Exhibit 99.1
Exhibit 99.1
PRESS RELEASE
WESTWOOD ONE, INC.
REPORTS RESULTS FOR
THE FULL YEAR AND FOURTH QUARTER 2010
New York, NY April 13, 2011 Westwood One, Inc. (NASDAQ: WWON), a leading independent provider
of network radio content and traffic information to the radio, television and digital sectors,
today reported operating results for the full year and fourth quarter 2010. As reflected in its
financial statements, Westwood One is organized into two business segments: Network Radio and Metro
Traffic. Network Radio distributes news, sports, music, talk and entertainment programming to
approximately 5,000 radio stations. Metro Traffic consists of Metro Traffic Radio, which produces
and distributes traffic and other local information reports to over 2,250 radio stations, and Metro
Television, which produces and distributes such reports to approximately 182 television stations.
Westwood Ones fourth quarter revenue increased $6.0 million, or 6.5%, to $98.3 million from $92.3
million in 2009. Revenue for the full year 2010 increased $22.2 million, or 6.5%, to $362.5 million
compared to $340.3 million in 2009.
Our fourth quarter and year end revenue increases reflect our strategy of growing our radio and
digital business by launching new programming, expanding our distribution, renewing key content
partnerships, and investing in our salesforce to support our revenue structure, said Rod Sherwood,
President. We saw revenue growth in Network Radio from our premium sports partnerships, including
NFL and NCAA football, and from our music and entertainment programming. Metro Traffic Radio had
higher revenue in key advertising categories of financial services, retail, automotive and
restaurants. Our fourth quarter revenue growth was offset by declines in Metro Television revenue
primarily due to lower ratings and audience levels. We have restructured the television business in
the first quarter of 2011, and anticipate that performance will improve for the full year.
Recently Westwood One also increased its operating and financial flexibility, and reduced its
financial risk, by significantly easing its debt leverage covenants with its lenders. In addition,
on February 28, 2011, Westwood One obtained $10 million in additional liquidity when Gores
purchased additional shares of common stock of Westwood One.
Network Radio revenue grew by 9.8% in the fourth quarter and by 7.1% for the full year compared to
the same periods in 2009, outpacing overall network market growth of 5.4% for the fourth quarter
and 2.5% for total year according to industry sources.
Revenue for the total Metro Traffic business increased 2.2% in the fourth quarter and increased
5.8% for the full year compared to the same periods in 2009. Metro Traffic Radio revenue grew by
14.3% in the fourth quarter and 9.2% for the full year, outpacing the growth of the combined
local/national radio market of 7.0% for the fourth quarter and 6.0% for the full year (as reported
by the Radio Advertising Bureau). Metro
Television revenue decreased by 36.8% in the fourth quarter, due to lower ratings and audience
levels, and decreased by 4.9% for the full year. The Metro Television business is being
restructured to focus on increasing the number of television affiliates, thereby reducing our need
to purchase inventory, which we believe will improve profitability over time. To date in 2011,
Metro Television has increased affiliates from 165 to 182.
Westwood Ones operating loss in the fourth quarter was $9.4 million, which represents a $0.2
million improvement over the fourth quarter of 2009.
Adjusted EBITDA(1) for the year ended December 31, 2010 was $12.1 million, an increase
of $1.7 million from $10.4 million in 2009. Adjusted EBITDA(1) in the fourth quarter
was $0.9 million compared to $6.1 million in the fourth quarter of 2009. This was primarily due to
a decline in Adjusted EBITDA of $2.4 million for Network Radio, due primarily to investments
directly associated with revenue generation, and a decline in Adjusted EBITDA of $2.4 million for
Metro Traffic, which was primarily the result of decreased revenue in Metro Television. In
addition, corporate expense increased by $0.4 million.
Three Months Ended December 31, 2010
For the three months ended December 31, 2010, revenue was $98.3 million, an increase of $6.0
million, or 6.5%, compared to $92.3 million in the fourth quarter of 2009.
Network Radio revenue was $57.2 million, an increase of $5.1 million, or 9.8%, compared to $52.1
million in the fourth quarter of 2009. Advertising revenue was up in sports, primarily due to NFL
and NCAA football, a new sports prep service, music and entertainment programming, including Billy
Bush and VH1 Classic Rock Nights, and news programming. These revenue increases were partially
offset by revenue declines in talk radio programming.
Overall, Metro Traffic revenue for the fourth quarter was $41.2 million, an increase of $0.9
million, or 2.2%, from $40.3 million in 2009. Revenue for Metro Traffic Radio was $35.1 million, an
increase of $4.4 million or 14.3%, compared to $30.7 million in 2009. This increase was based
largely on increased advertising revenue in key categories, as well as increased distribution.
