COX RADIO INC - 10-Q Quarterly Report

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

x	Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended June 30, 2004

¨	Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Commission File Number 1-12187

LOGO

(Exact name of registrant as specified in its charter)

Delaware

58-1620022

(State or other jurisdiction of

incorporation or organization)

(I.R.S. Employer

Identification No.)

6205 Peachtree Dunwoody Road

Atlanta, Georgia 30328

(Address of principal executive offices and zip code)

(678) 645-0000

(Registrant’s telephone number, including area code)

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

Indicate by check mark whether the registrant is an accelerated filer (as defined in Exchange Act Rule 12b-2). Yes x No ¨

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

Class A common stock, par value of $0.33 – 41,944,571 shares outstanding as of June 30, 2004.

Class B common stock, par value of $0.33 – 58,733,016 shares outstanding as of June 30, 2004.

COX RADIO, INC.

FORM 10-Q

FOR THE QUARTER ENDED JUNE 30, 2004

TABLE OF CONTENTS


		Page
	Part I – Financial Information

Item 1.	Financial Statements	3

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	15

Item 3.	Quantitative and Qualitative Disclosures about Market Risk	22

Item 4.	Controls and Procedures	22

	Part II - Other Information

Item 1.	Legal Proceedings	23

Item 2.	Changes in Securities, Use of Proceeds and Issuer Purchases of Equity Securities Equity Securities	23

Item 3.	Defaults Upon Senior Securities	23

Item 4.	Submission of Matters to a Vote of Security Holders	24

Item 5.	Other Information	24

Item 6.	Exhibits and Reports on Form 8-K	24

Signatures		26

Preliminary Note

This Quarterly Report on Form 10-Q is for the three-month and six-month periods ended June 30, 2004. This Quarterly Report modifies and supersedes documents filed prior to this Quarterly Report. The SEC allows us to “incorporate by reference” information that we file with them, which means that we can disclose important information to you by referring you directly to those documents. Information incorporated by reference is considered to be part of this Quarterly Report. In addition, information that we file with the SEC in the future will automatically update and supersede information contained in this Quarterly Report. In this Quarterly Report, “Cox Radio,” “we,” “us” and “our” refer to Cox Radio, Inc. and its subsidiaries.

Part I – FINANCIAL INFORMATION

ITEM 1. Financial Statements

COX RADIO, INC.

CONSOLIDATED BALANCE SHEETS

(Unaudited)


	June 30, 2004			December 31, 2003
	(Amounts in thousands, except share data)
ASSETS
Current assets:
Cash and cash equivalents	$	5,158		$	4,202
Accounts and notes receivable, less allowance for doubtful accounts of $4,210 and $4,229, respectively		89,609			82,750
Prepaid expenses and other current assets		11,282			7,194
Amounts due from Cox Enterprises.		—			6,284

Total current assets		106,049			100,430
Property and equipment, net		76,348			78,333
FCC licenses and other intangible assets, net		2,031,200			2,028,798
Goodwill		46,033			46,033
Other assets		22,972			23,432

Total assets	$	2,282,602		$	2,277,026

LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts payable and accrued expenses	$	21,060		$	28,602
Accrued salaries and wages		3,153			4,139
Accrued interest		7,353			7,230
Income taxes payable		29,791			10,937
Amounts due to Cox Enterprises.		5,268			—
Other current liabilities		4,800			2,924

Total current liabilities		71,425			53,832
Notes payable		494,810			534,744
Deferred income taxes		493,698			502,015
Other long term liabilities		4,399			4,767

Total liabilities		1,064,332			1,095,358

Commitments and contingencies (Note 4)

Shareholders’ equity:
Preferred stock, $0.33 par value: 15,000,000 shares authorized, none outstanding		—			—
Class A common stock, $0.33 par value; 210,000,000 shares authorized; 42,072,842 and 41,718,469 shares issued and 41,944,571 and 41,590,198 shares outstanding at June 30, 2004 and December 31, 2003, respectively		13,884			13,767
Class B common stock, $0.33 par value; 135,000,000 shares authorized; 58,733,016 shares issued and outstanding at June 30, 2004 and December 31, 2003		19,382			19,382
Additional paid-in capital		633,270			626,499
Unearned stock-based compensation		(2,576	)		—
Accumulated other comprehensive loss, net of tax		(913	)		(1,863	)
Retained earnings		557,069			525,729

		1,220,116			1,183,514
Less: Class A common stock held in treasury (128,271 shares at cost at June 30, 2004 and December 31, 2003)		(1,846	)		(1,846	)

Total shareholders’ equity		1,218,270			1,181,668

Total liabilities and shareholders’ equity	$	2,282,602		$	2,277,026

See notes to unaudited consolidated financial statements.

COX RADIO, INC.

CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)

(In thousands, except per share data)


	Three Months Ended June 30,						Six Months Ended June 30,
	2004			2003			2004			2003
Net revenues:
Local	$	84,252		$	83,020		$	151,097		$	149,959
National		25,155			26,010			44,957			45,268
Other		7,468			6,216			13,912			11,588

Total revenues		116,875			115,246			209,966			206,815

Operating expenses:
Cost of services (exclusive of depreciation and amortization shown separately below)		24,993			25,434			46,710			46,654
Selling, general and administrative		42,612			43,296			79,970			81,506
Corporate general and administrative		4,634			4,400			9,179			8,635
Depreciation		2,892			2,977			5,852			5,921
Amortization		13			29			31			59
Other operating expenses, net		69			29			69			28

Operating income		41,662			39,081			68,155			64,012

Other income (expense):
Interest income		1			1			2			2
Interest expense		(7,710	)		(8,877	)		(15,601	)		(18,053	)
Other - net		(88	)		(115	)		(188	)		(239	)

Income before income taxes		33,865			30,090			52,368			45,722

Current income tax expense		25,733			6,143			29,992			9,487
Deferred income tax (benefit) expense		(12,112	)		5,879			(8,964	)		8,790

Total income tax expense		13,621			12,022			21,028			18,277

Net income	$	20,244		$	18,068		$	31,340		$	27,445

Basic net income per share
Net income per common share	$	0.20		$	0.18		$	0.31		$	0.27

Diluted net income per share
Net income per common share	$	0.20		$	0.18		$	0.31		$	0.27

Weighted average basic common shares outstanding		100,544			100,217			100,537			100,208

Weighted average diluted common shares outstanding		100,708			100,622			100,744			100,598

See notes to unaudited consolidated financial statements.

COX RADIO, INC.

CONSOLIDATED STATEMENT OF SHAREHOLDERS’ EQUITY

(Unaudited)


	Class A Common Stock			Class B Common Stock			Additional Paid-in Capital
	Shares	Amount		Shares	Amount		Additional Paid-in Capital
	(Amounts in thousands)
Balance at December 31, 2003	41,718	$	13,767	58,733	$	19,382	$	626,499

Comprehensive income:
Net income	—		—	—		—		—
Unrealized gain on interest rate swaps	—		—	—		—		—
Reclassification to earnings of derivative transition adjustments	—		—	—		—		—
Comprehensive income	—		—	—		—		—
Unearned stock based compensation	—		—	—		—		—
Amortization of unearned stock-based compensation	—		—	—		—		—
Issuance of Class A common stock related to incentive plans including tax benefit of $0.1 million	355		117	—		—		6,771

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