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SECURITIES AND EXCHANGE COMMISSION
þ | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
o | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Delaware | 95-3980449 | |
(State or other jurisdiction of | (I.R.S. Employer | |
incorporation or organization) | Identification No.) |
New York, NY 10036
(212)-641-2000
(Address, including zip code, and telephone number,
including area code, of principal executive offices)
Title of each class | Name of each exchange on which registered | |
Common stock, par value $0.01 per share | NASDAQ Stock Market LLC |
Large accelerated filero | Accelerated filero | Non-accelerated filero | Smaller reporting companyþ |
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• | Metro Traffic Re-engineering. We consolidated 60 operating centers into 13 regional hubs. As part of this process, which spanned nearly 21 months, we implemented new traffic video and speed and flow technology and reduced our reliance on aircraft. |
• | Cost Reduction Programs. We reduced salary expense and headcount, reduced programming costs and eliminated unprofitable programming, and negotiated reductions in compensation we pay to our affiliated radio stations to more effectively match such compensation to the revenue and profitability of the commercial airtime the stations provide to us. |
• | Dedicated Sales Forces. We appointed new leadership to oversee the sales efforts of each of our Network and Metro Traffic businesses to improve focus, accountability and results. |
• | Revenue Initiatives.In our Network business, we delivered expanded product offerings such as copy-splitting and focused on adding new programming, which resulted in new programs such asThe Fred Thompson ShowandPeter Greenberg Worldwide,expanding distribution ofThe Billy Bush Showto CHR audiences nationwide, entering into a multi-year renewal agreement for continued syndication of the CNN Radio Network, and recently-announced deals with Harpo Radio for programs with Gayle King and Dr. Mehmet Oz. In Metro Traffic, we began to deliver an increased amount of 15 second spots and pre-recorded advertisements. |
• | Network.We plan to grow the Network business organically by: investing in new, targeted programming, expanding our affiliate and advertising salesforce, and investing in our systems and infrastructure to help increase sales productivity. |
• | Metro Traffic.We intend to drive revenue in our Metro Traffic business by deploying a SigAlert traffic product in major metropolitan areas throughout the U.S, adding to and top-grading our salesforce, completing new inventory optimization and pricing systems, further improving our sales mix, and expanding our local news product with short-form sports content and other high-demand content. As part of this strategy, we recently partnered with Litton News Source to help drive growth in the number of television affiliates and we plan to further upgrade our television traffic product with SigAlert graphics and online solutions. We also plan to selectively add television advertising salespersons in key markets to broaden our reach and scale. |
• | Business Development.We continue to seek opportunities to complement our organic growth strategy with strategic partnerships such as TrafficLand and Litton News Source and select business development activity, as we did with SigAlert, including acquisitions and dispositions. |
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• | a maximum senior leverage ratio (expressed as the principal amount of Senior Notes over our Adjusted EBITDA (as defined in our Senior Credit Facility) measured on a trailing, four-quarter basis) which is 8.0 to 1.0 on March 31, 2010 but begins to decline on a quarterly basis thereafter, including to a 6.5 to 1.0 ratio on December 31, 2010, a 4.50 to 1.0 ratio on December 31, 2011 and a 3.5 to 1.0 ratio on March 31, 2012; and |
• | restrictions on our ability to incur debt, incur liens, make investments, make capital expenditures, consummate acquisitions, pay dividends, sell assets and enter into mergers and similar transactions. |
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• | difficulties in integrating and managing the operations, technologies and products of the companies we acquire; |
• | diversion of our management’s attention from normal daily operations of our business; |
• | our inability to maintain the key business relationships and reputations of the businesses we acquire; |
• | uncertainty of entry into markets in which we have limited or no prior experience or in which competitors have stronger market positions; |
• | our dependence on unfamiliar affiliates and partners of the companies we acquire; |
• | insufficient revenue to offset our increased expenses associated with the acquisitions; |
• | our responsibility for the liabilities of the businesses we acquire; and |
• | potential loss of key employees of the companies we acquire. |
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• | delaying, deferring or preventing a change in control; |
• | impeding a merger, consolidation, takeover or other business combination; |
• | discouraging a potential acquirer from making a tender offer or otherwise attempting obtain control; or |
• | causing us to enter into transactions or agreements that are not in the best interests of all stockholders. |
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Approximate | ||||||
Location | Use | Floor Space Sq. Ft. | ||||
New York, NY | Corporate Headquarters | 39,000 | ||||
New York, NY | Broadcasting Center | 11,000 | ||||
Silver Spring, MD | Broadcasting | 21,000 | ||||
Culver City, CA(1) | Broadcasting | 32,000 |
(1) | On December 18, 2009, we closed the building financing of real property located in Culver City (the “Culver City Properties”). We received $6,998 in proceeds from the transaction after taking into account necessary repair work, commissions, fees and closing costs. As part of the transaction, we entered into a 10-year lease (with two five-year renewal options) for the Culver City Properties with annual rental payments of approximately $875 (in year 1 and thereafter, subject to incremental increases), not including a 2% management fee and operating expenses. We also issued a 12-month letter of credit for $219 (the equivalent of three months rent) as a security deposit under the lease. This transaction is presented as a “building financing” in the table entitled “Contractual Obligations and Commitments” that appears below. |
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2009 | High | Low | ||||||
First Quarter | $ | 0.12 | $ | 0.03 | ||||
Second Quarter | 0.10 | 0.05 | ||||||
Third Quarter (through August 4, 2009) | 0.06 | 0.04 | ||||||
Third Quarter (from August 5, 2009 through September 30, 2009)(1) | 9.50 | 5.90 | ||||||
Fourth Quarter (1) | 6.50 | 3.21 |
2008 | High | Low | ||||||
First Quarter | $ | 2.16 | $ | 1.51 | ||||
Second Quarter | 2.28 | 1.05 | ||||||
Third Quarter | 1.42 | 0.49 | ||||||
Fourth Quarter | 0.41 | 0.02 |
(1) | Reflects the 200 for 1 reverse stock split that occurred on August 3, 2009 and was reflected in stock prices on August 5, 2009. |
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Number of securities | ||||||||||||
remaining available for | ||||||||||||
future issuance under | ||||||||||||
Number of securities to | Weighted average | equity compensation | ||||||||||
be issued upon exercise | exercise price of | plus excluding | ||||||||||
of outstanding options, | outstanding options, | securities reflected in | ||||||||||
Plan Category | warrants and rights | warrants and rights | Column (a) | |||||||||
(a) | (b) | |||||||||||
(in thousands) | ||||||||||||
Equity compensation plans approved by security holders (1) | ||||||||||||
Options (2) | 28.6 | $ | 1,345.00 | (3 | ) | |||||||
Restricted Stock Units | 0.1 | N/A | (3 | ) | ||||||||
Restricted Stock | 0.8 | N/A | (3 | ) | ||||||||
Equity compensation plans not approved by security holders | — | — | — | |||||||||
Total | 29.5 | |||||||||||
(1) | We have amended and restated the 2005 Equity Compensation Plan (the “2005 Plan) because we had a limited number of shares available for issuance thereunder (such plan, as amended and restated, the “2010 Plan”). The 2010 Plan became effective upon its adoption by the Board on February 12, 2010 and accordingly the stock options issued under the 2010 Plan on such date are not reflected in the table above or the footnotes below. Such stock option awards remain subject to stockholder approval. | |
(2) | Options included herein were granted or are available for grant as part of our 1989 and 1999 stock option plans and/or the 2005 Plan that were approved by our stockholders. The Compensation Committee of the Board oversees option grants to executive officers and other employees. Among other things, the 2005 Plan provides for the granting of restricted stock and restricted stock units (“RSUs”). Pursuant to Board resolution since May 19, 2005, the date of our 2005 annual meeting of stockholders, outside directors have automatically received a grant of RSUs equal to $100 in value on the date of each of our annual meeting of stockholders and any newly appointed outside director would receive an initial grant of RSUs equal to $150 in value on the date such director is appointed to our Board. On April 23, 2009, the Board passed a resolution that discontinued this practice. Recipients of RSUs are entitled to receive dividend equivalents on the RSUs (subject to vesting) when and if we pay a cash dividend on our common stock. RSUs awarded to outside directors vest over a three-year period in equal one-third increments on the first, second and third anniversary of the date of the grant, subject to the director’s continued service with us. Directors’ RSUs vest automatically, in full, upon a change in control or upon their retirement, as defined in the 2005 Plan. RSUs are payable to outside directors in shares of our common stock. For a more complete description of the provisions of the 2005 Plan, refer to our proxy statement in which the 2005 Plan and a summary thereof are included as exhibits, filed with the SEC on April 29, 2005. The 1989 Plan expired in March 1999 and the 1999 Plan expired in March of 2009. | |
(3) | As of December 31, 2009, a maximum of 9,200 shares of common stock was authorized for issuance of equity compensation awards under the 2005 Plan. Options, RSUs and restricted stock are deducted from this authorized total, with grants of RSUs, restricted stock and related dividend equivalents being deducted at the rate of three shares for every one share granted. |
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CUMULATIVE TOTAL RETURN | 2005 | 2006 | 2007 | 2008 | 2009 | |||||||||||||||
Westwood One, Inc. | 61.48 | 27.60 | 7.81 | 0.22 | 0.09 | |||||||||||||||
Dow Jones US Total Market Index | 106.32 | 122.88 | 130.26 | 81.85 | 105.42 | |||||||||||||||
Dow Jones US Media Industry Index | 88.52 | 111.94 | 97.83 | 57.59 | 83.70 | |||||||||||||||
Westwood One Closing Stock Price(1) | 16.30 | 7.06 | 1.99 | 0.06 | 4.50 |
(1) | Stock prices prior to August 3, 2009 do not reflect the 200 for 1 reverse stock split that occurred on August 3, 2009 and was reflected in stock prices on and after August 5, 2009. |
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Successor Company | Predecessor Company | ||||||||||||||||||||||||
For the Period | For the Period | ||||||||||||||||||||||||
April 24, 2009 to | January 1, 2009 | Year Ended December 31, | |||||||||||||||||||||||
(In thousands except per share data) | December 31, 2009(1) | to April 23, 2009 | 2008 | 2007 | 2006 | 2005(2) | |||||||||||||||||||
Consolidated Statements of Operations: | |||||||||||||||||||||||||
Revenue | $ | 228,860 | $ | 111,474 | $ | 404,416 | $ | 451,384 | $ | 512,085 | $ | 557,830 | |||||||||||||
Operating costs | 213,521 | 111,580 | 360,492 | 350,440 | 395,196 | 378,998 | |||||||||||||||||||
Depreciation and amortization | 21,473 | 2,585 | 11,052 | 19,840 | 20,756 | 20,826 | |||||||||||||||||||
Corporate general and administrative expenses | 7,683 | 4,248 | 13,442 | 13,171 | 14,618 | 14,028 | |||||||||||||||||||
Goodwill and intangible impairment | 50,501 | — | 430,126 | — | 515,916 | — | |||||||||||||||||||
Restructuring charges | 3,976 | 3,976 | 14,100 | — | — | — | |||||||||||||||||||
Special charges | 5,554 | 12,819 | 13,245 | 4,626 | 1,579 | — | |||||||||||||||||||
Operating (loss) income | (73,848 | ) | (23,734 | ) | (438,041 | ) | 63,307 | (435,980 | ) | 143,978 | |||||||||||||||
Interest expense | 14,782 | 3,222 | 16,651 | 23,626 | 25,590 | 18,315 | |||||||||||||||||||
Other (income) expense | (5 | ) | (359 | ) | (12,369 | ) | (411 | ) | (926 | ) | (1,440 | ) | |||||||||||||
Income tax (benefit) expense | (25,025 | ) | (7,635 | ) | (14,760 | ) | 15,724 | 8,809 | 49,217 | ||||||||||||||||
Net (loss) income | $ | (63,600 | ) | $ | (18,962 | ) | $ | (427,563 | ) | $ | 24,368 | $ | (469,453 | ) | $ | 77,886 | |||||||||
