PART I — FINANCIAL INFORMATION

Item 1.Financial Statements

SAGA COMMUNICATIONS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

September 30, December 31,
2017 2016
(Unaudited) (Note)
(In thousands)
Assets
Current assets:
Cash and cash equivalents $ 81,035 $ 26,697
Accounts receivable, net 18,880 17,735
Prepaid expenses and other current assets 2,026 2,397
Barter transactions 1,721 1,318
Current assets of discontinued operations — 4,625
Total current assets 103,662 52,772
Property and equipment 135,644 134,680
Less accumulated depreciation 79,299 85,506
Net property and equipment 56,345 49,174
Other assets:
Broadcast licenses, net 94,708 86,622
Goodwill 15,417 7,407
Other intangibles, deferred costs and investments, net 7,822 5,975
Assets of discontinued operations — 18,048
$ 277,954 $ 219,998

Liabilities and stockholders’ equity
Current liabilities:
Accounts payable $ 2,211 $ 1,618
Payroll and payroll taxes 6,836 6,954
Other accrued expenses 26,348 3,198
Barter transactions 1,394 1,304
Current portion of long term debt 10,287 —
Current liabilities of discontinued operations 292 2,971
Total current liabilities 47,368 16,045
Deferred income taxes 31,762 29,741
Long-term debt 25,000 35,287
Other liabilities 2,269 2,885
Liabilities of discontinued operations — 1,058
Total liabilities 106,399 85,016
Commitments and contingencies — —
Stockholders’ equity:
Common stock 75 74
Additional paid-in capital 62,157 59,557
Retained earnings 143,308 108,733
Treasury stock (33,985 ) (33,382 )
Total stockholders’ equity 171,555 134,982
$ 277,954 $ 219,998


	March 31,		December 31,
	2021		2020
	(Unaudited)		(Note)

	(In thousands)
Assets
Current assets:
Cash and cash equivalents	$	56,313	$	51,353
Accounts receivable, net		12,670		15,732
Prepaid expenses and other current assets		2,750		2,988
Barter transactions		1,152		895
Total current assets		72,885		70,968
Property and equipment		142,299		142,680
Less accumulated depreciation		88,277		87,795
Net property and equipment		54,022		54,885
Other assets:
Broadcast licenses, net		90,277		90,208
Goodwill		19,209		19,106
Other intangibles, right of use assets, deferred costs and investments, net		11,014		11,321
	$	247,407	$	246,488

Liabilities and stockholders’ equity
Current liabilities:
Accounts payable	$	2,341	$	2,212
Accrued payroll and payroll taxes		5,730		5,660
Other accrued expenses		4,780		5,267
Barter transactions		1,005		795
Total current liabilities		13,856		13,934
Deferred income taxes		24,637		24,607
Long-term debt		10,000		10,000
Other liabilities		7,050		7,405
Total liabilities		55,543		55,946
Commitments and contingencies		—		—
Stockholders’ equity:
Common stock		77		77
Additional paid-in capital		69,043		68,900
Retained earnings		159,748		158,990
Treasury stock		(37,004)		(37,425)
Total stockholders’ equity		191,864		190,542
	$	247,407	$	246,488

Note: The balance sheet at December 31, ~~2016~~2020 has been derived from the audited financial statements at that date but does not include all of the information and footnotes required by accounting principles generally accepted in the United States for complete financial statements. ~~Certain prior period amounts have been reclassified to conform to the current year presentation.~~

~~See notes to unaudited condensed consolidated financial statements.~~

3

~~SAGA COMMUNICATIONS, INC.~~

~~CONDENSED CONSOLIDATED STATEMENTS OF INCOME~~

Three Months Ended Nine Months Ended
September 30, September 30,
2017 2016 2017 2016
(Unaudited)
(In thousands, except per share data)

Net operating revenue $ 30,269 $ 29,878 $ 86,685 $ 88,208
Station operating expense 21,755 21,775 64,521 64,757
Corporate general and administrative 3,132 2,728 8,875 8,065
Other operating expense (127 ) (1,393 ) (69 ) (1,388 )
Operating income from continuing operations 5,509 6,768 13,358 16,774
Interest expense 254 187 691 548
Income from continuing operations before tax 5,255 6,581 12,667 16,226
Income tax expense 2,290 2,678 5,280 6,665
Income from continuing operations, net of tax 2,965 3,903 7,387 9,561
Income from discontinued operations, net of tax (Note 5) 30,451 1,511 32,501 3,688
Net income $ 33,416 $ 5,414 $ 39,888 $ 13,249
Basic Earnings per share:
From continuing operations $ .50 $ .66 $ 1.25 $ 1.63
From discontinued operations 5.16 .26 5.51 .63
Basic earnings per share $ 5.66 $ .92 $ 6.76 $ 2.26

Weighted average common shares 5,807 5,755 5,800 5,753

Diluted Earnings per share:
From continuing operations $ .50 $ .66 $ 1.25 $ 1.62
From discontinued operations 5.16 .26 5.51 .63
Diluted earnings per share $ 5.66 $ .92 $ 6.76 $ 2.25

Weighted average common and common equivalent shares 5,807 5,764 5,804 5,762

Dividends declared per share $ .30 $ .30 $ .90 $ .80

See notes to unaudited condensed consolidated financial statements.

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SAGA COMMUNICATIONS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF ~~CASH FLOWS~~OPERATIONS

Nine Months Ended
September 30,
2017 2016
(Unaudited)
(In thousands)
Cash flows from operating activities:
Cash provided by operating activities $ 18,677 $ 21,020
Cash flows from investing activities:
Acquisition of property and equipment (4,850 ) (4,149 )
Acquisition of broadcast properties (25,856 ) (12,733 )
Proceeds from sale of television stations 69,528 —
Proceeds from disposals of fixed assets 417 1,644
Other investing activities — 11
Net cash provided by (used in) investing activities 39,239 (15,227 )
Cash flows from financing activities:
Cash dividends paid (3,541 ) (4,688 )
Purchase of treasury shares (37 ) (5 )
Other financing activities — —
Net cash used in financing activities (3,578 ) (4,693 )
Net increase in cash and cash equivalents 54,338 1,100
Cash and cash equivalents, beginning of period 26,697 21,614
Cash and cash equivalents, end of period $ 81,035 $ 22,714


	Three Months Ended
	March 31,
	2021		2020

	(Unaudited)
	(In thousands, except per share data)
Net operating revenue	$	22,301	$	26,051
Station operating expenses		18,923		22,199
Corporate general and administrative		2,438		3,015
Other operating expense (income), net		57		(1,330)
Operating income		883		2,167
Interest expense		73		108
Interest income		(6)		(108)
Other income		(272)		(213)
Income before income tax expense		1,088		2,380
Income tax expense		330		700
Net income	$	758	$	1,680

Earnings per share:
Basic	$	0.13	$	0.28
Diluted	$	0.13	$	0.28

Weighted average common shares		5,913		5,866
Weighted average common and common equivalent shares		5,913		5,866

Dividends declared per share	$	0	$	0.32

See notes to unaudited condensed consolidated financial statements.

Table of Contents

SAGA COMMUNICATIONS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

Three Months Ended

March 31,


2021

2020


(Unaudited)

(In thousands)

Cash flows from operating activities:



Net cash provided by operating activities

$
5,352

$
5,065

Cash flows from investing activities:

Acquisition of property and equipment

(534)

(1,021)

Acquisition of broadcast properties

(150)

(190)

Proceeds from sale and disposal of assets

22

—

Proceeds from insurance claims

272

213

Other investing activities

(2)

8

Net cash used in investing activities

(392)

(990)

Cash flows from financing activities:

Cash dividends paid

—

(1,797)

Purchase of treasury shares

—

(20)

Net cash used in financing activities

—

(1,817)

Net increase in cash and cash equivalents

4,960

2,258

Cash and cash equivalents, beginning of period

51,353

44,034

Cash and cash equivalents, end of period

$
56,313

$
46,292

See notes to unaudited condensed consolidated financial statements.

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SAGA COMMUNICATIONS, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1. Summary of Significant Accounting Policies
Basis of Presentation
The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States for annual financial statements.
In our opinion, the accompanying financial statements include all adjustments of a normal, recurring nature considered necessary for a fair presentation of our financial position as of ~~September 30, 2017~~March 31, 2021 and the results of operations for the three ~~and nine~~ months ended ~~September 30, 2017~~March 31, 2021 and ~~2016.~~2020. Results of operations for the three ~~and nine~~ months ended ~~September 30, 2017~~March 31, 2021 are not necessarily indicative of the results that may be expected for the year ending December 31, ~~2017.~~
2021.
We own or operate broadcast properties in 2627 markets, including 7579 FM and 3335 AM radio ~~stations.~~
~~On May 9, 2017 the Company entered into an agreement to sell the Joplin, Missouri~~stations and Victoria, Texas television stations. The disposition closed on September 1, 2017. The historical results of operations for the television stations are presented in discontinued operations for all periods presented (see Note 5). Unless indicated otherwise, the information in the notes to the accompanying unaudited condensed consolidated financial statements relates to the Company’s continuing operations. As a result of the Company’s television stations sale, the Company only has one reportable segment at September 30, 2017.
79 metro signals.
For further information, refer to the consolidated financial statements and footnotes thereto included in the Saga Communications, Inc. Annual Report on Form 10-K for the year ended December 31, ~~2016.~~2020.
~~The Company has~~We have evaluated events and transactions occurring subsequent to the balance sheet date of ~~September 30, 2017,~~March 31, 2021, for items that should potentially be recognized in these financial statements or discussed within the notes to the financial statements.
6
~~SAGA COMMUNICATIONS, INC.~~
~~NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL~~
~~STATEMENTS — (Continued)~~
Earnings Per Share Information
Earnings per share is calculated using the two-class method. The two-class method is an earnings allocation formula that determines earnings per share for each class of common stock and participating security. The Company has participating securities related to restricted stock units, granted under the Company’s Second Amended and Restated 2005 Incentive Compensation Plan, that earn dividends on an equal basis with common shares. In applying the two-class method, earnings are allocated to both common shares and participating securities.

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SAGA COMMUNICATIONS, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

The following table sets forth the computation of basic and diluted earnings (loss) per share:

Three Months Ended
September 30, Nine Months Ended
September 30,
2017 2016 2017 2016
(In thousands, except per share data)
Numerator:
Income from continuing operations $ 2,965 $ 3,903 $ 7,387 $ 9,561
Less: Income allocated to unvested participating securities 51 72 126 176
Income from continuing operations available to common stockholders $ 2,914 $ 3,831 $ 7,261 $ 9,385

Income from discontinued operations $ 30,451 $ 1,511 $ 32,501 $ 3,688
Less: Income allocated to unvested participating securities 520 28 556 68
Income from discontinued operations available to common stockholders $ 29,931 $ 1,483 $ 31,945 $ 3,620

Net income available to common stockholders $ 32,845 $ 5,314 $ 39,206 $ 13,005

Denominator:
Denominator for basic earnings per share — weighted average shares 5,807 5,755 5,800 5,753
Effect of dilutive securities:
Common stock equivalents — 9 4 9
Denominator for diluted earnings per share — adjusted weighted-average shares and assumed conversions 5,807 5,764 5,804 5,762

Basic earnings per share:
From continuing operations $ .50 $ .66 $ 1.25 $ 1.63
From discontinued operations 5.16 .26 5.51 .63
Basic earnings per share $ 5.66 $ .92 $ 6.76 $ 2.26

Diluted earnings per share
From continuing operations $ .50 $ .66 $ 1.25 $ 1.62
From discontinued operations 5.16 .26 5.51 .63
Diluted earnings per share $ 5.66 $ .92 $ 6.76 $ 2.25

Three Months Ended

March 31,


2021

2020



(In thousands, except per share data)

Numerator:





Net income

$
758

$
1,680

Less: Income allocated to unvested participating securities

8

37

Net income available to common stockholders

$
750

$
1,643

Denominator:

Denominator for basic earnings per share — weighted average shares

5,913

5,866

Effect of dilutive securities:

Common stock equivalents

0

0

Denominator for diluted earnings per share — adjusted weighted-average shares and assumed conversions

5,913

5,866

Earnings per share:

Basic

$
0.13

$
0.28

Diluted

$
0.13

$
0.28

~~The number of~~There were 0 stock options outstanding that had an antidilutive effect on our earnings per share calculation for the three months ended March 31, 2021 and ~~therefore have been excluded from~~2020, respectively. The actual effect of these shares, if any, on the diluted earnings per share calculation ~~was 0 for~~will vary significantly depending on the ~~three and nine months ended September 30, 2017 and 0 for~~fluctuation in the ~~three and nine months ended September 30, 2016, respectively. All~~ stock ~~options were exercised during the second quarter of 2017 and there were no stock options outstanding at September 30, 2017.~~price.
7
~~SAGA COMMUNICATIONS, INC.~~
~~NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL~~
~~STATEMENTS — (Continued)~~
Financial Instruments
Our financial instruments are comprised of cash and cash equivalents, accounts receivable, accounts payable and long-term debt. The carrying value of cash and cash equivalents, accounts receivable and accounts payable approximate fair value due to their short maturities. The carrying value of long-term debt approximates fair value as it carries interest rates that either fluctuate with the euro-dollar rate, prime rate or have been reset at the prevailing market rate at ~~September 30, 2017.~~March 31, 2021.
Allowance for Doubtful Accounts
A provision for doubtful accounts is recorded based on our judgment of collectability of receivables. Amounts are written off when determined to be fully uncollectible. Delinquent accounts are based on contractual terms. We have included in our calculation of our allowance for doubtful accounts, the potential impact of the COVID-19 pandemic on our customers’ businesses and their ability to pay their accounts receivable. We maintain a specific allowance for estimated losses resulting from the inability of certain customers to make required payments. We also consider factors external to the specific customer, including current conditions and forecasts of economic conditions, including the potential impact of the COVID-19 pandemic. In the event we recover amounts previously written off, we will reduce the specific allowance for credit loss. Our allowance for doubtful accounts was $528,000 and $648,000 at March 31, 2021 and December 31, 2020, respectively.

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SAGA COMMUNICATIONS, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

Income Taxes

Our effective tax rate is higher than the federal statutory rate as a result of the inclusion of state taxes in the income tax amount. We have historically calculated the provision for income taxes during interim reporting periods by applying an estimate of the annual effective tax rate for the full fiscal year to “ordinary” income or loss (pretax income or loss excluding unusual or infrequently occurring discrete items) for the reporting period.

Segments

We serve NaN radio markets (reporting units) that aggregate into 1 operating segment (Radio), which also qualifies as a reportable segment. We operate under 1 reportable business segment for which segment disclosure is consistent with the management decision-making process that determines the allocation of resources and the measuring of performance. The Chief Operating Decision Maker (“CODM”) evaluates the results of the radio operating segment and makes operating and capital investment decisions based at the Company level. Furthermore, technological enhancements and system integration decisions are reached at the Company level and applied to all markets rather than to specific or individual markets to ensure that each market has the same tools and opportunities as every other market. Managers at the market level do not report to the CODM and instead report to other senior management, who are responsible for the operational oversight of radio markets and for communication of results to the CODM. We continually review our operating segment classification to align with operational changes in our business and may make changes as necessary.

