##### 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, 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(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(Do not check if a smaller reporting company)
Smaller Reporting Company þ o þ




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##### 



INDEX
 PagePART I.
    
    FINANCIAL INFORMATION
    
    
    3Item 1.
    
    Financial Statements (Unaudited)
    
    
    3Condensed consolidated balance sheets  September 30, 2009 and December 31, 2008
    
    
    3Condensed consolidated statements of income  Three and nine months ended September
30, 2009 and 2008
    
    
    4Condensed consolidated statements of cash flows Nine months ended September 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
    
    
    14Item 3.
    
    Quantitative and Qualitative Disclosures about Market Risk
    
    
    26Item 4.
    
    Controls and Procedures
    
    
    26PART II
    
    OTHER INFORMATION
    
    
    27Item 1.
    
    Legal Proceedings
    
    
    27Item 6.
    
    Exhibits
    
    
    27Signatures
    
    
    28EX-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 31,2009
    
    
    2008(Unaudited)
    
    
    (Note)(In thousands)AssetsCurrent assets:Cash and cash equivalents
    
    $
    16,649
    
    
    $
    6,992Accounts receivable, net
    
    
    19,146
    
    
    
    20,091Prepaid expenses and other current assets
    
    
    2,050
    
    
    
    5,072Barter transactions
    
    
    1,995
    
    
    
    1,532Deferred income taxes
    
    
    1,061
    
    
    
    1,114Total current assets
    
    
    40,901
    
    
    
    34,801Property and equipment
    
    
    158,005
    
    
    
    157,829Less accumulated depreciation
    
    
    87,801
    
    
    
    84,446Net property and equipment
    
    
    70,204
    
    
    
    73,383Other assets:Broadcast licenses, net
    
    
    107,673
    
    
    
    107,673Other intangibles, deferred costs and investments, net
    
    
    5,962
    
    
    
    5,603Total other assets
    
    
    113,635
    
    
    
    113,276$
    224,740
    
    
    $
    221,460Liabilities and stockholders equityCurrent liabilities:Accounts payable
    
    $
    1,186
    
    
    $
    1,447Payroll and payroll taxes
    
    
    6,232
    
    
    
    7,326Other accrued expenses
    
    
    3,427
    
    
    
    3,804Barter transactions
    
    
    2,050
    
    
    
    1,786Current portion of long-term debt
    
    
    20,578
    
    
    
    1,061Total current liabilities
    
    
    33,473
    
    
    
    15,424Deferred income taxes
    
    
    6,860
    
    
    
    3,294Long-term debt
    
    
    110,000
    
    
    
    134,350Other liabilities
    
    
    3,300
    
    
    
    3,295Stockholders equityCommon stock
    
    
    53
    
    
    
    53Additional paid-in capital
    
    
    49,022
    
    
    
    51,951Retained earnings
    
    
    50,427
    
    
    
    45,645Treasury stock
    
    
    (28,395
    )
    
    
    (32,552
    )Total stockholders equity
    
    
    71,107
    
    
    
    65,097$
    224,740
    
    
    $
    221,460
   3




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##### Table of Contents



SAGA COMMUNICATIONS, INC.
 CONDENSED CONSOLIDATED STATEMENTS OF INCOME
 Three Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,2009
    
    
    2008
    
    
    2009
    
    
    2008(Unaudited)(In thousands, except per share data)Net operating revenue
    
    $
    31,253
    
    
    $
    36,192
    
    
    $
    89,014
    
    
    $
    105,066Station operating expense
    
    
    23,556
    
    
    
    26,588
    
    
    
    70,791
    
    
    
    79,255Corporate general and administrative
    
    
    1,906
    
    
    
    2,485
    
    
    
    6,131
    
    
    
    7,611Gain on asset exchange
    
    
    
    
    
    
    (282
    )
    
    
    
    
    
    
    (506
    )Operating income
    
    
    5,791
    
    
    
    7,401
    
    
    
    12,092
    
    
    
    18,706Other expenses, net:Interest expense
    
    
    1,386
    
    
    
    1,889
    
    
    
    3,589
    
    
    
    5,760Other expense, net
    
    
    43
    
    
    
    
    
    
    
    11
    
    
    
    27Income before income tax
    
    
    4,362
    
    
    
