Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2015 | Mar. 21, 2016 | Jun. 30, 2015 | |
Entity Registrant Name | SPANISH BROADCASTING SYSTEM INC | ||
Entity Central Index Key | 927,720 | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2015 | ||
Amendment Flag | false | ||
Document Fiscal Year Focus | 2,015 | ||
Document Fiscal Period Focus | FY | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Smaller Reporting Company | ||
Class A common stock | |||
Entity Public Float | $ 27,900,000 | ||
Entity Common Stock, Shares Outstanding | 4,166,991 | ||
Class B common stock | |||
Entity Public Float | $ 2,363 | ||
Entity Common Stock, Shares Outstanding | 2,340,353 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Current assets: | ||
Cash and cash equivalents | $ 19,443 | $ 23,991 |
Receivables: | ||
Trade | 34,415 | 27,506 |
Barter | 231 | 205 |
Total Receivables | 34,646 | 27,711 |
Less allowance for doubtful accounts | 1,431 | 2,322 |
Net receivables | 33,215 | 25,389 |
Prepaid expenses and other current assets | 5,318 | 3,928 |
Total current assets | 57,976 | 53,308 |
Property and equipment, net of accumulated depreciation of $71,590 in 2015 and $69,632 in 2014 | 30,460 | 32,382 |
FCC broadcasting licenses | 319,356 | 323,055 |
Goodwill | 32,806 | 32,806 |
Other intangible assets, net of accumulated amortization of $1,020 in 2015 and $924 in 2014 | 1,528 | 1,624 |
Deferred financing costs, net of accumulated amortization of $13,080 in 2015 and $9,706 in 2014 | 4,535 | 7,910 |
Assets held for exchange | 2,794 | |
Deferred tax assets | 1,758 | 4,213 |
Other assets | 531 | 728 |
Total assets | 451,744 | 456,026 |
Current liabilities: | ||
Accounts payable and accrued expenses | 16,552 | 13,559 |
Accrued interest | 7,194 | 7,202 |
Unearned revenue | 796 | 449 |
Other liabilities | 30 | 269 |
Current portion of other long-term debt | 306 | 336 |
10 3/4% Series B cumulative exchangeable redeemable preferred stock outstanding and dividends outstanding, $0.01 par value, liquidation value $1,000 per share. Authorized 280,000 shares: 90,549 shares issued and outstanding at December 31, 2015 and 2014 and $55,565 and $45,831 of dividends payable as of December 31, 2015 and 2014, respectively. | 146,114 | 136,380 |
Total current liabilities | 170,992 | 158,195 |
Other liabilities, less current portion | 3,007 | 3,030 |
Derivative instruments | 220 | 408 |
12.5% senior secured notes due 2017, net of unamortized discount of $2,609 in 2015 and $4,343 in 2014 | 272,391 | 270,657 |
Other long-term debt, less current portion | 4,616 | 4,922 |
Deferred tax liabilities | 99,066 | 90,604 |
Total liabilities | $ 550,292 | $ 527,816 |
Commitments and contingencies (note 12 and 14) | ||
Stockholders’ deficit: | ||
Additional paid-in capital | $ 525,344 | $ 525,335 |
Accumulated other comprehensive loss, net | (220) | (408) |
Accumulated deficit | (623,676) | (596,721) |
Total stockholders’ deficit | (98,548) | (71,790) |
Total liabilities and stockholders’ deficit | 451,744 | 456,026 |
Preferred Stock | Series C convertible preferred stock | ||
Stockholders’ deficit: | ||
Series C convertible preferred stock, $0.01 par value and liquidation value. Authorized 600,000 shares; 380,000 shares issued and outstanding at December 31, 2015 and 2014, respectively | 4 | 4 |
Total stockholders’ deficit | $ 4 | $ 4 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Property and equipment, accumulated depreciation | $ 71,590 | $ 69,632 |
Other intangible assets, accumulated amortization | 1,020 | 924 |
Deferred financing costs, accumulated amortization | $ 13,080 | $ 9,706 |
Cumulative exchangeable redeemable preferred stock dividend rate | 10.75% | 10.75% |
12.5% Senior Secured Notes Due 2017 | ||
Interest rate on Senior secured notes due 2017 | 12.50% | 12.50% |
Senior secured notes due 2017, unamortized discount | $ 2,609 | $ 4,343 |
Preferred Stock | Series B Preferred Stock | ||
Preferred stock par value per share | $ 0.01 | $ 0.01 |
Preferred stock, liquidation value per share | $ 1,000 | $ 1,000 |
Preferred stock, shares authorized | 280,000 | 280,000 |
Preferred stock, shares issued | 90,549 | 90,549 |
Preferred stock, shares outstanding | 90,549 | 90,549 |
Preferred Stock, dividends outstanding | $ 55,565 | $ 45,831 |
Preferred Stock | Series C convertible preferred stock | ||
Convertible preferred stock, par value | $ 0.01 | $ 0.01 |
Convertible preferred stock, liquidation value per share | $ 0.01 | $ 0.01 |
Convertible preferred stock, shares authorized | 600,000 | 600,000 |
Convertible preferred stock, shares issued | 380,000 | 380,000 |
Convertible preferred stock, shares outstanding | 380,000 | 380,000 |
Common Stock | Class A common stock | ||
Common stock, par value | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 100,000,000 | 100,000,000 |
Common stock, shares issued | 4,166,991 | 4,166,991 |
Common stock, shares outstanding | 4,166,991 | 4,166,991 |
Common Stock | Class B common stock | ||
Common stock, par value | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 50,000,000 | 50,000,000 |
Common stock, shares issued | 2,340,353 | 2,340,353 |
Common stock, shares outstanding | 2,340,353 | 2,340,353 |
Consolidated Statements of Oper
Consolidated Statements of Operations and Comprehensive Loss - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Income Statement [Abstract] | ||
Net revenue | $ 146,899 | $ 146,280 |
Operating expenses: | ||
Engineering and programming | 30,761 | 29,909 |
Selling, general and administrative | 66,574 | 67,539 |
Corporate expenses | 10,462 | 9,720 |
Depreciation and amortization | 4,802 | 5,125 |
Total operating expenses | 112,599 | 112,293 |
(Gain) loss on the disposal of assets | (87) | (1,204) |
Impairment charges and restructuring costs | 536 | (153) |
Operating income | 33,851 | 35,344 |
Other (expense) income: | ||
Interest expense | (39,885) | (39,724) |
Dividends on Series B preferred stock classified as interest expense | (9,734) | (9,734) |
Interest income | 38 | 5 |
Loss before income taxes | (15,730) | (14,109) |
Income tax expense (benefit) | 11,225 | 5,842 |
Net loss | $ (26,955) | $ (19,951) |
Basic and Diluted net loss per common share | $ (3.71) | $ (2.75) |
Weighted average common shares outstanding: | ||
Basic and Diluted | 7,267 | 7,267 |
Net loss | $ (26,955) | $ (19,951) |
Other comprehensive (loss) income, net of taxes- unrealized gain on derivative instrument | 188 | 194 |
Total comprehensive loss | $ (26,767) | $ (19,757) |
Consolidated Statements of Chan
Consolidated Statements of Changes in Stockholders' Deficit - USD ($) $ in Thousands | Total | Preferred StockSeries C convertible preferred stock | Common StockClass A common stock | Common StockClass B common stock | Additional paid-in capital | Accumulated other comprehensive loss, net | Accumulated deficit |
Beginning Balance at Dec. 31, 2013 | $ (52,034) | $ 4 | $ 525,334 | $ (602) | $ (576,770) | ||
Beginning Balance, Shares at Dec. 31, 2013 | 380,000 | 4,166,991 | 2,340,353 | ||||
Stock-based compensation | 1 | 1 | |||||
Net loss | (19,951) | (19,951) | |||||
Unrealized gain on derivative instrument | 194 | 194 | |||||
Ending Balance at Dec. 31, 2014 | (71,790) | $ 4 | 525,335 | (408) | (596,721) | ||
Ending Balance, Shares at Dec. 31, 2014 | 380,000 | 4,166,991 | 2,340,353 | ||||
Stock-based compensation | 9 | 9 | |||||
Net loss | (26,955) | (26,955) | |||||
Unrealized gain on derivative instrument | 188 | 188 | |||||
Ending Balance at Dec. 31, 2015 | $ (98,548) | $ 4 | $ 525,344 | $ (220) | $ (623,676) | ||
Ending Balance, Shares at Dec. 31, 2015 | 380,000 | 4,166,991 | 2,340,353 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Cash flows from operating activities: | ||
Net loss | $ (26,955) | $ (19,951) |
Adjustments to reconcile net loss to net cash provided by operating activities: | ||
Dividends on Series B preferred stock classified as interest expense | 9,734 | 9,734 |
(Gain) loss on the disposal of assets | (87) | (1,204) |
Impairment charges | 536 | (153) |
Stock-based compensation | 9 | 1 |
Depreciation and amortization | 4,802 | 5,125 |
Net barter (income) loss | (385) | (5) |
(Benefit) provision for trade doubtful accounts | (343) | 695 |
Amortization of deferred financing costs | 3,375 | 3,354 |
Amortization of original issued discount | 1,734 | 1,519 |
Deferred income taxes | 10,917 | 5,634 |
Unearned revenue-barter | 706 | 197 |
Changes in operating assets and liabilities: | ||
Trade receivables | (7,783) | 3,582 |
Prepaid expenses and other current assets | (1,064) | (1,150) |
Other assets | 197 | 490 |
Accounts payable and accrued expenses | 2,659 | (2,679) |
Accrued interest | (8) | (69) |
Other liabilities | 126 | (745) |
Net cash provided (used) by operating activities | (1,830) | 4,375 |
Cash flows from investing activities: | ||
Purchases of property and equipment | (2,472) | (2,216) |
Proceeds from the sale of property and equipment | 90 | 1,270 |
Net cash provided (used) in investing activities | (2,382) | (946) |
Cash flows from financing activities: | ||
Payments of other long-term debt | (336) | (3,004) |
Net cash provided (used) in financing activities | (336) | (3,004) |
Net increase (decrease) in cash and cash equivalents | (4,548) | 425 |
Cash and cash equivalents at beginning of year | 23,991 | 23,566 |
Cash and cash equivalents at end of year | 19,443 | 23,991 |
Supplemental cash flows information: | ||
Interest paid | 34,773 | 34,891 |
Income tax paid, net | 452 | 410 |
Noncash investing and financing activities: | ||
Unrealized gain on derivative instrument | $ 188 | $ 194 |
Organization and Nature of Busi
Organization and Nature of Business | 12 Months Ended |
Dec. 31, 2015 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Organization and Nature of Business | (1) Organization and Nature of Business Spanish Broadcasting System, Inc., a Delaware corporation, and its subsidiaries owns 20 radio stations in the Los Angeles, New York, Puerto Rico, Chicago, Miami and San Francisco markets. In addition, we own and operate three television stations, which operate as one television operation, branded as “MegaTV.” We also have various MegaTV broadcasting outlets under affiliation or programming agreements. As part of our operating business, we produce live concerts and events and maintain multiple bilingual websites, including www.LaMusica.com Our primary source of revenue is the sale of advertising time on our stations to local and national advertisers. Our revenue is affected primarily by the advertising rates that our stations are able to charge, as well as the overall demand for advertising time in each respective market. Seasonal net broadcasting revenue fluctuations are common in the broadcasting industry and are due to fluctuations in advertising expenditures by local and national advertisers. Typically for the broadcasting industry, the first calendar quarter generally produces the lowest revenue. The broadcasting industry is subject to extensive federal regulation which, among other things, requires approval by the Federal Communications Commission (“FCC”) for the issuance, renewal, transfer and assignment of broadcasting station operating licenses and limits the number of broadcasting properties we may acquire. |
Summary of Significant Accounti
Summary of Significant Accounting Policies and Related Matters | 12 Months Ended |
Dec. 31, 2015 | |
Text Block [Abstract] | |
Summary of Significant Accounting Policies and Related Matters | (2) Summary of Significant Accounting Policies and Related Matters (a) Basis of Presentation The consolidated financial statements include the accounts of Spanish Broadcasting System, Inc. and its subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation. In addition, we evaluated subsequent events after the balance sheet date and through the financial statements issuance date. The consolidated financial statements have been prepared on a going-concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. As of December 31, 2015 and 2014, we had a working capital deficit due to the reclassification of our series B preferred stock as a current liability, even though under Delaware law the series B preferred stock is deemed equity. Because the holders of the Series B preferred stock are not creditors, they do not have rights of, or remedies available to, creditors. Delaware law does not recognize a right of preferred stockholders to force redemptions or repurchases where the corporation does not have funds legally available. Currently, we do not have sufficient funds legally available to be able to repurchase the series B preferred stock and its accumulated unpaid dividends and management does not expect to be required to make any such repurchases during the next twelve months. Management does not believe that the Series B preferred stockholders have legal remedies that would require such repurchases (see note 10). (b) Revision of Prior Period Consolidated Financial Statements The Company identified an adjustment related to the release of the valuation allowance related to certain deferred tax assets in two of our subsidiaries. The adjustment increased certain deferred tax assets and increased net income related to the release of the valuation allowance in a prior period. In addition, our accumulated deficit balance in stockholders’ deficit decreased as a result of the adjustment. In order to assess materiality with respect to the adjustments, the Company considered Staff Accounting Bulletin (“SAB”) 99, Materiality and SAB 108, Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements, and determined that the impact of the adjustments on prior period consolidated financial statements was immaterial. Therefore, the cumulative adjustment as of December 31, 2014 has been recorded as an opening adjustment of $2.4 million on the Consolidated Statements of Changes in Stockholders’ Deficit. Due to jurisdictional netting rules, this adjustment was reflected as an increase to the deferred tax asset of $4.2 million and an increase to the deferred tax liability of $1.8 million. The $4.2 million deferred tax assets consists of the net DTA for the US Licensing entities of $1.9 million and the net DTA for SBS of Puerto Rico of $2.3 million. The impact of the adjustments on the Consolidated Statements of Changes in Stockholders’ Deficit at December 31, 2013 and 2014 is as follows: Previously Reported Adjustment As Revised (In thousands) Changes to accumulated deficit Balance at December 31, 2013 $ (579,185 ) $ 2,415 $ (576,770 ) Balance at December 31, 2014 (599,136 ) 2,415 (596,721 ) Additionally, the impact of the adjustment on the December 31, 2014 Consolidated Balance Sheet is as follows: December 31, 2014 Previously Reported Adjustment As Revised (In thousands) Deferred tax assets $ — $ 4,213 $ 4,213 Total assets 451,813 4,213 456,026 Deferred tax liabilities 88,806 $ 1,798 90,604 Total liabilities 526,018 1,798 527,816 Accumulated deficit (599,136 ) 2,415 (596,721 ) Total deficit (74,205 ) 2,415 (71,790 ) Total liabilities and deficit 451,813 4,213 456,026 The Consolidated Statements of Operations for the year ended December 31, 2014 has not been adjusted as the impact on net loss is not material to those consolidated financial statements. In considering whether the Company should amend its previously filed Form 10-K 2014, the Company’s evaluation of SAB 99 considered that the aggregate impact of the adjustment did not impact the Company’s loss before income taxes and was not material to the Company’s net loss, had no impact on operating cash flows, and had an insignificant impact on the Consolidated Balance Sheets. In aggregate, the Company does not believe it is probable that the views of a reasonable investor would have changed by this adjustment in the 2014 consolidated financial statements to warrant an amended Form 10-K. Accordingly, the adjustment was made to the December 31, 2014 Consolidated Balance Sheet and the Consolidated Statement of Changes in Stockholders’ Deficit as described above using the SAB 108 approach. ( c ) Revenue Recognition We recognize broadcasting revenue as advertisements are aired on our stations, subject to meeting certain conditions, such as persuasive evidence that an agreement exists, a fixed or determinable price and reasonable assurance of collection. Our revenue is presented net of agency commissions. Agency commissions are calculated based on a stated percentage applied to gross billing revenue. Advertisers remit the gross billing amount to the agency, and then the agency remits gross billings less their commission to us when the advertisement is not placed directly by the advertiser. Payments received in advance of being earned are recorded as customer advances, which are included in accounts payable and accrued expenses. ( d ) Valuation of Accounts Receivable We review accounts receivable to determine which accounts are doubtful of collection. In making the determination of the appropriate allowance for doubtful accounts, we consider our history of write-offs, relationships with our customers, age of the invoices and the overall creditworthiness of our customers. For each of the years ended December 31, 2015 and 2014, we generated income from the recovery of previously recognized bad debt expense of $0.3 million and incurred bad debt expense of $0.7 million, respectively. Changes in the credit worthiness of customers, general economic conditions and other factors may impact the level of future write-offs. (e ) Property and Equipment Property and equipment, including capital leases, are stated at historical cost, less accumulated depreciation and amortization. We depreciate the cost of our property and equipment using the straight-line method over the respective estimated useful lives (see note 6). Leasehold improvements are amortized on a straight-line basis over the shorter of the remaining life of the lease or the useful life of the improvements. Maintenance and repairs are charged to expense as incurred; improvements are capitalized. When items are retired or are otherwise disposed of, the related costs and accumulated depreciation and amortization are removed from the accounts and any resulting gains or losses are credited or charged to operating income. ( f ) Assets Held for Exchange Long lived assets or asset groups that have met the initial criteria to be classified as held for sale (disposal group) and have not yet been sold are measured at the lower of their carrying amount or fair value less cost to sell. Long-lived asset classified as held for sale shall not be depreciated (amortized) while classified as held for sale. Interest and other expenses attributable to the liabilities of a disposal group classified as held for sale shall continue to be accrued. (g ) Impairment or Disposal of Long-Lived Assets Accounting for impairment or disposal of long-lived assets requires that long-lived assets be reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to future net cash flows expected to be generated by the asset. If the carrying amount of an asset exceeds its estimated future cash flows, an impairment charge is recognized in the amount by which the carrying amount of the asset exceeds the estimated fair value of the asset. (h ) FCC Broadcasting Licenses Our indefinite-lived intangible assets consist of FCC broadcasting licenses. FCC broadcasting licenses are granted to stations for up to eight years under the Telecommunications Act of 1996. The Act requires the FCC to renew a broadcast license if: (i) it finds that the station has served the public interest, convenience and necessity; (ii) there have been no serious violations of either the Communications Act of 1934 or the FCC’s rules and regulations by the licensee; and (iii) there have been no other serious violations, which taken together, constitute a pattern of abuse. We intend to renew our licenses indefinitely and evidence supports our ability to do so. Historically, there has been no material challenge to our license renewals. In addition, the technology used in broadcasting is not expected to be replaced by another technology any time in the foreseeable future. The weighted-average period before the next renewal of our FCC broadcasting licenses is 4.8 years. We do not amortize our FCC broadcasting licenses. We test these indefinite-lived intangible assets for impairment at least annually or when an event occurs that may indicate that impairment may have occurred. We test our FCC broadcasting licenses for impairment at the market cluster level. We apply the guidance of Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 350-30-35, Unit of Accounting for Purposes of Testing for Impairment of Intangible Assets Not Subject to Amortization Our valuations principally use the discounted cash flow methodology. This income approach consists of a quantitative model, which assumes the FCC broadcasting licenses are acquired and operated by a third-party. The valuation method used is based on the premise that the only asset that the unbuilt start-up station would possess is the FCC broadcasting license. The valuation method isolates the income attributable to a FCC broadcasting license by modeling a hypothetical greenfield build-up to a normalized enterprise that, by design, lacks inherent goodwill and whose only other assets have essentially been paid for as part of the build-up process. Consequently, the resulting accretion in value is solely attributed to the FCC broadcasting license. In the discounted cash flow projections, a period of ten years was determined to be an appropriate time horizon for the analysis. The yearly streams of cash flows are adjusted to present value using an after-tax discount rate calculated for the broadcast industry as of December 31 of each year. Additionally, it is necessary to project the terminal value at the end of the ten-year projection period. The terminal value represents the hypothetical value of the licenses at the end of a ten-year period. An estimated amount of taxes are deducted from the assumed terminal value, which accordingly is discounted to net present value. The key assumptions incorporated in the discounted cash flow model are market revenue projections, market revenue share projections, anticipated operating profit margins and risk adjusted discount rates. These assumptions vary based on the market size, type of broadcast of signal, media competition and audience share. These assumptions primarily reflect industry norms for similar stations/broadcast signals, as well as historical performance and trends of the markets. In the preparation of the FCC broadcasting license appraisals, estimates and assumptions are made that affect the valuation of the intangible asset. These estimates and assumptions could differ from actual results