##### 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 June 30, 2009
 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.
 (Exact name of registrant as specified in its charter)
 Delaware
    
    38-3042953(State or other jurisdiction of
    
    (I.R.S. Employerincorporation or organization)
    
    Identification No.)73 Kercheval AvenueGrosse Pointe Farms, Michigan
    
    48236(Address of principal executive offices)
    
    (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  June 30, 2009 and December 31, 2008
    
    3Condensed consolidated statements of income  Three and six months ended June 30, 2009
and 2008
    
    4Condensed consolidated statements of cash flows Six months ended June 30, 2009 and 2008
    
    5Notes to unaudited condensed consolidated financial statements
    
    6Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    15Item 3. Quantitative and Qualitative Disclosures about Market Risk
    
    27Item 4. Controls and Procedures
    
    27PART II OTHER INFORMATION
    
    28Item 1. Legal Proceedings
    
    28Item 4. Submission of Matters to a Vote of Security Holders
    
    28Item 6. Exhibits
    
    28Signatures
    
    29EX-31.1 Certification of Chief Executive Officer Pursuant to Rule 13a-14(a) and Rule 15d-14(a) of the Securities Exchange Act of 1934EX-31.2 Certification of Chief Financial Officer Pursuant to Rule 13a-14(a) and Rule 15d-14(a) of the Securities Exchange Act of 1934EX-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
  2




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##### Table of Contents



PART I  FINANCIAL INFORMATION
 
 Item 1.Financial Statements
 SAGA COMMUNICATIONS, INC.
 
 CONDENSED CONSOLIDATED BALANCE SHEETS
 June 30,
    
    
    December 31,2009
    
    
    2008(Unaudited)
    
    
    (Note)(In thousands)AssetsCurrent assets:Cash and cash equivalents
    
    $
    13,736
    
    
    $
    6,992Accounts receivable, net
    
    
    19,247
    
    
    
    20,091Prepaid expenses and other current assets
    
    
    2,627
    
    
    
    5,072Barter transactions
    
    
    2,095
    
    
    
    1,532Deferred income taxes
    
    
    1,082
    
    
    
    1,114Total current assets
    
    
    38,787
    
    
    
    34,801Property and equipment
    
    
    157,464
    
    
    
    157,829Less accumulated depreciation
    
    
    85,956
    
    
    
    84,446Net property and equipment
    
    
    71,508
    
    
    
    73,383Other assets:Broadcast licenses, net
    
    
    107,673
    
    
    
    107,673Other intangibles, deferred costs and investments, net
    
    
    6,014
    
    
    
    5,603Total other assets
    
    
    113,687
    
    
    
    113,276$
    223,982
    
    
    $
    221,460Liabilities and stockholders equityCurrent liabilities:Accounts payable
    
    $
    1,290
    
    
    $
    1,447Payroll and payroll taxes
    
    
    6,729
    
    
    
    7,326Other accrued expenses
    
    
    3,521
    
    
    
    3,804Barter transactions
    
    
    2,137
    
    
    
    1,786Current portion of long-term debt
    
    
    13,428
    
    
    
    1,061Total current liabilities
    
    
    27,105
    
    
    
    15,424Deferred income taxes
    
    
    5,332
    
    
    
    3,294Long-term debt
    
    
    120,000
    
    
    
    134,350Other liabilities
    
    
    3,270
    
    
    
    3,295Stockholders equityCommon stock
    
    
    53
    
    
    
    53Additional paid-in capital
    
    
    48,660
    
    
    
    51,951Retained earnings
    
    
    47,957
    
    
    
    45,645Treasury stock
    
    
    (28,395
    )
    
    
    (32,552
    )Total stockholders equity
    
    
    68,275
    
    
    
    65,097$
    223,982
    
    
    $
    221,460
   3




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SAGA COMMUNICATIONS, INC.
 
