Radio One, Inc. Reports Third Quarter Results

WASHINGTON, Nov. 7, 2013 /PRNewswire/ -- Radio One, Inc. (NASDAQ: ROIAK and ROIA) today reported its results for the quarter ended September 30, 2013.  Net revenue was approximately $118.4 million, an increase of 7.7% from the same period in 2012. Station operating income1 was approximately $44.8 million, an increase of 9.7% from the same period in 2012. The Company reported operating income of approximately $21.8 million for the three months ended September 30, 2013, compared to operating income of $21.5 million for the same period in 2012. Net loss was approximately $13.2 million or $0.28 per share compared to a net loss of $13.1 million or $0.26 per share, for the same period in 2012. 

(Logo: http://photos.prnewswire.com/prnh/20090806/PH57529LOGO)

Alfred C. Liggins, III, Radio One's CEO and President stated, "Overall I am pleased with our 12.5% increase in adjusted EBITDA2. Our radio business, including Reach Media, grew revenues by 3.4% year-to-year despite the toughening political comparatives. Propelled by strong summer ratings, TV One posted revenue and adjusted EBITDA growth of 13.7% and 37.2% respectively, and our internet division showed solid progress. Excluding political, our Q4 radio revenues are currently pacing up mid-single digits.  Despite the $6.1 million of cyclical political revenue that we booked in Q4 2012, we expect Q4 radio revenues to finish approximately flat, which will be quite an achievement given that 2012 was a record year for our political revenues. As a result of our EBITDA growth, we have steadily been improving our leverage profile, and for the first time since Q1 2009, our total leverage ratio as measured by our credit agreement has dropped below 7.0x; our focus remains to continue this positive trend."

RESULTS OF OPERATIONS



















Three Months Ended September 30,


Nine Months Ended September 30, 



2013


2012


2013


2012





(as adjusted)3




(as adjusted)3

STATEMENT OF OPERATIONS

(unaudited)


(unaudited)



(in thousands, except share data)


(in thousands, except share data)











NET REVENUE

$                  118,391


$                  109,894


$                  337,105


$                  318,688


OPERATING EXPENSES









Programming and technical, excluding stock-based compensation

37,176


32,454


100,649


96,582


Selling, general and administrative, excluding stock-based compensation

36,400


36,593


110,143


106,894


Corporate selling, general and administrative, excluding stock-based compensation

9,684


9,613


27,107


29,003


Stock-based compensation

55


37


145


127


Depreciation and amortization 

9,571


9,699


28,600


29,161


Impairment of long-lived assets

3,710


-


14,880


313


Total operating expenses 

96,596


88,396


281,524


262,080


Operating income

21,795


21,498


55,581


56,608


INTEREST INCOME

23


108


165


155


INTEREST EXPENSE

22,336


22,089


66,811


68,584


OTHER (INCOME) EXPENSE, net

(29)


681


(99)


1,284


Loss before provision for income taxes, noncontrolling interest in income

of subsidiaries and income (loss) from discontinued operations

(489)


(1,164)


(10,966)


(13,105)


PROVISION FOR INCOME TAXES

8,415


9,051


19,798


25,814


Net loss from continuing operations

(8,904)


(10,215)


(30,764)


(38,919)


INCOME (LOSS) FROM DISCONTINUED OPERATIONS, net of tax

-


(40)


893


(56)


CONSOLIDATED NET LOSS

(8,904)


(10,255)


(29,871)


(38,975)


NET INCOME ATTRIBUTABLE TO NONCONTROLLING INTERESTS

4,317


2,809


15,670


10,663


CONSOLIDATED NET LOSS ATTRIBUTABLE TO COMMON STOCKHOLDERS

$                  (13,221)


$                  (13,064)


$                  (45,541)


$                  (49,638)











AMOUNTS ATTRIBUTABLE TO COMMON STOCKHOLDERS









NET LOSS FROM CONTINUING OPERATIONS

$                  (13,221)


$                  (13,024)


$                  (46,434)


$                  (49,582)


INCOME (LOSS) FROM DISCONTINUED OPERATIONS, net of tax

-


(40)


893


(56)


CONSOLIDATED NET LOSS ATTRIBUTABLE TO COMMON STOCKHOLDERS

$                  (13,221)


$                  (13,064)


$                  (45,541)