Time Brokerage Agreements/Local Marketing Agreements

We have entered into Time Brokerage Agreements (“~~TBA’s”~~TBAs”) or Local Marketing Agreements (“~~LMA’s”~~LMAs”) in certain markets. In a typical TBA/LMA, the FCC licensee of a station makes available, for a fee, blocks of air time on its station to another party that supplies programming to be broadcast during that air time and sells their own commercial advertising announcements during the time periods specified. Revenue and expenses related to ~~TBA’s/LMA’s~~TBAs/LMAs are included in the accompanying unaudited Condensed Consolidated Statements of Income. ~~At September 30, 2017 we had no TBA’s/LMA’s~~Assets and liabilities related to the TBAs/LMAs are included in ~~place.~~the accompanying unaudited Condensed Consolidated Balance Sheets.

2. Recent Accounting Pronouncements

Recently Adopted Accounting Pronouncements

In ~~November 2015, the FASB issued Accounting Standards Update No. 2015-17,~~~~“Income Taxes (Topic 740), Balance Sheet Classification of Deferred Taxes”~~ (“ASU 2015-17”), which requires companies to classify all deferred tax assets and liabilities as noncurrent on the balance sheet instead of separating deferred taxes into current and noncurrent amounts. This amendment was adopted on January 1, 2017 on a retrospective basis. As a result we have reclassified approximately $1,022,000 of current deferred tax assets into the noncurrent deferred tax liability line item within the Condensed Consolidated Balance Sheet for the period ended December ~~31, 2016.~~

~~In March 2016,~~2019, the FASB issued ASU ~~No. 2016-09,~~2019-12, “~~"Compensation - Stock Compensation~~Income Taxes (Topic ~~718)~~740): ~~Improvements to Employee Share-Based Payment Accounting"~~Simplifying the Accounting for Incomes Taxes” (" (“ASU ~~2016-09"~~2019-12”), which ~~includes multiple amendments~~is intended to simplify various aspects ~~of share-based payment accounting. Amendments~~related to accounting for income taxes. ASU 2019-12 removes certain exceptions to the ~~timing of when excess tax benefits are recognized, minimum statutory withholding requirements,~~general principles in Topic 740 and forfeitures will be applied using a modified retrospective transition method through a cumulative-effect adjustment to equity as of the beginning of the period of adoption. Amendments to the presentation of employee taxes paid on the statement of cash flows when an employer withholds shares to meet the minimum statutory withholding requirement will be applied retrospectively, and amendments requiring the recognition of excess tax benefits and tax deficiencies in the income statement are to be applied prospectively. This amendment was adopted on January 1, 2017 and did not have a material impact on our consolidated financial statements.

8

~~SAGA COMMUNICATIONS, INC.~~

~~NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL~~

~~STATEMENTS — (Continued)~~

~~Recent Accounting Pronouncements – Not Yet Adopted~~

~~In May 2017, the FASB issued ASU 2017-09,~~~~“Compensation – Stock Compensation (Topic 718), Scope of Modification Accounting)”~~ (“ASU 2017-09”) which clarifies when changes to the terms or conditions of a share-based payment award must be accounted for as modifications. The new guidance will reduce diversity in practice and result in fewer changes to the terms of an award being accounted for as modifications. ASU 2017-09 will be applied prospectively to awards modified on or after the adoption date. The guidance is effective for annual periods, and interim periods within those annual periods beginning after December 15, 2017, with early adoption permitted. The Company is currently evaluating the impact that this standard will have on our consolidated financial statements.

~~In January 2017, the FASB issued ASU 2017-04, “~~~~Intangibles – Goodwill and Other (Topic 350)”~~(“ASU 2017-04”) which removes step 2 from the goodwill impairment test. Under the new guidance, if a reporting unit’s carrying amount exceeds it fair value, an entity will record an impairment charge based on that difference. The impairment charge will be limited to the amount of goodwill allocated to that reporting unit. ASU 2017-04 will be applied prospectively and is effective for fiscal years and interim impairment tests performed in periods beginning after December 15, 2019 with early adoption permitted. The Company is currently evaluating the impact of adopting this standard on our consolidated financial statements.

~~In August 2016, the FASB issued ASU No. 2016-15, “~~~~Classification of Certain Cash Receipts and Cash Payments (Topic 230): Statement of Cash Flows”~~~~(“ASU 2016-15”), which clarifies how entities should classify certain cash receipts and cash payments on the statement of cash flows. ASU 2016-15~~ also clarifies ~~how~~and amends existing guidance regarding the ~~predominance principle should be applied when cash receipts~~tax treatment of certain franchise taxes, goodwill and ~~cash payments have aspects of more than one class of cash flows.~~nontaxable entities, among other items to improve consistent application. ASU ~~2016-15~~2019-12 is effective for fiscal years and interim periods beginning after December 15, ~~2017.~~2020. The Company ~~is currently evaluating the impact that this standard will have on our consolidated financial statements.~~

~~In June 2016, the FASB issued ASU No. 2016-13, “~~~~Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments”~~(“ASU 2016-13”), which amends guidance on reporting credit losses for assets held at amortized cost basis and available for sale debt securities. ASU 2016-13 is effective for fiscal years and interim periods beginning after December 15, 2019. The Company is currently evaluating the impact that this standard will have on our consolidated financial statements.

~~In February 2016, the FASB issued Accounting Standards Update No. 2016-02,~~~~“Leases (Topic 842)”~~ (“ASU 2016-02”)¸which requires that all leases with a term of more than one year, covering leased assets such as real estate, broadcasting towers and equipment, be reflected on the balance sheet as assets and liabilities for the rights and obligations created by these leases. ASU 2016-02 is effective for fiscal years fiscal years and interim periods beginning after December 15, 2018.While the Company is currently reviewing the effects of this guidance, the Company believes that this would result in an increase in the assets and liabilities reflected on the Company’s consolidated balance sheets. We are still evaluating the impact on our consolidated statements of operations.

~~In May 2014, the FASB issued Accounting Standards Update No. 2014-09,~~~~“Revenue from Contracts with Customers”~~(“ASU 2014-09”), which provides guidance for the recognition, measurement and disclosure of revenue resulting from contracts with customers and will supersede virtually all of the current revenue recognition guidance under GAAP. The FASB has also issued a number of updates to this standard. This standard is effective for the fiscal and interim periods beginning January 1, 2018. The Company has completed our preliminary analysis of the standard, our evaluation of contracts and the potential impact ofadopted this standard on ~~our consolidated financial statements. Based on our preliminary assessment, which is subject to change, the~~January 1, 2021 and there was no material impact as a result of ~~this guidance should not be material to the Company’s financial position, results~~adoption.

9

Table of ~~operations or cash flows. We plan to adopt the new guidance using the modified retrospective method.~~ Contents

9

SAGA COMMUNICATIONS, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

3. Revenue

Nature of goods and services

The following is a description of principal activities from which we generate our revenue:

Broadcast Advertising Revenue

Our primary source of revenue is from the sale of advertising for broadcast on our stations. We recognize revenue from the sale of advertising as performance obligations are satisfied upon airing of the advertising; therefore, revenue is recognized at a point in time when each advertising spot is transmitted. Agency commissions are calculated based on a stated percentage applied to gross billing revenue for our advertising inventory placed by an agency and are reported as a reduction of advertising revenue.

Digital Advertising Revenue

We recognize revenue from our digital initiatives across multiple platforms such as targeted digital advertising, online promotions, advertising on our websites, mobile messaging, email marketing and other e-commerce. Revenue is recorded when each specific performance obligation in the digital advertising campaign takes place, typically within a one month period.

Other Revenue

Other revenue includes revenue from concerts, promotional events, tower rent and other miscellaneous items. Revenue is generally recognized when the event is completed, as the promotional events are completed or as each performance obligation is satisfied.

Disaggregation of Revenue

Revenues from contracts with customers comprised the following for the three months ended March 31, 2021 and 2020:


	Three Months Ended
	March 31,
	2021		2020

	(in thousands)
Types of Revenue
Broadcast Advertising Revenue, net	$	20,007	$	23,754
Digital Advertising Revenue		1,000		858
Other Revenue		1,294		1,439
Net Revenue	$	22,301	$	26,051

Contract Liabilities

Payments from our advertisers are generally due within 30 days although certain advertisers are required to pay in advance. When an advertiser pays for the services in advance of the performance obligations these prepayments are recorded as contract liabilities. Typical contract liabilities relate to prepayments for advertising spots not yet run; prepayments from sponsors for events that have not yet been held; and gift cards sold on our websites used to finance a broadcast advertising campaign. Generally all contract liabilities are expected to be recognized within one year and are included in accounts payable in the Company’s Condensed Consolidated Financial Statements and are immaterial.

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SAGA COMMUNICATIONS, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS —– (Continued)

Transaction Price Allocated to the Remaining Performance Obligations

3.As the majority of our sales contracts are one year or less, we have utilized the optional exemption under ASC 606-10-50-14 and will not disclose information about the remaining performance obligations for sales contracts which have original expected durations of one year or less.

4. Broadcast License, Goodwill and Other Intangible Assets

We evaluate our FCC licenses ~~and goodwill~~ for impairment annually ~~as of October 1~~^st or more frequently if events or changes in circumstances indicate that the asset might be impaired. ~~FCC~~We operate our broadcast licenses in each market as a single asset and determine the fair value by relying on a discounted cash flow approach assuming a start-up scenario in which the only assets held by an investor are ~~evaluated~~broadcast licenses. The fair value calculation contains assumptions incorporating variables that are based on past experiences and judgments about future operating performance using industry normalized information for ~~impairment at~~an average station within a market. These variables include, but are not limited to: (1) the forecasted growth rate of each radio market, including population, household income, retail sales and other expenditures that would influence advertising expenditures; (2) the estimated available advertising revenue within the market ~~level using~~and the related market share and profit margin of an average station within a ~~direct method.~~market; (3) estimated capital start-up costs and losses incurred during the early years; (4) risk-adjusted discount rate; (5) the likely media competition within the market area; and (6) terminal values. If the carrying amount of FCC licenses is greater than their estimated fair value in a given market, the carrying amount of FCC licenses in that market is reduced to its estimated fair value.

We also evaluate goodwill for impairment annually, or more frequently if certain circumstances are present. If the carrying amount of goodwill in a reporting unit is greater than the implied value of goodwill determined by completing a hypothetical purchase price allocation using estimated fair value of the reporting unit, the carrying amount of goodwill in that reporting unit is reduced to its implied value.

As of March 31, 2021 we performed a high-level qualitative assessment and determined it was not necessary to complete an interim impairment test. After our low point in Q2 2020, our revenue has been increasing and our analysis as of September 30, 2020 is still our best estimate of future revenues. During the first quarter of 2021, we have had no further triggering events and therefore did not perform any additional impairment calculations for goodwill or our broadcast licenses. We will continue to monitor potential triggering events and perform the appropriate analysis when deemed necessary.

If actual market conditions are less favorable than those estimated by us or if events occur or circumstances change that would reduce the fair value of our broadcast licenses below the carrying value, we may be required to recognize impairment charges in future periods. Such a charge could have a material effect on our consolidated financial statements.

We evaluate amortizable intangible assets for recoverability when circumstances indicate impairment may have occurred, using an undiscounted cash flow methodology. If the future undiscounted cash flows for the intangible asset are less than net book value, then the net book value is reduced to the estimated fair value. Amortizable intangible assets are included in other intangibles, deferred costs and investments in the consolidated balance sheets. Intangible assets that have finite lives are amortized over their useful lives using the straight-line method. Favorable lease agreements are amortized over the lives of the leases ranging from ~~four~~five to twenty-six years. Other intangibles are amortized over one to fifteen years. Customer relationships are amortized over three years.

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4.SAGA COMMUNICATIONS, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

5. Common Stock and Treasury Stock

The following summarizes information relating to the number of shares of our common stock issued in connection with stock transactions through ~~September 30, 2017:~~March 31, 2021:


							Common Stock Issued
							Class A	Class B
	Common Stock Issued
	Class A			Class B
	(Shares in thousands)
Balance, January 1, 2016		6,603			865
							(Shares in thousands)
Balance, January 1, 2020							6,771	954
Conversion of shares		12			(12	)	16	(16)
Issuance of restricted stock		23			25		0	0
Balance, December 31, 2016		6,638			878
Exercise of stock options		21			8
Conversion of shares		4			(4	)
Forfeiture of restricted stock		(1	)		—		(2)	0
Balance, September 30, 2017		6,662			882
Balance, December 31, 2020							6,785	938
Balance, March 31, 2021							6,785	938

We have a Stock Buy-Back Program to allow us to purchase up to $75.8 million of our Class A Common Stock. As of ~~September 30, 2017,~~March 31, 2021, we have remaining authorization of ~~$23.3~~$18.8 million for future repurchases of our Class A Common Stock. On September 14, 2017, the Board of Directors authorized the repurchase of ~~its~~our Class A Common Stock under ~~its~~our trading plan adopted pursuant to Securities and Exchange Commission Rule 10b5-1.The Rule 10b5-1 repurchase plan allows ~~the Company~~us to repurchase ~~its~~our shares during periods when itwe would normally not be active in the market due to ~~its~~our internal trading blackout periods. Under the plan, ~~the Company~~we may repurchase ~~its~~our Class A Common Stock in any combination of open market, block transactions and privately negotiated transactions subject to market conditions, legal requirements including applicable SEC regulations (which include certain price, market, volume and timing constraints), specific repurchase instructions and other corporate considerations. Purchases under the plan ~~will be~~are funded by cash on ~~the Company's~~our balance sheet. The plan does not obligate ~~Saga~~us to acquire any particular amount of Class A Common Stock. ~~The~~Our original purchase authorization iswas effective until September 1, 2018 ~~but may be suspended,~~and has been extended several times, with the most recent extension being through May 28, 2020. Given the unprecedented uncertainty surrounding the COVID-19 virus and the resulting economic issues we have halted the directions for any additional buybacks under our plan. During the three months ended March 31, 2021 and 2020, approximately 0 and 800 shares, respectively, were repurchased for $0 and $20,000 respectively, related to the Stock Buy-Back Program.

6. Leases

We lease certain land, buildings and equipment for use in our operations. We recognize lease expense for these leases on a straight-line basis over the lease term and combine lease and non-lease components for all leases. Right-of-use (“ROU”) assets and lease liabilities are recorded on the balance sheet for all leases with an expected term of at least one year. Some leases include one or ~~amended~~more options to renew. The exercise of lease renewal options is generally at our discretion. The depreciable lives of ROU assets are limited to the expected lease term. Our lease agreements do not contain any ~~time~~residual value guarantees or material restrictive covenants. As of March 31, 2021, we do not have any non-cancellable operating lease commitments that have not yet commenced.

ROU assets are classified within other intangibles, deferred costs and investments, net on the condensed consolidated balance sheet while current lease liabilities are classified within other accrued expenses and long-term lease liabilities are classified within other liabilities. Leases with an initial term of 12 months or less are not recorded on the balance sheet. ROU assets were $6.3 million and $6.6 million at March 31, 2021 and December 31, 2020 respectively. Lease liabilities were $6.6 million and $6.9 million at March 31, 2021 and December 31, 2020, respectively. During the ~~Company's discretion.~~three months ended March 31, 2021, we recorded additional ROU assets under operating leases of $35,000. Payments on lease liabilities during the three months ended March 31, 2021 and 2020 totaled $469,000, and $457,000, respectively.