Revenue for Metro Television was $6.0 million, a decrease of $3.5 million or 36.8%, from $9.6
million in 2009, primarily due to lower ratings and audience levels that required us to use
additional inventory to meet customers audience requirements.
Operating loss in the fourth quarter of 2010 improved by $0.2 million, or 2.1% to $9.4 million from
$9.6 million in 2009. This improvement was largely due to lower restructuring and special charges
of $2.4 million and lower depreciation and amortization of $3.0 million. The improvement was
partially offset by lower EBITDA from Network Radio and Metro Traffic.
2
Adjusted EBITDA (1) was $0.9 million compared to $6.1 million in the fourth quarter of
2009. Adjusted EBITDA for Network Radio decreased $2.4 million, and for Metro Traffic decreased
$2.4 million. In addition, corporate expenses increased by $0.4 million. The
decrease in Network Radio Adjusted EBITDA was largely due to higher expenses associated with sports
programming, guaranteed program commissions and revenue-sharing expenses for certain contracts, and
investments in our advertising salesforces, along with related commission expenses. In light of the
increased programming expenses noted above, Westwood One has not renewed, or is restructuring,
certain of these Network Radio contracts to improve profit margins. The decrease in Metro Traffic
Adjusted EBITDA was primarily related to lower revenue and increased inventory purchases in Metro
Television, partially offset by higher revenue that exceeded increased expenses in Metro Traffic
Radio.
Interest expense in the fourth quarter of 2010 increased $0.9 million, or 17.4%, to $6.1 million
from $5.2 million in the fourth quarter of 2009. This reflects higher average balances of our
outstanding debt as a result of our increased borrowings, and increased interest expense related to
a capital lease incurred in connection with the Culver City sale-leaseback transaction that closed
in December 2009.
The Companys tax benefit decreased $7.5 million to $3.3 million compared to $10.8 million in the
fourth quarter of 2009, due to a lower effective tax rate.
Net loss for the fourth quarter was $11.9 million, or $0.56 per diluted share, compared with a net
loss of $3.9 million, or $0.19 per diluted share, in 2009. The year-over-year change in net loss
reflects the reduced tax benefit of $7.5 million, partially offset by the lower operating loss of
$0.2 million. Per share amounts reflect the effect of the 200-for-1 reverse stock split of our
common stock that occurred on August 3, 2009. Fourth quarter 2009 average share amounts were lower
than average share amounts in the fourth quarter of 2010 as a result of shares of common stock
being issued to Gores in September 2010, and to the owners of Jaytu (d/b/a Sigalert) in connection
with the Sigalert acquisition at the end of December 2009.
Free cash flow(2) usage in the fourth quarter of 2010 was $1.1 million as compared to a
free cash flow usage of $10.5 million in 2009, representing an increased cash flow of $9.4 million.
This was due to favorable working capital changes of $17.2 million and lower capital expenditures
of $1.0 million, partially offset by a higher net loss of $8.0 million and non-cash adjustments of
$0.8 million.
Year ended December 31, 2010(3)
For the year ended December 31, 2010, revenue increased $22.2 million, or 6.5%, to $362.5 million
compared with $340.3 million in 2009.
Network revenue increased to $197.0 million from $183.9 million for 2009, an increase of $13.1
million, or 7.1%. This increase resulted from increased revenue primarily related to sports
programming, including NFL-related programs, the 2010 Winter Olympics, NCAA football, the NCAA
Mens Basketball Championship, and music programming, principally country music. These increases
were partially offset by a decline in talk radio revenue, which was partly due to the cancellation
of certain talk programs.
3
Overall, Metro Traffic revenue for the year ended December 31, 2010 increased to $165.5 million
from $156.4 million in 2009, an increase of $9.1 million, or 5.8%. This
increase was principally related to increased revenue from Metro Traffic Radio advertising of $10.9
million, primarily in financial services, retail, automotive, and restaurant advertising,
partially offset by decreases in travel, entertainment and home improvement services advertising.
It also reflects a decrease in Metro Television revenue of $1.8 million primarily due to reduced
ratings and audience levels that required us to use additional inventory to meet customers
audience requirements.
Operating loss in the year ended December 31, 2010 was $22.0 million compared with an operating
loss of $97.6 million in 2009, or a decrease of $75.6 million. The decreased loss reflects the
absence of the 2009 impairment charge of $50.5 million, an increase in revenue, lower restructuring
and special charges, and lower depreciation and amortization, partially offset by an increase in
operating costs.
Adjusted EBITDA(1) for the year ended December 31, 2010 was $12.1 million, an increase
of $1.7 million from $10.4 million in 2009. This improvement was due to increased Network Radio and
Metro Traffic revenue, partially offset by increased station compensation and payroll-related
expense. The higher station compensation expenses resulted from increased inventory purchases to
support fourth quarter revenue growth and provide a foundation for revenue growth in 2011. The
increase in payroll-related expense reflects additional sales force hires in the first half of 2010
and variable compensation tied to revenue increases.
