Salem Communications Announces a 10.9% Increase in Fourth Quarter 2006 Total Revenue

CAMARILLO, Calif.--(BUSINESS WIRE)--

Salem Communications Corporation (Nasdaq:SALM), a leading U.S. radio broadcaster, Internet content provider, and magazine and book publisher targeting audiences interested in Christian and family-themed content and conservative values, today announced results for the three months and year ended December 31, 2006.

Commenting on the company's results, Edward G. Atsinger III, president and CEO said, "We achieved total revenue growth of 10.9% in the fourth quarter of 2006 due to the strong performance of our non-broadcast media business, continued development of our News Talk stations and our consistent block programming business. Our Internet and publishing businesses posted $6.0 million in revenue, more than doubling their revenue from the prior year. Radio broadcasting grew revenue by 5.5% to $53.7 million, led by a 19.6% increase in revenue from News Talk stations and by a 9.3% increase in revenue from block programming on our Christian Teaching and Talk stations. This revenue growth was offset by increased investment in marketing, promotion and local programming talent at certain of our News Talk stations, which reduced our station operating income for the quarter. We consider these investments an important step in driving our less developed radio stations to long-term profitability."

Fourth Quarter 2006 Results

For the quarter ended December 31, 2006 compared to the quarter ended December 31, 2005:

    --  Total revenue increased 10.9% to $59.8 million from $53.9
        million;

    --  Operating income decreased 17.5% to $10.1 million from $12.2
        million;

    --  Net income decreased 0.9% to $3.3 million;

    --  Net income per diluted share increased 5.7% to $0.14 from
        $0.13;

    --  EBITDA increased 1.3% to $15.5 million from $15.3 million;

    --  Adjusted EBITDA decreased 0.4% to $15.2 million;

    Broadcasting

    --  Net broadcasting revenue increased 5.5% to $53.7 from $50.9
        million;

    --  Station operating income ("SOI") decreased 1.4% to $19.6
        million from $19.9 million;

    --  Same station net broadcasting revenue increased 4.8% to $52.5
        million from $50.2 million;

    --  Same station SOI decreased 2.7% to $19.6 million from $20.2
        million;

    --  Same station SOI margin decreased to 37.3% from 40.2%;

    Non-broadcast Media

    --  Non-broadcast revenue increased 102.7% to $6.0 million from
        $3.0 million; and

    --  Non-broadcast operating income increased 3.6% to $0.4 million.

    Included in the results for the quarter ended December 31, 2006
are:

    --  A $0.2 million loss ($0.1 million loss, net of tax, or $0.01
        per share) on the disposal of assets;

    --  A $1.3 million gain ($0.06 gain per diluted share) from
        discontinued operations, net of tax; and

    --  A $0.8 million non-cash compensation charge ($0.5 million, net
        of tax, or $0.02 per share) related to the expensing of stock
        options consisting of:

        --  $0.6 million non-cash compensation included in corporate
            expenses; and

        --  $0.2 million non-cash compensation included in
            broadcasting operating expenses.

These results reflect the reclassification of the operations of certain stations to discontinued operations for all periods presented. Combined, these stations had net broadcasting revenue of approximately $0.1 million and lost $0.1 million for the quarter ended December 31, 2006. These stations had net broadcasting revenue of approximately $1.0 million and were breakeven for the quarter ended December 31, 2005.

Per share numbers are calculated based on 23,852,840 diluted weighted average shares for the quarter ended December 31, 2006, and 25,433,317 diluted weighted average shares for the comparable 2005 period.