Lease expense includes cost for leases with terms in excess of one year. For the three months ended March 31, 2021 and 2020, our total lease expense was $440,000, and $433,000, respectively. Short-term lease costs are de minimus.

10

12

Table of Contents

SAGA COMMUNICATIONS, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

~~STATEMENTS — (Continued)~~

~~5. Discontinued Operations~~

~~On May 9, 2017 we entered into a definitive agreement to sell our Joplin, Missouri~~We have no financing leases and Victoria, Texas television stations (“Television Sale”) for approximately $66.6 million, subject to certain adjustments, to Evening Telegram Company d/b/a Morgan Murphy Media. The Television Sale was completed on September 1, 2017 and the Company received net proceeds of $69.5 million which included the sales price of $66.6 million, and the proceeds from sale of related accounts receivable of approximately $3.4 million, offset by certain closing adjustments and transactional costs of $500 thousand. The Company recognized a pretax gain of $50.8 million as a resultminimum annual rental commitments under non-cancellable operating leases consisted of the Television Sale in the third quarter of 2017. The gain net of tax for the Television Sale was $29.9 million. Effective September 1, 2017, the Company used $24.2 million of the proceeds from the Television Sale to finance the acquisition of radio stations in South Carolina, which included the purchase price of $23 million, the purchase of $1.3 million in accounts receivable offset by certain closing adjustments and transactional costs of approximately $50,000 (as described in Note 6). On October 5, 2017 and November 3, 2017, the Company used $5,287,000 and $5,000,000 respectively of the proceeds from the Television Sale to pay down a portion of its Revolving Credit Facility (as defined and described in Note 8).

In accordance with authoritative guidance we have reported the results of operations of the Joplin, Missouri and Victoria, Texas television stations as discontinued operations in the accompanying consolidated financial statements. For all previously reported periods, certain amounts in the consolidated financial statements have been reclassified. All of the assets and liabilities of the Joplin, Missouri and Victoria, Texas television stations have been classified as discontinued operations and the net results of operations have been reclassified from continuing operations to discontinued operations. These were previously included in the Company’s television segment.

~~The~~ following ~~table shows the components of the results from discontinued operations associated with the Television Sale as reflected in the Company’s unaudited Condensed Consolidated Statements of Operations~~at March 31, 2021 (in thousands):

Three Months Ended
September 30, Nine Months Ended
September 30,
2017⁽⁴⁾ 2016 2017⁽⁴⁾ 2016

Net operating revenue $ 3,296 $ 6,241 $ 14,238 $ 17,094
Station operating expense⁽¹⁾ 2,372 3,684 9,727 10,807
Other operating (income) expense — — 31 3
Operating income 924 2,557 4,480 6,284
Interest Expense⁽²⁾ 5 9 21 26
Income before income taxes 919 2,548 4,459 6,258
Pretax gain on the disposal of discontinued operations 50,842 — 50,842 —
Total pretax gain on discontinued operations 51,761 2,548 55,301 6,258
Income tax expense⁽³⁾ 21,310 1,037 22,800 2,570
Income from discontinued operations, net of tax $ 30,451 $ 1,511 $ 32,501 $ 3,688


Years Ending December 31,
2021 (a)	$	1,309
2022		1,692
2023		1,368
2024		1,054
2025		657
Thereafter		1,572
Total lease payments (b)		7,652
Less: Interest (c)		1,065
Present value of lease liabilities (d)	$	6,587

(a)

⁽¹⁾

~~No depreciation expense was recorded by~~Remaining payments are for the ~~Company beginning May 9, 2017, the date the Television segment assets’ were held for sale.~~nine-months ending December 31, 2021

(b)

⁽²⁾

~~Interest expense related~~Lease payments include options to ~~Surtsey Media, LLC debt~~extend lease terms that ~~is guaranteed by the Television stations. Our affiliate repaid this loan when the television stations~~are reasonably certain of being exercised. There were ~~sold on September 1, 2017.~~no legally binding minimum lease payments for leases signed but not yet commenced at March 31, 2021.

(c)

⁽³⁾

~~The effective tax rates on pretax income from discontinued operations were 41%.~~Our leases do not provide a readily determinable implicit rate. Therefore, we must estimate our discount rate for such leases to determine the present value of lease payments at the lease commencement date.

(d)

⁽⁴⁾

~~Results of operations for the Television stations are reflected through August~~The weighted average remaining lease term and weighted average discount rate used in calculating our lease liabilities were 6.3 years and 4.3%, respectively, at March 31, ~~2017. The effective date of the sale was September 1, 2017.~~2021.

11

~~SAGA COMMUNICATIONS, INC.~~

~~NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL~~

~~STATEMENTS — (Continued)~~

~~The following table is a summary of the assets and liabilities of discontinued operations (in thousands):~~

September 30,
2017 December 31,
2016
Major Classes of Current Assets of Discontinued Operations
Accounts receivable $ — $ 3,868
Prepaid expenses and other current assets — 625
Barter transactions — 132
Total of current assets of discontinued operations $ — $ 4,625

Major Classes of Non-Current Assets of Discontinued Operations
Property and equipment, net⁽¹⁾ $ — $ 7,388
Broadcast licenses, net⁽¹⁾ — 9,607
Other intangibles, deferred costs and investments, net⁽¹⁾ — 1,053
Total of non-current assets of discontinued operations $ — $ 18,048
Total Assets Classified as Part of Discontinued Operations in the Condensed Consolidated Balance Sheets $ — $ 22,673

Major Classes of Current Liabilities of Discontinued Operations
Accounts payable $ 84 $ 759
Barter transactions — 163
Current portion of long term debt — 1,078
Other liabilities⁽¹⁾ 208 971
Total of current liabilities of discontinued operations $ 292 $ 2,971

Major Classes of Current Liabilities of Discontinued Operations
Other liabilities⁽¹⁾ $ — $ 1,058
Total of non-current liabilities of discontinued operations $ — $ 1,058
Total Liabilities Classified as Part of Discontinued Operations in the Condensed Consolidated Balance Sheets $ 292 $ 4,029
Net Assets Classified as Part of Discontinued Operations in the Condensed Consolidated Balance Sheets $ (292 ) $ 18,644

~~(1)~~

For prior periods, the current and long-term classification of assets and liabilities does not change as they did not meet the held-for-sale criteria the prior periods. We closed the disposition on September 1, 2017, therefore all amounts in the current year are considered current assets or liabilities of discontinued operations.

12

~~SAGA COMMUNICATIONS, INC.~~

~~NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL~~

~~STATEMENTS — (Continued)~~

The following table represents the components of the results from discontinued operations associated with the Television Sale as reflected in the Company’s unaudited Condensed Consolidated Statements of Cash Flows (in thousands):

September 30,
2017 September 30,
2016
Significant operating non-cash items
Depreciation and amortization⁽¹⁾ $ 445 $ 1,023
Broadcast program rights amortization 418 467
Barter revenue, net 18 58
Loss on sale of assets 31 3

Significant investing items
Acquisition of property and equipment $ 125 $ 717
Proceeds from sale and disposal of assets — 13
Net proceeds from sale of television stations⁽²⁾ 69,528 —

⁽¹⁾

~~No depreciation expense was recorded by the Company beginning May 9, 2017, the date the Television segment’s assets were held for sale.~~

⁽²⁾

Net proceeds from the sale of the television stations reflect the sale price of $66.6 million, and the proceeds from sale of accounts receivable of approximately $3.4 million, offset by certain closing adjustments and transactional costs of approximately $500 thousand.

6.7. Acquisitions and Dispositions

We actively seek and explore opportunities for expansion through the acquisition of additional broadcast properties. The consolidated statements of income include the operating results of the acquired stations from their respective dates of acquisition. All acquisitions were accounted for as purchases and, accordingly, the total purchase consideration was allocated to the acquired assets and assumed liabilities based on their estimated fair values as of the acquisition dates. The excess of the consideration paid over the estimated fair value of net assets acquired have been recorded as goodwill. The Company accounts for ~~acquisition~~acquisitions under the provisions of FASB ASC Topic 805,Business Combinations.

Management assigned fair values to the acquired property and equipment through a combination of cost and market approaches based upon each specific asset’s replacement cost, with a provision for depreciation, and to the acquired intangibles, primarily an FCC license, based on the Greenfield valuation methodology, a discounted cash flow approach.

2021 Acquisitions

~~2017 Acquisitions and Disposals~~

On ~~May 9, 2017 we entered into a definitive~~January 8, 2021, the Company closed on an agreement to ~~sell our Joplin, Missouri~~purchase WBQL and ~~Victoria, Texas television stations~~W288DQ from Consolidated Media, LLC, for approximately $66.6 million, subject to certain adjustments, to Evening Telegram Company d/b/a Morgan Murphy Media. The Television Sale was completed on September 1, 2017 and the Company received net proceeds of $69.5 million which included the sales price of $66.6 million, and the proceeds from sale of related accounts receivable of approximately $3.4 million, offset by certain closing adjustments and transactional costs of approximately $500 thousand.

~~On May 9, 2017, the Company entered into~~ an Asset Purchase Agreement with Apex Media Corporation and Pearce Development, LLC f/k/a Apex Real Property, LLC, both Companies of which a member of our Board of directors, G. Dean Pearce, is President of, to purchase radio stations principally serving the South Carolina area for approximately $23 million (subject to certain purchase price adjustments) plus the right to air certain radio commercials, substantially all the assets related to the operation of the following radio stations: WCKN(FM), WMXF(FM), WXST(FM), WAVF(FM), WSPO(AM), W261DG, W257BQ, WVSC(FM), WLHH(FM), WOEZ(FM), W256CB, W293BZ. The Company closed this transaction effective September 1, 2017, simultaneously with the closing of the Television Sale using funds generated from the Television Sale for $24.2 million, which included theaggregate purchase price of ~~$23 million,~~$175,000, of which $25,000 was paid in 2020 and the ~~purchase of $1.3 million~~remaining $150,000 paid in ~~related accounts receivable offset by certain closing adjustments and transactional costs of approximately $50,000.~~2021. Management attributes the goodwill recognized in the acquisition to the power of the existing brands in the ~~Charleston, South Carolina and Hilton Head, South Carolina~~Clarksville, Tennessee market as well as synergies and growth opportunities expected through the combination with the Company’s existing stations. The translators are start-up stations and therefore, have no pro forma revenue and expenses.

13

2020 Acquisitions

~~SAGA COMMUNICATIONS, INC.~~

~~NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL~~

~~STATEMENTS — (Continued)~~

On January ~~16, 2017, we entered into~~2, 2020, the Company closed on an ~~asset purchase~~ agreement to purchase W295BL from Basic Holdings, LLC, for an ~~FM radio station (WCVL) from WUVA, Incorporated, serving~~aggregate purchase price of $200,000, of which $10,000 was paid in 2019 and the ~~Charlottesville, Virginia market for approximately $1,658,000, which included $8,000~~remaining $190,000 paid in transactional costs. Simultaneously, we entered into a TBA to begin operating the station on February 1, 2017. We completed this acquisition on April 18, 2017. This acquisition was financed through funds generated from operations. Unaudited proforma results of operations for this acquisition are not required, as such information is not material to our financial statements and therefore is not presented in the pro forma tables in the following pages.

~~2016 Acquisitions~~

On November 2, 2015, we entered into an agreement to acquire an FM radio station (WLVQ) from Wilks Broadcast - Columbus, LLC, serving the Columbus, Ohio market for approximately $13,791,000, which included $734,000 in accounts receivable and $57,000 in transactional costs. We completed this acquisition on February 3, 2016. We operated this station under an LMA from November 16, 2015 through our completion of the acquisition. This acquisition was financed through funds generated from operations.2020. Management attributes the goodwill recognized in the acquisition to the power of the existing brands in the ~~Columbus, Ohio~~Manchester, New Hampshire market as well as ~~the~~ synergies and growth opportunities expected through the combination with the Company’s existing stations. The translators are start-up stations and therefore, have no pro forma revenue and expenses.

13

Table of Contents

~~On March 16, 2016 we acquired an FM translator serving the Portland, Maine market for approximately $50,000.~~

~~On March 25, 2016 we acquired an FM translator serving the Milwaukee, Wisconsin market for approximately $50,000.~~

~~On April 8, 2016 we acquired an FM translator serving the Charlottesville, Virginia market for approximately $100,000.~~

~~On April 11, 2016 we acquired an FM translator serving the Clarksville, Tennessee market for approximately $30,000.~~

~~On June 3, 2016 we acquired an FM translator serving the Spencer, Iowa market for approximately $35,000.~~

~~On August 11, 2016 we acquired two FM translators serving the Bellingham, Washington market for approximately $50,000.~~

~~On September 12, 2016 we acquired an FM translator serving the Portland, Maine market for approximately $45,000.~~

~~On October 11, 2016 we acquired a FM Translator serving the Bellingham, Washington market for approximately $25,000.~~

~~On November 8, 2016 we acquired a FM Translator serving the Des Moines, Iowa market for approximately $25,000.~~

~~On November 14, 2016 we acquired a FM Translator serving the Springfield, Illinois market for approximately $23,000.~~

~~On December 2, 2016 we acquired a FM Translator serving the Ithaca, New York market for approximately $35,000.~~

14

SAGA COMMUNICATIONS, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

~~STATEMENTS — (Continued)~~

Condensed Consolidated Balance Sheet of ~~2017~~2021 and ~~2016~~2020 Acquisitions:

The following unaudited condensed balance sheets represent the estimated fair value assigned to the related assets and liabilities of the ~~2017~~2021 and ~~2016 acquisitions at their respective acquisition dates. The allocation of the purchase price for the 2017 and 2016 acquisitions is preliminary at September 30, 2017.~~

2020 acquisitions.

Saga Communications, Inc.

Condensed Consolidated Balance Sheet of ~~2017~~2021 and ~~2016~~2020 Acquisitions


					Acquisitions in
					2021		2020
	Acquisitions in
	2017		2016
	(In thousands)
					(In thousands)
Assets Acquired:
Current assets	$	1,440	$	814
Property and equipment		6,678		375	$	3	$	11
Other assets:
Broadcast licenses		8,086		8,123		69		46
Goodwill		8,011		4,533		103		143
Other intangibles, deferred costs and investments		2,019		398
Total other assets		18,116		13,054		172		189
Total assets acquired		26,234		14,243		175		200
Liabilities Assumed:
Current liabilities		378		41		0		0
Total liabilities assumed		378		41		0		0
Net assets acquired	$	25,856	$	14,202	$	175	$	200

15

8. Income taxes

On March 18, 2020, the Families First Coronavirus Response Act ("FFCR Act"), and on March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act ("CARES Act") were each enacted in response to the COVID-19 pandemic. The FFCR Act and the CARES Act contain numerous tax provisions, such as deferring payroll payments, establishing a credit for the retention of certain employees, relaxing limitations on the deductibility of interest, and updating the definition of qualified improvement property. This legislation currently has no material impact to the Company’s financial statements.

An income tax expense of $330,000 was recorded for the three months ended March 31, 2021 compared to income tax expense of $700,000 for the three months ended March 31, 2020. The effective tax rate was approximately 30.3% for the three months ended March 31, 2021 compared to 29.4% for the three months ended March 31, 2020. Income tax provisions for interim (quarterly) periods are based on estimated annual income tax rates and are adjusted for the effects of significant, infrequent or unusual items (i.e. discrete items) occurring during the interim period.

