EX-99.1 2 cmls09302014earningsrelease.htm EXHIBIT 99.1 CMLS 09.30.2014 Earnings Release


Exhibit 99.1


 
CUMULUS MEDIA INC.

Cumulus Reports Operating Results for Third Quarter 2014

ATLANTA, GA — November 10, 2014: Cumulus Media Inc. (NASDAQ: CMLS) (the “Company,” “we,” “us,” or “our”) today announced operating results for the three and nine months ended September 30, 2014

Operating highlights are as follows (in thousands, except percentages) (footnotes follow):
 
 
Three Months Ended September 30,
 
 
Actual
 
Pro Forma (1)
 
 
2014
 
2013
 
% Change
 
2013
 
% Change
Revenue:
 
 
 
 
 
 
 
 
 
 
     Broadcast advertising
 
$
287,636

 
$
248,523

 
15.7
 %
 
$
300,095

 
(4.2
)%
     Digital advertising
 
12,632

 
5,379

 
134.8
 %
 
5,963

 
111.8
 %
     Political advertising
 
4,341

 
1,258

 
245.1
 %
 
1,394

 
211.4
 %
     License fees & other
 
9,276

 
7,375

 
25.8
 %
 
6,516

 
42.4
 %
Net revenue (2)
 
$
313,885

 
$
262,535

 
19.6
 %
 
$
313,968

 
 %
Adjusted EBITDA (3)
 
$
79,837

 
$
89,909

 
(11.2
)%
 
$
97,535

 
(18.1
)%

 
 
Nine Months Ended September 30,
 
 
Actual
 
Pro Forma (1)
 
 
2014
 
2013
 
% Change
 
2013
 
% Change
Revenue:
 
 
 
 
 
 
 
 
 
 
     Broadcast advertising
 
$
859,090

 
$
711,999

 
20.7
 %
 
$
876,819

 
(2.0
)%
     Digital advertising
 
35,203

 
15,730

 
123.8
 %
 
17,583

 
100.2
 %
     Political advertising
 
10,298

 
3,216

 
220.2
 %
 
3,471

 
196.7
 %
     License fees & other
 
29,585

 
19,735

 
49.7
 %
 
19,578

 
51.1
 %
Net revenue (2)
 
$
934,176

 
$
750,680

 
24.4
 %
 
$
917,451

 
1.8
 %
Adjusted EBITDA (3)
 
$
239,106

 
$
246,393

 
(3.0
)%
 
$
266,941

 
(10.4
)%

Selected Balance Sheet information:
 
 
As of
 
 
September 30, 2014
 
December 31, 2013
 
% Change
Cash and cash equivalents
 
$
26,757

 
$
32,792

 
(18.4
)%
 
 
 
 
 
 
 
     Term loans
 
$
1,953,875

 
$
2,025,000

 
(3.5
)%
     7.75% Senior Notes
 
610,000

 
610,000

 
 %
     Secured loan
 

 
25,000

 
(100.0
)%
Total debt
 
$
2,563,875

 
$
2,660,000

 
(3.6
)%







(1)
Pro forma information assumes that the acquisition of WestwoodOne, Inc. ("WestwoodOne"), which was completed in December 2013 (the "WestwoodOne Acquisition"), and the sale to Townsquare Media, LLC (“Townsquare”) of 53 radio stations in 12 small and mid-sized markets and the swap of 15 radio stations in two small and mid-sized markets with Townsquare in exchange for five radio stations in Fresno, California, which was completed in November 2013 (the "2013 Townsquare Transaction"), both occurred as of January 1, 2013. 
(2)
Net revenue consists of gross revenue less agency commissions, third party producer revenue shares and other direct costs.
(3)
Adjusted EBITDA is not a financial measure calculated or presented in accordance with accounting principles generally accepted in the United States of America (“GAAP”). For additional information, see “Non-GAAP Financial Measure and Definition” and “Reconciliation of Non-GAAP Financial Measure to Most Directly Comparable GAAP Measure” included herein.

Results for Third Quarter 2014

Net Revenue
Net revenue consists of gross revenue less agency commissions, third party producer revenue shares and other direct costs. Agency commissions are variable as they are based upon a stated percentage of the Company’s gross billings.

