##### Table of Contents



UNITED STATES SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 Form 10-Q
  þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the Quarterly Period ended September 30, 2010
 or
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the transition period from            to
 Commission file number 1-11588
 Saga Communications, Inc.
  Delaware(State or other jurisdiction of 
incorporation or organization)
    
    38-3042953(I.R.S. Employer
Identification No.)73 Kercheval Avenue 
Grosse Pointe Farms, Michigan(Address of principal executive offices)
    
    48236(Zip Code)
 (313) 886-7070  (Registrants telephone number, including area code)
 þ o
 o o
  Large accelerated filer o
    
    Accelerated filer o
    
    Non-accelerated filer o
    
    Smaller Reporting Company þ(Do not check if a smaller reporting company)
 o þ




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##### 



INDEX
 PagePART I. FINANCIAL INFORMATION
    
    3Item 1. Financial Statements (Unaudited)
    
    3Condensed consolidated balance sheets  September 30, 2010 and December 31, 2009
    
    3Condensed consolidated statements of income  Three and nine months ended September 30, 2010 and 2009
    
    4Condensed consolidated statements of cash flows Nine months ended September 30, 2010 and 2009
    
    5Notes to unaudited condensed consolidated financial statements
    
    6Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    12Item 3. Quantitative and Qualitative Disclosures about Market Risk
    
    23Item 4. Controls and Procedures
    
    24PART II OTHER INFORMATION
    
    24Item 1. Legal Proceedings
    
    24Item 6. Exhibits
    
    24Signatures
    
    25EX-10.HEX-31.1EX-31.2EX-32
  2




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##### Table of Contents



PART I  FINANCIAL INFORMATION
 
 Item 1.Financial Statements
 SAGA COMMUNICATIONS, INC.
 
 CONDENSED CONSOLIDATED BALANCE SHEETS
 September 30,
    
    
    December 31,2010
    
    
    2009(Unaudited)
    
    
    (Note)(In thousands)AssetsCurrent assets:Cash and cash equivalents
    
    $
    13,497
    
    
    $
    12,899Short-term investments
    
    
    2,009
    
    
    
    Accounts receivable, net
    
    
    19,153
    
    
    
    19,096Prepaid expenses and other current assets
    
    
    1,807
    
    
    
    2,345Barter transactions
    
    
    1,733
    
    
    
    1,681Deferred income taxes
    
    
    931
    
    
    
    873Total current assets
    
    
    39,130
    
    
    
    36,894Property and equipment
    
    
    158,385
    
    
    
    158,011Less accumulated depreciation
    
    
    91,912
    
    
    
    88,795Net property and equipment
    
    
    66,473
    
    
    
    69,216Other assets:Broadcast licenses, net
    
    
    90,552
    
    
    
    90,552Other intangibles, deferred costs and investments, net
    
    
    6,565
    
    
    
    5,689Total other assets
    
    
    97,117
    
    
    
    96,241$
    202,720
    
    
    $
    202,351Liabilities and stockholders equityCurrent liabilities:Accounts payable
    
    $
    1,711
    
    
    $
    1,345Payroll and payroll taxes
    
    
    6,086
    
    
    
    5,494Other accrued expenses
    
    
    3,092
    
    
    
    3,422Barter transactions
    
    
    1,968
    
    
    
    1,802Current portion of long-term debt
    
    
    11,088
    
    
    
    17,078Total current liabilities
    
    
    23,945
    
    
    
    29,141Deferred income taxes
    
    
    5,592
    
    
    
    1,907Long-term debt
    
    
    94,490
    
    
    
    104,000Other liabilities
    
    
    3,395
    
    
    
    3,210Stockholders equityCommon stock
    
    
    53
    
    
    
    53Additional paid-in capital
    
    
    50,085
    
    
    
    49,371Retained earnings
    
    
    53,633
    
    
    
    43,064Treasury stock
    
    
    (28,473
    )
    
    
    (28,395
    )Total stockholders equity
    
    
    75,298
    
    
    
    64,093$
    202,720
    
    
    $
    202,351
   3




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SAGA COMMUNICATIONS, INC.
 