14

Table of Contents

SAGA COMMUNICATIONS, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL

STATEMENTS —– (Continued)

~~Pro Forma Results of Operations for Acquisitions (Unaudited)~~

The following unaudited pro forma results of our operations for the three and nine months ended September 30, 2017 and 2016 assume the 2017 and 2016 acquisitions occurred as of January 1, 2016. The translators are start-up stations and therefore, have no pro forma revenue and expenses. The pro forma results give effect to certain adjustments, including depreciation, amortization of intangible assets, increased interest expense on acquisition debt and related income tax effects. The pro forma results have been prepared for comparative purposes only and do not purport to indicate the results of operations which would actually have occurred had the combinations been in effect on the dates indicated or which may occur in the future.

Three Months Ended
September 30, Nine Months Ended
September 30,
2017 2016 2017 2016

ProForma Results of Operation
Net operating revenue $ 31,546 $ 31,888 $ 92,187 $ 93,993
Station operating expense 23,000 23,478 69,325 69,874
Corporate general and administrative 3,132 2,728 8,875 8,065
Other operating (income) expense, net (127 ) (1,393 ) (69 ) (1,388 )
Operating income 5,541 7,075 14,056 17,442
Interest expense 254 187 691 548
Income from continuing operations, before tax 5,287 6,888 13,365 16,894
Income tax expense 2,430 2,804 5,566 6,939
Income from continuing operations, net of tax 2,857 4,084 7,799 9,955
Income from discontinued operations, net of tax 30,451 1,511 32,501 3,688
Net income $ 33,308 $ 5,595 $ 40,300 $ 13,643

Basic earnings per share:
From continuing operations $ .47 $ .70 $ 1.32 $ 1.70
From discontinued operations 5.16 .26 5.51 .63
Basic earnings per share $ 5.63 $ .96 $ 6.83 $ 2.33

Diluted earnings per share:
From continuing operations $ .47 $ .70 $ 1.32 $ 1.70
From discontinued operations 5.16 .26 5.51 .63
Diluted earnings per share $ 5.63 $ .96 $ 6.83 $ 2.33
16
~~SAGA COMMUNICATIONS, INC.~~
~~NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL~~
~~STATEMENTS — (Continued)~~
7.9. Stock-Based Compensation
2005 Incentive Compensation Plan
On October 16, 2013 our stockholders approved the Second Amended and Restated Saga Communications, Inc. 2005 Incentive Compensation Plan, ~~(the~~which was amended in 2018 after approval of the amendment by our stockholders at our 2018 annual meeting (as amended, the “Second Restated 2005 Plan”). The 2005 Incentive Compensation Plan, which replaced our 2003 Stock Option Plan, was first approved by stockholders in 2005 and ~~replaced our 2003 Stock Option Plan (the “2003 Plan”). The 2005 Incentive Compensation Plan~~subsequently this plan was re-approved by stockholders in 2010. The changes made in 2013 in the Second Restated 2005 Plan (i) ~~increases~~increased the number of authorized shares by 233,334 shares of Common Stock, (ii) ~~extends~~extended the date for making awards to September 6, 2018, (iii) ~~includes~~included directors as participants, (iv) ~~targets~~targeted awards according to groupings of participants based on ranges of base salary of employees and/or retainers of directors, (v) ~~requires~~required participants to retain ~~50%~~50 % of their net annual restricted stock awards during their employment or service as a director, and (vi) ~~includes~~included a clawback provision. The 2018 amendment to the Second Restated 2005 Plan (i) extended the date for making awards to September 6, 2023 and (ii) increased the number of authorized shares under the Plan by 90,000 shares of Class B Common Stock. The Second Restated 2005 Plan allows for the granting of restricted stock, restricted stock units, incentive stock options, nonqualified stock options, and performance awards to eligible employees and non-employee directors.
The number of shares of Common Stock that may be issued under the Second Restated 2005 Plan may not exceed ~~280,000~~370,000 shares of Class B Common Stock, ~~900,000~~990,000 shares of Class A Common Stock of which up to 620,000 shares of Class A Common Stock may be issued pursuant to incentive stock options and ~~280,000~~370,000 Class A Common Stock issuable upon conversion of Class B Common Stock. Awards denominated in Class A Common Stock may be granted to any employee or director under the Second Restated 2005 Plan. However, awards denominated in Class B Common Stock may only be granted to Edward K. Christian, President, Chief Executive Officer, Chairman of the Board of Directors, and the holder of 100% of the outstanding Class B Common Stock of the Company. Stock options granted under the Second Restated 2005 Plan may be for terms not exceeding ten years from the date of grant and may not be exercised at a price which is less than 100% of the fair market value of shares at the date of grant.
Stock-Based Compensation
All stock options granted were fully vested and expensed at December 31, 2012, therefore there was no0 compensation expense related to stock options for the three ~~and nine~~ months ended ~~September 30, 2017~~March 31, 2021 and ~~the three~~2020, respectively.
There were 0 options granted during 2021 and ~~nine months ended September 30, 2016, respectively.~~
~~The following summarizes the~~2020 and there were 0 stock ~~option transactions for the Second Restated 2005 Plan and 2003 Plan for the nine months ended September 30, 2017:~~
Weighted Average
Weighted Remaining Aggregate
Number of Average Contractual Term Intrinsic
Options Exercise Price (Years) Value
Outstanding at January 1, 2017 29,035 $ 28.47 0.4 $ 633,834
Exercised (29,035 ) 28.47
Outstanding at September 30, 2017 — $ — — $ —
Exercisable at September 30, 2017 — $ — — $ —
17
~~SAGA COMMUNICATIONS, INC.~~
~~NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL~~
~~STATEMENTS — (Continued)~~
options outstanding as of March 31, 2021. All outstanding stock options were exercised in 2017.
The following summarizes the restricted stock transactions for the ~~nine~~three months ended ~~September 30, 2017:~~March 31, 2021:

Weighted
Average
Grant Date
Fair
Shares Value
Outstanding at January 1, 2017 103,262 $ 43.73

Weighted

Average

Grant Date

Fair


Shares

Value
Outstanding at January 1, 2021

63,755

$
32.90
Vested (3,434 ) 43.10

0

0
Forfeited (594 ) 45.39

0

0
Non-vested and outstanding at September 30, 2017 99,234 $ 43.75
Non-vested and outstanding at March 31, 2021

63,755

$
32.90

For the three ~~and nine~~ months ended ~~September 30, 2017~~March 31, 2021 and ~~the three and nine months ended September 30, 2016,~~2020 , we had ~~$629,000, $1,761,000, $536,000~~$343,000 and ~~$1,594,000,~~$569,000, respectively, of total compensation expense related to restricted stock-based compensation arrangements. This expense is included in corporate general and administrative expenses in our results of operations. The associated tax benefit recognized for the three ~~and nine~~ months ended ~~September 30, 2017~~March 31, 2021 and ~~the three~~2020 was $30,000 and ~~nine months ended September 30, 2016, was $252,000, $704,000, $214,000 and $638,000,~~$58,000, respectively.

15

Table of Contents

8.SAGA COMMUNICATIONS, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

10. Long-Term Debt
Long-term debt consisted of the following:

March 31,

December 31,

2021

2020
September 30, December 31,
2017 2016
(In thousands)

(In thousands)
Revolving credit facility $ 35,287 $ 35,287

$
10,000

$
10,000
Secured debt of affiliate — 1,078
35,287 36,365
Amounts payable within one year 10,287 —

0

0
$ 25,000 $ 36,365

$
10,000

$
10,000

On August 18, 2015, we entered into a new credit facility (the “Credit Facility”) with JPMorgan Chase Bank, N.A., The Huntington National Bank, Citizens Bank, National Association and J.P. Morgan Securities LLC. ~~In connection with the execution of the Credit Facility, the credit agreement in place at June 30, 2015 (the “Old Credit Agreement”) was terminated, and all outstanding amounts were paid in full.~~ The Credit Facility consists of a $100 million five-year revolving facility (the “Revolving Credit Facility”) and ~~matures~~originally matured on August 18, 2020.
On June 27, 2018, the Company entered into a Second Amendment to its Credit Facility, (the “Second Amendment”), which had first been amended on September 1, 2017, extending the revolving credit maturity date under the Credit Agreement for five years after the date of the amendment to June 27, 2023. On July 1, 2019, we elected to reduce our Revolving Credit Facility to $70 million. On May 11, 2020 we entered into an assumption agreement and amendment of loan documents as part of our reincorporation as a Florida corporation. The amendment also included an alternative benchmark rate as a replacement to LIBOR.
We have pledged substantially all of our assets (excluding our FCC licenses and certain other assets) in support of the Credit Facility and each of our subsidiaries has guaranteed the Credit Facility and has pledged substantially all of their assets (excluding their FCC licenses and certain other assets) in support of the Credit Facility.
Approximately $266,000 of ~~transaction fees~~debt issuance costs related to the Credit Facility were capitalized and are being amortized over the life of the Credit Facility. ~~Those deferred~~These debt issuance costs are included in other assets, net in the ~~condensed~~ consolidated balance sheets.
As a result of the Second Amendment, the Company incurred an additional $120,000 of transaction fees related to the Credit Facility that were capitalized. The cumulative transaction fees are being amortized over the remaining life of the Credit Facility.
Interest rates under the Credit Facility are payable, at our option, at alternatives equal to LIBOR ~~(1.25%~~(0.1250% at ~~September 30, 2017)~~March 31, 2021), plus 1% to 2% or the base rate plus 0% to 1%1%. The spread over LIBOR and the base rate vary from time to time, depending upon our financial leverage. As previously noted, the May 11, 2020 amendment to the Credit Facility includes an alternative benchmark to LIBOR in the event LIBOR is no longer available. Letters of credit issued under the Credit Facility will be subject to a participation fee (which is equal to the interest rate applicable to Eurocurrency Loans, as defined in the Credit Agreement) payable to each of the Lenders and a fronting fee equal to 0.25% per annum payable to the issuing bank. We also pay quarterly commitment fees of 0.2% to 0.3% per annum on the unused portion of the Revolving Credit Facility.
18
~~SAGA COMMUNICATIONS, INC.~~
~~NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL~~
~~STATEMENTS — (Continued)~~
The Credit Facility contains a number of financial covenants (all of which we were in compliance with at ~~September 30, 2017)~~March 31, 2021) which, among other things, require us to maintain specified financial ratios and impose certain limitations on us with respect to investments, additional indebtedness, dividends, distributions, guarantees, liens and encumbrances.
We had approximately ~~$65~~$60 million of unused borrowing capacity under the Revolving Credit Facility at ~~September 30, 2017.~~March 31, 2021.

On October 5, 2017 and November 3, 2017, the Company used $5,287,000 and $5,000,000, respectively of the proceeds from the Television Sale to pay down a portion of its Revolving Credit Facility. Those amounts were classified as current portion of long term debt at September 30, 2017.
The loan agreement of approximately $1.1 million of secured debt of affiliate was amended in April, 2017 to extend the due date of the loan for three years to mature on May 1, 2020. Our affiliate repaid this loan when the television stations were sold on September 1, 2017.
9.11. Litigation
The Company is subject to various outstanding claims which arise in the ordinary course of business and to other legal proceedings. Management anticipates that any potential liability of the Company, which may arise out of or with respect to these matters, will not materially affect the Company’s financial statements.

16

Table of Contents

~~10.~~SAGA COMMUNICATIONS, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

12. Dividends

On ~~September 13, 2017,~~June 18, 2020, the Company’s Board of Directors ~~declared a regular~~announced that it was temporarily suspending the quarterly cash dividend in response to the continued uncertainty of ~~$0.30 per share on its Classes A and B Common Stock. This dividend, totaling $1.8 million, which is recorded within Other accrued expenses as~~the ongoing impact of ~~September 30, 2017 was paid on October 13, 2017 to shareholders of record on September 25, 2017.~~

On May 3, 2017, the Company’s Board of Directors declared a regular quarterly cash dividend of $0.30 per share on its Classes A and B Common Stock. This dividend, totaling $1.8 million was paid on June 9, 2017 to shareholders of record on May 22, 2017.

COVID-19.

On March 3, 2017, the Company’s Board of Directors declared a regular quarterly cash dividend of $0.30 per share on its Classes A and B Common Stock. This dividend, totaling $1.8 million, was paid on April 14, 2017 to shareholders of record on March 28, 2017.

On November 21, 2016 the Company’s Board of Directors declared a quarterly cash dividend of $0.30 per share and a special cash dividend of $0.20 per share on its Classes A and B shares. This dividend totaling $2.9 million was paid on December 23, 2016 to shareholders of record on December 5, 2016.

~~On August 30, 2016,~~4, 2020, the Company’s Board of Directors declared a regular cash dividend of ~~$0.30~~$0.32 per share on its Classes A and B Common Stock. This dividend, totaling ~~$1.8 million was paid on September 30, 2016 to shareholders of record on September 14, 2016.~~

On June 1, 2016, the Company’s Board of Directors declared a regular cash dividend of $0.25 per share on its Classes A and B Common Stock. This dividend, totaling $1.5 million, was paid on July 8, 2016 to shareholders of record on June 15, 2016.

~~On March 2, 2016, the Company’s Board of Directors declared a regular quarterly cash dividend of $0.25 per share on its Classes A and B Common Stock. This dividend, totaling $1.5~~approximately $1.9 million, was paid on April ~~15, 2016~~10, 2020 to shareholders of record on March ~~28, 2016.~~16, 2020.

19

13. Other Income

During the first quarter of 2021, there was weather-related damage to an antenna in our Des Moines, Iowa market. The Company’s insurance policy provided coverage for removal and replacement of the antenna and related equipment. As part of the initial insurance settlement during the first quarter of 2021, the Company received cash proceeds of $250,000, resulting in a gain of $250,000. The gain is recorded in other (income) expense, net, in the Company’s Condensed Consolidated Statements of Income.

During the first quarter of 2020, there was weather related damage to an antenna in our Keene, New Hampshire market. The Company’s insurance policy provided coverage for removal and replacement of the antenna and related equipment. The insurance settlement was finalized during the first quarter and the Company received cash proceeds of $208,000, resulting in a gain of $208,000. The gain is recorded in other (income) expense, net, in the Company’s Condensed Consolidated Statements of Income.

During the first quarter of 2020, the Company sold land and a building on one of its tower sites in its Bellingham, Washington market for approximately $1,700,000 to Talbot Real Estate, LLC, resulting in a $1,400,000 gain on the sale of assets. The gain is recorded in the other operating (income) expense, net in the Company’s Condensed Consolidated Statements of Income.

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Table of Contents

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

~~Results of Operations~~

The following discussion should be read in conjunction with the unaudited condensed consolidated financial statements and notes thereto of Saga Communications, Inc. and its subsidiaries contained elsewhere herein and the audited financial statements and Management Discussion and Analysis contained in our Annual Report on Form 10-K for the year ended December 31, ~~2016.~~2020. The following discussion is presented on a consolidated basis. On May 9, 2017 the Company entered into an agreement to sell its Joplin, Missouri and Victoria, Texas television stations and subsequently closed on this transaction on September 1, 2017. The historical results of operations for the television stations are presented in discontinued operations for all periods presented (see Note 5). As a result of the Company’s television stations being reported as discontinued operations the Company only has one reportable segment at September 30, 2017. Unless indicated otherwise, the information in the notes to the accompanying unaudited condensed consolidated financial statements relates to the Company’s continuing operations.

