||||||||
Net cash flows provided by (used in) investing activities
|
(10,163 | ) | 10,714 | 551 | 32,388 | 23,412 | 55,800 | 59,290 | 2,345 | 61,635 | |||||||||||||||||||||||||
CASH FLOWS FROM FINANCING ACTIVITIES: | |||||||||||||||||||||||||||||||||||
Net cash flows used in financing activities
|
(5,091 | ) | - | (5,091 | ) | (60,659 | ) | - | (60,659 | ) | (40,729 | ) | - | (40,729 | ) | ||||||||||||||||||||
INCREASE IN CASH AND CASH EQUIVALENTS
|
$ | 7,945 | $ | - | $ | 7,945 | $ | 26,747 | $ | - | $ | 26,747 | $ | 20,697 | $ | - | $ | 20,697 |
16 |
Three Months Ended
June 30,
|
Six Months Ended
June 30,
|
|||||||||||
2012
|
2011
|
2012
|
2011
|
|||||||||
(Unaudited)
|
||||||||||||
(In thousands)
|
|
|||||||||||
Net revenue
|
$
|
105,916
|
$
|
101,515
|
$
|
208,958
|
$
|
197,355
|
||||
Costs and expenses, net
|
63,248
|
93,776
|
245,532
|
110,913
|
||||||||
Net income (loss)
|
42,668
|
7,739
|
(36,574
|
)
|
86,442
|
17 |
Three Months Ended
June 30,
|
Six Months Ended
June 30,
|
||||||||||||
2012
|
2011
|
2012
|
2011
|
||||||||||
(Unaudited)
|
|||||||||||||
(In thousands)
|
|||||||||||||
Net revenue
|
$
|
—
|
$
|
22
|
$
|
—
|
$
|
59
|
|||||
Station operating expenses
|
65
|
48
|
123
|
125
|
|||||||||
Depreciation and amortization
|
18
|
19
|
36
|
35
|
|||||||||
Interest income
|
90
|
—
|
180
|
—
|
|||||||||
Gain on sale of assets
|
—
|
—
|
—
|
20
|
|||||||||
Income (loss) before income taxes
|
7
|
(45
|
)
|
21
|
(81
|
)
|
|||||||
Provision for income taxes |
—
|
—
|
—
|
—
|
|||||||||
Income (loss) from discontinued operations, net of tax
|
$
|
7
|
$
|
(45
|
)
|
$
|
21
|
$
|
(81
|
)
|
As of
|
|||||||
June 30,
|
December 31,
|
||||||
2012
|
2011
|
||||||
(Unaudited)
|
|||||||
(In thousands)
|
|||||||
Currents assets:
|
|||||||
Accounts receivable, net of allowance for doubtful accounts
|
$ | 89 | $ | 90 | |||
Total current assets
|
89 | 90 | |||||
Intangible assets, net
|
1,202 | 1,202 | |||||
Property and equipment, net
|
238 | 274 | |||||
Total assets
|
$ | 1,529 | $ | 1,566 | |||
Current liabilities:
|
|||||||
Other current liabilities
|
$ | 283 | $ | 260 | |||
Total current liabilities
|
283 | 260 | |||||
Long-term liabilities
|
24 | 29 | |||||
Total liabilities
|
$ | 307 | $ | 289 |
18 |
Radio Broadcasting Licenses
|
May 31, 2011 (a)
|
September 30, 2011 (a)
|
October 1, 2011
|
June 30, 2012 (a)
|
|||||||||||
Pre-tax impairment charge (in millions)
|
$ | — | $ | — | $ | — | $ | 0.3 | |||||||
Discount Rate
|
10.0 | % | 9.5 | % | 10.0 | % | 10.0 | % | |||||||
Year 1 Market Revenue Growth Range
|
1.3% -2.8 | % | 1.5% -2.0 | % | 1.5% -2.5 | % | 1.0% -3.0 | % | |||||||
Long-term Market Revenue Growth Rate Range (Years 6 – 10)
|
1.5% - 2.0 | % | 1.5% - 2.0 | % | 1.0% - 2.0 | % | 1.0% - 2.0 | % | |||||||
Mature Market Share Range
|
9.0% - 22.5 | % | 9.3% - 22.4 | % | 0.7% - 28.9 | % | 5.8% - 15.6 | % | |||||||
Operating Profit Margin Range
|
32.7% - 40.8 | % | 32.7% - 33.0 | % | 19.1% - 47.4 | % | 29.1% - 48.0 | % |
(a)
|
Reflects changes only to the key assumptions used in quarterly interim testing for certain reporting units.
|
19 |
Reach Media Goodwill |
March 31, 2011
|
June 30, 2011
|
September 30, 2011
|
December 31, 2011
|
March 31, 2012
|
June 30, 2012
|
||||||||||||||||||
Pre-tax impairment charge (in millions)
|
$ | – | $ | – | $ | – | $ | – | $ | – | $ | – | ||||||||||||
Discount Rate
|
13.5 | % | 13.0 | % | 12.0 | % | 12.5 | % | 12.5 | % | 12.5 | % | ||||||||||||
Year 1 Revenue Growth Rate
|
2.5 | % | 2.5 | % | 2.5 | % | 2.5 | % | 2.5 | % | 2.5 | % | ||||||||||||
Long-term Revenue Growth Rate Range
|
(1.3)% - 4.9 | % | (0.2)% - 3.9 | % | (2.0)% - 3.5 | % | 3.0% - 12.7 | % | 2.2% - 9.7 | % | 0.3% - 2.5 | % | ||||||||||||
Operating Profit Margin Range
|
16.2% - 27.4 | % | 17.6% - 22.6 | % | 18.8% - 21.7 | % | (2.0)% - 16.8 | % | 3.7% - 18.1 | % | 4.9% - 15.3 | % |
Goodwill Carrying Balances
|
||||||||||||
As of
|
As of
|
|||||||||||
Segment
|
December 31, 2011
|
Increase (Decrease)
|
June 30, 2012
|
|||||||||
(In millions)
|
||||||||||||
Radio Broadcasting Segment
|
$
|
70.8
|
$
|
—
|
$
|
70.8
|
||||||
Reach Media Segment
|
14.4
|
—
|
14.4
|
|||||||||
Internet Segment
|
21.8
|
—
|
21.8
|
|||||||||
Cable Television Segment
|
165.0
|
—
|
165.0
|
|||||||||
Total
|
$
|
272.0
|
$
|
—
|
$
|
272.0
|
20 |
21 |
Amortized Cost
Basis
|
Gross Unrealized Losses
|
Gross Unrealized Gains
|
Fair
Value
|
|||||||||||||
(In thousands)
|
||||||||||||||||
June 30, 2012
|
||||||||||||||||
Corporate debt securities
|
$ | 2,831 | $ | (38 | ) | $ | 158 | $ | 2,951 | |||||||
Government sponsored enterprise mortgage-backed securities
|
201 | - | - | 201 | ||||||||||||
Total investments
|
$ | 3,032 | $ | (38 | ) | $ | 158 | $ | 3,152 |
Amortized Cost
Basis
|
Gross Unrealized Losses
|
Gross Unrealized Gains
|
Fair
Value
|
|||||||||||||
(In thousands)
|
||||||||||||||||
December 31, 2011
|
||||||||||||||||
Corporate debt securities
|
$ | 7,376 | $ | (264 | ) | $ | 66 | $ | 7,178 | |||||||
Government sponsored enterprise mortgage-backed securities
|
1,012 | (2 | ) | 1 | 1,011 | |||||||||||
Total investments
|
$ | 8,388 | $ | (266 | ) | $ | 67 | $ | 8,189 |
Fair
Value
< 1 Year
|
Unrealized Losses
< 1 Year
|
Fair
Value
> 1 Year
|
Unrealized Losses
> 1 Year
|
Total Unrealized Losses
|
|||||||||||||||||
(In thousands)
|
|||||||||||||||||||||
June 30, 2012
|
|||||||||||||||||||||
Corporate debt securities
|
$ | 399 | $ | (23 | ) | $ | 703 | $ | (15 | ) | $ | (38 | ) | ||||||||
Government sponsored enterprise mortgage-backed securities
|
- | - | - | - | - | ||||||||||||||||
Total investments
|
$ | 399 | $ | (23 | ) | $ | 703 | $ | (15 | ) | $ | (38 | ) |
Fair
Value
< 1 Year
|
Unrealized Losses
< 1 Year
|
Fair
Value
> 1 Year
|
Unrealized Losses
> 1 Year
|
Total Unrealized Losses
|
|||||||||||||||||
(In thousands)
|
|||||||||||||||||||||
December 31, 2011
|
|||||||||||||||||||||
Corporate debt securities
|
$ | 2,760 | $ | (178 | ) | $ | 1,693 | $ | (86 | ) | $ | (264 | ) | ||||||||
Government sponsored enterprise mortgage-backed securities
|
400 | (2 | ) | - | - | (2 | ) | ||||||||||||||
Total investments
|
$ | 3,160 | $ | (180 | ) | $ | 1,693 | $ | (86 | ) | $ | (266 | ) |
22 |
Amortized Cost Basis
|
Fair Value
|
|||||||
(In thousands)
|
||||||||
Within 1 year
|
$ | 236 | $ | 233 | ||||
After 1 year through 5 years
|
2,028 | 2,146 | ||||||
After 5 years through 10 years
|
567 | 572 | ||||||
After 10 years
|
- | - | ||||||
Mortgage-backed securities
|
201 | 201 | ||||||
Total
|
$ | 3,032 | $ | 3,152 |
Three Months Ended June 30, 2012
|
Six Months Ended June 30, 2012
|
Three Months Ended June 30, 2011
|
Six Months Ended June 30, 2011
|
|||||||||||||
(In thousands)
|
||||||||||||||||
Proceeds from sales
|
$ | 1,708 | $ | 5,567 | $ | 2,530 | $ | 2,530 | ||||||||
Gross realized gains
|
6 | 19 | 6 | 6 | ||||||||||||
Gross realized losses
|
(33 | ) | (98 | ) | (65 | ) | (65 | ) |
Liability Derivatives
|
||||||||||
|
As of June 30, 2012
|
As of December 31, 2011
|
||||||||
(Unaudited)
|
||||||||||
(In thousands)
|
||||||||||
Balance Sheet Location
|
Fair Value
|
Balance Sheet Location
|
Fair Value
|
|||||||
Derivatives not designated as hedging instruments:
|
||||||||||
Employment agreement award
|
Other Long-Term Liabilities
|
$
|
11,039
|
Other Long-Term Liabilities
|
$
|
10,346
|
||||
Total derivatives
|
$
|
11,039
|
$
|
10,346
|
23 |
Derivatives in Cash Flow Hedging Relationships
|
Amount of Gain in Other Comprehensive Loss on Derivative (Effective Portion)
|
Loss Reclassified from Accumulated Other Comprehensive Loss into Income (Effective Portion)
|
Gain (Loss) in Income (Ineffective Portion and Amount Excluded from Effectiveness Testing)
|
||||||||||||
Amount
|
Location
|
Amount
|
Location
|
Amount
|
|||||||||||
Three Months Ended June 30,
|
|||||||||||||||
(Unaudited)
|
|||||||||||||||
(In thousands)
|
|||||||||||||||
2012
|
2011
|
2012
|
2011
|
2012
|
2011
|
||||||||||
Interest rate swaps
|
$—
|
$—
|
Interest expense
|
$—
|
$—
|
Interest expense
|
$—
|
$—
|
Derivatives in Cash Flow Hedging Relationships
|
Amount of Gain in Other Comprehensive Loss on Derivative (Effective Portion)
|
Loss Reclassified from Accumulated Other Comprehensive Loss into Income (Effective Portion)
|
Gain (Loss) in Income (Ineffective Portion and Amount Excluded from Effectiveness Testing)
|
|||||||||||||
Amount
|
Location
|
Amount
|
Location
|
Amount | ||||||||||||
Six Months Ended June 30,
|
||||||||||||||||
(Unaudited)
|
||||||||||||||||
(In thousands)
|
||||||||||||||||
2012
|
2011
|
2012
|
2011
|
2012
|
2011
|
|||||||||||
Interest rate swaps
|
$—
|
$—
|
Interest expense
|
—
|
$(258
|
)
|
Interest expense
|
$—
|
$—
|
Derivatives Not Designated as Hedging Instruments
|
Location of Gain (Loss) in Income of Derivative
|
Amount of Gain (Loss) in Income of Derivative
|
||
Three Months Ended June 30,
|
||||
2012
|
2011
|
|||
(Unaudited)
|
||||
(In thousands)
|
||||
Employment agreement award
|
Corporate selling, general and administrative expense
|
$(343)
|
$(510)
|
Derivatives Not Designated as Hedging Instruments
|
Location of Gain (Loss) in Income on Derivative
|
Amount of Gain (Loss) in Income of Derivative
|
||
Six Months Ended June 30,
|
||||
2012
|
2011
|
|||
(Unaudited)
|
||||
(In thousands)
|
||||
Employment agreement award
|
Corporate selling, general and administrative expense
|
$(693)
|
$(470)
|
24 |
25 |
June 30, 2012
|
December 31, 2011
|
|||||||
(Unaudited)
|
||||||||
(In thousands)
|
||||||||
Senior bank term debt
|
$ | 379,216 | $ | 383,105 | ||||
63/8% Senior Subordinated Notes due February 2013
|
747 | 747 | ||||||
121/2%/15% Senior Subordinated Notes due May 2016
|
327,035 | 312,800 | ||||||
10% Senior Secured TV One Notes due March 2016
|
119,000 | 119,000 | ||||||
Total debt
|
825,998 | 815,652 | ||||||
Less: current portion
|
4,587 | 3,860 | ||||||
Less: original issue discount
|
6,068 | 6,748 | ||||||
Long-term debt, net
|
$ | 815,343 | $ | 805,044 |
(a)
|
maintaining an interest coverage ratio of no less than:
|
§
|
1.25 to 1.00 on June 30, 2011 and the last day of each fiscal quarter through September 30, 2015; and
|
§
|
1.50 to 1.00 on December 31, 2015 and the last day of each fiscal quarter thereafter.