 CONDENSED CONSOLIDATED STATEMENTS OF INCOME
 Three Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,2010
    
    
    2009
    
    
    2010
    
    
    2009(Unaudited)(In thousands, except per share data)Net operating revenue
    
    $
    32,810
    
    
    $
    31,253
    
    
    $
    93,684
    
    
    $
    89,014Station operating expense
    
    
    23,629
    
    
    
    23,556
    
    
    
    69,346
    
    
    
    70,791Corporate general and administrative
    
    
    1,741
    
    
    
    1,906
    
    
    
    5,520
    
    
    
    6,131Operating income
    
    
    7,440
    
    
    
    5,791
    
    
    
    18,818
    
    
    
    12,092Other expenses, net:Interest expense
    
    
    1,375
    
    
    
    1,386
    
    
    
    4,362
    
    
    
    3,589Other (income) expense, net
    
    
    13
    
    
    
    43
    
    
    
    (3,398
    )
    
    
    11Income before income tax
    
    
    6,052
    
    
    
    4,362
    
    
    
    17,854
    
    
    
    8,492Income tax provision
    
    
    2,495
    
    
    
    1,892
    
    
    
    7,285
    
    
    
    3,710Net income
    
    $
    3,557
    
    
    $
    2,470
    
    
    $
    10,569
    
    
    $
    4,782Earnings per shareBasic
    
    $
    .84
    
    
    $
    .58
    
    
    $
    2.50
    
    
    $
    1.14Diluted
    
    $
    .84
    
    
    $
    .58
    
    
    $
    2.50
    
    
    $
    1.14Weighted average common shares
    
    
    4,236
    
    
    
    4,227
    
    
    
    4,230
    
    
    
    4,202Weighted average common and common equivalent shares
    
    
    4,236
    
    
    
    4,227
    
    
    
    4,230
    
    
    
    4,203
  4




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SAGA COMMUNICATIONS, INC.
 
 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
 Nine Months EndedSeptember 30,2010
    
    
    2009(Unaudited)(In thousands)Cash flows from operating activities:Cash provided by operating activities
    
    $
    19,229
    
    
    $
    18,649Cash flows from investing activities:Acquisition of property and equipment
    
    
    (3,259
    )
    
    
    (3,237
    )Proceeds from license downgrade
    
    
    3,561
    
    
    
    Purchases of short-term investments
    
    
    (2005
    )
    
    
    Other investing activities
    
    
    153
    
    
    
    89Net cash used in investing activities
    
    
    (1,550
    )
    
    
    (3,148
    )Cash flows from financing activities:Payments on long-term debt
    
    
    (15,500
    )
    
    
    (4,850
    )Payments for debt issuance costs
    
    
    (1,503
    )
    
    
    (967
    )Purchase of shares held in treasury
    
    
    (78
    )
    
    
    (20
    )Other financing activities
    
    
    
    
    
    
    (7
    )Net cash used in financing activities
    
    
    (17,081
    )
    
    
    (5,844
    )Net increase in cash and cash equivalents
    
    
    598
    
    
    
    9,657Cash and cash equivalents, beginning of period
    
    
    12,899
    
    
    
    6,992Cash and cash equivalents, end of period
    
    $
    13,497
    
    
    $
    16,649
  5




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SAGA COMMUNICATIONS, INC.
 
 NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 1. Summary of Significant Accounting Policies
 Basis of Presentation
     Earnings Per Share Information
  Three Months Ended September 30,
    
    
    Nine Months Ended September 30,2010
    
    
    2009
    
    
    2010
    
    
    2009(In thousands, except per share data)Numerator:Net income available to common stockholders
    
    $
    3,557
    
    
    $
    2,470
    
    
    $
    10,569
    
    
    $
    4,782Denominator:Denominator for basic earnings per share-weighted
average shares
    
    
    4,236
    
    
    
    4,227
    
    
    
    4,230
    
    
    
    4,202Effect of dilutive securities:Common stock equivalents
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1Denominator for diluted earnings per share 
adjusted weighted-average shares and assumed
conversions
    
    
    4,236
    
    
    
    4,227
    
    
    
    4,230
    
    
    
    4,203Basic earnings per share
    
    $
    0.84
    
    
    $
    .58
    
    
    $
    2.50
    
    
    $
    1.14Diluted earnings per share
    
    $
    0.84
    
    
    $
    .58
    
    
    $
    2.50
    
    
    $
    1.14
  6




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SAGA COMMUNICATIONS, INC.
 NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)
 Change in Accounting Estimate
  Fair Value of Financial Instruments
  Income Taxes
  Time Brokerage Agreements
  2. Recent Accounting Pronouncements
   7




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SAGA COMMUNICATIONS, INC.
 NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)
 3. Intangible Assets
 st
  4. Common Stock and Treasury Stock
  Common Stock IssuedClass A
    
    
    Class B(Shares in thousands)Balance, January 1, 2009
    
    
    4,770
    
    
    
    600Exercised options
    
    
    2
    
    
    
    Conversion of shares
    
    
    1
    
    
    
    (1
    )Forfeiture of restricted stock
    
    
    (2
    )
    
    
    Balance, December 31, 2009
    
    
    4,771
    
    
    
    599Conversion of shares
    
    
    1
    
    
    
    (1
    )Forfeiture of restricted stock
    
    
    (2
    )
    
    
    Balance, September 30, 2010
    
    
    4,770
    
    
    
    598
  5. Stock-Based Compensation
 2005 Incentive Compensation Plan
  Stock-Based Compensation
  8




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SAGA COMMUNICATIONS, INC.
 NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)
  Weighted AverageRemaining
    
    
    AggregateNumber of
    
    
    Weighted Average
    
    
    Contractual Term
    
    
    IntrinsicOptions
    
    
    Exercise Price
    
    
    (Years)
    
    
    ValueOutstanding at January 1, 2010
    
    
    388,469
    
    
    $
    54.56
    
    
    
    4.2
    
    
    $
    Granted
    
    
    
    
    
    
    Exercised
    
    
    
    
    
    
    Expired
    
    
    (48,590
    )
    
    
    66.49Forfeited
    
    
    (3,645
    )
    
    
    36.94Outstanding at September 30, 2010
    
    
    336,234
    
    
    $
    53.03
    
    
    
    3.6
    
    
    $
    Exercisable at September 30, 2010
    
    
    301,079
    
    
    $
    54.92
    
    
    
    3.3
    
    
    $
    
  Weighted AverageNumber of
    
    
    Grant Date FairOptions
    
    
    ValueNon-vested at January 1, 2010
    
    
    80,453
    
    
    $
    19.74Granted
    
    
    
    
    
    
    Vested
    
    
    (41,653
    )
    
    
    20.88Forfeited/canceled
    
    
    (3,645
    )
    
    
    18.59Non-vested at September 30, 2010
    
    
    35,155
    
    
    $
    18.51
  WeightedAverageGrant DateShares
    
    
    Fair ValueOutstanding at January 1, 2010
    
    
    37,368
    
    
    $
    31.45Granted
    
    
    
    
    
    
    Vested
    
    
    (14,097
    )
    
    
    35.92Forfeited
    
    
    (2,151
    )
    
    
    28.85Non-vested and outstanding at September 30, 2010
    
    
    21,120
    
    
    $
    28.73
  9




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SAGA COMMUNICATIONS, INC.
 NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)
 6. Long-Term Debt
  September 30,
    
    
    December 31,2010
    
    
    2009(In thousands)Credit Agreement:Reducing revolver facility
    
    $
    104,500
    
    
    $
    120,000Secured debt of affiliate
    
    
    1,078
    
    
    
    1,078105,578
    
    
    
