10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

(Mark One)

þ QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Quarterly Period ended June 30, 2012

or

¨ TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from              to

Commission file number 1-11588

Saga Communications, Inc.

(Exact name of registrant as specified in its charter)

Delaware	38-3042953
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
73 Kercheval Avenue Grosse Pointe Farms, Michigan	48236
(Address of principal executive offices)	(Zip Code)

(313) 886-7070

(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  þ    No  ¨.

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes  þ    No  ¨.

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer	¨	Accelerated filer	þ
Non-accelerated filer	¨  (Do not check if a smaller reporting company)	Smaller reporting company	¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ¨    No  þ

The number of shares of the registrant’s Class A Common Stock, $.01 par value, and Class B Common Stock, $.01 par value, outstanding as of August 3, 2012 was 3,652,405 and 597,504, respectively.

INDEX

	Page
PART I. FINANCIAL INFORMATION	3
Item 1. Financial Statements (Unaudited)	3
Condensed consolidated balance sheets — June 30, 2012 and December 31, 2011	3
Condensed consolidated statements of income — Three and six months ended June 30, 2012 and 2011	4
Condensed consolidated statements of cash flows —Six months ended June 30, 2012 and 2011	5
Notes to unaudited condensed consolidated financial statements	6
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	12
Item 3. Quantitative and Qualitative Disclosures about Market Risk	22
Item 4. Controls and Procedures	22
PART II OTHER INFORMATION	23
Item 1. Legal Proceedings	23
Item 6. Exhibits	23
Signatures	24
EX-31.1
EX-31.2
EX-32
EX-101

2

PART I — FINANCIAL INFORMATION

Item 1. Financial Statements

SAGA COMMUNICATIONS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

	June 30, 2012			December 31, 2011
	(Unaudited)
	(In thousands)
Assets
Current assets:
Cash and cash equivalents	$	8,841		$	6,991
Accounts receivable, net		19,374			19,415
Prepaid expenses and other current assets		2,341			1,907
Barter transactions		1,808			1,358
Deferred income taxes		1,175			1,169
Current assets held for sale		128			120
Total current assets		33,667			30,960
Property and equipment		156,437			154,246
Less accumulated depreciation		96,703			93,624
Net property and equipment		59,734			60,622
Broadcast licenses, net		90,361			90,356
Other intangibles, deferred costs and investments, net		5,250			5,409
Assets held for sale		2,832			2,987
	$	191,844		$	190,334
Liabilities and stockholders’ equity
Current liabilities:
Accounts payable	$	1,410		$	1,728
Payroll and payroll taxes		5,765			5,730
Other accrued expenses		4,760			2,502
Barter transactions		1,870			1,550
Current portion of long-term debt		—			3,000
Current liabilities of station held for sale		131			128
Total current liabilities		13,936			14,638
Deferred income taxes		15,163			13,383
Long-term debt		58,828			66,078
Other liabilities		2,914			3,065
Liabilities of station held for sale		188			195
Total liabilities		91,029			97,359
Commitments and contingencies
Stockholders’ equity
Common stock		53			53
Additional paid-in capital		50,763			50,681
Retained earnings		78,668			70,831
Treasury stock		(28,669	)		(28,590	)
Total stockholders’ equity		100,815			92,975
	$	191,844		$	190,334

See notes to unaudited condensed consolidated financial statements.

3

SAGA COMMUNICATIONS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

	Three Months Ended June 30,						Six Months Ended June 30,
	2012			2011			2012			2011
	(Unaudited)
	(In thousands, except per share data)
Net operating revenue	$	32,986		$	32,764		$	62,309		$	61,012
Station operating expense		21,959			23,016			44,319			45,150
Corporate general and administrative		1,940			1,949			3,889			3,889
Operating income from continuing operations		9,087			7,799			14,101			11,973
Other expenses, net:
Interest expense		458			1,034			986			2,191
Write-off revolving credit facility debt issuance costs		—			1,326			—			1,326
Other income, net		(8	)		(95	)		(10	)		(32	)
Income from continuing operations before income tax		8,637			5,534			13,125			8,488
Income tax provision		3,438			2,251			5,223			3,457
Income from continuing operations, net of income tax		5,199			3,283			7,902			5,031
Loss from discontinued operations, net of income tax		(67	)		(113	)		(65	)		(199	)
Net income	$	5,132		$	3,170		$	7,837		$	4,832
Basic earnings (loss) per share:
From continuing operations	$	1.22		$	.77		$	1.86		$	1.19
From discontinued operations		(.01	)		(.02	)		(.01	)		(.05	)
Earnings per share	$	1.21		$	.75		$	1.85		$	1.14
Diluted earnings (loss) per share:
From continuing operations	$	1.22		$	.77		$	1.86		$	1.19
From discontinued operations		(.01	)		(.02	)		(.02	)		(.05	)
Earnings per share	$	1.21		$	.75		$	1.84		$	1.14
Weighted average common shares		4,246			4,242			4,243			4,237
Weighted average common and common equivalent shares		4,247			4,245			4,250			4,242

See notes to unaudited condensed consolidated financial statements.

4

SAGA COMMUNICATIONS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

	Six Months Ended June 30,
	2012			2011
	(Unaudited)
	(In thousands)
Cash flows from operating activities:
Cash provided by operating activities	$	14,756		$	11,556
Cash flows from investing activities:
Acquisition of property and equipment		(2,502	)		(2,522	)
Other investing activities		(74	)		(104	)
Net cash used in investing activities		(2,576	)		(2,626	)
Cash flows from financing activities:
Payments on long-term debt		(10,250	)		(99,100	)
Proceeds from long-term debt		—			92,100
Payments for debt issuance costs		—			(1,147	)
Purchase of shares held in treasury		(80	)		(117	)
Net cash used in financing activities		(10,330	)		(8,264	)
Net increase in cash and cash equivalents		1,850			666
Cash and cash equivalents, beginning of period		6,991			12,197
Cash and cash equivalents, end of period	$	8,841		$	12,863

See notes to unaudited condensed consolidated financial statements.

5

SAGA COMMUNICATIONS, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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 (“GAAP”) 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 notes required by generally accepted accounting principles 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, 2012 and the results of operations for the three and six months ended June 30, 2012 and 2011. Results of operations for the six months ended June 30, 2012 are not necessarily indicative of the results that may be expected for the year ending December 31, 2012. The balance sheet at December 31, 2011 has been derived from the audited financial statements at that date but does not include all of the information and notes required by GAAP for annual financial statements.

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, 2011.

The Company has evaluated events and transactions occurring subsequent to the balance sheet date of June 30, 2012, 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,
	2012			2011			2012			2011
	(In thousands, except per share data)
Numerator:
Income from continuing operations, net of income tax	$	5,199		$	3,283		$	7,902		$	5,031
Loss from discontinued operations, net of income tax		(67	)		(113	)		(65	)		(199	)
Net income available to common stockholders	$	5,132		$	3,170		$	7,837		$	4,832
Denominator:
Denominator for basic earnings per share — weighted average shares		4,246			4,242			4,243			4,237
Effect of dilutive securities		1			3			7			5
Denominator for diluted earnings per share — adjusted weighted-average shares and assumed conversions		4,247			4,245			4,250			4,242
Basic earnings (loss) per share:
From continuing operations	$	1.22		$	.77		$	1.86		$	1.19
From discontinued operations		(.01	)		(.02	)		(.01	)		(.05	)
Earnings per share	$	1.21		$	.75		$	1.85		$	1.14
Diluted earnings (loss) per share:
From continuing operations	$	1.22		$	.77		$	1.86		$	1.19
From discontinued operations		(.01	)		(.02	)		(.02	)		(.05	)
Earnings per share	$	1.21		$	.75		$	1.84		$	1.14

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 105,000 for the three and six months ended June 30, 2012 and 228,000 for the three and six months ended June 30, 2011. 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.

6

SAGA COMMUNICATIONS, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL

STATEMENTS — (Continued)

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 (“TBA’s”) 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.

2. Recent Accounting Pronouncements

In May 2011, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2011-04, Fair Value Measurement (Topic 820): Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs. The amendments in this ASU change the wording used to describe many of the requirements in U.S. generally accepted accounting principles (“GAAP”) for measuring fair value and for disclosing information about fair value measurements. For many of the requirements, the FASB does not intend for the amendments in this ASU to result in a change in the application of the requirements in Topic 820. Some of the amendments clarify the FASB’s intent about the application of existing fair value measurement requirements. Other amendments change a particular principle or requirement for measuring fair value or for disclosing information about fair value measurements. This update was adopted on January 1, 2012 and did not have a material impact on our consolidated financial statements.

3. Intangible Assets

We evaluate our FCC licenses for impairment annually as of October 1^st or more frequently if events or circumstances indicate that the asset might be impaired. FCC licenses are evaluated for impairment at the market level using a direct method. If the carrying amount of FCC licenses is greater than their estimated fair value in a given market, the carrying amount of FCC licenses in that market is reduced to its estimated fair value.

Intangible assets that have finite lives are amortized over their useful lives using the straight-line method. Favorable lease agreements are amortized over the lives of the leases ranging from 4 to 26 years. Other intangibles are amortized over one to eleven years.

7

SAGA COMMUNICATIONS, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL

STATEMENTS — (Continued)

4. Discontinued Operations

On April 3, 2012 we entered into a definitive agreement to sell our Greenville, Mississippi TV station (“WXVT”) for $3 million, subject to certain adjustments, to H3 Communications, LLC (“H3”). We also entered into an Agreement for the Sale of Commercial Time and a Shared Services Agreement (“the Agreements”) with Commonwealth Broadcasting, LLC (“Commonwealth”), that were effective May 1, 2012, whereby Commonwealth, in conjunction with the WXVT sales staff will sell the advertising inventory of WXVT, and WXVT will provide programming and services including but not limited to use of facilities, traffic, billing, engineering, administrative and accounting to Commonwealth. The Agreements remain in effect until the closing of the sale or termination of the sales agreement, whichever is earlier. We do not anticipate this transaction to have a material effect on our consolidated financial statements. The sale, which is subject to the approval of the Federal Communications Commission, is expected to close in 2012.

In accordance with authoritative guidance we have reported the results of operations of WXVT as discontinued operations in the accompanying unaudited condensed consolidated financial statements. For all previously reported periods, certain amounts in the unaudited condensed consolidated financial statements have been reclassified. The assets and liabilities of WXVT have been classified as held for sale and the net results of operations have been reclassified from continuing operations to discontinued operations. WXVT was previously included in the Company’s television segment.

5. Common Stock and Treasury Stock

The following summarizes information relating to the number of shares of our common stock issued in connection with stock transactions through June 30, 2012:

	Common Stock Issued
	Class A		Class B
	(Shares in thousands)
Balance, January 1, 2011		4,770		598
Conversion of shares		1		(1	)
Balance, December 31, 2011		4,771		597
Conversion of shares		—		—
Balance, June 30, 2012		4,771		597

We have a Stock Buy-Back Program to allow us to purchase up to $60 million of our Class A Common Stock. As of June 30, 2012, we have remaining authorization of $14.2 million for future repurchases of our Class A Common Stock.