|
§
|
5.25 to 1.00 on June 30, 2011;
|
§
|
5.00 to 1.00 on September 30, 2011 and December 31, 2011;
|
§
|
4.75 to 1.00 on March 31, 2012;
|
§
|
4.50 to 1.00 on June 30, 2012, September 30, 2012 and December 31, 2012;
|
§
|
4.00 to 1.00 on March 31, 2013 and the last day of each fiscal quarter through September 30, 2013;
|
§
|
3.75 to 1.00 on December 31, 2013 and the last day of each fiscal quarter through September 30, 2014;
|
§
|
3.25 to 1.00 on December 31, 2014 and the last day of each fiscal quarter through September 30, 2015; and
|
§
|
2.75 to 1.00 on December 31, 2015 and the last day of each fiscal quarter thereafter.
|
§
|
9.25 to 1.00 on June 30, 2011 and the last day of each fiscal quarter through December 31, 2011;
|
§
|
9.00 to 1.00 on March 31, 2012;
|
§
|
8.75 to 1.00 on June 30, 2012;
|
§
|
8.50 to 1.00 on September 30, 2012 and December 31, 2012;
|
§
|
8.00 to 1.00 on March 31, 2013 and the last day of each fiscal quarter through September 30, 2013;
|
§
|
7.50 to 1.00 on December 31, 2013 and the last day of each fiscal quarter through September 30, 2014;
|
§
|
6.50 to 1.00 on December 31, 2014 and the last day of each fiscal quarter through September 30, 2015; and
|
§
|
6.00 to 1.00 on December 31, 2015 and the last day of each fiscal quarter thereafter.
|
§
|
liens;
|
§
|
sale of assets;
|
§
|
payment of dividends; and
|
§
|
mergers.
|
26 |
As of June 30, 2012
|
Covenant Limit
|
Excess Coverage
|
||||||||||
Pro Forma Last Twelve Months Covenant EBITDA (In millions)
|
$
|
83.2
|
||||||||||
Pro Forma Last Twelve Months Interest Expense (In millions)
|
$
|
52.0
|
||||||||||
Senior Debt (In millions)
|
$
|
358.7
|
||||||||||
Total Debt (In millions)
|
$
|
686.5
|
||||||||||
Senior Secured Leverage
|
||||||||||||
Senior Secured Debt / Covenant EBITDA
|
4.31
|
x
|
4.50
|
x
|
0.19
|
x
|
||||||
Total Leverage
|
||||||||||||
Total Debt / Covenant EBITDA
|
8.25
|
x
|
8.75
|
x
|
0.50
|
x
|
||||||
Interest Coverage
|
||||||||||||
Covenant EBITDA / Interest Expense
|
1.60
|
x
|
1.25
|
x
|
0.35
|
x
|
||||||
EBITDA - Earnings before interest, taxes, depreciation and amortization
|
27 |
28 |
29 |
30 |
Three MonthsEnded June 30,
|
Six Months Ended June 30,
|
|||||||||||||||
2012
|
2011
|
2012
|
2011
|
|||||||||||||
Average risk-free interest rate
|
— | 1.60 | % | — | 2.23 | % | ||||||||||
Expected dividend yield
|
— | 0.00 | % | — | 0.00 | % | ||||||||||
Expected lives
|
— |
5.75 Years
|
— |
6.25 Years
|
||||||||||||
Expected volatility
|
— | 124.3 | % | — | 120.7 | % |
Number of Options
|
Weighted-Average Exercise Price
|
Weighted-Average Remaining Contractual Term (In Years)
|
Aggregate Intrinsic Value
|
|||||||||||||
Outstanding at December 31, 2011
|
4,811,000
|
$
|
8.60
|
—
|
||||||||||||
Grants
|
—
|
$
|
—
|
|||||||||||||
Exercised
|
—
|
—
|
||||||||||||||
Forfeited/cancelled/expired
|
99,000
|
2.82
|
||||||||||||||
Balance as of June 30, 2012
|
4,712,000
|
$
|
8.72
|
3.92
|
$
|
—
|
||||||||||
Vested and expected to vest at June 30, 2012
|
4,708,000
|
$
|
8.73
|
3.92
|
$
|
—
|
||||||||||
Unvested at June 30, 2012
|
33,000
|
$
|
1.87
|
8.93
|
$
|
—
|
||||||||||
Exercisable at June 30, 2012
|
4,679,000
|
$
|
8.77
|
3.89
|
$
|
—
|
Shares
|
Average Fair Value at Grant Date
|
|||||||
Unvested at December 31, 2011
|
144,000
|
$
|
1.10
|
|||||
Grants
|
—
|
$
|
—
|
|||||
Vested
|
(25,000
|
)
|
$
|
1.04
|
||||
Forfeited/cancelled/expired
|
—
|
$
|
—
|
|||||
Unvested at June 30, 2012
|
119,000
|
$
|
1.12
|
31 |
32 |
Three Months Ended June 30,
|
||||||||
2012
|
2011
|
|||||||
(Unaudited)
|
||||||||
(In thousands)
|
||||||||
Net Revenue:
|
||||||||
Radio Broadcasting
|
$ | 61,759 | $ | 60,162 | ||||
Reach Media
|
8,546 | 9,774 | ||||||
Internet
|
4,423 | 4,307 | ||||||
Cable Television
|
32,254 | 25,166 | ||||||
Corporate/Eliminations/Other
|
(1,066 | ) | (2,347 | ) | ||||
Consolidated
|
$ | 105,916 | $ | 97,062 | ||||
Operating Expenses (excluding depreciation, amortization and impairment charges and including stock-based compensation):
|
||||||||
Radio Broadcasting
|
$ | 35,081 | $ | 36,261 | ||||
Reach Media
|
8,945 | 8,320 | ||||||
Internet
|
4,898 | 4,826 | ||||||
Cable Television
|
20,592 | 17,502 | ||||||
Corporate/Eliminations/Other
|
4,865 | 4,125 | ||||||
Consolidated
|
$ | 74,381 | $ | 71,034 | ||||
Depreciation and Amortization:
|
||||||||
Radio Broadcasting
|
$ | 1,623 | $ | 1,681 | ||||
Reach Media
|
293 | 990 | ||||||
Internet
|
823 | 919 | ||||||
Cable Television
|
6,762 | 6,429 | ||||||
Corporate/Eliminations/Other
|
241 | 219 | ||||||
Consolidated
|
$ | 9,742 | $ | 10,238 | ||||
Impairment of Long-Lived Assets:
|
||||||||
Radio Broadcasting
|
$ | 313 | $ | — | ||||
Reach Media
|
— | — | ||||||
Internet
|
— | — | ||||||
Cable Television
|
— | — | ||||||
Corporate/Eliminations/Other
|
— | — | ||||||
Consolidated
|
$ | 313 | $ | — | ||||
Operating income (loss):
|
||||||||
Radio Broadcasting
|
$ | 24,742 | $ | 22,220 | ||||
Reach Media
|
(692 | ) | 464 | |||||
Internet
|
(1,298 | ) | (1,438 | ) | ||||
Cable Television
|
4,900 | 1,235 | ||||||
Corporate/Eliminations/Other
|
(6,172 | ) | (6,691 | ) | ||||
Consolidated
|
$ | 21,480 | $ | 15,790 | ||||
June 30, 2012
|
December 31, 2011
|
|||||||
|
(Unaudited)
|
|||||||
(In thousands)
|
||||||||
Total Assets:
|
||||||||
Radio Broadcasting
|
$ | 807,976 | $ | 806,822 | ||||
Reach Media
|
32,933 | 33,737 | ||||||
Internet
|
31,825 | 33,265 | ||||||
Cable Television
|
547,167 | 561,325 | ||||||
Corporate/Eliminations/Other
|
54,486 | 51,333 | ||||||
Consolidated
|
$ | 1,474,387 | $ | 1,486,482 |
33 |
Six Months Ended June 30,
|
||||||||
2012
|
2011
|
|||||||
(Unaudited)
|
||||||||
(In thousands)
|
||||||||
Net Revenue:
|
||||||||
Radio Broadcasting
|
$ | 114,493 | $ | 108,419 | ||||
Reach Media
|
22,099 | 24,500 | ||||||
Internet
|
10,207 | 7,821 | ||||||
Cable Television
|
64,490 | 25,166 | ||||||
Corporate/Eliminations/Other
|
(2,331 | ) | (3,836 | ) | ||||
Consolidated
|
$ | 208,958 | $ | 162,070 | ||||
Operating Expenses (excluding depreciation, amortization and impairment charges and including stock-based compensation):
|
||||||||
Radio Broadcasting
|
$ | 70,405 | $ | 68,198 | ||||
Reach Media
|
23,307 | 22,257 | ||||||
Internet
|
10,362 | 9,897 | ||||||
Cable Television
|
40,910 | 17,502 | ||||||
Corporate/Eliminations/Other
|
8,981 | 8,528 | ||||||
Consolidated
|
$ | 153,965 | $ | 126,382 | ||||
Depreciation and Amortization:
|
||||||||
Radio Broadcasting
|
$ | 3,228 | $ | 3,433 | ||||
Reach Media
|
593 | 1,974 | ||||||
Internet
|
1,637 | 2,037 | ||||||
Cable Television
|
13,511 | 6,429 | ||||||
Corporate/Eliminations/Other
|
458 | 448 | ||||||
Consolidated
|
$ | 19,427 | $ | 14,321 | ||||
Impairment of Long-Lived Assets:
|
||||||||
Radio Broadcasting
|
$ | 313 | $ | — | ||||
Reach Media
|
— | — | ||||||
Internet
|
— | — | ||||||
Cable Television
|
— | — | ||||||
Corporate/Eliminations/Other
|
— | — | ||||||
Consolidated
|
$ | 313 | $ | — | ||||
Operating income (loss):
|
||||||||
Radio Broadcasting
|
$ | 40,547 | $ | 36,788 | ||||
Reach Media
|
(1,801 | ) | 269 | |||||
Internet
|
(1,792 | ) | (4,113 | ) | ||||
Cable Television
|
10,069 | 1,235 | ||||||
Corporate/Eliminations/Other
|
(11,770 | ) | (12,812 | ) | ||||
Consolidated
|
$ | 35,253 | $ | 21,367 |
34 |
RADIO ONE, INC. AND SUBSIDIARIES
|
||||||||||||||||
CONSOLIDATING STATEMENT OF OPERATIONS
|
||||||||||||||||
Three Months Ended June 30, 2012
|
||||||||||||||||
Combined
|
||||||||||||||||
Guarantor
|
Radio
|
|||||||||||||||
Subsidiaries
|
One, Inc.
|
Eliminations
|
Consolidated
|
|||||||||||||
(Unaudited)
|
||||||||||||||||
(In thousands)
|
||||||||||||||||
NET REVENUE
|
$
|
35,588
|
$
|
70,328
|
$
|
—
|
$
|
105,916
|
||||||||
OPERATING EXPENSES:
|
||||||||||||||||
Programming and technical
|
7,975
|
24,983
|
—
|
32,958
|
||||||||||||
Selling, general and administrative, including stock-based compensation
|
14,815
|
16,753
|
—
|
31,568
|
||||||||||||
Corporate selling, general and administrative, including stock-based compensation
|
—
|
9,855
|
—
|
9,855
|
||||||||||||
Depreciation and amortization
|
1,850
|
7,892
|
9,742
|
|||||||||||||
Impairment of long-lived assets
|
313
|
—
|
—
|
313
|
||||||||||||
Total operating expenses
|
24,953
|
59,483
|
—
|
84,436
|
||||||||||||
Operating income
|
10,635
|
10,845
|
—
|
21,480
|
||||||||||||
INTEREST INCOME
|
—
|
25
|
—
|
25
|
||||||||||||
INTEREST EXPENSE
|
250
|
22,678
|
—
|
22,928
|
||||||||||||
OTHER EXPENSE, net
|
—
|
610
|
—
|
610
|
||||||||||||
Income (loss) before benefit from income taxes, noncontrolling interests in income of subsidiaries and discontinued operations
|
10,385
|
(12,418
|
)
|
—
|
(2,033
|
)
|
||||||||||
BENEFIT FROM INCOME TAXES
|
—
|
(48,491
|
)
|
—
|
(48,491
|
) | ||||||||||
Net income before equity in income of subsidiaries and discontinued operations
|
10,385
|
36,073
|
—
|
46,458
|
||||||||||||
EQUITY IN INCOME OF SUBSIDIARIES
|
—
|
10,392
|
(10,392
|
)
|
—
|
|||||||||||
Net income (loss) from continuing operations
|
10,385
|
46,465
|
(10,392
|
)
|
46,458
|
|||||||||||
INCOME FROM DISCONTINUED OPERATIONS, net of tax
|
7
|
—
|
|
—
|
7
|
|||||||||||
CONSOLIDATED NET INCOME (LOSS)
|
10,392
|
46,465
|
(10,392
|
)
|
46,465
|
|||||||||||
NET INCOME ATTRIBUTABLE TO NONCONTROLLING INTERESTS
|
—
|
3,797
|
—
|
3,797
|
||||||||||||
CONSOLIDATED NET INCOME (LOSS) ATTRIBUTABLE TO COMMON STOCKHOLDERS
|
$
|
10,392
|
$
|
42,668
|
$
|
(10,392
|
)
|
$
|
42,668
|
35 |
RADIO ONE, INC. AND SUBSIDIARIES
|
||||||||||||||||
CONSOLIDATING STATEMENT OF OPERATIONS
|
||||||||||||||||
Three Months Ended June 30, 2011
|
||||||||||||||||
Combined
|
||||||||||||||||
Guarantor
|
Radio
|
|||||||||||||||
Subsidiaries
|
One, Inc.