Net (loss) income attributable to common stockholders(3) | $ | (145,148 | ) | $ | (22,038 | ) | $ | (430,644 | ) | $ | 24,363 | $ | (469,528 | ) | $ | 77,816 | |||||||||
(Loss) Income Per Basic Share: | |||||||||||||||||||||||||
Common stock | $ | (11.75 | ) | $ | (43.64 | ) | $ | (878.73 | ) | $ | 56.59 | $ | (1,091.76 | ) | $ | 171.56 | |||||||||
Class B stock | $ | — | $ | — | $ | — | $ | 3.20 | $ | 51.20 | $ | 48.00 | |||||||||||||
(Loss) Income Per Diluted Share: | |||||||||||||||||||||||||
Common stock | $ | (11.75 | ) | $ | (43.64 | ) | $ | (878.73 | ) | $ | 56.38 | $ | (1,091.76 | ) | $ | 170.05 | |||||||||
Class B stock | $ | — | $ | — | $ | — | $ | 3.20 | $ | 51.20 | $ | 48.00 | |||||||||||||
Dividends Declared(4) | |||||||||||||||||||||||||
Common stock | $ | — | $ | — | $ | — | $ | 3.85 | $ | 64.10 | $ | 59.44 | |||||||||||||
Class B stock | $ | — | $ | — | $ | — | $ | 3.20 | $ | 51.20 | $ | 48.00 | |||||||||||||
As of December 31, | As of December 31, | ||||||||||||||||||||||||
2009(1) | 2008 | 2007 | 2006 | 2005(1) | |||||||||||||||||||||
Consolidated Balance Sheet Data: | |||||||||||||||||||||||||
Current assets | $ | 123,871 | $ | 119,468 | $ | 138,154 | $ | 149,222 | $ | 172,245 | |||||||||||||||
Working capital (deficit)(5) | 37,532 | (208,034 | ) | 47,294 | 29,313 | 72,094 | |||||||||||||||||||
Total assets | 305,448 | 205,088 | 669,757 | 696,701 | 1,239,646 | ||||||||||||||||||||
Long-term debt(5) | 122,262 | — | 345,244 | 366,860 | 427,514 | ||||||||||||||||||||
Due to Gores | 11,165 | — | — | — | — | ||||||||||||||||||||
Total stockholders’ equity (deficit) | 17,984 | (203,145 | ) | 227,631 | 202,931 | 704,029 |
(1) | As a result of the Refinancing, we adopted the acquisition method of accounting effective April 23, 2009. Accordingly, we have revalued our assets and liabilities using our best estimate of current fair value. Our consolidated financial statements which present periods prior to the closing of the Refinancing reflect the historical accounting basis in our assets and liabilities and are labeled Predecessor Company, while the periods subsequent to the Refinancing are labeled Successor Company and reflect the push down basis of accounting for the fair values which were allocated to our segments based on the business enterprise value of each segment. Deferred tax liabilities have been recorded as a part of acquisition accounting to reflect the future taxable income to be recognized relating to the cancellation of indebtedness income as well as the deferred tax liability related to the acquisition accounting. | |
(2) | Effective January 1, 2006, we adopted Authoritative Guidance for Share Based Payment utilizing the modified retrospective transition alternative. Accordingly, results for years prior to 2006 have been restated to reflect stock-based compensation expense. | |
(3) | In connection with the Refinancing and the issuance of the Preferred Stock, we have determined that the Preferred Stock contained a beneficial conversion factor (“BCF”) that was partially contingent. BCF is measured as the spread between the effective conversion price and the market price of common stock on the commitment date and then multiplying this spread by the number of conversion shares. We recognized the portion of the BCF that was not related to the contingent shares at issuance (issuance BCF) while the majority of the BCF was contingent (contingent BCF) upon the authorization of additional common shares that occurred on August 3, 2009. Because such shares were authorized on August 3, 2009, the contingent BCF was recognized on such date in the third quarter and, due to the immediate conversion of the Preferred Stock into common stock on such date, resulted in a deemed dividend of $76,887 that is included in net loss attributable to common stockholders in the third quarter of 2009. |
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(4) | No cash dividend was paid on our common stock or Class B stock in 2009 or 2008. In 2005, our Board declared cash dividends of $0.10 per share for every issued and outstanding share of common stock and $0.08 per share for every issued and outstanding share of Class B stock on each of April 29, 2005, August 3, 2005 and November 2, 2005. In 2006, our Board declared cash dividends of $0.10 per share for every issued and outstanding share of common stock and $0.08 per share for every issued and outstanding share of Class B stock on each of February 2, 2006, April 18, 2006 and August 7, 2006. Our Board declared a cash dividend of $0.02 per share for every issued and outstanding share of common stock and $0.016 per share for every issued and outstanding share of Class B stock on November 7, 2006. Our Board declared cash dividends of $0.02 per share for every issued and outstanding share of common stock and $0.016 per share for every issued and outstanding share of Class B stock on March 6, 2007. The payment of dividends is prohibited by the terms of our Senior Notes and our Senior Credit Facility, and accordingly, we do not plan on paying dividends for the foreseeable future. | |
(5) | On November 30, 2008, we failed to make the interest payment on our outstanding indebtedness which constituted an event of default under the Old Credit Agreement and the Old Notes (as such terms are defined below). Accordingly, $249,053 of debt previously considered long-term was then re-classified as short-term debt, which decreased our Old Debt, as described in Item 1 — Business — Significant Events, and decreased our working capital from $41,019 to ($208,034) in 2008. |
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Low End | ||||||||||||
Metro Traffic | Network | Total | ||||||||||
Fair value exceeds carrying value by: | ||||||||||||
Less than 10% | $ | — | $ | 25,912 | $ | 25,912 | ||||||
Greater than 20% | 13,005 | — | 13,005 | |||||||||
Carrying value exceeds fair value | — | — | — |
Average | ||||||||||||
Metro Traffic | Network | Total | ||||||||||
Fair value exceeds carrying value by: | ||||||||||||
Less than 10% | $ | — | $ | 25,912 | $ | 25,912 | ||||||
Greater than 20% | 13,005 | — | 13,005 | |||||||||
Carrying value exceeds fair value | — | — | — |
High End | ||||||||||||
Metro Traffic | Network | Total | ||||||||||
Fair value exceeds carrying value by: | ||||||||||||
Greater than 20% | $ | 13,005 | $ | 25,912 | $ | 38,917 | ||||||
Carrying value exceeds fair value | — | — | — |
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Successor Company | Predecessor Company | Combined Total | ||||||||||||||
For the Period | For the Period | |||||||||||||||
April 24, 2009 to | January 1, 2009 to | For the year ended | For the year ended | |||||||||||||
December 31, 2009 | April 23, 2009 | December 31, 2009 | December 31, 2008 | |||||||||||||
Revenue | $ | 228,860 | $ | 111,474 | $ | 340,334 | $ | 404,416 | ||||||||
Operating costs | 213,521 | 111,580 | 325,101 | 360,492 | ||||||||||||
Depreciation and amortization | 21,473 | 2,585 | 24,058 | 11,052 | ||||||||||||
Corporate general and administrative expenses | 7,683 | 4,248 | 11,931 | 13,442 | ||||||||||||
Goodwill and intangible impairment | 50,501 | — | 50,501 | 430,126 | ||||||||||||
Restructuring charges | 3,976 | 3,976 | 7,952 | 14,100 | ||||||||||||
Special charges | 5,554 | 12,819 | 18,373 | 13,245 | ||||||||||||
Total operating costs | 302,708 | 135,208 | 437,916 | 842,457 | ||||||||||||
Operating loss | (73,848 | ) | (23,734 | ) | (97,582 | ) | (438,041 | ) | ||||||||
Interest expense | 14,782 | 3,222 | 18,004 | 16,651 | ||||||||||||
Other income, net | (5 | ) | (359 | ) | (364 | ) | (12,369 | ) | ||||||||
Loss before income tax | (88,625 | ) | (26,597 | ) | (115,222 | ) | (442,323 | ) | ||||||||
Income tax benefit | (25,025 | ) | (7,635 | ) | (32,660 | ) | (14,760 | ) | ||||||||
Net loss | $ | (63,600 | ) | $ | (18,962 | ) | $ | (82,562 | ) | $ | (427,563 | ) | ||||
2009 | 2008 | 2007 | ||||||||||||||||||||||
$ | % of Total | $ | % of Total | $ | % of Total | |||||||||||||||||||
Metro Traffic | $ | 156,487 | 46 | % | $ | 194,884 | 48 | % | $ | 232,445 | 51 | % | ||||||||||||
Network | 183,847 | 54 | % | 209,532 | 52 | % | 218,939 | 49 | % | |||||||||||||||
Total (1) | $ | 340,334 | 100 | % | $ | 404,416 | 100 | % | $ | 451,384 | 100 | % | ||||||||||||
(1) | As described above, we currently aggregate revenue data based on the operating segment. A number of advertisers purchase both local/regional and national or Network commercial airtime in both segments. Our objective is to optimize total revenue from those advertisers. |
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2009 | 2008 | 2007 | ||||||||||||||||||||||
$ | % of Total | $ | % of Total | $ | % of Total | |||||||||||||||||||
Payroll and payroll related | $ | 82,191 | 25 | % | $ | 100,651 | 28 | % | $ | 97,497 | 28 | % | ||||||||||||
Programming and production | 78,385 | 24 | % | 98,620 | 27 | % | 101,839 | 29 | % | |||||||||||||||
Program and operating | 25,138 | 8 | % | 15,781 | 4 | % | 14,181 | 4 | % | |||||||||||||||
Station compensation | 75,216 | 23 | % | 79,874 | 22 | % | 75,509 | 22 | % | |||||||||||||||
Other operating expenses | 64,169 | 20 | % | 65,566 | 18 | % | 61,413 | 18 | % | |||||||||||||||
$ | 325,101 | 100 | % | $ | 360,492 | 100 | % | $ | 350,440 | 100 | % | |||||||||||||
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Year Ended December 31, | ||||||||||||
2009 | 2008 | 2007 | ||||||||||
Metro Traffic | $ | (11,935 | ) | $ | 24,577 | $ | 64,033 | |||||
Network | 1,475 | 14,562 | 30,943 | |||||||||
Total segment operating income | $ | (10,460 | ) | $ | 39,139 | $ | 94,976 | |||||
Corporate expenses | (10,296 | ) | (19,709 | ) | (27,043 | ) | ||||||
Goodwill and intangible impairment | (50,501 | ) | (430,126 | ) | — | |||||||
Restructuring charges | (7,952 | ) | (14,100 | ) | — | |||||||
Special charges | (18,373 | ) | (13,245 | ) | (4,626 | ) | ||||||
Operating (loss) income | $ | (97,582 | ) | $ | (438,041 | ) | $ | 63,307 | ||||
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Maximum | Required Last Twelve | |||||||||||
Senior Leverage Ratio | Principal Amount of Senior Notes | Months (FE LTM) Minimum | ||||||||||
Quarter Ending | Covenant | Estimated Outstanding (Includes PIK)* | Adjusted EBITDA* | |||||||||
3/31/2010 | 8.00 to 1.0 | $ | 119,951 | $ | 14,994 | |||||||
6/30/2010 | 7.50 to 1.0 | 121,450 | 16,193 | |||||||||
9/30/2010 | 7.00 to 1.0 | 112,911 | 16,130 | |||||||||
12/31/2010 | 6.50 to 1.0 | 114,322 | 17,588 | |||||||||
3/31/2011 | 6.00 to 1.0 | 115,751 | 19,292 | |||||||||
6/30/2011 | 5.50 to 1.0 | 117,198 | 21,309 | |||||||||
9/30/2011 | 5.00 to 1.0 | 118,663 | 23,733 | |||||||||
12/31/2011 | 4.50 to 1.0 | 120,146 | 26,699 | |||||||||
3/31/2012 | 3.50 to 1.0 | 121,648 | 34,757 | |||||||||
6/30/2012 | 3.50 to 1.0 | 123,169 | 35,191 |
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For the Years ended December 31, | ||||||||||||
2009 | 2008 | 2007 | ||||||||||
Net cash (used in) provided by operating activities | $ | (24,919 | ) | $ | 2,038 | $ | 27,901 | |||||
Interest expense | 18,004 | 16,651 | 23,626 | |||||||||
Income taxes (benefit) | (32,660 | ) | (14,760 | ) | 15,724 | |||||||
Restructuring | 7,952 | 14,100 | — | |||||||||
Special charges and other (1) | 20,025 | 16,517 | 4,626 | |||||||||
Investment income | (188 | ) | (207 | ) | — | |||||||
Other non-operating income | (364 | ) | (998 | ) | (412 | ) | ||||||
Deferred taxes | 33,782 | 13,907 | 6,480 | |||||||||
Amortization of deferred financing costs | (331 | ) | (1,674 | ) | (481 | ) | ||||||
Change in assets and liabilities | (10,928 | ) | (6,376 | ) | 19,914 | |||||||
Adjusted EBITDA | $ | 10,373 | $ | 39,198 | $ | 97,378 | ||||||
(1) | Special charges and other includes expense of $1,652 and $3,272 classified as general and administrative expenses and operating costs, respectively, on the Statement of Operations for the years ended December 31, 2009 and 2008, respectively. |
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Payments due by Period | ||||||||||||||||||||
Contractual obligations(1) | Total | <1 year | 1 - 3 years | 3 - 5 years | >5 years | |||||||||||||||
Debt(2) | $ | 186,299 | $ | 25,216 | $ | 161,083 | $ | — | $ | — | ||||||||||
Capital lease obligations | 1,600 | 960 | 640 | — | — | |||||||||||||||
Building financing(3) | 10,271 | 875 | 1,844 | 1,976 | 5,576 | |||||||||||||||
Operating leases | 43,682 | 4,900 | 11,435 | 10,357 | 16,990 | |||||||||||||||
Other long-term obligations | 585,774 | 123,850 | 173,763 | 131,321 | 156,840 | |||||||||||||||
Total contractual obligations | $ | 827,626 | $ | 155,801 | $ | 348,765 | $ | 143,654 | $ | 179,406 | ||||||||||
(1) | The above table excludes our Fin 48 reserves and deferred tax liabilities as the future cash flows are uncertain as of December 31, 2009. | |
(2) | Includes the estimated net interest payments on fixed and variable rate debt. Estimated interest payments on floating rate instruments are computed using our interest rate as of December 31, 2009, and borrowings outstanding are assumed to remain at current levels. | |
(3) | Includes payments related to the financing of our Culver City Properties. |