6. Stock-Based Compensation

2005 Incentive Compensation Plan

On May 10, 2010, our stockholders approved the Amended and Restated 2005 Incentive Compensation Plan (the “2005 Plan”) which replaced our 2003 Stock Option Plan (the “2003 Plan”) as to future grants. The 2005 Plan extends through March 2015 and allows for the granting of restricted stock, restricted stock units, incentive stock options, nonqualified stock options, and performance awards to officers and a selected number of employees.

8

SAGA COMMUNICATIONS, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL

STATEMENTS — (Continued)

Stock-Based Compensation

For the six months ended June 30, 2012 and the three and six months ended June 30, 2011, we had $22,000, $34,000 and $129,000, respectively, of total compensation expense related to stock options. This expense is included in corporate general and administrative expenses in our results of operations. The associated tax benefit recognized for the six months ended June 30, 2012 and the three and six months ended June 30, 2011 was $9,000, $14,000 and $53,000, respectively. The stock options were fully expensed at March 31, 2012, therefore there was no compensation expense related to stock options for the three months ended June 30, 2012.

The following summarizes the stock option transactions for the 2005 and 2003 Plans and the 1992 Stock Option Plan (the “1992 Plan”) for the six months ended June 30, 2012:

	Number of Options			Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (Years)		Aggregate Intrinsic Value
Outstanding at January 1, 2012		227,747		$	49.86		3.6	$	109,299
Granted		—			—
Exercised		—			—
Expired		(24,566	)		82.85
Forfeited		—			—
Outstanding and exercisable at June 30, 2012		203,181		$	45.88		3.5	$	109,299

The following summarizes the restricted stock transactions for the six months ended June 30, 2012:

	Shares			Weighted Average Grant Date Fair Value
Outstanding at January 1, 2012		9,914		$	26.15
Granted		—			—
Vested		(5,734	)		27.75
Forfeited		(30	)		23.96
Non-vested and outstanding at June 30, 2012		4,150		$	23.96

For the three and six months ended June 30, 2012 and the three and six months ended June 30, 2011, we had $25,000, $60,000, $41,000 and $108,000, respectively, of total compensation expense related to restricted stock-based compensation arrangements. This expense is included in corporate general and administrative expenses in our results of operations. The associated tax benefit recognized for the three and six months ended June 30, 2012 and the three and six months ended June 30, 2011 was $10,000, $24,000, $16,000 and $44,000, respectively.

9

SAGA COMMUNICATIONS, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL

STATEMENTS — (Continued)

7. Long-Term Debt

Long-term debt consisted of the following:

	June 30, 2012		December 31, 2011
	(In thousands)
Credit Agreement:
Term loan	$	57,750	$	58,500
Revolving credit facility		—		9,500
Secured debt of affiliate		1,078		1,078
		58,828		69,078
Amounts payable within one year		—		3,000
	$	58,828	$	66,078

Our credit facility providing availability up to $117.8 million (the “Credit Facility”) consists of a $57.8 million term loan (the “Term Loan”) and a $60 million revolving loan (the “Revolving Credit Facility”) and matures on June 13, 2016.

We had $60 million of unused borrowing capacity under the Revolving Credit Facility at June 30, 2012. The unused portion of the Revolving Credit Facility is available for general corporate purposes, including working capital, capital expenditures, permitted acquisitions and related transaction expenses and permitted stock buybacks.

The Term Loan principal amortizes in equal installments of 5% of the Term Loan during each year, however, upon satisfaction of certain conditions, as defined in the Credit Facility, no amortization payment is required. The Credit Facility is also subject to mandatory prepayment requirements, including but not limited to, certain sales of assets, certain insurance proceeds, certain debt issuances and certain sales of equity. Optional prepayments of the Credit Facility are permitted without any premium or penalty, other than certain costs and expenses. As of June 30, 2012, we have no required amortization payment.

We have pledged substantially all of our assets (excluding our FCC licenses and certain other assets) in support of the Credit Facility and each of our subsidiaries has guaranteed the Credit Facility and has pledged substantially all of their assets (excluding their FCC licenses and certain other assets) in support of the Credit Facility.

The Credit Facility contains a number of financial covenants (all of which we were in compliance with at June 30, 2012) which, among other things, require us to maintain specified financial ratios and impose certain limitations on us with respect to investments, additional indebtedness, dividends, distributions, guarantees, liens and encumbrances.

10

SAGA COMMUNICATIONS, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL

STATEMENTS — (Continued)

8. Segment Information

We evaluate the operating performance of our markets individually. For purposes of business segment reporting, we have aligned operations with similar characteristics into two business segments: Radio and Television.

The Radio segment includes twenty-three markets, which includes all ninety-one of our radio stations and five radio information networks. The Television segment includes two markets and consists of four television stations and four low power television (“LPTV”) stations. The Radio and Television segments derive their revenue from the sale of commercial broadcast inventory. The category “Corporate general and administrative” represents the income and expense not allocated to reportable segments.

	Radio		Television		Corporate and Other			Consolidated
	(In thousands)
Three Months Ended June 30, 2012:
Net operating revenue	$	28,482	$	4,504	$	—		$	32,986
Station operating expense		18,921		3,038		—			21,959
Corporate general and administrative		—		—		1,940			1,940
Operating income (loss) from continuing operations	$	9,561	$	1,466	$	(1,940	)	$	9,087
Depreciation and amortization	$	1,274	$	346	$	56		$	1,676

	Radio		Television		Corporate and Other			Consolidated
	(In thousands)
Three Months Ended June 30, 2011:
Net operating revenue	$	28,611	$	4,153	$	—		$	32,764
Station operating expense		20,004		3,012		—			23,016
Corporate general and administrative		—		—		1,949			1,949
Operating income (loss) from continuing operations	$	8,607	$	1,141	$	(1,949	)	$	7,799
Depreciation and amortization	$	1,348	$	318	$	59		$	1,725

	Radio		Television		Corporate and Other			Assets Held For Sale		Consolidated
	(In thousands)
Six Months Ended June 30, 2012:
Net operating revenue	$	53,682	$	8,627	$	—				$	62,309
Station operating expense		38,276		6,043		—					44,319
Corporate general and administrative		—		—		3,889					3,889
Operating income (loss) from continuing operations	$	15,406	$	2,584	$	(3,889	)			$	14,101
Depreciation and amortization	$	2,571	$	685	$	113				$	3,369
Total assets	$	149,508	$	23,657	$	15,719		$	2,960	$	191,844

	Radio		Television		Corporate and Other			Assets Held For Sale		Consolidated
	(In thousands)
Six Months Ended June 30, 2011:
Net operating revenue	$	53,117	$	7,895	$	—				$	61,012
Station operating expense		39,282		5,868		—					45,150
Corporate general and administrative		—		—		3,889					3,889
Operating income (loss) from continuing operations	$	13,835	$	2,027	$	(3,889	)			$	11,973
Depreciation and amortization	$	2,687	$	637	$	113				$	3,437
Total assets	$	153,029	$	23,243	$	22,051		$	3,300	$	201,623

11

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion should be read in conjunction with the unaudited condensed consolidated financial statements and notes thereto of Saga Communications, Inc. and its subsidiaries contained elsewhere herein and the audited financial statements and Management Discussion and Analysis contained in our Annual Report on Form 10-K for the year ended December 31, 2011. The following discussion is presented on both a consolidated and segment basis. Corporate general and administrative expenses, interest expense, other (income) expense, and income tax expense are managed on a consolidated basis and are reflected only in our discussion of consolidated results.

For purposes of business segment reporting, we have aligned operations with similar characteristics into two business segments: Radio and Television. The Radio segment includes twenty-three markets, which includes all ninety-one of our radio stations and five radio information networks (“Networks”). The Television segment includes two markets and consists of four television stations and four LPTV stations. The discussion of our operating performance focuses on segment operating income because we manage our segments primarily on operating income. Operating performance is evaluated for each individual market.

General

We are a broadcast company primarily engaged in acquiring, developing and operating broadcast properties.

Recent Developments

On April 3, 2012 we entered into a definitive agreement to sell our Greenville, Mississippi TV station (“WXVT”) for $3 million, subject to certain adjustments, to H3 Communications, LLC. We also entered into an Agreement for the Sale of Commercial Time and a Shared Services Agreement (“the Agreements”) with Commonwealth Broadcasting, LLC (“Commonwealth”), that were effective May 1, 2012, whereby Commonwealth, in conjunction with the WXVT sales staff will sell the advertising inventory of WXVT, and WXVT will provide programming and services including but not limited to use of facilities, traffic, billing, engineering, administrative and accounting to Commonwealth. The Agreements remain in effect until the closing of the sale or termination of the sales agreement, whichever is earlier. We do not anticipate this transaction to have a material effect on our consolidated financial statements. The sale, which is subject to the approval of the Federal Communications Commission, is expected to close in 2012.

In accordance with authoritative guidance we have reported the results of operations of WXVT as discontinued operations in the accompanying unaudited condensed consolidated financial statements. For all previously reported periods, certain amounts in the unaudited condensed consolidated financial statements have been reclassified. The assets and liabilities of WXVT have been classified as held for sale and the net results of operations have been reclassified from continuing operations to discontinued operations. WXVT was previously included in the Company’s television segment.

Radio Segment

Our radio segment’s primary source of revenue is from the sale of advertising for broadcast on our stations. Depending on the format of a particular radio station, there are a predetermined number of advertisements available to be broadcast each hour.

Most advertising contracts are short-term and generally run for a few weeks only. The majority of our revenue is generated from local advertising, which is sold primarily by each radio markets’ sales staff. For the six months ended June 30, 2012 and 2011, approximately 88% and 86%, respectively, of our radio segment’s gross revenue was from local advertising. To generate national advertising sales, we engage independent advertising sales representative firms that specialize in national sales for each of our broadcast markets.

Our revenue varies throughout the year. Advertising expenditures, our primary source of revenue, generally have been lowest during the winter months, which include the first quarter of each year. We expect a significant increase in political advertising in 2012 due to both the presidential election and a number of congressional, senatorial, gubernatorial and local elections in most of our markets.

Our net operating revenue, station operating expense and operating income vary from market to market based upon the market’s rank or size which is based upon population and the available radio advertising revenue in that particular market.

The broadcasting industry and advertising in general, is influenced by the state of the overall economy, including unemployment rates, inflation, energy prices and consumer interest rates. Our stations primarily broadcast in small to midsize markets. Historically, these markets have been more stable than major metropolitan markets during downturns in advertising spending, but may not experience increases in such spending as significant as those in major metropolitan markets in periods of economic improvement.

12

Our financial results are dependent on a number of factors, the most significant of which is our ability to generate advertising revenue through rates charged to advertisers. The rates a station is able to charge are, in large part, based on a station’s ability to attract audiences in the demographic groups targeted by its advertisers. In a number of our markets this is measured by periodic reports generated by independent national rating services. In the remainder of our markets it is measured by the results advertisers obtain through the actual running of an advertising schedule. Advertisers measure these results based on increased demand for their goods or services and/or actual revenues generated from such demand. Various factors affect the rate a station can charge, including the general strength of the local and national economies, population growth, ability to provide popular programming, local market competition, target marketing capability of radio compared to other advertising media and signal strength.