|
Eliminations
|
Consolidated
|
|||||||||||||
(Unaudited)
|
||||||||||||||||
(In thousands)
|
||||||||||||||||
NET REVENUE
|
$
|
33,743
|
$
|
63,319
|
$
|
—
|
$
|
97,062
|
||||||||
OPERATING EXPENSES:
|
||||||||||||||||
Programming and technical
|
7,677
|
23,041
|
—
|
30,718
|
||||||||||||
Selling, general and administrative, including stock-based compensation
|
13,017
|
18,789
|
—
|
31,806
|
||||||||||||
Corporate selling, general and administrative, including stock-based compensation
|
—
|
8,510
|
—
|
8,510
|
||||||||||||
Depreciation and amortization
|
2,023
|
8,215
|
—
|
10,238
|
||||||||||||
Total operating expenses
|
22,717
|
58,555
|
—
|
81,272
|
||||||||||||
Operating income
|
11,026
|
4,764
|
—
|
15,790
|
||||||||||||
INTEREST INCOME
|
—
|
9
|
—
|
9
|
||||||||||||
INTEREST EXPENSE
|
—
|
22,916
|
—
|
22,916
|
||||||||||||
GAIN ON INVESTMENT IN AFFILIATED COMPANY
|
146,879
|
146,879
|
||||||||||||||
EQUITY IN INCOME OF AFFILIATED COMPANY
|
—
|
208
|
—
|
208
|
||||||||||||
OTHER EXPENSE, net
|
47
|
—
|
47
|
|||||||||||||
Income before provision for income taxes, noncontrolling interests in income of subsidiaries and discontinued operations
|
11,026
|
128,897
|
—
|
139,923
|
||||||||||||
PROVISION FOR INCOME TAXES
|
—
|
38,611
|
—
|
38,611
|
||||||||||||
Net income before equity in income of subsidiaries and discontinued operations
|
11,026
|
90,286
|
—
|
101,312
|
||||||||||||
EQUITY IN INCOME OF SUBSIDIARIES
|
—
|
10,981
|
(10,981
|
)
|
—
|
|||||||||||
Net income (loss) from continuing operations
|
11,026
|
101,267
|
(10,981
|
)
|
101,312
|
|||||||||||
LOSS FROM DISCONTINUED OPERATIONS, net of tax
|
(45
|
)
|
—
|
|
—
|
(45
|
)
|
|||||||||
CONSOLIDATED NET INCOME (LOSS)
|
10,981
|
101,267
|
(10,981
|
)
|
101,267
|
|||||||||||
NET INCOME ATTRIBUTABLE TO NONCONTROLLING INTERESTS
|
—
|
2,717
|
—
|
2,717
|
||||||||||||
CONSOLIDATED NET INCOME (LOSS) ATTRIBUTABLE TO COMMON STOCKHOLDERS
|
$
|
10,981
|
$
|
98,550
|
$
|
(10,981
|
)
|
$
|
98,550
|
36 |
Combined Guarantor
Subsidiaries
|
Radio One, Inc.
|
Eliminations
|
Consolidated
|
|||||||||||||
(Unaudited)
|
||||||||||||||||
(In thousands)
|
||||||||||||||||
NET REVENUE
|
$ | 66,678 | $ | 142,280 | $ | — | $ | 208,958 | ||||||||
OPERATING EXPENSES:
|
||||||||||||||||
Programming and technical
|
16,319 | 47,804 | — | 64,123 | ||||||||||||
Selling, general and administrative, including stock-based compensation
|
29,521 | 40,873 | — | 70,394 | ||||||||||||
Corporate selling, general and administrative, including stock-based compensation
|
— | 19,448 | — | 19,448 | ||||||||||||
Depreciation and amortization
|
3,671 | 15,756 | — | 19,427 | ||||||||||||
Impairment of long-lived assets
|
313 | — | — | 313 | ||||||||||||
Total operating expenses
|
49,824 | 123,881 | — | 173,705 | ||||||||||||
Operating income
|
16,854 | 18,399 | — | 35,253 | ||||||||||||
INTEREST INCOME
|
— | 47 | — | 47 | ||||||||||||
INTEREST EXPENSE
|
499 | 46,176 | — | 46,675 | ||||||||||||
OTHER EXPENSE, NET
|
— | 603 | — | 603 | ||||||||||||
Income (loss) before provision for income taxes, noncontrolling interests in income of subsidiaries and discontinued operations
|
16,355 | (28,333 | ) | — | (11,978 | ) | ||||||||||
PROVISION FOR INCOME TAXES
|
— | 16,763 | — | 16,763 | ||||||||||||
Net income (loss) before equity in income of subsidiaries and discontinued operations
|
16,355 | (45,096 | ) | — | (28,741 | ) | ||||||||||
EQUITY IN INCOME OF SUBSIDIARIES
|
— | 16,376 | (16,376 | ) | — | |||||||||||
Net income (loss) from continuing operations
|
16,355 | (28,720 | ) | (16,376 | ) | (28,741 | ) | |||||||||
INCOME FROM DISCONTINUED OPERATIONS, net of tax
|
21 | — | — | 21 | ||||||||||||
CONSOLIDATED NET INCOME (LOSS)
|
16,376 | (28,720 | ) | (16,376 | ) | (28,720 | ) | |||||||||
NET INCOME ATTRIBUTABLE TO NONCONTROLLING INTERESTS
|
— | 7,854 | — | 7,854 | ||||||||||||
CONSOLIDATED NET INCOME (LOSS) ATTRIBUTABLE TO COMMON STOCKHOLDERS
|
$ | 16,376 | $ | (36,574 | ) | $ | (16,376 | ) | $ | (36,574 | ) |
37 |
Combined Guarantor
Subsidiaries
|
Radio One, Inc.
|
Eliminations
|
Consolidated
|
|||||||||||||
(Unaudited)
|
||||||||||||||||
(In thousands)
|
||||||||||||||||
NET REVENUE
|
$ | 61,838 | $ | 100,232 | $ | — | $ | 162,070 | ||||||||
OPERATING EXPENSES:
|
||||||||||||||||
Programming and technical
|
16,196 | 33,353 | — | 49,549 | ||||||||||||
Selling, general and administrative, including stock-based compensation
|
25,888 | 34,413 | — | 60,301 | ||||||||||||
Corporate selling, general and administrative, including stock-based compensation
|
— | 16,532 | — | 16,532 | ||||||||||||
Depreciation and amortization
|
4,210 | 10,111 | — | 14,321 | ||||||||||||
Total operating expenses
|
46,294 | 94,409 | — | 140,703 | ||||||||||||
Operating income
|
15,544 | 5,823 | — | 21,367 | ||||||||||||
INTEREST INCOME
|
— | 17 | — | 17 | ||||||||||||
INTEREST EXPENSE
|
— | 42,249 | — | 42,249 | ||||||||||||
GAIN ON INVESTMENT IN AFFILIATED COMPANY
|
— | 146,879 | — | 146,879 | ||||||||||||
EQUITY IN INCOME OF AFFILIATED COMPANY
|
— | 3,287 | — | 3,287 | ||||||||||||
LOSS ON RETIREMENT OF DEBT
|
— | 7,743 | — | 7,743 | ||||||||||||
OTHER EXPENSE, NET
|
— | 22 | — | 22 | ||||||||||||
Income before provision for income taxes, noncontrolling interests in income of subsidiaries and discontinued operations
|
15,544 | 105,992 | — | 121,536 | ||||||||||||
PROVISION FOR INCOME TAXES
|
— | 84,230 | — | 84,230 | ||||||||||||
Net income before equity in income of subsidiaries and discontinued operations
|
15,544 | 21,762 | — | 37,306 | ||||||||||||
EQUITY IN INCOME OF SUBSIDIARIES
|
— | 15,463 | (15,463 | ) | — | |||||||||||
Net income (loss) from continuing operations
|
15,544 | 37,225 | (15,463 | ) | 37,306 | |||||||||||
LOSS FROM DISCONTINUED OPERATIONS, net of tax
|
(81 | ) | — | — | (81 | ) | ||||||||||
CONSOLIDATED NET INCOME (LOSS)
|
15,463 | 37,225 | (15,463 | ) | 37,225 | |||||||||||
NET INCOME ATTRIBUTABLE TO NONCONTROLLING INTERESTS
|
— | 2,920 | — | 2,920 | ||||||||||||
CONSOLIDATED NET INCOME (LOSS) ATTRIBUTABLE TO COMMON STOCKHOLDERS
|
$ | 15,463 | $ | 34,305 | $ | (15,463 | ) | $ | 34,305 |
38 |
Three Months Ended June 30, 2012
|
Combined
|
||||||||||||||||
Guarantor
|
Radio
|
|||||||||||||||
Subsidiaries
|
One, Inc.
|
Eliminations
|
Consolidated
|
|||||||||||||
(Unaudited)
|
||||||||||||||||
(In thousands)
|
||||||||||||||||
CONSOLIDATED NET INCOME (LOSS)
|
$
|
10,392
|
$
|
46,465
|
$
|
(10,392
|
)
|
$
|
46,465
|
|||||||
NET CHANGE IN UNREALIZED LOSS ON INVESTMENT ACTIVITIES
|
—
|
23
|
—
|
23
|
||||||||||||
COMPREHENSIVE INCOME (LOSS)
|
10,392
|
46,488
|
(10,392
|
)
|
|
46,488
|
||||||||||
LESS: COMPREHENSIVE INCOME ATTRIBUTABLE TO NONCONTROLLING INTERESTS
|
—
|
3,797
|
—
|
3,797
|
||||||||||||
COMPREHENSIVE INCOME (LOSS) ATTRIBUTABLE TO COMMON STOCKHOLDERS
|
$
|
10,392
|
$
|
42,691
|
$
|
(10,392
|
)
|
$
|
42,691
|
39 |
Combined
|
||||||||||||||||
Guarantor
|
Radio
|
|||||||||||||||
Subsidiaries
|
One, Inc.
|
Eliminations
|
Consolidated
|
|||||||||||||
(Unaudited)
|
||||||||||||||||
(In thousands)
|
||||||||||||||||
CONSOLIDATED NET INCOME (LOSS)
|
$
|
10,981
|
$
|
101,267
|
$
|
(10,981
|
)
|
$
|
101,267
|
|||||||
NET CHANGE IN UNREALIZED LOSS ON INVESTMENT ACTIVITIES
|
—
|
56
|
—
|
56
|
||||||||||||
COMPREHENSIVE INCOME (LOSS)
|
10,981
|
101,323
|
(10,981
|
)
|
|
101,323
|
||||||||||
LESS: COMPREHENSIVE INCOME ATTRIBUTABLE TO NONCONTROLLING INTERESTS
|
—
|
2,717
|
—
|
2,717
|
||||||||||||
COMPREHENSIVE INCOME (LOSS) ATTRIBUTABLE TO COMMON STOCKHOLDERS
|
$
|
10,981
|
$
|
98,606
|
$
|
(10,981
|
)
|
$
|
98,606
|
40 |
Six Months Ended June 30, 2012
|
Combined
|
||||||||||||||||
Guarantor
|
Radio
|
|||||||||||||||
Subsidiaries
|
One, Inc.
|
Eliminations
|
Consolidated
|
|||||||||||||
(Unaudited)
|
||||||||||||||||
(In thousands)
|
||||||||||||||||
CONSOLIDATED NET INCOME (LOSS)
|
$
|
16,376
|
$
|
(28,720
|
)
|
$
|
(16,376
|
)
|
$
|
(28,720
|
)
|
|||||
NET CHANGE IN UNREALIZED LOSS ON INVESTMENT ACTIVITIES
|
—
|
120
|
—
|
120
|
||||||||||||
COMPREHENSIVE INCOME (LOSS)
|
16,376
|
(28,600
|
)
|
(16,376
|
)
|
|
(28,600
|
)
|
||||||||
LESS: COMPREHENSIVE INCOME ATTRIBUTABLE TO NONCONTROLLING INTERESTS
|
—
|
7,854
|
—
|
7,854
|
||||||||||||
COMPREHENSIVE INCOME (LOSS) ATTRIBUTABLE TO COMMON STOCKHOLDERS
|
$
|
16,376
|
$
|
(36,454
|
)
|
$
|
(16,376
|
)
|
$
|
(36,454
|
)
|
41 |
Six Months Ended June 30, 2011
|
Combined
|
||||||||||||||||
Guarantor
|
Radio
|
|||||||||||||||
Subsidiaries
|
One, Inc.
|
Eliminations
|
Consolidated
|
|||||||||||||
(Unaudited)
|
||||||||||||||||
(In thousands)
|
||||||||||||||||
CONSOLIDATED NET INCOME (LOSS)
|
$
|
15,463
|
$
|
37,225
|
$
|
(15,463
|
)
|
$
|
37,225
|
|||||||
NET CHANGE IN UNREALIZED LOSS ON INVESTMENT ACTIVITIES
|
—
|
56
|
—
|
56
|
||||||||||||
COMPREHENSIVE INCOME (LOSS)
|
15,463
|
37,281
|
(15,463
|
)
|
|
37,281
|
||||||||||
LESS: COMPREHENSIVE INCOME ATTRIBUTABLE TO NONCONTROLLING INTERESTS
|
—
|
2,920
|
—
|
2,920
|
||||||||||||
COMPREHENSIVE INCOME (LOSS) ATTRIBUTABLE TO COMMON STOCKHOLDERS
|
$
|
15,463
|
$
|
34,361
|
$
|
(15,463
|
)
|
$
|
34,361
|
42 |
RADIO ONE, INC. AND SUBSIDIARIES
|
||||||||||||||||
CONSOLIDATING BALANCE SHEETS
|
||||||||||||||||
As of June 30, 2012
|
||||||||||||||||
Combined
|
||||||||||||||||
Guarantor
|
Radio One,
|
|||||||||||||||
Subsidiaries
|
Inc.