For the year ended December 31, 2010, net loss was $31.3 million, or $1.50 per diluted share,
compared with a net loss of $82.6 million, or $9.51 per diluted share, in 2009. The year-over-year
change in net loss reflects the absence of the 2009 impairment charge of $50.5 million and lower
restructuring and special charges of $15.6 million, partially offset by reduced tax benefits of
$16.9 million. Per share amounts reflect the effect of the 200-for-1 reverse stock split of our
common stock that occurred on August 3, 2009. Average share amounts for the year ended December 31,
2009 were significantly lower than the year ended December 31, 2010 as a result of the conversions
of shares of preferred stock into common stock in July and August 2009 and the shares issued to
Gores in September 2010.
Free cash flow(2) for the year 2010 was a usage of $0.7 million as compared to a free
cash flow usage of $31.5 million for the comparable period in 2009, representing an increased cash
flow of $30.8 million. This was due to a federal tax refund of $12.9 million in 2010, higher
working capital sources of $11.6 million, other non-cash adjustments of $7.8 million, and a lower
net loss of $0.8 million (absent the 2009 impairment charge of $50.5 million), partially offset by
higher capital expenditures of $2.3 million.
Outlook
Analysts are predicting modest growth for the overall radio industry in 2011, with revenue growth
forecasts ranging from low single digits of 1.3% (Magna) to 3.7% (BIA/Kelsey) or 4.0% (Jim Boyle,
Gilford Securities).
Westwood One is optimistic that recent investments in new programming, renewal of key partnerships
in Network Radio, and increased distribution in Metro Traffic, coupled with investments in the
salesforces of both Network Radio and Metro Traffic, will help
increase revenues for the Company for the full year 2011. In addition, the cost reduction and
margin improvement actions implemented in the first quarter of 2011 are anticipated to yield EBITDA
growth for the full year 2011.
4
About Westwood One
Westwood One (NASDAQ: WWON) is one of the nations largest providers of network radio programming
and one of the largest domestic providers of traffic information in the U.S. Westwood One serves
more than 5,000 radio and 182 TV stations in the U.S. Westwood One provides over 150 news, sports,
music, talk and entertainment programs, features and live events to numerous media partners.
Through its Metro Traffic business, Westwood One provides traffic reporting and local news, sports
and weather to more than 2,250 radio and TV stations. Westwood One also provides digital and other
cross-platform delivery of its Network and Metro Traffic content to radio, television and newspaper
affiliates.
Footnotes to Press Release
(1) Adjusted EBITDA is a non-GAAP financial measure that is reconciled to net cash provided by
(used in) operating activities, its most directly comparable GAAP measure, in the accompanying
financial tables. Adjusted EBITDA is defined as net cash provided by (used in) operating activities
adjusted to exclude the following: interest expense, income tax expense (benefit), restructuring
charges, special charges, other non-operating income, amortization of deferred financing costs and
changes in assets and liabilities, including deferred tax assets and liabilities.
Adjusted EBITDA is used by Westwood One to calculate its compliance with its debt covenants under
the terms of its senior secured notes and senior credit facility. Westwood One believes this
measure is relevant and useful for investors because it allows investors to view performance in the
same manner as Westwood Ones lenders (who also own approximately 22.5% of Westwood Ones equity as
a result of the refinancing, excluding Gores).
Since Adjusted EBITDA is not a measure of performance calculated in accordance with GAAP, it should
not be considered in isolation of, or as a substitute for, consolidated statements of operations
and cash flow data prepared in accordance with GAAP. Adjusted EBITDA as Westwood One calculates it,
may not be comparable to similarly titled measures employed by other companies. In addition, this
measure does not necessarily represent funds available for discretionary use, and is not
necessarily a measure of Westwood Ones ability to fund its cash needs. Westwood One uses Adjusted
EBITDA as a liquidity measure, which is different from operating cash flow, the most directly
comparable GAAP financial measure calculated and prepared in accordance with GAAP. Users of this
financial information should consider the types of events and transactions which are excluded.
5
(2) Free cash flow is a non-GAAP financial measure that is reconciled to net cash provided by (used
in) operating activities, its most directly comparable GAAP measure, in the accompanying financial
tables. Free cash flow is defined by Westwood One as net cash provided by (used in) operating
activities, less capital expenditures. Westwood One uses free cash flow, among other measures, to
evaluate its operating performance. Management believes free cash flow provides investors with an important perspective on Westwood
Ones cash available to service debt and Westwood Ones ability to make strategic acquisitions and
investments, maintain its capital assets and fund ongoing operations. As a result, free cash flow
is a significant measure of Westwood Ones ability to generate long term value. Westwood One
believes the presentation of free cash flow is relevant and useful for investors because it allows
investors to view performance in a manner similar to the method used by management. In addition,
free cash flow is also a primary measure used externally by Westwood Ones investors, analysts and
peers in its industry for purposes of valuation and comparing the operating performance of Westwood
One to other companies in its industry.