    5,512
    
    
    
    8,492
    
    
    
    12,919Income tax provision
    
    
    1,892
    
    
    
    2,415
    
    
    
    3,710
    
    
    
    5,452Net income
    
    $
    2,470
    
    
    $
    3,097
    
    
    $
    4,782
    
    
    $
    7,467Earnings per shareBasic
    
    $
    .58
    
    
    $
    .65
    
    
    $
    1.14
    
    
    $
    1.52Diluted
    
    $
    .58
    
    
    $
    .65
    
    
    $
    1.14
    
    
    $
    1.52Weighted average common shares
    
    
    4,227
    
    
    
    4,735
    
    
    
    4,202
    
    
    
    4,898Weighted average common and common equivalent shares
    
    
    4,227
    
    
    
    4,738
    
    
    
    4,203
    
    
    
    4,902
  4




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SAGA COMMUNICATIONS, INC.
 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
 Nine Months EndedSeptember 30,2009
    
    
    2008(Unaudited)(In thousands)Cash flows from operating activities:Cash provided by operating activities
    
    $
    18,649
    
    
    $
    18,185Cash flows from investing activities:Acquisition of property and equipment
    
    
    (3,237
    )
    
    
    (5,134
    )Acquisition of stations
    
    
    
    
    
    
    (10,944
    )Other investing activities
    
    
    89
    
    
    
    (101
    )Net cash used in investing activities
    
    
    (3,148
    )
    
    
    (16,179
    )Cash flows from financing activities:Payments on long-term debt
    
    
    (4,850
    )
    
    
    (1,000
    )Payments for
debt modification
    
    
    (967
    )
    
    
    Purchase of shares held in treasury
    
    
    (20
    )
    
    
    (11,810
    )Proceeds from long-term debt
    
    
    17
    
    
    
    5,500Other financing activities
    
    
    (24
    )
    
    
    (42
    )Net cash used in financing activities
    
    
    (5,844
    )
    
    
    (7,352
    )Net increase (decrease) in cash and cash equivalents
    
    
    9,657
    
    
    
    (5,346
    )Cash and cash equivalents, beginning of period
    
    
    6,992
    
    
    
    13,343Cash and cash equivalents, end of period
    
    $
    16,649
    
    
    $
    7,997
  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
  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
  Nonmonetary Asset Exchanges
  2. Recent Accounting Pronouncements
 Accounting Standards Codification
    7




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##### Table of Contents



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, 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
    
    
    2
    
    
    
    Conversion of shares
    
    
    1
    
    
    
    (1
    )Forfeiture of restricted stock
    
    
    (2
    )
    
    
    Balance, September 30, 2009
    
    
    4,771
    
    
    
    599
   8




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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
  9




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##### Table of Contents



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
    
    
    (57,997
    )
    
    
    51.90Forfeited
    
    
    (3,593
    )
    
    
    40.50Outstanding at September 30, 2009
    
    
    388,469
    
    
    $
    54.56
    
    
    
    4.5
    
    
    $
    Exercisable at September 30, 2009
    
    
    308,016
    
    
    $
    58.48
    
    
    
    3.9
    
    
    $
    
  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 September 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 September 30, 2009
    
    
    37,368
    
    
    $
    31.45
  1997 Non-Employee Director Stock Option Plan
   10




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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
    
    
    (1,036
    )
    
    
    0.035Outstanding and exercisable at September 30, 2009
    
    
    
    
    
    $
    
    
    
    $
    
 7. Long-Term Debt
  September 30,
    
    
    December 31,2009
    
    
    2008(In thousands)Credit Agreement:Reducing revolver facility
    
    $
    129,500
    
    
    $
    134,350Secured debt of affiliate
    
    
    1,078
    
    
    
    1,061130,578
    
    
    
    135,411Amounts payable within one year
    
    
    20,578
    
    
    
    1,061$
    110,000
    
    
    $
    134,350
     11




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SAGA COMMUNICATIONS, INC.
 NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)
   8. Gain on Asset Exchange
 .
  12




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SAGA COMMUNICATIONS, INC.
 NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)
 9. Segment Information
   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)Three Months Ended September 30, 2008:Net operating revenue
    
