GUARANTOR ARRANGEMENTS (Block)

12 Months Ended

Dec. 31, 2017

Disclosure Text Block Supplement Abstract

Commitments Contingencies And Guarantees Text Block

21. GUARANTOR ARRANGEMENTS

Guarantor Arrangements

The Company recognizes, at the inception of a guarantee, a liability for the fair value of the obligation undertaken by issuing the guarantee. The following is a summary of agreements that the Company has determined are within the scope of guarantor arrangements:

The Company enters into indemnification agreements in the ordinary course of business. Under these agreements, the Company typically indemnifies, holds harmless, and agrees to reimburse the indemnified party for losses suffered or incurred by the indemnified party. The maximum potential amount of future payments the Company could be required to make under these indemnification agreements is unlimited. The Company believes that the estimated fair value of these agreements is minimal. Accordingly, the Company has not recorded liabilities for these agreements as of December 31, 2017.
Under the Company’s Credit Facility, the Company is required to reimburse lenders for any increased costs that they may incur in the event of a change in law, rule or regulation resulting in their reduced returns from any change in capital requirements. The Company cannot estimate the potential amount of any future payment under this provision, nor can the Company predict if such an event will ever occur.
In connection with many of the Company’s acquisitions, the Company enters into a TBA or LMA for specified periods of time, usually six months or less, whereby the Company typically indemnifies the owner and operator of the radio station, their employees, agents and contractors from liability, claims and damages arising from the activities of operating the radio station under such agreements. The maximum potential amount of any future payments the Company could be required to make for any such previous indemnification obligations is indeterminable at this time. The Company has not, however, previously incurred any significant costs to defend lawsuits or settle claims relating to any such indemnification obligation.

Financial Statements of Parent

The condensed financial data of the Parent Company has been prepared in accordance with Rule 12-04 of Regulation S-X. The Parent Company’s financial data includes the financial data of Entercom Communications Corp., excluding all subsidiaries.

The most significant restrictions on the payment of dividends by CBS Radio (as contemplated by Rule 4-08(e) of Regulation S-X) are set forth in the Credit Facility and the indenture governing the Senior Notes.

Under the Credit Facility, CBS Radio is permitted to make distributions to the Parent Company in amounts, as defined, as follows: (a) amounts which are required to pay the Parent Company’s overhead costs; and (b) other restricted payments (“Other Restricted Payment”). With respect to the Credit Facility, the permitted Other Restricted Payment is generally an amount which does not trigger a default or exceed a Consolidated Net Leverage Ratio of 5.00 times. The Company’s ability to make an Other Restricted Payment in these amounts under the Credit Facility is a function of its leverage ratio.

Effectively all of CBS Radio’s assets are subject to these distribution limitations to the Parent Company.

The following tables set forth the condensed financial data (other than the statements of shareholders’ equity as this statement is not condensed) of the Parent Company:

the balance sheets as of December 31, 2017 and 2016;
the statements of operations for the years ended December 31, 2017, 2016 and 2015;
the statements of shareholders’ equity for the years ended December 31, 2017, 2016 and 2015; and
the statements of cash flows for the years ended December 31, 2017, 2016 and 2015.

ENTERCOM COMMUNICATIONS CORP.
CONDENSED PARENT COMPANY BALANCE SHEETS
(amounts in thousands)

	2017		2016
ASSETS

Current Assets	$	96,530	$	7,228
Property And Equipment - Net		26,410		2,866
Goodwill - Net		1,221,021		-
Assets Held For Sale		114,278		-
Deferred Charges And
Other Assets - Net		3,467		1,813
Investment In Subsidiaries / Intercompany		750,692		456,161
TOTAL ASSETS	$	2,212,398	$	468,068

LIABILITIES AND
SHAREHOLDERS' EQUITY
Current Liabilities	$	109,447	$	20,042
Long Term Liabilities		338,591		26,920
Total Liabilities		448,038		46,962
Perpetual Cumulative Convertible Preferred Stock		-		27,732
Shareholders' Equity:
Class A, B and C Common Stock		1,437		407
Additional Paid-In Capital		1,737,132		605,603
Accumulated Deficit		25,791		(212,636)
Total shareholders' equity		1,764,360		393,374
TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY	$	2,212,398	$	468,068

See notes to condensed Parent Company financial statements.

ENTERCOM COMMUNICATIONS CORP.
CONDENSED PARENT COMPANY INCOME STATEMENTS
(amounts in thousands)

	YEARS ENDED DECEMBER 31,
	2017		2016		2015

NET REVENUES	$	(88)	$	2,131	$	1,536

OPERATING (INCOME) EXPENSE:
Depreciation and amortization expense		1,793		1,235		1,123
Corporate general and administrative expenses		47,787		33,218		26,395
Restructuring charges and transition services costs		11,314		-		2,858
Impairment loss		511		-		-
Merger and acquisition costs		41,313		708		3,978
Other expenses related to financing		(117)		565		-
Net (gain) loss on sale or disposal of assets		(601)		(601)		(601)
Total operating expense		102,000		35,125		33,753
OPERATING INCOME (LOSS)		(102,088)		(32,994)		(32,217)
Net interest expense, including amortization
of deferred financing expense		43		24		-
Net recovery of a claim		-		100		-
Income from equity investment in subsidiaries		(78,895)		(85,977)		(79,838)
TOTAL OTHER (INCOME) EXPENSE		(78,852)		(85,853)		(79,838)

INCOME (LOSS) BEFORE INCOME TAXES (BENEFIT)		(23,236)		52,859		47,621

INCOME TAXES (BENEFIT)		(257,085)		14,794		18,437
NET INCOME AVAILABLE TO THE COMPANY - CONTINUING OPERATIONS		233,849		38,065		29,184
Preferred stock dividend		(2,015)		(1,901)		(752)
NET INCOME AVAILABLE TO COMMON SHAREHOLDERS - CONTINUING OPERATIONS		231,834		36,164		28,432
NET INCOME (LOSS) AVAILABLE TO COMMON SHAREHOLDERS	$	231,834	$	36,164	$	28,432

See notes to condensed Parent Company financial statements.