We use certain financial measures that are not calculated in accordance with generally accepted accounting principles in the United States of America (GAAP) to assess our financial performance. For example, we evaluate the performance of our markets based on “station operating income” (operating income plus corporate general and administrative expenses, depreciation and amortization, other operating (income) expenses, and impairment of intangible assets). Station operating income is generally recognized by the broadcasting industry as a measure of performance, is used by analysts who report on the performance of the broadcasting industry and it serves as an indicator of the market value of a group of stations. In addition, we use it to evaluate individual stations, market-level performance, overall operations and as a primary measure for incentive based compensation of executives and other members of management. Station operating income is not necessarily indicative of amounts that may be available to us for debt service requirements, other commitments, reinvestment or other discretionary uses. Station operating income is not a measure of liquidity or of performance in accordance with GAAP, and should be viewed as a supplement to, and not a substitute for our results of operations presented on a GAAP basis.

COVID-19 Impact and Response

During the first quarter of 2021, the effects of the COVID-19 pandemic and the related actions by governments to attempt to contain the spread of the virus have continued to impact our business. Despite the development of vaccines and more effective treatments for the physical impacts of COVID-19, there are no reliable estimates of how long the COVID-19 pandemic, and its negative effect on our business, will last. Therefore, the unpredictability of the current economic and public health conditions continues. However, all of our markets are functioning at effectively full capacity, subject to ongoing health and safety protocols, which vary from state-to-state, and we remain optimistic about future advertising revenue and the ability to start events soon. Additional information regarding all actions taken by the Company since the onset of the pandemic can be found in our audited financial statements and Management Discussion and Analysis contained in our Annual Report on Form 10-K for the year ended December 31, 2020.

Results of Operations

General

We are a broadcast company primarily engaged in acquiring, developing and operating broadcast properties. We actively seek and explore opportunities for expansion through the acquisition of additional broadcast properties. We review acquisition opportunities on an ongoing basis. For additional information with respect to acquisitions, see “Liquidity and Capital Resources” below. We own or operate broadcast properties in 2627 markets, including 7579 FM and 3335 AM radio ~~stations.~~stations and 79 metro signals.

~~Continuing Operations -~~ Radio Stations

Our radio ~~station’s~~stations’ primary source of revenue is from the sale of advertising for broadcast on our stations. Depending on the format of a particular radio station, there are a predetermined number of advertisements available to be broadcast each hour. We have twenty-six radio station markets, which include all 108 of our radio stations. The discussion of our operating performance focuses on operating income because we manage our stations primarily on operating income. Operating performance is evaluated for each individual market.

Most advertising contracts are short-term and generally run for a few weeks only. The majority of our revenue is generated from local advertising, which is sold primarily by each radio markets’ sales staff. For the ~~nine~~three months ended ~~September 30, 2017~~March 31, 2021 and ~~2016,~~2020, approximately ~~89%~~90% and ~~89%~~87%, respectively, of our radio ~~segment’s~~station’s gross revenue was from local advertising. To generate national advertising sales, we engage independent advertising sales representative firms that specialize in national sales for each of our broadcast markets.

Our revenue varies throughout the year. Advertising expenditures, our primary source of revenue, generally have been lowest during the winter months, which include the first quarter of each year. We expect a decrease in political advertising for ~~2017~~2021 due to the decreased number of national, state and local elections in most of our markets as compared to the prior year.

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Table of Contents

Our net operating revenue, station operating expense and operating income varies from market to market based upon the market’s rank or size which is based upon population and the available radio advertising revenue in that particular market.

The broadcasting industry and advertising in general, ~~are~~is influenced by the state of the overall economy, including unemployment rates, inflation, energy prices and consumer interest rates. Our stations primarily broadcast in small to midsize markets. Historically, these markets have been more stable than major metropolitan markets during downturns in advertising spending, but may not experience increases in such spending as significant as those in major metropolitan markets in periods of economic improvement.

20

Our financial results are dependent on a number of factors, the most significant of which is our ability to generate advertising revenue through rates charged to advertisers. The rates a station is able to charge are, in large part, based on a station’s ability to attract audiences in the demographic groups targeted by its advertisers. In a number of our markets this is measured by periodic reports generated by independent national rating services. In the remainder of our markets it is measured by the results advertisers obtain through the actual running of an advertising schedule. Advertisers measure these results based on increased demand for their goods or services and/or actual revenues generated from such demand. Various factors affect the rate a station can charge, including the general strength of the local and national economies, population growth, ability to provide popular programming, local market competition, target marketing capability of radio compared to other advertising media and signal strength.

When we acquire and/or begin to operate a station or group of stations we generally increase programming and advertising and promotion expenses to increase our share of our target demographic audience. Our strategy sometimes requires levels of spending commensurate with the revenue levels we plan on achieving in two to five years. During periods of economic downturns, or when the level of advertising spending is flat or down across the industry, this strategy may result in the appearance that our cost of operations ~~are~~is increasing at a faster rate than our growth in revenues, until such time as we achieve our targeted levels of revenue for the acquired station or group of stations.

The number of advertisements that can be broadcast without jeopardizing listening levels (and the resulting ratings) is limited in part by the format of a particular radio station. Our stations strive to maximize revenue by constantly managing the number of commercials available for sale and adjusting prices based upon local market conditions and ratings. While there may be shifts from time to time in the number of advertisements broadcast during a particular time of day, the total number of advertisements broadcast on a particular station generally does not vary significantly from year to year. Any change in our revenue, with the exception of those instances where stations are acquired or sold, is generally the result of inventory sell out ratios and pricing adjustments, which are made to ensure that the station efficiently utilizes available inventory.

Our radio stations employ a variety of programming formats. We periodically perform market research, including music evaluations, focus groups and strategic vulnerability studies. Because reaching a large and demographically attractive audience is crucial to a station’s financial success, we endeavor to develop strong listener loyalty. Our stations also employ audience promotions to further develop and secure a loyal following. We believe that the diversification of formats on our radio stations helps to insulate us from the effects of changes in musical tastes of the public on any particular format.

The primary operating expenses involved in owning and operating radio stations are employee salaries, sales commissions, programming expenses, depreciation, and advertising and promotion expenses.

The radio broadcasting industry is subject to rapid technological change, evolving industry standards and the emergence of new media technologies and services. These new technologies and media are gaining advertising share against radio and other traditional media.

We are continuing to expand our digital initiative to provide a seamless experience across ~~numerous platforms~~multiple platforms. Our goal is to allow our listeners ~~and viewers~~ to connect with our ~~products where~~brands on demand, wherever, however and ~~when~~whenever they ~~want.~~choose. We continue to create opportunities through targeted digital advertising and an array of digital services that include online promotions, mobile messaging, and email marketing.

~~In addition, we continue the rollout~~19

Table of HD radio™. HD radio™ utilizes digital technology that provides improved sound quality over standard analog broadcasts and also allows for the delivery of additional channels of diversified programming or data streaming in each radio market.Contents

21

During the ~~nine~~three months ended ~~September 30, 2017~~March 31, 2021 and ~~2016~~2020 and the years ended December 31, ~~2016~~2020 and ~~2015,~~2019, our Charleston, South Carolina; Columbus, Ohio; Des Moines, Iowa; ~~Manchester, New Hampshire;~~ Milwaukee, ~~Wisconsin;~~Wisconsin and Norfolk, Virginia markets, when combined, represented approximately ~~43%~~39%, ~~43%~~39%, ~~43%~~39% and ~~41%~~39%, respectively, of our consolidated net operating revenue. An adverse change in any of these radio markets or our relative market position in those markets could have a significant impact on our operating results as a whole.

The following tables describe the percentage of our consolidated net operating revenue represented by each of these markets:


	Percentage of Consolidated				Percentage of Consolidated
	Net Operating Revenue for				Net Operating Revenue
	the Three Months Ended				for the Years Ended
	March 31,				December 31,
	2021		2020		2020		2019
Market:
Charleston, South Carolina	5	%	5	%	5	%	5	%
Columbus, Ohio	10	%	11	%	10	%	11	%
Des Moines, Iowa	6	%	6	%	7	%	6	%
Milwaukee, Wisconsin	11	%	11	%	11	%	11	%
Norfolk, Virginia	7	%	6	%	6	%	6	%

Percentage of Consolidated Percentage of Consolidated
Net Operating Revenue for Net Operating Revenue
the Nine Months Ended for the Years Ended
September 30, December 31,
2017 2016 2016 2015
Market:
Columbus, Ohio 12 % 12 % 12 % 9 %
Des Moines, Iowa 8 % 8 % 8 % 8 %
Manchester, New Hampshire 5 % 6 % 6 % 6 %
Milwaukee, Wisconsin 12 % 12 % 12 % 12 %
Norfolk, Virginia 6 % 5 % 5 % 6 %

During the ~~nine~~three months ended ~~September 30, 2017~~March 31, 2021 and ~~2016~~2020 and the years ended December 31, ~~2016~~2021 and ~~2015,~~2020, the radio stations in our five largest markets, when combined, represented approximately ~~48%~~41%, ~~48%~~53%, 49% and ~~44%~~43%, respectively, of our consolidated station operating income. We note that the percent of consolidated station operating income at March 31, 2020 and December 31, 2020 is higher than normal due to the impact of the COVID-19 pandemic on our markets. If the pandemic is resolved, we would anticipate results by market to be back to normalized amounts in future years. The following tables describe the percentage of our consolidated station operating income represented by each of these markets:


	Percentage of Consolidated				Percentage of Consolidated
	*Station Operating Income ()**				*Station Operating Income()**
	for the Three Months Ended				for the Years Ended
	March 31,				December 31,
	2021		2020		2020		2019
Market:
Charleston, South Carolina	4	%	4	%	5	%	4	%
Columbus, Ohio	14	%	21	%	16	%	15	%
Des Moines, Iowa	4	%	4	%	7	%	6	%
Milwaukee, Wisconsin	11	%	16	%	15	%	12	%
Norfolk, Virginia	8	%	8	%	6	%	6	%

Percentage of Consolidated Percentage of Consolidated
Station Operating Income (*) Station Operating Income (*)
for the Nine Months Ended for the Years Ended
September 30, December 31,
2017 2016 2016 2015
Market:
Columbus, Ohio 15 % 15 % 15 % 10 %
Des Moines, Iowa 7 % 7 % 7 % 8 %
Manchester, New Hampshire 6 % 8 % 9 % 8 %
Milwaukee, Wisconsin 14 % 14 % 14 % 13 %
Norfolk, Virginia 6 % 4 % 4 % 5 %

*	Operating income ~~plus~~adjusted for corporate general and administrative expenses, depreciation and amortization, other operating (income) expenses, and impairment of intangible assets.

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20

~~Discontinued Operations - Television Stations~~

~~Our television station’s primary source~~Table of revenue is from the sale of advertising for broadcast on our stations. The number of advertisements available for broadcast on our television stations is limited by network affiliation and syndicated programming agreements and, with respect to children’s programs, federal regulation. Our television stations’ local market managers determine the number of advertisements to be broadcast in locally produced programs only, which are primarily news programming and occasionally local sports or information shows.Contents

Our net operating revenue, station operating expense and operating income vary from market to market based upon the market’s rank or size, which is based upon population, available television advertising revenue in that particular market, and the popularity of programming being broadcast.

Our financial results are dependent on a number of factors, the most significant of which is our ability to generate advertising revenue through rates charged to advertisers. The rates a station is able to charge are, in large part, based on a station’s ability to attract audiences in the demographic groups targeted by its advertisers, as measured principally by periodic reports by independent national rating services. Various factors affect the rate a station can charge, including the general strength of the local and national economies, population growth, ability to provide popular programming through locally produced news, sports and weather and as a result of syndication and network affiliation agreements, local market competition, the ability of television broadcasting to reach a mass appeal market compared to other advertising media, and signal strength including cable/satellite coverage, and government regulation and policies.

Our stations strive to maximize revenue by constantly adjusting prices for our commercial spots based upon local market conditions, advertising demands and ratings. While there may be shifts from time to time in the number of advertisements broadcast during a particular time of day, the total number of advertisements broadcast on a particular station generally does not vary significantly from year to year. Any change in our revenue, with the exception of those instances where stations are acquired or sold, is generally the result of pricing adjustments, which are made to ensure that the station efficiently utilizes available inventory.

Because audience ratings in the local market are crucial to a station’s financial success, we endeavor to develop strong viewer loyalty by providing locally produced news, weather and sports programming. We believe that this emphasis on the local market provides us with the viewer loyalty we are trying to achieve.

Most of our revenue is generated from local advertising, which is sold primarily by each television markets’ sales staff. For the eight months ended August 31, 2017 and the nine months ended September 30, 2016, approximately 83% and 85%, respectively, of our television segment’s gross revenue was from local advertising. To generate national advertising sales, we engage independent advertising sales representatives that specialize in national sales for each of our television markets.

Our revenue varies throughout the year. Advertising expenditures, our primary source of revenue, generally have been lowest during the winter months, which include the first quarter of each year. We had a decrease in political advertising for 2017 due to the decreased number of national, state and local elections in most of our markets as compared to prior year.

The primary operating expenses involved in owning and operating television stations are employee salaries, sales commissions, programming expenses, including news production and the cost of acquiring certain syndicated programming, depreciation and advertising and promotion expenses.

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Three Months Ended ~~September 30, 2017~~March 31, 2021 Compared to Three Months Ended ~~September 30, 2016~~March 31, 2020

Results of Operations

The following tables summarize our results of operations for the three months ended ~~September 30, 2017~~March 31, 2021 and ~~2016.~~

2020.