The following table presents our revenues, by source, as a percentage of total net revenue:
 
 
Three Months Ended September 30,
 
 
Actual
 
Pro Forma
 
 
2014

2013

2013
Revenue:
 
 
 
 
 
 
Broadcast advertising
 
91.6
%
 
94.7
%
 
95.6
%
Digital advertising
 
4.0
%
 
2.0
%
 
1.9
%
Political advertising
 
1.4
%
 
0.5
%
 
0.4
%
License fees & other
 
3.0
%
 
2.8
%
 
2.1
%
Net revenue
 
100.0
%
 
100.0
%
 
100.0
%

On an actual basis, net revenue for the three months ended September 30, 2014 increased $51.4 million, or 19.6%, to $313.9 million, compared to $262.5 million for the three months ended September 30, 2013. The increase resulted from increases of $39.1 million, $7.3 million, $3.1 million and $1.9 million in broadcast advertising, digital advertising, political advertising and license fees and other revenue, respectively. These increases were primarily attributable to the addition of the operations of WestwoodOne. The increases were partially offset by decreases in local spot and national spot revenue. The increase in political advertising revenue was due to additional activity associated with mid-term and gubernatorial elections in the current period.
On a pro forma basis, net revenues for the three months ended September 30, 2014 decreased $0.1 million, or 0.0%, to $313.9 million, from $314.0 million for the three months ended September 30, 2013. Broadcast advertising revenue decreased by $12.5 million. Net broadcast advertising revenue was down due to ongoing weakness in several large local markets that began in the second quarter of 2014; however, we believe that weakness has now largely dissipated into the early portion of the current quarter. National spot advertising was generally flat as we continued to take share from small competitors. Network advertising continued to see disruption following the acquisition of WestwoodOne in December 2013. We believe that process of reorganizing our network sales verticals is also now completed. Digital advertising revenue increased by $6.7 million, primarily due to increased Rdio user generation activity and digital commerce generated by our Sweetjack platform. Political advertising revenue increased by $2.9 million due to additional activity associated with mid-term and gubernatorial elections and license fees and other revenue increased by $2.8 million.

Content Costs
Content costs consist of all costs related to the licensing, acquisition and development of our programming including local and national talent costs and music license fees.
 
 
Three Months Ended September 30,
 
 
Actual
 
Pro Forma
 
 
2014
 
2013
 
% Change
 
2013
 
% Change
Content costs
 
$
106,574

 
$
65,559

 
62.6
%
 
$
92,108

 
15.7
%
The following table presents our content costs as a percentage of total net revenues:





 
 
Three Months Ended September 30,
 
 
Actual
 
Pro Forma
 
 
2014

2013

2013
Content costs
 
34.0
%
 
25.0
%
 
29.3
%
On an actual basis, content costs for the three months ended September 30, 2014 increased $41.0 million, or 62.6%, to $106.6 million, compared to $65.6 million for the three months ended September 30, 2013. This increase was primarily attributable to the addition of the operations of WestwoodOne.
On a pro forma basis, content costs for the three months ended September 30, 2014 increased $14.5 million, or 15.7%, from $92.1 million for the three months ended September 30, 2013. This increase was primarily attributable to investments in proprietary content to replace expiring third-party producer relationships at WestwoodOne. Several new radio stations being operated under local marketing agreements ("LMAs") in Chicago, Dallas and San Jose also contributed to year over year expense growth, as did the launch of a newly owned and operated station in the New York market. Previously contracted increases in sports rights and local talent bonuses for ratings growth in several large radio markets also contributed to year over year increases. Partially offsetting these expense increases were expense savings resulting from our ongoing integration of WestwoodOne.

Other Direct Operating Expenses
Other direct operating expenses consist of expenses related to the distribution and monetization of our content across our platform and overhead expenses.
 