and could have a material impact on our consolidated financial statements in the future. These key assumptions are subject to such factors as: overall advertising demand, station listenership and viewership, audience tastes, technology, fluctuation in preferred advertising media and the estimated cost of capital. Since a number of factors may influence the determination of the fair value of our FCC broadcasting licenses, we are unable to predict whether impairments will occur in the future. Any significant change in these factors will result in a modification of the key assumptions, which may result in an additional impairment. (i ) Goodwill Goodwill consists of the excess of the purchase price over the fair value of tangible and identifiable intangible net assets acquired in business combinations. We test goodwill for impairment at least annually at the reporting unit level. We have determined that we have two reporting units, Radio and Television. We currently only have goodwill in our radio reporting unit. We have aggregated our operating components (radio stations) into a single radio reporting unit based upon the similarity of their economic characteristics. Our evaluation included consideration of factors, such as regulatory environment, business model, gross margins, nature of services and the process for delivering these services. The goodwill impairment test is a two-step test. Under the first step, the fair value of the reporting unit is compared with its carrying value (including goodwill). If the fair value of the reporting unit is less than its carrying value, an indication of goodwill impairment exists for the reporting unit and the enterprise must perform step two of the impairment test (measurement). If the fair value of the reporting unit exceeds its carrying value, step two does not need to be performed. Under step two, an impairment loss is recognized for any excess of the carrying amount of the reporting unit’s goodwill over the implied fair value of that goodwill. The implied fair value of goodwill is determined by allocating the fair value of the reporting unit in a manner similar to a purchase price allocation. The residual fair value after this allocation is the implied fair value of the reporting unit goodwill. Fair value of the reporting unit is determined using a discounted cash flow analysis. If the fair value of the reporting unit exceeds its carrying value, step two does not need to be performed. During the years-ended December 31, 2015 and 2014, we performed interim and/or annual impairment reviews of our goodwill and determined that there was no impairment of goodwill. The estimated enterprise value of our radio reporting unit exceeded its carrying value during our impairment testing. In addition, there is currently a net accumulated deficit in our radio reporting unit and we have a net overall accumulated deficit; therefore we considered whether there were any adverse qualitative factors that would indicate that an impairment existed. When evaluating our estimated enterprise value, we utilized an income approach which uses assumptions and estimates which among others include the aggregated expected revenues and operating margins generated by our FCC broadcasting licenses (i.e. our stations) and use of a risk adjusted discount rate. We did not find reconciliation to our current market capitalization meaningful in the determination of our enterprise value given current factors that impact our market capitalization, including but not limited to: limited trading volume; the impact of our television segment operating losses; and the significant voting control of our Chairman and Chief Executive Officer. (j ) Other Intangible Assets, Net Other intangible assets, net, consist of favorable leases and agreements acquired. Gross other intangible assets total $2.5 million as of December 31, 2015 and 2014, respectively. These assets are being amortized over the lives of the leases; however, not to exceed 40 years. Amortization expense amounted to $0.1 million and $0.1 million for the years ended December 31, 2015 and 2014, respectively. Estimated amortization expense for the five years subsequent to December 31, 2015 is as follows (in thousands): Year ending December 31: 2016 $ 96 2017 96 2018 96 2019 96 2020 96 ( k ) Deferred Financing Costs Deferred financing costs relates to our 12.5% Senior Secured Notes due 2017 (see note 8). Deferred financing costs are being amortized to interest expense over the term of the related debt using the effective interest method. (l ) Barter Transactions Barter transactions represent advertising time exchanged for noncash goods and/or services, such as promotional items, advertising, supplies, equipment and services. Revenue from barter transactions are recognized as income when advertisements are broadcasted. Expenses are recognized when goods or services are received or used. We record barter transactions at the fair value of goods or services received or advertising surrendered, whichever is more readily determinable. Barter revenue amounted to $7.6 million and $8.7 million for the years ended December 31, 2015 and 2014, respectively. Barter expense amounted to $7.2 million and $8.7 million for the years ended December 31, 2015 and 2014, respectively. Unearned revenue consists of the excess of the aggregate fair value of goods or services received by us, over the aggregate fair value of advertising time delivered by us on certain barter customers. (m ) Cash and Cash Equivalents Cash and cash equivalents consist of cash and money market accounts at various commercial banks. All cash equivalents have original maturities of 90 days or less. (n ) Income Taxes We file a consolidated federal income tax return for substantially all of our domestic operations. We are also subject to foreign taxes on our Puerto Rico operations. We account for income taxes under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income, and tax planning strategies in making this assessment. If the realization of deferred tax assets in the future is considered more likely than not, an adjustment to the deferred tax assets would increase net income in the period such determination is made. Based upon the level of historical taxable income and projections for future taxable income over the periods which the deferred tax assets are deductible, at this time, management believes it is more likely than not that we will not realize the benefits of the majority of these deductible differences. As a result, we have established and maintained a valuation allowance for that portion of the deferred tax assets we believe will not be realized. We account for uncertain tax positions which require that a position taken or expected to be taken in a tax return be recognized in the financial statements when it is more likely than not (a likelihood of more than 50%) that the position would be sustained upon examination by tax authorities. A recognized tax position is then measured at the largest amount of benefit that is greater than 50% likely of being realized upon ultimate settlement. Interest and penalties on tax liabilities, if any, would be recorded in interest expense and other noninterest expense, respectively (see note 13). (o ) Advertising Costs We incur advertising costs to add and maintain listeners. These costs are charged to expense in the period incurred. Cash advertising costs amounted to $0.9 million and $0.3 million in the years ended December 31, 2015 and 2014, respectively. (p ) Contingent Liabilities Accounting standards require that an estimated loss from a loss contingency shall be accrued when information available prior to the issuance of the financial statements indicate that it is probable that an asset has been impaired or a liability has been incurred at the date of the financial statements and when the amount of the loss can be reasonably estimated. Accounting for contingencies such as legal and income tax matters requires us to use our judgment. We believe that our accruals for these matters are adequate. (q ) Use of Estimates The preparation of consolidated financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Significant items subject to such estimates and assumptions include the allowance for doubtful accounts, the realization of deferred tax assets, the useful lives and future cash flows used for testing the recoverability of property and equipment, the recoverability of FCC broadcasting licenses, goodwill and other intangible assets, the fair value of Level 2 and Level 3 financial instruments, production tax credits, contingencies and litigation. These estimates and assumptions are based on management’s best judgments. Management evaluates its estimates and assumptions on an ongoing basis using historical experience and other factors, including the current economic environment, which management believes to be reasonable under the circumstances. Management adjusts such estimates and assumptions as facts and circumstances dictate. Illiquid credit markets, volatile equity markets and reductions in advertising spending have combined to increase the uncertainty inherent in such estimates and assumptions. Actual results could differ from these estimates. (r ) Concentration of Business and Credit Risks Financial instruments that potentially subject us to concentrations of risk include primarily cash, trade receivables and financial instruments used in hedging activities (see notes 2(v) and 5). We place our cash with highly rated credit institutions. Although we try to limit the amount of credit exposure with any one financial institution, we do in the normal course of business maintain cash balances in excess of federally insured limits. Our operations are conducted in several markets across the United States, including Puerto Rico. Our New York, Los Angeles, and Miami markets accounted for more than 60% of net revenue for the years ended December 31, 2015 and 2014. Our credit risk is spread across a large number of diverse customers in a number of different industries, thus spreading the trade credit risk. We do not normally require collateral on credit sales; however, a credit analysis is performed before extending substantial credit to any customer and occasionally we request payment in advance. We establish an allowance for doubtful accounts based on customers’ payment history and perceived credit risks. (s ) Basic and Diluted Net Loss Per Common Share Basic net loss per common share was computed by dividing net loss available to common stockholders by the weighted average number of shares of common stock and convertible preferred stock outstanding for each period presented. Diluted net loss per common share is computed by giving effect to common stock equivalents as if they were outstanding for the entire period. The following table summarizes the net loss applicable to common stockholders and the net loss per common share for the years ended December 31, 2015 and 2014 (in thousands, except per share data): 2015 2014 Net loss $ (26,955 ) $ (19,951 ) Basic and Diluted net loss per common stock $ (3.71 ) $ (2.75 ) Weighted average common shares outstanding: Basic and Diluted 7,267 7,267 The following is a reconciliation of the shares used in the computation of basic and diluted net loss per share for the years ended December 31, 2015 and 2014 (in thousands, except per share data): 2015 2014 Basic weighted average shares outstanding $ 7,267 $ 7,267 Effect of dilutive equity instruments — — Dilutive weighted average shares outstanding $ 7,267 $ 7,267 Options to purchase shares of common stock and other stock-based awards outstanding which are not included in the calculation of diluted net loss per share because their impact is anti-dilutive 95 86 (t ) Fair Value Measurement We determine the fair value of assets and liabilities using a fair value hierarchy that distinguishes between market participant assumptions developed based on market data obtained from sources independent of the reporting entity, and the reporting entity’s own assumptions about market participant assumptions developed based on the best information available in the circumstances. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, essentially an exit price (see note 16). The levels of the fair value hierarchy are: · Level 1: inputs are quoted prices, unadjusted, in active markets for identical assets or liabilities that the reporting entity has the ability to access at the measurement date. · Level 2: inputs are other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. A Level 2 input must be observable for substantially the full term of the asset or liability. · Level 3: inputs are unobservable and reflect the reporting entity’s own assumptions about the assumptions that market participants would use in pricing the asset or liability. (u ) Share-Based Compensation Expense We account for our share-based compensation expense based on the estimated grant date fair value method using the Black-Scholes option pricing model. For these awards, we have recognized compensation expense using a straight-line amortization method (prorated). Share-based compensation expense is based on awards that are ultimately expected to vest. Share-based compensation for the years ended December 31, 2015 and 2014 were reduced for estimated forfeitures. When estimating forfeitures, we consider voluntary termination behaviors, as well as trends of actual option forfeitures. (v ) Leasing (Operating Leases) We recognize rent expense for operating leases with periods of free rent (including construction periods), step rent provisions and escalation clauses on a straight line basis over the applicable lease term. We consider lease renewals in the useful life of related leasehold improvements when such renewals are reasonably assured. We take these provisions into account when calculating minimum aggregate rental commitments under noncancelable operating leases (see note 12). From time to time, we receive capital improvement funding from our lessors. These amounts are recorded as deferred liabilities and amortized over the remaining lease term as a reduction of rent expense. (w ) Segment Reporting Accounting standards establish the way public business enterprises report information about operating segments in annual financial statements and require those enterprises to report selected information about operating segments in interim financial reports issued to stockholders. Operating segments are defined as components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision-maker in deciding how to allocate resources and in assessing performance. (x ) Derivative Instrument We only enter into derivative contracts to hedge against the potential impact of increases in interest rates on our debt instruments. We also only enter into derivative contracts that we intend to designate as a hedge of the variability of cash flows to be paid related to a recognized asset or liability (cash flow hedge). By using derivative financial instruments to hedge exposures to changes in interest rates, we expose ourselves to credit risk and market risk. Credit risk is the failure of the counterparty to perform under the terms of the derivative contract. We attempt to minimize the credit risk in derivative instruments by entering into transactions with high-quality counterparties whose credit rating is higher than Aa. Market risk is the adverse effect on the value of a derivative instrument that results from a change in interest rates. The market risk associated with interest-rate contracts is managed by establishing and monitoring parameters that limit the types and degree of market risk that may be undertaken. For all hedging relationships, we formally document the hedging relationship and its risk-management objective and strategy for undertaking the hedge, the hedging instrument, the hedged item, the nature of the risk being hedged, how the hedging instrument’s effectiveness in offsetting the hedged risk will be assessed prospectively and retrospectively, and a description of the method of measuring ineffectiveness. We also formally assess, both at the hedge’s inception and on an ongoing basis, whether the derivatives that are used in hedging transactions are highly effective in offsetting cash flows of hedged items. We are accounting for our interest rate swap as cash flow hedge, which requires us to recognize our derivative instrument on the consolidated balance sheet at fair value. The related gain or loss on this instrument is deferred in stockholders’ deficit as a component of accumulated other comprehensive (loss) income. The deferred gain or loss on this transaction is recognized in income in the period in which the related item is being hedged and recognized in expense. However, to the extent that the change in value of the derivative contracts does not offset the change in the value of the underlying transaction being hedged, that ineffective portion is immediately recognized into income. We recognize gains and losses immediately when the underlying transaction settles. For cash flow hedges in which hedge accounting is discontinued because it is determined that the derivative no longer qualifies as an effective cash flow hedge, we continue to carry the derivative instrument at its fair value on the consolidated balance sheet and recognize any subsequent changes in its fair value in earnings (change in fair value of derivative instrument). (y ) Comprehensive Loss Our comprehensive loss consists of net loss and other items recorded directly to the equity accounts. The objective is to report a measure of all changes in equity of an enterprise that result from transactions and other economic events during the period. Our comprehensive loss consists of net loss and gains (losses) on our derivative instrument that qualifies for cash flow hedge treatment. (z ) Reclassifications Certain prior year amounts have been reclassified to conform to the current year presentation. There is no effect on net income (loss) as a result of these reclassifications. ( aa ) New Accounting Standards In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842). In January 2016, the FASB issued ASU No. 2016-01, Accounting for Financial Instruments – Recognition and Measurement. In November 2015, the FASB issued ASU No. 2015-17, Income Taxes (Topic 740) Balance Sheet Classification of Deferred Taxes. In April 2015, the FASB issued ASU No. 2015-03, Simplifying the Presentation of Debt Issuance Costs. In August 2014, the FASB issued ASU No. 2014-15, Presentation of Financial Statements- Going Concern. In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers. |
Subsequent Event - Asset Exchan
Subsequent Event - Asset Exchange | 12 Months Ended |
Dec. 31, 2015 | |
Subsequent Event Asset Exchange [Abstract] | |
Subsequent Event - Asset Exchange | (3) Subsequent Event – Asset Exchange On January 4, 2016, the Company completed an asset exchange with International Broadcasting Corp. under which the Company agreed to exchange certain assets used or useful in the operations of WIOA-FM, WIOC-FM, and WZET-FM in Puerto Rico for certain assets used or useful in the operations of WTCV (DT), WVEO (DT), and WVOZ (TV) in Puerto Rico previously owned and operated by International Broadcasting Corp. The asset exchange is being accounted for as a non-monetary exchange in accordance with ASC-845 Nonmonetary Transactions Business Combinations The assets of WIOA-FM, WIOC-FM, and WZET-FM have been classified as held for exchange at the carrying amount of the assets as of December 31, 2015. A summary of assets held for exchange as of December 31, 2015 is as follows (in thousands): Property and equipment, net $ 19 FCC broadcasting licenses 2,775 Assets held for exchange $ 2,794 |
Impairment Charges and Restruct
Impairment Charges and Restructuring Costs | 12 Months Ended |
Dec. 31, 2015 | |
Text Block [Abstract] | |
Impairment Charges and Restructuring Costs | (4) Impairment Charges and Restructuring Costs During the years 2015 and 2014, we incurred impairment charges and restructuring costs of $0.5 million and $(0.2) million, respectively. We recorded a non-cash impairment loss of approximately $0.9 million that reduced the carrying amount of the San Francisco market FCC broadcasting license during 2015, while in 2014 we reversed a portion of the impairment charges and restructuring costs accrual of $(0.2) million related to the abandonment of a leased office space and losses on various subleased office spaces. During 2015, we did not pay impairment charges and restructuring costs and eliminated the total accrued expenses on our consolidated balance sheets related to impairment charges and restructuring costs of $(0.4) million, which was included in other liabilities, as of December 31, 2014. During 2014, we paid impairment charges and restructuring costs of $0.1 million. |
Derivative and Hedging Activity
Derivative and Hedging Activity | 12 Months Ended |
Dec. 31, 2015 | |
Derivative Instruments And Hedging Activities Disclosure [Abstract] | |
Derivative and Hedging Activity | (5) Derivative and Hedging Activity At December 31, 2015 and 2014, our derivative financial instrument comprised of the following (in thousands): Agreement Fixed interest rate Expiration date 2015 Notional amounts 2014 Notional amounts 2015 Fair value 2014 Fair value Interest rate swap 6.31 % January 2017 $ 4,922 $ 5,228 220 408 On January 4, 2007, we entered into a ten-year interest rate swap agreement for the original notional principal amount of $7.7 million whereby we will pay a fixed interest rate of 6.31%, as compared to interest at a floating rate equal to one-month LIBOR plus 125 basis points. The interest rate swap amortization schedule is identical to the promissory note amortization schedule, which has an effective date of January 4, 2007, monthly notional reductions and an expiration date of January 4, 2017 (see note 9). For each of the years ended December 31, 2015 and 2014, we reclassified from other comprehensive income to interest expense $0.3 million. During the years ended December 31, 2015 and 2014, we recognized in other comprehensive income (loss), net of taxes- an unrealized gain on derivative instrument of $0.2 million. |
Property and Equipment, Net
Property and Equipment, Net | 12 Months Ended |
Dec. 31, 2015 | |
Property Plant And Equipment [Abstract] | |
