Citadel Broadcasting Corporation Reports 2007 Fourth Quarter Operating Results

Business Wire, Feb 29, 2008

* Fourth Quarter 2007 Net Revenues of $245.5 million

LAS VEGAS -- Citadel Broadcasting Corporation (NYSE:CDL) today reported its results for the fourth quarter of 2007.

[TABLE OMITTED]

Net revenues for the fourth quarter of 2007 were $245.5 million as compared to $114.0 million for the fourth quarter of 2006. The increase in revenues was a result of the acquisition of ABC Radio on June 12, 2007. On a pro forma basis, net revenues in the fourth quarter of 2006 were $258.5 million as compared to $245.3 million for the quarter ended December 31, 2007. Pro forma revenues for 2007 and 2006 have been adjusted for the results of ABC Radio as if it had been acquired at the beginning of 2006 and any significant station dispositions. This decrease in pro forma revenues of $13.2 million, or 5.1%, is primarily a result of a $13.1 million decline in revenue from our Radio Markets, partially offset by an increase in revenue at the Radio Network of $0.6 million. The decline in net revenues at the Radio Markets was primarily attributable to lower revenues in our San Francisco, CA; Washington, DC; Chicago, IL; Atlanta, GA; New York, NY; Birmingham, AL; Dallas, TX and Los Angeles, CA radio stations.

Operating loss for the fourth quarter of 2007 was $1,043.9 million as compared to operating income of $10.8 million in the corresponding 2006 period, a decrease of $1,054.7 million. The decrease in operating income for the three months ended December 31, 2007 as compared to the three months ended December 31, 2006 is primarily the result of an increase in asset impairment charges of approximately $1,076.9 million. The asset impairment charge is related to a continued deterioration in the radio marketplace and to a decline in the Company's stock price during the three months ended December 31, 2007. Operating income was also impacted by an increase in depreciation and amortization of $9.3 million and an increase of $2.2 million in corporate general and administrative costs, offset by the operations of the ABC Radio stations and Network acquired on June 12, 2007. The increases in depreciation and amortization and corporate general and administrative expenses are primarily attributable to the ABC Radio acquisition.

Segment operating income (as detailed in the attached table, a non-GAAP financial measure, is generally defined as net loss plus income tax expense (benefit), interest-related expenses, depreciation and amortization, local marketing agreement fees, stock-based compensation, corporate general and administrative expenses, asset impairment and disposal charges and other, net) was $86.4 million for the fourth quarter of 2007, compared to $49.0 million for the fourth quarter of 2006, an increase of $37.4 million. This increase reflects the operations of ABC Radio, which was acquired on June 12, 2007. On a pro forma basis, segment operating income adjusted for the results of ABC Radio, as if it had been acquired at the beginning of 2006, and any significant station dispositions was $103.2 million in the fourth quarter of 2006 compared to $86.1 million for the quarter ended December 31, 2007. This decrease of $17.1 million, or 16.6%, is a result of a $16.2 million decline in segment operating income from our Radio Markets and a $0.9 million decline at the Radio Network. The decline in segment operating income at the Radio Markets was primarily attributable to our New York, NY; San Francisco, CA; Chicago, IL; Atlanta, GA; Los Angeles, CA; Washington, D.C.; Birmingham, AL and Dallas, TX radio stations.

Net interest expense increased to $37.4 million for the quarter ended December 31, 2007 from $8.0 million for the quarter ended December 31, 2006, an increase of $29.4 million. The increase in net interest expense was primarily the result of the interest incurred on the increased borrowings under the Company's new senior credit and term loan facility as a result of the merger with ABC Radio.

Income tax benefit for the quarter ended December 31, 2007 was $234.9 million (substantially all non-cash), compared to income tax expense of $2.9 million (substantially all non-cash) for the quarter ended December 31, 2006. The income tax benefit for the quarter ended December 31, 2007 is primarily related to the $1,103.1 million asset impairment and disposal charges, which resulted in an income tax benefit of approximately $246.1 million, partially offset by the tax expense on pre-tax income excluding impairment loss.

Net loss for the quarter ended December 31, 2007 was $848.0 million, or $(3.24) per basic share, as compared to a net loss of $1.1 million, or $(0.01) per basic share, for the same period in 2006. Included in net loss for the quarter ended December 31, 2007 was approximately $857.0 million of non-cash asset impairment and disposal charges, net of tax, or $(3.27) per basic share and $5.0 million of stock-based compensation expense, net of tax, or $(0.02) per basic share. Included in net loss for the quarter ended December 31, 2006 was approximately $14.7 million of non-cash asset impairment and disposal charges, net of tax, or $(0.13) per basic share, approximately $4.1 million of non-cash stock-based compensation expense, net of tax, or $(0.04) per basic share, and costs related to the FCC's investigation of sponsorship identification practices of $2.2 million, net of tax, or $(0.02) per basic share.