$                  (49,638)











Weighted average shares outstanding - basic4

47,443,031


50,019,048


48,680,979


50,010,406


Weighted average shares outstanding - diluted5

47,443,031


50,019,048


48,680,979


50,010,406

 


Three Months Ended September 30,


Nine Months Ended September 30, 


2013


2012


2013


2012




(as adjusted)3




(as adjusted)3

PER SHARE DATA - basic and diluted:

(unaudited)


(unaudited)


(in thousands, except per share data)


(in thousands, except per share data)









    Net loss from continuing operations (basic)

$                      (0.28)


$                  (0.26)


$                    (0.95)


$                  (0.99)

    Income (loss) from discontinued operations, net of tax (basic)

0.00


(0.00)


0.02


(0.00)

    Consolidated net loss attributable to common stockholders (basic)

$                      (0.28)


$                  (0.26)


$                    (0.94)

*

$                  (0.99)









    Net loss from continuing operations (diluted)

$                      (0.28)


$                  (0.26)


$                    (0.95)


$                  (0.99)

    Income (loss) from discontinued operations, net of tax (diluted)

0.00


(0.00)


0.02


(0.00)

    Consolidated net loss attributable to common stockholders (diluted)

$                      (0.28)


$                  (0.26)


$                    (0.94)

*

$                  (0.99)









SELECTED OTHER DATA








Station operating income 1

$                    44,815


$                40,847


$                126,313


$              115,212

Station operating income margin (% of net revenue)

37.9%


37.2%


37.5%


36.2%









Station operating income reconciliation:
















    Consolidated net loss attributable to common stockholders

$                  (13,221)


$              (13,064)


$                (45,541)


$              (49,638)









    Add back non-station operating income items included in consolidated net loss:








Interest income

(23)


(108)


(165)


(155)

Interest expense

22,336


22,089


66,811


68,584

Provision for income taxes

8,415


9,051


19,798


25,814

Corporate selling, general and administrative expenses

9,684


9,613


27,107


29,003

Stock-based compensation

55


37


145


127

Other (income) expense, net

(29)


681


(99)


1,284

Depreciation and amortization

9,571


9,699


28,600


29,161

Noncontrolling interest in income of subsidiaries

4,317


2,809


15,670


10,663

Impairment of long-lived assets

3,710


-


14,880


313

Loss (income) from discontinued operations, net of tax

-


40


(893)


56

Station operating income

$                    44,815


$                40,847


$                126,313


$              115,212









Adjusted EBITDA2

$                    35,131


$                31,234


$                  99,206


$                86,209









Adjusted EBITDA reconciliation:
















    Consolidated net loss attributable to common stockholders

$                  (13,221)


$              (13,064)


$                (45,541)


$              (49,638)

Interest income

(23)


(108)


(165)


(155)

Interest expense

22,336


22,089


66,811


68,584

Provision for income taxes

8,415


9,051


19,798


25,814

Depreciation and amortization

9,571


9,699


28,600


29,161

EBITDA

$                    27,078


$                27,667


$                  69,503


$                73,766

Stock-based compensation

55


37


145


127

Other (income) expense, net

(29)


681


(99)


1,284

Noncontrolling interest in income of subsidiaries

4,317


2,809


15,670


10,663

Impairment of long-lived assets

3,710


-


14,880


313

Loss (income) from discontinued operations, net of tax

-


40


(893)


56

Adjusted EBITDA

$                    35,131


$                31,234


$                  99,206


$                86,209









*Per share amounts do not add due to rounding.








 


September 30, 2013


December 31, 2012

(unaudited) 





(in thousands)

SELECTED BALANCE SHEET DATA:



Cash and cash equivalents

$                    48,317


$                   57,255


Intangible assets, net

1,157,126


1,202,562


Total assets

1,420,031


1,460,195


Total debt (including current portion)

816,208


818,718


Total liabilities

1,105,715


1,092,844


Total equity

301,670


354,498


Redeemable noncontrolling interest

12,646


12,853


Noncontrolling interest

208,188


210,698








Current Amount Outstanding


Applicable Interest Rate


(in thousands)



SELECTED LEVERAGE DATA:



Senior bank term debt, net of original issue discount of approximately $4.2 million (subject to variable rates) (a)

$                  370,174


7.50%


12 1/2%/15% senior subordinated notes (fixed rate)

327,034


12.50%


10% Senior Secured TV One Notes due March 2016 (fixed rate)

119,000


10.00%

 

(a)

Subject to variable Libor plus a spread that is incorporated into the applicable interest rate set forth above.