 
Three Months Ended September 30,
 
 
Actual
 
Pro Forma
 
 
2014
 
2013
 
% Change
 
2013
 
% Change
Other direct operating expenses
 
$
119,864

 
$
99,202

 
20.8
%
 
$
114,925

 
4.3
%
On an actual basis, other direct operating expenses for the three months ended September 30, 2014 increased $20.7 million, or 20.8%, to $119.9 million, compared to $99.2 million for the three months ended September 30, 2013. This increase was primarily attributable to the addition of the operations of WestwoodOne and the LMAs in the Chicago, Dallas and San Jose markets.
On a pro forma basis, other direct operating expenses for the three months ended September 30, 2014 increased $4.9 million, or 4.3%, from $114.9 million for the three months ended September 30, 2013. This increase was due to ongoing investments in our radio market sales efforts, including items related to the extension of our national representation agreement with Katz Media. We also recorded additional one-time marketing expenditures related to the launch of our new radio station in the New York market and related to the rollout of our NASH Country brand across the platform. Timing of healthcare claims also increased expenses for the quarter, on a year over year comparison. Partially offsetting these expense increases were expense savings resulting from our ongoing integration of WestwoodOne.

Corporate Expenses, Including Stock-based Compensation Expense
Corporate expenses consist primarily of compensation and related costs for our executive, finance, human resources, information technology and legal personnel, and fees for professional services. Professional services are principally comprised of outside legal, audit and consulting services.
 
 
Three Months Ended September 30,
 
 
Actual
 
Pro Forma
 
 
2014
 
2013
 
% Change
 
2013
 
% Change
Corporate expenses
 
$
14,756

 
$
11,757

 
25.5
%
 
$
13,429

 
9.9
%

Corporate expenses, including stock-based compensation expense, for the three months ended September 30, 2014 increased $3.0 million, or 25.5%, to $14.8 million, compared to $11.8 million for the three months ended September 30, 2013. This increase was primarily due to a $2.1 million increase in stock-based compensation expense partially driven by stock options granted to employees of WestwoodOne and a $0.9 million increase in other overhead costs.





On a pro forma basis, corporate expenses, including stock-based compensation expense, for the three months ended September 30, 2014 increased $1.3 million, or 9.9%, from $13.4 million for the three months ended September 30, 2013. This increase was primarily due to stock-based compensation expense partially driven by stock options granted to employees of WestwoodOne.

Capital Expenditures
Capital expenditures for the three months ended September 30, 2014 totaled $2.2 million, comprised of ongoing maintenance and upgrades across our broadcast platform. Capital expenditures during the three months ended September 30, 2013 were $3.6 million.

Earnings Call Information
Cumulus Media Inc. will host a teleconference today at 4:30 PM eastern time to discuss its third quarter 2014 operating results. The conference call dial-in number for domestic callers is 877-830-7699. International callers should dial 660-422-3366 for conference call access.

Please call five to ten minutes in advance to ensure that you are connected prior to the presentation. The call also may be accessed via webcast at www.cumulus.com.

Following completion of the call, a replay can be accessed until 12:00 AM eastern time, December 11, 2014. Domestic callers can access the replay by dialing 855-859-2056, replay code 17617805#. International callers should dial 404-537-3406 for conference replay access.

Forward-Looking Statements
Certain statements in this release may constitute “forward-looking” statements within the meaning of the Private Securities Litigation Reform Act of 1995 and other federal securities laws. Such statements are statements other than historical fact and relate to our intent, belief or current expectations primarily with respect to certain historical and our future operating, financial, and strategic performance. Any such forward-looking statements are not guarantees of future performance and may involve risks and uncertainties. Actual results may differ from those contained in or implied by the forward-looking statements as a result of various factors, including, but not limited to risks and uncertainties relating to the need for additional funds to service our debt and to execute our business strategy, our inability to renew one or more of our broadcast licenses, changes in interest rates, the timing of, and our ability to complete any acquisitions or dispositions pending from time to time, costs and synergies resulting from the integration of any completed acquisitions, our ability to effectively manage costs, our ability to manage growth, the popularity of radio as a broadcasting and advertising medium, changing consumer tastes, the impact of general economic conditions in the United States or in specific markets in which we currently do business, industry conditions, including existing competition and future competitive technologies and cancellation, disruptions or postponements of advertising schedules in response to national or world events, our ability to generate revenues from new sources, including local commerce and technology-based initiatives, the impact of regulatory rules or proceedings that may affect our business, or any acquisitions, from time to time, other risk factors described from time to time in our filings with the Securities and Exchange Commission, including our Form 10-K for the year ended December 31, 2013 (the “2013 Form 10-K”) and subsequently filed Forms 10-Q. Many of these risks and uncertainties are beyond our control, and the unexpected occurrence or failure to occur of any such events or matters could significantly alter our actual results of operations or financial condition. Cumulus Media Inc. assumes no responsibility to update any forward-looking statement as a result of new information, future events or otherwise.