Property and Equipment, Net | (6) Property and Equipment, Net Property and equipment, net consists of the following at December 31, 2015 and 2014 (in thousands): 2015 2014 Estimated useful lives Land $ 7,306 $ 7,306 — Building and building improvements 36,721 36,365 7–20 years Tower and antenna systems 5,978 5,887 10 years Studio and technical equipment 24,938 24,223 5–10 years Furniture and fixtures 4,946 5,456 5–10 years Transmitter equipment 9,062 9,266 10 years Leasehold improvements 2,772 2,745 1–20 years Computer equipment and software 8,382 8,913 3–5 years Other 1,945 1,853 3–5 years 102,050 102,014 Less accumulated depreciation (71,590 ) (69,632 ) $ 30,460 32,382 During the years ended December 31, 2015 and 2014, depreciation of property and equipment totaled $4.7 and $5.0 million, respectively. |
Accounts Payable and Accrued Ex
Accounts Payable and Accrued Expenses | 12 Months Ended |
Dec. 31, 2015 | |
Text Block [Abstract] | |
Accounts Payable and Accrued Expenses | (7) Accounts Payable and Accrued Expenses Accounts payable and accrued expenses at December 31, 2015 and 2014 consist of the following (in thousands): 2015 2014 Accounts payable – trade $ 2,779 $ 1,920 Accrued compensation and commissions 7,899 7,469 Accrued professional fees 1,622 957 Accrued step-up leases 213 160 Accrued income taxes — 13 Other accrued expenses 4,039 3,040 $ 16,552 13,559 |
Twelve Point Five Percent Senio
Twelve Point Five Percent Senior Secured Notes due Twenty Seventeen | 12 Months Ended |
Dec. 31, 2015 | |
Debt Disclosure [Abstract] | |
12.5% Senior Secured Notes due 2017 | (8) 12.5% Senior Secured Notes Due 2017 On February 7, 2012 we closed our offering of $275 million in aggregate principal amount of 12.5% senior secured notes due 2017 (the “Notes”), due April 15, 2017, at an issue price of 97% of the principal amount. The Notes were offered solely by means of a private placement either to qualified institutional buyers in the United States pursuant to Rule 144A under the Securities Act, or to certain persons outside the United States pursuant to Regulation S under the Securities Act, as amended. We used the net proceeds from the offering, together with cash on hand, to repay and terminate the previous senior credit facility, and to pay the transaction costs related to the offering. We have engaged financial advisors to assist us in developing a refinancing strategy. Additionally, we are participating in the Broadcast Incentive Auction and evaluating the potential monetization of our spectrum assets to generate cash proceeds that would be used to repay our outstanding notes in accordance with the Indenture. There can be no assurance that we will be able to successfully implement our strategy. (a) Interest The Notes accrue interest at a rate of 12.5% per year. Interest on the Notes is paid semi-annually on each April 15 and October 15, commencing on April 15, 2012. After April 15, 2013, interest will accrue at a rate of 12.5% per annum on (i) the original amount of the Notes plus (ii) any Additional Interest (as defined below) payable but unpaid in any prior interest period, payable in cash on each interest payment date. Further, beginning on the interest payment date occurring on April 15, 2013, additional interest will be payable at a rate of 2.00% per annum (the “Additional Interest”) on (i) the original principal amount of the Notes plus (ii) any amount of Additional Interest payable but unpaid in any prior interest period, to be paid in cash, at our election, (x) on the applicable interest payment date or (y) on the earliest of the maturity date of the Notes, any acceleration of the Notes and any redemption of the Notes; provided that no Additional Interest will be payable on any interest payment date if, for the applicable fiscal period, either (a) we record positive consolidated station operating income for our television segment or (b) our secured leverage ratio on a consolidated basis is less than 4.75 to 1.00. The Additional Interest applicable fiscal periods are as follows: (1) Six-months ended December 31, 2012 or as of December 31, 2012 (2) Last twelve months ended June 30, 2013 or as of June 30, 2013 (3) Last twelve months ended December 31, 2013 or as of December 31, 2013 (4) Last twelve months ended June 30, 2014 or as of June 30, 2014 (5) Last twelve months ended December 31, 2014 or as of December 31, 2014 (6) Last twelve months ended June 30, 2015 or as of June 30, 2015 (7) Last twelve months ended December 31, 2015 or as of December 31, 2015 (8) Last twelve months ended June 30, 2016 or as of June 30, 2016 (9) Last twelve months ended December 31, 2016 or as of December 31, 2016 Although for the Additional Interest applicable periods (1), (2), (3), (4), (5), (6) and (7) our secured leverage ratio was greater than 4.75 to 1.00, we recorded positive consolidated station operating income for our television segment for those respective periods (as defined in the Indenture) . (b) Collateral and Ranking The Notes and the guarantees are secured on a first-priority basis by a security interest in certain of the Company’s and the guarantors’ existing and future tangible and intangible assets (other than Excluded Assets (as defined in the Indenture)). The Notes and the guarantees are structurally subordinated to the obligations of our non-guarantor subsidiaries. The Notes and guarantees are senior to all of the Company’s and the guarantors’ existing and future unsecured indebtedness to the extent of the value of the collateral. The Indenture permits us, under specified circumstances, to incur additional debt; however, the occurrence and continuance of the Voting Rights Triggering Event (as defined in note 10) currently prevents us from incurring any such additional debt. The Notes are senior secured obligations of the Company that rank equally with all of our existing and future senior indebtedness and senior to all of our existing and future subordinated indebtedness. Subject to certain exceptions, the Notes are fully and unconditionally guaranteed by each of our existing wholly owned domestic subsidiaries (which excludes (i) our existing and future subsidiaries formed in Puerto Rico (the “Puerto Rican Subsidiaries”), (ii) our future subsidiaries formed under the laws of foreign jurisdictions and (iii) our existing and future subsidiaries, whether domestic or foreign, of the Puerto Rican Subsidiaries or foreign subsidiaries) and our other domestic subsidiaries that guarantee certain of our other debt. The Notes and guarantees are structurally subordinated to all existing and future liabilities (including trade payables) of our nonguarantor subsidiaries. (c) Covenants and Other Matters The Indenture governing the Notes contains covenants that, among other things, limit our ability and the ability of the guarantors to: · incur or guarantee additional indebtedness; · pay dividends and make other restricted payments; · incur restrictions on the payment of dividends or other distributions from our restricted subsidiaries; · engage in sale-lease back transactions; · enter into new lines of business; · make certain payments to holders of Notes that consent to amendments to the Indenture governing the Notes without paying such amounts to all holders of Notes; · create or incur certain liens; · make certain investments and acquisitions; · transfer or sell assets; · engage in transactions with affiliates; and · merge or consolidate with other companies or transfer all or substantially all of our assets. The Indenture contains certain customary representations and warranties, affirmative covenants and events of default which could, subject to certain conditions, cause the Notes to become immediately due and payable, including, but not limited to, the failure to make premium or interest payments; failure by us to accept and pay for Notes tendered when and as required by the change of control and asset sale provisions of the Indenture; failure to comply with certain covenants in the Indenture; failure to comply with certain agreements in the Indenture for a period of 60 days following notice by the Trustee or the holders of not less than 25% in aggregate principal amount of the Notes then outstanding; failure to pay any debt within any applicable grace period after the final maturity or acceleration of such debt by the holders thereof because of a default, if the total amount of such debt unpaid or accelerated exceeds $15 million; failure to pay final judgments entered by a court or courts of competent jurisdiction aggregating $15 million or more (excluding amounts covered by insurance), which judgments are not paid, discharged or stayed, for a period of 60 days; and certain events of bankruptcy or insolvency. As of December 31, 2015 and 2014, we were in compliance with all of our covenants under our Indenture. |
Other Long-Term Debt
Other Long-Term Debt | 12 Months Ended |
Dec. 31, 2015 | |
Text Block [Abstract] | |
Other Long-Term Debt | (9) Other Long-Term Debt Other long-term debt consists of the following at December 31, 2015 and 2014 (in thousands): 2015 2014 Promissory note payable, due in monthly principal installments of $26, plus interest at 6.31%, commencing January 2007, with balance due on January 2017 4,922 5,228 Various obligations under capital leases — 30 4,922 5,258 Less current portion (306 ) (336 ) $ 4,616 $ 4,922 The scheduled maturities of other long-term debt are as follows at December 31, 2015 (in thousands): Year ending December 31: 2016 306 2017 4,616 $ 4,922 On January 4, 2007, SBS, through its wholly owned subsidiary, SBS Miami Broadcast Center, Inc. (“SBS Miami Broadcast Center”), completed the acquisition of certain real property located in Miami-Dade County, Florida pursuant to the purchase and sale agreement, dated August 24, 2006, as amended on September 25, 2006, as further amended on October 25, 2006. In connection with the acquisition of the real property, on January 4, 2007, SBS Miami Broadcast Center, entered into a loan agreement (the “Loan Agreement”), a ten-year promissory note in the original principal amount of $7.7 million (the “Promissory Note”), and a Mortgage, Assignment of Rents and Security Agreement (the “Mortgage”) in favor of Wells Fargo (formerly Wachovia Bank). The Promissory Note bears an interest rate equal to one-month LIBOR plus 125 basis points and requires monthly principal payments of $0.03 million with any unpaid balance due on its maturity date of January 4, 2017. The Promissory Note is secured by the real property and any related collateral. The terms of the loan include certain restrictions and covenants for SBS Miami Broadcast Center, which limit, among other things, the incurrence of additional indebtedness and liens. The Loan Agreement specifies a number of events of default (some of which are subject to applicable cure periods), including, among others, the failure to make payments when due, noncompliance with covenants and defaults under other agreements or instruments of indebtedness. Upon the occurrence of an event of default and expiration of any applicable cure periods, Wells Fargo (formerly Wachovia Bank) may accelerate the loan and declare all amounts outstanding to be immediately due and payable. Additionally, on January 4, 2007, SBS Miami Broadcast Center entered into an interest rate swap arrangement (the “Swap Agreement”) for the original notional principal amount of $7.7 million whereby it will pay a fixed interest rate of 6.31% as compared to interest at a floating rate equal to one-month LIBOR plus 125 basis points on the Promissory Note. The interest rate swap amortization schedule is identical to the Promissory Note amortization schedule, which has an effective date of January 4, 2007, monthly notional reductions and an expiration date of January 4, 2017. In connection with the acquisition of the property, we agreed to unconditionally guaranty all obligations of SBS Miami Broadcast Center pursuant to the Promissory Note, the Loan Agreement, the Mortgage, the loan documents thereto, and the Swap Agreement, for the benefit of Wachovia and its affiliates (the “Guaranty”). In addition, the terms of the Guaranty contain certain financial covenants, which require us to maintain available liquidity of not less than 1.2 times the then outstanding principal balance of the loan made to SBS Miami Broadcast Center by Wells Fargo (formerly Wachovia Bank). |
Ten Point Seven Five Percent Se
Ten Point Seven Five Percent Series A and B Cumulative Exchangeable Redeemable Preferred Stock | 12 Months Ended |
Dec. 31, 2015 | |
Equity [Abstract] | |
10 3/4% Series A and B Cumulative Exchangeable Redeemable Preferred Stock | (10) 10 3/4% Series A and B Cumulative Exchangeable Redeemable Preferred Stock On October 30, 2003, we partially financed the purchase of a radio station with proceeds from the sale, through a private placement, of 75,000 shares of our 10 3/4% Series A cumulative exchangeable redeemable preferred stock, par value $0.01 per share, with a liquidation preference of $1,000 per share (the “Series A preferred stock”), without a specified maturity date. The gross proceeds from the issuance of the Series A preferred stock amounted to $75.0 million. On February 18, 2004, we commenced an offer to exchange registered shares of our 10 3/4% Series B cumulative exchangeable redeemable preferred stock, par value $0.01 per share and liquidation preference of $1,000 per share for any and all shares of our outstanding unregistered Series A preferred stock. On April 5, 2004, we completed the exchange offer and exchanged 76,702 shares of our Series B preferred stock for all of our then outstanding shares of Series A preferred stock. We had the option to redeem all or some of the registered Series B preferred stock for cash on or after October 15, 2009 at 103.583%, October 15, 2010 at 101.792% and October 15, 2011 and thereafter at 100%, plus accumulated and unpaid dividends to the redemption date. On October 15, 2013, each holder of Series B preferred stock had the right to request that we repurchase (subject to the legal availability of funds under Delaware General Corporate Law) all or a portion of such holder’s shares of Series B preferred stock at a purchase price equal to 100% of the liquidation preference of such shares, plus all accumulated and unpaid dividends (as described in more detail below) on those shares to the date of repurchase. Under the terms of our Series B preferred stock, we are required to pay dividends at a rate of 10 3/4% per year of the $1,000 liquidation preference per share of Series B preferred stock. From October 30, 2003 to October 15, 2008, we had the option to pay these dividends in either cash or additional shares of Series B preferred stock. During October 15, 2003 to October 30, 2008, we increased the carrying amount of the Series B preferred stock by approximately $17.3 million for stock dividends, which were accreted using the effective interest method. Since October 15, 2008, we have been required to pay the dividends on our Series B preferred stock in cash. On October 15, 2013, holders of shares of our Series B preferred stock requested that we repurchase 92,223 shares of Series B preferred stock for an aggregate repurchase price of $126.9 million, which included accumulated and unpaid dividends on these shares as of October 15, 2013. We did not have sufficient funds legally available to repurchase all of the Series B preferred stock for which we received requests and instead used the limited funds legally available to us to repurchase 1,800 shares for a purchase price of approximately $2.5 million, which included accrued and unpaid dividends. Consequently, a “voting rights triggering event” occurred (the “Voting Rights Triggering Event”). Following the occurrence, and during the continuation, of the Voting Rights Triggering Event, holders of the outstanding Series B preferred stock are entitled to elect two directors to newly created positions on our Board of Directors, and we have been subject to more restrictive operating covenants, including a prohibition on our ability to incur any additional indebtedness and restrictions on our ability to pay dividends or make distributions, redeem or repurchase securities, make investments, enter into transactions with affiliates or merge or consolidate with (or sell substantially all of our assets to) any other person. At our Annual Meeting of Stockholders in 2014, the holders of the Series B preferred stock nominated and elected Alan Miller and Gary Stone to serve as the Series B preferred stock directors who have remained on the board since then. The Voting Rights Triggering Event shall continue until (i) all dividends in arrears shall have been paid in full and (ii) all other failures, breaches or defaults giving rise to such Voting Rights Triggering Event are remedied or waived by the holders of at least a majority of the shares of the then outstanding Series B preferred stock. We do not currently have sufficient funds legally available to be able to satisfy the conditions for terminating the Voting Rights Triggering Event. During the continuation of the Voting Rights Triggering Event, the Indenture governing our Notes prohibits us from paying dividends or from repurchasing the Series B preferred stock. Quarterly Dividends Under the terms of our Series B preferred stock, the holders of the outstanding shares of the Series B preferred stock are entitled to receive, when, as and if declared by the Board of Directors out of funds of the Company legally available therefor, dividends on the Series B preferred stock at a rate of 10 3/4% per year, of the $1,000 liquidation preference per share. All dividends are cumulative, whether or not earned or declared, and are payable quarterly in arrears on specified dividend payment dates. While the Voting Rights Triggering Event continues, we cannot pay dividends on the Series B preferred stock without causing a breach of covenants under the Indenture governing our Notes. As of December 31, 2015, the aggregate cumulative unpaid dividends on the outstanding shares of the Series B preferred stock was approximately $55.6 million, which is accrued on our consolidated balance sheet as 10 ¾% Series B cumulative exchangeable redeemable preferred stock. Accounting Treatment of the Preferred Stock In accordance with ASC 480, the Series B preferred stock was re-measured subsequently from the initial measurement date as the amount of cash that would be paid under the conditions specified in the contract, as if the settlement occurred at December 31, 2013, because the final settlement amount to be paid on the Series B preferred stock was uncertain due to its continual accruing quarterly dividends and its uncertain settlement date. The resulting change in that amount from the previous reporting date (i.e. initial measurement date) was recognized as interest expense. Therefore, we recorded an $87.6 million adjustment to increase the Series B preferred stock liability to the contract settlement value as of December 31, 2013. Going forward, the Series B preferred stock will be measured at subsequent reporting dates at the amount of cash that would be paid under the conditions specified in the contract, as if the settlement occurred at the reporting date, recognizing the resulting change in that amount from the previous reporting date as interest expense. Therefore, the 10 ¾% accruing quarterly dividends will be recorded as interest expense (i.e. “Dividends on Series B preferred stock classified as interest expense”) as required by ASC 480. During the years 2015 and 2014, we recorded $9.7 million as dividends on Series B preferred stock classified as interest expense. |
Stockholders' Equity
Stockholders' Equity | 12 Months Ended |
Dec. 31, 2015 | |
Equity [Abstract] | |