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• | We created the position of Senior Vice President, Finance and Principal Accounting Officer, with the requisite experience to enhance our review of the calculation of the liability for uncertain tax positions. |
• | We engaged a reputable professional services firm to assist us in the calculation of the liability for uncertain tax positions. In prior periods, we used internal resources. |
• | In addition, tax experts from Glendon reviewed the Company’s calculation of the liability for uncertain tax positions. |
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• | if the information that is responsive to the information required with respect to this Item 10 is provided by means of an amendment to this Annual Report on Form 10-K filed with the Securities and Exchange Commission prior to the filing of such definitive proxy statement; or |
• | if such proxy statement is not mailed to stockholders and filed with the Securities and Exchange Commission within 120 days after the end of the registrant’s most recently completed fiscal year, in which case the registrant will provide such information by means of an amendment to this Annual Report on Form 10-K. |
• | if the information that is responsive to the information required with respect to this Item 11 is provided by means of an amendment to this Annual Report on Form 10-K filed with the Securities and Exchange Commission prior to the filing of such definitive proxy statement; or |
• | if such proxy statement is not mailed to stockholders and filed with the Securities and Exchange Commission within 120 days after the end of the registrant’s most recently completed fiscal year, in which case the registrant will provide such information by means of an amendment to this Annual Report on Form 10-K. |
• | if the information that is responsive to the information required with respect to this Item 12 is provided by means of an amendment to this Annual Report on Form 10-K filed with the Securities and Exchange Commission prior to the filing of such definitive proxy statement; or |
• | if such proxy statement is not mailed to stockholders and filed with the Securities and Exchange Commission within 120 days after the end of the registrant’s most recently completed fiscal year, in which case the registrant will provide such information by means of an amendment to this Annual Report on Form 10-K. |
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• | if the information that is responsive to the information required with respect to this Item 13 is provided by means of an amendment to this Annual Report on Form 10-K filed with the Securities and Exchange Commission prior to the filing of such definitive proxy statement; or |
• | if such proxy statement is not mailed to stockholders and filed with the Securities and Exchange Commission within 120 days after the end of the registrant’s most recently completed fiscal year, in which case the registrant will provide such information by means of an amendment to this Annual Report on Form 10-K. |
• | if the information that is responsive to the information required with respect to this Item 14 is provided by means of an amendment to this Annual Report on Form 10-K filed with the Securities and Exchange Commission prior to the filing of such definitive proxy statement; or |
• | if such proxy statement is not mailed to stockholders and filed with the Securities and Exchange Commission within 120 days after the end of the registrant’s most recently completed fiscal year, in which case the registrant will provide such information by means of an amendment to this Annual Report on Form 10-K. |
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1, 2. | Financial statements and schedules to be filed hereunder are indexed on page F-1 hereof. |
3. | Exhibits |
EXHIBIT | ||||
NUMBER (A) | DESCRIPTION | |||
3.1 | Restated Certificate of Incorporation, as filed with the Secretary of State of the State of Delaware. (14) | |||
3.1.1 | Certificate of Amendment to the Restated Certificate of Incorporation of Westwood One, Inc., as filed with the Secretary of the State of Delaware on August 3, 2009. (41) | |||
3.1.2 | Certificate of Elimination, filed with the Secretary of State of the State of Delaware on November 18, 2009. (42) | |||
3.2 | Amended and Restated Bylaws of Registrant adopted on April 23, 2009 and currently in effect. (40) | |||
4.1 | Securities Purchase Agreement, dated as of April 23, 2009, by and among Westwood One, Inc. and the other parties thereto. (40) | |||
4.1.1 | Waiver and First Amendment, dated as of October 14, 2009, to Securities Purchase Agreement, dated as of April 23, 2009, by and between Registrant and the noteholders parties thereto. (43) | |||
4.2 | Note Purchase Agreement, dated as of December 3, 2002, between Registrant and the noteholders parties thereto. (15) | |||
4.2.1 | First Amendment, dated as of February 28, 2008, to Note Purchase Agreement, dated as of December 3, 2002, by and between Registrant and the noteholders parties thereto. (34) | |||
4.3 | Certificate of Designations for the 7.50% Series A-1 Convertible Preferred Stock as filed with the Secretary of State of the State of Delaware on April 23, 2009. (40) | |||
4.4 | Certificate of Designations for the 8.0% Series B Convertible Preferred Stock as filed with the Secretary of State of the State of Delaware on April 23, 2009. (40) | |||
4.5 | Shared Security Agreement, dated as of February 28, 2008, by and among Registrant, the Subsidiary Guarantors parties thereto, JPMorgan Chase Bank, N.A., as Administrative Agent, and The Bank of New York, as Collateral Trustee (34) | |||
4.5.1 | First Amendment to Security Agreement, dated as of April 23, 2009, by and among Westwood One, Inc., each of the subsidiaries of Westwood One, Inc. and The Bank of New York Mellon, as collateral trustee. (40) | |||
10.1 | Credit Agreement, dated as of April 23, 2009, by and among Westwood One, Inc., Wells Fargo Foothill, LLC, and the lenders signatory thereto. (40) | |||
10.1.1 | Waiver and First Amendment, dated as of October 14, 2009, to Credit Agreement, dated as of April 23, 2009, by and between Registrant, the lenders party thereto and Wells Fargo Foothill, LLC, as administrative agent for the lenders. (43) | |||
10.2 | Agreement of Purchase and Sale, dated as of December 3, 2009, between the Company and NLC-Lindblade, LLC + | |||
10.3 | Form of Indemnification Agreement between Registrant and its directors and executive officers. (1) | |||
10.4 | Credit Agreement, dated March 3, 2004, between Registrant, the Subsidiary Guarantors parties thereto, the Lenders parties thereto and JPMorgan Chase Bank as Administrative Agent. (16) | |||
10.4.1 | Amendment No. 1, dated as of October 31, 2006, to the Credit Agreement, dated as of March 3, 2004, between Registrant, the Subsidiary Guarantors parties thereto, the Lenders parties thereto and JPMorgan Chase Bank, N.A., as Administrative Agent. (23) | |||
10.4.2 | Amendment No. 2, dated as of January 11, 2008, to the Credit Agreement, dated as of March 3, 2004, between Registrant, the Subsidiary Guarantors parties thereto, the Lenders parties thereto and JPMorgan Chase Bank, N.A., as Administrative Agent. (26) | |||
10.4.3 | Amendment No. 3, dated as of February 25, 2008, to the Credit Agreement, dated as of March 3, 2004, between Registrant, the Subsidiary Guarantors parties thereto, the Lenders parties thereto and JPMorgan Chase Bank, N.A., as Administrative Agent. (13) |
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EXHIBIT | ||||
NUMBER (A) | DESCRIPTION | |||
10.5 | Purchase Agreement, dated as of August 24, 1987, between Registrant and National Broadcasting Company, Inc. (2) | |||
10.6 | Agreement and Plan of Merger among Registrant, Copter Acquisition Corp. and Metro Networks, Inc. dated June 1, 1999 (9) | |||
10.7 | Amendment No. 1 to the Agreement and Plan Merger, dated as of August 20, 1999, by and among Registrant, Copter Acquisition Corp. and Metro Networks, Inc. (10) | |||
10.8 | Employment Agreement, effective May 1, 2003, between Registrant and Paul Gregrey, as amended by Amendment 1 to Employment Agreement, effective January 1, 2006. (35)* | |||
10.8.1 | Amendment No. 2 to Employment Agreement, dated May 4, 2007, between Registrant and Paul Gregrey (27)* | |||
10.8.2 | Separation Agreement, effective as of October 31, 2008, by and between Registrant and Paul Gregrey (47)* | |||
10.9 | Employment Agreement, effective October 16, 2004, between Registrant and David Hillman, as amended by Amendment No. 1 to Employment Agreement, effective January 1, 2006. (28)* | |||
10.9.1 | Amendment No. 2 to the Employment Agreement, effective July 10, 2007, between Registrant and David Hillman. (29)* | |||
10.10 | Registrant Amended 1999 Stock Incentive Plan. (22)* | |||
10.11 | Amendment to Registrant Amended 1999 Stock Incentive Plan, effective May 25, 2005 (19)* | |||
10.12 | Registrant 1989 Stock Incentive Plan. (3)* | |||
10.13 | Amendments to Registrant’s Amended 1989 Stock Incentive Plan. (4) (5)* | |||
10.14 | Leases, dated August 9, 1999, between Lefrak SBN LP and Westwood One Radio Networks, Inc. and between Infinity and Westwood One Radio Networks, Inc. relating to New York, New York offices. (11) | |||
10.15 | Form of Stock Option Agreement under Registrant’s Amended 1999 Stock Incentive Plan. (17)* | |||
10.16 | Employment Agreement, effective January 1, 2004, between Registrant and Andrew Zaref. (18)* | |||
10.16.1 | Amendment No. 1 to Employment Agreement, dated as of June 30, 2006, between Registrant and Andrew Zaref (24)* | |||
10.17 | Registrant 2005 Equity Compensation Plan (19)* | |||
10.18 | Form Amended and Restated Restricted Stock Unit Agreement under Registrant 2005 Equity Compensation Plan for outside directors (20)* | |||
10.19 | Form Stock Option Agreement under Registrant 2005 Equity Compensation Plan for directors. (21)* | |||
10.20 | Form Stock Option Agreement under Registrant 2005 Equity Compensation Plan for non-director participants. (21)* | |||
10.21 | Form Restricted Stock Unit Agreement under Registrant 2005 Equity Compensation Plan for non-director participants. (20)* | |||
10.22 | Form Restricted Stock Agreement under Registrant 2005 Equity Compensation Plan for non-director participants. (20)* | |||
10.23 | Employment Agreement, effective as of July 16, 2007, by and between Registrant and Gary Yusko. (29)* | |||
10.24 | Master Agreement, dated as of October 2, 2007, by and between Registrant and CBS Radio Inc. (31) | |||
10.25 | Employment Agreement, effective as of January 8, 2008, by and between Registrant and Thomas F.X. Beusse. (30)* | |||
10.25.1 | Separation Agreement, effective as of October 31, 2008, by and between Registrant and Thomas F.X. Beusse (38)* | |||
10.26 | Consent Agreement, dated as of January 8, 2008, made by and among CBS Radio Inc., Registrant, and Thomas F.X. Beusse. (30)* | |||
10.27 | Stand-Alone Stock Option Agreement, dated as of January 8, 2008, by and between Registrant and Thomas F.X. Beusse. (30)* | |||
10.28 | Letter Agreement, dated February 25, 2008, by and between Registrant and Norman J. Pattiz (32)* | |||
10.29 | Purchase Agreement, dated February 25, 2008, between Registrant and Gores Radio Holdings, LLC. (32) | |||
10.30 | Registration Rights Agreement, dated March 3, 2008, between Registrant and Gores Radio Holdings, LLC. (33) | |||
10.31 | Intercreditor and Collateral Trust Agreement, dated as of February 28, 2008, by and among Registrant, the Subsidiary Guarantors parties thereto, JPMorgan Chase Bank, N.A., as Administrative Agent, the financial institutions that hold the Notes and The Bank of New York, as Collateral Trustee (34) | |||
10.32 | Shared Security Agreement, dated as of February 28, 2008, by and among Registrant, the Subsidiary Guarantors parties thereto, JPMorgan Chase Bank, N.A., as Administrative Agent, and The Bank of New York, as Collateral Trustee (34) |
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EXHIBIT | ||||
NUMBER (A) | DESCRIPTION | |||
10.33 | Shared Deed of Trust, Assignment of Rents, Security Agreement and Fixture Filing, dated as of February 28, 2008, by Registrant, to First American Title Insurance Company, as Trustee, for the benefit of The Bank of New York, as Beneficiary (34) | |||
10.34 | Mutual General Release and Covenant Not to Sue, dated as of March 3, 2008, by and between Registrant and CBS Radio Inc. (33) | |||
10.35 | Amended and Restated News Programming Agreement, dated as of March 3, 2008, by and between Registrant and CBS Radio Inc. (33) | |||
10.36 | Amended and Restated Technical Services Agreement, dated as of March 3, 2008, by and between Registrant and CBS Radio Inc. (33) | |||
10.37 | Amended and Restated Trademark License Agreement, dated as of March 3, 2008, by and between Registrant and CBS Radio Inc. (33) | |||
10.38 | Registration Rights Agreement, dated as of March 3, 2008, by and between Registrant and CBS Radio Inc. (33) | |||
10.39 | Lease for 524 W. 57th Street, dated as of March 3, 2008, by and between Registrant and CBS Broadcasting Inc. (33) | |||