 

Cautionary Note Regarding Forward-Looking Statements

This press release includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements represent management's current expectations and are based upon information available to Radio One at the time of this release. These forward-looking statements involve known and unknown risks, uncertainties and other factors, some of which are beyond Radio One's control, that may cause the actual results to differ materially from any future results, performance or achievements expressed or implied by such forward-looking statements.  Important factors that could cause actual results to differ materially are described in Radio One's reports on Forms 10-K/A, 10-K, 10-Q/A, 10-Q, 8-K and other filings with the Securities and Exchange Commission (the "SEC"). Radio One does not undertake any duty to update any forward-looking statements.

Net revenue increased to approximately $118.4 million for the quarter ended September 30, 2013, from approximately $109.9 million for the same period in 2012, an increase of 7.7%. Net revenue from the radio business, including Reach Media, increased 3.4% for the quarter ended September 30, 2013 compared to the same period in 2012. Within our Cable Television segment, we recognized approximately $37.8 million of revenue during the three months ended September 30, 2013, versus approximately $33.2 million of revenue during the comparable period in 2012. Finally, net revenues for our internet business increased 37.6% for the three months ended September 30, 2013, compared to the same period in 2012 due to growth in advertising and studio services, where Interactive One provides services to other publishers.

Operating expenses, excluding depreciation and amortization, stock-based compensation and impairment of long-lived assets increased to approximately $83.3 million for the quarter ended September 30, 2013, from approximately $78.7 million for the quarter ended September 30, 2012, an increase of 5.8%. The increase for the three months ended September 30, 2013, compared to the same period in 2012 is primarily due to an increase in programming and technical expenses related to higher content amortization as TV One continues to expand its content programming.

Depreciation and amortization expense decreased to approximately $9.6 million compared to approximately $9.7 million for the quarters ended September 30, 2013 and 2012, respectively. The decrease was due to the completion of amortization for certain intangible assets and the completion of useful lives for certain assets. 

Impairment of long-lived assets for the three months ended September 30, 2013, increased to approximately $3.7 million and related to a non-cash impairment charge recorded to reduce the carrying value of our Boston and Cleveland radio broadcasting licenses.

Interest expense increased to approximately $22.3 million for the quarter ended September 30, 2013, from approximately $22.1 million for the same period in 2012, an increase of 1.1%. The Company made cash interest payments of approximately $20.9 million for the quarter ended September 30, 2013, compared to cash interest payments of approximately $21.0 million for the quarter ended September 30, 2012. Through May 14, 2012, interest on the Company's 12 1/2%/15% Senior Subordinated Notes ("Senior Subordinated Notes") was payable, at our election, at an all-inclusive rate of 15%, partially in cash and partially through the issuance of additional Senior Subordinated Notes (a "PIK Election") on a quarterly basis.  The PIK Election expired on May 14, 2012, and interest accruing on the Senior Subordinated Notes from and after May 15, 2012, accrued at a lower rate of 12 1/2% and was payable in cash.  We continually evaluate opportunities based upon market conditions to refinance our outstanding indebtedness in order to reduce our borrowing costs, extend maturities and/or increase our operating flexibility.  There can be no guarantee that any such refinancing opportunities will be available on acceptable terms or at all.

The provision for income taxes for the quarter ended September 30, 2013, was approximately $8.4 million compared to approximately $9.1 million for the comparable period in 2012, primarily attributable to the deferred tax liability ("DTL") for indefinite-lived intangible assets. Because our income tax expense does not have a correlation to our pre-tax earnings, changes in those earnings can have a significant impact on the income tax expense we recognize. As a result, we believe the actual effective tax rate best represents the estimated effective rate for the three month periods ended September 30, 2013 and 2012. The Company paid $221,000 and $271,000 in taxes for the quarters ended September 30, 2013 and 2012, respectively.

The increase in noncontrolling interests in income of subsidiaries is due primarily to greater net income generated by TV One and Reach Media during the three months ended September 30, 2013, compared to the 2012 period. 