The number of advertisements that can be broadcast without jeopardizing listening levels (and the resulting ratings) is limited in part by the format of a particular radio station. Our stations strive to maximize revenue by constantly managing the number of commercials available for sale and adjusting prices based upon local market conditions and ratings. While there may be shifts from time to time in the number of advertisements broadcast during a particular time of day, the total number of advertisements broadcast on a particular station generally does not vary significantly from year to year. Any change in our revenue, with the exception of those instances where stations are acquired or sold, is generally the result of inventory sell out ratios and pricing adjustments, which are made to ensure that the station efficiently utilizes available inventory.

Our radio stations employ a variety of programming formats. We periodically perform market research, including music evaluations, focus groups and strategic vulnerability studies. Because reaching a large and demographically attractive audience is crucial to a station’s financial success, we endeavor to develop strong listener loyalty. Our stations also employ audience promotions to further develop and secure a loyal following. We believe that the diversification of formats on our radio stations helps to insulate us from the effects of changes in musical tastes of the public on any particular format.

The primary operating expenses involved in owning and operating radio stations are employee salaries, sales commissions, programming expenses, depreciation, and advertising and promotion expenses.

During the six months ended June 30, 2012 and 2011 and the years ended December 31, 2011 and 2010, our Bellingham, Washington; Des Moines, Iowa; Manchester, New Hampshire; and Milwaukee, Wisconsin markets, when combined, represented approximately 28%, 29%, 29% and 30%, respectively, of our consolidated net operating revenue. An adverse change in any of these radio markets or our relative market position in those markets could have a significant impact on our operating results as a whole.

We have experienced a decline in our net operating revenue for the six months ended June 30, 2012 and year ended December 31, 2011, as compared to the corresponding periods of 2011 and 2010, respectively, in our Milwaukee, Wisconsin market. This decline in net operating revenue has directly affected the operating income of our radio stations in this market. These reductions are attributable to a combination of aggressive competitive pricing due to a soft economy and new rating methodology that has changed the competitive pricing landscape in the market; an increase in the demand for 30 second spots which has caused a reduction in both our rates and inventory available as we control the number of units per hour to provide more entertainment for our listeners; and a decline in certain key category spending in the market.

The following table describes the percentage of our consolidated net operating revenue represented by each of these markets:

	Percentage of  Consolidated Net Operating Revenue for the Six Months Ended June 30,				Percentage of Consolidated Net Operating Revenue for the Years Ended December 31,
	2012		2011		2011		2010
Market:
Bellingham, Washington		5%		5%		5%		5%
Des Moines, Iowa		7%		7%		7%		6%
Manchester, New Hampshire		5%		5%		5%		6%
Milwaukee, Wisconsin		12%		12%		12%		13%

We use certain financial measures that are not calculated in accordance with generally accepted accounting principles in the United States of America (GAAP) to assess our financial performance. For example, we evaluate the performance of our markets based on “station operating income” (operating income plus corporate general and administrative expenses, depreciation and amortization). Station operating income is generally recognized by the broadcasting industry as a measure of performance, is used by analysts who report on the performance of the broadcasting industry and it serves as an indicator of the market value of a group of stations. In addition, we use it to evaluate individual stations, market-level performance, overall operations and as a primary measure for incentive based compensation of executives and other members of management. Station operating income is not necessarily indicative of amounts that may be available to us for debt service requirements, other commitments, reinvestment or other discretionary uses. Station operating income is not a measure of liquidity or of performance in accordance with GAAP, and should be viewed as a supplement to, and not a substitute for our results of operations presented on a GAAP basis.

13

During the six months ended June 30, 2012 and 2011 and the years ended December 31, 2011 and 2010, the radio stations in our four largest markets when combined, represented approximately 34%, 35%, 34% and 36%, respectively, of our consolidated station operating income. The following table describes the percentage of our consolidated station operating income represented by each of these markets:

	Percentage of  Consolidated Station Operating Income (*) for the Six Months  Ended June 30,				Percentage of  Consolidated Station Operating Income(*) for the Years Ended December 31,
	2012		2011		2011		2010
Market:
Bellingham, Washington		6%		6%		6%		7%
Des Moines, Iowa		6%		6%		6%		4%
Manchester, New Hampshire		8%		7%		7%		8%
Milwaukee, Wisconsin		15%		16%		15%		17%

* Operating income plus corporate general and administrative expenses, depreciation and amortization.

Television Segment

Our television segment’s primary source of revenue is from the sale of advertising for broadcast on our stations. The number of advertisements available for broadcast on our television stations is limited by network affiliation and syndicated programming agreements and, with respect to children’s programs, federal regulation. Our television stations’ local market managers determine the number of advertisements to be broadcast in locally produced programs only, which are primarily news programming and occasionally local sports or information shows.

Our net operating revenue, station operating expense and operating income vary from market to market based upon the market’s rank or size, which is based upon population, available television advertising revenue in that particular market, and the popularity of programming being broadcast.

Our financial results are dependent on a number of factors, the most significant of which is our ability to generate advertising revenue through rates charged to advertisers. The rates a station is able to charge are, in large part, based on a station’s ability to attract audiences in the demographic groups targeted by its advertisers, as measured principally by periodic reports by independent national rating services. Various factors affect the rate a station can charge, including the general strength of the local and national economies, population growth, ability to provide popular programming through locally produced news, sports and weather and as a result of syndication and network affiliation agreements, local market competition, the ability of television broadcasting to reach a mass appeal market compared to other advertising media, and signal strength including cable/satellite coverage, and government regulation and policies.

Our stations strive to maximize revenue by constantly adjusting prices for our commercial spots based upon local market conditions, demand for advertising and ratings. While there may be shifts from time to time in the number of advertisements broadcast during a particular time of the day, the total number of advertisements broadcast on a particular station generally does not vary significantly from year to year. Any change in our revenue, with the exception of those instances where stations are acquired or sold, is generally the result of pricing adjustments, which are made to ensure that the station efficiently utilizes available inventory.

Because audience ratings in the local market are crucial to a station’s financial success, we endeavor to develop strong viewer loyalty by providing locally produced news, weather and sports programming. We believe that this emphasis on the local market provides us with the viewer loyalty we are trying to achieve.

Most of our revenue is generated from local advertising, which is sold primarily by each television markets’ sales staff. For the six months ended June 30, 2012 and 2011, approximately 84% and 82%, respectively, of our television segment’s gross revenue was from local advertising. To generate national advertising sales, we engage independent advertising sales representatives that specialize in national sales for each of our television markets.

Our revenue varies throughout the year. Advertising expenditures, our primary source of revenue, generally have been lowest during the winter months, which include the first quarter of each year. We expect a significant increase in political advertising in 2012 due to both the presidential election and a number of congressional, senatorial, gubernatorial and local elections in most of our markets.

14

In 2009 we entered into retransmission consent agreements with certain cable and satellite providers as to the terms of their carriage of our television stations, and the compensation we would receive for granting such carriage rights. We recognized revenue of approximately $608,000 for the year ended December 31, 2011 as a result of these agreements. In 2011 we negotiated new retransmission consent agreements with these and other providers that will result in a significant increase in our retransmission consent revenue. We expect to recognize revenue of approximately $1.8 million in 2012 and, per the terms of our network affiliation agreements, we expect to remit approximately $570,000 of this revenue to our network partners as their share of our retransmission consent revenue.

The primary operating expenses involved in owning and operating television stations are employee salaries, sales commissions, programming expenses, including news production and the cost of acquiring certain syndicated programming, depreciation, and advertising and promotion expenses.

Our television market in Joplin, Missouri represented approximately 9%, 9%, 9% and 8%, respectively, of our net operating revenues, and approximately 11%, 10%, 10% and 10%, respectively, of our consolidated station operating income (operating income plus corporate general and administrative expenses, depreciation and amortization) for the six months ended June 30, 2012 and 2011 and the years ended December 31, 2011 and 2010.

Three Months Ended June 30, 2012 Compared to Three Months Ended June 30, 2011

Results of Operations

The following tables summarize our results of operations for the three months ended June 30, 2012 and 2011.

Consolidated Results of Operations

	Three Months Ended June 30,						$ Increase			% Increase
	2012			2011			(Decrease)			(Decrease)
	(In thousands, except percentages and per share information)
Net operating revenue	$	32,986		$	32,764		$	222			0.7	%
Station operating expense		21,959			23,016			(1,057	)		(4.6	)%
Corporate G&A		1,940			1,949			(9	)		(0.5	)%
Operating income from continuing operations		9,087			7,799			1,288			16.5	%
Interest expense		458			1,034			(576	)		(55.7	)%
Write-off debt issuance costs		—			1,326			(1,326	)		N/M
Other income, net		(8	)		(95	)		(87	)		N/M
Income from continuing operations before income tax		8,637			5,534			3,103			56.1	%
Income tax provision		3,438			2,251			1,187			52.7	%
Income from continuing operations, net of income taxes		5,199			3,283			1,916			58.4	%
Loss from discontinued operations, net of income taxes		(67	)		(113	)		(46	)		(40.7	)%
Net income	$	5,132		$	3,170		$	1,962			61.9	%
Earnings per share:
From continuing operations	$	1.22		$	.77		$	.45			58.4	%
From discontinued operations		(.01	)		(.02	)		.01			50.0	%
Earnings per share (basic and diluted)	$	1.21		$	.75		$	.46			61.3	%

15

Radio Broadcasting Segment
	Three Months Ended June 30,				$ Increase			% Increase
	2012		2011		(Decrease)			(Decrease)
	(In thousands, except percentages)
Net operating revenue	$	28,482	$	28,611	$	(129	)		(0.5	)%
Station operating expense		18,921		20,004		(1,083	)		(5.4	)%
Operating income	$	9,561	$	8,607	$	954			11.1	%

Television Broadcasting Segment
	Three Months  Ended June 30,				$ Increase		% Increase
	2012		2011		(Decrease)		(Decrease)
	(In thousands, except percentages)
Net operating revenue	$	4,504	$	4,153	$	351		8.5	%
Station operating expense		3,038		3,012		26		0.9	%
Operating income	$	1,466	$	1,141	$	325		28.5	%

N/M = Not Meaningful

Reconciliation of segment operating income to consolidated operating income from continuing operations:

	Radio		Television		Corporate and Other			Consolidated
	(In thousands)
Three Months Ended June 30, 2012:
Net operating revenue	$	28,482	$	4,504	$	—		$	32,986
Station operating expense		18,921		3,038		—			21,959
Corporate general and administrative		—		—		1,940			1,940
Operating income (loss) from continuing operations	$	9,561	$	1,466	$	(1,940	)	$	9,087

	Radio		Television		Corporate and Other			Consolidated
	(In thousands)
Three Months Ended June 30, 2011:
Net operating revenue	$	28,611	$	4,153	$	—		$	32,764
Station operating expense		20,004		3,012		—			23,016
Corporate general and administrative		—		—		1,949			1,949
Operating income (loss) from continuing operations	$	8,607	$	1,141	$	(1,949	)	$	7,799

Consolidated

For the three months ended June 30, 2012, consolidated net operating revenue was $32,986,000 compared with $32,764,000 for the three months ended June 30, 2011, an increase of $222,000 or less than 1%. Gross political revenue and gross local revenue increased $480,000 and $98,000, respectively, in the current year. Gross retransmission consent revenue increased $328,000 and gross national revenue decreased $812,000 in the current quarter. The increase in gross political revenue was a result of the 2012 election campaigns, and the increase in gross retransmission consent revenue was due to our renegotiated contracts for the carriage rights of our television stations. The decrease in national revenue is due to a reduction of national advertising in our radio segment.