ENTERCOM COMMUNICATIONS CORP.
PARENT COMPANY STATEMENTS OF SHAREHOLDERS' EQUITY
YEARS ENDED DECEMBER 31, 2017, 2016 AND 2015
(amounts in thousands, except share data)

									Retained
	Common Stock						Additional		Earnings
	Class A			Class B			Paid-in		(Accumulated
	Shares	Amount		Shares	Amount		Capital		Deficit)		Total
Balance, December 31, 2014	31,862,294	$	319	7,197,532	$	72	$	608,515	$	(279,885)	$	329,021
Net income (loss) available to the Company	-		-	-		-		-		29,184		29,184
Compensation expense related to granting
of stock awards	738,195		7	-		-		5,517		-		5,524
Exercise of stock options	11,750		-	-		-		35		-		35
Purchase of vested employee restricted
stock units	(131,688)		(1)	-		-		(1,561)		-		(1,562)
Preferred stock dividend	-		-	-		-		(752)		-		(752)
Balance, December 31, 2015	32,480,551		325	7,197,532		72		611,754		(250,701)		361,450
Net income (loss) available to the Company	-		-	-		-		-		38,065		38,065
Compensation expense related to granting
of stock awards	1,095,759		11	-		-		6,528		-		6,539
Issuance of common stock related to the Employee
Stock Purchase Plan ("ESPP")	31,933		-	-		-		379		-		379
Exercise of stock options	134,238		1	-		-		264		-		265
Purchase of vested employee restricted
stock units	(232,297)		(2)	-		-		(2,266)		-		(2,268)
Payment of dividends on common stock	-		-	-		-		(8,666)		-		(8,666)
Payment of dividends on preferred stock	-		-	-		-		(1,788)		-		(1,788)
Dividend equivalents, net of forfeitures	-		-	-		-		(602)		-		(602)
Balance, December 31, 2016	33,510,184		335	7,197,532		72		605,603		(212,636)		393,374
Net income (loss) available to the Company	-		-	-		-		-		233,849		233,849
Conversion of Class B common stock
to Class A common stock in the Merger	3,152,333		32	(3,152,333)		(32)		-		-		-
Issuance of Class A common stock in the Merger	101,407,494		1,014	-		-		1,160,102		-		1,161,116
Equity awards assumed in the Merger	618,325		6	-		-		6,771		-		6,777
Stock options assumed in the Merger	-		-	-		-		1,007		-		1,007
Compensation expense related to granting
of stock awards	2,066,241		21	-		-		9,546		-		9,567
Issuance of common stock related to the Employee
Stock Purchase Plan ("ESPP")	14,833		-	-		-		182		-		182
Exercise of stock options	8,250		-	-		-		42		-		42
Common stock repurchase	(932,600)		(9)	-		-		(10,666)		-		(10,675)
Purchase of vested employee restricted
stock units	(169,279)		(2)	-		-		(2,563)		-		(2,565)
Payment of dividends on common stock	-		-	-		-		(29,296)		-		(29,296)
Dividend equivalents, net of forfeitures	-		-	-		-		(1,556)		-		(1,556)
Payment of dividends on preferred stock	-		-	-		-		(2,574)		-		(2,574)
Modified retrospective application of
stock-based compensation guidance	-		-	-		-		534		4,578		5,112
Balance, December 31, 2017	139,675,781	$	1,397	4,045,199	$	40	$	1,737,132	$	25,791	$	1,764,360

See notes to Parent Company financial statements.

ENTERCOM COMMUNICATIONS CORP.
CONDENSED PARENT COMPANY STATEMENTS OF CASH FLOWS
(amounts in thousands)

	YEARS ENDED DECEMBER 31,
	2017		2016		2015

OPERATING ACTIVITIES:
Net cash provided by (used in) operating activities	$	(69,704)	$	(24,344)	$	(25,355)

INVESTING ACTIVITIES:
Additions to property and equipment		(528)		(1,849)		(304)
Additions to amortizable intangible assets		-		(182)		(1,142)
Proceeds (distributions) from investments in subsidiaries		116,127		44,527		29,030
Net cash provided by (used in) investing activities		115,599		42,496		27,584

Proceeds from issuance of employee stock plan		182		379		-
Payment of fees associated with the issuance of preferred stock		-		-		(220)
Payment of call premium and other fees		-		(5,977)		-
Proceeds from the exercise of stock options		42		265		35
Purchase of vested employee restricted stock units		(2,565)		(2,268)		(1,562)
Payment of dividends on common stock		(29,296)		(8,666)		-
Payment of dividend equivalents on vested restricted stock units		(1,556)		(94)		(7)
Repurchase of common stock		(10,042)		-		-
Payment of dividends on preferred stock		(2,574)		(1,788)		(413)
Net cash provided by (used in) financing activities		(45,809)		(18,149)		(2,167)

NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS		86		3		62
CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR		198		195		133
CASH AND CASH EQUIVALENTS, END OF YEAR	$	284	$	198	$	195

See notes to condensed Parent Company financial statements.

Accounting Policies

The Parent Company follows the accounting policies as described in Note 2, Significant Accounting Policies, except that the Parent Company accounts for its investment in its subsidiaries using the equity method.

Debt – For a discussion of debt obligations of the Company, refer to Note 9, Long-Term Debt.

Other - For further information, reference should be made to the notes to the consolidated financial statements of the Company.