 CONDENSED CONSOLIDATED STATEMENTS OF INCOME
 Three Months Ended
    
    
    Six Months EndedJune 30,
    
    
    June 30,2009
    
    
    2008
    
    
    2009
    
    
    2008(Unaudited)(In thousands, except per share data)Net operating revenue
    
    $
    31,637
    
    
    $
    37,342
    
    
    $
    57,761
    
    
    $
    68,874Station operating expense
    
    
    23,295
    
    
    
    27,246
    
    
    
    47,235
    
    
    
    52,667Corporate general and administrative
    
    
    2,158
    
    
    
    2,574
    
    
    
    4,225
    
    
    
    5,126Gain on asset exchange
    
    
    
    
    
    
    (224
    )
    
    
    
    
    
    
    (224
    )Operating income
    
    
    6,184
    
    
    
    7,746
    
    
    
    6,301
    
    
    
    11,305Other expenses, net:Interest expense
    
    
    1,430
    
    
    
    1,876
    
    
    
    2,203
    
    
    
    3,871Other (income) expense, net
    
    
    (28
    )
    
    
    7
    
    
    
    (32
    )
    
    
    27Income before income tax
    
    
    4,782
    
    
    
    5,863
    
    
    
    4,130
    
    
    
    7,407Income tax provision
    
    
    2,108
    
    
    
    2,403
    
    
    
    1,818
    
    
    
    3,037Net income
    
    $
    2,674
    
    
    $
    3,460
    
    
    $
    2,312
    
    
    $
    4,370Earnings per shareBasic
    
    $
    .63
    
    
    $
    .70
    
    
    $
    .55
    
    
    $
    .88Diluted
    
    $
    .63
    
    
    $
    .70
    
    
    $
    .55
    
    
    $
    .88Weighted average common shares
    
    
    4,226
    
    
    
    4,950
    
    
    
    4,192
    
    
    
    4,983Weighted average common and common equivalent shares
    
    
    4,227
    
    
    
    4,951
    
    
    
    4,193
    
    
    
    4,984
  4




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SAGA COMMUNICATIONS, INC.
 
 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
 Six Months EndedJune 30,2009
    
    
    2008(Unaudited)(In thousands)Cash flows from operating activities:Cash provided by operating activities
    
    $
    12,001
    
    
    $
    9,839Cash flows from investing activities:Acquisition of property and equipment
    
    
    (2,574
    )
    
    
    (3,525
    )Acquisition of stations
    
    
    
    
    
    
    (10,734
    )Other investing activities
    
    
    302
    
    
    
    (169
    )Net cash used in investing activities
    
    
    (2,272
    )
    
    
    (14,428
    )Cash flows from financing activities:Payments on long-term debt
    
    
    (2,000
    )
    
    
    (1,000
    )Payments for debt issuance costs
    
    
    (967
    )
    
    
    Purchase of shares held in treasury
    
    
    (20
    )
    
    
    (3,033
    )Proceeds from long-term debt
    
    
    17
    
    
    
    5,500Other financing activities
    
    
    (15
    )
    
    
    (42
    )Net cash (used in) provided by financing activities
    
    
    (2,985
    )
    
    
    1,425Net increase (decrease) in cash and cash equivalents
    
    
    6,744
    
    
    
    (3,164
    )Cash and cash equivalents, beginning of period
    
    
    6,992
    
    
    
    13,343Cash and cash equivalents, end of period
    
    $
    13,736
    
    
    $
    10,179
  5




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##### Table of Contents



SAGA COMMUNICATIONS, INC.
 
 NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 1. Summary of Significant Accounting Policies
 Basis of Presentation
     Earnings Per Share Information and Reverse Stock Split
    Change in Accounting Estimate
 Accounting Changes and Error Corrections,
 6




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SAGA COMMUNICATIONS, INC.
 NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)
 Revenue Recognition
 Revenue Recognition Revised and Updated.
 Income Taxes
  Time Brokerage Agreements
 Accounting for Leases
 Nonmonetary Asset Exchanges
  2. Recent Accounting Pronouncements
 The
FASB Accounting Standards Codification and the Hierarchy of Generally Accepted Accounting
Principles  a replacement of FASB Statement No. 162
 Amendments to FASB Interpretation No. 46(R) Consolidation of Variable Interest Entities
 7




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SAGA COMMUNICATIONS, INC.
 NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)
 Accounting for Transfers of Financial Assets, an
amendment of FASB Statement No. 140 Accounting for Transfers and Servicing of Financial Assets and
Extinguishments of Liabilities  a replacement of FASB Statement No. 125
 Subsequent Events
 Determining Fair Value When the Volume and Level of
Activity for the Asset or Liability Have Significantly Decreased and Identifying Transactions That
Are Not Orderly Fair Value Measurements Recognition and Presentation of
Other-Than-Temporary Impairments Interim
Disclosures about Fair Value of Financial Instruments
 Determination of the Useful Life of Intangible
Assets Goodwill and Other Intangible Assets
 Business Combinations
 8




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SAGA COMMUNICATIONS, INC.
 NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)
 Fair Value Measurements
 3. Intangible Assets and Goodwill
 Accounting for Goodwill and Other Intangible Assets,
  
    
    The radio and television broadcasting licenses may be renewed indefinitely at little
cost.
    