16

Station operating expense was $21,959,000 for the three months ended June 30, 2012, compared with $23,016,000 for the three months ended June 30, 2011, a decrease of $1,057,000 or 5%. Music licensing fees decreased approximately $1,200,000 in the current quarter as a result of lower royalty rates and credits received from two of our performance rights organizations for fees previously paid. We also had a decrease in health care costs of $225,000 in the current quarter. Salaries increased $251,000, primarily as a result of the reinstatement of the 5% salary reductions implemented in March 2009. Retransmission fees were $106,000 which is a new expense in 2012 for our television stations. Retransmission fees are the amount that we will have to pay our network affiliates as a result of our renegotiated carriage rights agreements.

Operating income from continuing operations for the three months ended June 30, 2012 was $9,087,000 compared to $7,799,000 for the three months ended June 30, 2011, an increase of $1,288,000 or 17%. The increase was a result of the improvement in net operating revenue and the reduction in station operating expense described in detail above.

The loss from discontinued operations is related to our Greenville, Mississippi TV station held for sale and is presented net of income taxes. See Note 4 to the unaudited condensed consolidated financial statements for more information on our discontinued operations.

We generated net income of $5,132,000 ($1.21 per share on a fully diluted basis) during the three months ended June 30, 2012, compared with $3,170,000 ($.75 per share on a fully diluted basis) for the three months ended June 30, 2011, an increase of $1,962,000 or 62%. In the current quarter we had an increase in operating income from continuing operations of $1,288,000, as described above, and a decrease in interest expense of $576,000. The decrease in interest expense was attributable to an average decrease in market interest rates, a decrease in average debt outstanding and a decrease in the amortization of debt financing costs. Income tax expense increased $1,187,000 in the current quarter, as a result of the improvement in operating income and the decline in interest expense. Additionally, in the prior year we recognized a one-time charge of $1,326,000 for the write-off of unamortized debt issuance costs, and non-recurring other income of $105,000 from the construction of a tower at one of our markets.

Radio Segment

For the three months ended June 30, 2012, net operating revenue of the radio segment decreased $129,000, or less than 1%, to $28,482,000 compared with $28,611,000 for the three months ended June 30, 2011. Gross national revenue decreased $734,000 for the quarter. National advertising on our Networks accounted for 46% of this decrease. Gross political revenue and gross local revenue increased $255,000 and $200,000, respectively. The increase in gross political revenue was a result of the 2012 election campaigns. The increase in gross local revenue was primarily attributable to improvements in our Charlottesville, VA, Columbus, OH and Norfolk, VA markets, partially offset by a decline in local revenue on our Networks.

Station operating expense for the radio segment was $18,921,000 for the three months ended June 30, 2012, compared with $20,004,000 for the three months ended June 30, 2011, a decrease of $1,083,000 or 5%. Music licensing fees decreased approximately $1,200,000 in the current quarter as a result of lower royalty rates and credits received from two of our performance rights organizations for fees previously paid. We also had a decrease in health care costs of $203,000 in the current quarter. Salaries increased $209,000, primarily as a result of the reinstatement of the 5% salary reductions implemented in March 2009.

Operating income for the radio segment increased $954,000 to $9,561,000 for the three months ended June 30, 2012, from $8,607,000 for the three months ended June 30, 2011. The increase was a result of the decrease in station operating expense described in detail above.

Television Segment

For the three months ended June 30, 2012, net operating revenue of our television segment was $4,504,000 compared with $4,153,000 for the three months ended June 30, 2011, an increase of $351,000 or 8%. Gross political revenue and gross retransmission consent revenue increased $225,000 and $328,000, respectively. The increase in gross political revenue was attributable to the 2012 election campaigns, and the increase in gross retransmission consent revenue was a result of our renegotiated contracts for the carriage rights of our television stations. These increases were partially offset by decreases in gross national revenue and gross local revenue of $78,000 and $102,000, respectively.

Station operating expense in the television segment for the three months ended June 30, 2012 was $3,038,000, compared with $3,012,000 for the three months ended June 30, 2011, an increase of $26,000 or less than 1%.

Operating income for the television segment for the three months ended June 30, 2012 was $1,466,000 compared with $1,141,000 for the three months ended June 30, 2011, an increase of $325,000 or 28%. The increase was a result of the improvement in net operating revenue described in detail above.

17

Six Months Ended June 30, 2012 Compared to Six Months Ended June 30, 2011

Results of Operations

The following tables summarize our results of operations for the six months ended June 30, 2012 and 2011.

Consolidated Results of Operations

	Six Months Ended June 30,						$ Increase			% Increase
	2012			2011			(Decrease)			(Decrease)
	(In thousands, except percentages and per share information)
Net operating revenue	$	62,309		$	61,012		$	1,297			2.1	%
Station operating expense		44,319			45,150			(831	)		(1.8	)%
Corporate G&A		3,889			3,889			—			—	%
Operating income		14,101			11,973			2,128			17.8	%
Interest expense		986			2,191			(1,205	)		(55.0	)%
Write-off debt issuance costs		—			1,326			(1,326	)		N/M
Other income, net		(10	)		(32	)		(22	)		N/M
Income from continuing operations before income tax		13,125			8,488			4,637			54.6	%
Income tax provision		5,223			3,457			1,766			51.1	%
Income from continuing operations, net of income taxes		7,902			5,031			2,871			57.1	%
Loss from discontinued operations, net of income taxes		(65	)		(199	)		(134	)		(67.3	)%
Net income	$	7,837		$	4,832		$	3,005			62.2	%
Earnings per share:
From continuing operations	$	1.86		$	1.19		$	.67			56.3	%
From discontinued operations		(.02	)		(.05	)		.03			60.0	%
Earnings per share (diluted)	$	1.84		$	1.14		$	.70			61.4	%

Radio Broadcasting Segment
	Six Months Ended June 30,				$ Increase			% Increase
	2012		2011		(Decrease)			(Decrease)
	(In thousands, except percentages)
Net operating revenue	$	53,682	$	53,117	$	565			1.1	%
Station operating expense		38,276		39,282		(1,006	)		(2.6	)%
Operating income	$	15,406	$	13,835	$	1,571			11.4	%

Television Broadcasting Segment
	Six Months Ended June 30,				$ Increase		% Increase
	2012		2011		(Decrease)		(Decrease)
	(In thousands, except percentages)
Net operating revenue	$	8,627	$	7,895	$	732		9.3	%
Station operating expense		6,043		5,868		175		3.0	%
Operating income	$	2,584	$	2,027	$	557		27.5	%

N/M = Not Meaningful

18

Reconciliation of segment operating income to consolidated operating income from continuing operations:

	Radio		Television		Corporate and Other			Consolidated
	(In thousands)
Six Months Ended June 30, 2012:
Net operating revenue	$	53,682	$	8,627	$	—		$	62,309
Station operating expense		38,276		6,043		—			44,319
Corporate general and administrative		—		—		3,889			3,889
Operating income (loss) from continuing operations	$	15,406	$	2,584	$	(3,889	)	$	14,101

	Radio		Television		Corporate and Other			Consolidated
	(In thousands)
Six Months Ended June 30, 2011:
Net operating revenue	$	53,117	$	7,895	$	—		$	61,012
Station operating expense		39,282		5,868		—			45,150
Corporate general and administrative		—		—		3,889			3,889
Operating income (loss) from continuing operations	$	13,835	$	2,027	$	(3,889	)	$	11,973

Consolidated

For the six months ended June 30, 2012, consolidated net operating revenue was $62,309,000 compared with $61,012,000 for the six months ended June 30, 2011, an increase of $1,297,000 or 2%. Gross local revenue and gross political revenue increased $669,000 and $882,000, respectively, for the six months of 2012. Gross retransmission consent revenue increased $628,000 and gross national revenue decreased $1,056,000 compared to the prior year. The increase in gross local revenue was primarily attributable to improvements in our Charlottesville, VA, Columbus, OH and Norfolk, VA markets, partially offset by a decline in local revenue on our Networks. The increase in gross political revenue was a result of the 2012 election campaigns, and the increase in gross retransmission consent revenue was due to our renegotiated contracts for the carriage rights of our television stations. The decrease in national revenue is due to a reduction of national advertising in 2012.

Station operating expense was $44,319,000 for the six months ended June 30, 2012, compared with $45,150,000 for the six months ended June 30, 2011, a decrease of $831,000 or 2%. Music licensing fees decreased approximately $1,300,000 in the current year as a result of lower royalty rates and credits received from two of our performance rights organizations for fees previously paid. We also had a decrease in health care costs of $378,000 as compared to the prior year. Salaries increased $610,000, primarily as a result of the reinstatement of the 5% salary reductions implemented in March 2009. Retransmission fees were $232,000 which is a new expense in 2012 for our television stations. Retransmission fees are the amount that we will have to pay our network affiliates as a result of our renegotiated carriage rights agreements.

Operating income for the six months ended June 30, 2012 was $14,101,000 compared to $11,973,000 for the six months ended June 30, 2011, an increase of $2,128,000, or 18%. The increase was a result of the improvement in net operating revenue and the reduction in station operating expense described in detail above.

The loss from discontinued operations is related to our Greenville, Mississippi TV station held for sale and is presented net of income taxes. See Note 4 to the unaudited condensed consolidated financial statements for more information on our discontinued operations.

We generated net income of $7,837,000 ($1.84 per share on a fully diluted basis) for the six months ended June 30, 2012, compared with $4,832,000 ($1.14 per share on a fully diluted basis) for the six months ended June 30, 2011, an increase of $3,005,000 or 62%. In the current year we had an increase in operating income of $2,128,000, as described above, and a decrease in interest expense of $1,205,000. Additionally, in the prior year we recognized a non-recurring charge of $1,326,000 for the write-off of unamortized debt issuance costs. The decrease in interest expense was attributable to an average decrease in market interest rates of 0.90%, a decrease in average debt outstanding, and a decrease in the amortization of debt financing costs. Income tax expense increased $1,766,000 as a result of the improvement in operating income and the decline in interest expense.

19

Radio Segment

For the six months ended June 30, 2012, net operating revenue of the radio segment was $53,682,000 compared with $53,117,000 for the six months ended June 30, 2011, an increase of $565,000 or 1%. Gross local revenue and gross political revenue increased $757,000 and $561,000, respectively, for the six months of 2012. Gross national revenue decreased $961,000 compared to the prior year. The increase in gross local revenue was primarily attributable to improvements in our Charlottesville, VA, Columbus, OH and Norfolk, VA markets, partially offset by a decline in local revenue on our Networks. The increase in gross political revenue was a result of the 2012 election campaigns. The decrease in national revenue is due to a reduction of national advertising in 2012. National advertising on our Networks accounted for 32% of this decrease.

Station operating expense for the radio segment was $38,276,000 for the six months ended June 30, 2012, compared with $39,282,000 for the six months ended June 30, 2011, a decrease of $1,006,000 or 3%. Music licensing fees decreased approximately $1,300,000 in the current year as a result of lower royalty rates and credits received from two of our performance rights organizations for fees previously paid. We also had a decrease in health care costs of $351,000 in the current year. Salaries increased $472,000, primarily as a result of the reinstatement of the 5% salary reductions implemented in March 2009, and local sales commissions increased $133,000 due to the increased revenue for the period.