Stockholders' Equity | (11) Stockholders’ Equity (a) Series C Convertible Preferred Stock On December 23, 2004, in connection with the closing of the merger agreement, dated October 5, 2004, with CBS Radio (formerly known as Infinity Media Corporation, CBS Radio), a division of CBS Corporation, Infinity Broadcasting Corporation of San Francisco (“Infinity SF”) and SBS Bay Area, LLC, a wholly owned subsidiary of SBS, pursuant to which SBS acquired the FCC license of Infinity SF (the “CBS Radio Merger”), we issued to CBS Radio an aggregate of 380,000 shares of Series C convertible preferred stock, $0.01 par value per share (the “Series C preferred stock”). Each share of Series C preferred Stock is convertible at the option of the holder into two fully paid and non-assessable shares of the Class A common stock. The shares of Series C preferred stock issued at the closing of the CBS Radio Merger are convertible into 760,000 shares of Class A common stock, subject to certain adjustments. In connection with the CBS Radio Merger, we also entered into a registration rights agreement with CBS Radio, pursuant to which CBS Radio may instruct us to file up to three registration statements, on a best efforts basis, with the SEC, providing for the registration for resale of the Class A common stock issuable upon conversion of the Series C preferred stock. We are required to pay holders of Series C preferred stock dividends on parity with our Class A common stock and Class B common stock, and each other class or series of our capital stock created after December 23, 2004. (b) Class A and B Common Stock The rights of the Class A common stockholders and Class B common stockholders are identical except with respect to their voting rights and conversion provisions. The Class A common stock is entitled to one vote per share and the Class B common stock is entitled to ten votes per share. The Class B common stock is convertible to Class A common stock on a share-for-share basis at the option of the holder at any time, or automatically upon a transfer of the Class B common stock to a person or entity which is not a permitted transferee (as described in our Certificate of Incorporation). Holders of each class of common stock are entitled to receive dividends and, upon liquidation or dissolution, are entitled to receive all assets available for distribution to stockholders. Neither the holders of the Class A common stock nor the holders of the Class B common stock have preemptive or other subscription rights, and there are no redemption or sinking fund provisions with respect to such shares. Each class of common stock is subordinate to our Series B preferred stock. The Series B preferred stock has a liquidation preference of $1,000 per share and is on parity with the Series C preferred stock with respect to dividend rights and rights upon liquidation, winding up and dissolution of SBS. (c) Share-Based Compensation Plans 2006 Omnibus Equity Compensation Plan In July 2006, we adopted an omnibus equity compensation plan (the “Omnibus Plan”) in which grants of Class A common stock can be made to participants in any of the following forms: (i) incentive stock options, (ii) nonqualified stock options, (iii) stock appreciation rights, (iv) stock units, (v) stock awards, (vi) dividend equivalents, and (vii) other stock-based awards. The Omnibus Plan authorizes up to 350,000 shares of our Class A common stock for issuance, subject to adjustment in certain circumstances. The Omnibus Plan provides that the maximum aggregate number of shares of Class A common stock units, stock awards and other stock-based awards that may be granted, other than dividend equivalents, to any individual during any calendar year is 100,000 shares, subject to adjustments. 1999 Stock Option Plans In September 1999, we adopted an employee incentive stock option plan (the “1999 ISO Plan”) and a nonemployee director stock option plan (the “1999 NQ Plan”, and together with the 1999 ISO Plan, the “1999 Stock Option Plans”). Options granted under the 1999 ISO Plan vest according to the terms determined by the compensation committee of our Board of Directors, and have a contractual life of up to ten years from the date of grant. Options granted under the 1999 NQ Plan vest 20% upon grant and 20% each year for the first four years from the date of grant. All options granted under the 1999 ISO Plan and the 1999 NQ Plan vest immediately upon a change in control of SBS, as defined therein. A total of 300,000 shares and 30,000 shares of Class A common stock were reserved for issuance under the 1999 ISO Plan and the 1999 NQ Plan, respectively. In September 2009, our 1999 Stock Option Plans expired; therefore, no more options can be granted under these plans. Accounting for Share-Based Plans We recognize share-based compensation expense based on the estimated grant date fair value method using the Black-Scholes option pricing model. For these awards, we have recognized compensation expense using a straight-line amortization method (prorated). Share-based compensation expense is based on awards that are ultimately expected to vest. Share-based compensation for the years ended December 31, 2015 and 2014 was reduced for estimated forfeitures. When estimating forfeitures, we consider voluntary termination behaviors, as well as trends of actual option forfeitures. For the years ended December 31, 2015 and 2014, share-based compensation totaled $9 thousand and $1 thousand, respectively. As of December 31, 2015, there was $0.1 million of total unrecognized compensation costs related to nonvested stock-based compensation arrangements granted under all of our plans. The cost is expected to be recognized over a weighted average period of approximately 4.6 years. Accounting standards require that cash flows resulting from excess tax benefits be classified as a part of cash flows from financing activities. Excess tax benefits are realized tax benefits related to tax deductions for exercised options in excess of the deferred tax asset attributable to stock compensation costs for such options. During the years ended December 31, 2015 and 2014, no stock options were exercised; therefore, no cash payments were received. In addition, during the years ended December 31, 2015 and 2014, we did not recognize a tax benefit on our stock-based compensation expense due to our valuation allowance on substantially all of our deferred tax assets. Valuation Assumptions We calculated the fair value of each option award on the date of grant using the Black-Scholes option pricing model. The per share weighted average fair value of the stock options granted to employees during 2015 was $4.58. For the year ended December 31, 2014, no option awards were granted. The following weighted average assumptions were used for each respective period: 2015 2014 Expected term 4 N/A Dividends to common stockholders None N/A Risk-free interest rate 1.39% N/A Expected volatility 97.96 N/A Our computation of expected volatility for the year ended December 31, 2015 was based on a combination of historical and market-based implied volatility from traded options on our stock. Our computation of expected term in 2015 was determined based on historical experience of similar awards, giving consideration to the contractual terms of the stock-based awards, vesting schedules and expectations of future employee behavior. The information provided above results from the behavior patterns of separate groups of employees that have similar historical experience. The interest rate for periods within the contractual life of the award is based on the U.S. Treasury yield curve in effect at the time of grant. Stock Options and Nonvested Shares Activity Stock options have only been granted to employees or directors. Our stock options have various vesting schedules and are subject to the employees’ continuing service. A summary of the status of our stock options, as of December 31, 2015 and 2014, and changes during the years ended December 31, 2015 and 2014, is presented below (in thousands, except per share data and contractual life): Weighted Weighted Average Average Aggregate Remaining Exercise Intrinsic Contractual Shares Price Value Life (Years) Outstanding at December 31, 2013 142 34.77 Granted — — Exercised — — Forfeited (21 ) 102.23 Outstanding at December 31, 2014 121 $ 22.74 Granted 25 6.48 Exercised — — Forfeited (18 ) 81.59 Outstanding at December 31, 2015 128 $ 11.25 $ 34,500 5.1 Exercisable at December 31, 2015 103 $ 12.41 $ 34,500 4.0 During the years 2015 and 2014, no stock options were exercised. The following table summarizes information about our stock options outstanding and exercisable at December 31, 2015 (in thousands, except per share data and contractual life): Weighted Weighted Average Weighted Average Remaining Average Vested Unvested Exercise Contractual Options Exercise Range of Exercise Prices Options Options Price Life (Years) Exercisable Price $1.03 - 49.99 103.0 25.0 $ 11.25 5.10 103 $ 12.41 50.00 - 99.99 — — — — — — 100.00 - 107.90 — — — — — — 103 25 11.25 5.10 103 12.41 Nonvested shares (restricted stock) are awarded to employees under our Omnibus Plan. In general, nonvested shares vest over two to five years and are subject to the employees’ continuing service. The cost of nonvested shares is determined using the fair value of our common stock on the date of grant. The compensation expense is recognized over the vesting period. As of December 31, 2015 and 2014, there were no nonvested shares outstanding, respectively. |
Commitments
Commitments | 12 Months Ended |
Dec. 31, 2015 | |
Commitments And Contingencies Disclosure [Abstract] | |
Commitments | (12) Commitments (a) Leases We lease office space and facilities and certain equipment under operating leases that expire at various dates through 2082. Certain leases provide for base rental payments plus escalation charges for real estate taxes and operating expenses. At December 31, 2015, future minimum lease payments under such leases are as follows (in thousands): Capital Operating leases leases Year ending December 31: 2016 $ — 3,374 2017 — 2,845 2018 — 1,622 2019 — 1,256 2020 — 1,062 Thereafter — 6,425 Total minimum lease payments — $ 16,584 Less executory costs — — Less interest — Present value of minimum lease payments $ — In connection with an operating lease, we have a standby letter of credit of $0.1 million, which was required under the lease terms. Total rent expense for each of the years ended December 31, 2015 and 2014 amounted to $3.3 million. We have agreements to sublease our radio frequencies and portions of our tower sites and buildings. Such agreements provide for payments through 2030. The future minimum rental income to be received under these agreements as of December 31, 2015 is as follows (in thousands): Year ending December 31: 2016 $ 1,022 2017 752 2018 766 2019 392 2020 157 Thereafter 819 $ 3,908 (b) Employment and Service Agreements At December 31, 2015, we are committed to employment and service contracts for certain executives, on-air talent, general managers, and others expiring through 2021. Future payments under such contracts are as follows (in thousands): Year ending December 31: 2016 $ 11,000 2017 8,652 2018 6,801 2019 1,525 2020 769 Thereafter 92 $ 28,839 Included in the future payments schedule is our Chief Executive Officer’s (“CEO”) employment agreement, which may expire on December 31, 2018. Our CEO’s annual base salary is $1.75 million, and he is eligible to receive a performance bonus of $750 thousand if the performance criteria are achieved for the year. In addition, the Board of Directors may also award a discretionary bonus, as it deems appropriate. During the year ended December 31, 2014, our CEO was awarded a retention bonus totaling $1.6 million, which was recorded in corporate expenses. The retention bonus will be paid monthly over time and the remaining balance of $0.5 million was included in accounts payable and accrued expenses in the accompanying consolidated balance sheets as of December 31, 2015. Certain employees’ contracts provide for additional amounts to be paid if station ratings or cash flow targets are met. (c) 401(k) Profit-Sharing Plan In September 1999, we adopted a tax-qualified employee savings and retirement plan (the “401(k) Plan”). We can make matching and/or profit-sharing contributions to the 401(k) Plan on behalf of all participants at our sole discretion. All full-time employees are eligible to voluntarily participate in the 401(k) Plan after their 90 day introductory period. To date, we have not made contributions to this plan. (d) Other Commitments At December 31, 2015, we have commitments to vendors that provide us with goods or services. These commitments included services for rating services, programming contracts, software contracts and others. Future payments under such commitments are as follows (in thousands): Year ending December 31: 2016 $ 4,666 2017 951 2018 597 2019 208 2020 — Thereafter — $ 6,422 Subsequent to year end, December 31, 2015, the company entered in to additional vendor commitments, as described above, in the amount of $25.4 million for the years ended December 31, 2016 through 2021. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2015 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | (13) Income Taxes Total income tax expense (benefit) for the years ended December 31, 2015 and 2014 were as follows (in thousands): 2015 2014 Income tax expense (benefit) $ 11,225 $ 5,842 For the years ended December 31, 2015 and 2014, (loss) income before income tax expense consists of the following (in thousands): 2015 2014 U.S. operations $ (14,078 ) $ (14,800 ) Foreign operations (1,652 ) 691 $ (15,730 ) $ (14,109 ) The components of the provision for income tax (benefit) expense included in the consolidated statements of operations and comprehensive loss are as follows for the years ended December 31, 2015 and 2014 (in thousands): 2015 2014 Current: Federal $ — — State and local, net of federal income tax benefit 10 43 Foreign 298 165 308 208 Deferred: Federal 6,458 3,135 State and local, net of federal income tax benefit 2,126 1,421 Foreign 2,333 1,078 10,917 5,634 Total income tax (benefit) expense $ 11,225 $ 5,842 For the year ended December 31, 2015 and 2014, approximately $1.1 million and $2.7 million of Puerto Rico net operating loss carry-forwards were utilized. For the year ended December 31, 2015 and 2014, $0.8 million and $0.0 million federal net operating loss carry-forwards were utilized. The tax effect of temporary differences and carry-forwards that give rise to deferred tax assets and deferred tax liabilities at December 31, 2015 and 2014 are as follows (in thousands): 2015 2014 Deferred tax assets: Federal and state net operating loss carryforwards $ 109,020 $ 102,728 Foreign net operating loss carryforwards 12,506 12,917 FCC licenses 6,291 6,982 Allowance for doubtful accounts 1,133 1,489 Unearned revenue 333 187 AMT credit 1,120 1,039 Derivatives and hedging instruments 254 248 Property and equipment 2,056 1,887 Accrued foreign withholding 2,136 2,034 Straight-line expense adjustments 31 154 Accrued restructuring 11 45 Production costs 11,535 11,663 Stock-based compensation 1,649 1,629 Intercompany expenses 3,624 2,420 Accrued Vacation/Bonus/Payroll 1,067 840 Other 1,620 2,234 Total gross deferred tax assets 154,386 148,496 Less valuation allowance (151,273 ) (142,957 ) Net deferred tax assets 3,113 5,539 Deferred tax liabilities: FCC licenses and goodwill 100,421 91,930 Total gross deferred tax liabilities 100,421 91,930 Net deferred tax liability $ 97,308 86,391 The net change in the total valuation allowance for the years ended December 31, 2015 and 2014 was an increase of $8.3 million and an increase of $10.5 million, respectively. The valuation allowance at 2015 and 2014 was primarily related to domestic and foreign net operating loss carryforwards and future deductible amounts related to the excess tax basis over the book basis of certain FCC broadcasting licenses. In 2015, the overall increase in valuation allowance was primarily due to NOLs generated during the current year, and a set-up of a valuation allowance in Puerto Rico of $2.3 million expense. In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income, and tax planning strategies in making this assessment. As of December 31, 2015, the valuation allowance is comprised of $127.9 million in the US and $23.4 million in Puerto Rico. Based upon the level of historical taxable income and projections for future taxable income over the periods in which the deferred tax assets are deductible, at this time, management believes it is more likely than not that we will not realize the benefits of the majority of these deductible differences. As a result, we have established and maintained a valuation allowance for that portion of the deferred tax assets we believe will not be realized. At December 31, 2015, we have federal and state net operating loss carry-forwards of approximately $261.9 million and $257.5 million, respectively. These net operating loss carry-forwards are available to offset future taxable income and expire from the years 2016 through 2035. In addition, at December 31, 2015, we have foreign net operating loss carry-forwards of approximately $33.8 million available to offset future taxable income expiring from the years 2017 through 2025. In November 2015, the Financial Accounting Standards Board issued accounting standard update, ASU 2015-17, Balance Sheet Classification of Deferred Taxes, requiring all deferred tax assets and liabilities, and any related valuation allowance, to be classified as non-current on the balance sheet. This standard is required to be adopted for annual periods beginning after December 15, 2016, including interim periods within that annual period, with early adoption permitted. The amendment may be applied either prospectively to all deferred tax liabilities and assets or retrospectively to all periods presented. The Company elected to retroactively adopt the accounting standard in the beginning of the fourth quarter of 2015, and the adoption had no material impact on the consolidated financial position of the Company. Total income tax expense from continuing operations differed from the amounts computed by applying the U.S. federal income tax rate of 35% for the years ended December 31, 2015 and 2014, as a result of the following: 2015 2014 Computed “expected” tax (benefit) expense (35.0 ) % (35.0 ) State and local income taxes, net of federal benefit 1.1 (7.7 ) Foreign tax differential (1.3 ) (1.2 ) Current year change in valuation allowance 52.7 73.8 Nondeductible expenses 2.8 5.9 Nondeductible interest expense 21.7 — Change in effective rate 5.3 6.0 Return to provision 23.5 0.6 Other 0.6 (1.0 ) 71.4 % 41.4 The return to provision adjustment booked in 2015 relates to non-deductible interest expense, which has no impact on the operating statement due to a full valuation allowance. The adjustment decreased the NOL DTA and decreased the corresponding valuation allowance. U.S. Federal jurisdiction and the jurisdictions of Florida, New York, California, Illinois, Texas and Puerto Rico are the major tax jurisdictions where we file income tax returns. The tax years that remain subject to assessment of additional liabilities by the federal, state and local tax authorities are 2010 through 2015. The tax years that remain subject to assessment of additional liabilities by the Puerto Rico tax authority are 2011 through 2015. For the years ended December 31, 2015 and 2014, we did not have any unrecognized tax benefits as a result of tax positions taken during a prior period or during the current period. No interest or penalties have been recorded as a result of tax uncertainties. Our evaluation was performed for the tax years ended December 31, 2010 through December 31, 2015, which are the tax years that remain subject to examination by the tax jurisdictions as of December 31, 2015. We do not expect any unrecognized tax benefits to significantly change over the next twelve months. |
Contingencies
Contingencies | 12 Months Ended |
Dec. 31, 2015 | |
Commitments And Contingencies Disclosure [Abstract] | |
Contingencies | (14) Contingencies FCC Licenses Matters The broadcasting industry is subject to extensive regulation by the FCC under the Communications Act of 1996. We are required to obtain licenses from the FCC to operate our stations. Licenses are normally granted for a term of eight years and are renewable. We have timely filed license renewal applications for all of our stations; however, certain licenses were not renewed prior to their expiration dates. Based on having filed the timely renewal application, we continued to operate the radio stations operating under the expired licenses. As of March 9, 2016, all station licenses have been renewed. |
Litigation
Litigation | 12 Months Ended |
Dec. 31, 2015 | |
Commitments And Contingencies Disclosure [Abstract] | |
Litigation | (15) Litigation From time to time, we are involved in various routine legal and administrative proceedings and litigation incidental to the conduct of our business, such as contractual matters and employee-related matters. In the opinion of management, such litigation is not likely to have a material adverse effect on our business, operating results or financial condition. Certain material legal proceedings involving us and our subsidiaries are described below. Brevan Howard and Others Complaint On December 27, 2013, River Birch Master Fund, L.P., P River Birch Ltd. (together, “River Birch”) and Visium Catalyst Credit Master Fund, Ltd. (collectively with River Birch, “Initial Plaintiffs”) brought a claim against us in the Court seeking a declaratory judgment that a Voting Rights Triggering Event had occurred (as of April 15, 2010) under our Certificate of Designations as a result of our non-payment of dividends. The claim states that as a result of such Voting Rights Triggering Event, the incurrence of indebtedness for the purpose of purchasing our Houston television station and the issuance of our Notes under the Indenture governing the Notes were prohibited incurrences of indebtedness under the Certificate of Designations. The Initial Plaintiffs further claim that we violated the Certificate of Designations by failing to take any actions or explore any options that would have given us legally available funds with which to repurchase the outstanding Series B preferred stock on October 15, 2013. In connection with their claims, Initial Plaintiffs also seek an award of contract damages. On January 17, 2014, we filed a motion to dismiss the complaint. On March 3, 2014, the complaint was amended to remove River Birch and add Brevan Howard Credit Catalyst Master Fund Ltd., Brevan Howard Master Fund, ALJ Capital I, LP, ALJ Capital II, LP, LJR Capital, LP, and Cedarview Opportunities Master Fund, LP as additional plaintiffs. Plaintiffs filed an answering brief to our Motion to Dismiss on April 30, 2014. Our reply brief was filed on May 16, 2014, and a hearing was held on our Motion to Dismiss on June 10, 2014. Following the hearing, the parties agreed to stay all proceedings relating to Count I (which seeks a declaration that a Voting Rights Triggering Event was in effect at all times after April 15, 2010), Count II (which alleges that SBS breached the Certificate of Designations by incurring indebtedness in 2011 and 2012) and Count IV (which alleges that SBS breached the implied covenant of good faith and fair dealing by deferring certain dividends) of the complaint. The stay has since been lifted. On June 27, 2014, the Court denied our motion to dismiss Count III (which alleges that SBS breached the Certificate of Designations by failing to redeem all of the Series B Preferred Stock on October 15, 2013) of the complaint. A hearing on our motion to dismiss Counts I, II and IV of the complaint was held on February 10, 2015. On May 19, 2015, the Court of Chancery granted our motion to dismiss Counts I, II and IV of the amended complaint. An order dismissing those Counts with prejudice was entered on May 22, 2015. At present, Count III of the amended complaint remains outstanding. Court of Chancery Rule 41 (e) permits any party (or the Court sua sponte We deny the allegations contained in the complaint and, to the contrary, assert that we have been and continue to be in full and complete compliance with all of our obligations under the Certificate of Designations, as fully disclosed in our public filings dating back to 2009. Accordingly, we believe that the complaint’s allegations are frivolous and wholly without merit and intend to contest such allegations vigorously. |
Fair Value Measurement Disclosu
Fair Value Measurement Disclosures | 12 Months Ended |