|
Eliminations
|
Consolidated
|
|||||||||||||
(Unaudited)
|
||||||||||||||||
(In thousands)
|
||||||||||||||||
ASSETS
|
||||||||||||||||
CURRENT ASSETS:
|
||||||||||||||||
Cash and cash equivalents
|
$
|
1,208
|
$
|
41,552
|
$
|
—
|
$
|
42,760
|
||||||||
Short-term investments
|
—
|
232
|
—
|
232
|
||||||||||||
Trade accounts receivable, net of allowance for doubtful accounts
|
30,782
|
57,307
|
—
|
88,089
|
||||||||||||
Prepaid expenses and other current assets
|
1,333
|
3,252
|
—
|
4,585
|
||||||||||||
Current portion of content assets
|
—
|
27,820
|
—
|
27,820
|
||||||||||||
Current assets from discontinued operations
|
(36
|
)
|
125
|
—
|
89
|
|||||||||||
Total current assets
|
33,287
|
130,288
|
—
|
163,575
|
||||||||||||
PROPERTY AND EQUIPMENT, net
|
17,584
|
17,134
|
—
|
34,718
|
||||||||||||
INTANGIBLE ASSETS, net
|
540,956
|
682,864
|
—
|
1,223,820
|
||||||||||||
CONTENT ASSETS, net
|
—
|
44,857
|
—
|
44,857
|
||||||||||||
LONG-TERM INVESTMENTS
|
—
|
2,920
|
—
|
2,920
|
||||||||||||
INVESTMENT IN SUBSIDIARIES
|
—
|
579,113
|
(579,113
|
)
|
—
|
|||||||||||
OTHER ASSETS
|
191
|
2,866
|
—
|
3,057
|
||||||||||||
NON-CURRENT ASSETS FROM DISCONTINUED OPERATIONS
|
1,440
|
—
|
—
|
1,440
|
||||||||||||
Total assets
|
$
|
593,458
|
$
|
1,460,042
|
$
|
(579,113
|
)
|
$
|
1,474,387
|
|||||||
LIABILITIES, REDEEMABLE NONCONTROLLING INTEREST AND EQUITY
|
||||||||||||||||
CURRENT LIABILITIES:
|
||||||||||||||||
Accounts payable
|
$
|
1,445
|
$
|
4,662
|
$
|
—
|
$
|
6,107
|
||||||||
Accrued interest
|
—
|
5,928
|
—
|
5,928
|
||||||||||||
Accrued compensation and related benefits
|
2,441
|
8,494
|
—
|
10,935
|
||||||||||||
Current portion of content payables
|
—
|
18,680
|
—
|
18,680
|
||||||||||||
Income taxes payable
|
—
|
926
|
—
|
926
|
||||||||||||
Other current liabilities
|
9,200
|
2,084
|
—
|
11,284
|
||||||||||||
Current portion of long-term debt
|
—
|
4,587
|
—
|
4,587
|
||||||||||||
Current liabilities from discontinued operations
|
254
|
29
|
—
|
283
|
||||||||||||
Total current liabilities
|
13,340
|
45,390
|
—
|
58,730
|
||||||||||||
LONG-TERM DEBT, net of current portion and original issue discount
|
—
|
815,343
|
—
|
815,343
|
||||||||||||
CONTENT PAYABLES, net of current portion
|
—
|
13,536
|
—
|
13,536
|
||||||||||||
OTHER LONG-TERM LIABILITIES
|
981
|
18,370
|
—
|
19,351
|
||||||||||||
DEFERRED TAX LIABILITIES
|
—
|
170,752
|
—
|
170,752
|
||||||||||||
NON-CURRENT LIABILITIES FROM DISCONTINUED OPERATIONS
|
24
|
—
|
—
|
24
|
||||||||||||
Total liabilities
|
14,345
|
1,063,391
|
—
|
1,077,736
|
||||||||||||
REDEEMABLE NONCONTROLLING INTEREST
|
—
|
18,000
|
—
|
18,000
|
||||||||||||
STOCKHOLDERS’ EQUITY:
|
||||||||||||||||
Common stock
|
—
|
50
|
—
|
50
|
||||||||||||
Accumulated other comprehensive loss
|
—
|
(79
|
)
|
—
|
(79
|
)
|
||||||||||
Additional paid-in capital
|
172,125
|
1,003,706
|
(172,125
|
)
|
1,003,706
|
|||||||||||
Retained earnings (accumulated deficit)
|
406,988
|
(832,730
|
)
|
(406,988
|
)
|
(832,730
|
)
|
|||||||||
Total stockholders’ equity
|
579,113
|
170,947
|
(579,113
|
)
|
170,947
|
|||||||||||
Noncontrolling interest
|
—
|
207,704
|
—
|
207,704
|
||||||||||||
Total Equity
|
579,113
|
378,651
|
(579,113
|
)
|
378,651
|
|||||||||||
Total liabilities, redeemable noncontrolling interest and equity
|
$
|
593,458
|
$
|
1,460,042
|
$
|
(579,113
|
)
|
$
|
1,474,387
|
43 |
RADIO ONE, INC. AND SUBSIDIARIES
|
||||||||||||||||
CONSOLIDATING BALANCE SHEETS
|
||||||||||||||||
As of December 31, 2011
|
||||||||||||||||
Combined
|
||||||||||||||||
Guarantor
|
Radio One,
|
|||||||||||||||
Subsidiaries
|
Inc.
|
Eliminations
|
Consolidated
|
|||||||||||||
(In thousands)
|
||||||||||||||||
ASSETS
|
||||||||||||||||
CURRENT ASSETS:
|
||||||||||||||||
Cash and cash equivalents
|
$
|
187
|
$
|
35,752
|
$
|
—
|
$
|
35,939
|
||||||||
Short-term investments
|
—
|
761
|
—
|
761
|
||||||||||||
Trade accounts receivable, net of allowance for doubtful accounts
|
29,896
|
53,980
|
—
|
83,876
|
||||||||||||
Prepaid expenses and other current assets
|
1,691
|
6,730
|
—
|
8,421
|
||||||||||||
Current portion of content assets
|
—
|
27,383
|
—
|
27,383
|
||||||||||||
Current assets from discontinued operations
|
(35
|
)
|
125
|
—
|
90
|
|||||||||||
Total current assets
|
31,739
|
124,731
|
—
|
156,470
|
||||||||||||
PROPERTY AND EQUIPMENT, net
|
17,994
|
15,994
|
—
|
33,988
|
||||||||||||
INTANGIBLE ASSETS, net
|
551,271
|
693,590
|
—
|
1,244,861
|
||||||||||||
CONTENT ASSETS, net
|
—
|
38,934
|
—
|
38,934
|
||||||||||||
LONG-TERM INVESTMENTS
|
—
|
7,428
|
—
|
7,428
|
||||||||||||
INVESTMENT IN SUBSIDIARIES
|
—
|
588,292
|
(588,292
|
)
|
—
|
|||||||||||
OTHER ASSETS
|
204
|
3,121
|
—
|
3,325
|
||||||||||||
NON-CURRENT ASSETS FROM DISCONTINUED OPERATIONS
|
1,476
|
—
|
—
|
1,476
|
||||||||||||
Total assets
|
$
|
602,684
|
$
|
1,472,090
|
$
|
(588,292
|
)
|
$
|
1,486,482
|
|||||||
LIABILITIES, REDEEMABLE NONCONTROLLING INTEREST AND EQUITY
|
||||||||||||||||
CURRENT LIABILITIES:
|
||||||||||||||||
Accounts payable
|
$
|
1,568
|
$
|
4,058
|
$
|
—
|
$
|
5,626
|
||||||||
Accrued interest
|
—
|
6,703
|
—
|
6,703
|
||||||||||||
Accrued compensation and related benefits
|
1,958
|
9,023
|
—
|
10,981
|
||||||||||||
Current portion of content payables
|
—
|
20,807
|
—
|
20,807
|
||||||||||||
Income taxes payable
|
—
|
1,794
|
—
|
1,794
|
||||||||||||
Other current liabilities
|
9,367
|
2,860
|
—
|
12,227
|
||||||||||||
Current portion of long-term debt
|
—
|
3,860
|
—
|
3,860
|
||||||||||||
Current liabilities from discontinued operations
|
230
|
30
|
—
|
260
|
||||||||||||
Total current liabilities
|
13,123
|
49,135
|
—
|
62,258
|
||||||||||||
LONG-TERM DEBT, net of current portion and original issue discount
|
—
|
805,044
|
—
|
805,044
|
||||||||||||
CONTENT PAYABLES, net of current portion
|
—
|
16,168
|
—
|
16,168
|
||||||||||||
OTHER LONG-TERM LIABILITIES
|
1,240
|
17,281
|
—
|
18,521
|
||||||||||||
DEFERRED TAX LIABILITIES
|
—
|
153,521
|
—
|
153,521
|
||||||||||||
NON-CURRENT LIABILITIES FROM DISCONTINUED OPERATIONS
|
29
|
—
|
—
|
29
|
||||||||||||
Total liabilities
|
14,392
|
1,041,149
|
—
|
1,055,541
|
||||||||||||
REDEEMABLE NONCONTROLLING INTEREST
|
—
|
20,343
|
—
|
20,343
|
||||||||||||
STOCKHOLDERS’ EQUITY:
|
||||||||||||||||
Common stock
|
—
|
50
|
—
|
50
|
||||||||||||
Accumulated other comprehensive loss
|
—
|
(199
|
)
|
—
|
(199
|
)
|
||||||||||
Additional paid-in capital
|
197,680
|
1,001,840
|
(197,680
|
)
|
1,001,840
|
|||||||||||
Retained earnings (accumulated deficit)
|
390,612
|
(796,156
|
)
|
(390,612
|
)
|
(796,156
|
)
|
|||||||||
Total stockholders’ equity
|
588,292
|
205,535
|
(588,292
|
)
|
205,535
|
|||||||||||
Noncontrolling interest
|
—
|
205,063
|
—
|
205,063
|
||||||||||||
Total Equity
|
588,292
|
410,598
|
(588,292
|
)
|
410,598
|
|||||||||||
Total liabilities, redeemable noncontrolling interest and equity
|
$
|
602,684
|
$
|
1,472,090
|
$
|
(588,292
|
)
|
$
|
1,486,482
|
44 |
RADIO ONE, INC. AND SUBSIDIARIES
|
||||||||||||||||
CONSOLIDATING STATEMENT OF CASH FLOWS
|
||||||||||||||||
Six Months Ended June 30, 2012
|
||||||||||||||||
Combined
|
||||||||||||||||
Guarantor
|
Radio
|
|||||||||||||||
Subsidiaries
|
One, Inc.
|
Eliminations
|
Consolidated
|
|||||||||||||
(Unaudited)
|
||||||||||||||||
(In thousands)
|
||||||||||||||||
CASH FLOWS FROM OPERATING ACTIVITIES:
|
||||||||||||||||
Consolidated net income (loss)
|
$
|
16,376
|
$
|
(28,720
|
)
|
$
|
(16,376
|
)
|
$
|
(28,720
|
)
|
|||||
Adjustments to reconcile net income (loss) to net cash from operating activities:
|
||||||||||||||||
Depreciation and amortization
|
3,671
|
15,756
|
—
|
19,427
|
||||||||||||
Amortization of debt financing costs
|
—
|
1,520
|
—
|
1,520
|
||||||||||||
Amortization of content assets
|
—
|
18,240
|
—
|
18,240
|
||||||||||||
Amortization of launch assets
|
—
|
4,979
|
—
|
4,979
|
||||||||||||
Deferred income taxes
|
—
|
17,231
|
—
|
17,231
|
||||||||||||
Impairment of long-lived assets
|
313
|
—
|
—
|
313
|
||||||||||||
Stock-based compensation and other non-cash compensation
|
—
|
90
|
—
|
90
|
||||||||||||
Non-cash interest
|
—
|
14,235
|
—
|
14,235
|
||||||||||||
Effect of change in operating assets and liabilities, net of assets acquired:
|
||||||||||||||||
Trade accounts receivable, net
|
(886
|
)
|
(3,327
|
)
|
—
|
(4,213
|
)
|
|||||||||
Prepaid expenses and other current assets
|
358
|
3,477
|
—
|
3,835
|
|
|||||||||||
Other assets
|
13
|
255
|
—
|
268
|
||||||||||||
Accounts payable
|
(123
|
)
|
604
|
—
|
481
|
|
||||||||||
Due to corporate/from subsidiaries
|
(18,739
|
)
|
18,739
|
—
|
—
|
|||||||||||
Accrued interest
|
—
|
(775
|
)
|
—
|
(775
|
)
|
||||||||||
Accrued compensation and related benefits
|
483
|
(529
|
)
|
—
|
(46
|
)
|
||||||||||
Income taxes payable
|
—
|
(868
|
)
|
—
|
(868
|
)
|
||||||||||
Other liabilities
|
(426
|
)
|
1,762
|
|
—
|
1,336
|
|
|||||||||
Payments for content assets |
—
|
(29,132 | ) |
—
|
(29,132 | ) | ||||||||||
Net cash flows used in operating activities from discontinued operations
|
(19
|
)
|
—
|
—
|
(19
|
)
|
||||||||||
Net cash flows provided by (used in) by operating activities
|
1,021
|
33,537
|
(16,376
|
)
|
18,182
|
|
||||||||||
CASH FLOWS FROM INVESTING ACTIVITIES:
|
||||||||||||||||
Purchase of property and equipment
|
—
|
(6,712
|
)
|
—
|
(6,712
|
)
|
||||||||||
Proceeds from sales of investment securities
|
—
|
5,567
|
—
|
5,567
|
||||||||||||
Purchases of investment securities
|
—
|
(530
|
)
|
—
|
(530
|
)
|
||||||||||
Investment in subsidiaries
|
—
|
(16,376
|
)
|
16,376
|
—
|
|||||||||||
Net cash flows (used in) provided by investing activities
|
—
|
(18,051
|
)
|
16,376
|
(1,675
|
)
|
||||||||||
CASH FLOWS FROM FINANCING ACTIVITIES:
|
||||||||||||||||
Repayment of credit facility
|
—
|
(3,889
|
)
|
—
|
(3,889
|
)
|
||||||||||
Debt refinancing and modification costs
|
—
|
(17
|
)
|
—
|
(17
|
)
|
||||||||||
Payment of dividends to noncontrolling interest members of TV One
|
—
|
(5,780
|
)
|
—
|
(5,780
|
)
|
||||||||||
Net cash flows used in financing activities
|
—
|
(9,686
|
)
|
—
|
(9,686
|
)
|
||||||||||
INCREASE IN CASH AND CASH EQUIVALENTS
|
1,021
|
5,800
|
—
|
6,821
|
||||||||||||
CASH AND CASH EQUIVALENTS, beginning of period
|
187
|
35,752
|
—
|
35,939
|
||||||||||||
CASH AND CASH EQUIVALENTS, end of period
|
$
|
1,208
|
$
|
41,552
|
$
|
—
|
$
|
42,760
|
45 |
RADIO ONE, INC. AND SUBSIDIARIES
|
||||||||||||||||
CONSOLIDATING STATEMENT OF CASH FLOWS
|
||||||||||||||||
Six Months Ended June 30, 2011
|
||||||||||||||||
Combined
|
||||||||||||||||
Guarantor
|
Radio
|
|||||||||||||||
Subsidiaries
|
One, Inc.