10.40 | Form Westwood One Affiliation Agreement, dated February 29, 2008, between Westwood One, Inc. on its behalf and on behalf of its affiliate, Westwood One Radio Networks, Inc. and CBS Radio Inc., on its behalf and on behalf of certain CBS Radio stations (33) | |||
10.41 | Form Metro Affiliation Agreement, dated as of February 29, 2008, by and between Metro Networks Communications, Limited Partnership, and CBS Radio Inc., on its behalf and on behalf of certain CBS Radio stations (33) | |||
10.42 | Employment Agreement, dated as of July 7, 2008, between Registrant and Steven Kalin. (6)* | |||
10.42.1 | Amendment No. 1 to Employment Agreement, dated as of December 22, 2008, by and between the Registrant and Steven Kalin, amending terms in a manner intended to address Section 409A of the Internal Revenue Code of 1986, as amended (47)* | |||
10.43 | Employment Agreement, effective as of September 17, 2008, by and between Registrant and Roderick M. Sherwood, III. (36)* | |||
10.44 | Employment Agreement, effective as of October 20, 2008, by and between Registrant and Gary Schonfeld (37)* | |||
10.45 | Employment Agreement, effective as of April 14, 2008, by and between Registrant and Jonathan Marshall. (47)* | |||
10.46 | License and Services Agreement, dated as of December 22, 2008, by and between Metro Networks Communications, Inc. and TrafficLand, Inc. (39) | |||
10.48 | Employment Agreement, dated as of May 12, 2008, between Registrant and Andrew Hersam. (47)* | |||
10.48.1 | Separation Agreement, effective as of March 31, 2009, by and between Registrant and Andrew Hersam. (45)* | |||
10.48.2 | Consulting Agreement made as of April 27, 2009, by and between Registrant and Andrew Hersam. (45)* | |||
10.49 | Agreement of Sublease made as of November 2, 2009, by and between Marsh & McLennan Companies, Inc. and Westwood One Radio Networks, Inc. (42) | |||
10.50 | Form of Amendment to Employment Agreement for senior executives, amending terms in a manner intended to address Section 409A of the Internal Revenue Code of 1986, as amended (47)* | |||
10.51 | Employment Agreement, dated April 29, 1998, between Registrant and Norman J. Pattiz. (8) * | |||
10.52 | Single Tenant Triple Net Lease, dated as of December 17, 2009, between the Company and NLC-Lindblade, LLC + | |||
10.53 | Amendment to Employment Agreement, dated October 27, 2003, between Registrant and Norman J. Pattiz. (16)* | |||
10.53.1 | Amendment No. 2 to Employment Agreement, dated November 28, 2005, between Registrant and Norman J. Pattiz (7)* | |||
10.53.2 | Amendment No. 3, effective January 8, 2008, to the employment agreement by and between Registrant and Norman Pattiz (30)* | |||
10.53.3 | Amendment No. 4, effective December 31, 2008, to the employment agreement by and between Westwood One, Inc. and Norman Pattiz, dated as of April 29, 1998, as amended. (44)* | |||
10.53.4 | Amendment No. 5, effective June 11, 2009, to the employment agreement by and between Westwood One, Inc. and Norman Pattiz, dated as of April 29, 1998, as amended. (44)* | |||
10.54 | Master Mutual Release, dated as of April 23, 2009, by and among Westwood One, Inc. and the other parties party to the Securities Purchase Agreement. (40) |
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EXHIBIT | ||||
NUMBER (A) | DESCRIPTION | |||
10.55 | Purchase Agreement, dated as of April 23, 2009, by and among Westwood One, Inc. and Gores Radio Holdings, LLC. (40) | |||
10.56 | Amendment No. 1 to Registration Rights Agreement, dated as of April 23, 2009, between Westwood One, Inc. and Gores Radio Holdings, LLC. (40) | |||
10.57 | Investor Rights Agreement, dated as of April 23, 2009, among Westwood One, Inc., Gores Radio Holdings, LLC and the other investors signatory thereto and the parties executing a Joinder Agreement in accordance with the terms thereto. (40) | |||
14.1 | Westwood One, Inc. Code of Ethics. (46) | |||
21 | List of Subsidiaries. + | |||
23 | Consent of Independent Registered Public Accounting Firm. + | |||
31.1 | Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. + | |||
31.2 | Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. + | |||
32.1 | Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes- Oxley Act of 2002. ** | |||
32.2 | Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. ** |
* | Indicates a management contract or compensatory plan | |
+ | Filed herewith. | |
** | Furnished herewith. | |
(A) | We agree to furnish supplementally a copy of any omitted schedule to the SEC upon request. | |
(1) | Filed as part of Registrant’s September 25, 1986 proxy statement and incorporated herein by reference. | |
(2) | Filed an exhibit to Registrant’s current report on Form 8-K dated September 4, 1987 and incorporated herein by reference. | |
(3) | Filed as part of Registrant’s March 27, 1992 proxy statement and incorporated herein by reference. | |
(4) | Filed as an exhibit to Registrant’s July 20, 1994 proxy statement and incorporated herein by reference. | |
(5) | Filed as an exhibit to Registrant’s April 29, 1996 proxy statement and incorporated herein by reference. | |
(6) | Filed as an exhibit to Registrant’s current report on Form 8-K dated July 7, 2008 and incorporated herein by reference. | |
(7) | Filed as an exhibit to Registrant’s current report on Form 8-K dated November 28, 2005 and incorporated herein by reference. | |
(8) | Filed as an exhibit to Registrant’s annual report on Form 10-K for the year ended December 31, 1998 and incorporated herein by reference. | |
(9) | Filed as an exhibit to Registrant’s current report on Form 8-K dated June 4, 1999 and incorporated herein by reference. | |
(10) | Filed as an exhibit to Registrant’s current report on Form 8-K dated October 1, 1999 and incorporated herein by reference. | |
(11) | Filed as an exhibit to Registrant’s annual report on Form 10-K for the year ended December 31, 1999 and incorporated herein by reference. | |
(12) | Filed as an exhibit to Registrant’s annual report on Form 10-K for the year ended December 31, 2000 and incorporated herein by reference. | |
(13) | Filed as an exhibit to Registrant’s current report on Form 8-K dated February 25, 2008 (filed on February 29, 2008) and incorporated herein by reference. | |
(14) | Filed as an exhibit to Registrant’s quarterly report on Form 10-Q for the quarter ended June 30, 2008 and incorporated herein by reference. | |
(15) | Filed as an exhibit to Registrant’s current report on Form 8-K dated December 4, 2002 and incorporated herein by reference. | |
(16) | Filed as an exhibit to Registrant’s annual report on Form 10-K for the year ended December 31, 2003 and incorporated herein by reference. | |
(17) | Filed as an exhibit to Registrant’s current report on Form 8-K dated October 12, 2004 and incorporated herein by reference. | |
(18) | Filed as an exhibit to Registrant’s annual report on Form 10-K for the year ended December 31, 2004 and incorporated herein by reference. | |
(19) | Filed as an exhibit to Company’s current report on Form 8-K, dated May 25, 2005 and incorporated herein by reference. |
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(20) | Filed as an exhibit to Company’s current report of Form 8-K dated March 17, 2006 and incorporated herein by reference. | |
(21) | Filed as an exhibit to Registrant’s current report on Form 8-K dated December 5, 2005 and incorporated herein by reference. | |
(22) | Filed as an exhibit to Registrant’s April 30, 1999 proxy statement and incorporated herein by reference. | |
(23) | Filed as an exhibit to Registrant’s current report on Form 8-K dated November 6, 2006 and incorporated herein by reference. | |
(24) | Filed as an exhibit to Registrant’s current report on Form 8-K dated June 30, 2006 and incorporated herein by reference. | |
(25) | Filed as an exhibit to Registrant’s quarterly report on Form 10-Q for the quarter ended March 31, 2006 and incorporated herein by reference. | |
(26) | Filed as an exhibit to Registrant’s current report on Form 8-K dated January 11, 2008 and incorporated herein by reference. | |
(27) | Filed as an exhibit to Registrant’s current report on Form 10-Q for the quarter ended March 31, 2007 and incorporated herein by reference. | |
(28) | Filed as an exhibit to Registrant’s annual report on Form 10-K/A for the year ended December 31, 2006 and incorporated herein by reference. | |
(29) | Filed as an exhibit to Company’s current report on Form 8-K dated July 10, 2007 and incorporated herein by reference. | |
(30) | Filed as an exhibit to Company’s current report on Form 8-K dated January 8, 2008 and incorporated herein by reference. | |
(31) | Filed as an exhibit to Company’s current report on Form 8-K dated October 2, 2007 and incorporated herein by reference. | |
(32) | Filed as an exhibit to Registrant’s current report on Form 8-K dated February 25, 2008 (filed on February 27, 2008) and incorporated herein by reference. | |
(33) | Filed as an exhibit to Registrant’s current report on Form 8-K dated March 3, 2008 and incorporated herein by reference. | |
(34) | Filed as an exhibit to Registrant’s current report on Form 8-K dated February 28, 2008 (filed on March 5, 2008) and incorporated herein by reference. | |
(35) | Filed as an exhibit to Registrant’s annual report on Form 10-K for the year ended December 31, 2005 and incorporated herein by reference. | |
(36) | Filed as an exhibit to Registrant’s current report on Form 8-K dated September 18, 2008 and incorporated herein by reference. | |
(37) | Filed as an exhibit to Registrant’s current report on Form 8-K dated October 24, 2008 and incorporated herein by reference. | |
(38) | Filed as an exhibit to Registrant’s current report on Form 8-K dated October 30, 2008 and incorporated herein by reference. | |
(39) | Filed as an exhibit to Registrant’s current report on Form 8-K dated December 22, 2008 and incorporated herein by reference. | |
(40) | Filed as an exhibit to Company’s current report on Form 8-K dated April 27, 2009 and incorporated herein by reference. | |
(41) | Filed as an exhibit to Company’s quarterly report on Form 10-Q for the quarter ended June 30, 2009 and incorporated herein by reference. | |
(42) | Filed as an exhibit to Company’s current report on Form 8-K dated November 20, 2009 and incorporated herein by reference. | |
(43) | Filed as an exhibit to Amendment No. 3 of the Company’s registration statement on Form S-1 and incorporated herein by reference. | |
(44) | Filed as an exhibit to Company’s current report on Form 8-K dated June 18, 2009 and incorporated herein by reference. | |
(45) | Filed as an exhibit to Company’s quarterly report on Form 10-Q for the quarter ended March 31, 2009 and incorporated herein by reference. | |
(46) | Filed as an exhibit to Company’s current report on Form 8-K dated April 27, 2009 and incorporated herein by reference. | |
(47) | Filed as an exhibit to Registrant’s annual report on Form 10-K for the year ended December 31, 2008 and incorporated herein by reference. |
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WESTWOOD ONE, INC. | ||||
Date: March 31, 2010 | By: | /S/ RODERICK M. SHERWOOD III | ||
Roderick M. Sherwood III | ||||
President and Chief Financial Officer |
Signature | Title | Date | ||
/S/ RODERICK M. SHERWOOD III | President and Chief Financial Officer (Principal Executive Officer) | March 31, 2010 | ||
/S/ NORMAN J. PATTIZ | Chairman of the Board of Directors | March 31, 2010 | ||
/S/ MARK STONE | Vice-Chairman of the Board of Directors | March 31, 2010 | ||
/S/ ANDREW P. BRONSTEIN | Director | March 31, 2010 | ||
/S/ JONATHAN I. GIMBEL | Director | March 31, 2010 | ||
/S/ SCOTT M. HONOUR | Director | March 31, 2010 | ||
/S/ H MELVIN MING | Director | March 31, 2010 | ||
/S/ MICHAEL F. NOLD | Director | March 31, 2010 | ||
/S/ EMANUEL NUNEZ | Director | March 31, 2010 | ||
/S/ JOSEPH P. PAGE | Director | March 31, 2010 | ||
/S/ RONALD W. WUENSCH | Director | March 31, 2010 | ||
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AND FINANCIAL STATEMENT SCHEDULE
Page | ||||
1. Consolidated Financial Statements | ||||
F-2 | ||||
F-4 | ||||
F-5 | ||||
F-6 | ||||
F-7 | ||||
F-8 | ||||
2. Financial Statement Schedule: | ||||
II-1 |
F-1
Table of Contents
New York, New York
March 31, 2010
F-2
Table of Contents
New York, New York
F-3
Table of Contents
(In thousands, except per share amounts)
Successor Company | Predecessor Company | ||||||||
December 31, | December 31, | ||||||||
2009 | 2008 | ||||||||
ASSETS | |||||||||
Current assets: | |||||||||
Cash and cash equivalents | $ | 4,824 | $ | 6,437 | |||||
Accounts receivable, net of allowance for doubtful accounts of $2,723 (2009) and $3,632 (2008) | 87,568 | 94,273 | |||||||
Federal income tax receivable | 12,355 | — | |||||||
Prepaid and other assets | 20,994 | 18,758 | |||||||
Total current assets | 125,741 | 119,468 | |||||||
Property and equipment, net | 36,265 | 30,417 | |||||||
Intangible assets, net | 103,400 | 2,660 | |||||||
Goodwill | 38,917 | 33,988 | |||||||
Deferred tax asset | — | 14,220 | |||||||