Dec. 31, 2015 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurement Disclosures | (16) Fair Value Measurement Disclosures (a) Fair Value of Financial Instruments Cash and cash equivalents, receivables, as well as accounts payable and accrued expenses, and other current liabilities, as reflected in the consolidated financial statements, approximate fair value because of the short-term maturity of these instruments. The estimated fair value of our other long-term debt instruments, approximate their carrying amounts as the interest rates approximate our current borrowing rate for similar debt instruments of comparable maturity, or have variable interest rates. Fair value estimates are made at a specific point in time, based on relevant market information and information about the financial instrument. These estimates are subjective in nature and involve uncertainties and matters of significant judgment and therefore cannot be determined with precision. Changes in assumptions could significantly affect the estimates. The estimated fair values of our financial instruments are as follows (in millions): December 31, 2015 2014 Fair Value Carrying Fair Carrying Fair Description Hierarchy Amount Value Amount Value 12.5% senior secured notes due 2017 Level 2 $ 275.0 281.2 $ 275.0 286.5 10 3 4 redeemable preferred stock Level 3 146.1 60.1 136.4 61.8 Promissory note payable, included in other long- term debt Level 3 4.9 4.2 5.2 4.5 The fair value estimates of these financial instruments were based upon either: (a) market quotes from a major financial institution taking into consideration the most recent market activity, or (b) a discounted cash flow analysis taking into consideration current rates. From time to time, certain assets or liabilities may be recorded at fair value on a non-recurring basis. During the third quarter 2015, the Company determined there was an impairment of its San Francisco market FCC Broadcasting license. A non-cash impairment loss of $0.9 million was recorded to reduce the carrying value of this license to its fair value (Level 3 non-recurring fair value measure). Key assumptions used in the discounted cash flow method used to arrive at the fair value were: 1.5% revenue growth rate, 3.9% market revenue shares at maturity, 33.4% operating income margin at maturity, and a 10.0% discount rate. At December 31, 2015 the fair value of this license exceeded its carrying value. (b) Fair Value of Derivative Instruments The following tables represent required quantitative disclosures regarding fair values of our derivative instruments (in thousands). Fair value measurements at December 31, 2015 Liabilities Description December 31, 2015 carrying value and balance sheet location of derivative instruments Quoted prices in active markets for identical instruments (Level 1) Significant other observable inputs (Level 2) Significant unobservable inputs (Level 3) Derivative designated as a cash flow hedging instrument: Interest rate swap liability $ 220 — 220 — Fair value measurements at December 31, 2014 Liabilities Description December 31, 2014 carrying value and balance sheet location of derivative instruments Quoted prices in active markets for identical instruments (Level 1) Significant other observable inputs (Level 2) Significant unobservable inputs (Level 3) Derivative designated as a cash flow hedging instrument: Interest rate swap liability $ 408 — 408 — The interest rate swap fair value is derived from the present value of the difference in cash flows based on the forward-looking LIBOR yield curve rates, as compared to our fixed rate applied to the hedged amount through the term of the agreement, less adjustments for credit risk. December 31, Interest rate swap: 2015 2014 Gain recognized in other comprehensive loss (effective portion) $ 188 194 |
Segment Data
Segment Data | 12 Months Ended |
Dec. 31, 2015 | |
Segment Reporting [Abstract] | |
Segment Data | (17) Segment Data The following summary table presents separate financial data for each of our operating segments. The accounting applied to determine the segment information are generally the same as those described in the summary of significant accounting polices (see note 2(u)). We evaluate the performance of our operating segments based on separate financial data for each operating segment as provided below (in thousands): Year Ended December 31, 2015 2014 Net revenue: Radio $ 133,624 $ 130,505 Television 13,275 15,775 Consolidated $ 146,899 $ 146,280 Engineering and programming expenses: Radio $ 23,101 $ 21,132 Television 7,660 8,777 Consolidated $ 30,761 $ 29,909 Selling, general and administrative expenses: Radio $ 60,706 $ 59,981 Television 5,868 7,558 Consolidated $ 66,574 $ 67,539 Corporate expenses: $ 10,462 $ 9,720 Depreciation and amortization: Radio $ 1,813 $ 2,009 Television 2,621 2,748 Corporate 368 368 Consolidated $ 4,802 $ 5,125 (Gain) loss on the disposal of assets, net: Radio $ (78 ) $ (1,204 ) Television 2 — Corporate (11 ) — Consolidated $ (87 ) $ (1,204 ) Impairment charges and restructuring costs: Radio $ 925 $ — Television — — Corporate (389 ) (153 ) Consolidated $ 536 $ (153 ) Operating income (loss): Radio $ 47,157 $ 48,587 Television (2,876 ) (3,308 ) Corporate (10,430 ) (9,935 ) Consolidated $ 33,851 $ 35,344 Capital expenditures: Radio $ 1,316 $ 1,415 Television 805 437 Corporate 351 364 Consolidated $ 2,472 $ 2,216 December 31, December 31, 2015 2014 Total Assets: Radio $ 392,926 $ 393,607 Television 51,388 51,876 Corporate 7,430 10,543 Consolidated $ 451,744 $ 456,026 |
Valuation and Qualifying Accoun
Valuation and Qualifying Accounts | 12 Months Ended |
Dec. 31, 2015 | |
Valuation And Qualifying Accounts [Abstract] | |
Valuation and Qualifying Accounts | SPANISH BROADCASTING SYSTEM, INC. AND SUBSIDIARIES Consolidated Financial Statement Schedule – Valuation and Qualifying Accounts Years Ended December 31, 2015 and 2014 (In thousands) Balance at Charged to Charged beginning of cost and to other Balance at Description year expense accounts Deductions (1) end of year Year ended December 31, 2014: Allowance for doubtful accounts $ 2,204 695 — 577 2,322 Valuation allowance on deferred taxes (4) 132,466 10,492 (1 ) (2) — 142,957 Year ended December 31, 2015: Allowance for doubtful accounts $ 2,322 (343 ) (248 ) (3) 300 1,431 Valuation allowance on deferred taxes 142,957 8,316 — — 151,273 (1) Cash write-offs, net of recoveries. (2) 2014 amounts charged to other comprehensive income related to derivative instruments. (3) Amount monetized through acquisition of programming assets. (4) See footnote 2(b) in Notes to Consolidated Financial Statements. See accompanying report of independent registered public accounting firm. |
Summary of Significant Accoun25
Summary of Significant Accounting Policies and Related Matters (Policies) | 12 Months Ended |
Dec. 31, 2015 | |
Text Block [Abstract] | |
Basis of Presentation | (a) Basis of Presentation The consolidated financial statements include the accounts of Spanish Broadcasting System, Inc. and its subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation. In addition, we evaluated subsequent events after the balance sheet date and through the financial statements issuance date. The consolidated financial statements have been prepared on a going-concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. As of December 31, 2015 and 2014, we had a working capital deficit due to the reclassification of our series B preferred stock as a current liability, even though under Delaware law the series B preferred stock is deemed equity. Because the holders of the Series B preferred stock are not creditors, they do not have rights of, or remedies available to, creditors. Delaware law does not recognize a right of preferred stockholders to force redemptions or repurchases where the corporation does not have funds legally available. Currently, we do not have sufficient funds legally available to be able to repurchase the series B preferred stock and its accumulated unpaid dividends and management does not expect to be required to make any such repurchases during the next twelve months. Management does not believe that the Series B preferred stockholders have legal remedies that would require such repurchases (see note 10). |
Revision of Prior Period Consolidated Financial Statements | (b) Revision of Prior Period Consolidated Financial Statements The Company identified an adjustment related to the release of the valuation allowance related to certain deferred tax assets in two of our subsidiaries. The adjustment increased certain deferred tax assets and increased net income related to the release of the valuation allowance in a prior period. In addition, our accumulated deficit balance in stockholders’ deficit decreased as a result of the adjustment. In order to assess materiality with respect to the adjustments, the Company considered Staff Accounting Bulletin (“SAB”) 99, Materiality and SAB 108, Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements, and determined that the impact of the adjustments on prior period consolidated financial statements was immaterial. Therefore, the cumulative adjustment as of December 31, 2014 has been recorded as an opening adjustment of $2.4 million on the Consolidated Statements of Changes in Stockholders’ Deficit. Due to jurisdictional netting rules, this adjustment was reflected as an increase to the deferred tax asset of $4.2 million and an increase to the deferred tax liability of $1.8 million. The $4.2 million deferred tax assets consists of the net DTA for the US Licensing entities of $1.9 million and the net DTA for SBS of Puerto Rico of $2.3 million. The impact of the adjustments on the Consolidated Statements of Changes in Stockholders’ Deficit at December 31, 2013 and 2014 is as follows: Previously Reported Adjustment As Revised (In thousands) Changes to accumulated deficit Balance at December 31, 2013 $ (579,185 ) $ 2,415 $ (576,770 ) Balance at December 31, 2014 (599,136 ) 2,415 (596,721 ) Additionally, the impact of the adjustment on the December 31, 2014 Consolidated Balance Sheet is as follows: December 31, 2014 Previously Reported Adjustment As Revised (In thousands) Deferred tax assets $ — $ 4,213 $ 4,213 Total assets 451,813 4,213 456,026 Deferred tax liabilities 88,806 $ 1,798 90,604 Total liabilities 526,018 1,798 527,816 Accumulated deficit (599,136 ) 2,415 (596,721 ) Total deficit (74,205 ) 2,415 (71,790 ) Total liabilities and deficit 451,813 4,213 456,026 The Consolidated Statements of Operations for the year ended December 31, 2014 has not been adjusted as the impact on net loss is not material to those consolidated financial statements. In considering whether the Company should amend its previously filed Form 10-K 2014, the Company’s evaluation of SAB 99 considered that the aggregate impact of the adjustment did not impact the Company’s loss before income taxes and was not material to the Company’s net loss, had no impact on operating cash flows, and had an insignificant impact on the Consolidated Balance Sheets. In aggregate, the Company does not believe it is probable that the views of a reasonable investor would have changed by this adjustment in the 2014 consolidated financial statements to warrant an amended Form 10-K. Accordingly, the adjustment was made to the December 31, 2014 Consolidated Balance Sheet and the Consolidated Statement of Changes in Stockholders’ Deficit as described above using the SAB 108 approach. |
Revenue Recognition | ( c ) Revenue Recognition We recognize broadcasting revenue as advertisements are aired on our stations, subject to meeting certain conditions, such as persuasive evidence that an agreement exists, a fixed or determinable price and reasonable assurance of collection. Our revenue is presented net of agency commissions. Agency commissions are calculated based on a stated percentage applied to gross billing revenue. Advertisers remit the gross billing amount to the agency, and then the agency remits gross billings less their commission to us when the advertisement is not placed directly by the advertiser. Payments received in advance of being earned are recorded as customer advances, which are included in accounts payable and accrued expenses. |
Valuation of Accounts Receivable | ( d ) Valuation of Accounts Receivable We review accounts receivable to determine which accounts are doubtful of collection. In making the determination of the appropriate allowance for doubtful accounts, we consider our history of write-offs, relationships with our customers, age of the invoices and the overall creditworthiness of our customers. For each of the years ended December 31, 2015 and 2014, we generated income from the recovery of previously recognized bad debt expense of $0.3 million and incurred bad debt expense of $0.7 million, respectively. Changes in the credit worthiness of customers, general economic conditions and other factors may impact the level of future write-offs. |
Property and Equipment | (e ) Property and Equipment Property and equipment, including capital leases, are stated at historical cost, less accumulated depreciation and amortization. We depreciate the cost of our property and equipment using the straight-line method over the respective estimated useful lives (see note 6). Leasehold improvements are amortized on a straight-line basis over the shorter of the remaining life of the lease or the useful life of the improvements. Maintenance and repairs are charged to expense as incurred; improvements are capitalized. When items are retired or are otherwise disposed of, the related costs and accumulated depreciation and amortization are removed from the accounts and any resulting gains or losses are credited or charged to operating income. |
Assets Held for Exchange | ( f ) Assets Held for Exchange Long lived assets or asset groups that have met the initial criteria to be classified as held for sale (disposal group) and have not yet been sold are measured at the lower of their carrying amount or fair value less cost to sell. Long-lived asset classified as held for sale shall not be depreciated (amortized) while classified as held for sale. Interest and other expenses attributable to the liabilities of a disposal group classified as held for sale shall continue to be accrued. |
Impairment or Disposal of Long-Lived Assets | (g ) Impairment or Disposal of Long-Lived Assets Accounting for impairment or disposal of long-lived assets requires that long-lived assets be reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to future net cash flows expected to be generated by the asset. If the carrying amount of an asset exceeds its estimated future cash flows, an impairment charge is recognized in the amount by which the carrying amount of the asset exceeds the estimated fair value of the asset. |
FCC Broadcasting Licenses | (h ) FCC Broadcasting Licenses Our indefinite-lived intangible assets consist of FCC broadcasting licenses. FCC broadcasting licenses are granted to stations for up to eight years under the Telecommunications Act of 1996. The Act requires the FCC to renew a broadcast license if: (i) it finds that the station has served the public interest, convenience and necessity; (ii) there have been no serious violations of either the Communications Act of 1934 or the FCC’s rules and regulations by the licensee; and (iii) there have been no other serious violations, which taken together, constitute a pattern of abuse. We intend to renew our licenses indefinitely and evidence supports our ability to do so. Historically, there has been no material challenge to our license renewals. In addition, the technology used in broadcasting is not expected to be replaced by another technology any time in the foreseeable future. The weighted-average period before the next renewal of our FCC broadcasting licenses is 4.8 years. We do not amortize our FCC broadcasting licenses. We test these indefinite-lived intangible assets for impairment at least annually or when an event occurs that may indicate that impairment may have occurred. We test our FCC broadcasting licenses for impairment at the market cluster level. We apply the guidance of Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 350-30-35, Unit of Accounting for Purposes of Testing for Impairment of Intangible Assets Not Subject to Amortization Our valuations principally use the discounted cash flow methodology. This income approach consists of a quantitative model, which assumes the FCC broadcasting licenses are acquired and operated by a third-party. The valuation method used is based on the premise that the only asset that the unbuilt start-up station would possess is the FCC broadcasting license. The valuation method isolates the income attributable to a FCC broadcasting license by modeling a hypothetical greenfield build-up to a normalized enterprise that, by design, lacks inherent goodwill and whose only other assets have essentially been paid for as part of the build-up process. Consequently, the resulting accretion in value is solely attributed to the FCC broadcasting license. In the discounted cash flow projections, a period of ten years was determined to be an appropriate time horizon for the analysis. The yearly streams of cash flows are adjusted to present value using an after-tax discount rate calculated for the broadcast industry as of December 31 of each year. Additionally, it is necessary to project the terminal value at the end of the ten-year projection period. The terminal value represents the hypothetical value of the licenses at the end of a ten-year period. An estimated amount of taxes are deducted from the assumed terminal value, which accordingly is discounted to net present value. The key assumptions incorporated in the discounted cash flow model are market revenue projections, market revenue share projections, anticipated operating profit margins and risk adjusted discount rates. These assumptions vary based on the market size, type of broadcast of signal, media competition and audience share. These assumptions primarily reflect industry norms for similar stations/broadcast signals, as well as historical performance and trends of the markets. In the preparation of the FCC broadcasting license appraisals, estimates and assumptions are made that affect the valuation of the intangible asset. These estimates and assumptions could differ from actual results and could have a material impact on our consolidated financial statements in the future. These key assumptions are subject to such factors as: overall advertising demand, station listenership and viewership, audience tastes, technology, fluctuation in preferred advertising media and the estimated cost of capital. Since a number of factors may influence the determination of the fair value of our FCC broadcasting licenses, we are unable to predict whether impairments will occur in the future. Any significant change in these factors will result in a modification of the key assumptions, which may result in an additional impairment. |
Goodwill | (i ) Goodwill Goodwill consists of the excess of the purchase price over the fair value of tangible and identifiable intangible net assets acquired in business combinations. We test goodwill for impairment at least annually at the reporting unit level. We have determined that we have two reporting units, Radio and Television. We currently only have goodwill in our radio reporting unit. We have aggregated our operating components (radio stations) into a single radio reporting unit based upon the similarity of their economic characteristics. Our evaluation included consideration of factors, such as regulatory environment, business model, gross margins, nature of services and the process for delivering these services. The goodwill impairment test is a two-step test. Under the first step, the fair value of the reporting unit is compared with its carrying value (including goodwill). If the fair value of the reporting unit is less than its carrying value, an indication of goodwill impairment exists for the reporting unit and the enterprise must perform step two of the impairment test (measurement). If the fair value of the reporting unit exceeds its carrying value, step two does not need to be performed. Under step two, an impairment loss is recognized for any excess of the carrying amount of the reporting unit’s goodwill over the implied fair value of that goodwill. The implied fair value of goodwill is determined by allocating the fair value of the reporting unit in a manner similar to a purchase price allocation. The residual fair value after this allocation is the implied fair value of the reporting unit goodwill. Fair value of the reporting unit is determined using a discounted cash flow analysis. If the fair value of the reporting unit exceeds its carrying value, step two does not need to be performed. During the years-ended December 31, 2015 and 2014, we performed interim and/or annual impairment reviews of our goodwill and determined that there was no impairment of goodwill. The estimated enterprise value of our radio reporting unit exceeded its carrying value during our impairment testing. In addition, there is currently a net accumulated deficit in our radio reporting unit and we have a net overall accumulated deficit; therefore we considered whether there were any adverse qualitative factors that would indicate that an impairment existed. When evaluating our estimated enterprise value, we utilized an income approach which uses assumptions and estimates which among others include the aggregated expected revenues and operating margins generated by our FCC broadcasting licenses (i.e. our stations) and use of a risk adjusted discount rate. We did not find reconciliation to our current market capitalization meaningful in the determination of our enterprise value given current factors that impact our market capitalization, including but not limited to: limited trading volume; the impact of our television segment operating losses; and the significant voting control of our Chairman and Chief Executive Officer. |
Other Intangible Assets, Net | (j ) Other Intangible Assets, Net Other intangible assets, net, consist of favorable leases and agreements acquired. Gross other intangible assets total $2.5 million as of December 31, 2015 and 2014, respectively. These assets are being amortized over the lives of the leases; however, not to exceed 40 years. Amortization expense amounted to $0.1 million and $0.1 million for the years ended December 31, 2015 and 2014, respectively. Estimated amortization expense for the five years subsequent to December 31, 2015 is as follows (in thousands): Year ending December 31: 2016 $ 96 2017 96 2018 96 2019 96 2020 96 |
Deferred Financing Costs | ( k ) Deferred Financing Costs Deferred financing costs relates to our 12.5% Senior Secured Notes due 2017 (see note 8). Deferred financing costs are being amortized to interest expense over the term of the related debt using the effective interest method. |
Barter Transactions | (l ) Barter Transactions Barter transactions represent advertising time exchanged for noncash goods and/or services, such as promotional items, advertising, supplies, equipment and services. Revenue from barter transactions are recognized as income when advertisements are broadcasted. Expenses are recognized when goods or services are received or used. We record barter transactions at the fair value of goods or services received or advertising surrendered, whichever is more readily determinable. Barter revenue amounted to $7.6 million and $8.7 million for the years ended December 31, 2015 and 2014, respectively. Barter expense amounted to $7.2 million and $8.7 million for the years ended December 31, 2015 and 2014, respectively. Unearned revenue consists of the excess of the aggregate fair value of goods or services received by us, over the aggregate fair value of advertising time delivered by us on certain barter customers. |