Consolidated Results of Operations


	Three Months Ended
	March 31,				$ Increase		% Increase
	2021		2020		(Decrease)		(Decrease)

	(In thousands, except percentages and per share information)
Net operating revenue	$	22,301	$	26,051	$	(3,750)	(14.4)	%
Station operating expense		18,923		22,199		(3,276)	(14.8)	%
Corporate general and administrative		2,438		3,015		(577)	(19.1)	%
Other operating (income) expense, net		57		(1,330)		1,387	N/M
Operating income		883		2,167		(1,284)	(59.3)	%
Interest expense		73		108		(35)	(32.4)	%
Interest income		(6)		(108)		102	(94.4)	%
Other income		(272)		(213)		(59)	N/M
Income before income tax expense		1,088		2,380		(1,292)	(54.3)	%
Income tax expense		330		700		(370)	(52.9)	%
Net income	$	758	$	1,680	$	(922)	(54.9)	%
Earnings per share (diluted)	$	0.13	$	0.28		(0.15)	(53.6)	%

Three Months Ended
September 30, $ Increase % Increase
2017 2016 (Decrease) (Decrease)
(In thousands, except percentages and per share information)
Net operating revenue $ 30,269 $ 29,878 $ 391 1.3 %
Station operating expense 21,755 21,775 (20 ) (0.1 )%
Corporate general and administrative 3,132 2,728 404 14.8 %
Other operating expense (127 ) (1,393 ) 1,266 N/M
Operating income from continuing operations 5,509 6,768 (1,259 ) (18.6 )%
Interest expense 254 187 67 35.8 %
Income from continuing operations before taxes 5,255 6,581 (1,326 ) (20.1 )%
Income tax expense 2,290 2,678 (388 ) (14.5 )%
Income from continuing operations, net of tax 2,965 3,903 (938 ) (24.0 )%
Income from discontinued operations, net of tax 30,451 1,511 28,940 N/M
Net income $ 33,416 $ 5,414 $ 28,002 N/M

Earnings per share:
From continuing operations $ .50 $ .66 $ (.16 ) (24.2 )%
From discontinued operations 5.16 .26 4.90 N/M
Earnings per share (diluted) $ 5.66 $ .92 $ 4.74 N/M

~~Results of Discontinued Operations~~

Three Months Ended
September 30, $ Increase % Increase
2017⁽¹⁾ 2016 (Decrease) (Decrease)
(In thousands, except percentages)
Net operating revenue $ 3,296 $ 6,241 $ (2,945 ) (47.2 )%
Station operating expense 2,372 3,684 (1,312 ) (35.6 )%
Operating income from discontinued operations 924 2,557 (1,633 ) (63.9 )%
Interest expense 5 9 (4 ) (44.4 )%
Income before income taxes from discontinued operations 919 2,548 (1,629 ) (63.9 )%
Pretax gain on the disposal of discontinued operations 50,842 — 50,842 N/M
Total pretax gain on discontinued operations 51,761 2,548 49,213 N/M
Income tax expense 21,310 1,037 20,273 N/M
Income from discontinued operations $ 30,451 $ 1,511 $ 28,940 N/M

~~(1)~~

~~Results of operations for the Television stations are reflected through August 31, 2017. The effective date of the sale was September 1, 2017.~~

N/M = Not Meaningful

24

For the three months ended ~~September 30, 2017,~~March 31, 2021, consolidated net operating revenue was ~~$30,269,000~~$22,301,000 compared with ~~$29,878,000~~$26,051,000 for the three months ended September 30, 2016, an increase of $391,000 or 1.3%. We had an increase of approximately $717,000 that was attributable to stations that we did not own or operate for the entire comparable period, partially offset byMarch 31, 2020, a decrease of ~~$326,000 generated by stations we owned~~$3,750,000 or ~~operated for the comparable period in 2016 (“same station”)~~14.4%. The decrease in ~~same station~~ revenue was ~~primarily~~attributable to the ~~result of~~COVID-19 pandemic. We had decreases in gross local revenue of ~~$311,000,~~$2,907,000, gross political revenue of ~~$197,000~~$818,000, gross national revenue of $266,000, gross barter revenue of $194,000, and non-spot gross revenue of $156,000, partially offset by an increase in gross interactive revenue of $139,000 and a decrease in agency commissions of ~~approximately $123,000~~$416,000, from the ~~third~~first quarter of ~~2016.~~2020. The decrease in gross local, national, barter revenue and agency commissions was at the majority of our markets as a result of the impact of the COVID-19 pandemic and the disruption to our advertisers’ businesses. The decrease in non-spot gross revenue is primarily due to decreases in ~~our Bellingham, Washington and Springfield, Illinois markets.~~the number of events being held due to the COVID-19 pandemic. The decrease in gross political revenue was attributable to fewer national, local and state elections in 2021 versus 2020. The increase in gross interactive revenue is primarily due to ~~a lower number of national, state and local elections~~an increase in ~~most of~~ our ~~markets. The decrease in agency commissions is due to lower gross local agency and political~~streaming revenue.

Station operating expense was ~~$21,755,000~~$18,923,000 for the three months ended ~~September 30, 2017,~~March 31, 2021, compared with ~~$21,775,000~~$22,199,000 for the three months ended ~~September 30, 2016,~~March 31, 2020, a decrease of ~~$20,000~~$3,276,000 or ~~0.1%~~14.8%. We had an increase of approximately $581,000 that was attributable to stations that we did not own or operate for the entire comparable period, offset by a decrease of approximately $601,000 generated by stations we owned or operated for the comparable period in 2016. The decrease isin operating expense was primarily ~~attributable to~~ a ~~decrease~~result of ~~$203,000~~decreases in compensation related expenses, bad debt expense, commission expense, healthcare costs, ~~a decrease of $191,000 in licensing agreements~~depreciation and ~~a decrease in~~amortization expenses, barter expenses, tower lease expense, and music licensing fees, of ~~$128,000 due to a credit received in the 3~~^rd ~~quarter of 2017 resulting from SESAC arbitration~~$1,100,000, $676,000, $503,000, $341,000, $265,000, $218,000, $149,000 and $127,000 respectively partially offset by an increase in ~~other music licensing fees.~~sales rating survey expenses of $287,000 from the first quarter of 2020.

~~Operating~~We had operating income for the three months ended ~~September 30, 2017 was $5,509,000~~March 31, 2021 of $883,000 compared to ~~$6,768,000~~$2,167,000 for the three months ended ~~September 30, 2016,~~March 31, 2020, a decrease of $1,259,000 or 18.6%. The decrease was a result of the increase in net operating revenue partially offset by a decrease in station operating expense, described above, an increase in our corporate general and administrative expenses of $404,000 or 14.8%, and a decrease in other operating income of $1,266,000 from the third quarter of 2016. The increase in corporate expenses is due to an increase in key man life insurance of $103,000, an increase in non-cash compensation related to the amortization of restricted stock grants of $93,000, an increase of $80,000 in legal and other fees due to the Charleston/Hilton Head South Carolina acquisition, an increase of $42,000 in compensation costs, an increase in transportation costs of $35,000 and an increase in healthcare costs of $24,000. In 2016, we had other operating income of $1,393,000 due to the gain of $1,415,000 received from the sale of a tower in Norfolk, Virginia.

Income from continuing operations, net of tax for the three months ended September 30, 2017 was $2,965,000 compared to $3,903,000 for the three months ended September 30, 2016, a decrease of $938,000 or 24.0%. The decrease in income from continuing operations, net of tax is due to the decrease of operating income, described above, an increase in interest expense of $67,000 due to an increase in our interest rates partially offset by a decrease in income taxes of $388,000.

Income from discontinued operations, net of tax for the two months ended August 31, 2017 was $30,451,000 compared to $1,511,000 for the three months ended September 30, 2016 an increase of $28,940,000. The increase was a direct result of the pretax gain on the disposal of the Television stations of $50,842,000, a decrease in station operating expense of $1,312,000 or 35.6%, partially offset by a decrease in net operating revenue of $2,945,000 or $47.2% and an increase in income tax related to the gain on the sale of $20,273,000. For the two months ended August 31, 2017, net operating revenue of our television stations was $3,296,000 compared with $6,241,000 for the three months ended September 30, 2016, a decrease of $2,945,000 or 47.2% primarily due to only operating the television stations for two months in 2017 and a decrease in gross political revenue in our Joplin, Missouri market. Station operating expense of the television stations for the two months ended August 31, 2017 was $2,372,000, compared with $3,684,000 for the three months ended September 30, 2016, a decrease of $1,312,000 or 35.6%. The decrease is primarily due to only operating the television stations for two months in 2017 compared to the whole quarter in 2016.

We generated net income of $33,416,000 ($5.66 per share on a fully diluted basis) during the three months ended September 30, 2017, compared to $5,414,000 ($.92 per share on a fully diluted basis) for the three months ended September 30, 2016, an increase of $28,002,000. This is a direct result of the increase of $28,940,000 from discontinued operations partially offset by a decrease in income from continuing operations of $938,000.

25

~~Nine Months Ended September 30, 2017 Compared to Nine Months Ended September 30, 2016~~

~~Results of Operations~~

~~The following tables summarize our results of operations for the nine months ended September 30, 2017 and 2016.~~

~~Consolidated Results of Operations~~

Nine Months Ended
September 30, $ Increase % Increase
2017 2016 (Decrease) (Decrease)
(In thousands, except percentages and per share information)
Net operating revenue $ 86,685 $ 88,208 $ (1,523 ) (1.7 )%
Station operating expense 64,521 64,757 (236 ) (0.4 )%
Corporate general and administrative 8,875 8,065 810 10.0 %
Other operating expense (69 ) (1,388 ) 1,319 N/M
Operating income 13,358 16,774 (3,416 ) (20.4 )%
Interest expense 691 548 143 26.1 %
Income from continuing operations before taxes 12,667 16,226 (3,559 ) (21.9 )%
Income tax expense 5,280 6,665 (1,385 ) (20.8 )%
Income from continuing operations, net of tax 7,387 9,561 (2,174 ) (22.7 )%
Income from discontinued operations, net of tax 32,501 3,688 28,813 N/M

Net income $ 39,888 $ 13,249 $ 26,639 N/M

Earnings per share:
From continuing operations $ 1.25 $ 1.62 $ (.37 ) (22.8 )%
From discontinued operations 5.51 .63 4.88 N/M
Earnings per share (diluted) $ 6.76 $ 2.25 $ 4.50 N/M

~~Results of Discontinued Operations~~

Nine Months Ended
September 30, $ Increase % Increase
2017⁽¹⁾ 2016 (Decrease) (Decrease)
(In thousands, except percentages)
Net operating revenue $ 14,238 $ 17,094 $ (2,856 ) (16.7 )%
Station operating expense 9,727 10,807 (1,080 ) (10.0 )%
Other operating 31 3 28 N/M
Operating income from discontinued operations 4,480 6,284 (1,804 ) (28.7 )%
Interest expense 21 26 (5 ) (19.2 )%
Income before income taxes from discontinued operations 4,459 6,258 (1,799 ) (28.7 )%
Pretax gain on the disposal of discontinued operations 50,842 — 50,842 N/M
Total pretax gain on discontinued operations 55,301 6,258 49,043 N/M
Income tax expense 22,800 2,570 20,230 N/M
Income from discontinued operations $ 32,501 $ 3,688 $ 28,813 N/M

~~(1)~~

~~Results of operations for the Television stations are reflected through August 31, 2017. The effective date of the sale was September 1, 2017.~~

~~N/M = Not Meaningful~~

26

For the nine months ended September 30, 2017, consolidated net operating revenue was $86,685,000 compared with $88,208,000 for the nine months ended September 30, 2016, a decrease of $1,523,000 or 1.7%. We had an increase of approximately $874,000 that was attributable to stations that we did not own or operate for the entire comparable period, offset by a decrease of approximately $2,397,000 generated by stations we owned or operated for the comparable period in 2016 (“same station”). On a same station basis gross political revenue, gross local revenue and gross national revenue decreased $1,289,000, $1,097,000 and $505,000 respectively from 2016. These decreases were partially offset by a decrease in agency commissions of $470,000. The decrease in gross political revenue was due to the decreased number of national, state and local elections in most of our markets as compared to prior year. The decrease in gross local revenue was due to decreases in our Bellingham, Washington; Charlottesville, Virginia; Columbus, Ohio; Ithaca, New York; Springfield, Illinois and Springfield, Massachusetts markets. The decrease in gross national revenue is due to decreases in our Champaign, Illinois and Yankton, South Dakota markets. The decrease in agency commissions is due to lower local agency, national and political revenues.

Station operating expense was $64,521,000 for the nine months ended September 30, 2017, compared with $64,757,000 for the nine months ended September 30, 2016, a decrease of $236,000 or 0.4%. We had an increase of approximately $696,000 that was attributable to stations that we did not own or operate for the entire comparable period, offset by a decrease of approximately $932,000 generated by stations we owned or operated for the comparable period in 2016. The decrease is primarily attributable to a $568,000 decrease in licensing agreements, a $206,000 decrease in sales commission expense and a decrease in compensation costs of $138,000.

~~Operating income for the nine months ended September 30, 2017 was $13,358,000 compared to $16,774,000 for the nine months ended September 30, 2016, a decrease of $3,416,000 or 20.4%.~~$1,284,000. The decrease was a result of the decrease in net operating revenue partially offset by athe decrease in station operating expense, ~~described~~noted above, ~~an increase~~a decrease in ~~our~~ corporate general and administrative expenses of ~~$810,000 or 10.0%, and~~$577,000 partially offset by a decrease in other operating income of $1,319,000 from 2016. The increase in corporate expenses is due to an increase in key man life insurance of $286,000, an increase in non-cash compensation related to the amortization of restricted stock grants of $167,000, an increase in transportation costs of $110,000, and increase in compensation costs of $91,000, an increase in legal expenses of $87,000 and an increase of $50,000 in healthcare costs. In 2016, we had other operating income of $1,393,000 due to the gain of $1,415,000 received from the sale of a tower in Norfolk, Virginia.

Income from continuing operations, net of tax for the nine months ended September 30, 2017 was $12,667,000 compared to $16,226,000 for the nine months ended September 30, 2016, a decrease of $3,559,000 or 21.9%.$1,387,000. The decrease in ~~income~~corporate general and administrative expenses was primarily attributable to decreases in non cash compensation expenses of $226,000, compensation related expenses of $188,000 and overall expense reductions of $166,000, respectively, from ~~continuing operations, net~~first quarter of ~~tax is due to~~2020. In the ~~decrease~~first quarter of ~~operating income, described above, an increase in interest expense of $143,000 due to an increase in our interest rates partially offset by a decrease in income taxes of $1,385,000.~~

Income from discontinued operations, net of tax for the eight months ended August 31, 2017 was $32,501,000 compared to $3,688,000 for the nine months ended September 30, 2016 an increase of $28,813,000. The increase was a direct result of the pretax gain on the disposal of the Television stations of $50,842,000, a decrease in station operating expense of $1,080,000 or 10%, partially offset by a decrease in net operating revenue of $2,856,000 or $16.7% and an increase in income tax related to2020 we recorded the gain on the sale of ~~$20,230,000. For the eight months ended August 31, 2017, net operating revenue~~a tower and a building on one of our television stations was $14,238,000 compared with $17,094,000 for the nine months ended September 30, 2016, a decrease of $2,856,000 or 16.7% primarily due to only operating the television stations for eight months in 2017 and a decrease in gross political revenuetower sites in our ~~Joplin, Missouri market. Station~~Bellingham, Washington market of $1,400,000 in other operating ~~expense~~(income) expense.

21

Table of the television stations for the eight months ended August 31, 2017 was $9,727,000, compared with $10,807,000 for the nine months ended September 30, 2016, a decrease of $1,080,000 or 10%. The decrease is primarily due to only operating the television stations for eight months in 2017 compared to the nine months in 2016.Contents

We generated net income of ~~$39,888,000~~$758,000 ($~~6.76~~0.13 per share on a fully diluted basis) during the ~~nine~~three months ended ~~September 30, 2017,~~March 31, 2021, compared to ~~$13,249,000~~net income of $1,680,000 ($~~2.25~~0.28 per share on a fully diluted basis) for the ~~nine~~three months ended ~~September 30, 2016, an increase~~March 31, 2020, a decrease of ~~$26,639,000. This~~$922,000. The decrease in net income is primarily due to the decrease in operating income, described above and a ~~direct result~~decrease in interest income of ~~the increase in income from discontinued operations of $28,813,000~~$102,000 partially offset by a decrease in income ~~from continuing operations~~tax expense of ~~$2,174,000.~~

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$370,000. The decrease in our income tax expense is due to the decrease in income before income tax.