    121,078Amounts payable within one year
    
    
    11,088
    
    
    
    17,078$
    94,490
    
    
    $
    104,000
      10




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SAGA COMMUNICATIONS, INC.
 NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)
 7. Segment Information
   CorporateRadio
    
    
    Television
    
    
    and Other
    
    
    Consolidated(In thousands)Three Months Ended September 30, 2010:Net operating revenue
    
    $
    28,089
    
    
    $
    4,721
    
    
    $
    
    
    
    $
    32,810Station operating expense
    
    
    20,134
    
    
    
    3,495
    
    
    
    
    
    
    
    23,629Corporate general and administrative
    
    
    
    
    
    
    
    
    
    
    1,741
    
    
    
    1,741Operating income (loss)
    
    $
    7,955
    
    
    $
    1,226
    
    
    $
    (1,741
    )
    
    $
    7,440Depreciation and amortization
    
    $
    1,447
    
    
    $
    438
    
    
    $
    57
    
    
    $
    1,942
 CorporateRadio
    
    
    Television
    
    
    and Other
    
    
    Consolidated(In thousands)Three Months Ended September 30, 2009:Net operating revenue
    
    $
    26,992
    
    
    $
    4,261
    
    
    $
    
    
    
    $
    31,253Station operating expense
    
    
    20,046
    
    
    
    3,510
    
    
    
    
    
    
    
    23,556Corporate general and administrative
    
    
    
    
    
    
    
    
    
    
    1,906
    
    
    
    1,906Operating income (loss)
    
    $
    6,946
    
    
    $
    751
    
    
    $
    (1,906
    )
    
    $
    5,791Depreciation and amortization
    
    $
    1,521
    
    
    $
    453
    
    
    $
    57
    
    
    $
    2,031
 CorporateRadio
    
    
    Television
    
    
    and Other
    
    
    Consolidated(In thousands)Nine Months Ended September 30, 2010:Net operating revenue
    
    $
    80,894
    
    
    $
    12,790
    
    
    $
    
    
    
    $
    93,684Station operating expense
    
    
    59,184
    
    
    
    10,162
    
    
    
    
    
    
    
    69,346Corporate general and administrative
    
    
    
    
    
    
    
    
    
    
    5,520
    
    
    
    5,520Operating income (loss)
    
    $
    21,710
    
    
    $
    2,628
    
    
    $
    (5,520
    )
    
    $
    18,818Depreciation and amortization
    
    $
    4,312
    
    
    $
    1,271
    
    
    $
    163
    
    
    $
    5,746Total assets
    
    $
    152,136
    
    
    $
    26,806
    
    
    $
    23,778
    
    
    $
    202,720
 CorporateRadio
    
    
    Television
    
    
    and Other
    
    
    Consolidated(In thousands)Nine Months Ended September 30, 2009:Net operating revenue
    
    $
    77,219
    
    
    $
    11,795
    
    
    $
    
    
    
    $
    89,014Station operating expense
    
    
    60,057
    
    
    
    10,734
    
    
    
    
    
    
    
    70,791Corporate general and administrative
    
    
    
    
    
    
    
    
    
    
    6,131
    
    
    
    6,131Operating income (loss)
    
    $
    17,162
    
    
    $
    1,061
    
    
    $
    (6,131
    )
    
    $
    12,092Depreciation and amortization
    
    $
    4,568
    
    
    $
    1,783
    
    
    $
    166
    
    
    $
    6,517Total assets
    
    $
    172,244
    
    
    $
    28,968
    
    
    $
    23,528
    
    
    $
    224,740
 11




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Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
 Results of Operations
   General
  Radio Segment
      12