Cash and Cash Equivalents | (m ) Cash and Cash Equivalents Cash and cash equivalents consist of cash and money market accounts at various commercial banks. All cash equivalents have original maturities of 90 days or less. |
Income Taxes | (n ) Income Taxes We file a consolidated federal income tax return for substantially all of our domestic operations. We are also subject to foreign taxes on our Puerto Rico operations. We account for income taxes under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income, and tax planning strategies in making this assessment. If the realization of deferred tax assets in the future is considered more likely than not, an adjustment to the deferred tax assets would increase net income in the period such determination is made. Based upon the level of historical taxable income and projections for future taxable income over the periods which the deferred tax assets are deductible, at this time, management believes it is more likely than not that we will not realize the benefits of the majority of these deductible differences. As a result, we have established and maintained a valuation allowance for that portion of the deferred tax assets we believe will not be realized. We account for uncertain tax positions which require that a position taken or expected to be taken in a tax return be recognized in the financial statements when it is more likely than not (a likelihood of more than 50%) that the position would be sustained upon examination by tax authorities. A recognized tax position is then measured at the largest amount of benefit that is greater than 50% likely of being realized upon ultimate settlement. Interest and penalties on tax liabilities, if any, would be recorded in interest expense and other noninterest expense, respectively (see note 13). |
Advertising Costs | (o ) Advertising Costs We incur advertising costs to add and maintain listeners. These costs are charged to expense in the period incurred. Cash advertising costs amounted to $0.9 million and $0.3 million in the years ended December 31, 2015 and 2014, respectively. |
Contingent Liabilities | (p ) Contingent Liabilities Accounting standards require that an estimated loss from a loss contingency shall be accrued when information available prior to the issuance of the financial statements indicate that it is probable that an asset has been impaired or a liability has been incurred at the date of the financial statements and when the amount of the loss can be reasonably estimated. Accounting for contingencies such as legal and income tax matters requires us to use our judgment. We believe that our accruals for these matters are adequate. |
Use of Estimates | (q ) Use of Estimates The preparation of consolidated financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Significant items subject to such estimates and assumptions include the allowance for doubtful accounts, the realization of deferred tax assets, the useful lives and future cash flows used for testing the recoverability of property and equipment, the recoverability of FCC broadcasting licenses, goodwill and other intangible assets, the fair value of Level 2 and Level 3 financial instruments, production tax credits, contingencies and litigation. These estimates and assumptions are based on management’s best judgments. Management evaluates its estimates and assumptions on an ongoing basis using historical experience and other factors, including the current economic environment, which management believes to be reasonable under the circumstances. Management adjusts such estimates and assumptions as facts and circumstances dictate. Illiquid credit markets, volatile equity markets and reductions in advertising spending have combined to increase the uncertainty inherent in such estimates and assumptions. Actual results could differ from these estimates. |
Concentration of Business and Credit Risks | (r ) Concentration of Business and Credit Risks Financial instruments that potentially subject us to concentrations of risk include primarily cash, trade receivables and financial instruments used in hedging activities (see notes 2(v) and 5). We place our cash with highly rated credit institutions. Although we try to limit the amount of credit exposure with any one financial institution, we do in the normal course of business maintain cash balances in excess of federally insured limits. Our operations are conducted in several markets across the United States, including Puerto Rico. Our New York, Los Angeles, and Miami markets accounted for more than 60% of net revenue for the years ended December 31, 2015 and 2014. Our credit risk is spread across a large number of diverse customers in a number of different industries, thus spreading the trade credit risk. We do not normally require collateral on credit sales; however, a credit analysis is performed before extending substantial credit to any customer and occasionally we request payment in advance. We establish an allowance for doubtful accounts based on customers’ payment history and perceived credit risks. |
Basic and Diluted Net Loss Per Common Share | (s ) Basic and Diluted Net Loss Per Common Share Basic net loss per common share was computed by dividing net loss available to common stockholders by the weighted average number of shares of common stock and convertible preferred stock outstanding for each period presented. Diluted net loss per common share is computed by giving effect to common stock equivalents as if they were outstanding for the entire period. The following table summarizes the net loss applicable to common stockholders and the net loss per common share for the years ended December 31, 2015 and 2014 (in thousands, except per share data): 2015 2014 Net loss $ (26,955 ) $ (19,951 ) Basic and Diluted net loss per common stock $ (3.71 ) $ (2.75 ) Weighted average common shares outstanding: Basic and Diluted 7,267 7,267 The following is a reconciliation of the shares used in the computation of basic and diluted net loss per share for the years ended December 31, 2015 and 2014 (in thousands, except per share data): 2015 2014 Basic weighted average shares outstanding $ 7,267 $ 7,267 Effect of dilutive equity instruments — — Dilutive weighted average shares outstanding $ 7,267 $ 7,267 Options to purchase shares of common stock and other stock-based awards outstanding which are not included in the calculation of diluted net loss per share because their impact is anti-dilutive 95 86 |
Fair Value Measurement | (t ) Fair Value Measurement We determine the fair value of assets and liabilities using a fair value hierarchy that distinguishes between market participant assumptions developed based on market data obtained from sources independent of the reporting entity, and the reporting entity’s own assumptions about market participant assumptions developed based on the best information available in the circumstances. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, essentially an exit price (see note 16). The levels of the fair value hierarchy are: · Level 1: inputs are quoted prices, unadjusted, in active markets for identical assets or liabilities that the reporting entity has the ability to access at the measurement date. · Level 2: inputs are other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. A Level 2 input must be observable for substantially the full term of the asset or liability. · Level 3: inputs are unobservable and reflect the reporting entity’s own assumptions about the assumptions that market participants would use in pricing the asset or liability. |
Share-based Compensation Expense | (u ) Share-Based Compensation Expense We account for our share-based compensation expense based on the estimated grant date fair value method using the Black-Scholes option pricing model. For these awards, we have recognized compensation expense using a straight-line amortization method (prorated). Share-based compensation expense is based on awards that are ultimately expected to vest. Share-based compensation for the years ended December 31, 2015 and 2014 were reduced for estimated forfeitures. When estimating forfeitures, we consider voluntary termination behaviors, as well as trends of actual option forfeitures. |
Leasing (Operating Leases) | (v ) Leasing (Operating Leases) We recognize rent expense for operating leases with periods of free rent (including construction periods), step rent provisions and escalation clauses on a straight line basis over the applicable lease term. We consider lease renewals in the useful life of related leasehold improvements when such renewals are reasonably assured. We take these provisions into account when calculating minimum aggregate rental commitments under noncancelable operating leases (see note 12). From time to time, we receive capital improvement funding from our lessors. These amounts are recorded as deferred liabilities and amortized over the remaining lease term as a reduction of rent expense. |
Segment Reporting | (w ) Segment Reporting Accounting standards establish the way public business enterprises report information about operating segments in annual financial statements and require those enterprises to report selected information about operating segments in interim financial reports issued to stockholders. Operating segments are defined as components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision-maker in deciding how to allocate resources and in assessing performance. |
Derivative Instrument | (x ) Derivative Instrument We only enter into derivative contracts to hedge against the potential impact of increases in interest rates on our debt instruments. We also only enter into derivative contracts that we intend to designate as a hedge of the variability of cash flows to be paid related to a recognized asset or liability (cash flow hedge). By using derivative financial instruments to hedge exposures to changes in interest rates, we expose ourselves to credit risk and market risk. Credit risk is the failure of the counterparty to perform under the terms of the derivative contract. We attempt to minimize the credit risk in derivative instruments by entering into transactions with high-quality counterparties whose credit rating is higher than Aa. Market risk is the adverse effect on the value of a derivative instrument that results from a change in interest rates. The market risk associated with interest-rate contracts is managed by establishing and monitoring parameters that limit the types and degree of market risk that may be undertaken. For all hedging relationships, we formally document the hedging relationship and its risk-management objective and strategy for undertaking the hedge, the hedging instrument, the hedged item, the nature of the risk being hedged, how the hedging instrument’s effectiveness in offsetting the hedged risk will be assessed prospectively and retrospectively, and a description of the method of measuring ineffectiveness. We also formally assess, both at the hedge’s inception and on an ongoing basis, whether the derivatives that are used in hedging transactions are highly effective in offsetting cash flows of hedged items. We are accounting for our interest rate swap as cash flow hedge, which requires us to recognize our derivative instrument on the consolidated balance sheet at fair value. The related gain or loss on this instrument is deferred in stockholders’ deficit as a component of accumulated other comprehensive (loss) income. The deferred gain or loss on this transaction is recognized in income in the period in which the related item is being hedged and recognized in expense. However, to the extent that the change in value of the derivative contracts does not offset the change in the value of the underlying transaction being hedged, that ineffective portion is immediately recognized into income. We recognize gains and losses immediately when the underlying transaction settles. For cash flow hedges in which hedge accounting is discontinued because it is determined that the derivative no longer qualifies as an effective cash flow hedge, we continue to carry the derivative instrument at its fair value on the consolidated balance sheet and recognize any subsequent changes in its fair value in earnings (change in fair value of derivative instrument). |
Comprehensive Loss | (y ) Comprehensive Loss Our comprehensive loss consists of net loss and other items recorded directly to the equity accounts. The objective is to report a measure of all changes in equity of an enterprise that result from transactions and other economic events during the period. Our comprehensive loss consists of net loss and gains (losses) on our derivative instrument that qualifies for cash flow hedge treatment. |
Reclassifications | (z ) Reclassifications Certain prior year amounts have been reclassified to conform to the current year presentation. There is no effect on net income (loss) as a result of these reclassifications. |
New Accounting Standards | ( aa ) New Accounting Standards In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842). In January 2016, the FASB issued ASU No. 2016-01, Accounting for Financial Instruments – Recognition and Measurement. In November 2015, the FASB issued ASU No. 2015-17, Income Taxes (Topic 740) Balance Sheet Classification of Deferred Taxes. In April 2015, the FASB issued ASU No. 2015-03, Simplifying the Presentation of Debt Issuance Costs. In August 2014, the FASB issued ASU No. 2014-15, Presentation of Financial Statements- Going Concern. In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers. |
Summary of Significant Accoun26
Summary of Significant Accounting Policies and Related Matters (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Text Block [Abstract] | |
Impact of Prior Period Adjustments on Consolidated Financial Statements | The impact of the adjustments on the Consolidated Statements of Changes in Stockholders’ Deficit at December 31, 2013 and 2014 is as follows: Previously Reported Adjustment As Revised (In thousands) Changes to accumulated deficit Balance at December 31, 2013 $ (579,185 ) $ 2,415 $ (576,770 ) Balance at December 31, 2014 (599,136 ) 2,415 (596,721 ) Additionally, the impact of the adjustment on the December 31, 2014 Consolidated Balance Sheet is as follows: December 31, 2014 Previously Reported Adjustment As Revised (In thousands) Deferred tax assets $ — $ 4,213 $ 4,213 Total assets 451,813 4,213 456,026 Deferred tax liabilities 88,806 $ 1,798 90,604 Total liabilities 526,018 1,798 527,816 Accumulated deficit (599,136 ) 2,415 (596,721 ) Total deficit (74,205 ) 2,415 (71,790 ) Total liabilities and deficit 451,813 4,213 456,026 |
Summary of Estimated Amortization Expense | Amortization expense amounted to $0.1 million and $0.1 million for the years ended December 31, 2015 and 2014, respectively. Estimated amortization expense for the five years subsequent to December 31, 2015 is as follows (in thousands): Year ending December 31: 2016 $ 96 2017 96 2018 96 2019 96 2020 96 |
Summary of Net Loss Available to Common Stockholders and the Net Loss Per Common Share | Basic net loss per common share was computed by dividing net loss available to common stockholders by the weighted average number of shares of common stock and convertible preferred stock outstanding for each period presented. Diluted net loss per common share is computed by giving effect to common stock equivalents as if they were outstanding for the entire period. The following table summarizes the net loss applicable to common stockholders and the net loss per common share for the years ended December 31, 2015 and 2014 (in thousands, except per share data): 2015 2014 Net loss $ (26,955 ) $ (19,951 ) Basic and Diluted net loss per common stock $ (3.71 ) $ (2.75 ) Weighted average common shares outstanding: Basic and Diluted 7,267 7,267 |
Reconciliation of the Shares Used in the Computation of Basic and Diluted Net Loss Per Share | The following is a reconciliation of the shares used in the computation of basic and diluted net loss per share for the years ended December 31, 2015 and 2014 (in thousands, except per share data): 2015 2014 Basic weighted average shares outstanding $ 7,267 $ 7,267 Effect of dilutive equity instruments — — Dilutive weighted average shares outstanding $ 7,267 $ 7,267 Options to purchase shares of common stock and other stock-based awards outstanding which are not included in the calculation of diluted net loss per share because their impact is anti-dilutive 95 86 |
Subsequent Event - Asset Exch27
Subsequent Event - Asset Exchange (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Business Combinations [Abstract] | |
Summary of Assets Held for Exchange | A summary of assets held for exchange as of December 31, 2015 is as follows (in thousands): Property and equipment, net $ 19 FCC broadcasting licenses 2,775 Assets held for exchange $ 2,794 |
Derivative and Hedging Activi28
Derivative and Hedging Activity (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Derivative Instruments And Hedging Activities Disclosure [Abstract] | |
Description of Derivative Financial Instruments | At December 31, 2015 and 2014, our derivative financial instrument comprised of the following (in thousands): Agreement Fixed interest rate Expiration date 2015 Notional amounts 2014 Notional amounts 2015 Fair value 2014 Fair value Interest rate swap 6.31 % January 2017 $ 4,922 $ 5,228 220 408 |
Property and Equipment, Net (Ta
Property and Equipment, Net (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Property Plant And Equipment [Abstract] | |
Summary of Property and Equipment | Property and equipment, net consists of the following at December 31, 2015 and 2014 (in thousands): 2015 2014 Estimated useful lives Land $ 7,306 $ 7,306 — Building and building improvements 36,721 36,365 7–20 years Tower and antenna systems 5,978 5,887 10 years Studio and technical equipment 24,938 24,223 5–10 years Furniture and fixtures 4,946 5,456 5–10 years Transmitter equipment 9,062 9,266 10 years Leasehold improvements 2,772 2,745 1–20 years Computer equipment and software 8,382 8,913 3–5 years Other 1,945 1,853 3–5 years 102,050 102,014 Less accumulated depreciation (71,590 ) (69,632 ) $ 30,460 32,382 |
Accounts Payable and Accrued 30
Accounts Payable and Accrued Expenses (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Text Block [Abstract] | |
Summary of Accounts Payable and Accrued Expenses | Accounts payable and accrued expenses at December 31, 2015 and 2014 consist of the following (in thousands): 2015 2014 Accounts payable – trade $ 2,779 $ 1,920 Accrued compensation and commissions 7,899 7,469 Accrued professional fees 1,622 957 Accrued step-up leases 213 160 Accrued income taxes — 13 Other accrued expenses 4,039 3,040 $ 16,552 13,559 |
Other Long-Term Debt (Tables)
Other Long-Term Debt (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Text Block [Abstract] | |
Summary of Other Long-Term Debt | Other long-term debt consists of the following at December 31, 2015 and 2014 (in thousands): 2015 2014 Promissory note payable, due in monthly principal installments of $26, plus interest at 6.31%, commencing January 2007, with balance due on January 2017 4,922 5,228 Various obligations under capital leases — 30 4,922 5,258 Less current portion (306 ) (336 ) $ 4,616 $ 4,922 |
Summary of Scheduled Maturities of Other Long-Term Debt | The scheduled maturities of other long-term debt are as follows at December 31, 2015 (in thousands): Year ending December 31: 2016 306 2017 4,616 $ 4,922 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Equity [Abstract] | |
Summary of Weighted Average Assumptions Used for Calculating Per Share Weighted Average Fair Value of Stock Options | We calculated the fair value of each option award on the date of grant using the Black-Scholes option pricing model. The per share weighted average fair value of the stock options granted to employees during 2015 was $4.58. For the year ended December 31, 2014, no option awards were granted. The following weighted average assumptions were used for each respective period: 2015 2014 Expected term 4 N/A Dividends to common stockholders None N/A Risk-free interest rate 1.39% N/A Expected volatility 97.96 N/A |
Summary of Stock Options | Stock options have only been granted to employees or directors. Our stock options have various vesting schedules and are subject to the employees’ continuing service. A summary of the status of our stock options, as of December 31, 2015 and 2014, and changes during the years ended December 31, 2015 and 2014, is presented below (in thousands, except per share data and contractual life): Weighted Weighted Average Average Aggregate Remaining Exercise Intrinsic Contractual Shares Price Value Life (Years) Outstanding at December 31, 2013 142 34.77 Granted — — Exercised — — Forfeited (21 ) 102.23 Outstanding at December 31, 2014 121 $ 22.74 Granted 25 6.48 Exercised — — Forfeited (18 ) 81.59 Outstanding at December 31, 2015 128 $ 11.25 $ 34,500 5.1 Exercisable at December 31, 2015 103 $ 12.41 $ 34,500 4.0 |
Summary of Stock Options Outstanding and Exercisable | The following table summarizes information about our stock options outstanding and exercisable at December 31, 2015 (in thousands, except per share data and contractual life): Weighted Weighted Average Weighted Average Remaining Average Vested Unvested Exercise Contractual Options Exercise Range of Exercise Prices Options Options Price Life (Years) Exercisable Price $1.03 - 49.99 103.0 25.0 $ 11.25 5.10 103 $ 12.41 50.00 - 99.99 — — — — — — 100.00 - 107.90 — — — — — — 103 25 11.25 5.10 103 12.41 |
Commitments (Tables)
Commitments (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Commitments And Contingencies Disclosure [Abstract] | |
Summary of Future Minimum Lease Payments | At December 31, 2015, future minimum lease payments under such leases are as follows (in thousands): Capital Operating leases leases Year ending December 31: 2016 $ — 3,374 2017 — 2,845 2018 — 1,622 2019 — 1,256 2020 — 1,062 Thereafter — 6,425 Total minimum lease payments — $ 16,584 Less executory costs — — Less interest — Present value of minimum lease payments $ — |
Summary of Future Minimum Rental Income through Sublease | Year ending December 31: 2016 $ 1,022 2017 752 2018 766 2019 392 2020 157 Thereafter 819 $ 3,908 |
Summary of Future Payments under Employment and Service Contracts | At December 31, 2015, we are committed to employment and service contracts for certain executives, on-air talent, general managers, and others expiring through 2021. Future payments under such contracts are as follows (in thousands): Year ending December 31: 2016 $ 11,000 2017 8,652 2018 6,801 2019 1,525 2020 769 Thereafter 92 $ 28,839 |
