Summary of Significant Accounting Policies

6 Months Ended

Jun. 30, 2011

Summary of Significant Accounting Policies [Abstract]

Summary of Significant Accounting Policies

1. Summary of Significant Accounting Policies

     Basis of Presentation

     The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States for annual financial statements.

     In our opinion, the accompanying financial statements include all adjustments of a normal, recurring nature considered necessary for a fair presentation of our financial position as of June 30, 2011 and the results of operations for the three and six months ended June 30, 2011 and 2010. Results of operations for the six months ended June 30, 2011 are not necessarily indicative of the results that may be expected for the year ending December 31, 2011.

     For further information, refer to the consolidated financial statements and footnotes thereto included in the Saga Communications, Inc. Annual Report on Form 10-K for the year ended December 31, 2010.

     The Company has evaluated events and transactions occurring subsequent to the balance sheet date of June 30, 2011, for items that should potentially be recognized in these financial statements or discussed within the notes to the financial statements.

     Earnings Per Share Information

     The following table sets forth the computation of basic and diluted earnings per share:

	Three Months Ended June 30,				Six Months Ended June 30,
	2011		2010		2011		2010
	(In thousands, except per share data)
Numerator:
Net income available to common stockholders	$	3,170	$	3,695	$	4,832	$	7,012
Denominator:
Denominator for basic earnings per share — weighted average shares		4,242		4,236		4,237		4,229
Effect of dilutive securities		3		1		5		—
Denominator for diluted earnings per share — adjusted weighted-average shares and assumed conversions		4,245		4,237		4,242		4,229
Basic earnings per share	$	.75	$	.87	$	1.14	$	1.66
Diluted earnings per share	$	.75	$	.87	$	1.14	$	1.66

     The number of stock options outstanding that had an antidilutive effect on our earnings per share calculation, and therefore have been excluded from diluted earnings per share calculation, was 228,000 for the three and six months ended June 30, 2011 and 350,000 for the three and six months ended June 30, 2010. The actual effect of these shares, if any, on the diluted earnings per share calculation will vary significantly depending on the fluctuation in the stock price.

     Fair Value of Financial Instruments

     Short-term investments, which include certificates of deposit, approximate fair value due to their short maturities.

     Income Taxes

     Our effective tax rate is higher than the federal statutory rate as a result of the inclusion of state taxes in the income tax amount.

     Time Brokerage Agreements

     We have entered into Time Brokerage Agreements (“TBAs”) or Local Marketing Agreements (“LMA’s”) in certain markets. In a typical TBA/LMA, the FCC licensee of a station makes available, for a fee, blocks of air time on its station to another party that supplies programming to be broadcast during that air time and sells their own commercial advertising announcements during the time periods specified. Revenue and expenses related to TBA’s/LMA’s are included in the accompanying unaudited Condensed Consolidated Statements of Income.