Other pertinent financial information includes capital expenditures of approximately $1.3 million and $2.8 million for the quarters ended September 30, 2013 and 2012, respectively.  The Company received dividends from TV One in the amount of approximately $6.2 million and $2.0 million for the quarters ended September 30, 2013 and 2012, respectively. As of September 30, 2013, the Company had total debt (net of cash balances) of approximately $767.9 million. The Company's cash and cash equivalents by segment are as follows:  Radio and Internet, approximately $24.8 million; Reach Media, approximately $4.8 million; and Cable Television, approximately $18.7 million. In addition to cash and cash equivalents, the Cable Television segment also has short-term investments of approximately $3.2 million and long-term investments of $72,000. During the three months ended September 30, 2013, the Company repurchased 512,300 shares of Class D common stock in the amount of $1,209,108 and 1,100 shares of Class A common stock in the amount of $2,655. There were no stock repurchases made during the three months ended September 30, 2012.

Supplemental Financial Information:

For comparative purposes, the following more detailed, unaudited statements of operations for the three and nine months ended September 30, 2013 and 2012 are included.  These detailed, unaudited and adjusted statements of operations include certain reclassifications associated with accounting for discontinued operations.  These reclassifications had no effect on previously reported net income or loss, or any other previously reported statements of operations, balance sheet or cash flow amounts.

Effective January 1, 2013, the Radio Broadcasting segment contributed the assets and operations of its Syndication One urban programming line-up to the Reach Media segment. We consolidated our syndication operations within Reach Media to leverage that platform to create the leading syndicated radio network targeted to the African-American audience.  In connection with the consolidation, we shifted our syndicated programming sales to an internal sales force operating out of Reach Media.  Segment data for the three and nine months ended September 30, 2012, has been reclassified to conform to the current period presentation.






Three Months Ended September 30, 2013






(in thousands, unaudited)
































Corporate/








Radio  


Reach




Cable


Eliminations/






Consolidated

Broadcasting

Media


Internet

Television

Other







STATEMENT OF OPERATIONS:






























NET REVENUE

$

118,391

$

59,281

$

16,872

$

6,125

$

37,786

$

(1,673)


OPERATING EXPENSES:














Programming and technical 


37,176


10,946


8,088


2,160


17,541


(1,559)


Selling, general and administrative


36,400


21,074


4,445


3,948


7,260


(327)


Corporate selling, general and administrative


9,684


-


1,168


-


1,669


6,847


Stock-based compensation


55


14


-


-


-


41


Depreciation and amortization


9,571


1,645


310


588


6,555


473


Impairment of long-lived assets


3,710


3,710


-


-


-


-


Total operating expenses


96,596


37,389


14,011


6,696


33,025


5,475


           Operating income (loss)


21,795


21,892


2,861


(571)


4,761


(7,148)


INTEREST INCOME


23


-


-


-


17


6


INTEREST EXPENSE


22,336


303


-


-


3,039


18,994


OTHER INCOME, net


(29)


-


-


-


-


(29)


(Loss) income before provision for income taxes, noncontrolling interest in income of subsidiaries and income from discontinued operations


(489)


21,589


2,861


(571)


1,739


(26,107)


PROVISION FOR INCOME TAXES


8,415


7,387


1,028


-


-


-


Net (loss) income from continuing operations


(8,904)


14,202


1,833


(571)


1,739


(26,107)


INCOME FROM DISCONTINUED OPERATIONS, net of tax


-


-


-


-


-


-


CONSOLIDATED NET (LOSS) INCOME 


(8,904)


14,202


1,833


(571)


1,739


(26,107)


NET INCOME ATTRIBUTABLE TO NONCONTROLLING INTERESTS


4,317


-


-


-


-


4,317


NET (LOSS) INCOME ATTRIBUTABLE TO COMMON STOCKHOLDERS

$

(13,221)

$

14,202

$

1,833

$

(571)

$

1,739

$

(30,424)


















Adjusted EBITDA2

$

35,131

$

27,261

$

3,171

$

17

$

11,316

$

(6,634)

 






Three Months Ended September 30, 2012






(in thousands, unaudited, as adjusted)3
































Corporate/








Radio  


Reach




Cable


Eliminations/






Consolidated

Broadcasting

Media


Internet

Television

Other







STATEMENT OF OPERATIONS:






