Other assets | 2,995 | 4,335 | |||||||
TOTAL ASSETS | $ | 307,318 | $ | 205,088 | |||||
LIABILITIES, REDEEMABLE PREFERRED STOCK AND STOCKHOLDERS’ EQUITY (DEFICIT) | |||||||||
Current liabilities: | |||||||||
Accounts payable | $ | 40,164 | $ | 27,807 | |||||
Amounts payable to related parties | 129 | 22,680 | |||||||
Deferred revenue | 3,682 | 2,397 | |||||||
Accrued expenses and other liabilities | 28,864 | 25,565 | |||||||
Current maturity of long-term debt | 13,500 | 249,053 | |||||||
Total current liabilities | 86,339 | 327,502 | |||||||
Long-term debt | 122,262 | — | |||||||
Deferred tax liability | 50,932 | — | |||||||
Due to Gores | 11,165 | — | |||||||
Other liabilities | 18,636 | 6,993 | |||||||
TOTAL LIABILITIES | 289,334 | 334,495 | |||||||
Commitments and Contingencies | |||||||||
Redeemable preferred stock: $.01 par value, authorized: 10,000 shares; issued and outstanding: 75 shares of Series A Convertible Preferred Stock; liquidation preference $1,000 per share, plus accumulated dividends | — | 73,738 | |||||||
TOTAL PREFERRED STOCK | |||||||||
STOCKHOLDERS’ EQUITY (DEFICIT) | |||||||||
Common stock, $.01 par value: authorized: 5,000,000 shares (2009) and 300,000 (2008) issued and outstanding: 20,544 (2009) and 101,253 (2008) | 205 | 1,013 | |||||||
Class B stock, $.01 par value: authorized: 3,000 shares; issued and outstanding: 0 (2009) and 292 (2008) | — | 3 | |||||||
Additional paid-in capital | 81,268 | 293,120 | |||||||
Net unrealized gain | 111 | 267 | |||||||
Accumulated deficit | (63,600 | ) | (497,548 | ) | |||||
TOTAL STOCKHOLDERS’ EQUITY (DEFICIT) | 17,984 | (203,145 | ) | ||||||
TOTAL LIABILITIES, REDEEMABLE PREFERRED STOCK AND STOCKHOLDERS’ EQUITY (DEFICIT) | $ | 307,318 | $ | 205,088 | |||||
F-4
Table of Contents
(In thousands, except per share amounts)
Successor Company | Predecessor Company | ||||||||||||||||
For the Period | For the Period | For the Year Ended | |||||||||||||||
April 24, 2009 to | January 1, 2009 | December 31, | |||||||||||||||
December 31, 2009 | to April 23, 2009 | 2008 | 2007 | ||||||||||||||
Revenue | $ | 228,860 | $ | 111,474 | $ | 404,416 | $ | 451,384 | |||||||||
Operating costs | 213,521 | 111,580 | 360,492 | 350,440 | |||||||||||||
Depreciation and amortization | 21,473 | 2,585 | 11,052 | 19,840 | |||||||||||||
Corporate general and administrative expenses | 7,683 | 4,248 | 13,442 | 13,171 | |||||||||||||
Goodwill and intangible impairment | 50,501 | — | 430,126 | — | |||||||||||||
Restructuring charges | 3,976 | 3,976 | 14,100 | — | |||||||||||||
Special charges | 5,554 | 12,819 | 13,245 | 4,626 | |||||||||||||
Total operating costs | 302,708 | 135,208 | 842,457 | 388,077 | |||||||||||||
Operating (loss) income | (73,848 | ) | (23,734 | ) | (438,041 | ) | 63,307 | ||||||||||
Interest expense | 14,782 | 3,222 | 16,651 | 23,626 | |||||||||||||
Other (income) expense | (5 | ) | (359 | ) | (12,369 | ) | (411 | ) | |||||||||
(Loss) income before income tax | (88,625 | ) | (26,597 | ) | (442,323 | ) | 40,092 | ||||||||||
Income tax (benefit) expense | (25,025 | ) | (7,635 | ) | (14,760 | ) | 15,724 | ||||||||||
Net (loss) income | $ | (63,600 | ) | $ | (18,962 | ) | $ | (427,563 | ) | $ | 24,368 | ||||||
Net (loss) income attributable to common stockholders | $ | (145,148 | ) | $ | (22,038 | ) | $ | (430,644 | ) | $ | 24,363 | ||||||
(Loss) earnings per share | |||||||||||||||||
Common Stock | |||||||||||||||||
Basic | $ | (11.75 | ) | $ | (43.64 | ) | $ | (878.73 | ) | $ | 56.59 | ||||||
Diluted | $ | (11.75 | ) | $ | (43.64 | ) | $ | (878.73 | ) | $ | 56.38 | ||||||
Class B stock | |||||||||||||||||
Basic | $ | — | $ | — | $ | — | $ | 3.20 | |||||||||
Diluted | $ | — | $ | — | $ | — | $ | 3.20 | |||||||||
Weighted average shares outstanding: | |||||||||||||||||
Common Stock | |||||||||||||||||
Basic | 12,351 | 505 | 490 | 431 | |||||||||||||
Diluted | 12,351 | 505 | 490 | 432 | |||||||||||||
Class B stock | |||||||||||||||||
Basic | — | 1 | 1 | 1 | |||||||||||||
Diluted | — | 1 | 1 | 1 | |||||||||||||
F-5
Table of Contents
(In thousands)
Predecessor Company | ||||||||||||||||||||||||||||||||||||
Unrealized | Total | |||||||||||||||||||||||||||||||||||
Additional | Gain (Loss) on | Stock- | Compre- | |||||||||||||||||||||||||||||||||
Common Stock | Class B Stock | Paid-in | (Accumulated | Available for | holders’ | hensive | ||||||||||||||||||||||||||||||
Shares | Amount | Shares | Amount | Capital | Deficit) | Sale Securities | Equity | Income (Loss) | ||||||||||||||||||||||||||||
Balance as of January 1, 2007 | 86,311 | $ | 864 | 292 | $ | 3 | $ | 291,847 | $ | (94,353 | ) | $ | 4,570 | $ | 202,931 | |||||||||||||||||||||
Net income | — | — | — | — | — | 24,368 | — | 24,368 | $ | 24,368 | ||||||||||||||||||||||||||
Comprehensive income | — | — | — | — | — | — | 1,385 | 1,385 | 1,385 | |||||||||||||||||||||||||||
Equity based compensation | — | — | — | — | 9,606 | — | — | 9,606 | — | |||||||||||||||||||||||||||
Issuance common stock under equity based compensation plans | 794 | 8 | — | — | (344 | ) | — | — | (336 | ) | — | |||||||||||||||||||||||||
Cancellations of vested equity grants | — | — | — | — | (7,099 | ) | — | — | (7,099 | ) | — | |||||||||||||||||||||||||
Cancellation of warrants | — | — | — | — | (1,561 | ) | — | — | (1,561 | ) | — | |||||||||||||||||||||||||
Cash dividend paid | — | — | — | — | (1,663 | ) | — | — | (1,663 | ) | — | |||||||||||||||||||||||||
Balance as of December 31, 2007 | 87,105 | 872 | 292 | 3 | 290,786 | (69,985 | ) | 5,955 | 227,631 | $ | 25,753 | |||||||||||||||||||||||||
Net loss | — | — | — | — | — | (427,563 | ) | — | (427,563 | ) | $ | (427,563 | ) | |||||||||||||||||||||||
Comprehensive loss | — | — | — | — | — | — | (5,688 | ) | (5,688 | ) | (5,688 | ) | ||||||||||||||||||||||||
Equity based compensation | — | — | — | — | 5,443 | — | — | 5,443 | — | |||||||||||||||||||||||||||
Issuance common stock under equity based compensation plans | 110 | 1 | — | — | (1,727 | ) | — | — | (1,726 | ) | — | |||||||||||||||||||||||||
Issuance of common stock | 14,038 | 140 | — | — | 22,471 | — | — | 22,611 | — | |||||||||||||||||||||||||||
Issuance of warrants | — | — | — | — | 440 | — | — | 440 | — | |||||||||||||||||||||||||||
Cancellations of vested equity grants | — | — | — | — | (4,722 | ) | — | — | (4,722 | ) | — | |||||||||||||||||||||||||
Cancellation of warrants | — | — | — | — | (19,571 | ) | — | — | (19,571 | ) | — | |||||||||||||||||||||||||
Balance as of December 31, 2008 | 101,253 | 1,013 | 292 | 3 | 293,120 | (497,548 | ) | 267 | (203,145 | ) | $ | (433,251 | ) | |||||||||||||||||||||||
Net loss | — | — | — | — | — | (18,962 | ) | — | (18,962 | ) | $ | (18,962 | ) | |||||||||||||||||||||||
Comprehensive income | — | — | — | — | — | — | 219 | 219 | 219 | |||||||||||||||||||||||||||
Equity based compensation | — | — | — | — | 2,110 | — | — | 2,110 | — | |||||||||||||||||||||||||||
Issuance common stock under equity based compensation plans | 777 | 7 | — | — | (939 | ) | — | — | (932 | ) | — | |||||||||||||||||||||||||
Preferred stock accretion | — | — | — | — | (6,157 | ) | — | — | (6,157 | ) | — | |||||||||||||||||||||||||
Cancellations of vested equity grants | — | — | — | — | (890 | ) | — | — | (890 | ) | — | |||||||||||||||||||||||||
Balance as of April 23, 2009 | 102,030 | $ | 1,020 | 292 | $ | 3 | $ | 287,244 | $ | (516,510 | ) | $ | 486 | $ | (227,757 | ) | $ | (18,743 | ) | |||||||||||||||||
Successor Company | ||||||||||||||||||||||||||||||||||||
Unrealized | Total | |||||||||||||||||||||||||||||||||||
Additional | Gain (Loss) on | Stock- | Compre- | |||||||||||||||||||||||||||||||||
Common Stock | Class B Stock | Paid-in | (Accumulated | Available for | holders’ | hensive | ||||||||||||||||||||||||||||||
Shares | Amount | Shares | Amount | Capital | Deficit) | Sale Securities | Equity | Income (Loss) | ||||||||||||||||||||||||||||
Revalued Capital | 510 | $ | 5 | 292 | $ | 3 | $ | 2,256 | $ | — | $ | — | $ | 2,264 | ||||||||||||||||||||||
Net loss | — | — | — | — | — | (63,600 | ) | — | (63,600 | ) | $ | (63,600 | ) | |||||||||||||||||||||||
Comprehensive income | — | — | — | — | — | — | 111 | 111 | 111 | |||||||||||||||||||||||||||
Equity based compensation | — | — | — | — | 3,310 | — | — | 3,310 | — | |||||||||||||||||||||||||||
Issuance common stock for acquisition | 232 | 2 | — | — | 1,043 | — | — | 1,045 | — | |||||||||||||||||||||||||||
Issuance common stock under equity based compensation plans | 2 | — | — | — | (219 | ) | — | — | (219 | ) | — | |||||||||||||||||||||||||
Class B conversion | 1 | — | (292 | ) | (3 | ) | — | — | (3 | ) | — | |||||||||||||||||||||||||
Preferred stock conversion | 19,799 | 198 | — | — | 81,353 | — | — | 81,551 | — | |||||||||||||||||||||||||||
Preferred stock accretion | — | — | — | — | (4,661 | ) | — | — | (4,661 | ) | — | |||||||||||||||||||||||||
Cancellations of vested equity grants | — | — | — | — | (1,814 | ) | — | — | (1,814 | ) | — | |||||||||||||||||||||||||
Beneficial conversion feature | — | — | — | — | 76,887 | — | — | 76,887 | — | |||||||||||||||||||||||||||
Beneficial conversion feature accretion | — | — | — | — | (76,887 | ) | — | — | (76,887 | ) | — | |||||||||||||||||||||||||
Balance as of December 31, 2009 | 20,544 | $ | 205 | — | $ | — | $ | 81,268 | $ | (63,600 | ) | $ | 111 | $ | 17,984 | $ | (63,489 | ) | ||||||||||||||||||
F-6
Table of Contents
(In thousands)
Successor Company | Predecessor Company | ||||||||||||||||
For the | For the | ||||||||||||||||
Period | Period | ||||||||||||||||
April 24, 2009 to | January 1, 2009 | Year Ended December 31, | |||||||||||||||
December 31, 2009 | to April 23, 2009 | 2008 | 2007 | ||||||||||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | |||||||||||||||||
Net (loss) income | $ | (63,600 | ) | $ | (18,962 | ) | $ | (427,563 | ) | $ | 24,368 | ||||||
Adjustments to reconcile net (loss) income to net cash provided by operating activities: | |||||||||||||||||
Depreciation and amortization | 21,473 | 2,585 | 11,052 | 19,840 | |||||||||||||
Goodwill and intangible impairment | 50,501 | — | 430,126 | — | |||||||||||||
Loss on disposal of property and equipment | — | 188 | 1,257 | — | |||||||||||||
Deferred taxes | (25,038 | ) | (6,873 | ) | (13,907 | ) | (6,480 | ) | |||||||||
Non-cash stock compensation | 3,310 | 2,110 | 5,443 | 9,606 | |||||||||||||
Gain on sale of marketable securities | — | — | (12,420 | ) | — | ||||||||||||
Amortization of deferred financing costs | — | 331 | 1,674 | 481 | |||||||||||||
(13,354 | ) | (20,621 | ) | (4,338 | ) | 47,815 | |||||||||||
Changes in assets and liabilities, net of effect of business combination: | |||||||||||||||||
(Increase) decrease in accounts receivable | (3,608 | ) | 10,313 | 13,998 | 7,234 | ||||||||||||
(Increase) decrease in prepaid and other assets | (2,542 | ) | 3,187 | (2,515 | ) | (990 | ) | ||||||||||
Increase (decrease) in deferred revenue | 749 | 536 | (3,418 | ) | (2,335 | ) | |||||||||||
Increase (decrease) in income taxes payable | 180 | 28 | (7,246 | ) | 1,097 | ||||||||||||
Increase (decrease) in accounts payable, accrued expenses and other liabilities | 285 | 2,861 | 13,736 | (29,435 | ) | ||||||||||||
(Decrease) increase in amounts payable to related parties | (5,852 | ) | 2,919 | (8,179 | ) | 4,515 | |||||||||||
Net cash (used in ) provided by operating activities | (24,142 | ) | (777 | ) | 2,038 | 27,901 | |||||||||||
CASH FLOWS FROM INVESTING ACTIVITIES: | |||||||||||||||||
Capital expenditures | (5,184 | ) | (1,384 | ) | (7,313 | ) | (5,849 | ) | |||||||||
Acquisition of business | (1,250 | ) | — | — | — | ||||||||||||
Proceeds from sale of marketable securities | — | — | 12,741 | — | |||||||||||||
Net cash (used in) provided by investing activities | (6,434 | ) | (1,384 | ) | 5,428 | (5,849 | ) | ||||||||||
CASH FLOWS FROM FINANCING ACTIVITIES: | |||||||||||||||||
Proceeds from term loan | 20,000 | — | — | — | |||||||||||||
Proceeds from Senior Credit Facility | 16,000 | — | — | — | |||||||||||||
Repayment of Senior Credit Facility | (11,000 | ) | — | — | — | ||||||||||||
Issuance of Series B Convertible Preferred Stock | 25,000 | — | — | — | |||||||||||||
Debt repayments | (25,000 | ) | — | — | — | ||||||||||||
Proceeds from building financing | 6,998 | — | — | — | |||||||||||||
Payments of capital lease obligations | (603 | ) | (271 | ) | (104,737 | ) | (25,730 | ) | |||||||||
Deferred financing costs | — | — | (1,556 | ) | — | ||||||||||||
Issuance of Series A Convertible Preferred Stock and warrants | — | — | 74,168 | — | |||||||||||||
Issuance of common stock | — | — | 22,760 | — | |||||||||||||
Termination of interest swap agreements | — | — | 2,150 | — | |||||||||||||
Dividend payments | — | — | — | (1,663 | ) | ||||||||||||
Net cash provided by (used in) financing activities | 31,395 | (271 | ) | (7,216 | ) | (27,393 | ) | ||||||||||
Net increase (decrease) in cash and cash equivalents | 819 | (2,432 | ) | 250 | (5,341 | ) | |||||||||||
Cash and cash equivalents at beginning of period | 4,005 | 6,437 | 6,187 | 11,528 | |||||||||||||
Cash and cash equivalents at end of period | $ | 4,824 | $ | 4,005 | $ | 6,437 | $ | 6,187 | |||||||||