    The radio and television broadcasting licenses are essential to our business, and we
intend to renew our licenses indefinitely.
    
    We have never been denied the renewal of a FCC broadcast license.
    
    We do not believe that there will be any compelling challenge to the renewal of our
broadcast licenses.
    
    We do not believe that the technology used in broadcasting will be replaced by another
technology in the foreseeable future.
   4. Common Stock and Treasury Stock
  Common Stock IssuedClass A
    
    Class B(Shares in thousands)Balance, January 1, 2008
    
    
    4,744
    
    
    
    598Exercised options
    
    
    5
    
    
    
    Conversion of shares
    
    
    1
    
    
    
    (1
    )Issuance of restricted stock
    
    
    23
    
    
    
    3Forfeiture of restricted stock
    
    
    (3
    )
    
    
    Balance, December 31, 2008
    
    
    4,770
    
    
    
    600Exercised options
    
    
    1
    
    
    
    Conversion of shares
    
    
    1
    
    
    
    (1
    )Forfeiture of restricted stock
    
    
    (2
    )
    
    
    Balance, June 30, 2009
    
    
    4,770
    
    
    
    599
 9




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##### Table of Contents



SAGA COMMUNICATIONS, INC.
 NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)
   5. Acquisitions
  2008 Acquisitions
    6. Stock-Based Compensation
 2005 Incentive Compensation Plan
  Stock-Based Compensation
 Share-Based
Payment
 10




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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, 2009
    
    
    450,059
    
    
    $
    54.11
    
    
    
    4.7
    
    
    $
    Granted
    
    
    
    
    
    
    Exercised
    
    
    
    
    
    
    Expired
    
    
    (55,998
    )
    
    
    51.83Forfeited
    
    
    (3,593
    )
    
    
    40.50Outstanding at June 30, 2009
    
    
    390,468
    
    
    $
    54.56
    
    
    
    4.7
    
    
    $
    Exercisable at June 30, 2009
    
    
    310,015
    
    
    $
    58.45
    
    
    
    4.1
    
    
    $
    
  Weighted AverageNumber of
    
    
    Grant Date FairOptions
    
    
    ValueNon-vested at January 1, 2009
    
    
    126,325
    
    
    $
    20.13Granted
    
    
    
    
    
    
    Vested
    
    
    (42,279
    )
    
    
    20.87Forfeited/canceled
    
    
    (3,593
    )
    
    
    20.14Non-vested at June 30, 2009
    
    
    80,453
    
    
    $
    19.74
  WeightedAverageGrant DateShares
    
    
    Fair ValueOutstanding at January 1, 2009
    
    
    53,649
    
    
    $
    32.60Granted
    
    
    
    
    
    
    Vested
    
    
    (14,356
    )
    
    
    35.82Forfeited
    
    
    (1,925
    )
    
    
    30.84Non-vested and outstanding at June 30, 2009
    
    
    37,368
    
    
    $
    31.45
  1997 Non-Employee Director Stock Option Plan
   11




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SAGA COMMUNICATIONS, INC.
 NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)
  Weighted
    
    
    AggregateNumber of
    
    
    Average Price
    
    
    IntrinsicOptions
    
    
    per Share
    
    
    ValueOutstanding at January 1, 2009
    
    
    1,036
    
    
    $
    0.035
    
    
    $
    6,802Granted
    
    
    
    
    
    
    Exercised
    
    
    (695
    )
    
    
    0.032Outstanding and exercisable at June 30, 2009
    
    
    341
    
    
    $
    0.040
    
    
    $
    1,743
 7. Long-Term Debt
  June 30,
    
    
    December 31,2009
    
    
    2008(In thousands)Credit Agreement:Reducing revolver facility
    
    $
    132,350
    
    
    $
    134,350Secured debt of affiliate
    
    
    1,078
    
    
    