NET REVENUE

$

109,894

$

58,353

$

15,321

$

4,452

$

33,232

$

(1,464)


OPERATING EXPENSES:














Programming and technical 


32,454


10,510


7,683


2,104


13,168


(1,011)


Selling, general and administrative


36,593


21,097


4,175


2,784


9,263


(726)


Corporate selling, general and administrative


9,613


-


1,875


-


2,552


5,186


Stock-based compensation


37


20


-


-


-


17


Depreciation and amortization


9,699


1,574


323


795


6,707


300


Impairment of long-lived assets


-


-


-


-


-


-


Total operating expenses


88,396


33,201


14,056


5,683


31,690


3,766


           Operating income (loss) 


21,498


25,152


1,265


(1,231)


1,542


(5,230)


INTEREST INCOME


108


-


1


-


34


73


INTEREST EXPENSE


22,089


218


-


-


3,039


18,832


OTHER EXPENSE (INCOME), net


681


5


-


-


604


72


(Loss) income before provision for income taxes, noncontrolling interest in income of subsidiaries and loss from discontinued operations


(1,164)


24,929


1,266


(1,231)


(2,067)


(24,061)


PROVISION FOR INCOME TAXES


9,051


8,809


242


-


-


-


Net (loss) income from continuing operations


(10,215)


16,120


1,024


(1,231)


(2,067)


(24,061)


LOSS FROM DISCONTINUED OPERATIONS, net of tax


(40)


(40)


-


-


-


-


CONSOLIDATED NET (LOSS) INCOME 


(10,255)


16,080


1,024


(1,231)


(2,067)


(24,061)


NET INCOME ATTRIBUTABLE TO NONCONTROLLING INTERESTS


2,809


-


-


-


-


2,809


NET (LOSS) INCOME ATTRIBUTABLE TO COMMON STOCKHOLDERS

$

(13,064)

$

16,080

$

1,024

$

(1,231)

$

(2,067)

$

(26,870)


















Adjusted EBITDA2

$

31,234

$

26,746

$

1,588

$

(436)

$

8,249

$

(4,913)

 






Nine Months Ended September 30, 2013






(in thousands, unaudited)
































Corporate/








Radio  


Reach




Cable


Eliminations/






Consolidated

Broadcasting

Media


Internet

Television

Other







STATEMENT OF OPERATIONS:






























NET REVENUE

$

337,105

$

167,898

$

44,428

$

17,612

$

111,506

$

(4,339)


OPERATING EXPENSES:














Programming and technical 


100,649


32,690


23,003


6,142


42,873


(4,059)


Selling, general and administrative


110,143


63,938


13,762


11,445


21,927


(929)


Corporate selling, general and administrative


27,107


-


3,382


-


5,899


17,826


Stock-based compensation


145


38


-


-


-


107


Depreciation and amortization


28,600


4,720


950


1,902


19,773


1,255


Impairment of long-lived assets


14,880


14,880


-


-


-


-


Total operating expenses


281,524


116,266


41,097


19,489


90,472


14,200


           Operating income (loss) 


55,581


51,632


3,331


(1,877)


21,034


(18,539)


INTEREST INCOME


165


-


-


-


44


121


INTEREST EXPENSE


66,811


888


-


-


9,117


56,806


OTHER INCOME, net


(99)


(11)


-


-


-


(88)


(Loss) income before provision for income taxes, noncontrolling interest in income of subsidiaries and income from discontinued operations


(10,966)


50,755


3,331


(1,877)


11,961


(75,136)


PROVISION FOR INCOME TAXES


19,798


18,298


1,500


-


-


-


Net (loss) income from continuing operations


(30,764)


32,457


1,831


(1,877)


11,961


(75,136)


INCOME FROM DISCONTINUED OPERATIONS, net of tax


893


893


-


-


-


-


CONSOLIDATED NET (LOSS) INCOME


(29,871)


33,350


1,831


(1,877)


11,961


(75,136)


NET INCOME ATTRIBUTABLE TO NONCONTROLLING INTERESTS


15,670


-


-


-


-


15,670


NET (LOSS) INCOME ATTRIBUTABLE TO COMMON STOCKHOLDERS

$

(45,541)

$

33,350

$

1,831

$

(1,877)

$

11,961

$

(90,806)


