Supplemental Schedule of Cash Flow Information: | |||||||||||||||||
Cash paid during the period for : | |||||||||||||||||
Interest | $ | 12,960 | $ | — | $ | 10,146 | $ | 24,239 | |||||||||
Income taxes, net of refunds | — | — | 10,179 | 21,814 | |||||||||||||
Supplemental Schedule of Non-Cash Investing and Financing Activities: | |||||||||||||||||
Cancellation of long-term debt(1) | $ | — | $ | (252,060 | ) | $ | — | $ | — | ||||||||
Issuance of new long-term debt | 117,500 | — | — | — | |||||||||||||
Preferred stock — conversion to common stock(2) | 81,551 | — | — | — | |||||||||||||
Issuance of shares for asset acquisition | 1,045 | — | — | — | |||||||||||||
Class B — conversion to common stock | (3 | ) | — | — | — |
(1) | 34,962 shares of the Series B Preferred Stock was issued to our lenders in exchange in part for the cancellation of our prior indebtedness. | |
(2) | All of the Series A Preferred Stock was exchanged for all of the Series A-1 Preferred Stock. See accompanying notes to consolidated financial statements |
F-7
Table of Contents
(In thousands, except per share amounts)
F-8
Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(In thousands, except per share amounts)
F-9
Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(In thousands, except per share amounts)
Current Assets | $ | 104,641 | ||
Goodwill | 86,414 | |||
Intangibles | 116,910 | |||
Property, plant and equipment, net | 36,270 | |||
Other assets | 21,913 | |||
Current liabilities | 81,160 | |||
Deferred income taxes | 77,879 | |||
Due to Gores | 10,797 | |||
Other liabilities | 10,458 | |||
Long-term debt | 106,703 | |||
Total Business Enterprise Value | $ | 79,151 | ||
Unaudited Pro Forma | ||||||||
Year ended December 31, | ||||||||
2009 | 2008 | |||||||
Revenue | $ | 340,334 | $ | 404,416 | ||||
Net loss | (78,177 | ) | (466,010 | ) |
F-10
Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(In thousands, except per share amounts)
F-11
Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(In thousands, except per share amounts)
Buildings | 30 years | |
Leasehold improvements | Shorter of economic useful life or lease term | |
Recording, broadcasting and studio equipment | 3 – 10 years | |
Furniture and equipment and other | 3 – 10 years |
F-12
Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(In thousands, except per share amounts)
F-13
Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(In thousands, except per share amounts)
F-14
Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(In thousands, except per share amounts)
F-15
Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(In thousands, except per share amounts)
F-16
Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(In thousands, except per share amounts)
Successor Company | Predecessor Company | ||||||||||||||||
For the Period | For the Period | ||||||||||||||||
April 24, 2009 to | January 1, 2009 | Year Ended December 31, | |||||||||||||||
December 31, 2009 | to April 23, 2009 | 2008 | 2007 | ||||||||||||||
Net Loss | $ | (63,600 | ) | $ | (18,962 | ) | $ | (427,563 | ) | $ | 24,368 | ||||||
Less: Accumulated Preferred Stock dividends and accretion | (4,661 | ) | (3,076 | ) | (3,081 | ) | — | ||||||||||
Less: Deemed dividends from beneficial conversion feature | (76,887 | ) | — | — | — | ||||||||||||
Less: distributed earnings to common stockholders | — | — | — | 1,658 | |||||||||||||
Less: distributed earnings to Class B stockholders | — | — | — | 5 | |||||||||||||
Undistributed earnings | $ | (145,148 | ) | $ | (22,038 | ) | $ | (430,644 | ) | $ | 22,705 | ||||||
Earnings — Common stock | |||||||||||||||||
Basic | |||||||||||||||||
Distributed earnings to Common shareholders | $ | — | $ | — | $ | — | $ | 1,658 | |||||||||
Undistributed earnings allocated to Common shareholders | (145,148 | ) | (22,038 | ) | (430,644 | ) | 22,705 | ||||||||||
Total Earnings — Common stock, basic | $ | (145,148 | ) | $ | (22,038 | ) | $ | (430,644 | ) | $ | 24,363 | ||||||
Diluted | |||||||||||||||||
Distributed earnings to Common stockholders | $ | — | $ | — | $ | — | $ | 1,658 | |||||||||
Distributed earnings to Class B stockholders | — | — | — | 5 | |||||||||||||
Undistributed earnings allocated to Common stockholders | (145,148 | ) | (22,038 | ) | (430,644 | ) | 22,705 | ||||||||||
Total Earnings — Common stock, diluted | $ | (145,148 | ) | $ | (22,038 | ) | $ | (430,644 | ) | $ | 24,368 | ||||||
Weighted average Common shares outstanding, basic | 12,351 | 505 | 490 | 431 | |||||||||||||
Weighted average Class B shares | — | 0 | 0 | 1 | |||||||||||||
Weighted average Common shares outstanding, diluted | 12,351 | 505 | 490 | 432 | |||||||||||||
(Loss) Earnings per Common share, basic | |||||||||||||||||
Distributed earnings, basic | $ | — | $ | — | $ | — | $ | 3.85 | |||||||||
Undistributed earnings — basic | (11.75 | ) | (43.64 | ) | (878.73 | ) | 52.73 | ||||||||||
Total | $ | (11.75 | ) | $ | (43.64 | ) | $ | (878.73 | ) | $ | 56.59 | ||||||
(Loss) Earnings per Common share, diluted | |||||||||||||||||
Distributed earnings, diluted | $ | — | $ | — | $ | — | $ | 3.84 | |||||||||
Undistributed earnings — diluted | (11.75 | ) | (43.64 | ) | (878.73 | ) | 52.54 | ||||||||||
Total | $ | (11.75 | ) | $ | (43.64 | ) | $ | (878.73 | ) | $ | 56.38 | ||||||
Earnings per share — Class B Stock | |||||||||||||||||
Basic | |||||||||||||||||
Distributed earnings to Class B stockholders | $ | — | $ | — | $ | — | $ | 5.00 | |||||||||
Undistributed earnings allocated to Class B stockholders | — | — | — | — | |||||||||||||
Total Earnings — Class B Stock, basic | $ | — | $ | — | $ | — | $ | 5.00 | |||||||||
Diluted | |||||||||||||||||
Distributed earnings to Class B stockholders | $ | — | $ | — | $ | — | $ | 5.00 | |||||||||
Undistributed earnings allocated to Class B stockholders | — | — | — | — | |||||||||||||
Total Earnings — Class B Stock, diluted | $ | — | $ | — | $ | — | $ | 5.00 | |||||||||
Weighted average Class B shares outstanding, basic | — | 1 | 1 | 1 | |||||||||||||
Share-based compensation | — | — | — | — | |||||||||||||
Warrants | — | — | — | — | |||||||||||||
Weighted average Class B shares outstanding, diluted | — | 1 | 1 | 1 | |||||||||||||
Earnings per Class B share, basic | |||||||||||||||||
Distributed earnings, basic | $ | — | $ | — | $ | — | $ | 3.20 | |||||||||
Undistributed earnings — basic | — | — | — | — | |||||||||||||
Total | $ | — | $ | — | $ | — | $ | 3.20 | |||||||||
Earnings per Class B share, diluted | |||||||||||||||||
Distributed earnings, diluted | $ | — | $ | — | $ | — | $ | 3.20 | |||||||||
Undistributed earnings — diluted | — | — | — | — | |||||||||||||
Total | $ | — | $ | — | $ | — | $ | 3.20 | |||||||||
F-17
Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(In thousands, except per share amounts)
Successor Company | Predecessor Company | ||||||||||||||||
For the Period | For the Period | ||||||||||||||||
April 24, 2009 to | January 1, 2009 | Year Ended December 31, | |||||||||||||||
December 31, 2009 | to April 23, 2009 | 2008 | 2007 | ||||||||||||||
Programming and affiliate arrangements | $ | 13,877 | $ | 20,884 | $ | 57,609 | $ | 39,314 | |||||||||
News agreement | 3,623 | 4,107 | — | — | |||||||||||||
Representation agreement | — | — | 15,440 | 27,319 | |||||||||||||
Management agreement (excluding warrant amortization) | — | — | 610 | 3,394 | |||||||||||||
Warrant amortization | — | — | 1,618 | 9,706 | |||||||||||||
Payment upon closing of Master Agreement | — | — | 5,000 | — | |||||||||||||
$ | 17,500 | $ | 24,991 | $ | 80,277 | $ | 79,733 | ||||||||||
F-18
Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(In thousands, except per share amounts)
Successor Company | Predecessor Company | ||||||||||||||||
For the Period | For the Period | ||||||||||||||||
April 24, 2009 to | January 1, 2009 | Year Ended December 31, | |||||||||||||||
December 31, 2009 | to April 23, 2009 | 2008 | 2007 | ||||||||||||||
Consultancy and advisory fees | $ | 386 | $ | 1,533 | $ | — | $ | — | |||||||||
Gores Radio Holdings, LLC | — | 230 | 250 | — | |||||||||||||
Glendon Partners fees | 810 | 754 | — | — | |||||||||||||
$ | 1,196 | $ | 2,517 | $ | 250 | $ | — | ||||||||||
Successor Company | Predecessor Company | ||||||||||||||||
For the Period | For the Period | ||||||||||||||||
April 24, 2009 to | January 1, 2009 | Year Ended December 31, | |||||||||||||||
December 31, 2009 | to April 23, 2009 | 2008 | 2007 | ||||||||||||||
Program commission expense | $ | 913 | $ | 416 | $ | 2,050 | $ | 2,558 | |||||||||
Successor Company | Predecessor Company | ||||||||||||||||
For the Period | For the Period | ||||||||||||||||
April 24, 2009 to | January 1, 2009 | Year Ended December 31, | |||||||||||||||
December 31, 2009 | to April 23, 2009 | 2008 | 2007 | ||||||||||||||
Operating costs | $ | 18,413 | $ | 25,407 | $ | 75,099 | $ | 69,191 | |||||||||
Depreciation and amortization | — | — | 1,618 | 9,706 | |||||||||||||
Corporate, general and administrative | — | — | 610 | 3,394 | |||||||||||||
Consulting fees | — | 2,517 | 250 | — | |||||||||||||
Special charges | 1,196 | — | 5,000 | — | |||||||||||||
$ | 19,609 | $ | 27,924 | $ | 82,577 | $ | 82,291 | ||||||||||
F-19
Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(In thousands, except per share amounts)
Successor Company | Predecessor Company | ||||||||
December 31, 2009 | December 31, 2008 | ||||||||
Land, buildings and improvements | $ | 10,830 | $ | 11,999 | |||||
Recording, broadcasting and studio equipment | 20,581 | 75,907 | |||||||
Furniture, equipment and other | 11,592 | 18,445 | |||||||
43,003 | 106,351 | ||||||||
Less: Accumulated depreciation and amortization | 6,738 | 75,934 | |||||||
Property and equipment, net | $ | 36,265 | $ | 30,417 | |||||
Successor Company | Predecessor Company | ||||||||||||||||
For the Period | For the Period | ||||||||||||||||
April 24, 2009 to | January 1, 2009 | Year Ended December 31, | |||||||||||||||
December 31, 2009 | to April 23, 2009 | 2008 | 2007 | ||||||||||||||
Depreciation expense | $ | 6,738 | $ | 2,354 | $ | 8,652 | $ | 9,134 |
F-20
Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(In thousands, except per share amounts)
F-21
Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(In thousands, except per share amounts)
F-22
Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(In thousands, except per share amounts)
Total | Metro Traffic | Network | ||||||||||
Predecessor Company | ||||||||||||
Balance at January 1, 2008 | $ | 464,114 | $ | 327,495 | $ | 136,619 | ||||||
Goodwill impairment | (430,126 | ) | (303,703 | ) | (126,423 | ) | ||||||
Balance at December 31, 2008 | 33,988 | 23,792 | 10,196 | |||||||||
Goodwill impairment | — | — | — | |||||||||
Balance at April 23, 2009 | $ | 33,988 | $ | 23,792 | $ | 10,196 | ||||||
Successor Company | ||||||||||||
Balance at April 24, 2009 | $ | 86,414 | $ | 61,354 | $ | 25,060 | ||||||
Accumulated impairment losses | — | — | — | |||||||||
Balance at April 24, 2009 | 86,414 | 61,354 | 25,060 | |||||||||
Adjustments to opening balance(1) | 2,904 | 2,052 | 852 | |||||||||
Goodwill impairment | (50,401 | ) | (50,401 | ) | — | |||||||
Balance at December 31, 2009 | 89,318 | 63,406 | 25,912 | |||||||||
Accumulated impairment losses | (50,401 | ) | (50,401 | ) | — | |||||||
Balance at December 31, 2009 | $ | 38,917 | $ | 13,005 | $ | 25,912 | ||||||
(1) | We recorded an adjustment to goodwill in December 2009 related to our liability for uncertain tax positions $3,165 as of April 23, 2009. In the 23-day period ended April 23, 2009, we recorded a charge to special charges for insurance expense of $261 which should have been capitalized and expensed through April 30, 2010. The appropriate adjustments, including an adjustment to our opening balance of goodwill at April 24, 2009, were recorded in the period from April 24, 2009 to December 31, 2009. |
F-23
Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(In thousands, except per share amounts)
Successor Company | Predecessor Company | ||||||||||||||||||||||||||||
As of December 31, 2009 | As of December 31, 2008 | ||||||||||||||||||||||||||||
Gross | Net | Gross | Net | ||||||||||||||||||||||||||
Estimated | Carrying | Accumulated | Carrying | Carrying | Accumulated | Carrying | |||||||||||||||||||||||
Life | Value | Amortization | Value | Value | Amortization | Value | |||||||||||||||||||||||
Trademarks (1) | Indefinite | $ | 20,800 | $ | — | $ | 20,800 | $ | — | $ | — | $ | — | ||||||||||||||||
Affiliate relationships | 10 years | 72,100 | (4,953 | ) | 67,147 | 28,380 | (25,720 | ) | 2,660 | ||||||||||||||||||||
Software and technology | 5 years | 7,896 | (890 | ) | 7,006 | — | — | — | |||||||||||||||||||||
Client contracts | 5 years | 8,930 | (1,363 | ) | 7,567 | — | — | — | |||||||||||||||||||||
Leases | 7 years | 980 | (100 | ) | 880 | — | — | — | |||||||||||||||||||||
Insertion orders | 9 months | 8,400 | (8,400 | ) | — | — | — | — | |||||||||||||||||||||
$ | 119,106 | $ | (15,706 | ) | $ | 103,400 | $ | 28,380 | $ | (25,720 | ) | $ | 2,660 | ||||||||||||||||