About Cumulus Media Inc. [NASDAQ: CMLS]
Cumulus Media Inc. (CMLS) combines high-quality local programming with iconic, nationally syndicated media, sports and entertainment brands in order to deliver premium choices for listeners, provide substantial reach for advertisers and create opportunities for shareholders. As the largest pure-play radio broadcaster in the United States, Cumulus provides exclusive content that is fully distributed through approximately 460 owned-and-operated stations in 90 U.S. media markets (including eight of the top 10), approximately 9,000 broadcast radio affiliates and numerous digital channels. Cumulus is well-positioned in the widening digital audio space through a significant stake in the Rdio digital music service, featuring over 30 million songs on-demand in addition to custom playlists and exclusive curated channels. Cumulus is also the leading provider of country music and lifestyle content through its NASH brand, which will serve country fans through radio programming, NASH magazine, concerts, licensed products and television/video. For more information, visit www.cumulus.com










For further information, please contact:
Cumulus Media Inc.
J.P. Hannan
Senior Vice President, Treasurer and Chief Financial Officer
404-260-6600
jp.hannan@cumulus.com





CUMULUS MEDIA INC.
Unaudited Condensed Consolidated Statements of Operations
(Dollars in thousands, except per share data)
 
 
 
Three months ended September 30,
 
Nine months ended September 30,
 
 
Actual
 
Pro Forma
 
Actual
 
Pro Forma
 
 
2014
 
2013
 
2013
 
2014
 
2013
 
2013
Revenue:
 
 
 
 
 
 
 
 
 
 
 
 
Broadcast advertising
 
$
287,636

 
$
248,523

 
$
300,095

 
$
859,090

 
$
711,999

 
$
876,819

Digital advertising
 
12,632

 
5,379

 
5,963

 
35,203

 
15,730

 
17,583

Political advertising
 
4,341

 
1,258

 
1,394

 
10,298

 
3,216

 
3,471

License fees and other
 
9,276

 
7,375

 
6,516

 
29,585

 
19,735

 
19,578

Net revenue
 
313,885

 
262,535

 
313,968

 
934,176

 
750,680

 
917,451

Operating expenses:
 
 
 
 
 
 
 
 
 
 
 
 
Content costs
 
106,574

 
65,559

 
92,108

 
316,868

 
189,765

 
280,813

Other direct operating expenses
 
119,864

 
99,202

 
114,925

 
353,588

 
292,576

 
341,730

Depreciation and amortization
 
29,143

 
27,614

 
32,949

 
87,095

 
82,814

 
98,821

LMA fees
 
2,021

 
609

 
609

 
5,226

 
2,293

 
2,293

Corporate expenses (including stock-based compensation expense of $4,399, $2,259, $2,712, $12,645, $7,393 and $11,794, respectively)
 
14,756

 
11,757

 
13,429

 
53,215

 
33,517

 
50,705

Gain on sale of assets or stations
 
(373
)
 
(5,198
)
 
(5,198
)
 
(1,271
)
 
(3,662
)
 
(3,662
)
Loss (gain) on derivative instrument
 

 
172

 
172

 

 
(2,672
)
 
(2,672
)
Total operating expenses
 
271,985

 
199,715

 
248,994

 
814,721

 
594,631

 
768,028

Operating income
 
41,900

 
62,820

 
64,974

 
119,455

 
156,049

 
149,423

Non-operating (expense) income:
 
 
 
 
 