    $
    31,306
    
    
    $
    4,886
    
    
    $
    
    
    
    $
    36,192Station operating expense
    
    
    22,717
    
    
    
    3,871
    
    
    
    
    
    
    
    26,588Corporate general and administrative
    
    
    
    
    
    
    
    
    
    
    2,485
    
    
    
    2,485Gain on asset exchange
    
    
    
    
    
    
    (282
    )
    
    
    
    
    
    
    (282
    )Operating income (loss)
    
    $
    8,589
    
    
    $
    1,297
    
    
    $
    (2,485
    )
    
    $
    7,401Depreciation and amortization
    
    $
    1,618
    
    
    $
    620
    
    
    $
    54
    
    
    $
    2,292
 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
 CorporateRadio
    
    
    Television
    
    
    and Other
    
    
    Consolidated(In thousands)Nine Months Ended September 30, 2008:Net operating revenue
    
    $
    91,316
    
    
    $
    13,750
    
    
    $
    
    
    
    $
    105,066Station operating expense
    
    
    68,028
    
    
    
    11,227
    
    
    
    
    
    
    
    79,255Corporate general and administrative
    
    
    
    
    
    
    
    
    
    
    7,611
    
    
    
    7,611Gain on asset exchange
    
    
    
    
    
    
    (506
    )
    
    
    
    
    
    
    (506
    )Operating income (loss)
    
    $
    23,288
    
    
    $
    3,029
    
    
    $
    (7,611
    )
    
    $
    18,706Depreciation and amortization
    
    $
    4,771
    
    
    $
    1,620
    
    
    $
    160
    
    
    $
    6,551Total assets
    
    $
    295,422
    
    
    $
    32,447
    
    
    $
    11,946
    
    
    $
    339,815
 13




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Item 2.Managements Discussion and Analysis of Financial Condition and Results of
Operations
 Results of Operations
   General
  Radio Segment
       14




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15




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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 31,2009
    
    2008
    
    2008
    
    2007Market:Columbus, Ohio
    
    
    7
    %
    
    
    6
    %
    
    
    6
    %
    
    
    7
    %Manchester, New Hampshire
    
    
    5
    %
    
    
    7
    %
    
    
    6
    %
    
    
    6
    %Milwaukee, Wisconsin
    
    
    13
    %
    
    
    15
    %
    
    
    14
    %
    
    
    14
    %Norfolk, Virginia
    
    
    4
    %
    
    
    4
    %
    
    
    4
    %
    
    
    5
    %
   Percentage of Consolidated
    
    Percentage of ConsolidatedStation Operating Income (*)
    
    Station Operating Income(*)for the Nine Months Ended
    
    for the Years EndedSeptember 30,
    
    December 31,2009
    
    2008
    
    2008
    
    2007Market:Columbus, Ohio
    
    
    5
    %
    
    
    4
    %
    
    
    4
    %
    
    
    6
    %Manchester, New Hampshire
    
    
    8
    %
    
    
    11
    %
    
    
    11
    %
    
    
    10
    %Milwaukee, Wisconsin
    
    
    21
    %
    
    
    21
    %
    
    
    20
    %
    
    
    20
    %Norfolk, Virginia
    
    
    1
    %
    
    
    2
    %
    
    
    2
    %
    
    
    4
    %
 
 *
    
    Operating income (excluding non-cash impairment charge) plus corporate general and
administrative expenses, depreciation and amortization. 16




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Television Segment
           17




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Three Months Ended September 30, 2009 Compared to Three Months Ended September 30, 2008
 Results of Operations
  Consolidated Results of Operations
 Three Months EndedSeptember 30,
    
    
    $ Increase
    
    
    % Increase2009
    
    
    2008
    
    
    (Decrease)
    
    
    (Decrease)(In thousands, except percentages and per share information)Net operating revenue
    
    $
    31,253
    
    
    $
    36,192
    
    
    $
    (4,939
    )
    
    
    (13.6
    )%Station operating expense
    
    
    23,556
    
    
    
    26,588
    
    
    
    (3,032
    )
    
    
    (11.4
    )%Corporate G&A
    
    
    1,906
    
    
    
    2,485
    
    
    
    (579
    )
    
    
    (23.3
    )%Gain on asset exchange
    
    
    