Adjusted EBITDA2

$

99,206

$

71,270

$

4,281

$

25

$

40,807

$

(17,177)

 






Nine Months Ended September 30, 2012






(in thousands, unaudited, as adjusted)3
































Corporate/








Radio  


Reach




Cable


Eliminations/






Consolidated

Broadcasting


Media


Internet

Television

Other







STATEMENT OF OPERATIONS:






























NET REVENUE

$

318,688

$

166,064

$

44,038

$

14,659

$

97,722

$

(3,795)


OPERATING EXPENSES:














Programming and technical 


96,582


32,964


23,303


6,183


37,269


(3,137)


Selling, general and administrative


106,894


64,376


12,836


9,067


21,954


(1,339)


Corporate selling, general and administrative


29,003


-


6,228


-


6,670


16,105


Stock-based compensation


127


52


-


-


-


75


Depreciation and amortization


29,161


4,774


979


2,432


20,219


757


Impairment of long-lived assets


313


313


-


-


-


-


Total operating expenses


262,080


102,479


43,346


17,682


86,112


12,461


           Operating income (loss) 


56,608


63,585


692


(3,023)


11,610


(16,256)


INTEREST INCOME


155


-


5


-


48


102


INTEREST EXPENSE


68,584


537


-


-


9,117


58,930


OTHER EXPENSE (INCOME),  net


1,284


(10)


-


-


605


689


(Loss) income before provision for (benefit from) income taxes, noncontrolling interest in income of subsidiaries and loss from discontinued operations


(13,105)


63,058


697


(3,023)


1,936


(75,773)


PROVISION FOR (BENEFIT FROM) INCOME TAXES


25,814


26,196


(382)


-


-


-


Net (loss) income from continuing operations


(38,919)


36,862


1,079


(3,023)


1,936


(75,773)


LOSS FROM DISCONTINUED OPERATIONS, net of tax


(56)


(56)


-


-


-


-


CONSOLIDATED NET (LOSS) INCOME


(38,975)


36,806


1,079


(3,023)


1,936


(75,773)


NET INCOME ATTRIBUTABLE TO NONCONTROLLING INTERESTS


10,663


-


-


-


-


10,663


NET (LOSS) INCOME ATTRIBUTABLE TO COMMON STOCKHOLDERS

$

(49,638)

$

36,806

$

1,079

$

(3,023)

$

1,936

$

(86,436)


















Adjusted EBITDA2

$

86,209

$

68,724

$

1,671

$

(591)

$

31,829

$

(15,424)

 

Radio One, Inc. will hold a conference call to discuss its results for third fiscal quarter of 2013. This conference call is scheduled for Thursday, November 7, 2013 at 10:00 a.m. Eastern Standard Time. To participate on this call, U.S. callers may dial toll-free 1-800-230-1059; international callers may dial direct (+1) 612-234-9959.

A replay of the conference call will be available from 12:00 p.m. EST November 07, 2013 until 11:59 p.m. November 10, 2013. Callers may access the replay by calling 1-800-475-6701; international callers may dial direct (+1) 320-365-3844. The replay Access Code is 305381. Access to live audio and a replay of the conference call will also be available on Radio One's corporate website at http://www.radio-one.com/. The replay will be made available on the website for seven days after the call.

Radio One, Inc., together with its subsidiaries (http://www.radio-one.com/), is a diversified media company that primarily targets African-American and urban consumers. The Company is one of the nation's largest radio broadcasting companies, currently owning and/or operating 54 broadcast stations located in 16 urban markets in the United States. Through its controlling interest in Reach Media, Inc. (http://www.blackamericaweb.com/), the Company also operates syndicated programming including the Tom Joyner Morning Show, the Russ Parr Morning Show, the Yolanda Adams Morning Show, the Rickey Smiley Morning Show, Bishop T.D. Jakes' "Empowering Moments", and the Reverend Al Sharpton Show. Beyond its core radio broadcasting franchise, Radio One owns Interactive One (http://www.interactiveone.com/), an online platform serving the African-American community through social content, news, information, and entertainment. Interactive One operates a number of branded sites, including News One, UrbanDaily, HelloBeautiful and social networking websites, including BlackPlanet and MiGente. In addition, the Company owns a controlling interest in TV One, LLC (http://www.tvoneonline.com/), a cable/satellite network programming primarily to African-Americans.