 
 
 
 
 
 
 
Interest expense
 
(36,647
)
 
(45,502
)
 
(45,674
)
 
(109,380
)
 
(134,221
)
 
(134,393
)
Interest income
 
352

 
308

 
480

 
1,024

 
942

 
1,114

Loss on early extinguishment of debt
 

 

 

 

 
(4,539
)
 
(4,539
)
Other income (expense), net
 
443

 
(139
)
 
(139
)
 
3,972

 
(247
)
 
(245
)
Total non-operating expense, net
 
(35,852
)
 
(45,333
)
 
(45,333
)
 
(104,384
)
 
(138,065
)
 
(138,063
)
Income from continuing operations before income taxes
 
6,048

 
17,487

 
19,641

 
15,071

 
17,984

 
11,360

Income tax expense
 
(3,508
)
 
(6,995
)
 
(14,732
)
 
(6,663
)
 
(19,043
)
 
(30,792
)
Income (loss) from continuing operations
 
2,540

 
10,492

 
4,909

 
8,408

 
(1,059
)
 
(19,432
)
(Loss) income from discontinued operations, net of taxes
 

 
(3,455
)
 

 

 
26,207

 

Net income (loss)
 
$
2,540

 
$
7,037

 
$
4,909

 
$
8,408

 
$
25,148

 
$
(19,432
)
Basic and diluted income (loss) per common share:
 
 
 
 
 
 
 
 
 
 
 
 
Basic: Income (loss) from continuing operations per share
 
$
0.01

 
$
0.03

 
 
 
$
0.04

 
$
(0.07
)
 
 
(Loss) income from discontinued operations per share
 
$

 
$
(0.02
)
 
 
 
$

 
$
0.15

 
 
Income per share
 
$
0.01

 
$
0.01

 
 
 
$
0.04

 
$
0.08

 
 
Diluted: Income (loss) from continuing operations per share
 
$
0.01

 
$
0.03

 
 
 
$
0.04

 
$
(0.07
)
 
 
(Loss) income from discontinued operations per share
 
$

 
$
(0.02
)
 
 
 
$

 
$
0.15

 
 
Income per share
 
$
0.01

 
$
0.01

 
 
 
$
0.04

 
$
0.08

 
 
Weighted average basic common shares outstanding
 
231,885,444

 
179,669,739

 
 
 
224,074,622

 
176,994,583

 
 
Weighted average diluted common shares outstanding
 
233,222,153

 
183,131,260

 
 
 
227,802,636

 
180,032,349

 
 


        







Non-GAAP Financial Measure and Definition
We utilize certain financial measures that are not prepared or calculated in accordance with GAAP to assess our financial performance and profitability. The non-GAAP financial measure used in this release is Adjusted EBITDA.

We define Adjusted EBITDA as net income (loss) before any non-operating expenses, including depreciation and amortization, stock-based compensation expense, gain or loss on sale of assets or stations (if any), gain or loss on derivative instruments (if any), impairment of intangible assets and goodwill (if any), acquisition-related and restructuring costs (if any) and franchise taxes.

Adjusted EBITDA is the financial metric utilized by management to analyze the cash flow generated by our business. This measure isolates the amount of income generated by our core operations after the incurrence of corporate, general and administrative expenses. Management also uses this measure to determine the contribution of our core operations, including the corporate resources employed to manage the operations, to the funding of our other operating expenses and to the funding of debt service and acquisitions. In addition, Adjusted EBITDA is a key metric for purposes of calculating and determining our compliance with certain covenants contained in our credit facility.

In deriving this measure, management excludes depreciation, amortization, and stock-based compensation expense, as these do not represent cash payments for activities directly related to our core operations. Management excludes any gain or loss on the exchange or sale of any assets as it does not represent a cash transaction. Management also excludes any gain or loss on derivative instruments as it does not represent a cash transaction nor are they associated with core operations. Expenses relating to acquisitions and restructuring costs are also excluded from the calculation of Adjusted EBITDA as they are not directly related to our core operations. Management excludes any impairment of goodwill and intangible assets as they do not require a cash outlay.