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® ® ®
 13




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Percentage of Consolidated
    
    
    Percentage of ConsolidatedNet Operating Revenue for
    
    
    Net Operating Revenuethe Nine Months Ended
    
    
    for the Years EndedSeptember 30,
    
    
    December 31,2010
    
    
    2009
    
    
    2009
    
    
    2008Market:Bellingham, Washington
    
    
    5
    %
    
    
    5
    %
    
    
    5
    %
    
    
    5
    %Des Moines, Iowa
    
    
    6
    %
    
    
    7
    %
    
    
    7
    %
    
    
    7
    %Manchester, New Hampshire
    
    
    6
    %
    
    
    5
    %
    
    
    5
    %
    
    
    6
    %Milwaukee, Wisconsin
    
    
    13
    %
    
    
    14
    %
    
    
    13
    %
    
    
    14
    %
   Percentage of Consolidated
    
    
    Percentage of ConsolidatedStation Operating Income (*)
    
    
    Station Operating Income(*)for the Nine Months Ended
    
    
    for the Years EndedSeptember 30,
    
    
    December 31,2010
    
    
    2009
    
    
    2009
    
    
    2008Market:Bellingham, Washington
    
    
    7
    %
    
    
    7
    %
    
    
    7
    %
    
    
    7
    %Des Moines, Iowa
    
    
    5
    %
    
    
    7
    %
    
    
    7
    %
    
    
    4
    %Manchester, New Hampshire
    
    
    8
    %
    
    
    8
    %
    
    
    7
    %
    
    
    11
    %Milwaukee, Wisconsin
    
    
    17
    %
    
    
    21
    %
    
    
    20
    %
    
    
    20
    %
 
 *
    
    Operating income (excluding non-cash impairment charge) plus corporate general and
administrative expenses, depreciation and amortization, less gain on asset exchange. 14




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Television Segment
          15




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Three Months Ended September 30, 2010 Compared to Three Months Ended September 30, 2009
 Results of Operations
  Consolidated Results of Operations
 Three Months EndedSeptember 30,
    
    
    $ Increase
    
    
    % Increase2010
    
    
    2009
    
    
    (Decrease)
    
    
    (Decrease)(In thousands, except percentages and per share information)Net operating revenue
    
    $
    32,810
    
    
    $
    31,253
    
    
    $
    1,557
    
    
    
    5.0
    %Station operating expense
    
    
    23,629
    
    
    
    23,556
    
    
    
    73
    
    
    
    0.3
    %Corporate G&A
    
    
    1,741
    
    
    
    1,906
    
    
    
    (165
    )
    
    
    (8.7
    )%Operating income
    
    
    7,440
    
    
    
    5,791
    
    
    
    1,649
    
    
    
    28.5
    %Interest expense
    
    
    1,375
    
    
    
    1,386
    
    
    
    (11
    )
    
    
    (0.8
    )%Other (income) expense, net
    
    
    13
    
    
    
    43
    
    
    
    (30
    )
    
    
    N/MIncome taxes
    
    
    2,495
    
    
    
    1,892
    
    
    
    603
    
    
    
    31.9
    %Net income
    
    $
    3,557
    
    
    $
    2,470
    
    
    $
    1,087
    
    
    
    44.0
    %Earnings per share (basic and diluted)
    
    $
    .84
    
    
    $
    .58
    
    
    $
    .26
    
    
    
    44.8
    %
 Radio Broadcasting Segment
 Three Months EndedSeptember 30,
    
    
    $ Increase
    
    
    % Increase2010
    
    
    2009
    
    
    (Decrease)
    
    
    (Decrease)(In thousands, except percentages)Net operating revenue
    
    $
    28,089
    
    
    $
    26,992
    
    
    $
    1,097
    
    
    
    4.1
    %Station operating expense
    
    
    20,134
    
    
    
    20,046
    
    
    
    88
    
    
    
    0.4
    %Operating income
    
    $
    7,955
    
    
    $
    6,946
    
    
    $
    1,009
    
    
    
    14.5
    %
 Television Broadcasting Segment
 Three Months EndedSeptember 30,
    
    
    $ Increase
    
    
    % Increase2010
    
    
    2009
    
    
    (Decrease)
    