|
Eliminations
|
Consolidated
|
|||||||||||||
(Unaudited)
|
||||||||||||||||
(In thousands)
|
||||||||||||||||
CASH FLOWS FROM OPERATING ACTIVITIES:
|
||||||||||||||||
Consolidated net income (loss)
|
$
|
15,463
|
37,225
|
(15,463
|
)
|
37,225
|
||||||||||
Adjustments to reconcile net income (loss) to net cash from operating activities:
|
||||||||||||||||
Depreciation and amortization
|
4,210
|
10,111
|
—
|
14,321
|
||||||||||||
Amortization of debt financing costs
|
—
|
2,339
|
—
|
2,339
|
||||||||||||
Write off of debt financing costs
|
—
|
9,406
|
—
|
9,406
|
||||||||||||
Deferred income taxes
|
—
|
84,230
|
—
|
84,230
|
||||||||||||
Gain on investment in affiliated company
|
—
|
(146,879
|
)
|
—
|
(146,879
|
)
|
||||||||||
Equity in income of affiliated company
|
—
|
(3,287
|
)
|
—
|
(3,287
|
)
|
||||||||||
Stock-based compensation and other non-cash compensation
|
—
|
2,136
|
—
|
2,136
|
||||||||||||
Non-cash interest
|
—
|
12,391
|
—
|
12,391
|
||||||||||||
Loss on retirement of debt
|
—
|
7,743
|
—
|
7,743
|
||||||||||||
Effect of change in operating assets and liabilities, net of assets acquired:
|
||||||||||||||||
Trade accounts receivable, net
|
1,708
|
(26,462
|
)
|
—
|
(24,754
|
)
|
||||||||||
Prepaid expenses and other current assets
|
(75
|
)
|
2,788
|
—
|
2,713
|
|
||||||||||
Other assets
|
147
|
1,778
|
—
|
1,925
|
||||||||||||
Content assets
|
—
|
(2,345
|
)
|
—
|
(2,345
|
)
|
||||||||||
Accounts payable
|
516
|
1,123
|
—
|
1,639
|
|
|||||||||||
Due to corporate/from subsidiaries
|
(22,356
|
)
|
22,356
|
—
|
—
|
|||||||||||
Accrued interest
|
—
|
1,804
|
—
|
1,804
|
||||||||||||
Accrued compensation and related benefits
|
(347
|
)
|
219
|
—
|
(128
|
)
|
||||||||||
Income taxes payable
|
—
|
243
|
—
|
243
|
||||||||||||
Other liabilities
|
(257
|
)
|
(1,290
|
)
|
—
|
(1,547
|
)
|
|||||||||
Net cash flows provided by operating activities from discontinued operations
|
—
|
616
|
—
|
616
|
||||||||||||
Net cash flows (used in) provided by operating activities
|
(991
|
)
|
16,245
|
(15,463
|
)
|
(209
|
)
|
|||||||||
CASH FLOWS FROM INVESTING ACTIVITIES:
|
||||||||||||||||
Purchase of property and equipment
|
—
|
(3,610
|
)
|
—
|
(3,610
|
)
|
||||||||||
Net cash and investments acquired in connection with TV One consolidation
|
— |
65,245
|
—
|
65,245
|
||||||||||||
Investment in subsidiaries
|
—
|
(15,463
|
)
|
15,463
|
—
|
|||||||||||
Net cash flows provided by investing activities
|
—
|
46,172
|
15,463
|
61,635
|
||||||||||||
CASH FLOWS FROM FINANCING ACTIVITIES:
|
||||||||||||||||
Proceeds from credit facility
|
—
|
378,280
|
—
|
378,280
|
||||||||||||
Repayment of credit facility
|
—
|
(353,681
|
)
|
—
|
(353,681
|
)
|
||||||||||
Repurchase of common stock
|
—
|
(7,510
|
)
|
—
|
(7,510
|
)
|
||||||||||
Repurchase of noncontrolling interest
|
—
|
(54,595
|
)
|
—
|
(54,595
|
)
|
||||||||||
Proceeds from noncontrolling interest member
|
—
|
2,776
|
—
|
2,776
|
||||||||||||
Debt refinancing and modification costs
|
—
|
(5,999
|
)
|
—
|
(5,999
|
)
|
||||||||||
Net cash flows used in financing activities
|
—
|
(40,729
|
)
|
—
|
(40,729
|
)
|
||||||||||
(DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS
|
(991
|
)
|
21,688
|
—
|
20,697
|
|||||||||||
CASH AND CASH EQUIVALENTS, beginning of period
|
1,043
|
8,149
|
—
|
9,192
|
||||||||||||
CASH AND CASH EQUIVALENTS, end of period
|
$
|
52
|
$
|
29,837
|
$
|
—
|
$
|
29,889
|
46 |
47 |
48 |
49 |
50 |
Three Months Ended June 30,
|
Six Months Ended June 30,
|
|||||||||||||||
2012
|
2011
|
2012
|
2011
|
|||||||||||||
(In thousands, except margin data)
|
||||||||||||||||
Net revenue
|
$
|
105,916
|
$
|
97,062
|
$
|
208,958
|
$
|
162,070
|
||||||||
Station operating income
|
41,405
|
34,750
|
74,473
|
52,596
|
||||||||||||
Station operating income margin
|
39.1
|
%
|
35.8
|
%
|
35.6
|
%
|
32.5
|
%
|
||||||||
Consolidated net income (loss) attributable to common stockholders
|
$
|
42,668
|
|
$
|
98,550
|
$
|
(36,574
|
)
|
$
|
34,305
|
Three Months Ended
|
Six Months Ended
|
|||||||||||||||
June 30,
|
||||||||||||||||
2012
|
2011
|
2012
|
2011
|
|||||||||||||
(In thousands)
|
||||||||||||||||
Consolidated net income (loss) attributable to common stockholders
|
$
|
42,668
|
$
|
98,550
|
$
|
(36,574
|
)
|
$
|
34,305
|
|||||||
Add back non-station operating income items included in consolidated net income (loss):
|
||||||||||||||||
Interest income
|
(25
|
)
|
(9
|
)
|
(47
|
)
|
(17
|
)
|
||||||||
Interest expense
|
22,928
|
22,916
|
46,675
|
42,249
|
||||||||||||
(Benefit from) provision for income taxes
|
(48,491
|
)
|
38,611
|
16,763
|
84,230
|
|
||||||||||
Corporate selling, general and administrative, excluding stock-based compensation
|
9,824
|
7,523
|
19,390
|
14,772
|
||||||||||||
Stock-based compensation
|
46
|
1,199
|
90
|
2,136
|
||||||||||||
Equity in income of affiliated company
|
—
|
(208
|
)
|
—
|
(3,287
|
)
|
||||||||||
Loss on retirement of debt
|
—
|
—
|
—
|
7,743
|
||||||||||||
Gain on investment in affiliated company
|
—
|
(146,879
|
)
|
—
|
(146,879
|
)
|
||||||||||
Other expense, net
|
610
|
47
|
603
|
22
|
||||||||||||
Depreciation and amortization
|
9,742
|
10,238
|
19,427
|
14,321
|
||||||||||||
Noncontrolling interests in income of subsidiaries
|
3,797
|
2,717
|
7,854
|
2,920
|
||||||||||||
Impairment of long-lived assets
|
313
|
—
|
313
|
—
|
||||||||||||
(Income) loss from discontinued operations, net of tax
|
(7
|
)
|
45
|
(21
|
)
|
81
|
||||||||||
Station operating income
|
$
|
41,405
|
$
|
34,750
|
$
|
74,473
|
$
|
52,596
|
Three Months Ended
|
Six Months Ended
|
|||||||||||||||
June 30,
|
||||||||||||||||
2012
|
2011
|
2012
|
2011
|
|||||||||||||
(In thousands)
|
||||||||||||||||
Adjusted EBITDA reconciliation:
|
||||||||||||||||
Consolidated net income (loss) attributable to common stockholders, as reported
|
$
|
42,668
|
$
|
98,550
|
$
|
(36,574
|
)
|
$
|
34,305
|
|||||||
Add back non-station operating income items included in consolidated net loss:
|
||||||||||||||||
Interest income
|
(25
|
)
|
(9
|
)
|
(47
|
)
|
(17
|
)
|
||||||||
Interest expense
|
22,928
|
22,916
|
46,675
|
42,249
|
|
|||||||||||
(Benefit from) provision for income taxes
|
(48,491
|
)
|
38,611
|
16,763
|
84,230
|
|||||||||||
Depreciation and amortization
|
9,742
|
10,238
|
19,427
|
14,321
|
||||||||||||
EBITDA
|
26,822
|
170,306
|
46,244
|
175,088
|
||||||||||||
Stock-based compensation
|
46
|
1,199
|
90
|
2,136
|
||||||||||||
Gain on investment in affiliated company
|
—
|
(146,879
|
)
|
—
|
(146,879
|
)
|
||||||||||
Loss on retirement of debt
|
—
|
—
|
—
|
7,743
|
||||||||||||
Equity in income of affiliated company
|
—
|
(208
|
)
|
—
|
(3,287
|
)
|
||||||||||
Other expense, net
|
610
|
47
|
603
|
22
|
||||||||||||
Noncontrolling interests in income of subsidiaries
|
3,797
|
2,717
|
7,854
|
2,920
|
||||||||||||
Impairment of long-lived assets
|
313
|
—
|
313
|
—
|
||||||||||||
(Income) loss from discontinued operations, net of tax
|
(7
|
)
|
45
|
(21
|
)
|
81
|
||||||||||
Adjusted EBITDA
|
$
|
31,581
|
$
|
27,227
|
$
|
55,083
|
$
|
37,824
|
51 |
Three Months Ended June 30,
|
||||||||||||||||
2012
|
2011
|
Increase/(Decrease)
|
||||||||||||||
(Unaudited)
|
||||||||||||||||
Statements of Operations:
|
||||||||||||||||
Net revenue
|
$ | 105,916 | $ | 97,062 | $ | 8,854 | 9.1 | % | ||||||||
Operating expenses:
|
||||||||||||||||
Programming and technical, excluding stock-based compensation
|
32,958 | 30,718 | 2,240 | 7.3 | ||||||||||||
Selling, general and administrative, excluding stock-based compensation
|
31,553 | 31,594 | (41 | ) | (0.1 | ) | ||||||||||
Corporate selling, general and administrative, excluding stock-based compensation
|
9,824 | 7,523 | 2,301 | 30.6 | ||||||||||||
Stock-based compensation
|
46 | 1,199 | (1,153 | ) | (96.2 | ) | ||||||||||
Depreciation and amortization
|
9,742 | 10,238 | (496 | ) | (4.8 | ) | ||||||||||
Impairment of long-lived assets
|
313 | — | 313 | 100.0 | ||||||||||||
Total operating expenses
|
84,436 | 81,272 | 3,164 | 3.9 | ||||||||||||
Operating income
|
21,480 | 15,790 | 5,690 | 36.0 | ||||||||||||
Interest income
|
25 | 9 | 16 | 177.8 | ||||||||||||
Interest expense
|
22,928 | 22,916 | 12 | 0.1 | ||||||||||||
Gain on investment in affiliated company
|
— | 146,879 | (146,879 | ) | (100.0 | ) | ||||||||||
Equity in income of affiliated company
|
— | 208 | (208 | ) | (100.0 | ) | ||||||||||
Other expense, net
|
610 | 47 | 563 | 1,197.9 | ||||||||||||
(Loss) income before (benefit from) provision for income taxes, noncontrolling interests in income of subsidiaries and discontinued operations
|
(2,033 | ) | 139,923 | (141,956 | ) | (101.5 | ) | |||||||||
(Benefit from) provision for income taxes
|
(48,491 | ) | 38,611 | (87,102 | ) | (225.6 | ) | |||||||||
Net income from continuing operations
|
46,458 | 101,312 | (54,854 | ) | (54.1 | ) | ||||||||||
Income (loss) from discontinued operations, net of tax
|
7 | (45 | ) | (52 | ) | (115.6 | ) | |||||||||
Consolidated net income
|
46,465 | 101,267 | (54,802 | ) | (54.1 | ) | ||||||||||
Net income attributable to noncontrolling interests
|
3,797 | 2,717 | 1,080 | 39.7 | ||||||||||||
Net income attributable to common stockholders
|
$ | 42,668 | $ | 98,550 | $ | (55,882 | ) | (56.7 | )% |
52 |
Three Months Ended June 30,
|
Increase/(Decrease)
|
|||
2012
|
2011
|
|||
$105,916
|
$97,062
|
$8,854
|
9.1%
|
Programming and technical, excluding stock-based compensation
|
Three Months Ended June 30,
|
Increase/(Decrease)
|
|||
2012
|
2011
|
|
||
$32,958
|
$30,718
|
$2,240
|
7.3%
|