Notes:

1              "Station operating income" consists of net loss before depreciation and amortization, corporate expenses, stock-based compensation, equity in income of affiliated company, income taxes, noncontrolling interest in income (loss) of subsidiaries, interest expense, impairment of long-lived assets, other (income) expense, loss (gain) on retirement of debt, (income) loss from discontinued operations, net of tax, interest income and gain on purchase of affiliated company. Station operating income is not a measure of financial performance under generally accepted accounting principles. Nevertheless station operating income is a significant basis used by our management to measure the operating performance of our stations within the various markets because station operating income provides helpful information about our results of operations apart from expenses associated with our fixed assets and long-lived intangible assets, income taxes, investments, debt financings and retirements, overhead, stock-based compensation, impairment charges, and asset sales. Our measure of station operating income may not be comparable to similarly titled measures of other companies as our definition includes the results of all four segments (Radio Broadcasting, Reach Media, Internet and Cable Television). Station operating income does not purport to represent operating income or cash flow from operating activities, as those terms are defined under generally accepted accounting principles, and should not be considered as an alternative to those measurements as an indicator of our performance. A reconciliation of net income (loss) to station operating income has been provided in this release.

2              "Adjusted EBITDA" consists of net loss plus (1) depreciation, amortization, income taxes, interest expense, noncontrolling interest in income of subsidiaries, impairment of long-lived assets, stock-based compensation, loss on retirement of debt, loss from discontinued operations, net of tax, less (2) equity in income of affiliated company, other income, interest income, gain on retirement of debt and gain on purchase of affiliated company. Net income before interest income, interest expense, income taxes, depreciation and amortization is commonly referred to in our business as "EBITDA." Adjusted EBITDA and EBITDA are not measures of financial performance under generally accepted accounting principles. However, we believe Adjusted EBITDA is often a useful measure of a company's operating performance and is a significant basis used by our management to measure the operating performance of our business because Adjusted EBITDA excludes charges for depreciation, amortization and interest expense that have resulted from our acquisitions and debt financing, our taxes, impairment charges, as well as our equity in (income) loss of our affiliated company, gain on retirements of debt, and any discontinued operations. Accordingly, we believe that Adjusted EBITDA provides useful information about the operating performance of our business, apart from the expenses associated with our fixed assets and long-lived intangible assets, capital structure or the results of our affiliated company. Adjusted EBITDA is frequently used as one of the bases for comparing businesses in our industry, although our measure of Adjusted EBITDA may not be comparable to similarly titled measures of other companies as our definition includes the results of all four segments (Radio Broadcasting, Reach Media, Internet and Cable Television).  Adjusted EBITDA and EBITDA do not purport to represent operating income or cash flow from operating activities, as those terms are defined under generally accepted accounting principles, and should not be considered as alternatives to those measurements as an indicator of our performance. A reconciliation of net income (loss) to EBITDA and Adjusted EBITDA has been provided in this release.

3              Certain reclassifications associated with accounting for discontinued operations have been made to prior period balances to conform to the current presentation. These reclassifications had no effect on any other previously reported or consolidated net income or loss or any other statement of operations, balance sheet or cash flow amounts. Where applicable, these financial statements have been identified as "as adjusted."   In addition, certain reclassifications have been made associated with the transfer and consolidation of our syndication operations within Reach Media.  These reclassifications occurred between the Radio Broadcasting segment, the Reach Media segment and Corporate/Eliminations/Other.

4              For the three months ended September 30, 2013 and 2012, Radio One had 47,443,031 and 50,019,048 shares of common stock outstanding on a weighted average basis (basic), respectively.  For the nine months ended September 30, 2013 and 2012, Radio One had 48,680,979 and 50,010,406 shares of common stock outstanding on a weighted average basis (basic), respectively. 

5              For the three months ended September 30, 2013 and 2012, Radio One had 47,443,031 and 50,019,048 shares of common stock outstanding on a weighted average basis (fully diluted), for outstanding stock options, respectively.  For the nine months ended September 30, 2013 and 2012, Radio One had 48,680,979 and 50,010,406 shares of common stock outstanding on a weighted average basis (fully diluted), for outstanding stock options, respectively.

SOURCE Radio One, Inc.



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