    1,061133,428
    
    
    
    135,411Amounts payable within one year
    
    
    13,428
    
    
    
    1,061$
    120,000
    
    
    $
    134,350
      12




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SAGA COMMUNICATIONS, INC.
 NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)
 8. Gain on Asset Exchange
 Accounting for
Nonmonetary Transactions, Exchanges of Nonmonetary Assets.
  9. Segment Information
   CorporateRadio
    
    
    Television
    
    
    and Other
    
    
    Consolidated(In thousands)Three Months Ended June 30, 2009:Net operating revenue
    
    $
    27,530
    
    
    $
    4,107
    
    
    $
    
    
    
    $
    31,637Station operating expense
    
    
    19,694
    
    
    
    3,601
    
    
    
    
    
    
    
    23,295Corporate general and administrative
    
    
    
    
    
    
    
    
    
    
    2,158
    
    
    
    2,158Operating income (loss)
    
    $
    7,836
    
    
    $
    506
    
    
    $
    (2,158
    )
    
    $
    6,184Depreciation and amortization
    
    $
    1,516
    
    
    $
    664
    
    
    $
    48
    
    
    $
    2,228
 CorporateRadio
    
    
    Television
    
    
    and Other
    
    
    Consolidated(In thousands)Three Months Ended June 30, 2008:Net operating revenue
    
    $
    32,629
    
    
    $
    4,713
    
    
    $
    
    
    
    $
    37,342Station operating expense
    
    
    23,398
    
    
    
    3,848
    
    
    
    
    
    
    
    27,246Corporate general and administrative
    
    
    
    
    
    
    
    
    
    
    2,574
    
    
    
    2,574Gain on asset exchange
    
    
    
    
    
    
    (224
    )
    
    
    
    
    
    
    (224
    )Operating income (loss)
    
    $
    9,231
    
    
    $
    1,089
    
    
    $
    (2,574
    )
    
    $
    7,746Depreciation and amortization
    
    $
    1,591
    
    
    $
    605
    
    
    $
    53
    
    
    $
    2,249
 13




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SAGA COMMUNICATIONS, INC.
 NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)
 CorporateRadio
    
    
    Television
    
    
    and Other
    
    
    Consolidated(In thousands)Six Months Ended June 30, 2009:Net operating revenue
    
    $
    50,227
    
    
    $
    7,534
    
    
    $
    
    
    
    $
    57,761Station operating expense
    
    
    40,011
    
    
    
    7,224
    
    
    
    
    
    
    
    47,235Corporate general and administrative
    
    
    
    
    
    
    
    
    
    
    4,225
    
    
    
    4,225Operating income (loss)
    
    $
    10,216
    
    
    $
    310
    
    
    $
    (4,225
    )
    
    $
    6,301Depreciation and amortization
    
    $
    3,047
    
    
    $
    1,330
    
    
    $
    109
    
    
    $
    4,486Total assets
    
    $
    176,136
    
    
    $
    30,032
    
    
    $
    17,814
    
    
    $
    223,982
 CorporateRadio
    
    
    Television
    
    
    and Other
    
    
    Consolidated(In thousands)Six Months Ended June 30, 2008:Net operating revenue
    
    $
    60,010
    
    
    $
    8,864
    
    
    $
    
    
    
    $
    68,874Station operating expense
    
    
    45,311
    
    
    
    7,356
    
    
    
    
    
    
    
    52,667Corporate general and administrative
    
    
    
    
    
    
    
    
    
    
    5,126
    
    
    
    5,126Gain on asset exchange
    
    
    
    
    
    
    (224
    )
    
    
    
    
    
    
    (224
    )Operating income (loss)
    
    $
    14,699
    
    
    $
    1,732
    
    
    $
    (5,126
    )
    
    $
    11,305Depreciation and amortization
    
    $
    3,153
    
    
    $
    1,000
    
    
    $
    106
    
    
    $
    4,259Total assets
    
    $
    298,472
    
    
    $
    32,136
    
    
    $
    13,784
    
    
    $
    344,392
 14




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Item 2.Managements Discussion and Analysis of Financial Condition and Results of
Operations
 Results of Operations
   General
  Radio Segment
       15