Operating income for the radio segment increased $1,571,000 or 11% to $15,406,000 for the six months ended June 30, 2012, from $13,835,000 for the six months ended June 30, 2011. The increase was a result of the improvement in net operating revenue and the reduction in station operating expense described in detail above.

Television Segment

For the six months ended June 30, 2012, net operating revenue of our television segment was $8,627,000 compared with $7,895,000 for the six months ended June 30, 2011, an increase of $732,000 or 9%. Gross political revenue and gross retransmission consent revenue increased $321,000 and $628,000, respectively, in 2012. The increase in gross political revenue was attributable to the 2012 election campaigns, and the increase in gross retransmission consent revenue was a result of our renegotiated contracts for the carriage rights of our television stations. These increases were partially offset by decreases in gross national revenue and gross local revenue of $95,000 and $88,000, respectively.

Station operating expense in the television segment for the six months ended June 30, 2012 was $6,043,000, compared with $5,868,000 for the six months ended June 30, 2011, an increase of $175,000 or 3%. The increase in station operating expense was primarily retransmission fees of $232,000 in 2012, which is a new expense in 2012 for our television stations. Retransmission fees are the amount that we will have to pay our network affiliates as a result of our renegotiated carriage rights agreements.

Operating income in the television segment for the six months ended June 30, 2012 was $2,584,000 compared with $2,027,000 for the six months ended June 30, 2011, an increase of $557,000 or 27%. The increase was a result of the improvement in net operating revenue partially offset by an increase in station operating expense, described in detail above.

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Forward-Looking Statements

Statements contained in this Form 10-Q that are not historical facts are forward-looking statements that are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. In addition, words such as “believes,” “anticipates,” “estimates,” “plans,” “expects,” and similar expressions are intended to identify forward-looking statements. These statements are made as of the date of this report or as otherwise indicated, based on current expectations. We undertake no obligation to update this information. A number of important factors could cause our actual results for 2012 and beyond to differ materially from those expressed in any forward-looking statements made by or on our behalf. Forward-looking statements are not guarantees of future performance as they involve a number of risks, uncertainties and assumptions that may prove to be incorrect and that may cause our actual results and experiences to differ materially from the anticipated results or other expectations expressed in such forward-looking statements. The risks, uncertainties and assumptions that may affect our performance include our financial leverage and debt service requirements, dependence on key personnel, dependence on key stations, U.S. and local economic conditions, our ability to successfully integrate acquired stations, regulatory requirements, new technologies, natural disasters and terrorist attacks. We cannot be sure that we will be able to anticipate or respond timely to changes in any of these factors, which could adversely affect the operating results in one or more fiscal quarters. Results of operations in any past period should not be considered, in and of itself, indicative of the results to be expected for future periods. Fluctuations in operating results may also result in fluctuations in the price of our stock.

For a more complete description of the prominent risks and uncertainties inherent in our business, see Item 1A. “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2011.

Liquidity and Capital Resources

Debt Arrangements and Debt Service Requirements

Our credit facility providing availability up to $117.8 million (the “Credit Facility”) consists of a $57.8 million term loan (the “Term Loan”) and a $60 million revolving loan (the “Revolving Credit Facility”) and matures on June 13, 2016.

We had $60 million of unused borrowing capacity under the Revolving Credit Facility at June 30, 2012. The unused portion of the Revolving Credit Facility is available for general corporate purposes, including working capital, capital expenditures, permitted acquisitions and related transaction expenses and permitted stock buybacks.

The Term Loan principal amortizes in equal installments of 5% of the Term Loan during each year, however, upon satisfaction of certain conditions, as defined in the Credit Facility, no amortization payment is required. The Credit Facility is also subject to mandatory prepayment requirements, including but not limited to, certain sales of assets, certain insurance proceeds, certain debt issuances and certain sales of equity. Optional prepayments of the Credit Facility are permitted without any premium or penalty, other than certain costs and expenses. As of June 30, 2012, we have no required amortization payment.

We have pledged substantially all of our assets (excluding our FCC licenses and certain other assets) in support of the Credit Facility and each of our subsidiaries has guaranteed the Credit Facility and has pledged substantially all of their assets (excluding their FCC licenses and certain other assets) in support of the Credit Facility.

The Credit Facility contains a number of financial covenants (all of which we were in compliance with at June 30, 2012) which, among other things, require us to maintain specified financial ratios and impose certain limitations on us with respect to investments, additional indebtedness, dividends, distributions, guarantees, liens and encumbrances.

Sources and Uses of Cash

During the six months ended June 30, 2012 and 2011, we had net cash flows from operating activities of $14,756,000 and $11,556,000, respectively. We believe that cash flow from operations will be sufficient to meet quarterly debt service requirements for interest and payments of principal under our Credit Facility. However, if such cash flow is not sufficient we may be required to sell additional equity securities, refinance our obligations or dispose of one or more of our properties in order to make such payments. There can be no assurance that we would be able to effect any such transactions on favorable terms, if at all.

Our capital expenditures, exclusive of acquisitions, for the six months ended June 30, 2012 were $2,502,000 ($2,522,000 for the corresponding period in 2011). We anticipate capital expenditures in 2012 to be $4.5 to $5.0 million, which we expect to finance through funds generated from operations.

21

Summary Disclosures About Contractual Obligations and Commercial Commitments

We have future cash obligations under various types of contracts, including the terms of our Credit Facility, operating leases, programming contracts, employment agreements, and other operating contracts. For additional information concerning our future cash obligations see “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operation — Summary Disclosures About Contractual Obligations and Commercial Commitments” in our Annual Report on Form 10-K for the year ended December 31, 2011.

We anticipate that our contractual cash obligations will be financed through funds generated from operations or additional borrowings under the Credit Facility, or a combination thereof.

Critical Accounting Policies and Estimates

Our consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States, which require us to make estimates, judgments and assumptions that affect the reported amounts of certain assets, liabilities, revenues, expenses and related disclosures and contingencies. We evaluate estimates used in preparation of our financial statements on a continual basis. There have been no significant changes to our critical accounting policies that are described in Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Critical Accounting Policies” in our Annual Report on Form 10-K for the year ended December 31, 2011.

Inflation

The impact of inflation on our operations has not been significant to date. There can be no assurance that a high rate of inflation in the future would not have an adverse effect on our operations.

Item 3. Quantitative and Qualitative Disclosures about Market Risk

Refer to “Item 7A. Quantitative and Qualitative Disclosures about Market Risk” and “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations — Market Risk and Risk Management Policies” in our Annual Report on Form 10-K for the year ended December 31, 2011 for a complete discussion of our market risk. There have been no material changes to the market risk information included in our 2011 Annual Report on Form 10-K.

Item 4. Controls and Procedures

As of the end of the period covered by this report, the Company carried out an evaluation, under the supervision and with the participation of the Company’s management, including its Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of the Company’s disclosure controls and procedures pursuant to Rule 13a-15 of the Securities Exchange Act of 1934. Based upon that evaluation, the Company’s Chief Executive Officer and Chief Financial Officer concluded that the Company’s disclosure controls and procedures are effective to cause the material information required to be disclosed by the Company in the reports that it files or submits under the Securities Exchange Act of 1934 to be recorded, processed, summarized and reported within the time periods specified in the Commission’s rules and forms. There were no changes in the Company’s internal controls over financial reporting during the quarter ended June 30, 2012, that have materially affected, or are reasonably likely to materially affect, the Company’s internal controls over financial reporting.

22

PART II — OTHER INFORMATION

Item 1. Legal Proceedings

We currently and from time to time are involved in litigation incidental to the conduct of our business. We are not a party to any lawsuit or proceeding which, in the opinion of management, is likely to have a material adverse effect on our financial position, cash flows or results of operations.

Item 6. Exhibits

31.1	Certification of Chief Executive Officer Pursuant to Rule 13a-14(a) and Rule 15d-14(a) of the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2	Certification of Chief Financial Officer Pursuant to Rule 13a-14(a) and Rule 15d-14(a) of the Securities Exchange Act1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32	Certification of Chief Executive Officer and Chief Financial Officer Pursuant to 18 U.S.C. Section 1350 and Rule 13-14(b) of the Securities Exchange Act of 1934, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS	XBRL Instance Document
101.SCH	XBRLTaxonomy Extension Schema Document
101.CAL	XBRLTaxonomy Calculation Linkbase Document
101.DEF	XBRLTaxonomy Extension Definition Linkbase Document
101.LAB	XBRLTaxonomy Extension Label Linkbase Document
101.PRE	XBRLTaxonomy Extension Presentation Linkbase Document

23

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	SAGA COMMUNICATIONS, INC
Date: August 9, 2012	/s/ SAMUEL D. BUSH
	Samuel D. Bush
	Senior Vice President and Chief Financial Officer (Principal Financial Officer)

Date: August 9, 2012	/s/ CATHERINE A. BOBINSKI
	Catherine A. Bobinski
	Senior Vice President, Corporate Controller and Chief Accounting Officer (Principal Accounting Officer)

24

EX-31.1

EXHIBIT 31.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER PURSUANT TO RULE 13a-14(a)

AND RULE 15d-14(a) OF THE SECURITIES EXCHANGE ACT, AS AMENDED

I, Edward K. Christian, Chief Executive Officer of Saga Communications, Inc., certify that:

1. I have reviewed this quarterly report on Form 10-Q of Saga Communications, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)), and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)), for the registrant and have:

a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 9, 2012	/s/ Edward K. Christian
	Edward K. Christian Chief Executive Officer

EX-31.2

EXHIBIT 31.2

CERTIFICATION OF CHIEF FINANCIAL OFFICER PURSUANT TO RULE 13a-14(a)

AND RULE 15d-14(a) OF THE SECURITIES EXCHANGE ACT, AS AMENDED

I, Samuel D. Bush, Chief Financial Officer of Saga Communications, Inc., certify that:

1. I have reviewed this quarterly report on Form 10-Q of Saga Communications, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)), and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)), for the registrant and have:

a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 9, 2012	/s/ Samuel D. Bush
	Samuel D. Bush
	Chief Financial Officer

EX-32

EXHIBIT 32

CERTIFICATION OF CHIEF EXECUTIVE OFFICER AND CHIEF FINANCIAL OFFICER

PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Saga Communications, Inc. (the “Company”) on Form 10-Q for the period ended June 30, 2012 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), we, Edward K. Christian, Chief Executive Officer of the Company, and Samuel D. Bush, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, to the best of our knowledge, that:

1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated: August 9, 2012	/s/ Edward K. Christian
	Edward K. Christian Chief Executive Officer
Dated: August 9, 2012	/s/ Samuel D. Bush
	Samuel D. Bush Chief Financial Officer

XML

Stock Based Compensation (Details1) (Restricted stock [Member], USD $)	6 Months Ended
	Jun. 30, 2012
Restricted stock [Member]
Summary of the restricted stock transactions
Outstanding at January 1, 2012	9,914
Outstanding Weighted Average Grant Date Fair Value, January 1, 2012	$ 26.15
Shares, Granted
Weighted Average Grant Date Fair Value, Granted
Weighted Average Grant Date Fair Value, Vested	$ 27.75
Weighted Average Grant Date Fair Value, Forfeited	$ 23.96
Non-vested and outstanding at June 30, 2012	4,150
Non-vested and outstanding Weighted Average Grant Date Fair Value	$ 23.96
Shares, Vested	(5,734)
Shares, Forfeited	(30)

XML

Common Stock and Treasury Stock

6 Months Ended

Jun. 30, 2012

Common Stock and Treasury Stock [Abstract]

Common Stock and Treasury Stock

5. Common Stock and Treasury Stock

The following summarizes information relating to the number of shares of our common stock issued in connection with stock transactions through June 30, 2012:

	Common Stock Issued
	Class A		Class B
	(Shares in thousands)
Balance, January 1, 2011		4,770		598
Conversion of shares		1		(1	)
Balance, December 31, 2011		4,771		597
Conversion of shares		—		—
Balance, June 30, 2012		4,771		597

We have a Stock Buy-Back Program to allow us to purchase up to $60 million of our Class A Common Stock. As of June 30, 2012, we have remaining authorization of $14.2 million for future repurchases of our Class A Common Stock.