    
    (Decrease)(In thousands, except percentages)Net operating revenue
    
    $
    4,721
    
    
    $
    4,261
    
    
    $
    460
    
    
    
    10.8
    %Station operating expense
    
    
    3,495
    
    
    
    3,510
    
    
    
    (15
    )
    
    
    (0.4
    )%Operating income
    
    $
    1,226
    
    
    $
    751
    
    
    $
    475
    
    
    
    63.2
    %
 
 N/M = Not Meaningful 16




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Reconciliation of segment operating income to consolidated operating income:
 CorporateRadio
    
    
    Television
    
    
    and Other
    
    
    Consolidated(In thousands)Three Months Ended September 30, 2010:Net operating revenue
    
    $
    28,089
    
    
    $
    4,721
    
    
    $
    
    
    
    $
    32,810Station operating expense
    
    
    20,134
    
    
    
    3,495
    
    
    
    
    
    
    
    23,629Corporate general and administrative
    
    
    
    
    
    
    
    
    
    
    1,741
    
    
    
    1,741Operating income (loss)
    
    $
    7,955
    
    
    $
    1,226
    
    
    $
    (1,741
    )
    
    $
    7,440
 CorporateRadio
    
    
    Television
    
    
    and Other
    
    
    Consolidated(In thousands)Three Months Ended September 30, 2009:Net operating revenue
    
    $
    26,992
    
    
    $
    4,261
    
    
    $
    
    
    
    $
    31,253Station operating expense
    
    
    20,046
    
    
    
    3,510
    
    
    
    
    
    
    
    23,556Corporate general and administrative
    
    
    
    
    
    
    
    
    
    
    1,906
    
    
    
    1,906Operating income (loss)
    
    $
    6,946
    
    
    $
    751
    
    
    $
    (1,906
    )
    
    $
    5,791
 Consolidated
     17




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##### Table of Contents



Radio Segment
    Television Segment
    18




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##### Table of Contents



Nine Months Ended September 30, 2010 Compared to Nine Months Ended September 30, 2009
 Results of Operations
  Consolidated Results of Operations
 Nine Months EndedSeptember 30,
    
    
    $ Increase
    
    
    % Increase2010
    
    
    2009
    
    
    (Decrease)
    
    
    (Decrease)(In thousands, except percentages and per share information)Net operating revenue
    
    $
    93,684
    
    
    $
    89,014
    
    
    $
    4,670
    
    
    
    5.2
    %Station operating expense
    
    
    69,346
    
    
    
    70,791
    
    
    
    (1,445
    )
    
    
    (2.0
    )%Corporate G&A
    
    
    5,520
    
    
    
    6,131
    
    
    
    (611
    )
    
    
    (10.0
    )%Operating income
    
    
    18,818
    
    
    
    12,092
    
    
    
    6,726
    
    
    
    55.6
    %Interest expense
    
    
    4,362
    
    
    
    3,589
    
    
    
    773
    
    
    
    21.5
    %Other (income) expense, net
    
    
    (3,398
    )
    
    
    11
    
    
    
    (3,409
    )
    
    
    N/MIncome taxes
    
    
    7,285
    
    
    
    3,710
    
    
    
    3,575
    
    
    
    96.4
    %Net income
    
    $
    10,569
    
    
    $
    4,782
    
    
    $
    5,787
    
    
    
    121.0
    %Earnings per share (basic and diluted)
    
    $
    2.50
    
    
    $
    1.14
    
    
    $
    1.36
    
    
    
    119.3
    %Radio Broadcasting SegmentNine Months EndedSeptember 30,
    
    
    $ Increase
    
    
    % Increase2010
    
    
    2009
    
    
    (Decrease)
    
    
    (Decrease)(In thousands, except percentages)Net operating revenue
    
    $
    80,894
    
    
    $
    77,219
    
    
    $
    3,675
    
    
    
    4.8
    %Station operating expense
    
    
    59,184
    
    
    
    60,057
    
    
    
    (873
    )
    