Forward-Looking Statements

Statements contained in this Form 10-Q that are not historical facts are forward-looking statements that are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. In addition, words such as “believes,” “anticipates,” “estimates,” “plans,” “expects,” and similar expressions are intended to identify forward-looking statements. These statements are made as of the date of this report or as otherwise indicated, based on current expectations. We undertake no obligation to update this information. A number of important factors could cause our actual results for ~~2017~~2021 and beyond to differ materially from those expressed in any forward-looking statements made by us or on our behalf. Forward-looking statements are not guarantees of future performance as they involve a number of risks, uncertainties and assumptions that may prove to be incorrect and that may cause our actual results and experiences to differ materially from the anticipated results or other expectations expressed in such forward-looking statements. The risks, uncertainties and assumptions that may affect our performance include our financial leverage and debt service requirements, dependence on key personnel, dependence on key stations, U.S. and local economic conditions, our ability to successfully integrate acquired stations, regulatory requirements, new technologies, natural disasters, terrorist attacks, and ~~terrorist attacks.~~the effects of the ongoing COVID-19 pandemic. We cannot be sure that we will be able to anticipate or respond timely to changes in any of these factors, which could adversely affect the operating results in one or more fiscal quarters. Results of operations in any past period should not be considered, in and of itself, indicative of the results to be expected for future periods. Fluctuations in operating results may also result in fluctuations in the price of our stock.

For a more complete description of the prominent risks and uncertainties inherent in our business, see Item 1A. “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, ~~2016.~~

2020 and in this Report.

Liquidity and Capital Resources

Debt Arrangements and Debt Service Requirements

On August 18, 2015, we entered into a new credit facility (the “Credit Facility”) with ~~a group of banks. In connection with the execution of the Credit Facility, the credit agreement in place at June 30, 2015 (the “Old Credit Agreement”) was terminated,~~JPMorgan Chase Bank, N.A., The Huntington National Bank, Citizens Bank, National Association and ~~all outstanding amounts were paid in full.~~J.P. Morgan Securities LLC. The Credit Facility consists of a $100 million five-year revolving facility (the “Revolving Credit Facility”) and ~~matures~~originally matured on August 18, 2020.

On June 27, 2018, the Company entered into a Second Amendment to its Credit Facility, (the “Second Amendment”), which had first been amended on September 1, 2017, extending the revolving credit maturity date under the Credit Agreement for five years after the date of the amendment to June 27, 2023. On July 1, 2019, we elected to reduce our Revolving Credit Facility to $70 million. On May 11, 2020 we entered into an assumption agreement and amendment of loan documents as part of our reincorporation as a Florida corporation.

We have pledged substantially all of our assets (excluding our FCC licenses and certain other assets) in support of the Credit Facility and each of our subsidiaries has guaranteed the Credit Facility and has pledged substantially all of their assets (excluding their FCC licenses and certain other assets) in support of the Credit Facility.

Approximately $266,000 of ~~transaction fees~~debt issuance costs related to the Credit Facility were capitalized and are being amortized over the life of the Credit Facility. ~~Those deferred~~These debt issuance costs are included in other assets, net in the ~~condensed~~ consolidated balance sheets.

As a result of the Second Amendment, the Company incurred an additional $120,000 of transaction fees related to the Credit Facility that were capitalized. The cumulative transaction fees are being amortized over the remaining life of the Credit Facility.

Interest rates under the Credit Facility are payable, at our option, at alternatives equal to LIBOR ~~(1.25%~~(0.1250% at ~~September 30, 2017)~~March 31, 2021), plus 1% to 2% or the base rate plus 0% to 1%. The spread over LIBOR and the base rate vary from time to time, depending upon our financial leverage. As previously noted, the May 11, 2020 amendment to the Credit Facility includes an alternative to LIBOR in the event LIBOR is no longer available. Letters of credit issued under the Credit Facility will be subject to a participation fee (which is equal to the interest ~~rates~~rate applicable to Eurocurrency Loans, as defined in the Credit Agreement) payable to each of the Lenders and a fronting fee equal to 0.25% per annum payable to the issuing bank. We also pay quarterly commitment fees of 0.2% to 0.3% per annum on the unused portion of the Revolving Credit Facility.

22

Table of Contents

The Credit Facility contains a number of financial covenants (all of which we were in compliance with at ~~September 30, 2017)~~March 31, 2021) which, among other things, require us to maintain specified financial ratios and impose certain limitations on us with respect to investments, additional indebtedness, dividends, distributions, guarantees, liens and encumbrances.

We had approximately ~~$65~~$60 million of unused borrowing capacity under the Revolving Credit Facility at ~~September 30, 2017.~~March 31, 2021.

On October 5, 2017 and November 3, 2017, the Company used $5,287,000 and $5,000,000, respectively of the proceeds from the Television Sale to pay down a portion of its Revolving Credit Facility. Those amounts were classified as current portion of long term debt at September 30, 2017.

The loan agreement of approximately $1.1 million of secured debt of affiliate was amended in April, 2017 to extend the due date of the loan for three years to mature on May 1, 2020. Our affiliate repaid this loan when the television stations were sold on September 1, 2017.

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Sources and Uses of Cash

During the ~~nine~~three months ended ~~September 30, 2017~~March 31, 2021 and ~~2016,~~2020, we had net cash flows from operating activities of ~~$18,677,000~~$5,352,000 and ~~$21,020,000,~~$5,065,000, respectively. We believe that cash flow from operations will be sufficient to meet quarterly debt service requirements for interest and payments of principal under our Credit Facility. However, if such cash flow is not sufficient we may be required to sell additional equity securities, refinance our obligations or dispose of one or more of our properties in order to make such scheduled payments. There can be no assurance that we would be able to effect any such transactions on favorable terms, if at all.

In March 2013, our board of directors authorized an increase to our Stock Buy-Back Program (the “Buy-Back Program”) to allow us to purchase up to $75.8 million of our Class A Common Stock. From its inception in 1998 through March 31, 2021, we have repurchased 2.2 million shares of our Class A Common Stock for $57 million. During the three months ended March 31, 2021, approximately 0 and 800 shares were repurchased for $0 and $20,000, respectively, related to the Buy-Back Program. Given the unprecedented uncertainty surrounding the COVID-19 virus and the resulting economic issues we have halted the directions for any additional buybacks under our plan.

Our capital expenditures, exclusive of acquisitions, for the ~~nine~~three months ended ~~September 30, 2017~~March 31, 2021 were ~~$4,850,000~~$534,000 ($~~4,149,000~~1,021,000 in ~~2016)~~2020). We anticipate capital expenditures in ~~2017~~2021 to be approximately ~~$6.5~~$4.5 million ~~including approximately $750 thousand relating~~ to ~~our recent acquisitions in Charleston and Hilton Head,~~$5.5 million, which we expect to finance through funds generated from operations.

On January 8, 2021, the Company closed on an agreement to purchase WBQL and W288DQ from Consolidated Media, LLC, for an aggregate purchase price of $175,000, of which $25,000 was paid in 2020 and the remaining $150,000 paid in 2021. Management attributes the goodwill recognized in the acquisition to the power of the existing brands in the Clarksville, Tennessee market as well as synergies and growth opportunities expected through the combination with the Company’s existing stations.

On ~~September 13, 2017,~~January 2, 2020, the Company closed on an agreement to purchase W295BL from Basic Holdings, LLC, for an aggregate purchase price of $200,000, of which $10,000 was paid in 2019 and the remaining $190,000 paid in 2020. Management attributes the goodwill recognized in the acquisition to the power of the existing brands in the Manchester, New Hampshire market as well as synergies and growth opportunities expected through the combination with the Company’s existing stations.

On March 4, 2020, the Company’s Board of Directors declared a regular ~~quarterly~~ cash dividend of ~~$0.30~~$0.32 per share on its Classes A and B Common Stock. This dividend, totaling ~~$1.8 million, which is recorded within Other accrued expenses as of September 30, 2017 was paid on October 13, 2017 to shareholders of record on September 25, 2017.~~

On May 3, 2017, the Company’s Board of Directors declared a regular quarterly cash dividend of $0.30 per share on its Classes A and B Common Stock. This dividend, totaling $1.8 million was paid on June 9, 2017 to shareholders of record on May 22, 2017and funded by cash on the Company’s balance sheet.

~~On March 3, 2017, the Company’s Board of Directors declared a regular quarterly cash dividend of $0.30 per share on its Classes A and B Common Stock. This dividend, totaling $1.8~~approximately $1.9 million, was paid on April ~~14, 2017~~10, 2020 to shareholders of record on March ~~28, 2017~~16, 2020 and ~~funded by cash~~was recorded in dividends payable on the Company’s ~~balance sheet.~~

Condensed Consolidated Balance sheet at March 31, 2020. On ~~January 16, 2017, we entered into an asset purchase agreement~~June 18, 2020, the Company’s Board of Directors announced that it was temporarily suspending the quarterly cash dividend in response to ~~purchase an FM radio station (WCVL) from WUVA, Incorporated, serving~~ the Charlottesville, Virginia market for approximately $1,650,000. Simultaneously, we entered into a TBA to begin operating the station on February 1, 2017. We completed this acquisition on April 18, 2017. This acquisition was financed through funds generated from operations.

On May 9, 2017 we entered into a definitive agreement to sell our Joplin, Missouri and Victoria, Texas television stations for approximately $66.6 million, subject to certain adjustments, to Evening Telegram Company d/b/a Morgan Murphy Media. The Television Sale was completed on September 1, 2017 and the Company received net proceeds of $69.5 million which included the sales price of $66.6 million, and the proceeds from sales of related accounts receivable of approximately $3.4 million, offset by certain closing adjustments and transactional costs of $500 thousand. The Company recognized a pretax gain of $50.8 million as a resultcontinued uncertainty of the ~~Television Sale in the third quarter~~ongoing impact of 2017. The gain net of tax for the Television Sale was $29.9 million. Effective September 1, 2017, the Company used $24.2 million of the proceeds from the Television Sale to finance the acquisition of radio stations in South Carolina (as described in Note 6). On October 5, 2017 and November 3, 2017, the Company used $5,287,000 and $5,000,000, respectively of the proceeds from the Television Sale to pay down a portion of its Revolving Credit Facility (as defined and described in Note 8).

On May 9, 2017, the Company entered into an Asset Purchase Agreement with Apex Media Corporation and Pearce Development, LLC f/k/a Apex Real Property, LLC to purchase, for approximately $23 million (subject to certain purchase price adjustments) plus the right to air certain radio commercials, substantially all the assets related to the operation of the following radio stations principally serving the South Carolina area: WCKN (FM), WMXF(FM), WXST(FM), WAVF(FM), WSPO(AM), W261DG, W257BQ, WVSC(FM), WLHH(FM), WOEZ(FM), W256CB, W293BZ. The Company closed this transaction effective September 1, 2017, simultaneously with the closing of the Television Sale using funds generated from the Television Sale.

COVID-19.

We continue to actively seek and explore opportunities for expansion through the acquisitions of additional broadcast properties.

We anticipate that any future acquisitions of radio and television stations and dividend payments will be financed through funds generated from operations, borrowings under the Credit Agreement, ~~proceeds from the Television Sale,~~ additional debt or equity financing, cash on hand, or a combination thereof. However, there can be no assurances that any such financing will be available on acceptable terms, if at all.

29

23

Table of Contents

Summary Disclosures About Contractual Obligations and Commercial Commitments

We have future cash obligations under various types of contracts, including the terms of our Credit Facility, operating leases, programming contracts, employment agreements, and other operating contracts. For additional information concerning our future cash obligations see “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operation — Summary Disclosures About Contractual Obligations” in our Annual Report on Form 10-K for the year ended December 31, ~~2016.~~

2020.

We anticipate that our contractual cash obligations will be financed through funds generated from operations or additional borrowings under the Credit Facility, or a combination thereof.

Critical Accounting Policies and Estimates

Our consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States, which require us to make estimates, judgments and assumptions that affect the reported amounts of certain assets, liabilities, revenues, expenses and related disclosures and contingencies. We evaluate estimates used in preparation of our financial statements on a continual basis. There have been no significant changes to our critical accounting policies that are described in Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Critical Accounting ~~Policies and Estimates”~~Policies” in our Annual Report on Form 10-K for the year ended December 31, ~~2016.~~

2020.

Recent Accounting Pronouncements

Recent accounting pronouncements are described in Note 2 to the accompanying financial statements.

Inflation

The impact of inflation on our operations has not been significant to date. There can be no assurance that a high rate of inflation in the future would not have an adverse effect on our operations.

Item 3. Quantitative and Qualitative Disclosures about Market Risk

Refer to “Item 7A. Quantitative and Qualitative Disclosures ~~About~~about Market Risk” and “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations — Market Risk and Risk Management Policies” in our Annual Report on Form 10-K for the year ended December 31, ~~2016~~2020 for a complete discussion of our market risk. There have been no material changes to the market risk information included in our ~~2016~~2020 Annual Report on Form ~~10-K.~~10-K except as noted below in “Part II – Other Information; Item 1A. Risk Factors”.

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Item 4. Controls and Procedures

As of the end of the period covered by this report, the Company carried out an evaluation, under the supervision and with the participation of the Company’s management, including its Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of the Company’s disclosure controls and procedures pursuant to Rule 13a-15 of the Securities Exchange Act of 1934. Based upon that evaluation, the Company’s Chief Executive Officer and Chief Financial Officer concluded that the Company’s disclosure controls and procedures are effective to cause the material information required to be disclosed by the Company in the reports that it files or submits under the Securities Exchange Act of 1934 to be recorded, processed, summarized and reported within the time periods specified in the Commission’s rules and forms. There were no changes in the Company’s internal controls over financial reporting during the quarter ended ~~September 30, 2017,~~March 31, 2021, that have materially affected, or are reasonably likely to materially affect, the Company’s internal controls over financial reporting.

24

Table of Contents

PART II — OTHER INFORMATION

Item 1. Legal Proceedings

The Company is subject to various outstanding claims which arise in the ordinary course of business and to other legal proceedings. Management anticipates that any potential liability of the Company, which ~~may~~ arise out of or with respect to these matters, will not materially affect the Company’s financial statements.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

The following table summarizes our repurchases of our Class A Common Stock during the three months ended September 30, 2017. Shares repurchased during the quarter were from the retention of shares for cashless exercise of stock options and the payment of the withholding taxes related to those stock option exercises.March 31, 2021.


				Total Number	Approximate
				of	Dollar
				Shares	Value of
				Purchased	Shares
	Total	Average		as Part of	that May Yet be
	Number	Price		Publicly	Purchased
	of Shares	Paid per		Announced	Under the
Period	Purchased	Share		Program	Program(a)
January 1 - January 31, 2021	—	$	—	—	$	18,785,315
February 1 - February 28, 2021	—	$	—	—	$	18,785,315
March 1 - March 31, 2021	—	$	—	—	$	18,785,315
Total	—	$	—	—	$	18,785,315

Approximate
Total Number Dollar
of Value of
Shares Shares
Purchased that May Yet
as Part of be
Total Number Average Price Publicly Purchased
of Shares Paid per Announced Under the
Period Purchased Share Program Program(a)
July 1 – July 31, 2017 — $ — — $ 23,352,857
August 1 – August 31, 2017 916 $ 40.60 — $ 23,315,667
September 1 – September 30, 2017 — $ — — $ 23,315,667
Total 916 $ 40.60 — $ 23,315,667

(a)	We have a Stock Buy-Back Program which allows us to purchase our Class A Common Stock. In February 2013, our Board of Directors authorized an increase in the amount committed to the Buy-Back Program from $60 million to approximately $75.8 million.

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25

Table of Contents

Item 6. Exhibits

~~31.1~~


31.1		Certification of Chief Executive Officer Pursuant to Rule 13a-14(a) and Rule15d-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 of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

~~31.2~~ 32		~~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.