As free cash flow is not a measure of performance calculated in accordance with GAAP, free
cash flow should not be considered in isolation of, or as a substitute for, net income as an
indicator of operating performance or net cash provided by (used in) operating activities as a
measure of liquidity. Free cash flow, as Westwood One calculates it, may not be comparable to
similarly titled measures employed by other companies. In addition, free cash flow does not
necessarily represent funds available for discretionary use and is not necessarily a measure of
Westwood Ones ability to fund its cash needs. In arriving at free cash flow, Westwood One adjusts
net cash provided by (used in) operating activities to remove the impact of cash flow timing
differences to arrive at a measure which Westwood One believes more accurately reflects funds
available for discretionary use. Specifically, Westwood One adjusts net cash provided by (used in)
operating activities (the most directly comparable GAAP financial measure) for capital
expenditures, special charges, and deferred taxes, in addition to removing the impact of sources
and or uses of cash resulting from changes in operating assets and liabilities. Accordingly, users
of this financial information should consider the types of events and transactions which are not
reflected.
(3) As a result of our refinancing that closed on April 23, 2009, we applied the acquisition method
of accounting and applied the SEC rules and the authoritative guidance regarding push down
accounting treatment. Accordingly, our consolidated financial statements and transactional records
prior to the closing of the refinancing on April 23, 2009 reflect the historical accounting basis
in our assets and liabilities and are labeled predecessor company, while such records subsequent to
the refinancing are labeled successor company and reflect the push down basis of accounting for the
new fair values in our financial statements. This is presented in our consolidated financial
statements by a vertical black line division which appears between the columns entitled predecessor
company and successor company on the statements and relevant notes. The black line signifies that
the amounts shown for the periods prior to and subsequent to the refinancing are not comparable.
Management, however, continues to use such statements to measure Westwood Ones performance against
comparable prior periods. For purposes of presenting a comparison of our 2009 results to the
current periods, we have presented our 2009 results as the mathematical addition of the predecessor
company and successor company periods. We believe that this presentation provides the most
meaningful information about our results of operations. This approach is not consistent with GAAP,
may yield results that are not strictly comparable on a period-to-period basis and may not reflect
the actual results we would have achieved.
6
Forward-Looking Statements
Certain statements in this release constitute forward-looking statements within the meaning of
the Private Securities Litigation Reform Act of 1995. Such forward-looking statements involve known
and unknown risks, uncertainties and other factors which may cause the actual results, performance
or achievements of Westwood One to be materially different from any future results, performance or
achievements expressed or implied by such forward-looking statements. The words or phrases
guidance, expect, anticipate, estimates and forecast and similar words or expressions are
intended to identify such forward-looking statements. In addition any statements that refer to
expectations or other characterizations of future events or circumstances are forward-looking
statements. Various risks that could cause future results to differ from those expressed by the
forward-looking statements included in this release include, but are not limited to: continued
declines in our operating income; our significant amount of indebtedness and limited liquidity; our
ability to comply with the covenants of our debt; the higher cost of our indebtedness; the
availability of additional financing and future amendments to our debt agreements; our future cash
flow from operations and our ability to achieve our financial forecast; changes to our CBS
arrangement; increased proliferation of free traffic content; introduction of The Portable People
MeterTM; maintenance of an effective system of internal controls; increased competition
and technological changes and innovations; failure to obtain or retain the rights in popular
programming; acceptance of our content; continued consolidation in the industry; further
impairment charges; and Gores influence over our corporate actions. Our key risks are described in
our reports filed with the SEC, including our Annual Report on Form 10-K for the year ended
December 31, 2010. Except as otherwise stated in this news announcement, Westwood One, Inc. does
not undertake any obligation to publicly update or revise any forward-looking statements because of
new information, future events or otherwise.