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16




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Percentage of Consolidated
    
    Percentage of ConsolidatedNet Operating Revenue for
    
    Net Operating Revenuethe Six Months Ended
    
    for the Years EndedJune 30,
    
    December 31,2009
    
    2008
    
    2008
    
    2007Market:Columbus, Ohio
    
    
    7
    %
    
    
    6
    %
    
    
    6
    %
    
    
    7
    %Manchester, New Hampshire
    
    
    5
    %
    
    
    6
    %
    
    
    6
    %
    
    
    6
    %Milwaukee, Wisconsin
    
    
    14
    %
    
    
    15
    %
    
    
    14
    %
    
    
    14
    %Norfolk, Virginia
    
    
    4
    %
    
    
    5
    %
    
    
    4
    %
    
    
    5
    %
   Percentage of Consolidated
    
    Percentage of ConsolidatedStation Operating Income (*)
    
    Station Operating Income(*)for the Six Months Ended
    
    for the Years EndedJune 30,
    
    December 31,2009
    
    2008
    
    2008
    
    2007Market:Columbus, Ohio
    
    
    5
    %
    
    
    4
    %
    
    
    4
    %
    
    
    6
    %Manchester, New Hampshire
    
    
    8
    %
    
    
    10
    %
    
    
    11
    %
    
    
    10
    %Milwaukee, Wisconsin
    
    
    22
    %
    
    
    21
    %
    
    
    20
    %
    
    
    20
    %Norfolk, Virginia
    
    
    0
    %
    
    
    2
    %
    
    
    2
    %
    
    
    4
    %
 
 *
    
    Operating income (excluding non-cash impairment charge) plus corporate general and
administrative expenses, depreciation and amortization. 17




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Television Segment
          18




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Three Months Ended June 30, 2009 Compared to Three Months Ended June 30, 2008
 Results of Operations
  Consolidated Results of Operations
 Three Months EndedJune 30,
    
    
    $ Increase
    
    
    % Increase2009
    
    
    2008
    
    
    (Decrease)
    
    
    (Decrease)(In thousands, except percentages and per share information)Net operating revenue
    
    $
    31,637
    
    
    $
    37,342
    
    
    $
    (5,705
    )
    
    
    (15.3
    )%Station operating expense
    
    
    23,295
    
    
    
    27,246
    
    
    
    (3,951
    )
    
    
    (14.5
    )%Corporate G&A
    
    
    2,158
    
    
    
    2,574
    
    
    
    (416
    )
    
    
    (16.2
    )%Gain on asset exchange
    
    
    
    
    
    
    (224
    )
    
    
    224
    
    
    
    N/MOperating income
    
    
    6,184
    
    
    
    7,746
    
    
    
    (1,562
    )
    
    
    (20.2
    )%Interest expense
    
    
    1,430
    
    
    
    1,876
    
    
    
    (446
    )
    
    
    (23.8
    )%Other (income) expense, net
    
    
    (28
    )
    
    
    7
    
    
    
    (35
    )
    
    
    N/MIncome taxes
    
    
    2,108
    
    
    
    2,403
    
    
    
    (295
    )
    
    
    (12.3
    )%Net income
    
    $
    2,674
    
    
    $
    3,460
    
    
    $
    (786
    )
    
    
    (22.7
    )%Earnings per share (basic and diluted)
    
    $
    .63
    
    
    $
    .70
    
    
    $
    (.07
    )
    
    
    (10.0
    )%
 Radio Broadcasting Segment
 Three Months EndedJune 30,
    
    
    $ Increase
    
    
    % Increase2009
    
    
    2008
    
    
    (Decrease)
    
    
    (Decrease)(In thousands, except percentages)Net operating revenue
    
    $
    27,530
    
    
    $
    32,629
    
    
    $
    (5,099
    )
    
    
    (15.6
    )%Station operating expense
    
    
    19,694
    
    
    
    23,398
    
    
    
    (3,704
    )
    
    
    (15.8
    )%Operating income
    
    $
    7,836
    
    
    $
    9,231
    
    
    $
    (1,395
    )
    
    
    (15.1
    )%
 Television Broadcasting Segment
 Three Months EndedJune 30,
    
    
    $ Increase
    
    
    % Increase2009
    
    
    2008
    
    
    (Decrease)
    