101.INS		Inline XBRL Instance Document (the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document)

101.SCH		Inline XBRL Taxonomy Extension Schema Document

101.CAL		Inline XBRL Taxonomy Calculation Linkbase Document

101.DEF		Inline XBRL Taxonomy Extension Definition Linkbase Document

101.LAB		Inline XBRL Taxonomy Extension Label Linkbase Document

101.PRE		Inline XBRL Taxonomy Extension Presentation Linkbase Document

(104)		Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101)

32

26

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	SAGA COMMUNICATIONS, INC.

Date: ~~November 9, 2017~~ May 10, 2021	/s/ SAMUEL D. BUSH
	Samuel D. Bush
	Senior Vice President and Chief Financial Officer ~~(Principal~~ (Principal Financial Officer)

Date: ~~November 9, 2017~~ May 10, 2021	/s/ CATHERINE A. BOBINSKI
	Catherine A. Bobinski
	Senior Vice President, Chief Accounting Officer and Corporate Controller (Principal Accounting Officer)

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27

~~Delaware~~		~~38-3042953~~
Florida	38-3042953
(State or other jurisdiction of		~~(I.R.S. Employer~~
incorporation or organization)		(I.R.S. Employer Identification No.)

~~73 Kercheval Avenue~~
73 Kercheval Avenue Grosse Pointe Farms, Michigan		~~48236~~
(Address of principal executive offices)		48236 (Zip Code)


Title of each class	Trading symbol(s)	Name of each exchange on which registered
Class A Common Stock, par value $.01 per share	SGA	NASDAQ

Large accelerated filer¨◻	Accelerated filer þ	Non-accelerated filer¨◻	Smaller Reporting Company¨☐	Emerging growth company¨
		~~(Do not check if a smaller~~ ~~reporting company)~~		☐

		Page
PART I. FINANCIAL INFORMATION		3

Item 1. Financial Statements (Unaudited)		3

Condensed consolidated balance sheets — ~~September 30, 2017~~March 31, 2021 and December 31, ~~2016~~2020		3

Condensed consolidated statements of ~~income~~operations — Three ~~and nine~~ months ended ~~September 30, 2017~~March 31, 2021 and ~~2016~~2020		4

Condensed consolidated statements of stockholders’ equity – Three months ended March 31, 2021 and 2020	5

Condensed consolidated statements of cash flows — ~~Nine~~Three months ended ~~September 30, 2017~~March 31, 2021 and ~~2016~~2020		5 6

Notes to unaudited condensed consolidated financial statements		6 7

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations		20 18

Item 3. Quantitative and Qualitative Disclosures about Market Risk		30 24

Item 4. Controls and Procedures		31 24

PART II OTHER INFORMATION		31 25

Item 1. Legal Proceedings		31 25

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds		31 25

Item 6. Exhibits		32 26
~~Signatures~~		33

~~EX-31.1~~
~~EX-31.2~~ Signatures	27
~~EX-32~~
EX-31.1

EX-31.2

EX-32

EX-101 INSTANCE DOCUMENT

EX-101 SCHEMA DOCUMENT

EX-101 CALCULATION LINKBASE DOCUMENT

EX-101 LABELS LINKBASE DOCUMENT

EX-101 PRESENTATION LINKBASE DOCUMENT

EX-101 DEFINITION LINKBASE DOCUMENT
~~EX-101 LABELS LINKBASE DOCUMENT~~
~~EX-101 PRESENTATION LINKBASE DOCUMENT~~

	þ
☒	QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

	¨
☐	TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

	September 30,			December 31,
	2017			2016
	(Unaudited)			(Note)
	(In thousands)
Assets
Current assets:
Cash and cash equivalents	$	81,035		$	26,697
Accounts receivable, net		18,880			17,735
Prepaid expenses and other current assets		2,026			2,397
Barter transactions		1,721			1,318
Current assets of discontinued operations		—			4,625
Total current assets		103,662			52,772
Property and equipment		135,644			134,680
Less accumulated depreciation		79,299			85,506
Net property and equipment		56,345			49,174
Other assets:
Broadcast licenses, net		94,708			86,622
Goodwill		15,417			7,407
Other intangibles, deferred costs and investments, net		7,822			5,975
Assets of discontinued operations		—			18,048
	$	277,954		$	219,998

Liabilities and stockholders’ equity
Current liabilities:
Accounts payable	$	2,211		$	1,618
Payroll and payroll taxes		6,836			6,954
Other accrued expenses		26,348			3,198
Barter transactions		1,394			1,304
Current portion of long term debt		10,287			—
Current liabilities of discontinued operations		292			2,971
Total current liabilities		47,368			16,045
Deferred income taxes		31,762			29,741
Long-term debt		25,000			35,287
Other liabilities		2,269			2,885
Liabilities of discontinued operations		—			1,058
Total liabilities		106,399			85,016
Commitments and contingencies		—			—
Stockholders’ equity:
Common stock		75			74
Additional paid-in capital		62,157			59,557
Retained earnings		143,308			108,733
Treasury stock		(33,985	)		(33,382	)
Total stockholders’ equity		171,555			134,982
	$	277,954		$	219,998

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2017			2016			2017			2016
	(Unaudited)
	(In thousands, except per share data)

Net operating revenue	$	30,269		$	29,878		$	86,685		$	88,208
Station operating expense		21,755			21,775			64,521			64,757
Corporate general and administrative		3,132			2,728			8,875			8,065
Other operating expense		(127	)		(1,393	)		(69	)		(1,388	)
Operating income from continuing operations		5,509			6,768			13,358			16,774
Interest expense		254			187			691			548
Income from continuing operations before tax		5,255			6,581			12,667			16,226
Income tax expense		2,290			2,678			5,280			6,665
Income from continuing operations, net of tax		2,965			3,903			7,387			9,561
Income from discontinued operations, net of tax (Note 5)		30,451			1,511			32,501			3,688
Net income	$	33,416		$	5,414		$	39,888		$	13,249
Basic Earnings per share:
From continuing operations	$	.50		$	.66		$	1.25		$	1.63
From discontinued operations		5.16			.26			5.51			.63
Basic earnings per share	$	5.66		$	.92		$	6.76		$	2.26

Weighted average common shares		5,807			5,755			5,800			5,753

Diluted Earnings per share:
From continuing operations	$	.50		$	.66		$	1.25		$	1.62
From discontinued operations		5.16			.26			5.51			.63
Diluted earnings per share	$	5.66		$	.92		$	6.76		$	2.25

Weighted average common and common equivalent shares		5,807			5,764			5,804			5,762

Dividends declared per share	$	.30		$	.30		$	.90		$	.80


	Class A			Class B			Additional						Total
	Common Stock			Common Stock			Paid-In		Retained		Treasury		Stockholders’
	Shares	Amount		Shares	Amount		Capital		Earnings		Stock		Equity

	(unaudited) (In thousands)

Balance at December 31, 2019	6,771	$	68	954	$	9	$	66,811	$	162,822	$	(37,358)	$	192,352
Net income, three months ended March 31, 2020	0		0	0		0		0		1,680		0		1,680
Dividends declared per common share	0		0	0		0		0		(1,919)		0		(1,919)
Compensation expense related to restricted stock awards	0		0	0		0		569		0		0		569
Purchase of shares held in treasury	0		0	0		0		0		0		(20)		(20)
401(k) plan contribution	0		0	0		0		(131)		0		382		251
Balance at March 31, 2020	6,771	$	68	954	$	9	$	67,249	$	162,583	$	(36,996)	$	192,913

	Three Months Ended September 30,				Nine Months Ended September 30,
	2017		2016		2017		2016
	(In thousands, except per share data)
Numerator:
Income from continuing operations	$	2,965	$	3,903	$	7,387	$	9,561
Less: Income allocated to unvested participating securities		51		72		126		176
Income from continuing operations available to common stockholders	$	2,914	$	3,831	$	7,261	$	9,385

Income from discontinued operations	$	30,451	$	1,511	$	32,501	$	3,688
Less: Income allocated to unvested participating securities		520		28		556		68
Income from discontinued operations available to common stockholders	$	29,931	$	1,483	$	31,945	$	3,620

Net income available to common stockholders	$	32,845	$	5,314	$	39,206	$	13,005

Denominator:
Denominator for basic earnings per share — weighted average shares		5,807		5,755		5,800		5,753
Effect of dilutive securities:
Common stock equivalents		—		9		4		9
Denominator for diluted earnings per share — adjusted weighted-average shares and assumed conversions		5,807		5,764		5,804		5,762

Basic earnings per share:
From continuing operations	$	.50	$	.66	$	1.25	$	1.63
From discontinued operations		5.16		.26		5.51		.63
Basic earnings per share	$	5.66	$	.92	$	6.76	$	2.26

Diluted earnings per share
From continuing operations	$	.50	$	.66	$	1.25	$	1.62
From discontinued operations		5.16		.26		5.51		.63
Diluted earnings per share	$	5.66	$	.92	$	6.76	$	2.25

	Three Months Ended September 30,				Nine Months Ended September 30,
	2017⁽⁴⁾		2016		2017⁽⁴⁾		2016

Net operating revenue	$	3,296	$	6,241	$	14,238	$	17,094
Station operating expense⁽¹⁾		2,372		3,684		9,727		10,807
Other operating (income) expense		—		—		31		3
Operating income		924		2,557		4,480		6,284
Interest Expense⁽²⁾		5		9		21		26
Income before income taxes		919		2,548		4,459		6,258
Pretax gain on the disposal of discontinued operations		50,842		—		50,842		—
Total pretax gain on discontinued operations		51,761		2,548		55,301		6,258
Income tax expense⁽³⁾		21,310		1,037		22,800		2,570
Income from discontinued operations, net of tax	$	30,451	$	1,511	$	32,501	$	3,688

	September 30, 2017			December 31, 2016
Major Classes of Current Assets of Discontinued Operations
Accounts receivable	$	—		$	3,868
Prepaid expenses and other current assets		—			625
Barter transactions		—			132
Total of current assets of discontinued operations	$	—		$	4,625

Major Classes of Non-Current Assets of Discontinued Operations
Property and equipment, net⁽¹⁾	$	—		$	7,388
Broadcast licenses, net⁽¹⁾		—			9,607
Other intangibles, deferred costs and investments, net⁽¹⁾		—			1,053
Total of non-current assets of discontinued operations	$	—		$	18,048
Total Assets Classified as Part of Discontinued Operations in the Condensed Consolidated Balance Sheets	$	—		$	22,673

Major Classes of Current Liabilities of Discontinued Operations
Accounts payable	$	84		$	759
Barter transactions		—			163
Current portion of long term debt		—			1,078
Other liabilities⁽¹⁾		208			971
Total of current liabilities of discontinued operations	$	292		$	2,971

Major Classes of Current Liabilities of Discontinued Operations
Other liabilities⁽¹⁾	$	—		$	1,058
Total of non-current liabilities of discontinued operations	$	—		$	1,058
Total Liabilities Classified as Part of Discontinued Operations in the Condensed Consolidated Balance Sheets	$	292		$	4,029
Net Assets Classified as Part of Discontinued Operations in the Condensed Consolidated Balance Sheets	$	(292	)	$	18,644

	September 30, 2017		September 30, 2016
Significant operating non-cash items
Depreciation and amortization⁽¹⁾	$	445	$	1,023
Broadcast program rights amortization		418		467
Barter revenue, net		18		58
Loss on sale of assets		31		3

Significant investing items
Acquisition of property and equipment	$	125	$	717
Proceeds from sale and disposal of assets		—		13
Net proceeds from sale of television stations⁽²⁾		69,528		—

						Weighted Average
				Weighted		Remaining		Aggregate
	Number of			Average		Contractual Term		Intrinsic
	Options			Exercise Price		(Years)		Value
Outstanding at January 1, 2017		29,035		$	28.47		0.4	$	633,834
Exercised		(29,035	)		28.47
Outstanding at September 30, 2017		—		$	—		—	$	—
Exercisable at September 30, 2017		—		$	—		—	$	—

				Weighted Average
				Grant Date Fair
	Shares			Value
Outstanding at January 1, 2017		103,262		$	43.73

							Weighted
							Average
							Grant Date
							Fair
						Shares	Value
Outstanding at January 1, 2021						63,755	$	32.90
Vested		(3,434	)		43.10	0		0
Forfeited		(594	)		45.39	0		0
Non-vested and outstanding at September 30, 2017		99,234		$	43.75
Non-vested and outstanding at March 31, 2021						63,755	$	32.90

	Percentage of Consolidated						Percentage of Consolidated
	Net Operating Revenue for						Net Operating Revenue
	the Nine Months Ended						for the Years Ended
	September 30,						December 31,
	2017			2016			2016			2015
Market:
Columbus, Ohio		12	%		12	%		12	%		9	%
Des Moines, Iowa		8	%		8	%		8	%		8	%
Manchester, New Hampshire		5	%		6	%		6	%		6	%
Milwaukee, Wisconsin		12	%		12	%		12	%		12	%
Norfolk, Virginia		6	%		5	%		5	%		6	%

	Percentage of Consolidated						Percentage of Consolidated
	Station Operating Income (*)						Station Operating Income (*)
	for the Nine Months Ended						for the Years Ended
	September 30,						December 31,
	2017			2016			2016			2015
Market:
Columbus, Ohio		15	%		15	%		15	%		10	%
Des Moines, Iowa		7	%		7	%		7	%		8	%
Manchester, New Hampshire		6	%		8	%		9	%		8	%
Milwaukee, Wisconsin		14	%		14	%		14	%		13	%
Norfolk, Virginia		6	%		4	%		4	%		5	%

	Three Months Ended
	September 30,						$ Increase			% Increase
	2017			2016			(Decrease)			(Decrease)
	(In thousands, except percentages and per share information)
Net operating revenue	$	30,269		$	29,878		$	391			1.3	%
Station operating expense		21,755			21,775			(20	)		(0.1	)%
Corporate general and administrative		3,132			2,728			404			14.8	%
Other operating expense		(127	)		(1,393	)		1,266			N/M
Operating income from continuing operations		5,509			6,768			(1,259	)		(18.6	)%
Interest expense		254			187			67			35.8	%
Income from continuing operations before taxes		5,255			6,581			(1,326	)		(20.1	)%
Income tax expense		2,290			2,678			(388	)		(14.5	)%
Income from continuing operations, net of tax		2,965			3,903			(938	)		(24.0	)%
Income from discontinued operations, net of tax		30,451			1,511			28,940			N/M
Net income	$	33,416		$	5,414		$	28,002			N/M

Earnings per share:
From continuing operations	$	.50		$	.66		$	(.16	)		(24.2	)%
From discontinued operations		5.16			.26			4.90			N/M
Earnings per share (diluted)	$	5.66		$	.92		$	4.74			N/M

							Approximate
					Total Number		Dollar
					of		Value of
					Shares		Shares
					Purchased		that May Yet
					as Part of		be
	Total Number		Average Price		Publicly		Purchased
	of Shares		Paid per		Announced		Under the
Period	Purchased		Share		Program		Program(a)
July 1 – July 31, 2017		—	$	—		—	$	23,352,857
August 1 – August 31, 2017		916	$	40.60		—	$	23,315,667
September 1 – September 30, 2017		—	$	—		—	$	23,315,667
Total		916	$	40.60		—	$	23,315,667