(1) | A fair value appraisal, using the discounted cash flow method, was conducted on our trademarks, our only indefinite lived intangible assets, and an impairment of $100 was recorded for the reduction in the gross carrying value of the Metro Traffic trademark. |
F-24
Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(In thousands, except per share amounts)
Total | Metro Traffic | Network | ||||||||||
Predecessor Company | ||||||||||||
Balance at January 1, 2008 | $ | 3,443 | $ | 46 | $ | 3,397 | ||||||
Amortization | (783 | ) | (46 | ) | (737 | ) | ||||||
Balance at December 31, 2008 | 2,660 | — | 2,660 | |||||||||
Amortization | (231 | ) | — | (231 | ) | |||||||
Balance at April 23, 2009 | $ | 2,429 | $ | — | $ | 2,429 | ||||||
Successor Company | ||||||||||||
Balance at April 24, 2009 | $ | 116,910 | $ | 83,280 | $ | 33,630 | ||||||
Additions | 2,295 | 2,295 | — | |||||||||
Amortization | (15,705 | ) | (11,661 | ) | (4,044 | ) | ||||||
Trademark impairment | (100 | ) | (100 | ) | — | |||||||
Balance at December 31, 2009 | $ | 103,400 | $ | 73,814 | $ | 29,586 | ||||||
Gross carrying value | $ | 119,205 | $ | 85,575 | $ | 33,630 | ||||||
Accumulated amortization | (15,705 | ) | (11,661 | ) | (4,044 | ) | ||||||
Accumulated impairment losses | (100 | ) | (100 | ) | — | |||||||
Balance at December 31, 2009 | $ | 103,400 | $ | 73,814 | $ | 29,586 | ||||||
F-25
Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(In thousands, except per share amounts)
F-26
Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(In thousands, except per share amounts)
Successor Company | Predecessor Company | ||||||||
December 31, 2009 | December 31, 2008 | ||||||||
Term loans(1) | $ | 20,000 | $ | 32,000 | |||||
Revolving credit facilities(1) | 5,000 | 9,000 | |||||||
Senior Secured Notes due on July 15, 2012(2) | 110,762 | — | |||||||
Due to Gores(2) | 11,165 | — | |||||||
5.26% Senior Notes due on November 30, 2012 | — | 154,503 | |||||||
4.64% Senior Notes due on November 30, 2009 | — | 51,475 | |||||||
Deferred derivative gain | — | 2,075 | |||||||
$ | 146,927 | $ | 249,053 | ||||||
(1) | Interest rate of 7.0% on term loan and revolving credit facilities as of December 31, 2009. Interest rate was variable and is payable at a maximum of the prime rate plus an applicable margin of up to .25% or LIBOR plus an applicable margin of up to 1.25%, at our option as of December 31, 2008. | |
(2) | Interest rate of 15%, which includes 5.0% PIK interest which accrues and is added to principal on a quarterly basis. |
Long-Term Debt | ||||
Years ended December 31, | Maturities | |||
2010 | $ | 13,500 | ||
2011 | — | |||
2012 | 133,427 | |||
2013 | — | |||
2014 | — | |||
Thereafter | — | |||
$ | 146,927 | |||
F-27
Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(In thousands, except per share amounts)
Successor Company | Predecessor Company | |||||||||||||||
December 31, 2009 | December 31, 2008 | |||||||||||||||
Carrying | Fair | Carrying | Fair | |||||||||||||
Amount | Value | Amount | Value | |||||||||||||
Borrowings (short and long term) | $ | 141,927 | $ | 148,425 | $ | 249,053 | $ | 158,100 | ||||||||
Series A Convertible Preferred Stock | — | — | 75,000 | 50,000 |
• | Level 1 — Quoted prices in active markets that are unadjusted and accessible at the measurement date for identical, unrestricted assets or liabilities; |
• | Level 2 — Quoted prices for identical assets and liabilities in markets that are not active, quoted prices for similar assets and liabilities in active markets or financial instruments for which significant inputs are observable, either directly or indirectly; |
• | Level 3 — Prices or valuations that require inputs that are both significant to the fair value measurement and unobservable. |
F-28
Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(In thousands, except per share amounts)
Level 1 | Level 2 | Level 3 | ||||||||||||||||||||||
Quoted Prices in Active | Significant Other | Significant | ||||||||||||||||||||||
Markets for Identical Assets | Observable Inputs | Unobservable Inputs | ||||||||||||||||||||||
2009 | 2008 | 2009 | 2008 | 2009 | 2008 | |||||||||||||||||||
Assets: | ||||||||||||||||||||||||
Investments (included in other assets) | $ | 968 | $ | 433 | $ | — | $ | — | $ | — | $ | — | ||||||||||||
$ | 968 | $ | 433 | $ | — | $ | — | $ | — | $ | — | |||||||||||||
Level 1 | Level 2 | Level 3 | ||||||||||
Quoted Prices in | Significant | |||||||||||
Active Markets | Other | Significant | ||||||||||
for Identical | Observable | Unobservable | ||||||||||
Assets | Inputs | Inputs | ||||||||||
Other long-term assets: | ||||||||||||
Intangible assets | $ | — | $ | — | $ | 103,400 | ||||||
Goodwill | — | — | 38,917 | |||||||||
$ | — | $ | — | $ | 142,317 | |||||||
F-29
Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(In thousands, except per share amounts)
F-30
Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(In thousands, except per share amounts)
Predecessor Company | ||||||||||||||||||||||||
Series A | Series A-1 | Series B | ||||||||||||||||||||||
Shares | Book Value | Shares | Book Value | Shares | Book Value | |||||||||||||||||||
Balance at January 1, 2008 | — | $ | — | — | $ | — | — | $ | — | |||||||||||||||
Issuance of Series A Preferred Stock | 75.0 | 70,657 | — | — | — | — | ||||||||||||||||||
Preferred Stock accretion | �� | — | 3,081 | — | — | — | — | |||||||||||||||||
Balance at December 31, 2008 | 75.0 | 73,738 | — | — | — | — | ||||||||||||||||||
Preferred Stock accretion | — | 6,157 | — | — | — | — | ||||||||||||||||||
Balance at April 23, 2009 | 75.0 | $ | 79,895 | — | $ | — | — | $ | — | |||||||||||||||
Successor Company | ||||||||||||||||||||||||
Balance at April 24, 2009 | 75.0 | $ | 79,895 | — | $ | — | — | $ | — | |||||||||||||||
April 24, 2009 transactions: | ||||||||||||||||||||||||
Exchange Series A-1 for Series A | (75.0 | ) | (79,895 | ) | 75.0 | 43,070 | — | — | ||||||||||||||||
Gores purchase of Series B | — | — | — | — | 25.0 | 14,099 | ||||||||||||||||||
Refinancing issuance of Series B | — | — | — | — | 35.0 | 19,718 | ||||||||||||||||||
Preferred Stock accretion | — | — | — | 2,658 | — | 2,003 | ||||||||||||||||||
July 9, 2009 conversion to common shares | — | — | (3.5 | ) | (2,101 | ) | — | — | ||||||||||||||||
August 3, 2009 conversion to common shares | — | — | (71.5 | ) | (43,627 | ) | (60.0 | ) | (35,820 | ) | ||||||||||||||
Beneficial Conversion Feature | — | — | — | 43,070 | — | 33,817 | ||||||||||||||||||
Beneficial Conversion Feature accretion | — | — | — | (43,070 | ) | — | (33,817 | ) | ||||||||||||||||
Balance at December 31, 2009 | — | $ | — | — | $ | — | — | $ | — | |||||||||||||||
F-31
Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(In thousands, except per share amounts)
F-32
Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(In thousands, except per share amounts)
Successor Company | Predecessor Company | ||||||||||||||||||||||||||||||||
December 31, 2009 | April 23, 2009 | December 31, 2008 | December 31, 2007 | ||||||||||||||||||||||||||||||
Weighted | Weighted | Weighted | Weighted | ||||||||||||||||||||||||||||||
Average | Average | Average | Average | ||||||||||||||||||||||||||||||
Exercise | Exercise | Exercise | Exercise | ||||||||||||||||||||||||||||||
Shares | Price | Shares | Price | Shares | Price | Shares | Price | ||||||||||||||||||||||||||
Outstanding beginning of period | 32.1 | $ | 1,463 | 35.0 | $ | 1,504 | 19.4 | $ | 4,372 | 30.4 | $ | 4,768 | |||||||||||||||||||||
Granted | — | $ | — | 0.4 | $ | 12 | 32.9 | $ | 272 | 1.8 | $ | 1,164 | |||||||||||||||||||||
Exercised | — | $ | — | — | $ | — | — | $ | — | — | $ | — | |||||||||||||||||||||
Cancelled, forfeited or expired | (3.5 | ) | $ | 3,726 | (3.3 | ) | $ | 1,860 | (17.3 | ) | $ | 2,352 | (12.8 | ) | $ | 4,862 | |||||||||||||||||
Outstanding end of period | 28.6 | $ | 1,345 | 32.1 | $ | 1,463 | 35.0 | $ | 1,504 | 19.4 | $ | 4,372 | |||||||||||||||||||||
Options exercisable at end of period | 13.6 | $ | 2,485 | 11.4 | $ | 3,810 | 8.7 | $ | 4,856 | 13.7 | $ | 4,800 | |||||||||||||||||||||
Aggregate estimated fair value of options vesting during the period | $ | 826 | $ | 788 | $ | 2,360 | $ | 5,976 | |||||||||||||||||||||||||
Successor Company | Predecessor Company | ||||||||||||||||
For the Period | For the Period | ||||||||||||||||
April 24, 2009 to | January 1, 2009 | Year Ended December 31, | |||||||||||||||
December 31, 2009 | to April 23, 2009 | 2008 | 2007 | ||||||||||||||
Risk-free interest rate | — | 2.98 | % | 2.64 | % | 4.52 | % | ||||||||||
Expected term (years) | — | 5.0 | 4.8 | 5.7 | |||||||||||||
Expected volatility | — | 92.17 | % | 55.99 | % | 40.12 | % | ||||||||||
Expected dividend yield | — | 0.00 | % | 0.00 | % | 0.79 | % | ||||||||||
Weighted average fair value of options granted | $ | — | $ | 8.40 | $ | 104.00 | $ | 478.00 |
F-33
Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(In thousands, except per share amounts)
Remaining | ||||||||||||
Weighted | Weighted | |||||||||||
Average | Average | |||||||||||
Number of | Exercise | Contractual | ||||||||||
Options outstanding at exercise price of: | Options | Price | Life (in years) | |||||||||
$10 – $36 | 6.2 | $ | 34 | 8.84 | ||||||||
$76 – $150 | 3.3 | 99 | 8.72 | |||||||||
$248 – $250 | 2.9 | 250 | 8.52 | |||||||||
$326 – $374 | 3.9 | 352 | 8.22 | |||||||||
$398 – $1,448 | 5.4 | 454 | 8.14 | |||||||||
$2,790 – $7,038 | 6.9 | 4,826 | 3.75 | |||||||||
28.6 | 1,345 | 7.34 | ||||||||||
Successor Company | Predecessor Company | ||||||||||||||||
For the Period | For the Period | ||||||||||||||||
April 24, 2009 to | January 1, 2009 | Year Ended December 31, | |||||||||||||||
December 31, 2009 | to April 23, 2009 | 2008 | 2007 | ||||||||||||||
Operating costs | $ | 1,294 | $ | 624 | $ | 2,502 | $ | 3,933 | |||||||||
General and administrative expense | 303 | 192 | 160 | 2,902 | |||||||||||||
$ | 1,597 | $ | 816 | $ | 2,662 | $ | 6,835 | ||||||||||
Successor Company | Predecessor Company | ||||||||||||||||||||||||||||||||
December 31, 2009 | April 23, 2009 | December 31, 2008 | December 31, 2007 | ||||||||||||||||||||||||||||||
Weighted | Weighted | Weighted | Weighted | ||||||||||||||||||||||||||||||
Average | Average | Average | Average | ||||||||||||||||||||||||||||||
Grant Date | Grant Date | Grant Date | Grant Date | ||||||||||||||||||||||||||||||
Shares | Fair Value | Shares | Fair Value | Shares | Fair Value | Shares | Fair Value | ||||||||||||||||||||||||||
Outstanding beginning of period | 0.9 | $ | 1,498 | 1.8 | $ | 1,510 | 4.8 | $ | 1,724 | 1.7 | $ | 2,612 | |||||||||||||||||||||
Granted | — | — | — | — | 0.2 | 126 | 4.4 | 1,232 | |||||||||||||||||||||||||
Converted to common shares | (0.1 | ) | 1,360 | (0.9 | ) | 1,522 | (1.8 | ) | 1,330 | (0.4 | ) | 2,656 | |||||||||||||||||||||
Cancelled, forfeited or expired | — | — | — | — | (1.4 | ) | 1,534 | (0.9 | ) | 1,654 | |||||||||||||||||||||||
Outstanding end of period | 0.8 | $ | 1,504 | 0.9 | $ | 1,498 | 1.8 | $ | 1,510 | 4.8 | $ | 1,724 | |||||||||||||||||||||
F-34
Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(In thousands, except per share amounts)
Successor Company | Predecessor Company | ||||||||||||||||
For the Period | For the Period | ||||||||||||||||
April 24, 2009 to | January 1, 2009 | Year Ended December 31, | |||||||||||||||
December 31, 2009 | to April 23, 2009 | 2008 | 2007 | ||||||||||||||
Operating costs | $ | 1,221 | $ | 536 | $ | 1,772 | $ | 1,453 | |||||||||
General and administrative expense | 165 | 74 | 390 | 468 | |||||||||||||
$ | 1,386 | $ | 610 | $ | 2,162 | $ | 1,921 | ||||||||||
Successor Company | Predecessor Company | ||||||||||||||||||||||||||||||||
December 31, 2009 | April 23, 2009 | December 31, 2008 | December 31, 2007 | ||||||||||||||||||||||||||||||
Weighted | Weighted | Weighted | Weighted | ||||||||||||||||||||||||||||||
Average | Average | Average | Average | ||||||||||||||||||||||||||||||
Grant Date | Grant Date | Grant Date | Grant Date | ||||||||||||||||||||||||||||||
Shares | Fair Value | Shares | Fair Value | Shares | Fair Value | Shares | Fair Value | ||||||||||||||||||||||||||
Outstanding beginning of period | 2.4 | $ | 306 | 6.1 | $ | 320 | 1.2 | $ | 1,830 | 1.2 | $ | 2,612 | |||||||||||||||||||||
Granted | — | — | — | — | 5.5 | 138 | 0.6 | 1,126 | |||||||||||||||||||||||||
Converted to common shares | (2.3 | ) | 186 | (3.7 | ) | 325 | (0.6 | ) | 1,330 | (0.4 | ) | 2,480 | |||||||||||||||||||||
Forfeited | — | — | — | — | — | — | (0.2 | ) | 3,024 | ||||||||||||||||||||||||
Outstanding end of period | 0.1 | $ | 1,314 | 2.4 | $ | 306 | 6.1 | $ | 320 | 1.2 | $ | 1,830 | |||||||||||||||||||||
Successor Company | Predecessor Company | ||||||||||||||||
For the Period | For the Period | ||||||||||||||||
April 24, 2009 to | January 1, 2009 | Year Ended December 31, | |||||||||||||||
December 31, 2009 | to April 23, 2009 | 2008 | 2007 | ||||||||||||||
Operating costs | $ | — | $ | — | $ | — | $ | — | |||||||||
General and administrative expense | 327 | 684 | 618 | 850 | |||||||||||||
$ | 327 | $ | 684 | $ | 618 | $ | 850 | ||||||||||
F-35
Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(In thousands, except per share amounts)