Media Contact:
Chris Miller
Westwood One
212.641.2108
917-533-7224
chris_miller@westwoodone.com
7
WESTWOOD ONE, INC
CONSOLIDATED STATEMENT OF OPERATIONS
(In thousands, except per share amounts)
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Predecessor |
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Successor Company |
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Company |
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Three Months Ended |
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For the Period |
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December 31, |
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Year Ended December |
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For the Period April 24 to |
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January 1 to April |
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2010 |
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2009 |
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31, 2010 |
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December 31, 2009 |
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23, 2009 |
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(unaudited) |
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Revenue |
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$ |
98,308 |
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$ |
92,342 |
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$ |
362,546 |
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$ |
228,860 |
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$ |
111,474 |
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Operating costs |
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94,946 |
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84,305 |
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342,258 |
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210,805 |
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111,309 |
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Depreciation and amortization |
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4,552 |
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7,564 |
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18,243 |
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21,474 |
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2,584 |
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Corporate general and
administrative expenses |
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4,195 |
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4,523 |
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13,369 |
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10,398 |
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4,519 |
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Goodwill impairment |
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50,501 |
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Restructuring charges |
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477 |
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1,150 |
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2,899 |
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3,976 |
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3,976 |
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Special charges |
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3,521 |
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4,366 |
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7,816 |
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5,554 |
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12,819 |
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Total expenses |
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107,691 |
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101,908 |
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384,585 |
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302,708 |
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135,207 |
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Operating loss |
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(9,383 |
) |
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(9,566 |
) |
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(22,039 |
) |
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(73,848 |
) |
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(23,733 |
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Interest expense |
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6,060 |
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5,164 |
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23,251 |
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14,781 |
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3,222 |
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Other expense (income) |
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(230 |
) |
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(70 |
) |
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1,688 |
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(4 |
) |
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(359 |