    
    
    
    (282
    )
    
    
    282
    
    
    
    N/MOperating income
    
    
    5,791
    
    
    
    7,401
    
    
    
    (1,610
    )
    
    
    (21.8
    )%Interest expense
    
    
    1,386
    
    
    
    1,889
    
    
    
    (503
    )
    
    
    (26.6
    )%Other (income) expense, net
    
    
    43
    
    
    
    
    
    
    
    43
    
    
    
    N/MIncome taxes
    
    
    1,892
    
    
    
    2,415
    
    
    
    (523
    )
    
    
    (21.7
    )%Net income
    
    $
    2,470
    
    
    $
    3,097
    
    
    $
    (627
    )
    
    
    (20.2
    )%Earnings per share (basic and diluted)
    
    $
    .58
    
    
    $
    .65
    
    
    $
    (.07
    )
    
    
    (10.8
    )%
 Radio Broadcasting Segment
 Three Months EndedSeptember 30,
    
    
    $ Increase
    
    
    % Increase2009
    
    
    2008
    
    
    (Decrease)
    
    
    (Decrease)(In thousands, except percentages)Net operating revenue
    
    $
    26,992
    
    
    $
    31,306
    
    
    $
    (4,314
    )
    
    
    (13.8
    )%Station operating expense
    
    
    20,046
    
    
    
    22,717
    
    
    
    (2,671
    )
    
    
    (11.8
    )%Operating income
    
    $
    6,946
    
    
    $
    8,589
    
    
    $
    (1,643
    )
    
    
    (19.1
    )%
 Television Broadcasting Segment
 Three Months EndedSeptember 30,
    
    
    $ Increase
    
    
    % Increase2009
    
    
    2008
    
    
    (Decrease)
    
    
    (Decrease)(In thousands, except percentages)Net operating revenue
    
    $
    4,261
    
    
    $
    4,886
    
    
    $
    (625
    )
    
    
    (12.8
    )%Station operating expense
    
    
    3,510
    
    
    
    3,871
    
    
    
    (361
    )
    
    
    (9.3
    )%Gain on asset exchange
    
    
    
    
    
    
    (282
    )
    
    
    282
    
    
    
    N/MOperating income
    
    $
    751
    
    
    $
    1,297
    
    
    $
    (546
    )
    
    
    (42.1
    )%
 
 N/M = Not Meaningful 18




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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 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
 CorporateRadio
    
    
    Television
    
    
    and Other
    
    
    Consolidated(In thousands)Three Months Ended September 30, 2008:Net operating revenue
    
    $
    31,306
    
    
    $
    4,886
    
    
    $
    
    
    
    $
    36,192Station operating expense
    
    
    22,717
    
    
    
    3,871
    
    
    
    
    
    
    
    26,588Corporate general and administrative
    
    
    
    
    
    
    
    
    
    
    2,485
    
    
    
    2,485Gain on asset exchange
    
    
    
    
    
    
    (282
    )
    
    
    
    
    
    
    (282
    )Operating income (loss)
    
    $
    8,589
    
    
    $
    1,297
    
    
    $
    (2,485
    )
    
    $
    7,401
 Consolidated
    19




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##### Table of Contents



Radio Segment
    Television Segment
   20




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##### Table of Contents



Nine Months Ended September 30, 2009 Compared to Nine Months Ended September 30, 2008
 Results of Operations
  Consolidated Results of Operations
 Nine Months EndedSeptember 30,
    
    
    $ Increase
    
    
    % Increase2009
    
    
    2008
    
    
    (Decrease)
    
    
    (Decrease)(In thousands, except percentages and per share information)Net operating revenue
    
    $
    89,014
    
    
    $
    105,066
    
    
    $
    (16,052
    )
    
    
    (15.3
    )%Station operating expense
    
    
    70,791
    
    
    
    79,255
    
    
    
    (8,464
    )
    
    
    (10.7
    )%Corporate G&A
    
    
    6,131
    
    
    
    7,611
    
    
    
    (1,480
    )
    
    
    (19.4
    )%Gain on asset exchange
    
    
    
    
    
    
    (506
    )
    
    
    506
    
    
    
    N/MOperating income
    
    
    12,092
    
    
    