Management believes that Adjusted EBITDA, although not a measure that is calculated in accordance with GAAP, nevertheless is commonly employed by the investment community as a measure for determining the market value of a media company. Management has also observed that Adjusted EBITDA is routinely employed to evaluate and negotiate the potential purchase price for media companies and is a key metric for purposes of calculating and determining compliance with certain covenants in our credit facility. Given the relevance to our overall value, management believes that investors consider the metric to be extremely useful.

Adjusted EBITDA should not be considered in isolation or as a substitute for net income, operating income, cash flows from operating activities or any other measure for determining the Company’s operating performance or liquidity that is calculated in accordance with GAAP.

A quantitative reconciliation of Adjusted EBITDA to net income (loss), the most directly comparable financial measure calculated and presented in accordance with GAAP, is provided below.








Reconciliation of Non-GAAP Financial Measure to Most Directly Comparable GAAP Measure
The following table reconciles net income (loss), the most directly comparable financial measure calculated and presented in accordance with GAAP, to Adjusted EBITDA for the three and nine months ended September 30, 2014 and 2013 (dollars in thousands):

 
 
Three Months Ended September 30,
 
 
Actual
 
Pro Forma
 
 
2014
 
2013
 
2013
Net income
 
$
2,540

 
$
7,037

 
$
4,909

Income tax expense
 
3,508

 
6,995

 
14,732

Non-operating expenses, including interest expense
 
35,852

 
45,333

 
45,333

LMA fees
 
2,021

 
609

 
609

Depreciation and amortization
 
29,143

 
27,614

 
32,949

Stock-based compensation expense
 
4,399

 
2,259

 
2,712

Gain on sale of assets or stations
 
(373
)
 
(5,198
)
 
(5,198
)
Loss on derivative instrument
 

 
172

 
172

Acquisition-related and restructuring costs
 
2,773

 
1,457

 
1,141

Franchise and state taxes
 
(26
)
 
176

 
176

Discontinued operations:
 


 


 


          Loss from discontinued operations, net of tax
 

 
3,455

 

Adjusted EBITDA
 
$
79,837

 
$
89,909


$
97,535


 
 
Nine Months Ended September 30,
 
 
Actual
 
Pro Forma
 
 
2014
 
2013
 
2013
Net income (loss)
 
$
8,408

 
$
25,148

 
$
(19,432
)
Income tax expense
 
6,663

 
19,043

 
30,792

Non-operating expenses, including interest expense
 
104,384

 
138,065

 
138,063

LMA fees
 
5,226

 
2,293

 
2,293

Depreciation and amortization
 
87,095

 
82,814

 
98,821

Stock-based compensation expense
 
12,645

 
7,393

 
11,794

Gain on sale of assets or stations
 
(1,271
)
 
(3,662
)
 
(3,662
)
Gain on derivative instrument
 

 
(2,672
)
 
(2,672
)
Acquisition-related and restructuring costs
 
15,434

 
3,652

 
10,415

Franchise and state taxes
 
522

 
526

 
529

Discontinued operations:
 


 


 


          Income from discontinued operations, net of tax
 

 
(26,207
)
 

Adjusted EBITDA
 
$
239,106


$
246,393

 
$
266,941







The following supplemental unaudited pro forma financial information is intended to provide you with information about how the WestwoodOne Acquisition and the 2013 Townsquare Transaction might have affected our historical consolidated quarterly financial statements during each completed quarterly period during 2013 and the year ended December 31, 2013 as if such transactions had closed as of January 1, 2013. This pro forma information is presented for illustrative purposes only, and should not be considered indicative of our actual historical financial position or results of operations had the WestwoodOne Acquisition or the 2013 Townsquare Transaction occurred as of the date indicated or any other date. This pro forma financial information should also not be considered representative of our future financial condition or results of operations.
CUMULUS MEDIA INC.
Pro Forma Condensed Consolidated Statements of Operations
(Dollars in thousands)
(Unaudited)
 
 
Q1
 
Q2
 
Q3
 
Q4
 
Year Ended December 31, 2013
Revenue:
 
 
 
 
 
 
 
 
 