) |
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Loss before income tax |
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(15,213 |
) |
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(14,660 |
) |
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(46,978 |
) |
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(88,625 |
) |
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(26,596 |
) |
Income tax benefit |
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(3,336 |
) |
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(10,794 |
) |
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(15,721 |
) |
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(25,025 |
) |
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(7,635 |
) |
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Net loss |
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$ |
(11,877 |
) |
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$ |
(3,866 |
) |
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$ |
(31,257 |
) |
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$ |
(63,600 |
) |
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$ |
(18,961 |
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Net loss attributable to
common stockholders |
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$ |
(11,877 |
) |
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$ |
(3,866 |
) |
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$ |
(31,257 |
) |
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$ |
(145,148 |
) |
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$ |
(22,037 |
) |
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Loss per share: |
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Common Stock |
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Basic |
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$ |
(0.56 |
) |
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$ |
(0.19 |
) |
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$ |
(1.50 |
) |
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$ |
(11.75 |
) |
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$ |
(43.64 |
) |
Diluted |
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$ |
(0.56 |
) |
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$ |
(0.19 |
) |
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$ |
(1.50 |
) |
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$ |
(11.75 |
) |
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$ |
(43.64 |
) |
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Class B stock |
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Basic |
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$ |
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$ |
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Diluted |
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$ |
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$ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares outstanding: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common Stock |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
21,314 |
|
|
|
20,314 |
|
|
|
20,833 |
|
|
|
12,351 |
|
|
|
|
505 |
|
Diluted |
|
|
21,314 |
|
|
|
20,314 |
|
|
|
20,833 |
|
|
|
12,351 |
|
|
|
|
505 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Class B stock |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1 |
|
Diluted |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1 |
|
See Non-GAAP Combined Consolidated Statement of Operations
for comparable 2009 Income Statement data.
8
WESTWOOD ONE, INC
CONSOLIDATED BALANCE SHEETS
(In thousands, except per share amounts)
|
|
|
|
|
|
|
|
|
|
|
December 31, 2010 |
|
|
December 31, 2009 |
|
|
|
|
|
|
|
|
|
|
ASSETS |
|
|
|
|
|
|
|
|
Current assets: |
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
2,938 |
|
|
$ |
4,824 |
|
Accounts receivable, net of allowance for doubtful accounts |
|
|
96,557 |
|
|
|
87,568 |
|
Income tax receivable |
|
|
|
|
|
|
12,355 |
|
Prepaid and other assets |
|
|
18,421 |
|
|
|
20,994 |
|
|
|
|
|
|
|
|
Total current assets |
|
|
117,916 |
|
|
|
125,741 |
|
|
|
|
|
|
|
|
|
|
Property and equipment, net |
|
|
37,047 |
|
|
|
36,265 |
|
Intangible assets, net |
|
|
92,487 |
|
|
|
103,400 |
|
Goodwill |
|
|
38,945 |
|
|
|
38,917 |
|
Other assets |
|
|
1,879 |
|
|
|
2,995 |
|
|
|
|
|
|
|
|
TOTAL ASSETS |
|
$ |
288,274 |
|
|
$ |
307,318 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS (DEFICIT) EQUITY |
|
|
|
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
|
|
|
Accounts payable |
|
$ |
45,907 |
|
|
$ |
40,164 |
|
Amounts payable to related parties |
|
|
859 |
|
|
|
129 |
|
Deferred revenue |
|
|
6,736 |
|
|
|
3,682 |
|
Accrued expenses and other liabilities |
|
|
33,819 |
|
|
|
28,134 |
|
Current maturity of long-term debt |
|
|
|
|
|
|
13,500 |
|
|
|
|
|
|
|
|
Total current liabilities |
|
|
87,321 |
|
|
|
85,609 |
|
|
|
|
|
|
|
|
|
|
Long-term debt |
|
|
136,407 |
|
|
|
122,262 |
|
Deferred tax liability |
|
|
36,174 |
|
|
|
50,932 |
|
Due to Gores |
|
|
10,222 |
|
|
|
11,165 |
|
Other liabilities |
|
|
24,142 |
|
|
|
19,366 |
|
|
|
|
|
|
|
|
TOTAL LIABILITIES |
|
|
294,266 |
|
|
|