    18,706
    
    
    
    (6,614
    )
    
    
    (35.4
    )%Interest expense
    
    
    3,589
    
    
    
    5,760
    
    
    
    (2,171
    )
    
    
    (37.7
    )%Other (income) expense, net
    
    
    11
    
    
    
    27
    
    
    
    (16
    )
    
    
    N/MIncome taxes
    
    
    3,710
    
    
    
    5,452
    
    
    
    (1,742
    )
    
    
    (32.0
    )%Net income
    
    $
    4,782
    
    
    $
    7,467
    
    
    $
    (2,685
    )
    
    
    (36.0
    )%Earnings per share (basic and diluted)
    
    $
    1.14
    
    
    $
    1.52
    
    
    $
    (.38
    )
    
    
    (25.0
    )%
 Radio Broadcasting Segment
 Nine Months EndedSeptember 30,
    
    
    $ Increase
    
    
    % Increase2009
    
    
    2008
    
    
    (Decrease)
    
    
    (Decrease)(In thousands, except percentages)Net operating revenue
    
    $
    77,219
    
    
    $
    91,316
    
    
    $
    (14,097
    )
    
    
    (15.4
    )%Station operating expense
    
    
    60,057
    
    
    
    68,028
    
    
    
    (7,971
    )
    
    
    (11.7
    )%Operating income
    
    $
    17,162
    
    
    $
    23,288
    
    
    $
    (6,126
    )
    
    
    (26.3
    )%
 Television Broadcasting Segment
 Nine Months EndedSeptember 30,
    
    
    $ Increase
    
    
    % Increase2009
    
    
    2008
    
    
    (Decrease)
    
    
    (Decrease)(In thousands, except percentages)Net operating revenue
    
    $
    11,795
    
    
    $
    13,750
    
    
    $
    (1,955
    )
    
    
    (14.2
    )%Station operating expense
    
    
    10,734
    
    
    
    11,227
    
    
    
    (493
    )
    
    
    (4.4
    )%Gain on asset exchange
    
    
    
    
    
    
    (506
    )
    
    
    506
    
    
    
    N/MOperating income
    
    $
    1,061
    
    
    $
    3,029
    
    
    $
    (1,968
    )
    
    
    (65.0
    )%
 
 N/M = Not Meaningful 21




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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, 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
 CorporateRadio
    
    
    Television
    
    
    and Other
    
    
    Consolidated(In thousands)Nine Months Ended September 30, 2008:Net operating revenue
    
    $
    91,316
    
    
    $
    13,750
    
    
    $
    
    
    
    $
    105,066Station operating expense
    
    
    68,028
    
    
    
    11,227
    
    
    
    
    
    
    
    79,255Corporate general and administrative
    
    
    
    
    
    
    
    
    
    
    7,611
    
    
    
    7,611Gain on asset exchange
    
    
    
    
    
    
    (506
    )
    
    
    
    
    
    
    (506
    )Operating income (loss)
    
    $
    23,288
    
    
    $
    3,029
    
    
    $
    (7,611
    )
    
    $
    18,706
 Consolidated
    22




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##### Table of Contents



Radio Segment
    Television Segment
   23




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##### Table of Contents



Forward-Looking Statements
   Liquidity and Capital Resources
 Debt Arrangements and Debt Service Requirements
     24




---



##### Table of Contents



Sources and Uses of Cash
     Summary Disclosures About Contractual Obligations and Commercial Commitments
    25




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##### Table of Contents



Critical Accounting Policies and Estimates
  Inflation
  
 Item 3.Quantitative and Qualitative Disclosures about Market Risk
  
 Item 4.Controls and Procedures
  26




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##### Table of Contents



PART II  OTHER INFORMATION
 
 Item 1. Legal Proceedings
   
 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.
 27




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##### Table of Contents



SIGNATURES
  SAGA COMMUNICATIONS, INC.Date: November 9, 2009
    /s/ SAMUEL D. BUSHSamuel D. BushSenior Vice President, Chief Financial Officer and
Treasurer (Principal Financial Officer)Date: November 9, 2009
    /s/ CATHERINE A. BOBINSKICatherine A. BobinskiVice President, Corporate Controller and Chief
Accounting Officer (Principal Accounting Officer) 28