Three Months Ended June 30,
|
Increase/(Decrease)
|
|||
2012
|
2011
|
|
||
$31,553
|
$31,594
|
$(41)
|
(0.1)%
|
53 |
Three Months Ended June 30,
|
Increase/(Decrease)
|
|||
2012
|
2011
|
|
||
$9,824
|
$7,523
|
$2,301
|
30.6%
|
Three Months Ended June 30,
|
Increase/(Decrease)
|
|||
2012
|
2011
|
|
||
$46
|
$1,199
|
$(1,153)
|
(96.2)%
|
Three Months Ended June 30,
|
Increase/(Decrease)
|
|||
2012
|
2011
|
|
||
$9,742
|
$10,238
|
$(496)
|
(4.8)%
|
Three Months Ended June 30,
|
Increase/(Decrease)
|
|||
2012
|
2011
|
|
||
$313
|
$—
|
$313
|
100.0%
|
Three Months Ended June 30,
|
Increase/(Decrease)
|
|||
2012
|
2011
|
|
||
$22,928
|
$22,916
|
$12
|
0.1%
|
54 |
Three Months Ended June 30,
|
Increase/(Decrease)
|
|||||
2012
|
2011
|
|
||||
$—
|
$146,879
|
$(146,879)
|
(100.0)%
|
Three Months Ended June 30,
|
Increase/(Decrease)
|
|||||
2012
|
2011
|
|
||||
$610
|
$47
|
$563
|
1,197.9%
|
Three Months Ended June 30,
|
Increase/(Decrease)
|
|||
2012
|
2011
|
|
||
$—
|
$208
|
$(208)
|
(100.0)%
|
Three Months Ended June 30,
|
Increase/(Decrease)
|
|||
2012
|
2011
|
|
||
$(48,491)
|
$38,611
|
$(87,102)
|
(225.6)%
|
55 |
Three Months Ended June 30,
|
Increase/(Decrease)
|
|||
2012
|
2011
|
|||
$7
|
$(45)
|
$(52)
|
(115.6)%
|
Three Months Ended June 30,
|
Increase/(Decrease)
|
|||
2012
|
2011
|
|||
$3,797
|
$2,717
|
$1,080
|
39.7%
|
56 |
Six Months Ended June 30,
|
||||||||||||||||
2012
|
2011
|
Increase/(Decrease)
|
||||||||||||||
(Unaudited)
|
||||||||||||||||
Statements of Operations:
|
||||||||||||||||
Net revenue
|
$ | 208,958 | $ | 162,070 | $ | 46,888 | 28.9 | % | ||||||||
Operating expenses:
|
||||||||||||||||
Programming and technical, excluding stock-based compensation
|
64,123 | 49,549 | 14,574 | 29.4 | ||||||||||||
Selling, general and administrative, excluding stock-based compensation
|
70,362 | 59,925 | 10,437 | 17.4 | ||||||||||||
Corporate selling, general and administrative, excluding stock-based compensation
|
19,390 | 14,772 | 4,618 | 31.3 | ||||||||||||
Stock-based compensation
|
90 | 2,136 | (2,046 | ) | (95.8 | ) | ||||||||||
Depreciation and amortization
|
19,427 | 14,321 | 5,106 | 35.7 | ||||||||||||
Impairment of long-lived assets
|
313 | — | 313 | 100.0 | ||||||||||||
Total operating expenses
|
173,705 | 140,703 | 33,002 | 23.5 | ||||||||||||
Operating income
|
35,253 | 21,367 | 13,886 | 65.0 | ||||||||||||
Interest income
|
47 | 17 | 30 | 176.5 | ||||||||||||
Interest expense
|
46,675 | 42,249 | 4,426 | 10.5 | ||||||||||||
Loss on retirement of debt
|
— | 7,743 | (7,743 | ) | (100.0 | ) | ||||||||||
Gain on investment in affiliated company
|
— | 146,879 | (146,879 | ) | (100.0 | ) | ||||||||||
Equity in income of affiliated company
|
— | 3,287 | (3,287 | ) | (100.0 | ) | ||||||||||
Other expense, net
|
603 | 22 | 581 | 2,640.9 | ||||||||||||
Loss (income) before provision for income taxes, noncontrolling interests in income of subsidiaries and discontinued operations
|
(11,978 | ) | 121,536 | (133,514 | ) | (109.9 | ) | |||||||||
Provision for income taxes
|
16,763 | 84,230 | (67,467 | ) | (80.1 | ) | ||||||||||
Net (loss) income from continuing operations
|
(28,741 | ) | 37,306 | (66,047 | ) | (177.0 | ) | |||||||||
Income (loss) from discontinued operations, net of tax
|
21 | (81 | ) | (102 | ) | (125.9 | ) | |||||||||
Consolidated net (loss) income
|
(28,720 | ) | 37,225 | (65,945 | ) | (177.2 | ) | |||||||||
Net income attributable to noncontrolling interests
|
7,854 | 2,920 | 4,934 | 169.0 | ||||||||||||
Net income (loss) attributable to common stockholders
|
$ | (36,574 | ) | $ | 34,305 | $ | (70,879 | ) | (206.6 | )% |
57 |
Six Months Ended June 30,
|
Increase/(Decrease)
|
|||
2012
|
2011
|
|
||
$208,958
|
$162,070
|
$46,888
|
28.9%
|
Six Months Ended June 30,
|
Increase/(Decrease)
|
|||
2012
|
2011
|
|
||
$64,123
|
$49,549
|
$14,574
|
29.4%
|
Six Months Ended June 30,
|
Increase/(Decrease)
|
|||
2012
|
2011
|
|
||
$70,362
|
$59,925
|
$10,437
|
17.4%
|
58 |
Six Months Ended June 30,
|
Increase/(Decrease)
|
|||
2012
|
2011
|
|
||
$90
|
$2,136
|
$(2,046)
|
(95.8)%
|
Six Months Ended June 30,
|
Increase/(Decrease)
|
|||
2012
|
2011
|
|
||
$19,390
|
$14,772
|
$4,618
|
31.3%
|
Six Months Ended June 30,
|
Increase/(Decrease)
|
|||
2012
|
2011
|
|
||
$19,427
|
$14,321
|
$5,106
|
35.7%
|
Six Months Ended June 30,
|
Increase/(Decrease)
|
|||
2012
|
2011
|
|
||
$313
|
$—
|
$313
|
100.0%
|
Six Months Ended June 30,
|
Increase/(Decrease)
|
|||
2012
|
2011
|
|
||
$46,675
|
$42,249
|
$4,426
|
10.5%
|
59 |
Six Months Ended June 30,
|
Increase/(Decrease)
|
|||
2012
|
2011
|
|
||
$—
|
$ 7,743
|
$(7,743)
|
(100.0)%
|
Six Months Ended June 30,
|
Increase/(Decrease)
|
|||||
2012
|
2011
|
|
||||
$—
|
$146,879
|
$(146,879)
|
(100.0)%
|
Six Months Ended June 30,
|
Increase/(Decrease)
|
|||||
2012
|
2011
|
|
||||
$603
|
$22
|
$581
|
2,640.9%
|
Six Months Ended June 30,
|
Increase/(Decrease)
|
|||
2012
|
2011
|
|
||
$—
|
$3,287
|
$(3,287)
|
(100.0)%
|
Six Months Ended June 30,
|
Increase/(Decrease)
|
|||
2012
|
2011
|
|
||
$16,763
|
$84,230
|
$67,467
|
80.1%
|
60 |
Six Months Ended June 30,
|
Increase/(Decrease)
|
|||
2012
|
2011
|
|||
$21
|
$(81)
|
$(102)
|
(125.9)%
|
Six Months Ended June 30,
|
Increase/(Decrease)
|
|||
2012
|
2011
|
|
||
$7,854
|
$2,920
|
$4,934
|
169.0%
|
61 |
§
|
1.25 to 1.00 on June 30, 2011 and the last day of each fiscal quarter through September 30, 2015; and
|
§
|
1.50 to 1.00 on December 31, 2015 and the last day of each fiscal quarter thereafter.
|
§
|
5.25 to 1.00 on June 30, 2011;
|
§
|
5.00 to 1.00 on September 30, 2011 and December 31, 2011;
|
§
|
4.75 to 1.00 on March 31, 2012;
|
§
|
4.50 to 1.00 on June 30, 2012, September 30, 2012 and December 31, 2012;
|
§
|
4.00 to 1.00 on March 31, 2013 and the last day of each fiscal quarter through September 30, 2013;
|
§
|
3.75 to 1.00 on December 31, 2013 and the last day of each fiscal quarter through September 30, 2014;
|
§
|
3.25 to 1.00 on December 31, 2014 and the last day of each fiscal quarter through September 30, 2015; and
|
§
|
2.75 to 1.00 on December 31, 2015 and the last day of each fiscal quarter thereafter.
|
§
|
9.25 to 1.00 on June 30, 2011 and the last day of each fiscal quarter through December 31, 2011;
|
§
|
9.00 to 1.00 on March 31, 2012;
|
§
|
8.75 to 1.00 on June 30, 2012;
|
§
|
8.50 to 1.00 on September 30, 2012 and December 31, 2012;
|
§
|
8.00 to 1.00 on March 31, 2013 and the last day of each fiscal quarter through September 30, 2013;
|
§
|
7.50 to 1.00 on December 31, 2013 and the last day of each fiscal quarter through September 30, 2014;
|
§
|
6.50 to 1.00 on December 31, 2014 and the last day of each fiscal quarter through September 30, 2015; and
|
§
|
6.00 to 1.00 on December 31, 2015 and the last day of each fiscal quarter thereafter.
|
§
|
liens;
|
§
|
sale of assets;
|
§
|
payment of dividends; and
|
§
|
mergers.
|
62 |
As of June 30, 2012
|
Covenant Limit
|
Excess Coverage
|
||||||||||
Pro Forma Last Twelve Months Covenant EBITDA (In millions)
|
$
|
83.2
|
||||||||||
Pro Forma Last Twelve Months Interest Expense (In millions)
|
$
|
52.0
|
||||||||||
Senior Debt (In millions)
|
$
|
358.7
|
||||||||||
Total Debt (In millions)
|
$
|
686.5
|
||||||||||
Senior Secured Leverage
|
||||||||||||
Senior Secured Debt / Covenant EBITDA
|
4.31
|
x
|
4.50
|
x
|
0.19
|
x
|
||||||
Total Leverage
|
||||||||||||
Total Debt / Covenant EBITDA
|
8.25
|
x
|
8.75
|
x
|
0.50
|
x
|
||||||
Interest Coverage
|
||||||||||||
Covenant EBITDA / Interest Expense
|
1.60
|
x
|
1.25
|
x
|
0.35
|
x
|
||||||
EBITDA - Earnings before interest, taxes, depreciation and amortization
|
63 |
The following table summarizes the interest rates in effect with respect to our debt as of June 30, 2012:
|
||||||
Type of Debt
|
Amount Outstanding
|
Applicable Interest Rate
|
||||
(In millions)
|
||||||
Senior bank term debt, net of original issue discount (at variable rates)(1)
|
$
|
373.1
|
7.50
|
%
|
||
121/2 %/15% Senior Subordinated Notes (fixed rate)
|
$
|
327.0
|
12.50
|
%
|
||
10% Senior Secured TV One Notes due March 2016 (fixed rate)
|
$
|
119.0
|
10.00
|
%
|
||
63/8% Senior Subordinated Notes (fixed rate)
|
$
|
0.7
|
6.38
|
%
|
(1)
|
Subject to variable Libor plus a spread currently at 6.00% and incorporated into the applicable interest rate set forth above.
|
64 |
2012
|
2011
|
||||||
(In thousands)
|
|||||||
Net cash flows provided by (used in) operating activities
|
$
|
18,182
|
$
|
(209
|
)
|
||
Net cash flows (used in) provided by investing activities
|
$
|
(1,675
|
)
|
$
|
61,635
|
||
Net cash flows used in by financing activities
|
$
|
(9,686
|
)
|
$
|
(40,729
|
)
|
65 |
Goodwill and Radio Broadcasting Licenses
|
66 |
Radio Broadcasting Licenses
|
May 31, 2011 (a)
|
September 30, 2011 (a)
|
October 1, 2011
|
June 30, 2012 (a)
|
|||||||||||
Pre-tax impairment charge (in millions)
|
$ | — | $ | — | $ | — | $ | 0.3 | |||||||
Discount Rate
|
10.0 | % | 9.5 | % | 10.0 | % | 10.0 | % | |||||||
Year 1 Market Revenue Growth Range
|
1.3% -2.8 | % | 1.5% -2.0 | % | 1.5% -2.5 | % | 1.0% -3.0 | % | |||||||
Long-term Market Revenue Growth Rate Range (Years 6 – 10)
|
1.5% - 2.0 | % | 1.5% - 2.0 | % | 1.0% - 2.0 | % | 1.0% - 2.0 | % | |||||||
Mature Market Share Range
|
9.0% - 22.5 | % | 9.3% - 22.4 | % | 0.7% - 28.9 | % | 5.8% - 15.6 | % | |||||||
Operating Profit Margin Range
|
32.7% - 40.8 | % | 32.7% - 33.0 | % | 19.1% - 47.4 | % | 29.1% - 48.0 | % |
(a)
|
Reflects changes only to the key assumptions used in quarterly interim testing for certain reporting units.