289,334 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commitments and Contingencies |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
STOCKHOLDERS (DEFICIT) EQUITY |
|
|
|
|
|
|
|
|
Common stock, $.01 par value: authorized: 5,000,000 shares
issued and outstanding: 21,314 (2010) and 20,544 (2009) |
|
|
213 |
|
|
|
205 |
|
Class B stock, $ .01 par value: authorized: 3,000 shares;
issued and outstanding: 0 |
|
|
|
|
|
|
|
|
Additional paid-in capital |
|
|
88,652 |
|
|
|
81,268 |
|
Net unrealized gain |
|
|
|
|
|
|
111 |
|
Accumulated deficit |
|
|
(94,857 |
) |
|
|
(63,600 |
) |
|
|
|
|
|
|
|
TOTAL STOCKHOLDERS (DEFICIT) EQUITY |
|
|
(5,992 |
) |
|
|
17,984 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL LIABILITIES AND STOCKHOLDERS (DEFICIT) EQUITY |
|
$ |
288,274 |
|
|
$ |
307,318 |
|
|
|
|
|
|
|
|
9
WESTWOOD ONE, INC
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Successor Company |
|
|
|
|
|
|
|
For the Three Months Ended |
|
|
|
|
|
|
For the Period April 24 |
|
|
|
|
|
|
|
December 31, |
|
|
For the Year Ended |
|
|
to |
|
|
|
For the Period January 1 |
|
|
|
2010 |
|
|
2009 |
|
|
December 31, 2010 |
|
|
December 31, 2009 |
|
|
|
to April 23, 2009 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash Flows from Operating Activities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss |
|
$ |
(11,877 |
) |
|
$ |
(3,866 |
) |
|
$ |
(31,257 |
) |
|
$ |
(63,600 |
) |
|
|
$ |
(18,961 |
) |
Adjustments to reconcile net loss to net |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization |
|
|
4,552 |
|
|
|
7,564 |
|
|
|
18,243 |
|
|
|
21,474 |
|
|
|
|
2,584 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Goodwill and intangible asset impairment |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
50,501 |
|
|
|
|
|
|
Deferred taxes |
|
|
(5,291 |
) |
|
|
(9,214 |
) |
|
|
(17,458 |
) |
|
|
(25,038 |
) |
|
|
|
(6,873 |
) |
Federal tax refund |
|
|
|
|
|
|
|
|
|
|
12,940 |
|
|
|
|
|
|
|
|
|
|
Paid-in-kind interest |
|
|
1,386 |
|
|
|
1,505 |
|
|
|
5,734 |
|
|
|
4,427 |
|
|
|
|
|
|
Non-cash equity-based compensation |
|
|
888 |
|
|
|
925 |
|
|
|
3,559 |
|
|
|
3,310 |
|
|
|
|
2,110 |
|
Change in fair value of derivative liability |
|
|
(382 |
) |
|
|
|
|
|
|
1,538 |
|
|
|
|
|
|
|
|
|
|
Traffic land write-down |
|
|
321 |
|
|
|
1,852 |
|
|
|
321 |
|
|
|
1,852 |
|
|
|
|
|
|
Loss on disposal of property and equipment |
|
|
258 |
|
|
|
188 |
|
|
|
258 |
|
|
|
|
|
|
|
|
188 |
|
Gain on sale of marketable securities |
|
|
(98 |
) |
|
|
(361 |
) |
|
|
(98 |
) |
|
|
|
|
|
|
|
|
|
Amortization of deferred financing costs |
|
|
23 |
|
|
|
|
|
|
|
23 |
|
|
|
|
|
|
|
|
331 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Changes in assets and liabilities, net of effect of
(Increase) decrease in accounts receivable |
|
|
(10,175 |
) |
|
|
(6,704 |
) |
|
|
(8,989 |
) |
|
|
(3,608 |
) |
|
|
|
10,313 |
|
Decrease (increase) in prepaid and other assets |
|
|
6,468 |
|
|
|
210 |
|
|
|
2,947 |
|
|
|
(4,394 |
) |
|
|
|
3,187 |
|
Increase (decrease) in deferred revenue |
|
|
3,487 |
|
|
|
(3,547 |
) |
|
|
3,054 |
|
|
|
749 |
|
|
|
|
536 |
|
(Decrease) increase in income taxes payable |
|
|
(2 |
) |
|
|
(485 |
) |
|
|
|
|
|
|
180 |
|
|
|
|
28 |
|
Increase (decrease) in accounts payable,
accrued expenses
and other liabilities |
|
|
11,068 |
|
|
|
10,122 |
|
|
|
16,591 |
|
|
|
(4,142 |
) |
|
|
|
2,861 |
|
Increase (decrease) in amounts payable to
related parties |
|
|
84 |
|
|
|
(5,853 |
) |
|
|
730 |
|
|
|
(5,853 |
) |
|
|
|
2,919 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net change in other assets and liabilities |
|
|
10,930 |
|
|
|
(6,257 |
) |
|
|
14,333 |
|
|
|
(17,068 |
) |
|
|
|
19,844 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by (used in) operating
activities |
|
|
710 |
|
|
|
(7,664 |
) |
|
|
8,136 |
|
|
|
(24,142 |
) |
|
|
|
(777 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash Flows from Investing Activities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital expenditures |
|
|
(1,785 |
) |
|
|
(2,829 |
) |
|
|
(8,843 |
) |
|
|
(5,184 |
) |
|
|
|
(1,384 |
) |
Proceeds from sale of marketable securities |
|
|
886 |
|
|
|
|
|
|
|
886 |
|
|
|
|
|
|
|
|
|
|
Acquisition of business |
|
|
|
|
|
|
(1,250 |
) |
|
|
|
|
|
|
(1,250 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash used in investing activities |
|
|
(899 |
) |
|
|
(4,079 |
) |
|
|
(7,957 |
) |
|
|
(6,434 |
) |
|
|
|
(1,384 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash Flows from Financing Activities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Proceeds from Revolving Credit Facility |
|
|
|
|
|
|
16,000 |
|
|
|
10,000 |
|
|
|
16,000 |
|
|
|
|
|
|
Repayment of Revolving Credit Facility |
|
|
|
|
|
|
(11,000 |
) |
|
|
|
|
|
|
(11,000 |
) |
|
|
|
|
|
Repayments of Senior Notes |
|
|
(532 |
) |
|
|
|
|
|
|
(16,032 |
) |
|
|
|
|
|
|
|
|
|
Issuance of common stock |
|
|
|
|
|
|
|
|
|
|
5,000 |
|
|
|
|
|
|
|
|
|
|
Payments of capital lease obligations |
|
|
(399 |
) |
|
|
(227 |
) |
|
|
(1,033 |
) |
|
|
(603 |
) |
|
|
|
(271 |
) |
Proceeds from building financing |
|
|
|
|
|
|
6,998 |
|
|
|
|
|
|
|
6,998 |
|
|
|
|
|
|
Proceeds from term loan |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
20,000 |
|
|
|
|
|
|