 
Broadcast advertising
 
$
269,547

 
$
307,177

 
$
300,095

 
$
313,265

 
$
1,190,084

Digital advertising
 
5,125

 
6,495

 
5,963

 
7,136

 
24,719

Political advertising
 
891

 
1,186

 
1,394

 
1,507

 
4,978

License fees & other
 
5,972

 
7,090

 
6,516

 
6,356

 
25,934

Net revenues
 
281,535

 
321,948

 
313,968

 
328,264

 
1,245,715

Operating expenses:
 
 
 
 
 
 
 
 
 
 
Content costs
 
101,802

 
86,902

 
92,108

 
108,495

 
389,307

Other direct operating expenses
 
110,916

 
115,890

 
114,925

 
121,868

 
463,599

Depreciation and amortization
 
32,932

 
32,940

 
32,949

 
34,060

 
132,881

LMA fees
 
946

 
738

 
609

 
1,423

 
3,716

Corporate expenses (including stock-based compensation expense)
 
21,330

 
15,946

 
13,429

 
22,686

 
73,391

Loss (gain) on asset or station sale
 
1,309

 
227

 
(5,198
)
 
(23
)
 
(3,685
)
Realized (gain) loss on derivative instrument
 
(738
)
 
(2,106
)
 
172

 
820

 
(1,852
)
Total operating expenses
 
268,497

 
250,537

 
248,994

 
289,329

 
1,057,357

Operating income
 
13,038

 
71,411

 
64,974

 
38,935

 
188,358

Non-operating (expense) income:
 
 
 
 
 
 
 
 
 
 
Interest expense
 
(44,522
)
 
(44,197
)
 
(45,674
)
 
(44,054
)
 
(178,447
)
Interest income
 
270

 
364

 
480

 
352

 
1,466

Loss on early extinguishment of debt
 

 
(4,539
)
 

 
(30,395
)
 
(34,934
)
Other income (expense), net
 
287

 
(393
)
 
(139
)
 
(57
)
 
(302
)
Total non-operating expense, net
 
(43,965
)
 
(48,765
)
 
(45,333
)
 
(74,154
)
 
(212,217
)
(Loss) income from continuing operations before income taxes
 
(30,927
)
 
22,646

 
19,641

 
(35,219
)
 
(23,859
)
Income tax benefit (expense)
 
3,425

 
(19,485
)
 
(14,732
)
 
122,761

 
91,969

Pro forma net (loss) income
 
$
(27,502
)
 
$
3,161

 
$
4,909

 
$
87,542

 
$
68,110






Reconciliation of Pro Forma Non-GAAP Financial Measure to a Comparable Pro forma GAAP Measure

The following table reconciles pro forma net (loss) income to pro forma Adjusted EBITDA for each quarter during 2013, and for the year ended December 31, 2013 (dollars in thousands):

 
Q1
 
Q2
 
Q3
 
Q4
 
Year Ended December 31, 2013
Pro forma net (loss) income
$
(27,502
)
 
$
3,161

 
$
4,909

 
$
87,542

 
$
68,110

Income tax (benefit) expense
(3,425
)
 
19,485

 
14,732

 
(122,761
)
 
(91,969
)
Non-operating expenses, including net interest expense
43,965

 
48,765

 
45,333

 
74,154

 
212,217

LMA fees
946

 
738

 
609

 
1,423

 
3,716

Depreciation and amortization
32,932

 
32,940

 
32,949

 
34,060

 
132,881

Stock-based compensation expense
4,761

 
4,321

 
2,712

 
3,766

 
15,560

Loss (gain) on asset or station sale
1,309

 
227

 
(5,198
)
 
(23
)
 
(3,685
)
(Gain) loss on derivative instrument
(738
)
 
(2,106
)
 
172

 
820

 
(1,852
)
Acquisition-related and restructuring costs
6,117

 
3,157

 
1,141

 
16,822

 
27,237

Franchise and state taxes
177

 
176

 
176

 
613

 
1,142

Pro forma Adjusted EBITDA
$
58,542

 
$
110,864

 
$
97,535

 
$
96,416

 
$
363,357