    
    (1.5
    )%Operating income
    
    $
    21,710
    
    
    $
    17,162
    
    
    $
    4,548
    
    
    
    26.5
    %Television Broadcasting SegmentNine Months EndedSeptember 30,
    
    
    $ Increase
    
    
    % Increase2010
    
    
    2009
    
    
    (Decrease)
    
    
    (Decrease)(In thousands, except percentages)Net operating revenue
    
    $
    12,790
    
    
    $
    11,795
    
    
    $
    995
    
    
    
    8.4
    %Station operating expense
    
    
    10,162
    
    
    
    10,734
    
    
    
    (572
    )
    
    
    (5.3
    )%Operating income
    
    $
    2,628
    
    
    $
    1,061
    
    
    $
    1,567
    
    
    
    147.7
    %
 
 N/M = Not Meaningful 19




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##### Table of Contents



Reconciliation of segment operating income to consolidated operating income:
 CorporateRadio
    
    
    Television
    
    
    and Other
    
    
    Consolidated(In thousands)Nine Months Ended September 30, 2010:Net operating revenue
    
    $
    80,894
    
    
    $
    12,790
    
    
    $
    
    
    
    $
    93,684Station operating expense
    
    
    59,184
    
    
    
    10,162
    
    
    
    
    
    
    
    69,346Corporate general and administrative
    
    
    
    
    
    
    
    
    
    
    5,520
    
    
    
    5,520Operating income (loss)
    
    $
    21,710
    
    
    $
    2,628
    
    
    $
    (5,520
    )
    
    $
    18,818
 CorporateRadio
    
    
    Television
    
    
    and Other
    
    
    Consolidated(In thousands)Nine Months Ended September 30, 2009:Net operating revenue
    
    $
    77,219
    
    
    $
    11,795
    
    
    $
    
    
    
    $
    89,014Station operating expense
    
    
    60,057
    
    
    
    10,734
    
    
    
    
    
    
    
    70,791Corporate general and administrative
    
    
    
    
    
    
    
    
    
    
    6,131
    
    
    
    6,131Operating income (loss)
    
    $
    17,162
    
    
    $
    1,061
    
    
    $
    (6,131
    )
    
    $
    12,092
 Consolidated
     20




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##### Table of Contents



Radio Segment
    Television Segment
    21




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##### Table of Contents



Forward-Looking Statements
   Liquidity and Capital Resources
 Debt Arrangements and Debt Service Requirements
       22




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##### Table of Contents



Sources and Uses of Cash
   Summary Disclosures About Contractual Obligations and Commercial Commitments
   Critical Accounting Policies and Estimates
  Inflation
  
 Item 3.Quantitative and Qualitative Disclosures about Market Risk
  23




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##### Table of Contents



Item 4.Controls and Procedures
  
 PART II  OTHER INFORMATION
 
 Item 1.Legal Proceedings
  
 Item 6.Exhibits
 10(h)
    
    Amended and Restated Saga Communications, Inc. 2005 Incentive Compensation Plan.31.1
    
    Certification of Chief Executive Officer Pursuant to Rule 13a-14(a) and Rule 15d-14(a) of the Securities Exchange Act of
1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.31.2
    
    Certification of Chief Financial Officer Pursuant to Rule 13a-14(a) and Rule 15d-14(a) of the Securities Exchange
Act 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.32
    
    Certification of Chief Executive Officer and Chief Financial Officer Pursuant to 18 U.S.C. Section 1350 and Rule 13-14(b)
of the Securities Exchange Act of 1934, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
 24




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##### Table of Contents



SIGNATURES
  SAGA COMMUNICATIONS, INCDate: November 12, 2010
    /s/ SAMUEL D. BUSHSamuel D. BushSenior Vice President, Chief Financial Officer and
Treasurer (Principal Financial Officer)Date: November 12, 2010
    /s/ CATHERINE A. BOBINSKICatherine A. BobinskiVice President, Corporate Controller and Chief
Accounting Officer (Principal Accounting Officer) 25