Citadel Broadcasting Corporation Reports 2008 First Quarter Operating Results

Business Wire, May 8, 2008

* First quarter 2008 net revenues of $205.8 million compared to $92.9 million in 2007

* Segment operating income of $62.1 million in the first quarter of 2008 compared to $35.4 million in 2007

LAS VEGAS -- In first table of release, deleting line item that reads: Segment operating income, excluding non-cash charge related to contractual obligations.

The corrected release reads:

CITADEL BROADCASTING CORPORATION REPORTS 2008 FIRST QUARTER OPERATING RESULTS

* First quarter 2008 net revenues of $205.8 million compared to $92.9 million in 2007

* Segment operating income of $62.1 million in the first quarter of 2008 compared to $35.4 million in 2007

Citadel Broadcasting Corporation (NYSE:CDL) today reported its results for the first quarter of 2008.

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Net revenues for the first quarter of 2008 were $205.8 million as compared to $92.9 million for the first quarter of 2007. 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 first quarter of 2008 were $202.8 million as compared to $213.1 million for the quarter ended March 31, 2007. This decrease in pro forma revenues of $10.3 million, or 4.8%, is primarily the result of a $11.7 million decline in revenue from our Radio Markets, partially offset by an increase in revenue at the Radio Network.

Operating income for the first quarter of 2008 was $17.6 million, which reflects a non-cash charge of approximately $22.2 million related to the termination of a pre-existing national representation contract, as compared to $25.6 million in the corresponding 2007 period, a decrease of $8.0 million. The Company has consolidated all of its national business under its existing national representation firm. Under the terms of its agreement, the national representation firm will assume all of the costs arising from the termination and the Company will not incur any costs. The change in operating income was also impacted by the inclusion of the results of ABC Radio. Excluding the non-cash charge, the Company's operating income for the first quarter of 2008 would have been approximately $39.9 million.

Segment operating income (a non-GAAP financial measure generally defined as operating income adjusted to exclude depreciation and amortization, stock-based compensation, corporate general and administrative expenses, non-cash charge related to contract obligations, local marketing agreement fees and other, net) was $62.1 million for the first quarter of 2008, compared to $35.4 million for the first quarter of 2007, an increase of $26.7 million. This increase reflects the acquisition of ABC Radio. On a pro forma basis, segment operating income was $59.1 million in the first quarter of 2008 compared to $69.3 million for the quarter ended March 31, 2007. This decrease of $10.2 million, or 14.7%, is the result of a $12.5 million decline in segment operating income from our Radio Markets partially offset by an increase at the Radio Network. Pro forma revenue and segment operating income amounts have been adjusted for the results of ABC Radio, as if it had been acquired at the beginning of 2007, any significant station dispositions during 2007 and purchase accounting adjustments related to the acquisition of ABC Radio.

Net interest expense increased to $35.4 million for the quarter ended March 31, 2008 from $7.8 million for the quarter ended March 31, 2007, an increase of $27.6 million. The increase in net interest expense was primarily the result of the interest incurred on the increased borrowings to finance the merger with ABC Radio as well as the payment of approximately $276.5 million for the Special Distribution to pre-merger shareholders.

In the first quarter of 2008, the Company prepaid approximately $113.3 million of its senior debt resulting in a gain on extinguishment of debt, net of costs, of approximately $19.9 million. In addition, subsequent to March 31, 2008, the Company repurchased an additional $36.0 million of its senior debt for approximately $30.2 million resulting in additional gain of approximately $5.8 million before any costs. The Company also expects to complete its pro rata cash tender and exchange offer for its convertible subordinated notes by the end of the second quarter of 2008 and will repurchase $55.0 million of the notes for approximately $49.5 million.

Income tax expense for the quarter ended March 31, 2008 was $8.7 million (substantially all non-cash), compared to $11.3 million (substantially all non-cash) for the quarter ended March 31, 2007. The income tax expense for the quarters ended March 31, 2008 and 2007 includes an $8.3 million and $2.9 million, respectively, non-cash write-down of the Company's deferred tax asset in connection with stock-based compensation.

Net loss for the quarter ended March 31, 2008 was $8.3 million, or $(0.03) per basic share, as compared to net income of $6.8 million, or $0.06 per basic share, for the same period in 2007. Included in net loss for the quarter ended March 31, 2008 was a $13.6 million non-cash charge related to contract obligations, net of tax, or $(0.05) per basic share, a $12.1 million gain on the extinguishment of debt less write-off of deferred financing costs, net of tax, or $0.05 per basic share, and $11.7 million of stock-based compensation expense, net of tax, or $(0.04) per basic share. Included in net income for the quarter ended March 31, 2007 was approximately $7.1 million of stock-based compensation expense, net of tax, or $(0.06) per basic share, and approximately $2.4 million related to gain on sale of certain assets, net of tax, or $0.02 per basic share.