XML

Segment Information (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011	Dec. 31, 2011
Segment reporting information
Net operating revenue	$ 32,986	$ 32,764	$ 62,309	$ 61,012
Station operating expense	21,959	23,016	44,319	45,150
Corporate general and administrative	1,940	1,949	3,889	3,889
Operating income (loss) from continuing operations	9,087	7,799	14,101	11,973
Depreciation and amortization	1,676	1,725	3,369	3,437
Total assets	191,844	201,623	191,844	201,623	190,334
Radio [Member]
Segment reporting information
Net operating revenue	28,482	28,611	53,682	53,117
Station operating expense	18,921	20,004	38,276	39,282
Operating income (loss) from continuing operations	9,561	8,607	15,406	13,835
Depreciation and amortization	1,274	1,348	2,571	2,687
Total assets	149,508	153,029	149,508	153,029
Television [Member]
Segment reporting information
Net operating revenue	4,504	4,153	8,627	7,895
Station operating expense	3,038	3,012	6,043	5,868
Operating income (loss) from continuing operations	1,466	1,141	2,584	2,027
Depreciation and amortization	346	318	685	637
Total assets	23,657	23,243	23,657	23,243
Corporate and Other [Member]
Segment reporting information
Corporate general and administrative	1,940	1,949	3,889	3,889
Operating income (loss) from continuing operations	(1,940)	(1,949)	(3,889)	(3,889)
Depreciation and amortization	56	59	113	113
Total assets	15,719	22,051	15,719	22,051
Assets Held For Sale [Member]
Segment reporting information
Total assets	$ 2,960	$ 3,300	$ 2,960	$ 3,300

XML

Long-Term Debt (Details Textual) (USD $) In Millions, unless otherwise specified	6 Months Ended
	Jun. 30, 2012
Long Term Debt (Textual) [Abstract]
Credit Facility maximum borrowing capacity	$ 117.8
Credit Facility matures	Jun. 13, 2016
Amortization payment
Term loan [Member]
Long Term Debt (Textual) [Abstract]
Credit Facility maximum borrowing capacity	57.8
Term loan principal amortization rate	5.00%
Revolving credit facility [Member]
Long Term Debt (Textual) [Abstract]
Credit Facility maximum borrowing capacity	60.0
Unused borrowing capacity under the revolving credit Facility	$ 60

XML

Segment Information (Details Textual)	6 Months Ended
	Jun. 30, 2012 Segment Networks Stations
Segment Information (Additional Textual) [Abstract]
Number of operating segments	2
Number of radio information networks	5
Number of low power television stations	4
Radio [Member]
Segment Information (Textual) [Abstract]
Number of market segments	23
Number of stations	91
Television [Member]
Segment Information (Textual) [Abstract]
Number of market segments	2
Number of stations	4

XML

Discontinued Operations

6 Months Ended

Jun. 30, 2012

Discontinued Operations [Abstract]

Discontinued Operations

4. Discontinued Operations

On April 3, 2012 we entered into a definitive agreement to sell our Greenville, Mississippi TV station (“WXVT”) for $3 million, subject to certain adjustments, to H3 Communications, LLC (“H3”). We also entered into an Agreement for the Sale of Commercial Time and a Shared Services Agreement (“the Agreements”) with Commonwealth Broadcasting, LLC (“Commonwealth”), that were effective May 1, 2012, whereby Commonwealth, in conjunction with the WXVT sales staff will sell the advertising inventory of WXVT, and WXVT will provide programming and services including but not limited to use of facilities, traffic, billing, engineering, administrative and accounting to Commonwealth. The Agreements remain in effect until the closing of the sale or termination of the sales agreement, whichever is earlier. We do not anticipate this transaction to have a material effect on our consolidated financial statements. The sale, which is subject to the approval of the Federal Communications Commission, is expected to close in 2012.

In accordance with authoritative guidance we have reported the results of operations of WXVT as discontinued operations in the accompanying unaudited condensed consolidated financial statements. For all previously reported periods, certain amounts in the unaudited condensed consolidated financial statements have been reclassified. The assets and liabilities of WXVT have been classified as held for sale and the net results of operations have been reclassified from continuing operations to discontinued operations. WXVT was previously included in the Company’s television segment.

XML

Condensed Consolidated Balance Sheets (Unaudited) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2012	Dec. 31, 2011
Current assets:
Cash and cash equivalents	$ 8,841	$ 6,991
Accounts receivable, net	19,374	19,415
Prepaid expenses and other current assets	2,341	1,907
Barter transactions	1,808	1,358
Deferred income taxes	1,175	1,169
Current assets held for sale	128	120
Total current assets	33,667	30,960
Property and equipment	156,437	154,246
Less accumulated depreciation	96,703	93,624
Net property and equipment	59,734	60,622
Broadcast licenses, net	90,361	90,356
Other intangibles, deferred costs and investments, net	5,250	5,409
Assets held for sale	2,832	2,987
Total assets	191,844	190,334
Current liabilities:
Accounts payable	1,410	1,728
Payroll and payroll taxes	5,765	5,730
Other accrued expenses	4,760	2,502
Barter transactions	1,870	1,550
Current portion of long-term debt		3,000
Current liabilities of station held for sale	131	128
Total current liabilities	13,936	14,638
Deferred income taxes	15,163	13,383
Long-term debt	58,828	66,078
Other liabilities	2,914	3,065
Liabilities of station held for sale	188	195
Total liabilities	91,029	97,359
Commitments and contingencies
Stockholders' equity
Common stock	53	53
Additional paid-in capital	50,763	50,681
Retained earnings	78,668	70,831
Total stockholders' equity	100,815	92,975
Treasury stock	(28,669)	(28,590)
Total liabilities and stockholders' equity	$ 191,844	$ 190,334

XML

Recent Accounting Pronouncements

6 Months Ended

Jun. 30, 2012

Recent Accounting Pronouncements [Abstract]

Recent Accounting Pronouncements

2. Recent Accounting Pronouncements

In May 2011, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2011-04, Fair Value Measurement (Topic 820): Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs. The amendments in this ASU change the wording used to describe many of the requirements in U.S. generally accepted accounting principles (“GAAP”) for measuring fair value and for disclosing information about fair value measurements. For many of the requirements, the FASB does not intend for the amendments in this ASU to result in a change in the application of the requirements in Topic 820. Some of the amendments clarify the FASB’s intent about the application of existing fair value measurement requirements. Other amendments change a particular principle or requirement for measuring fair value or for disclosing information about fair value measurements. This update was adopted on January 1, 2012 and did not have a material impact on our consolidated financial statements.

XML

Discontinued Operations (Details Textual) (USD $) In Millions, unless otherwise specified	Apr. 03, 2012
Discontinued Operations [Abstract]
Agreement to sell TV station	$ 3

XML

Stock Based Compensation (Details) (USD $) In Thousands, except Share data, unless otherwise specified	6 Months Ended
	Jun. 30, 2012	Dec. 31, 2011
Summary the stock option transactions
Number of Options Outstanding at January 1, 2012	227,747
Weighted Average Exercise Price Outstanding, at January 1, 2012	$ 49.86
Weighted Average Remaining Contractual Term (Years)		3 years 7 months 6 days
Aggregate Intrinsic Value Outstanding, at January 1, 2012	$ 109,299
Number of Options Granted
Weighted Average Exercise Price, Granted
Number of Options Exercised
Weighted Average Exercise Price, Exercised
Number of Options Expired	(24,566)
Number of Options Forfeited
Weighted Average Exercise Price, Expired	$ 82.85
Weighted Average Exercise Price, Forfeited
Number of Options Outstanding and exercisable, at June 30, 2012	203,181
Weighted Average Exercise Price, Outstanding and exercisable at June 30, 2012	$ 45.88
Weighted Average Remaining Contractual Term (Years), Outstanding and exercisable	3 years 6 months
Aggregate Intrinsic Value of Stock Options, Outstanding and exercisable	$ 109,299

XML

Intangible Assets

6 Months Ended

Jun. 30, 2012

Intangible Assets [Abstract]

Intangible Assets

3. Intangible Assets

We evaluate our FCC licenses for impairment annually as of October 1 ^st or more frequently if events or circumstances indicate that the asset might be impaired. FCC licenses are evaluated for impairment at the market level using a direct method. If the carrying amount of FCC licenses is greater than their estimated fair value in a given market, the carrying amount of FCC licenses in that market is reduced to its estimated fair value.

Intangible assets that have finite lives are amortized over their useful lives using the straight-line method. Favorable lease agreements are amortized over the lives of the leases ranging from 4 to 26 years. Other intangibles are amortized over one to eleven years.