    
    (Decrease)(In thousands, except percentages)Net operating revenue
    
    $
    4,107
    
    
    $
    4,713
    
    
    $
    (606
    )
    
    
    (12.9
    )%Station operating expense
    
    
    3,601
    
    
    
    3,848
    
    
    
    (247
    )
    
    
    (6.4
    )%Gain on asset exchange
    
    
    
    
    
    
    (224
    )
    
    
    224
    
    
    
    N/MOperating income
    
    $
    506
    
    
    $
    1,089
    
    
    $
    (583
    )
    
    
    (53.5
    )%
 
 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)Three Months Ended June 30, 2009:Net operating revenue
    
    $
    27,530
    
    
    $
    4,107
    
    
    $
    
    
    
    $
    31,637Station operating expense
    
    
    19,694
    
    
    
    3,601
    
    
    
    
    
    
    
    23,295Corporate general and administrative
    
    
    
    
    
    
    
    
    
    
    2,158
    
    
    
    2,158Operating income (loss)
    
    $
    7,836
    
    
    $
    506
    
    
    $
    (2,158
    )
    
    $
    6,184
 CorporateRadio
    
    
    Television
    
    
    and Other
    
    
    Consolidated(In thousands)Three Months Ended June 30, 2008:Net operating revenue
    
    $
    32,629
    
    
    $
    4,713
    
    
    $
    
    
    
    $
    37,342Station operating expense
    
    
    23,398
    
    
    
    3,848
    
    
    
    
    
    
    
    27,246Corporate general and administrative
    
    
    
    
    
    
    
    
    
    
    2,574
    
    
    
    2,574Gain on asset exchange
    
    
    
    
    
    
    (224
    )
    
    
    
    
    
    
    (224
    )Operating income (loss)
    
    $
    9,231
    
    
    $
    1,089
    
    
    $
    (2,574
    )
    
    $
    7,746
 Consolidated
    20




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##### Table of Contents



Radio Segment
    Television Segment
   21




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##### Table of Contents



Six Months Ended June 30, 2009 Compared to Six Months Ended June 30, 2008
 Results of Operations
  Consolidated Results of Operations
 Six Months EndedJune 30,
    
    
    $ Increase
    
    
    % Increase2009
    
    
    2008
    
    
    (Decrease)
    
    
    (Decrease)(In thousands, except percentages and per share information)Net operating revenue
    
    $
    57,761
    
    
    $
    68,874
    
    
    $
    (11,113
    )
    
    
    (16.1
    )%Station operating expense
    
    
    47,235
    
    
    
    52,667
    
    
    
    (5,432
    )
    
    
    (10.3
    )%Corporate G&A
    
    
    4,225
    
    
    
    5,126
    
    
    
    (901
    )
    
    
    (17.6
    )%Gain on asset exchange
    
    
    
    
    
    
    (224
    )
    
    
    224
    
    
    
    N/MOperating income
    
    
    6,301
    
    
    
    11,305
    
    
    
    (5,004
    )
    
    
    (44.3
    )%Interest expense
    
    
    2,203
    
    
    
    3,871
    
    
    
    (1,668
    )
    
    
    (43.1
    )%Other (income) expense, net
    
    
    (32
    )
    
    
    27
    
    
    
    (59
    )
    
    
    N/MIncome taxes
    
    
    1,818
    
    
    
    3,037
    
    
    
    (1,219
    )
    
    
    (40.1
    )%Net income
    
    $
    2,312
    
    
    $
    4,370
    
    
    $
    (2,058
    )
    
    
    (47.1
    )%Earnings per share (basic and diluted)
    
    $
    .55
    
    
    $
    .88
    
    
    $
    (.33
    )
    
    
    (37.5
    )%
 Radio Broadcasting Segment
 Six Months EndedJune 30,
    
    
    $ Increase
    
    
    % Increase2009
    
    
    2008
    
    
    (Decrease)
    
    
    (Decrease)(In thousands, except percentages)Net operating revenue
    
    $
    50,227
    
    
    $
    60,010
    
    
    $
    (9,783
    )
    
    
    (16.3
    )%Station operating expense
    
    
    40,011
    
    
    
    45,311
    
    
    
    (5,300
    )
    
    
    (11.7
    )%Operating income
    
    $
    10,216
    
    
    $
    14,699
    
    
    $
    (4,483
    )
    