|
67 |
Reach Media Goodwill |
March 31, 2011
|
June 30, 2011
|
September 30, 2011
|
December 31, 2011
|
March 31, 2012
|
June 30, 2012
|
||||||||||||||||||
Pre-tax impairment charge (in millions)
|
$ | – | $ | – | $ | – | $ | – | $ | – | $ | – | ||||||||||||
Discount Rate
|
13.5 | % | 13.0 | % | 12.0 | % | 12.5 | % | 12.5 | % | 12.5 | % | ||||||||||||
Year 1 Revenue Growth Rate
|
2.5 | % | 2.5 | % | 2.5 | % | 2.5 | % | 2.5 | % | 2.5 | % | ||||||||||||
Long-term Revenue Growth Rate Range
|
(1.3)% - 4.9 | % | (0.2)% - 3.9 | % | (2.0)% - 3.5 | % | 3.0% - 12.7 | % | 2.2% - 9.7 | % | 0.3% - 2.5 | % | ||||||||||||
Operating Profit Margin Range
|
16.2% - 27.4 | % | 17.6% - 22.6 | % | 18.8% - 21.7 | % | (2.0)% - 16.8 | % | 3.7% - 18.1 | % | 4.9% - 15.3 | % |
68 |
69 |
Payments Due by Period
|
|||||||||||||||||||||||
Contractual Obligations
|
2012
|
2013
|
2014
|
2015
|
2016
|
2017 and Beyond
|
Total
|
||||||||||||||||
(In thousands)
|
|||||||||||||||||||||||
63/8% Senior Subordinated Notes(1)
|
$
|
24
|
$
|
753
|
$
|
–
|
$
|
–
|
$
|
–
|
$
|
–
|
$
|
777
|
|||||||||
121/2%/15% Senior Subordinated Notes(1)
|
20,440
|
40,879
|
40,879
|
40,879
|
339,980
|
–
|
483,057
|
||||||||||||||||
Credit facilities(2)
|
16,563
|
32,239
|
31,951
|
31,663
|
372,771
|
–
|
485,187
|
||||||||||||||||
Other operating contracts / agreements(3)
|
39,266
|
38,164
|
24,664
|
4,121
|
4,033
|
642
|
110,890
|
||||||||||||||||
Operating lease obligations
|
4,855
|
8,287
|
7,218
|
6,073
|
5,252
|
17,224
|
48,909
|
||||||||||||||||
Senior Secured Notes(4)
|
5,950
|
11,900
|
11,900
|
11,900
|
121,777
|
–
|
163,427
|
||||||||||||||||
Total
|
$
|
87,098
|
$
|
132,222
|
$
|
116,612
|
$
|
94,636
|
$
|
843,813
|
$
|
17,866
|
$
|
1,292,247
|
(1)
|
Includes interest obligations based on current effective interest rate on senior subordinated notes outstanding as of June 30, 2012.
|
(2)
|
Includes interest obligations based on current effective interest rate and projected interest expense on credit facilities outstanding as of June 30, 2012.
|
(3)
|
Includes employment contracts, severance obligations, on-air talent contracts, consulting agreements, equipment rental agreements, programming related agreements, and other general operating agreements. Also includes contracts that TV One has entered into to acquire entertainment programming rights and programs from distributors and producers. These contracts relate to content assets as well as prepaid programming related agreements.
|
(4)
|
Represents $119.0 million issued by TV One in senior secured notes on February 25, 2011. The notes were issued in connection with the repurchase of its equity interest from certain financial investors and TV One management. The notes bear interest at 10.0% per annum, which is payable monthly, and the entire principal amount is due on March 15, 2016.
|
70 |
71 |
•
|
The Company did not maintain internal controls with regard to evaluating the proper cash flow classification of cash payments for TV One content assets
|
•
|
Restructured the Finance and Accounting functions and engaged additional resources with the appropriate depth of experience for our Finance and Accounting departments
|
|
•
|
Updated accounting policies and procedures to ensure that accounting personnel have sufficient guidance to remediate the previously communicated weakness and to appropriately account for transactions
|
|
•
|
Implemented a required senior management, legal and accounting review to specifically address all new disclosures and related financial information
|
72 |
73 |
In addition to the other information set forth in this report, you should carefully consider the risk factors discussed in Part I, “Item 1A. Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2011 (the “2011 Annual Report”), which could materially affect our business, financial condition or future results. The risks described in our 2011 Annual Report, as updated by our quarterly reports on Form 10-Q and Form 10-Q/A, are not the only risks facing our Company. Additional risks and uncertainties not currently known to us, or that we currently deem to be immaterial, may also materially adversely affect our business, financial condition and/or operating results.
Exhibit Number |
Description | |
31.1* | Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | |
31.2* | Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | |
32.1* | Certification of Chief Executive Officer pursuant to 18 U.S.C. § 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | |
32.2* | Certification of Chief Financial Officer pursuant to 18 U.S.C. § 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | |
101 | Financial information from the Quarterly Report on Form 10-Q/A for the quarter ended June 30, 2012, formatted in XBRL. |
* These exhibits were previously included in the Quarterly Report on 10-Q for the quarterly period ended June 30, 2012, filed with the Securities and Exchange Commission on August 9, 2012.
74 |
75 |
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details 1)
In Thousands, unless otherwise specified |
6 Months Ended |
---|---|
Jun. 30, 2012
|
|
Stock Options [Member]
|
|
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 4,712 |
Restricted Stock [Member]
|
|
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 119 |
INVESTMENT IN AFFILIATED COMPANY (Details Textual) (USD $)
|
3 Months Ended | 6 Months Ended | 12 Months Ended | 3 Months Ended | 6 Months Ended | 12 Months Ended | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2012
|
Jun. 30, 2011
|
Jun. 30, 2012
|
Jun. 30, 2011
|
Dec. 31, 2011
|
Feb. 28, 2011
|
Feb. 28, 2011
Financial Investers [Member]
|
Dec. 31, 2011
Senior Notes [Member]
|
Jun. 30, 2012
Senior Notes [Member]
|
Feb. 28, 2011
Senior Notes [Member]
|
Feb. 25, 2011
Senior Notes [Member]
|
Jun. 30, 2011
TV One LLC [Member]
|
Jun. 30, 2011
TV One LLC [Member]
|
Dec. 31, 2011
TV One LLC [Member]
|
Apr. 25, 2011
TV One LLC [Member]
|
Feb. 28, 2011
TV One LLC [Member]
|
Apr. 30, 2007
TV One LLC [Member]
|
Jan. 31, 2004
TV One LLC [Member]
|
Jun. 30, 2011
TV One LLC [Member]
Advertising Services [Member]
|
Jun. 30, 2011
TV One LLC [Member]
Advertising Services [Member]
|
Dec. 31, 2011
TV One LLC [Member]
Advertising Services [Member]
|
Dec. 31, 2003
TV One LLC [Member]
Advertising Services [Member]
|
|
Equity Method Investment, Aggregate Cost | $ 74,000,000 | |||||||||||||||||||||
Equity Method Investments | 60,300,000 | |||||||||||||||||||||
Payments to Acquire Equity Method Investments | 13,700,000 | |||||||||||||||||||||
Long-term Debt, Gross | 825,998,000 | 825,998,000 | 815,652,000 | 119,000,000 | 119,000,000 | 74,000,000 | ||||||||||||||||
Debt Instrument, Interest Rate, Stated Percentage | 10.00% | |||||||||||||||||||||
Private Placement Debt Offering Utilized Amount | 82,400,000 | |||||||||||||||||||||
Equity Method Investment, Ownership Percentage | 51.00% | |||||||||||||||||||||
Noncontrolling Interest, Ownership Percentage by Parent | 50.00% | 51.00% | 2.00% | |||||||||||||||||||
Operating income | 21,480,000 | 15,790,000 | 35,253,000 | 21,367,000 | 208,000 | 3,300,000 | ||||||||||||||||
Debt Instrument Maturity Period | Mar. 15, 2016 | |||||||||||||||||||||
Percentage Of Outstanding Membership Interest | 2.00% | 15.40% | 12.40% | |||||||||||||||||||
Percentage Of Outstanding Membership Interest Before Acquisition | 36.80% | |||||||||||||||||||||
Percentage Of Outstanding Membership Interest After Acquisition | 50.90% | |||||||||||||||||||||
Sales Revenue, Services, Net | 501,000 | 874,000 | ||||||||||||||||||||
Fees and Commissions | $ 500,000 | |||||||||||||||||||||
Media Placement Fee | 15.00% |
DISCONTINUED OPERATIONS (Details) (USD $)
In Thousands, unless otherwise specified |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2012
|
Jun. 30, 2011
|
Jun. 30, 2012
|
Jun. 30, 2011
|
|
Net revenue | $ 0 | $ 22 | $ 0 | $ 59 |
Station operating expenses | 65 | 48 | 123 | 125 |
Depreciation and amortization | 18 | 19 | 36 | 35 |
Interest income | 90 | 0 | 180 | 0 |
Gain on sale of assets | 0 | 0 | 0 | 20 |
Income (loss) before income taxes | 7 | (45) | 21 | (81) |
Provision for income taxes | 0 | 0 | 0 | 0 |
Income (loss) from discontinued operations, net of tax | $ 7 | $ (45) | $ 21 | $ (81) |
STOCKHOLDERS' EQUITY (Details Textual) (USD $)
|
3 Months Ended | 6 Months Ended | 1 Months Ended | |||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2012
|
Jun. 30, 2011
|
Jun. 30, 2012
|
Jun. 30, 2011
|
Jun. 30, 2012
Repurchase Program 2011 [Member]
|
Jan. 30, 2010
Stock Plan LTIP Shares 2009 [Member]
|
Dec. 31, 2009
Stock Plan LTIP Shares 2009 [Member]
|
Dec. 31, 2009
Chief Executive Officer [Member]
Stock Plan LTIP Shares 2009 [Member]
|
Dec. 31, 2009
Board Of Directors Chairman [Member]
Stock Plan LTIP Shares 2009 [Member]
|
Dec. 31, 2009
Chief Financial Officer [Member]
Stock Plan LTIP Shares 2009 [Member]
|
Dec. 31, 2009
Chief Operating Officer [Member]
Stock Plan LTIP Shares 2009 [Member]
|
Dec. 31, 2009
Former President Of Radio Division [Member]
Stock Plan LTIP Shares 2009 [Member]
|
Dec. 31, 2009
Other Key Employees [Member]
Stock Plan LTIP Shares 2009 [Member]
|
Jun. 30, 2012
Common Class A [Member]
Stock Option and Restricted Stock Grant Plan 1999 [Member]
|
Jun. 30, 2012
Common Class D [Member]
Stock Option and Restricted Stock Grant Plan 1999 [Member]
|
Jun. 30, 2012
Common Class D [Member]
Stock Plan 2009 [Member]
|
|
Stock Repurchase Program, Authorized Amount | $ 15,000,000 | |||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized | 3,250,000 | 1,408,099 | 10,816,198 | 8,250,000 | ||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Available for Grant | 4,874,872 | |||||||||||||||
Stock Issued During Period, Shares, Restricted Stock Award, Gross | 1,000,000 | 300,000 | 225,000 | 225,000 | 130,000 | 1,370,000 | ||||||||||
Share Based Compensation Arrangement Number Of Employees Covered | 31 | 26 | ||||||||||||||
Percentage Of Restricted Stock Award Vested During Period | 33.00% | |||||||||||||||
Stock-based compensation | 46,000 | 1,200,000 | 90,000 | 2,136,000 | ||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross | 66,845 | 0 | 181,520 | |||||||||||||
Share-Based Compensation Arrangement By Share-Based Payment Award Options Vested In Period | 79,292 | 95,064 | 656,079 | 53,124 | ||||||||||||
Employee Service Share-based Compensation, Nonvested Awards, Total Compensation Cost Not yet Recognized, Stock Options | 49,000 | 49,000 | ||||||||||||||
Employee Service Share-based Compensation, Nonvested Awards, Total Compensation Cost Not yet Recognized, Period for Recognition | 0 years 11 months | |||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Weighted Average Grant Date Fair Value | $ 3.48 | |||||||||||||||
Employee Service Share-based Compensation, Nonvested Awards, Total Compensation Cost Not yet Recognized, Share-based Awards Other than Options | $ 94,000 | $ 94,000 |
INVESTMENTS (Details) (USD $)
In Thousands, unless otherwise specified |
Jun. 30, 2012
|
Dec. 31, 2011
|
---|---|---|
Amortized Cost Basis | $ 3,032 | $ 8,388 |
Gross Unrealized Losses | (38) | (266) |
Gross Unrealized Gains | 158 | 67 |
Fair Value | 3,152 | 8,189 |
Corporate Debt Securities [Member]
|
||
Amortized Cost Basis | 2,831 | 7,376 |
Gross Unrealized Losses | (38) | (264) |
Gross Unrealized Gains | 158 | 66 |
Fair Value | 2,951 | 7,178 |
Mortgage-Backed Securities, Issued By Us Government Sponsored Enterprises [Member]
|
||
Amortized Cost Basis | 201 | 1,012 |
Gross Unrealized Losses | 0 | (2) |
Gross Unrealized Gains | 0 | 1 |
Fair Value | $ 201 | $ 1,011 |
SUBSEQUENT EVENTS (Details Textual) (USD $)
|
6 Months Ended |
---|---|
Jun. 30, 2012
|
|
Local Marketing Agreement [Member]
|
|
Subsequent Event, Description | Pursuant to the LMA, beginning as of August 27, 2012, we are permitted to broadcast programs produced, owned or acquired by Radio One on Gaffney''''s Gaffney, South Carolina radio station, WNOW-FM. We are required to pay certain operating costs of WNOW-FM, and in exchange we will retain all revenues from the sale of the advertising within the programming we provide. The LMA continues for 18 months or until consummation of certain related transactions under a stock purchase agreement (the SPA) with the stockholders of Gaffney. |
Subsequent Event, Date | Jul. 18, 2012 |
Class D Notification [Member]
|
|
Subsequent Event, Description | On July 13, 2012, the Company received notification (the Class D Notification) from the NASDAQ Stock Markets (NASDAQ) that for the 30 consecutive business days prior to July 13, 2012, the bid price of the Company''''s Class D common stock had closed below the minimum $1.00 per share requirement for continued listing under Marketplace Rule 5450(a)(1). As such, the Company''''s Class D common stock had become non-compliant with NASDAQ''''s continued listing requirements. |
Subsequent Event, Date | Jul. 13, 2012 |
Minimum Per Share Bid Price Requirement (in dollars per share) | 1.00 |
Class A Notification [Member]
|
|
Subsequent Event, Description | On July 26, 2012, the Company received notification (the Class A Notification) from NASDAQ that for the 30 consecutive business days prior to July 26, 2012, the bid price of the Company''''s Class A common stock had closed below the minimum $1.00 per share requirement for continued listing. As such, the Company''''s Class A common stock had become non-compliant with NASDAQ''''s continued listing requirements. |
Subsequent Event, Date | Jul. 26, 2012 |
Minimum Per Share Bid Price Requirement (in dollars per share) | 1.00 |
ACQUISITIONS (Details) (USD $)
In Thousands, unless otherwise specified |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2012
|
Jun. 30, 2011
|
Jun. 30, 2012
|
Jun. 30, 2011
|
|
Net revenue | $ 105,916 | $ 101,515 | $ 208,958 | $ 197,355 |
Costs and expenses, net | 63,248 | 93,776 | 245,532 | 110,913 |
Net income (loss) | $ 42,668 | $ 7,739 | $ (36,574) | $ 86,442 |
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES (Tables)
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6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2012