Summary of Future Payments under Vendor Agreements | Future payments under such commitments are as follows (in thousands): Year ending December 31: 2016 $ 4,666 2017 951 2018 597 2019 208 2020 — Thereafter — $ 6,422 Subsequent to year end, December 31, 2015, the company entered in to additional vendor commitments, as described above, in the amount of $25.4 million for the years ended December 31, 2016 through 2021. |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Income Tax Disclosure [Abstract] | |
Summary of Total Income Tax (Benefit) Expense | Total income tax expense (benefit) for the years ended December 31, 2015 and 2014 were as follows (in thousands): 2015 2014 Income tax expense (benefit) $ 11,225 $ 5,842 The components of the provision for income tax (benefit) expense included in the consolidated statements of operations and comprehensive loss are as follows for the years ended December 31, 2015 and 2014 (in thousands): 2015 2014 Current: Federal $ — — State and local, net of federal income tax benefit 10 43 Foreign 298 165 308 208 Deferred: Federal 6,458 3,135 State and local, net of federal income tax benefit 2,126 1,421 Foreign 2,333 1,078 10,917 5,634 Total income tax (benefit) expense $ 11,225 $ 5,842 |
(Loss) Income before Income Tax Expense | For the years ended December 31, 2015 and 2014, (loss) income before income tax expense consists of the following (in thousands): 2015 2014 U.S. operations $ (14,078 ) $ (14,800 ) Foreign operations (1,652 ) 691 $ (15,730 ) $ (14,109 ) |
Schedule of Deferred Tax Assets and Deferred Tax Liabilities | The tax effect of temporary differences and carry-forwards that give rise to deferred tax assets and deferred tax liabilities at December 31, 2015 and 2014 are as follows (in thousands): 2015 2014 Deferred tax assets: Federal and state net operating loss carryforwards $ 109,020 $ 102,728 Foreign net operating loss carryforwards 12,506 12,917 FCC licenses 6,291 6,982 Allowance for doubtful accounts 1,133 1,489 Unearned revenue 333 187 AMT credit 1,120 1,039 Derivatives and hedging instruments 254 248 Property and equipment 2,056 1,887 Accrued foreign withholding 2,136 2,034 Straight-line expense adjustments 31 154 Accrued restructuring 11 45 Production costs 11,535 11,663 Stock-based compensation 1,649 1,629 Intercompany expenses 3,624 2,420 Accrued Vacation/Bonus/Payroll 1,067 840 Other 1,620 2,234 Total gross deferred tax assets 154,386 148,496 Less valuation allowance (151,273 ) (142,957 ) Net deferred tax assets 3,113 5,539 Deferred tax liabilities: FCC licenses and goodwill 100,421 91,930 Total gross deferred tax liabilities 100,421 91,930 Net deferred tax liability $ 97,308 86,391 |
Summary of Income Tax Expense From Continuing Operations | Total income tax expense from continuing operations differed from the amounts computed by applying the U.S. federal income tax rate of 35% for the years ended December 31, 2015 and 2014, as a result of the following: 2015 2014 Computed “expected” tax (benefit) expense (35.0 ) % (35.0 ) State and local income taxes, net of federal benefit 1.1 (7.7 ) Foreign tax differential (1.3 ) (1.2 ) Current year change in valuation allowance 52.7 73.8 Nondeductible expenses 2.8 5.9 Nondeductible interest expense 21.7 — Change in effective rate 5.3 6.0 Return to provision 23.5 0.6 Other 0.6 (1.0 ) 71.4 % 41.4 |
Fair Value Measurement Disclo35
Fair Value Measurement Disclosures (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Fair Value Disclosures [Abstract] | |
Estimated Fair Values of Financial Instrument | The estimated fair values of our financial instruments are as follows (in millions): December 31, 2015 2014 Fair Value Carrying Fair Carrying Fair Description Hierarchy Amount Value Amount Value 12.5% senior secured notes due 2017 Level 2 $ 275.0 281.2 $ 275.0 286.5 10 3 4 redeemable preferred stock Level 3 146.1 60.1 136.4 61.8 Promissory note payable, included in other long- term debt Level 3 4.9 4.2 5.2 4.5 |
Fair Value of Derivative Instruments | The following tables represent required quantitative disclosures regarding fair values of our derivative instruments (in thousands). Fair value measurements at December 31, 2015 Liabilities Description December 31, 2015 carrying value and balance sheet location of derivative instruments Quoted prices in active markets for identical instruments (Level 1) Significant other observable inputs (Level 2) Significant unobservable inputs (Level 3) Derivative designated as a cash flow hedging instrument: Interest rate swap liability $ 220 — 220 — Fair value measurements at December 31, 2014 Liabilities Description December 31, 2014 carrying value and balance sheet location of derivative instruments Quoted prices in active markets for identical instruments (Level 1) Significant other observable inputs (Level 2) Significant unobservable inputs (Level 3) Derivative designated as a cash flow hedging instrument: Interest rate swap liability $ 408 — 408 — |
Interest Rate Swaps | The interest rate swap fair value is derived from the present value of the difference in cash flows based on the forward-looking LIBOR yield curve rates, as compared to our fixed rate applied to the hedged amount through the term of the agreement, less adjustments for credit risk. December 31, Interest rate swap: 2015 2014 Gain recognized in other comprehensive loss (effective portion) $ 188 194 |
Segment Data (Tables)
Segment Data (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Segment Reporting [Abstract] | |
Operating Segments | The following summary table presents separate financial data for each of our operating segments. The accounting applied to determine the segment information are generally the same as those described in the summary of significant accounting polices (see note 2(u)). We evaluate the performance of our operating segments based on separate financial data for each operating segment as provided below (in thousands): Year Ended December 31, 2015 2014 Net revenue: Radio $ 133,624 $ 130,505 Television 13,275 15,775 Consolidated $ 146,899 $ 146,280 Engineering and programming expenses: Radio $ 23,101 $ 21,132 Television 7,660 8,777 Consolidated $ 30,761 $ 29,909 Selling, general and administrative expenses: Radio $ 60,706 $ 59,981 Television 5,868 7,558 Consolidated $ 66,574 $ 67,539 Corporate expenses: $ 10,462 $ 9,720 Depreciation and amortization: Radio $ 1,813 $ 2,009 Television 2,621 2,748 Corporate 368 368 Consolidated $ 4,802 $ 5,125 (Gain) loss on the disposal of assets, net: Radio $ (78 ) $ (1,204 ) Television 2 — Corporate (11 ) — Consolidated $ (87 ) $ (1,204 ) Impairment charges and restructuring costs: Radio $ 925 $ — Television — — Corporate (389 ) (153 ) Consolidated $ 536 $ (153 ) Operating income (loss): Radio $ 47,157 $ 48,587 Television (2,876 ) (3,308 ) Corporate (10,430 ) (9,935 ) Consolidated $ 33,851 $ 35,344 Capital expenditures: Radio $ 1,316 $ 1,415 Television 805 437 Corporate 351 364 Consolidated $ 2,472 $ 2,216 December 31, December 31, 2015 2014 Total Assets: Radio $ 392,926 $ 393,607 Television 51,388 51,876 Corporate 7,430 10,543 Consolidated $ 451,744 $ 456,026 |
Organization and Nature of Bu37
Organization and Nature of Business (Details) | 12 Months Ended |
Dec. 31, 2015RadioStationTelevisionStationTelevisionOperation | |
Radio | |
Organization and Nature of Business (Textual) [Abstract] | |
Number of stations owned | RadioStation | 20 |
Television | |
Organization and Nature of Business (Textual) [Abstract] | |
Number of stations owned | TelevisionStation | 3 |
Number of operations operated | TelevisionOperation | 1 |
Summary of Significant Accoun38
Summary of Significant Accounting Policies and Related Matters (Details Textual) | 12 Months Ended | |||
Dec. 31, 2015USD ($)Segment | Dec. 31, 2014USD ($) | Dec. 31, 2013USD ($) | Feb. 07, 2012 | |
Summary of Significant Accounting Policies and Related Matters (Textual) [Abstract] | ||||
Cumulative adjustment to accumulated deficit | $ (623,676,000) | $ (596,721,000) | $ (576,770,000) | |
Provision (recovery) of bad debt expense | $ (343,000) | 695,000 | ||
FCC Broadcasting license period | 8 years | |||
Weighted-average period before the next renewal of FCC broadcasting licenses | 4 years 9 months 18 days | |||
FCC Broadcasting license cash flow projection period | 10 years | |||
Number of reporting segment units | Segment | 2 | |||
Impairment of goodwill | $ 0 | 0 | ||
Gross other Intangible asset | $ 2,500,000 | 2,500,000 | ||
Other finite lived intangible asset amortization period | 40 years | |||
Finite lived intangible asset amortization expense | $ 100,000 | 100,000 | ||
Barter Revenue amount | 7,600,000 | 8,700,000 | ||
Barter Expense amount | $ 7,200,000 | 8,700,000 | ||
Recognized tax position | Largest amount of benefit that is greater than 50% likely of being realized upon ultimate settlement | |||
Cash Advertising cost | $ 900,000 | $ 300,000 | ||
Percentage revenue accounted by foreign markets | 60.00% | 60.00% | ||
Increase in deferred tax asset | $ 1,758,000 | $ 4,213,000 | ||
Increase in deferred tax liability | 99,066,000 | 90,604,000 | ||
Debt Issuance Costs | $ 4,500,000 | |||
Twelve Point Five Percentage Senior Secured Notes Due Two Thousand Seventeen | ||||
Summary of Significant Accounting Policies and Related Matters (Textual) [Abstract] | ||||
Notes issued, interest rate | 12.50% | 12.50% | ||
Senior Secured Notes Due date | 2,017 | |||
Adjustment | ||||
Summary of Significant Accounting Policies and Related Matters (Textual) [Abstract] | ||||
Cumulative adjustment to accumulated deficit | 2,415,000 | $ 2,415,000 | ||
Increase in deferred tax asset | 4,213,000 | |||
Increase in deferred tax liability | 1,798,000 | |||
Adjustment | UNITED STATES | ||||
Summary of Significant Accounting Policies and Related Matters (Textual) [Abstract] | ||||
Increase in deferred tax asset | 1,900,000 | |||
Adjustment | Puerto Rico | ||||
Summary of Significant Accounting Policies and Related Matters (Textual) [Abstract] | ||||
Increase in deferred tax asset | $ 2,300,000 |
Summary of Significant Accoun39
Summary of Significant Accounting Policies and Related Matters (Details) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 |
Error Corrections And Prior Period Adjustments Restatement [Line Items] | |||
Accumulated deficit | $ (623,676) | $ (596,721) | $ (576,770) |
Previously Reported | |||
Error Corrections And Prior Period Adjustments Restatement [Line Items] | |||
Accumulated deficit | (599,136) | (579,185) | |
Adjustment | |||
Error Corrections And Prior Period Adjustments Restatement [Line Items] | |||
Accumulated deficit | $ 2,415 | $ 2,415 |
Summary of Significant Accoun40
Summary of Significant Accounting Policies and Related Matters (Details 1) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 |
Error Corrections And Prior Period Adjustments Restatement [Line Items] | |||
Deferred tax assets | $ 1,758 | $ 4,213 | |
Total assets | 451,744 | 456,026 | |
Deferred tax liabilities | 99,066 | 90,604 | |
Total liabilities | 550,292 | 527,816 | |
Accumulated deficit | (623,676) | (596,721) | $ (576,770) |
Total deficit | (98,548) | (71,790) | (52,034) |
Total liabilities and deficit | $ 451,744 | 456,026 | |
Previously Reported | |||
Error Corrections And Prior Period Adjustments Restatement [Line Items] | |||
Total assets | 451,813 | ||
Deferred tax liabilities | 88,806 | ||
Total liabilities | 526,018 | ||
Accumulated deficit | (599,136) | (579,185) | |
Total deficit | (74,205) | ||
Total liabilities and deficit | 451,813 | ||
Adjustment | |||
Error Corrections And Prior Period Adjustments Restatement [Line Items] | |||
Deferred tax assets | 4,213 | ||
Total assets | 4,213 | ||
Deferred tax liabilities | 1,798 | ||
Total liabilities | 1,798 | ||
Accumulated deficit | 2,415 | $ 2,415 | |
Total deficit | 2,415 | ||
Total liabilities and deficit | $ 4,213 |
Summary of Significant Accoun41
Summary of Significant Accounting Policies and Related Matters (Details 2) $ in Thousands | Dec. 31, 2015USD ($) |
Summary of estimated amortization expense | |
2,016 | $ 96 |
2,017 | 96 |
2,018 | 96 |
2,019 | 96 |
2,020 | $ 96 |
Summary of Significant Accoun42
Summary of Significant Accounting Policies and Related Matters (Details 3) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Summary of net income available to common stockholders and the net income per common share | ||
Net loss | $ (26,955) | $ (19,951) |
Basic and Diluted net loss per common stock | $ (3.71) | $ (2.75) |
Weighted average common shares outstanding: | ||
Basic and Diluted | 7,267 | 7,267 |
Summary of Significant Accoun43
Summary of Significant Accounting Policies and Related Matters (Details 4) - shares shares in Thousands | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Reconciliation of the shares used in the computation of basic and diluted net income per share | ||
Basic weighted average shares outstanding | 7,267 | 7,267 |
Dilutive weighted average shares outstanding | 7,267 | 7,267 |
Options to purchase shares of common stock and other stock-based awards outstanding which are not included in the calculation of diluted net loss per share because their impact is anti-dilutive | 95 | 86 |
Subsequent Event - Asset Exch44
Subsequent Event - Asset Exchange (Details Textual) - Subsequent Event - International Broadcasting Corp | Jan. 04, 2016USD ($) |
Business Acquisition [Line Items] | |
Fair value of assets to be received in asset exchange | $ 2,926,934 |
Additional cash payments | $ 1,900,000 |
Subsequent Event - Asset Exch45
Subsequent Event - Asset Exchange (Details) $ in Thousands | Dec. 31, 2015USD ($) |
Income Statement Balance Sheet And Additional Disclosures By Disposal Groups Including Discontinued Operations [Line Items] | |
Property and equipment, net | $ 19 |
Assets held for exchange | 2,794 |
FCC Broadcasting License | |
Income Statement Balance Sheet And Additional Disclosures By Disposal Groups Including Discontinued Operations [Line Items] | |
FCC broadcasting licenses | $ 2,775 |
Impairment Charges and Restru46
Impairment Charges and Restructuring Costs (Details Textual) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Impairment Charges and Restructuring Costs (Textual) [Abstract] | ||
Impairment charges and restructuring costs | $ 536 | $ (153) |
Impairment charges and restructuring costs accrual | (200) | |
Total accrued expenses on impairment charges and restructuring costs | (400) | |
Payments of impairment charges and restructuring costs | 0 | $ 100 |
FCC Broadcasting License | ||
Impairment Charges and Restructuring Costs (Textual) [Abstract] | ||
Impairment of intangible asset | $ 900 |
Derivative and Hedging Activi47
Derivative and Hedging Activity (Details) - Ten Year Interest Rate Swap - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Jan. 04, 2007 | |
Description of derivative financial instruments | |||
Fixed interest rate | 6.31% | ||
Expiration date | 2017-01 | ||
Notional amount | $ 4,922 | $ 5,228 | $ 7,700 |
Fair value | $ 220 | $ 408 |
Derivative and Hedging Activi48
Derivative and Hedging Activity (Details Textual) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Jan. 04, 2007 | |
Derivative Instrument and Hedging Activity (Textual) [Abstract] | |||
Interest rate swap agreement period | 10 years | ||
Amount reclassified from other comprehensive income to interest expense | $ 300 | $ 300 | |
Other comprehensive (loss) income, net of taxes- unrealized gain on derivative instrument | 188 | 194 | |
Ten Year Interest Rate Swap | |||
Derivative Instrument and Hedging Activity (Textual) [Abstract] | |||
Notional amount | $ 4,922 | $ 5,228 | $ 7,700 |
Fixed interest rate | 6.31% | ||
Basis spread on variable rate of interest rate swap | 1.25% | ||
Derivative floating interest rate description | Equal to one-month LIBOR plus 125 basis points | ||
Interest rate swap expiration date | Jan. 4, 2017 |
Property and Equipment, Net (De
Property and Equipment, Net (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Summary of property and equipment | ||
Property and equipment, Gross | $ 102,050 | $ 102,014 |
Less accumulated depreciation | (71,590) | (69,632) |
Property and equipment, Net | 30,460 | 32,382 |
Land | ||
Summary of property and equipment | ||
Property and equipment, Gross | 7,306 | 7,306 |
Building and building improvements | ||
Summary of property and equipment | ||
Property and equipment, Gross | $ 36,721 | 36,365 |
Building and building improvements | Minimum | ||
Summary of property and equipment | ||
Property and Equipment, Estimated useful lives | 7 years | |
Building and building improvements | Maximum | ||
Summary of property and equipment | ||
Property and Equipment, Estimated useful lives | 20 years | |
Tower and antenna systems | ||
Summary of property and equipment | ||
Property and equipment, Gross | $ 5,978 | 5,887 |
Tower and antenna systems | Maximum | ||
Summary of property and equipment | ||
Property and Equipment, Estimated useful lives | 10 years | |
Studio and technical equipment | ||
Summary of property and equipment | ||
Property and equipment, Gross | $ 24,938 | 24,223 |
Studio and technical equipment | Minimum | ||
Summary of property and equipment | ||
Property and Equipment, Estimated useful lives | 5 years | |
Studio and technical equipment | Maximum | ||
Summary of property and equipment | ||
Property and Equipment, Estimated useful lives | 10 years | |
Furniture and fixtures | ||
Summary of property and equipment | ||
Property and equipment, Gross | $ 4,946 | 5,456 |
Furniture and fixtures | Minimum | ||
Summary of property and equipment | ||
Property and Equipment, Estimated useful lives | 5 years | |
Furniture and fixtures | Maximum | ||
Summary of property and equipment | ||
Property and Equipment, Estimated useful lives | 10 years | |
Transmitter equipment | ||
Summary of property and equipment | ||
Property and equipment, Gross | $ 9,062 | 9,266 |
Transmitter equipment | Maximum | ||
Summary of property and equipment | ||
Property and Equipment, Estimated useful lives | 10 years | |
Leasehold improvements | ||
Summary of property and equipment | ||
Property and equipment, Gross | $ 2,772 | 2,745 |
Leasehold improvements | Minimum | ||
Summary of property and equipment | ||
Property and Equipment, Estimated useful lives | 1 year | |
Leasehold improvements | Maximum | ||
Summary of property and equipment | ||
Property and Equipment, Estimated useful lives | 20 years | |
Computer equipment and software | ||
Summary of property and equipment | ||
Property and equipment, Gross | $ 8,382 | 8,913 |
Computer equipment and software | Minimum | ||
Summary of property and equipment | ||
Property and Equipment, Estimated useful lives | 3 years | |
Computer equipment and software | Maximum | ||
Summary of property and equipment | ||
Property and Equipment, Estimated useful lives | 5 years | |
Other | ||
Summary of property and equipment | ||
Property and equipment, Gross | $ 1,945 | $ 1,853 |
Other | Minimum | ||
Summary of property and equipment | ||
Property and Equipment, Estimated useful lives | 3 years | |
Other | Maximum | ||
Summary of property and equipment | ||
Property and Equipment, Estimated useful lives | 5 years |
Property and Equipment, Net (50
Property and Equipment, Net (Details Textual) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Property and Equipment, Net (Textual) [Abstract] | ||
Depreciation of property and equipment | $ 4.7 | $ 5 |
Accounts Payable and Accrued 51
Accounts Payable and Accrued Expenses (Details) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Summary of accounts payable and accrued expenses | ||
Accounts payable – trade | $ 2,779 | $ 1,920 |
Accrued compensation and commissions | 7,899 | 7,469 |
Accrued professional fees | 1,622 | 957 |
Accrued step-up leases | 213 | 160 |
Accrued income taxes | 13 | |
Other accrued expenses | 4,039 | 3,040 |
Total accounts payable and accrued expenses | $ 16,552 | $ 13,559 |
Twelve Point Five Percent Sen52
Twelve Point Five Percent Senior Secured Notes due Twenty Seventeen (Details Textual) - Twelve Point Five Percentage Senior Secured Notes Due Two Thousand Seventeen - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2015 | Feb. 07, 2012 | |
12.5% Senior Secured Notes due 2017 (Textual) [Abstract] | ||
Notes issued principal amount | $ 275 | |
Interest rate on Senior secured notes due 2017 | 12.50% | 12.50% |
Senior secured notes, maturity date | Apr. 15, 2017 | |
Issue price percentage of principal amount | 97.00% | |
Frequency of interest payment | semi-annually | |
Date of first required payment | Apr. 15, 2012 | |
Additional interest rate | 2.00% | |
Aggregate principal amount of the notes | 25.00% | |
Covenants, maximum unpaid principal payment | $ 15 | |
Debt instrument payment period | 60 days | |
Maximum | ||
12.5% Senior Secured Notes due 2017 (Textual) [Abstract] | ||
Secured leverage ratio | 4.75% | |
Maximum | Period One | ||
12.5% Senior Secured Notes due 2017 (Textual) [Abstract] | ||
Secured leverage ratio | 4.75% | |
Maximum | Period Two | ||
12.5% Senior Secured Notes due 2017 (Textual) [Abstract] | ||
Secured leverage ratio | 4.75% | |
Maximum | Period Three | ||
12.5% Senior Secured Notes due 2017 (Textual) [Abstract] | ||
Secured leverage ratio | 4.75% | |
Maximum | Period Four | ||
12.5% Senior Secured Notes due 2017 (Textual) [Abstract] | ||
Secured leverage ratio | 4.75% | |
Maximum | Period Five | ||
12.5% Senior Secured Notes due 2017 (Textual) [Abstract] | ||
Secured leverage ratio | 4.75% | |
Maximum | Period Six | ||
12.5% Senior Secured Notes due 2017 (Textual) [Abstract] | ||
Secured leverage ratio | 4.75% | |
Maximum | Period Seven | ||
12.5% Senior Secured Notes due 2017 (Textual) [Abstract] | ||
Secured leverage ratio | 4.75% |
Other Long Term Debt (Details)
Other Long Term Debt (Details) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Summary of other long-term debt | ||
Other long-term debt, Total | $ 4,922 | $ 5,258 |
Less current portion | (306) | (336) |
Other long-term debt, less current portion | 4,616 | 4,922 |
Promissory Note | ||
Summary of other long-term debt | ||
Other long-term debt, Total | $ 4,922 | 5,228 |
Capital Lease Obligations | ||
Summary of other long-term debt | ||
Other long-term debt, Total | $ 30 |
Other Long Term Debt (Details)
Other Long Term Debt (Details) (Parenthetical) - Promissory Note $ in Thousands | 12 Months Ended |
Dec. 31, 2015USD ($) | |
Debt Instrument [Line Items] | |
Debt Instrument annual principal installment amount | $ 26 |
Debt Instrument annual principal installment commencement month year | 2007-01 |
Debt Instrument due in annual principal installment , maturity month year | 2017-01 |
Notes issued, interest rate | 6.31% |
Other Long Term Debt (Details 1
Other Long Term Debt (Details 1) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Summary of scheduled maturities of other long-term debt | ||
2,016 | $ 306 | |