    
    (30.5
    )%
 Television Broadcasting Segment
 Six Months EndedJune 30,
    
    
    $ Increase
    
    
    % Increase2009
    
    
    2008
    
    
    (Decrease)
    
    
    (Decrease)(In thousands, except percentages)Net operating revenue
    
    $
    7,534
    
    
    $
    8,864
    
    
    $
    (1,330
    )
    
    
    (15.0
    )%Station operating expense
    
    
    7,224
    
    
    
    7,356
    
    
    
    (132
    )
    
    
    (1.8
    )%Gain on asset exchange
    
    
    
    
    
    
    (224
    )
    
    
    224
    
    
    
    N/MOperating income
    
    $
    310
    
    
    $
    1,732
    
    
    $
    (1,422
    )
    
    
    (82.1
    )%
 
 N/M
    
    = Not Meaningful 22




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##### Table of Contents



Reconciliation of segment operating income to consolidated operating income:
 CorporateRadio
    
    
    Television
    
    
    and Other
    
    
    Consolidated(In thousands)Six Months Ended June 30, 2009:Net operating revenue
    
    $
    50,227
    
    
    $
    7,534
    
    
    $
    
    
    
    $
    57,761Station operating expense
    
    
    40,011
    
    
    
    7,224
    
    
    
    
    
    
    
    47,235Corporate general and administrative
    
    
    
    
    
    
    
    
    
    
    4,225
    
    
    
    4,225Operating income (loss)
    
    $
    10,216
    
    
    $
    310
    
    
    $
    (4,225
    )
    
    $
    6,301
 CorporateRadio
    
    
    Television
    
    
    and Other
    
    
    Consolidated(In thousands)Six Months Ended June 30, 2008:Net operating revenue
    
    $
    60,010
    
    
    $
    8,864
    
    
    $
    
    
    
    $
    68,874Station operating expense
    
    
    45,311
    
    
    
    7,356
    
    
    
    
    
    
    
    52,667Corporate general and administrative
    
    
    
    
    
    
    
    
    
    
    5,126
    
    
    
    5,126Gain on asset exchange
    
    
    
    
    
    
    (224
    )
    
    
    
    
    
    
    (224
    )Operating income (loss)
    
    $
    14,699
    
    
    $
    1,732
    
    
    $
    (5,126
    )
    
    $
    11,305
 Consolidated
    23




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##### Table of Contents



Radio Segment
    Television Segment
   24




---



##### Table of Contents



Forward-Looking Statements
   Liquidity and Capital Resources
 Debt Arrangements and Debt Service Requirements
     25




---



##### Table of Contents



Sources and Uses of Cash
    Summary Disclosures About Contractual Obligations and Commercial Commitments
    Critical Accounting Policies and Estimates
  26




---



##### Table of Contents



Inflation
  
 Item 3.
    
    Quantitative and Qualitative Disclosures about Market Risk
  
 Item 4.
    
    Controls and Procedures
  27




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##### Table of Contents



PART II  OTHER INFORMATION
 
 Item 1.
    
    Legal Proceedings
  
 Item 4.
    
    Submission of Matters to a Vote of Security Holders
    Name
    
    For
    
    AgainstClarke Brown*
    
    
    1,736,033
    
    
    
    1,050,099Gary Stevens*
    
    
    1,739,427
    
    
    
    1,046,705Donald Alt
    
    
    8,742,945
    
    
    
    39,327Brian Brady
    
    
    8,754,001
    
    
    
    28,271Edward K. Christian
    
    
    8,200,003
    
    
    
    582,269Robert Maccini
    
    
    8,742,358
    
    
    
    39,914David Stephens
    
    
    8,751,683
    
    
    
    30,589
 
 *
    
    Elected by the holders of Class A Common Stock.  
 Item 6.
    
    Exhibits
 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 Act1934, 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.
 28




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##### Table of Contents



SIGNATURES
  SAGA COMMUNICATIONS, INCDate: August 7, 2009
    /s/ SAMUEL D. BUSHSamuel D. BushSenior Vice President, Chief Financial Officer and
Treasurer (Principal Financial Officer)Date: August 7, 2009
    /s/ CATHERINE A. BOBINSKICatherine A. BobinskiVice President, Corporate Controller and Chief
Accounting Officer (Principal Accounting Officer) 29