XML

Condensed Consolidated Statements of Income (Unaudited) (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011
Condensed Consolidated Statements of Income [Abstract]
Net operating revenue	$ 32,986	$ 32,764	$ 62,309	$ 61,012
Station operating expense	21,959	23,016	44,319	45,150
Corporate general and administrative	1,940	1,949	3,889	3,889
Operating income from continuing operations	9,087	7,799	14,101	11,973
Other expenses, net:
Interest expense	458	1,034	986	2,191
Write-off revolving credit facility debt issuance costs		1,326		1,326
Other income , net	(8)	(95)	(10)	(32)
Income from continuing operations before income tax	8,637	5,534	13,125	8,488
Income tax provision	3,438	2,251	5,223	3,457
Income from continuing operations, net of income tax	5,199	3,283	7,902	5,031
Loss from discontinued operations, net of income tax	(67)	(113)	(65)	(199)
Net income	$ 5,132	$ 3,170	$ 7,837	$ 4,832
Basic earning (loss) per share :
From continuing operations	$ 1.22	$ 0.77	$ 1.86	$ 1.19
From discontinued operations	$ (0.01)	$ (0.02)	$ (0.01)	$ (0.05)
Earnings per share	$ 1.21	$ 0.75	$ 1.85	$ 1.14
Diluted earnings (loss) per share:
From continuing operations	$ 1.22	$ 0.77	$ 1.86	$ 1.19
From discontinued operations	$ (0.01)	$ (0.02)	$ (0.02)	$ (0.05)
Earnings per share	$ 1.21	$ 0.75	$ 1.84	$ 1.14
Weighted average common shares	4,246	4,242	4,243	4,237
Weighted average common and common equivalent shares	4,247	4,245	4,250	4,242

XML

Long-Term Debt (Tables)

6 Months Ended

Jun. 30, 2012

Long-Term Debt [Abstract]

Long-term debt

	June 30, 2012		December 31, 2011
	(In thousands)
Credit Agreement:
Term loan	$	57,750	$	58,500
Revolving credit facility		—		9,500
Secured debt of affiliate		1,078		1,078
		58,828		69,078
Amounts payable within one year		—		3,000
	$	58,828	$	66,078

XML

Document and Entity Information	6 Months Ended
	Jun. 30, 2012	Aug. 03, 2012 Common Class A	Aug. 03, 2012 Common Class B
Entity Registrant Name	SAGA COMMUNICATIONS INC
Entity Central Index Key	0000886136
Document Type	10-Q
Document Period End Date	Jun. 30, 2012
Amendment Flag	false
Document Fiscal Year Focus	2012
Document Fiscal Period Focus	Q2
Current Fiscal Year End Date	--12-31
Entity Filer Category	Accelerated Filer
Entity Common Stock, Shares Outstanding		3,652,405	597,504

XML

Segment Information (Tables)

6 Months Ended

Jun. 30, 2012

Segment Information [Abstract]

Segment reporting information

	Radio		Television		Corporate and Other			Consolidated
	(In thousands)
Three Months Ended June 30, 2012:
Net operating revenue	$	28,482	$	4,504	$	—		$	32,986
Station operating expense		18,921		3,038		—			21,959
Corporate general and administrative		—		—		1,940			1,940
Operating income (loss) from continuing operations	$	9,561	$	1,466	$	(1,940	)	$	9,087
Depreciation and amortization	$	1,274	$	346	$	56		$	1,676

	Radio		Television		Corporate and Other			Consolidated
	(In thousands)
Three Months Ended June 30, 2011:
Net operating revenue	$	28,611	$	4,153	$	—		$	32,764
Station operating expense		20,004		3,012		—			23,016
Corporate general and administrative		—		—		1,949			1,949
Operating income (loss) from continuing operations	$	8,607	$	1,141	$	(1,949	)	$	7,799
Depreciation and amortization	$	1,348	$	318	$	59		$	1,725

	Radio		Television		Corporate and Other			Assets Held For Sale		Consolidated
	(In thousands)
Six Months Ended June 30, 2012:
Net operating revenue	$	53,682	$	8,627	$	—				$	62,309
Station operating expense		38,276		6,043		—					44,319
Corporate general and administrative		—		—		3,889					3,889
Operating income (loss) from continuing operations	$	15,406	$	2,584	$	(3,889	)			$	14,101
Depreciation and amortization	$	2,571	$	685	$	113				$	3,369
Total assets	$	149,508	$	23,657	$	15,719		$	2,960	$	191,844

	Radio		Television		Corporate and Other			Assets Held For Sale		Consolidated
	(In thousands)
Six Months Ended June 30, 2011:
Net operating revenue	$	53,117	$	7,895	$	—				$	61,012
Station operating expense		39,282		5,868		—					45,150
Corporate general and administrative		—		—		3,889					3,889
Operating income (loss) from continuing operations	$	13,835	$	2,027	$	(3,889	)			$	11,973
Depreciation and amortization	$	2,687	$	637	$	113				$	3,437
Total assets	$	153,029	$	23,243	$	22,051		$	3,300	$	201,623

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Condensed Consolidated Statements of Cash Flows (Unaudited) (USD $) In Thousands, unless otherwise specified	6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011
Cash flows from operating activities:
Cash provided by operating activities	$ 14,756	$ 11,556
Cash flows from investing activities:
Net cash used in investing activities	(2,576)	(2,626)
Acquisition of property and equipment	(2,502)	(2,522)
Other investing activities	(74)	(104)
Cash flows from financing activities:
Proceeds from long-term debt		92,100
Net cash used in financing activities	(10,330)	(8,264)
Payments on long-term debt	(10,250)	(99,100)
Payments for debt issuance costs		(1,147)
Purchase of shares held in treasury	(80)	(117)
Net increase in cash and cash equivalents	1,850	666
Cash and cash equivalents, beginning of period	6,991	12,197
Cash and cash equivalents, end of period	$ 8,841	$ 12,863

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Segment Information

6 Months Ended

Jun. 30, 2012

Segment Information [Abstract]

Segment Information

8. Segment Information

We evaluate the operating performance of our markets individually. For purposes of business segment reporting, we have aligned operations with similar characteristics into two business segments: Radio and Television.

The Radio segment includes twenty-three markets, which includes all ninety-one of our radio stations and five radio information networks. The Television segment includes two markets and consists of four television stations and four low power television (“LPTV”) stations. The Radio and Television segments derive their revenue from the sale of commercial broadcast inventory. The category “Corporate general and administrative” represents the income and expense not allocated to reportable segments.

	Radio		Television		Corporate and Other			Consolidated
	(In thousands)
Three Months Ended June 30, 2012:
Net operating revenue	$	28,482	$	4,504	$	—		$	32,986
Station operating expense		18,921		3,038		—			21,959
Corporate general and administrative		—		—		1,940			1,940
Operating income (loss) from continuing operations	$	9,561	$	1,466	$	(1,940	)	$	9,087
Depreciation and amortization	$	1,274	$	346	$	56		$	1,676

	Radio		Television		Corporate and Other			Consolidated
	(In thousands)
Three Months Ended June 30, 2011:
Net operating revenue	$	28,611	$	4,153	$	—		$	32,764
Station operating expense		20,004		3,012		—			23,016
Corporate general and administrative		—		—		1,949			1,949
Operating income (loss) from continuing operations	$	8,607	$	1,141	$	(1,949	)	$	7,799
Depreciation and amortization	$	1,348	$	318	$	59		$	1,725

	Radio		Television		Corporate and Other			Assets Held For Sale		Consolidated
	(In thousands)
Six Months Ended June 30, 2012:
Net operating revenue	$	53,682	$	8,627	$	—				$	62,309
Station operating expense		38,276		6,043		—					44,319
Corporate general and administrative		—		—		3,889					3,889
Operating income (loss) from continuing operations	$	15,406	$	2,584	$	(3,889	)			$	14,101
Depreciation and amortization	$	2,571	$	685	$	113				$	3,369
Total assets	$	149,508	$	23,657	$	15,719		$	2,960	$	191,844

	Radio		Television		Corporate and Other			Assets Held For Sale		Consolidated
	(In thousands)
Six Months Ended June 30, 2011:
Net operating revenue	$	53,117	$	7,895	$	—				$	61,012
Station operating expense		39,282		5,868		—					45,150
Corporate general and administrative		—		—		3,889					3,889
Operating income (loss) from continuing operations	$	13,835	$	2,027	$	(3,889	)			$	11,973
Depreciation and amortization	$	2,687	$	637	$	113				$	3,437
Total assets	$	153,029	$	23,243	$	22,051		$	3,300	$	201,623

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Long-Term Debt

6 Months Ended

Jun. 30, 2012

Long-Term Debt [Abstract]

Long-Term Debt

7. Long-Term Debt

Long-term debt consisted of the following:

	June 30, 2012		December 31, 2011
	(In thousands)
Credit Agreement:
Term loan	$	57,750	$	58,500
Revolving credit facility		—		9,500
Secured debt of affiliate		1,078		1,078
		58,828		69,078
Amounts payable within one year		—		3,000
	$	58,828	$	66,078

Our credit facility providing availability up to $117.8 million (the “Credit Facility”) consists of a $57.8 million term loan (the “Term Loan”) and a $60 million revolving loan (the “Revolving Credit Facility”) and matures on June 13, 2016.

We had $60 million of unused borrowing capacity under the Revolving Credit Facility at June 30, 2012. The unused portion of the Revolving Credit Facility is available for general corporate purposes, including working capital, capital expenditures, permitted acquisitions and related transaction expenses and permitted stock buybacks.

The Term Loan principal amortizes in equal installments of 5% of the Term Loan during each year, however, upon satisfaction of certain conditions, as defined in the Credit Facility, no amortization payment is required. The Credit Facility is also subject to mandatory prepayment requirements, including but not limited to, certain sales of assets, certain insurance proceeds, certain debt issuances and certain sales of equity. Optional prepayments of the Credit Facility are permitted without any premium or penalty, other than certain costs and expenses. As of June 30, 2012, we have no required amortization payment.

We have pledged substantially all of our assets (excluding our FCC licenses and certain other assets) in support of the Credit Facility and each of our subsidiaries has guaranteed the Credit Facility and has pledged substantially all of their assets (excluding their FCC licenses and certain other assets) in support of the Credit Facility.

The Credit Facility contains a number of financial covenants (all of which we were in compliance with at June 30, 2012) which, among other things, require us to maintain specified financial ratios and impose certain limitations on us with respect to investments, additional indebtedness, dividends, distributions, guarantees, liens and encumbrances.

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Common Stock and Treasury Stock (Details) (USD $) In Millions, except Share data in Thousands, unless otherwise specified	6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011
Common Stock Class A [Member]
Number of common stock issued in connection with stock transactions
Common Stock, Shares, Issued, Beginning Balance	4,771	4,770
Conversion of shares		1
Common Stock, Shares, Issued, Ending Balance	4,771
Common Stock and Treasury Stock (Textual) [Abstract]
Share repurchase program, authorized amount	$ 60
Share repurchase program, remaining authorized amount	$ 14.2
Common Stock Class B [Member]
Number of common stock issued in connection with stock transactions
Common Stock, Shares, Issued, Beginning Balance	597	598
Conversion of shares		(1)
Common Stock, Shares, Issued, Ending Balance	597

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Summary of Significant Accounting Policies (Details) (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011
Numerator:
Income from continuing operations, net of income tax	$ 5,199	$ 3,283	$ 7,902	$ 5,031
Loss from discontinued operations, net of income tax	(67)	(113)	(65)	(199)
Net income	$ 5,132	$ 3,170	$ 7,837	$ 4,832
Denominator:
Denominator for basic earnings per share - weighted average shares	4,246	4,242	4,243	4,237
Effect of dilutive securities	1	3	7	5
Denominator for diluted earnings per share - adjusted weighted-average shares and assumed conversions	4,247	4,245	4,250	4,242
Basic earning (loss) per share :
From continuing operations	$ 1.22	$ 0.77	$ 1.86	$ 1.19
From discontinued operations	$ (0.01)	$ (0.02)	$ (0.01)	$ (0.05)
Earnings per share	$ 1.21	$ 0.75	$ 1.85	$ 1.14
Diluted earnings (loss) per share:
From continuing operations	$ 1.22	$ 0.77	$ 1.86	$ 1.19
From discontinued operations	$ (0.01)	$ (0.02)	$ (0.02)	$ (0.05)
Earnings per share	$ 1.21	$ 0.75	$ 1.84	$ 1.14

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Common Stock and Treasury Stock (Tables)

6 Months Ended

Jun. 30, 2012

Common Stock and Treasury Stock [Abstract]

Number of common stock issued in connection with stock transactions

	Common Stock Issued
	Class A		Class B
	(Shares in thousands)
Balance, January 1, 2011		4,770		598
Conversion of shares		1		(1	)
Balance, December 31, 2011		4,771		597
Conversion of shares		—		—
Balance, June 30, 2012		4,771		597

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Summary of Significant Accounting Policies (Policies)

6 Months Ended

Jun. 30, 2012

Summary of Significant Accounting Policies [Abstract]

Basis of Presentation

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) 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 notes required by generally accepted accounting principles 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, 2012 and the results of operations for the three and six months ended June 30, 2012 and 2011. Results of operations for the six months ended June 30, 2012 are not necessarily indicative of the results that may be expected for the year ending December 31, 2012. The balance sheet at December 31, 2011 has been derived from the audited financial statements at that date but does not include all of the information and notes required by GAAP for annual financial statements.