2,017 | 4,616 | |
Other long-term debt, Total | $ 4,922 | $ 5,258 |
Other Long Term Debt (Details T
Other Long Term Debt (Details Textual) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Jan. 04, 2007 | |
Other Long Term Debt (Additional Textual) [Abstract] | |||
Guarantee obligations, liquidity of outstanding principal amount to be maintained | 1.2 | ||
Ten Year Interest Rate Swap | |||
Other Long Term Debt (Textual) [Abstract] | |||
Notional amount | $ 4,922 | $ 5,228 | $ 7,700 |
Fixed interest rate | 6.31% | ||
Basis spread on variable rate of interest rate swap | 1.25% | ||
Derivative floating interest rate description | Equal to one-month LIBOR plus 125 basis points | ||
Interest rate swap expiration date | Jan. 4, 2017 | ||
Secured Promissory Note | |||
Other Long Term Debt (Textual) [Abstract] | |||
Term of promissory note | 10 years | ||
SBS Miami Broadcast Center | Promissory Note | |||
Other Long Term Debt (Textual) [Abstract] | |||
Notes issued principal amount | 7,700 | ||
Promissory note issued by SBS Miami Broadcast Center, interest rate description | The Promissory Note bears an interest rate equal to one-month LIBOR plus 125 basis points | ||
Promissory note issued by SBS Miami Broadcast Center, applicable margin rate | 1.25% | ||
Promissory note issued by SBS Miami Broadcast Center, monthly principal payments | $ 30 | ||
Promissory note issued by SBS Miami Broadcast Center, maturity date | Jan. 4, 2017 |
Ten Point Seven Five Percent 57
Ten Point Seven Five Percent Series A and B Cumulative Exchangeable Redeemable Preferred Stock (Details Textual) - USD ($) $ / shares in Units, $ in Millions | Oct. 15, 2013 | Oct. 15, 2011 | Oct. 15, 2010 | Oct. 15, 2009 | Apr. 05, 2004 | Oct. 30, 2003 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | Feb. 18, 2004 |
10 3/4% Series A and B Cumulative Exchangeable Redeemable Preferred Stock (Textual) [Abstract] | ||||||||||
Series B preferred stock adjustment to contract settlement value at reporting date classified as interest expense | $ 9.7 | $ 9.7 | $ 87.6 | |||||||
Series A Preferred Stock | ||||||||||
10 3/4% Series A and B Cumulative Exchangeable Redeemable Preferred Stock (Textual) [Abstract] | ||||||||||
Preferred stock par value per share | $ 0.01 | |||||||||
Liquidation preference per share | $ 1,000 | |||||||||
Gross proceeds from the issuance of Series A preferred Stock | $ 75 | |||||||||
Series A Preferred Stock | Private Placement | ||||||||||
10 3/4% Series A and B Cumulative Exchangeable Redeemable Preferred Stock (Textual) [Abstract] | ||||||||||
Preferred stock, shares issued | 75,000 | |||||||||
Series B Preferred Stock | ||||||||||
10 3/4% Series A and B Cumulative Exchangeable Redeemable Preferred Stock (Textual) [Abstract] | ||||||||||
Preferred stock par value per share | $ 0.01 | |||||||||
Liquidation preference per share | $ 1,000 | $ 1,000 | ||||||||
Shares of Series B preferred stock exchanged for Series A preferred stock | 76,702 | |||||||||
Rate of redemption of Preferred stock for cash | 100.00% | 101.792% | 103.583% | |||||||
Rate of redemption of Preferred stock at purchase price | 100.00% | |||||||||
Dividends on the Series B preferred stock | 10.75% | |||||||||
Increase in carrying value of preferred stock | $ 17.3 | |||||||||
Stock requested to be repurchased | 92,223 | |||||||||
Purchase price of stock requested to be repurchased | $ 126.9 | |||||||||
Stock repurchased | 1,800 | |||||||||
Purchase price of stock repurchased | $ 2.5 | |||||||||
Preferred stock outstanding carrying value | $ 55.6 |
Stockholders' Equity (Details T
Stockholders' Equity (Details Textual) | 12 Months Ended | ||||
Dec. 31, 2015USD ($)RegistrationStatements$ / sharesshares | Dec. 31, 2014USD ($)shares | Jul. 30, 2006shares | Dec. 23, 2004$ / sharesshares | Feb. 18, 2004$ / shares | |
Stockholders' Equity (Textual) [Abstract] | |||||
Nonvested shares outstanding | 25,000 | ||||
Stockholders' Equity (Additional Textual) [Abstract] | |||||
Number of registration statements filled | RegistrationStatements | 3 | ||||
Stock-based compensation | $ | $ 9,000 | $ 1,000 | |||
Unrecognized compensation costs related to nonvested | $ | $ 100,000 | ||||
Weighted average period over which unrecognized compensation is expected to be recognized | 4 years 7 months 6 days | ||||
Stock options granted, weighted average fair value, per share | $ / shares | $ 4.58 | ||||
Stock options granted | 25,000 | 0 | |||
Stock options exercised | $ | $ 0 | $ 0 | |||
Cash payments received | $ | 0 | 0 | |||
Tax benefit from stock -based compensation expense | $ | $ 0 | $ 0 | |||
2006 Omnibus Equity Compensation Plan | |||||
Stockholders' Equity (Textual) [Abstract] | |||||
Omnibus Plan authorizes shares of Class A common stock for issuance, subject to adjustment in certain circumstances | 350,000 | ||||
Omnibus Plan provides that the maximum aggregate number of shares of Class A common stock units, stock awards and other stock-based awards that may be granted, other than dividend equivalent | 100,000 | ||||
Nonvested shares outstanding | 0 | 0 | |||
1999 NQ Plan | |||||
Stockholders' Equity (Textual) [Abstract] | |||||
Option Granted, Vesting period | 4 years | ||||
Options Granted Vesting Percentage | 20.00% | ||||
1999 NQ Plan vesting rights | 20% each year for the first four years from the date of grant. | ||||
1999 ISO Plan | |||||
Stockholders' Equity (Textual) [Abstract] | |||||
Shares reserve for issuance | 300,000 | ||||
Contractual life of option | 10 years | ||||
Restricted Stock | Minimum | |||||
Stockholders' Equity (Textual) [Abstract] | |||||
Option Granted, Vesting period | 2 years | ||||
Restricted Stock | Maximum | |||||
Stockholders' Equity (Textual) [Abstract] | |||||
Option Granted, Vesting period | 5 years | ||||
Series C convertible preferred stock | |||||
Stockholders' Equity (Textual) [Abstract] | |||||
Preferred stock par value per share | $ / shares | $ 0.01 | ||||
Common stock shares to be issued to CBS Radio | 760,000 | ||||
Series B Preferred Stock | |||||
Stockholders' Equity (Textual) [Abstract] | |||||
Preferred stock par value per share | $ / shares | $ 0.01 | ||||
Liquidation preference per share | $ / shares | $ 1,000 | $ 1,000 | |||
Class A common stock | |||||
Stockholders' Equity (Textual) [Abstract] | |||||
Common stock voting right | one vote per share | ||||
Class A common stock | 1999 NQ Plan | |||||
Stockholders' Equity (Textual) [Abstract] | |||||
Shares reserve for issuance | 30,000 | ||||
Class B common stock | |||||
Stockholders' Equity (Textual) [Abstract] | |||||
Common stock voting right | ten votes per share | ||||
CBS Radio | Series C convertible preferred stock | |||||
Stockholders' Equity (Textual) [Abstract] | |||||
Preferred Stock issued to CBS Radio | 380,000 | ||||
Preferred Stock, shares issuable upon conversion | 2 |
Stockholders' Equity (Details)
Stockholders' Equity (Details) | 12 Months Ended |
Dec. 31, 2015 | |
Summary of Weighted average assumptions used for calculating per share weighted average fair value of stock options | |
Expected term | 4 years |
Dividends to common stockholders | 0.00% |
Risk-free interest rate | 1.39% |
Expected volatility | 97.96% |
Stockholders' Equity (Details 1
Stockholders' Equity (Details 1) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Summary of stock options | ||
Options Outstanding, Beginning balance | 121,000 | 142,000 |
Stock Options Outstanding, Granted | 25,000 | 0 |
Stock Options Outstanding, Forfeited | (18,000) | (21,000) |
Shares Outstanding, Ending balance | 128,000 | 121,000 |
Stock Options, Shares exercisable at December 31, 2015 | 103,000 | |
Weighted Average Exercise Price, Beginning Balance | $ 22.74 | $ 34.77 |
Weighted Average Exercise Price, Granted | 6.48 | |
Weighted Average Exercise Price, Forfeited | 81.59 | 102.23 |
Weighted Average Exercise Price, Ending Balance | 11.25 | $ 22.74 |
Stock Options, Weighted Average Exercise Price Exercisable at December 31, 2015 | $ 12.41 | |
Aggregate intrinsic value Outstanding | $ 34,500 | |
Aggregate intrinsic value Exercisable at December 31, 2015 | $ 34,500 | |
Weighted Average Remaining Contractual Life, Outstanding | 5 years 1 month 6 days | |
Weighted Average Remaining Contractual Life, Exercisable at December 31, 2015 | 4 years |
Stockholders' Equity (Details 2
Stockholders' Equity (Details 2) - $ / shares | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Stock options outstanding and exercisable | |||
Stock options outstanding, Vested Options | 103,000 | ||
Stock options outstanding, Unvested Options | 25,000 | ||
Stock options outstanding, Weighted Average Exercise Price | $ 11.25 | $ 22.74 | $ 34.77 |
Weighted Average Remaining Contractual Life, Outstanding | 5 years 1 month 6 days | ||
Stock options, Number Exercisable | 103,000 | ||
Stock option, Exercisable Weighted Average Exercise Price | $ 12.41 | ||
1.03 - 49.99 | |||
Stock options outstanding and exercisable | |||
Range of Exercise Price, Lower Range | 1.03 | ||
Range of Exercise Price, Upper Range | $ 49.99 | ||
Stock options outstanding, Vested Options | 103,000 | ||
Stock options outstanding, Unvested Options | 25,000 | ||
Stock options outstanding, Weighted Average Exercise Price | $ 11.25 | ||
Weighted Average Remaining Contractual Life, Outstanding | 5 years 1 month 6 days | ||
Stock options, Number Exercisable | 103,000 | ||
Stock option, Exercisable Weighted Average Exercise Price | $ 12.41 | ||
50.00 - 99.99 | |||
Stock options outstanding and exercisable | |||
Range of Exercise Price, Lower Range | 50 | ||
Range of Exercise Price, Upper Range | 99.99 | ||
100.00 - 117.90 | |||
Stock options outstanding and exercisable | |||
Range of Exercise Price, Lower Range | 100 | ||
Range of Exercise Price, Upper Range | $ 107.90 |
Commitments (Details)
Commitments (Details) $ in Thousands | Dec. 31, 2015USD ($) |
Operating lease | |
2,016 | $ 3,374 |
2,017 | 2,845 |
2,018 | 1,622 |
2,019 | 1,256 |
2,020 | 1,062 |
Thereafter | 6,425 |
Total minimum lease payments | $ 16,584 |
Commitments (Details Textual)
Commitments (Details Textual) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Mar. 30, 2016 | |
Commitments And Contingencies [Line Items] | |||
Standby letter of credit related to operating lease | $ 100 | ||
Rent expense | $ 3,300 | $ 3,300 | |
Cash bonus due to CEO | $ 1,600 | ||
Condition to participate in 401(k) plan | All full-time employees are eligible to voluntarily participate in the 401(k) Plan after their 90 day introductory period. | ||
Other additional vendor commitment | $ 6,422 | ||
Subsequent Event | |||
Commitments And Contingencies [Line Items] | |||
Other additional vendor commitment | $ 25,400 | ||
Plan Scenario | |||
Commitments And Contingencies [Line Items] | |||
CEO's annual base salary | 1,750 | ||
Plan Scenario | CEO | |||
Commitments And Contingencies [Line Items] | |||
CEO's performance bonus | 750 | ||
Accounts Payable and Accrued Expenses | |||
Commitments And Contingencies [Line Items] | |||
Cash bonus due to CEO | $ 500 |
Commitments (Details 1)
Commitments (Details 1) $ in Thousands | Dec. 31, 2015USD ($) |
Summary of future minimum rental income through sublease | |
2,016 | $ 1,022 |
2,017 | 752 |
2,018 | 766 |
2,019 | 392 |
2,020 | 157 |
Thereafter | 819 |
Total future minimum rental income through sublease | $ 3,908 |
Commitments (Details 2)
Commitments (Details 2) $ in Thousands | Dec. 31, 2015USD ($) |
Summary of future payments under employment and service contracts | |
2,016 | $ 11,000 |
2,017 | 8,652 |
2,018 | 6,801 |
2,019 | 1,525 |
2,020 | 769 |
Thereafter | 92 |
Contractual, Total | $ 28,839 |
Commitments (Details 3)
Commitments (Details 3) $ in Thousands | Dec. 31, 2015USD ($) |
Summary of future payments under vendor agreements | |
2,016 | $ 4,666 |
2,017 | 951 |
2,018 | 597 |
2,019 | 208 |
2,020 | 0 |
Thereafter | 0 |
Other Commitment, Total | $ 6,422 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Income from continuing operations income tax expense | ||
Income tax expense (benefit) | $ 11,225 | $ 5,842 |
Income Taxes (Details 1)
Income Taxes (Details 1) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
(Loss) income before income tax expense | ||
U.S. operations | $ (14,078) | $ (14,800) |
Foreign operations | (1,652) | 691 |
Loss before income taxes | $ (15,730) | $ (14,109) |
Income Taxes (Details 2)
Income Taxes (Details 2) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Current: | ||
State and local, net of federal income tax benefit | $ 10 | $ 43 |
Foreign | 298 | 165 |
Total | 308 | 208 |
Deferred: | ||
Federal | 6,458 | 3,135 |
State and local, net of federal income tax benefit | 2,126 | 1,421 |
Foreign | 2,333 | 1,078 |
Total | 10,917 | 5,634 |
Total income tax (benefit) expense | $ 11,225 | $ 5,842 |
Income Taxes (Details Textual)
Income Taxes (Details Textual) - USD ($) | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Operating Loss Carryforwards [Line Items] | ||
Federal net operating loss carry-forwards | $ 800,000 | $ 0 |
Increase (decrease) in valuation allowance | 8,300,000 | 10,500,000 |
Valuation allowance | 151,273,000 | $ 142,957,000 |
Federal net operating loss carry-forwards | 261,900,000 | |
State net operating loss carry-forwards | 257,500,000 | |
Foreign net operating loss carryforwards | $ 33,800,000 | |
U.S. federal income tax rate | 35.00% | 35.00% |
Interest or penalties as result of tax uncertainties | $ 0 | $ 0 |
Unrecognized tax benefits as a result of tax positions taken | $ 0 | 0 |
Domestic Tax Authority | Maximum | ||
Operating Loss Carryforwards [Line Items] | ||
Net operating loss carryforwards expiration | 2,035 | |
Domestic Tax Authority | Minimum | ||
Operating Loss Carryforwards [Line Items] | ||
Net operating loss carryforwards expiration | 2,016 | |
Foreign Tax Authority | Maximum | ||
Operating Loss Carryforwards [Line Items] | ||
Net operating loss carryforwards expiration | 2,025 | |
Foreign Tax Authority | Minimum | ||
Operating Loss Carryforwards [Line Items] | ||
Net operating loss carryforwards expiration | 2,017 | |
Puerto Rico | ||
Operating Loss Carryforwards [Line Items] | ||
Federal net operating loss carry-forwards | $ 1,100,000 | $ 2,700,000 |
Valuation allowance expense | 2,300,000 | |
Valuation allowance | 23,400,000 | |
UNITED STATES | ||
Operating Loss Carryforwards [Line Items] | ||
Valuation allowance | $ 127,900,000 |
Income Taxes (Details 3)
Income Taxes (Details 3) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Deferred tax assets: | ||
Federal and state net operating loss carryforwards | $ 109,020 | $ 102,728 |
Foreign net operating loss carryforwards | 12,506 | 12,917 |
FCC licenses | 6,291 | 6,982 |
Allowance for doubtful accounts | 1,133 | 1,489 |
Unearned revenue | 333 | 187 |
AMT credit | 1,120 | 1,039 |
Derivatives and hedging instruments | 254 | 248 |
Property and equipment | 2,056 | 1,887 |
Accrued foreign withholding | 2,136 | 2,034 |
Straight-line expense adjustments | 31 | 154 |
Accrued restructuring | 11 | 45 |
Production costs | 11,535 | 11,663 |
Stock-based compensation | 1,649 | 1,629 |
Intercompany expenses | 3,624 | 2,420 |
Accrued Vacation/Bonus/Payroll | 1,067 | 840 |
Other | 1,620 | 2,234 |
Total gross deferred tax assets | 154,386 | 148,496 |
Less valuation allowance | (151,273) | (142,957) |
Net deferred tax assets | 3,113 | 5,539 |
Deferred tax liabilities: | ||
FCC licenses and goodwill | 100,421 | 91,930 |
Total gross deferred tax liabilities | 100,421 | 91,930 |
Net deferred tax liability | $ 97,308 | $ 86,391 |
Income Taxes (Details 4)
Income Taxes (Details 4) | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Summary of income tax rate | ||
Computed “expected” tax (benefit) expense | (35.00%) | (35.00%) |
State and local income taxes, net of federal benefit | 1.10% | (7.70%) |
Foreign tax differential | (1.30%) | (1.20%) |
Current year change in valuation allowance | 52.70% | 73.80% |
Nondeductible expenses | 2.80% | 5.90% |
Nondeductible interest expense | 21.70% | |
Change in effective rate | 5.30% | 6.00% |
Return to provision | 23.50% | 0.60% |
Other | 0.60% | (1.00%) |
Total | 71.40% | 41.40% |
Contingencies (Details Textual)
Contingencies (Details Textual) | 12 Months Ended |
Dec. 31, 2015 | |
Contingencies (Textual) [Abstract] | |
FCC Broadcasting license period | 8 years |
Fair Value Measurement Disclo74
Fair Value Measurement Disclosures (Details) - USD ($) $ in Millions | Dec. 31, 2015 | Dec. 31, 2014 |
Carrying Amount | Significant other observable inputs (Level 2) | Twelve Point Five Percentage Senior Secured Notes Due Two Thousand Seventeen | ||
Estimated fair values of financial instruments | ||
12.5% senior secured notes due 2017 | $ 275 | $ 275 |
Carrying Amount | Significant unobservable inputs (Level 3) | ||
Estimated fair values of financial instruments | ||
Promissory note payable, included in other long- term debt | 4.9 | 5.2 |
Carrying Amount | Series B Preferred Stock | Significant unobservable inputs (Level 3) | ||
Estimated fair values of financial instruments | ||
10 3/4% Series B cumulative exchangeable redeemable preferred stock | 146.1 | 136.4 |
Fair Value | Significant other observable inputs (Level 2) | Twelve Point Five Percentage Senior Secured Notes Due Two Thousand Seventeen | ||
Estimated fair values of financial instruments | ||
12.5% senior secured notes due 2017 | 281.2 | 286.5 |
Fair Value | Significant unobservable inputs (Level 3) | ||
Estimated fair values of financial instruments | ||
Promissory note payable, included in other long- term debt | 4.2 | 4.5 |
Fair Value | Series B Preferred Stock | Significant unobservable inputs (Level 3) | ||
Estimated fair values of financial instruments | ||
10 3/4% Series B cumulative exchangeable redeemable preferred stock | $ 60.1 | $ 61.8 |
Fair Value Measurement Disclo75
Fair Value Measurement Disclosures (Details Textual) - FCC Broadcasting License - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended |
Sep. 30, 2015 | Dec. 31, 2015 | |
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis Valuation Techniques [Line Items] | ||
Impairment of intangible asset | $ 0.9 | |
Level 3 Non-Reoccurring Fair Value Measure | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis Valuation Techniques [Line Items] | ||
Impairment of intangible asset | $ 0.9 | |
Level 3 Non-Reoccurring Fair Value Measure | Discounted Cash Flow Method | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis Valuation Techniques [Line Items] | ||
Revenue growth rates | 1.50% | |
Market revenue shares at maturity | 3.90% | |
Operating income margins at maturity | 33.40% | |
Discount rate | 10.00% |
Fair Value Measurement Disclo76
Fair Value Measurement Disclosures (Details 1) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Derivative designated as a cash flow hedging instrument: | ||
Derivative instruments | $ 220 | $ 408 |
Significant other observable inputs (Level 2) | ||
Derivative designated as a cash flow hedging instrument: | ||
Derivative instruments | $ 220 | $ 408 |
Fair Value Measurement Disclo77
Fair Value Measurement Disclosures (Details 2) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Interest Rate Swap | ||
Interest rate swap: | ||
Gain recognized in other comprehensive loss (effective portion) | $ 188 | $ 194 |
Segment Data (Details)
Segment Data (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Net revenue: | ||
Net revenue | $ 146,899 | $ 146,280 |
Engineering and programming expenses: | ||
Engineering and programming expenses | 30,761 | 29,909 |
Selling, general and administrative expenses: | ||
Selling, general and administrative expenses | 66,574 | 67,539 |
Corporate expenses | 10,462 | 9,720 |
Depreciation and amortization: | ||
Depreciation and amortization | 4,802 | 5,125 |
(Gain) loss on the disposal of assets, net: | ||
(Gain) loss on the disposal of assets, net | (87) | (1,204) |
Impairment charges and restructuring costs: | ||
Impairment charges and restructuring costs | 536 | (153) |
Operating income (loss): | ||
Operating income (loss) | 33,851 | 35,344 |
Capital expenditures: | ||
Capital expenditures | 2,472 | 2,216 |
Assets | ||
Total Assets | 451,744 | 456,026 |
Operating Segments | Radio | ||
Net revenue: | ||
Net revenue | 133,624 | 130,505 |
Engineering and programming expenses: | ||
Engineering and programming expenses | 23,101 | 21,132 |
Selling, general and administrative expenses: | ||
Selling, general and administrative expenses | 60,706 | 59,981 |
Depreciation and amortization: | ||
Depreciation and amortization | 1,813 | 2,009 |
(Gain) loss on the disposal of assets, net: | ||
(Gain) loss on the disposal of assets, net | (78) | (1,204) |
Impairment charges and restructuring costs: | ||
Impairment charges and restructuring costs | 925 | |
Operating income (loss): | ||
Operating income (loss) | 47,157 | 48,587 |
Capital expenditures: | ||
Capital expenditures | 1,316 | 1,415 |
Assets | ||
Total Assets | 392,926 | 393,607 |
Operating Segments | Television | ||
Net revenue: | ||
Net revenue | 13,275 | 15,775 |
Engineering and programming expenses: | ||
Engineering and programming expenses | 7,660 | 8,777 |
Selling, general and administrative expenses: | ||
Selling, general and administrative expenses | 5,868 | 7,558 |
Depreciation and amortization: | ||
Depreciation and amortization | 2,621 | 2,748 |
(Gain) loss on the disposal of assets, net: | ||
(Gain) loss on the disposal of assets, net | 2 | |
Operating income (loss): | ||
Operating income (loss) | (2,876) | (3,308) |
Capital expenditures: | ||
Capital expenditures | 805 | 437 |
Assets | ||
Total Assets | 51,388 | 51,876 |
Corporate, Non-Segment | ||
Selling, general and administrative expenses: | ||
Corporate expenses | 10,462 | 9,720 |
Depreciation and amortization: | ||
Depreciation and amortization | 368 | 368 |
(Gain) loss on the disposal of assets, net: | ||
(Gain) loss on the disposal of assets, net | (11) | |
Impairment charges and restructuring costs: | ||
Impairment charges and restructuring costs | (389) | (153) |
Operating income (loss): | ||
Operating income (loss) | (10,430) | (9,935) |
Capital expenditures: | ||
Capital expenditures | 351 | 364 |
Assets | ||
Total Assets | $ 7,430 | $ 10,543 |
Valuation and Qualifying Acco79
Valuation and Qualifying Accounts (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Allowance for doubtful accounts | ||
Valuation and Qualifying Accounts | ||
Balance at beginning of year | $ 2,322 | $ 2,204 |
Charged to cost and expense | (343) | 695 |
Charged to other accounts | (248) | |
Deductions | 300 | 577 |
Balance at end of year | 1,431 | 2,322 |
Valuation allowance on deferred taxes | ||
Valuation and Qualifying Accounts | ||
Balance at beginning of year | 142,957 | 132,466 |
Charged to cost and expense | 8,316 | 10,492 |
Charged to other accounts | (1) | |
Balance at end of year | $ 151,273 | $ 142,957 |