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Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Derivative Liabilities at Fair Value [Table Text Block] | The fair values and the presentation of the Company’s derivative instruments in the consolidated balance sheets are as follows:
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Schedule of Cash Flow Hedging Instruments, Statements of Financial Performance and Financial Position, Location [Table Text Block] | The effect and the presentation of the Company’s derivative instruments on the consolidated statements of operations are as follows:
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Schedule Of Derivative Instruments NotDesignated AsHedgingInstruments [Table Text Block] |
|
INVESTMENTS (Details 2) (USD $)
In Thousands, unless otherwise specified |
Jun. 30, 2012
|
Dec. 31, 2011
|
---|---|---|
Amortized Cost Basis, Within 1 year | $ 236 | |
Amortized Cost Basis, After 1 year through 5 years | 2,028 | |
Amortized Cost Basis, After 5 years through 10 years | 567 | |
Amortized Cost Basis, After 10 years | 0 | |
Amortized Cost Basis, Mortgage-backed securities | 201 | |
Amortized Cost Basis, Total | 3,032 | |
Fair Value, Within 1 year | 233 | |
Fair Value, After 1 year through 5 years | 2,146 | |
Fair Value, After 5 years through 10 years | 572 | |
Fair Value, After 10 years | 0 | |
Fair Value, Mortgage-backed securities | 201 | |
Fair Value, Total | $ 3,152 | $ 8,189 |
COMMITMENTS AND CONTINGENCIES (Details Textual) (USD $)
In Millions, unless otherwise specified |
6 Months Ended | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||
---|---|---|---|---|---|---|---|
Jun. 30, 2012
Standby Letters Of Credit [Member]
|
Jun. 30, 2012
Music License Agreements [Member]
|
Jun. 30, 2011
Music License Agreements [Member]
|
Jun. 30, 2012
Music License Agreements [Member]
|
Jun. 30, 2011
Music License Agreements [Member]
|
Dec. 31, 2009
Minimum [Member]
|
Dec. 31, 2009
Maximum [Member]
|
|
License Expenses | $ 2.6 | $ 3.5 | $ 5.4 | $ 6.3 | |||
Fair Value Disclosure, Off-balance Sheet Risks, Face Amount, Liability | $ 1.1 | ||||||
Percentage Of Provisional Discount On Music Licensing Fee | 7.00% | 11.00% | |||||
Number Of Letters of Credit | 4 |
SUBSEQUENT EVENTS
|
6 Months Ended |
---|---|
Jun. 30, 2012
|
|
Subsequent Events [Abstract] | |
Subsequent Events [Text Block] | 16. SUBSEQUENT EVENTS: As of July 18, 2012, we entered into a local marketing agreement (“LMA”) with Gaffney Broadcasting, Incorporated (“Gaffney”). Pursuant to the LMA, beginning as of August 27, 2012, we are permitted to broadcast programs produced, owned or acquired by Radio One on Gaffney’s Gaffney, South Carolina radio station, WNOW-FM. We are required to pay certain operating costs of WNOW-FM, and in exchange we will retain all revenues from the sale of the advertising within the programming we provide. The LMA continues for 18 months or until consummation of certain related transactions under a stock purchase agreement (the “SPA”) with the stockholders of Gaffney. The closing of the transactions under the SPA are subject to certain conditions including but not limited to approval by the Federal Communications Commission (the “FCC”) of the transfer of Gaffney’s FCC licenses. On July 13, 2012, the Company received notification (the “Class D Notification”) from the NASDAQ Stock Markets (“NASDAQ”) that for the 30 consecutive business days prior to July 13, 2012, the bid price of the Company’s Class D common stock had closed below the minimum $1.00 per share requirement for continued listing under Marketplace Rule 5450(a)(1). As such, the Company’s Class D common stock had become non-compliant with NASDAQ’s continued listing requirements. In accordance with NASDAQ Marketplace Rule 5810(c)(3)(A), the Company has a grace period of 180 calendar days, or until January 9, 2013, to regain compliance with the minimum bid price requirement. To regain compliance, the closing bid price of the Company’s Class D common stock must meet or exceed $1.00 per share for at least ten consecutive business days during this 180-day grace period. If the Company does not regain compliance by January 9, 2013, NASDAQ will provide written notification that the Company’s Class D common stock will be delisted. However, the Company may apply to transfer its Class D common stock to the NASDAQ Capital Market. If its application is approved, NASDAQ will afford the Company a second 180 calendar day compliance period in order to regain compliance while on the NASDAQ Capital Market. If the Company does not regain compliance after such additional compliance period, NASDAQ will provide written notification that the Company’s Class D common stock will be delisted. The Class D Notification did not impact upon the Company’s Class A common stock. On July 26, 2012, the Company received notification (the “Class A Notification”) from NASDAQ that for the 30 consecutive business days prior to July 26, 2012, the bid price of the Company’s Class A common stock had closed below the minimum $1.00 per share requirement for continued listing. As such, the Company’s Class A common stock had become non-compliant with NASDAQ’s continued listing requirements. As with the Company’s Class D common stock, the Company has a grace period of 180 calendar days, or until January 22, 2013, to regain compliance with the minimum bid price requirement. To regain compliance, the closing bid price of the Company’s Class A common stock must meet or exceed $1.00 per share for at least ten consecutive business days during this 180-day grace period. If the Company does not regain compliance by January 22, 2013, NASDAQ will provide written notification that the Company’s Class A common stock will be delisted. However, the Company may apply for an additional grace period if it meets all of the criteria for continued listing other than the minimum closing bid price at the time of application for the additional grace period. If the Company then fails to regain compliance within the additional grace period permitted by the NASDAQ Capital Market, the Company’s Class A common stock will be subject to delisting by NASDAQ. The Company will consider available options to resolve the noncompliance with the minimum bid price requirement for both the Class A and Class D common stock, including but not limited to the implementation of a reverse stock split. However, there can be no assurance that the Company will be able to regain compliance with the minimum bid price requirements or other NASDAQ listing criteria for either class of stock. |
GOODWILL AND RADIO BROADCASTING LICENSES (Details) (Income Approach Valuation Technique [Member], USD $)
In Millions, unless otherwise specified |
Jun. 30, 2012
|
Oct. 01, 2011
|
Sep. 30, 2011
|
May 31, 2011
|
|||||
---|---|---|---|---|---|---|---|---|---|
Pre Tax Impairment Charges (in millions) | $ 0.3 | [1] | $ 0 | $ 0 | [1] | $ 0 | [1] | ||
Discount Rate | 10.00% | [1] | 10.00% | 9.50% | [1] | 10.00% | [1] | ||
Minimum [Member]
|
|||||||||
Year1 Market Revenue Growth Range | 1.00% | [1] | 1.50% | 1.50% | [1] | 1.30% | [1] | ||
Long-term Market Revenue Growth Rate Range (Years 6 - 10) | 1.00% | [1] | 1.00% | 1.50% | [1] | 1.50% | [1] | ||
Mature Market Share Range | 5.80% | [1] | 0.70% | 9.30% | [1] | 9.00% | [1] | ||
Operating Profit Margin Range | 29.10% | [1] | 19.10% | 32.70% | [1] | 32.70% | [1] | ||
Maximum [Member]
|
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Year1 Market Revenue Growth Range | 3.00% | [1] | 2.50% | 2.00% | [1] | 2.80% | [1] | ||
Long-term Market Revenue Growth Rate Range (Years 6 - 10) | 2.00% | [1] | 2.00% | 2.00% | [1] | 2.00% | [1] | ||
Mature Market Share Range | 15.60% | [1] | 28.90% | 22.40% | [1] | 22.50% | [1] | ||
Operating Profit Margin Range | 48.00% | [1] | 47.40% | 33.00% | [1] | 40.80% | [1] | ||
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ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details 4) (Discounted Cash Flow Valuation Technique [Member])
|
6 Months Ended |
---|---|
Jun. 30, 2012
|
|
Employment Agreement Award [Member]
|
|
Fair Value Inputs, Discount Rate | 11.50% |
Fair Value Inputs, Long-term Revenue Growth Rate | 3.00% |
Fair Value Measurements, Valuation Techniques | Discounted Cash Flow |
Incentive Award Plan [Member]
|
|
Fair Value Inputs, Discount Rate | 11.50% |
Fair Value Inputs, Long-term Revenue Growth Rate | 3.00% |
Fair Value Measurements, Valuation Techniques | Discounted Cash Flow |
Redeemable Noncontrolling Interests [Member]
|
|
Fair Value Inputs, Discount Rate | 12.50% |
Fair Value Inputs, Long-term Revenue Growth Rate | 2.50% |
Fair Value Measurements, Valuation Techniques | Discounted Cash Flow |
CONDENSED CONSOLIDATING FINANCIAL STATEMENTS (Tables)
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Jun. 30, 2012
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Organization, Consolidation and Presentation Of Financial Statements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Condensed Income Statement [Table Text Block] |
RADIO ONE, INC. AND SUBSIDIARIES CONSOLIDATING STATEMENT OF OPERATIONS Six Months Ended June 30, 2012
RADIO ONE, INC. AND SUBSIDIARIES CONSOLIDATING STATEMENT OF OPERATIONS Six Months Ended June 30, 2011
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Schedule of Comprehensive Income (Loss) [Table Text Block] | RADIO ONE, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (LOSS)
RADIO ONE, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (LOSS) Three Months Ended June 30, 2011
RADIO ONE, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (LOSS)
RADIO ONE, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (LOSS)
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Schedule of Condensed Balance Sheet [Table Text Block] |
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Schedule of Condensed Cash Flow Statement [Table Text Block] |
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GOODWILL AND RADIO BROADCASTING LICENSES (Details 2) (USD $)
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6 Months Ended |
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Jun. 30, 2012
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Goodwill, Beginning balance at December 31, 2011 | $ 272,037,000 |
Goodwill, Period Increase (Decrease) | 0 |
Goodwill, Beginning balance at June 30, 2012 | 272,037,000 |
Radio Broadcasting Segment [Member]
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Goodwill, Beginning balance at December 31, 2011 | 70,800,000 |
Goodwill, Period Increase (Decrease) | 0 |
Goodwill, Beginning balance at June 30, 2012 | 70,800,000 |
Reach Media Segment [Member]
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Goodwill, Beginning balance at December 31, 2011 | 14,400,000 |
Goodwill, Period Increase (Decrease) | 0 |
Goodwill, Beginning balance at June 30, 2012 | 14,400,000 |
Internet Segment [Member]
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Goodwill, Beginning balance at December 31, 2011 | 21,800,000 |
Goodwill, Period Increase (Decrease) | 0 |
Goodwill, Beginning balance at June 30, 2012 | 21,800,000 |
Cable Television Segment [Member]
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Goodwill, Beginning balance at December 31, 2011 | 165,000,000 |
Goodwill, Period Increase (Decrease) | 0 |
Goodwill, Beginning balance at June 30, 2012 | $ 165,000,000 |
STOCKHOLDERS' EQUITY (Details) (Stock Options [Member])
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3 Months Ended | 6 Months Ended | ||
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Jun. 30, 2012
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Jun. 30, 2011
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Jun. 30, 2012
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Jun. 30, 2011
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Stock Options [Member]
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Average risk-free interest rate | 1.60% | 2.23% | ||
Expected dividend yield | 0.00% | 0.00% | ||
Expected lives | 5 years 9 months | 6 years 3 months | ||
Expected volatility | 124.30% | 120.70% |
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES (Details 2) (Not Designated As Hedging Instrument [Member], Employment Agreement Award [Member], Corporate Selling General and Administrative Expense [Member], USD $)
In Thousands, unless otherwise specified |
3 Months Ended | 6 Months Ended | ||
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Jun. 30, 2012
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Jun. 30, 2011
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Jun. 30, 2012
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Jun. 30, 2011
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Not Designated As Hedging Instrument [Member] | Employment Agreement Award [Member] | Corporate Selling General and Administrative Expense [Member]
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Amount of Gain (Loss) in Income of Derivative | $ (343) | $ (510) | $ (693) | $ (470) |
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES (Details Textual) (USD $)
In Millions, unless otherwise specified |
6 Months Ended | |||||
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Jun. 30, 2012
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Jun. 01, 2005
Interest Rate Swap [Member]
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Jun. 30, 2005
Interest Rate Swap [Member]
Derivative Agreement 1 [Member]
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Jun. 30, 2005
Interest Rate Swap [Member]
Derivative Agreement 2 [Member]
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Jun. 30, 2005
Interest Rate Swap [Member]
Derivative Agreement 3 [Member]
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Jun. 30, 2005
Interest Rate Swap [Member]
Derivative Agreement 4 [Member]
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Derivative Agreement Face Amount Of Contract | $ 25 | |||||
Derivative, Maturity Date | Jun. 30, 2007 | Jun. 30, 2008 | Jun. 30, 2010 | Mar. 31, 2011 | ||
Percentage Of Award Amount | 8.00% | |||||
Reassesed Estimated Fair Value Of Award | $ 11 |