Debt repayments |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(25,000 |
) |
|
|
|
|
|
Issuance of Series B Convertible Preferred Stock |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
25,000 |
|
|
|
|
|
|
Issuance of Series A Convertible Preferred Stock
and warrants |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Termination of interest swap agreements |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deferred financing costs |
|
|
|
|
|
|
228 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash (used in) provided by financing
activities |
|
|
(931 |
) |
|
|
11,999 |
|
|
|
(2,065 |
) |
|
|
31,395 |
|
|
|
|
(271 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net increase in cash and cash equivalents |
|
|
(1,120 |
) |
|
|
256 |
|
|
|
(1,886 |
) |
|
|
819 |
|
|
|
|
(2,432 |
) |
Cash and cash equivalents, beginning of
period |
|
|
4,058 |
|
|
|
4,568 |
|
|
|
4,824 |
|
|
|
4,005 |
|
|
|
|
6,437 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents, end of period |
|
$ |
2,938 |
|
|
$ |
4,824 |
|
|
$ |
2,938 |
|
|
$ |
4,824 |
|
|
|
$ |
4,005 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10
WESTWOOD ONE, INC
ADJUSTED EBITDA RECONCILIATION
(In thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended December 31, |
|
|
Twelve Months Ended December 31, |
|
|
|
2010 |
|
|
2009 |
|
|
2010 |
|
|
2009 |
|
Net loss |
|
$ |
(11,877 |
) |
|
$ |
(3,866 |
) |
|
$ |
(31,257 |
) |
|
$ |
(82,561 |
) |
Plus: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense |
|
|
6,060 |
|
|
|
5,164 |
|
|
|
23,251 |
|
|
|
18,003 |
|
Depreciation and amortization |
|
|
4,552 |
|
|
|
7,564 |
|
|
|
18,243 |
|
|
|
24,058 |
|
Income taxes provision (benefit) |
|
|
(3,336 |
) |
|
|
(10,794 |
) |
|
|
(15,721 |
) |
|
|
(32,660 |
) |
Restructuring, special charges
and other (a) |
|
|
3,999 |
|
|
|
7,168 |
|
|
|
11,312 |
|
|
|
27,977 |
|
Stock-based compensation |
|
|
888 |
|
|
|
925 |
|
|
|
3,559 |
|
|
|
5,420 |
|
Sigalert earn-out (b) |
|
|
813 |
|
|
|
|
|
|
|
1,063 |
|
|
|
|
|
Other non-operating losses (gains) |
|
|
(132 |
) |
|
|
(70 |
) |
|
|
1,786 |
|
|
|
(363 |
) |
Losses (gains) on sales of securities |
|
|
(98 |
) |
|
|
(2 |
) |
|
|
(98 |
) |
|
|
(2 |
) |
Intangible assets and goodwill
impairment |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
50,501 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA |
|
$ |
869 |
|
|
$ |
6,089 |
|
|
$ |
12,138 |
|
|
$ |
10,373 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a) |
|
Restructuring, special charges and other includes expense of $322,
$918, and $1,652 are classified as general and administrative expense
on the Statement of Operations for the three months ended December 31,
2010 and the years ended December 31, 2010 and 2009, respectively. |
|
(b) |
|
Sigalert earn-out refers to payments made to the members of Jaytu
under the acquisition agreements in connection with the delivery and
acceptance of certain traffic products in accordance with
specifications mutually agreed upon by the parties. |
WESTWOOD ONE, INC
FREE CASH FLOW RECONCILIATION
(In thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended December 31, |
|
|
Year Ended December 31, |
|
|
|
2010 |
|
|
2009 |
|
|
2010 |
|
|
2009 |
|
Net cash provided by
(used in) operating
activities |
|
$ |
710 |
|
|
$ |
(7,664 |
) |
|
$ |
8,136 |
|
|
$ |
(24,919 |
) |
(Less) Capital expenditures |
|
|
(1,785 |
) |
|
|
(2,829 |
) |
|
|
(8,843 |
) |
|
|
(6,568 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Free Cash Flow |
|
$ |
(1,075 |
) |
|
$ |
(10,493 |
) |
|
$ |
(707 |
) |
|
$ |
(31,487 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
11
WESTWOOD ONE, INC.
NON-GAAP COMBINED CONSOLIDATED STATEMENT OF OPERATIONS
(In thousands)
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Successor Company |
|
|
Predecessor Company |
|
|
Combined Total |
|
|
|
For the Period April 24 to |
|
|
For the Period January 1 to |
|
|
Twelve Months Ended |
|
|
|
December 31, 2009 |
|
|
April 23, 2009 |
|
|
December 31, 2009 |
|
Revenue |
|
$ |
228,860 |
|
|
$ |
111,474 |
|
|
$ |
340,334 |
|
|
|
|
|
|
|
|
|
|
|
Operating costs |
|
|
210,805 |
|
|
|
111,309 |
|
|
|
322,114 |
|
Depreciation and amortization |
|
|
21,474 |
|
|
|
2,584 |
|
|
|
24,058 |
|
Corporate general and
administrative expenses |
|
|
10,398 |
|
|
|
4,519 |
|
|
|
14,917 |
|
Goodwill and intangible
impairment |
|
|
50,501 |
|
|
|
|
|
|
|
50,501 |
|
Restructuring charges |
|
|
3,976 |
|
|
|
3,976 |
|
|
|
7,952 |
|
Special charges |
|
|
5,554 |
|
|
|
12,819 |
|
|
|
18,373 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total expenses |
|
|
302,708 |
|
|
|
135,207 |
|
|
|
437,915 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating loss |
|
|
(73,848 |
) |
|
|
(23,733 |
) |
|
|
(97,581 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense |
|
|
14,781 |
|
|
|
3,222 |
|
|
|
18,003 |
|
Other expense (income) |
|
|
(4 |
) |
|
|
(359 |
) |
|
|
(363 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss before income tax |
|
|
(88,625 |
) |
|
|
(26,596 |
) |
|
|
(115,221 |
) |
Income tax benefit |
|
|
(25,025 |
) |
|
|
(7,635 |
) |
|
|
(32,660 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss |
|
$ |
(63,600 |
) |
|
$ |
(18,961 |
) |
|
$ |
(82,561 |
) |
|
|
|
|
|
|
|
|
|
|
12