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, 2011.

The Company has evaluated events and transactions occurring subsequent to the balance sheet date of June 30, 2012, for items that should potentially be recognized in these financial statements or discussed within the notes to the financial statements.

Earnings Per Share Information

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,
	2012			2011			2012			2011
	(In thousands, except per share data)
Numerator:
Income from continuing operations, net of income tax	$	5,199		$	3,283		$	7,902		$	5,031
Loss from discontinued operations, net of income tax		(67	)		(113	)		(65	)		(199	)
Net income available to common stockholders	$	5,132		$	3,170		$	7,837		$	4,832
Denominator:
Denominator for basic earnings per share — weighted average shares		4,246			4,242			4,243			4,237
Effect of dilutive securities		1			3			7			5
Denominator for diluted earnings per share — adjusted weighted-average shares and assumed conversions		4,247			4,245			4,250			4,242
Basic earnings (loss) per share:
From continuing operations	$	1.22		$	.77		$	1.86		$	1.19
From discontinued operations		(.01	)		(.02	)		(.01	)		(.05	)
Earnings per share	$	1.21		$	.75		$	1.85		$	1.14
Diluted earnings (loss) per share:
From continuing operations	$	1.22		$	.77		$	1.86		$	1.19
From discontinued operations		(.01	)		(.02	)		(.02	)		(.05	)
Earnings per share	$	1.21		$	.75		$	1.84		$	1.14

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 105,000 for the three and six months ended June 30, 2012 and 228,000 for the three and six months ended June 30, 2011. 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.

Income Taxes

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

Time Brokerage Agreements

We have entered into Time Brokerage Agreements (“TBA’s”) 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.

Discontinued Operations

In accordance with authoritative guidance we have reported the results of operations of WXVT as discontinued operations in the accompanying unaudited condensed consolidated financial statements. For all previously reported periods, certain amounts in the unaudited condensed consolidated financial statements have been reclassified. The assets and liabilities of WXVT have been classified as held for sale and the net results of operations have been reclassified from continuing operations to discontinued operations. WXVT was previously included in the Company’s television segment.

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Summary of Significant Accounting Policies (Tables)

6 Months Ended

Jun. 30, 2012

Summary of Significant Accounting Policies [Abstract]

Computation of basic and diluted earnings per share

	Three Months Ended June 30,						Six Months Ended June 30,
	2012			2011			2012			2011
	(In thousands, except per share data)
Numerator:
Income from continuing operations, net of income tax	$	5,199		$	3,283		$	7,902		$	5,031
Loss from discontinued operations, net of income tax		(67	)		(113	)		(65	)		(199	)
Net income available to common stockholders	$	5,132		$	3,170		$	7,837		$	4,832
Denominator:
Denominator for basic earnings per share — weighted average shares		4,246			4,242			4,243			4,237
Effect of dilutive securities		1			3			7			5
Denominator for diluted earnings per share — adjusted weighted-average shares and assumed conversions		4,247			4,245			4,250			4,242
Basic earnings (loss) per share:
From continuing operations	$	1.22		$	.77		$	1.86		$	1.19
From discontinued operations		(.01	)		(.02	)		(.01	)		(.05	)
Earnings per share	$	1.21		$	.75		$	1.85		$	1.14
Diluted earnings (loss) per share:
From continuing operations	$	1.22		$	.77		$	1.86		$	1.19
From discontinued operations		(.01	)		(.02	)		(.02	)		(.05	)
Earnings per share	$	1.21		$	.75		$	1.84		$	1.14

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Stock Based Compensation (Tables)

6 Months Ended

Jun. 30, 2012

Stock-Based Compensation [Abstract]

Summary the stock option transactions

	Number of Options			Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (Years)		Aggregate Intrinsic Value
Outstanding at January 1, 2012		227,747		$	49.86		3.6	$	109,299
Granted		—			—
Exercised		—			—
Expired		(24,566	)		82.85
Forfeited		—			—
Outstanding and exercisable at June 30, 2012		203,181		$	45.88		3.5	$	109,299

Summary of restricted stock transactions

	Shares			Weighted Average Grant Date Fair Value
Outstanding at January 1, 2012		9,914		$	26.15
Granted		—			—
Vested		(5,734	)		27.75
Forfeited		(30	)		23.96
Non-vested and outstanding at June 30, 2012		4,150		$	23.96

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Intangible Assets (Details Textual)	6 Months Ended
	Jun. 30, 2012
Favorable lease agreements [Member] | Maximum [Member]
Intangible Assets (Textual) [Abstract]
Amortized over the lives of the leases term range	26 years
Favorable lease agreements [Member] | Minimum [Member]
Intangible Assets (Textual) [Abstract]
Amortized over the lives of the leases term range	4 years
Other intangibles [Member] | Maximum [Member]
Intangible Assets (Textual) [Abstract]
Amortized over the lives of the leases term range	11 years
Other intangibles [Member] | Minimum [Member]
Intangible Assets (Textual) [Abstract]
Amortized over the lives of the leases term range	1 year

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Stock Based Compensation (Details Textual) (USD $)	3 Months Ended		6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011
Restricted stock [Member]
Stock Based Compensation (Textual) [Abstract]
Stock-Based Compensation expense	$ 25,000	$ 41,000	$ 60,000	$ 108,000
Recognized tax benefits	10,000	16,000	24,000	44,000
Stock Option [Member]
Stock Based Compensation (Textual) [Abstract]
Stock-Based Compensation expense	0	34,000	22,000	129,000
Recognized tax benefits		$ 14,000	$ 9,000	$ 53,000

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Summary of Significant Accounting Policies

6 Months Ended

Jun. 30, 2012

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 (“GAAP”) 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 notes required by generally accepted accounting principles 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, 2012 and the results of operations for the three and six months ended June 30, 2012 and 2011. Results of operations for the six months ended June 30, 2012 are not necessarily indicative of the results that may be expected for the year ending December 31, 2012. The balance sheet at December 31, 2011 has been derived from the audited financial statements at that date but does not include all of the information and notes required by GAAP for annual financial statements.

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, 2011.

The Company has evaluated events and transactions occurring subsequent to the balance sheet date of June 30, 2012, 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,
	2012			2011			2012			2011
	(In thousands, except per share data)
Numerator:
Income from continuing operations, net of income tax	$	5,199		$	3,283		$	7,902		$	5,031
Loss from discontinued operations, net of income tax		(67	)		(113	)		(65	)		(199	)
Net income available to common stockholders	$	5,132		$	3,170		$	7,837		$	4,832
Denominator:
Denominator for basic earnings per share — weighted average shares		4,246			4,242			4,243			4,237
Effect of dilutive securities		1			3			7			5
Denominator for diluted earnings per share — adjusted weighted-average shares and assumed conversions		4,247			4,245			4,250			4,242
Basic earnings (loss) per share:
From continuing operations	$	1.22		$	.77		$	1.86		$	1.19
From discontinued operations		(.01	)		(.02	)		(.01	)		(.05	)
Earnings per share	$	1.21		$	.75		$	1.85		$	1.14
Diluted earnings (loss) per share:
From continuing operations	$	1.22		$	.77		$	1.86		$	1.19
From discontinued operations		(.01	)		(.02	)		(.02	)		(.05	)
Earnings per share	$	1.21		$	.75		$	1.84		$	1.14

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 105,000 for the three and six months ended June 30, 2012 and 228,000 for the three and six months ended June 30, 2011. 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.

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 (“TBA’s”) 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.

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Stock-Based Compensation

6 Months Ended

Jun. 30, 2012

Stock-Based Compensation [Abstract]

Stock-Based Compensation

6. Stock-Based Compensation

2005 Incentive Compensation Plan

On May 10, 2010, our stockholders approved the Amended and Restated 2005 Incentive Compensation Plan (the “2005 Plan”) which replaced our 2003 Stock Option Plan (the “2003 Plan”) as to future grants. The 2005 Plan extends through March 2015 and allows for the granting of restricted stock, restricted stock units, incentive stock options, nonqualified stock options, and performance awards to officers and a selected number of employees.

Stock-Based Compensation

For the six months ended June 30, 2012 and the three and six months ended June 30, 2011, we had $22,000, $34,000 and $129,000, respectively, of total compensation expense related to stock options. This expense is included in corporate general and administrative expenses in our results of operations. The associated tax benefit recognized for the six months ended June 30, 2012 and the three and six months ended June 30, 2011 was $9,000, $14,000 and $53,000, respectively. The stock options were fully expensed at March 31, 2012, therefore there was no compensation expense related to stock options for the three months ended June 30, 2012.

The following summarizes the stock option transactions for the 2005 and 2003 Plans and the 1992 Stock Option Plan (the “1992 Plan”) for the six months ended June 30, 2012:

	Number of Options			Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (Years)		Aggregate Intrinsic Value
Outstanding at January 1, 2012		227,747		$	49.86		3.6	$	109,299
Granted		—			—
Exercised		—			—
Expired		(24,566	)		82.85
Forfeited		—			—
Outstanding and exercisable at June 30, 2012		203,181		$	45.88		3.5	$	109,299

The following summarizes the restricted stock transactions for the six months ended June 30, 2012:

	Shares			Weighted Average Grant Date Fair Value
Outstanding at January 1, 2012		9,914		$	26.15
Granted		—			—
Vested		(5,734	)		27.75
Forfeited		(30	)		23.96
Non-vested and outstanding at June 30, 2012		4,150		$	23.96

For the three and six months ended June 30, 2012 and the three and six months ended June 30, 2011, we had $25,000, $60,000, $41,000 and $108,000, respectively, of total compensation expense related to restricted stock-based compensation arrangements. This expense is included in corporate general and administrative expenses in our results of operations. The associated tax benefit recognized for the three and six months ended June 30, 2012 and the three and six months ended June 30, 2011 was $10,000, $24,000, $16,000 and $44,000, respectively.

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Long-Term Debt (Details) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2012	Dec. 31, 2011
Total debt
Long-term debt	$ 58,828	$ 69,078
Amounts payable within one year		3,000
Long-term debt, noncurrent	58,828	66,078
Term loan [Member]
Total debt
Long-term debt	57,750	58,500
Revolving credit facility [Member]
Total debt
Long-term debt		9,500
Secured debt of affiliate [Member]
Total debt
Long-term debt	$ 1,078	$ 1,078

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Summary of Significant Accounting Policies (Details Textual)	3 Months Ended		6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011
Summary of Significant Accounting Policies (Textual) [Abstract]
Number of stock options outstanding having antidilutive effect	105,000	228,000	105,000	228,000