Successor Company | Predecessor Company | ||||||||||||||||
For the Period | For the Period | ||||||||||||||||
April 24, 2009 to | January 1, 2009 | Year Ended December 31, | |||||||||||||||
December 31, 2009 | to April 23, 2009 | 2008 | 2007 | ||||||||||||||
Net (loss) income | $ | (63,600 | ) | $ | (18,962 | ) | $ | (427,563 | ) | $ | 24,368 | ||||||
Unrealized gain on marketable securities net effect of income taxes | 111 | 219 | 6,732 | 1,385 | |||||||||||||
Adjustment for gains included in net income (1) | — | — | (12,420 | ) | — | ||||||||||||
Comprehensive (loss) income | $ | (63,489 | ) | $ | (18,743 | ) | $ | (433,251 | ) | $ | 25,753 | ||||||
(1) | During the year ended December 31, 2008, we sold marketable securities for total proceeds of approximately $12,741 and realized a gain of $12,420 included as a component of other expense (income) in the Consolidated Statement of Operations. |
Successor Company | Predecessor Company | ||||||||||||||||
For the Period | For the Period | ||||||||||||||||
April 24, 2009 to | January 1, 2009 | Year Ended December 31, | |||||||||||||||
December 31, 2009 | to April 23, 2009 | 2008 | 2007 | ||||||||||||||
Current: | |||||||||||||||||
Federal | $ | (8,828 | ) | $ | (2,693 | ) | $ | (1,220 | ) | $ | 18,466 | ||||||
State | (2,529 | ) | (772 | ) | 367 | 3,738 | |||||||||||
(11,357 | ) | (3,465 | ) | (853 | ) | 22,204 | |||||||||||
Deferred: | |||||||||||||||||
Federal | (9,567 | ) | (2,919 | ) | (11,790 | ) | (5,542 | ) | |||||||||
State | (4,101 | ) | (1,251 | ) | (2,117 | ) | (938 | ) | |||||||||
(13,668 | ) | (4,170 | ) | (13,907 | ) | (6,480 | ) | ||||||||||
Income tax (benefit) expense | $ | (25,025 | ) | $ | (7,635 | ) | $ | (14,760 | ) | $ | 15,724 | ||||||
F-36
Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(In thousands, except per share amounts)
Successor Company | Predecessor Company | ||||||||
December 31, 2009 | December 31, 2008 | ||||||||
Deferred tax liabilities: | |||||||||
Goodwill, intangibles and other | $ | 26,198 | $ | — | |||||
Deferred cancellation of debt income | 32,726 | — | |||||||
Property and equipment | 7,038 | 5,076 | |||||||
Investment | 387 | 166 | |||||||
Other | 299 | 295 | |||||||
Total deferred tax liabilities | 66,648 | 5,537 | |||||||
Deferred tax assets: | |||||||||
Goodwill, intangibles and other | — | 6,487 | |||||||
Allowance for doubtful accounts | 1,653 | 1,379 | |||||||
Deferred compensation | 695 | 1,444 | |||||||
Equity based compensation | 8,260 | 8,460 | |||||||
Accrued expenses and other | 9,069 | 4,016 | |||||||
Total deferred tax assets | 19,677 | 21,786 | |||||||
Net deferred tax (liabilities) assets | (46,971 | ) | 16,249 | ||||||
Net deferred tax asset — current | $ | 3,961 | $ | 2,029 | |||||
Net deferred tax (liability) asset — long-term | $ | (50,932 | ) | $ | 14,220 | ||||
Successor Company | Predecessor Company | ||||||||||||||||
For the Period | For the Period | ||||||||||||||||
April 24, 2009 to | January 1, 2009 | Year Ended December 31, | |||||||||||||||
December 31, 2009 | to April 23, 2009 | 2008 | 2007 | ||||||||||||||
Federal statutory rate | 35.0 | % | 35.0 | % | 35.0 | % | 35.0 | % | |||||||||
State taxes net of federal benefit | 3.2 | 3.2 | 0.3 | 3.3 | |||||||||||||
Non-deductible portion of goodwill impairment | (14.4 | ) | 0.0 | (31.8 | ) | 0.0 | |||||||||||
Other | 4.4 | (9.5 | ) | (0.2 | ) | 0.9 | |||||||||||
Effective tax rate | 28.2 | % | 28.7 | % | 3.3 | % | 39.2 | % | |||||||||
F-37
Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(In thousands, except per share amounts)
Unrecognized | ||||
Tax Benefit | ||||
Predecessor Company | ||||
Balance at January 1, 2008 | $ | 6,470 | ||
Additions for current year tax positions | 439 | |||
Additions for prior year tax positions | 94 | |||
Settlements | (444 | ) | ||
Reductions related to expiration of statue of limitations | (157 | ) | ||
Balance at December 31, 2008 | 6,402 | |||
Additions for current period tax positions | — | |||
Additions for prior years tax positions | — | |||
Settlements | — | |||
Reductions related to expiration of statue of limitations | — | |||
Balance at April 23, 2009 | $ | 6,402 | ||
Successor Company | ||||
Balance at April 24, 2009 | $ | 6,402 | ||
Additions for current period tax positions | 1,751 | |||
Additions for prior years tax positions | 3,165 | |||
Settlements | (2,614 | ) | ||
Reductions related to expiration of statue of limitations | (2,067 | ) | ||
Balance at December 31, 2009 | $ | 6,637 | ||
F-38
Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(In thousands, except per share amounts)
Leases | ||||||||||||||||
Year | Capital | Operating | Other | Total | ||||||||||||
2010 | 960 | 5,775 | 123,850 | 130,585 | ||||||||||||
2011 | 640 | 6,689 | 91,652 | 98,981 | ||||||||||||
2012 | — | 6,590 | 82,111 | 88,701 | ||||||||||||
2013 | — | 6,529 | 67,061 | 73,590 | ||||||||||||
2014 | — | 5,804 | 64,260 | 70,064 | ||||||||||||
Thereafter | — | 22,566 | 156,840 | 179,406 | ||||||||||||
$ | 1,600 | $ | 53,953 | $ | 585,774 | $ | 641,327 | |||||||||
F-39
Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(In thousands, except per share amounts)
Severance | Facilities | Contract | ||||||||||||||
Termination | Consolidation | Termination | ||||||||||||||
Costs | Related Costs | Costs | Total | |||||||||||||
Activity thru December 31, 2008 | ||||||||||||||||
Charges | $ | 6,765 | $ | 831 | $ | 6,504 | $ | 14,100 | ||||||||
Payments | (3,487 | ) | (41 | ) | (1,108 | ) | (4,636 | ) | ||||||||
Non-cash utilization | (80 | ) | — | (1,600 | ) | (1,680 | ) | |||||||||
Balance at December 31, 2008 | 3,198 | 790 | 3,796 | 7,784 | ||||||||||||
Charges from January 1, to April 23, 2009 | 1,658 | 2,318 | — | 3,976 | ||||||||||||
Charges from April 24, to December 31, 2009 | 1,941 | 1,885 | 150 | 3,976 | ||||||||||||
Non-cash utilization | — | (360 | ) | — | (360 | ) | ||||||||||
Payments | (5,260 | ) | (956 | ) | (2,196 | ) | (8,412 | ) | ||||||||
Balance at December 31, 2009 | $ | 1,537 | $ | 3,677 | $ | 1,750 | $ | 6,964 | ||||||||
Accumulated charges | $ | 10,364 | $ | 5,034 | $ | 6,654 | $ | 22,052 | ||||||||
Accumulated payments | (8,747 | ) | (997 | ) | (3,304 | ) | (13,048 | ) | ||||||||
Accumulated non-cash utilization | (80 | ) | (360 | ) | (1,600 | ) | (2,040 | ) | ||||||||
Balance at December 31, 2009 | $ | 1,537 | $ | 3,677 | $ | 1,750 | $ | 6,964 | ||||||||
Successor Company | Predecessor Company | ||||||||||||||||
For the Period | For the Period | ||||||||||||||||
April 24, 2009 to | January 1, 2009 | Year Ended December 31, | |||||||||||||||
December 31, 2009 | to April 23, 2009 | 2008 | 2007 | ||||||||||||||
Fees related to the Refinancing | $ | 1,196 | $ | 12,699 | $ | — | $ | — | |||||||||
TrafficLand write-down | 1,852 | — | — | — | |||||||||||||
Professional fees related to the offering | 1,698 | — | — | — | |||||||||||||
Regionalization costs | 519 | 120 | — | — | |||||||||||||
Financing and acquisition costs | 289 | — | — | — | |||||||||||||
Professional and other fees related to the new CBS agreements, Gores investment and debt refinancing | — | — | 6,624 | 3,626 | |||||||||||||
Closing payment to CBS for new agreement | — | — | 5,000 | — | |||||||||||||
Severance obligations related to executive officer changes | — | — | — | 1,000 | |||||||||||||
Re-engineering expenses | — | — | 1,621 | — | |||||||||||||
$ | 5,554 | $ | 12,819 | $ | 13,245 | $ | 4,626 | ||||||||||
F-40
Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(In thousands, except per share amounts)
Successor Company | Predecessor Company | ||||||||||||||||
For the Period | For the Period | ||||||||||||||||
April 24, 2009 to | January 1, 2009 | Year Ended December 31, | |||||||||||||||
December 31, 2009 | to April 23, 2009 | 2008 | 2007 | ||||||||||||||
Revenue | |||||||||||||||||
Metro Traffic | $ | 109,008 | $ | 47,479 | $ | 194,884 | $ | 232,445 | |||||||||
Network | 119,852 | 63,995 | 209,532 | 218,939 | |||||||||||||
$ | 228,860 | $ | 111,474 | $ | 404,416 | $ | 451,384 | ||||||||||
Segment operating (loss) income | |||||||||||||||||
Metro Traffic | $ | (9,842 | ) | $ | (2,093 | ) | $ | 24,577 | $ | 64,033 | |||||||
Network | 3,144 | (1,669 | ) | 14,562 | 30,943 | ||||||||||||
Total segment operating (loss) income | (6,698 | ) | (3,762 | ) | 39,139 | 94,976 | |||||||||||
Corporate expenses | (7,119 | ) | (3,177 | ) | (19,709 | ) | (27,043 | ) | |||||||||
Restructuring and special charges | (9,530 | ) | (16,795 | ) | (27,345 | ) | (4,626 | ) | |||||||||
Goodwill and intangible impairment | (50,501 | ) | — | (430,126 | ) | — | |||||||||||
Operating (loss) income | (73,848 | ) | (23,734 | ) | (438,041 | ) | 63,307 | ||||||||||
Interest expense | 14,782 | 3,222 | 16,651 | 23,626 | |||||||||||||
Other (income) expense | (5 | ) | (359 | ) | (12,369 | ) | (411 | ) | |||||||||
(Loss) income before income taxes | $ | (88,625 | ) | $ | (26,597 | ) | $ | (442,323 | ) | $ | 40,092 | ||||||
Depreciation and amortization | |||||||||||||||||
Metro Traffic | $ | 15,345 | $ | 1,480 | $ | 6,120 | $ | 6,955 | |||||||||
Network | 6,110 | 1,096 | 3,139 | 3,152 | |||||||||||||
Corporate | 18 | 9 | 1,793 | 9,733 | |||||||||||||
$ | 21,473 | $ | 2,585 | $ | 11,052 | $ | 19,840 | ||||||||||
Capital expenditures | |||||||||||||||||
Metro Traffic | $ | 3,509 | $ | 878 | $ | 1,538 | $ | 4,042 | |||||||||
Network | 1,675 | 506 | 5,634 | 1,800 | |||||||||||||
Corporate | — | 141 | 7 | ||||||||||||||
$ | 5,184 | $ | 1,384 | $ | 7,313 | $ | 5,849 | ||||||||||
F-41
Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(In thousands, except per share amounts)
Successor Company | Predecessor Company | ||||||||
December 31, 2009 | December 31, 2008 | ||||||||
Total assets | |||||||||
Metro Traffic | $ | 152,057 | $ | 80,079 | |||||
Network | 134,084 | 92,109 | |||||||
Corporate | 19,307 | 32,900 | |||||||
$ | 305,448 | $ | 205,088 | ||||||
Successor Company | ||||||||||||||||
For the period | 2009 | 2009 | For the period | |||||||||||||
April 24, 2009 to | Third | Fourth | April 24, 2009 to | |||||||||||||
June 30, 2009 | Quarter | Quarter | December 31, 2009 | |||||||||||||
Net revenue | $ | 58,044 | $ | 78,474 | $ | 92,342 | $ | 228,860 | ||||||||
Operating loss | $ | (4,146 | ) | $ | (60,135 | ) | $ | (9,567 | ) | $ | (73,848 | ) | ||||
Net loss | $ | (6,184 | ) | $ | (53,549 | ) | $ | (3,867 | ) | $ | (63,600 | ) | ||||
Net loss per share: | ||||||||||||||||
Basic | ||||||||||||||||
Common Stock | $ | (18.85 | ) | $ | (10.03 | ) | $ | (0.19 | ) | $ | (11.75 | ) | ||||
Class B Stock | $ | — | $ | — | $ | — | $ | — | ||||||||
Diluted | ||||||||||||||||
Common Stock | $ | (18.85 | ) | $ | (10.03 | ) | $ | (0.19 | ) | $ | (11.75 | ) | ||||
Class B Stock | $ | — | $ | — | $ | — | $ | — |
Predecessor Company | ||||||||||||
2009 | For the period | For the period | ||||||||||
First | April 1, 2009 to | January 1, 2009 to | ||||||||||
Quarter | April 23, 2009 | April 23, 2009 | ||||||||||
Net revenue | $ | 85,867 | $ | 25,607 | $ | 111,474 | ||||||
Operating loss | $ | (19,604 | ) | $ | (4,130 | ) | $ | (23,734 | ) | |||
Net loss | $ | (15,186 | ) | $ | (3,776 | ) | $ | (18,962 | ) | |||
Net loss per share: | ||||||||||||
Basic | ||||||||||||
Common Stock | $ | (33.95 | ) | $ | (10.67 | ) | $ | (43.64 | ) | |||
Class B Stock | $ | — | $ | — | $ | — | ||||||
Diluted | ||||||||||||
Common Stock | $ | (33.95 | ) | $ | (10.67 | ) | $ | (43.64 | ) | |||
Class B Stock | $ | — | $ | — | $ | — |
F-42
Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(In thousands, except per share amounts)
Predecessor Company | ||||||||||||||||||||
2008 | ||||||||||||||||||||
First | Second | Third | Fourth | For the | ||||||||||||||||
Quarter | Quarter | Quarter | Quarter | Year | ||||||||||||||||
Net revenue | $ | 106,627 | $ | 100,372 | $ | 96,299 | $ | 101,118 | $ | 404,416 | ||||||||||
Operating loss | (3,000 | ) | (195,609 | ) | (7,555 | ) | (231,877 | ) | (438,041 | ) | ||||||||||
Net loss | (5,338 | ) | (199,744 | ) | (10 | ) | (222,471 | ) | (427,563 | ) | ||||||||||
Net loss per share: | ||||||||||||||||||||
Basic | ||||||||||||||||||||
Common Stock | $ | (11.94 | ) | $ | (396.88 | ) | $ | (2.88 | ) | $ | (443.88 | ) | $ | (878.73 | ) | |||||
Class B Stock | $ | — | $ | — | $ | — | $ | — | $ | — | ||||||||||
Diluted | ||||||||||||||||||||
Common Stock | $ | (11.94 | ) | $ | (396.88 | ) | $ | (2.88 | ) | $ | (443.88 | ) | $ | (878.73 | ) | |||||
Class B Stock | $ | — | $ | — | $ | — | $ | — | $ | — |
F-43
Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(In thousands, except per share amounts)
Allowance for Doubtful Accounts
Balance at | Additions | Deductions | Balance at | |||||||||||||
Beginning of | Charged to Costs | Write-offs and | End of | |||||||||||||
Period | and Expenses | Other Adjustments | Period | |||||||||||||
Successor Company | ||||||||||||||||
4/24/2009 to 12/31/2009 | $ | 0 | $ | 2,425 | $ | 298 | $ | 2,723 | ||||||||
Predecessor Company | ||||||||||||||||
1/1/2009 to 4/23/2009 | $ | 3,632 | $ | 574 | $ | (6 | ) | $ | 4,200 | |||||||
2008 | $ | 3,602 | $ | 439 | $ | (409 | ) | $ | 3,632 | |||||||
2007 | $ | 4,387 | $ | 139 | $ | (924 | ) | $ | 3,602 |
II-1