Full Year 2006 Results

For the year ended December 31, 2006 compared to the year ended December 31, 2005:

    --  Total revenue increased 8.6% to $227.8 million from $209.6
        million;

    --  Operating income increased 30.1% to $57.9 million from $44.5
        million;

    --  Net income increased 50.0% to $19.0 million, or $0.78 net
        income per diluted share, from net income of $12.7 million, or
        $0.49 net income per diluted share;

    --  EBITDA increased 26.3% to $71.5 million from $56.6 million;

    --  Adjusted EBITDA increased 0.3% to $58.4 million from $58.2
        million;

    Broadcasting

    --  Net broadcasting revenue increased 4.8% to $208.4 from $198.9
        million;

    --  SOI decreased 0.1% to $77.3 million from $77.4 million;

    --  Same station net broadcasting revenue increased 2.4% to $200.6
        million from $195.8 million;

    --  Same station SOI decreased 0.6% to $77.4 million from $77.9
        million;

    --  Same station SOI margin decreased to 38.6% from 39.8%;

    Non-broadcast Media

    --  Non-broadcast revenue increased 79.5% to $19.4 million from
        $10.8 million; and

    --  Non-broadcast operating income increased 32.9% to $1.2 million
        from $0.9 million.

    Included in the results for the year ended December 31, 2006 are:

    --  An $18.6 million gain primarily from the disposal and exchange
        of assets in the Sacramento, Cleveland and Dallas markets
        ($11.1 million gain, net of tax, or $0.46 gain per diluted
        share);

    --  A $3.6 million loss ($2.2 million loss, net of tax, or $0.09
        loss per share) from the early redemption of $94.3 million of
        9.0% senior subordinated notes due 2011;

    --  A $2.5 million gain ($0.10 per diluted share) from
        discontinued operations, net of tax related to the disposition
        of assets in the Baltimore, Jacksonville and Richmond markets,
        and

    --  A $4.3 million non-cash compensation charge ($2.6 million, net
        of tax, or $0.11 per share) related to the expensing of stock
        options consisting of:

        --  $3.5 million non-cash compensation included in corporate
            expenses; and

        --  $0.8 million non-cash compensation included in
            broadcasting operating expenses.

    Included in the results for the year ended December 31, 2005 are:

    --  Litigation costs of $0.7 million ($0.4 million loss, net of
        tax, or $0.02 loss per share);

    --  A $0.5 million loss ($0.3 million loss, net of tax, or $0.01
        loss per share) on disposal of assets; and

    --  A $0.4 million loss ($0.01 loss per share) from discontinued
        operations, net of tax.

These results reflect the reclassification of the operations of certain stations to discontinued operations for all periods presented. Combined, these stations had net broadcasting revenue of approximately $2.0 million and lost $0.2 million for the year ended December 31, 2006. These stations had net broadcasting revenue of approximately $3.5 million and lost $0.5 million for the year ended December 31, 2005.

Other comprehensive income of $0.5 million, net of tax, for the year ended December 31, 2006 is due to the change in fair market value of the company's interest rate swaps.

Per share numbers are calculated based on 24,223,751 diluted weighted average shares for the year ended December 31, 2006, and 25,794,875 diluted weighted average shares for the comparable 2005 period.

SOI Margin Composition Analysis

The following table, which is for analytical purposes only, has been created by assigning each station in the company's radio station portfolio to one of four categories based upon the station's fourth quarter SOI margin. The company believes this table is helpful in assessing the portfolio's financial and operational development.

                   Three Months Ended December 31,
            (Net Broadcasting Revenue and SOI in millions)
----------------------------------------------------------------------


                                                   2005
                                       ------------------------------
                                                              Average
SOI Margin %                           Stations Revenue  SOI   SOI %
-------------------------------------- -------- ------- ----- -------
50% or greater                              19    20.2  13.1    64.7%
30% to 49%                                  29    13.8   5.9    42.9%
0% to 29%                                   31    10.3   1.9    18.4%
Less than 0%                                18     2.5  (0.7) (27.7%)
                                       -------- ------- ----- -------
Subtotal                                    97    46.8  20.2    43.2%
Other                                        -     4.1  (0.3)  (6.6%)
                                       -------- ------- ----- -------
Total                                       97    50.9  19.9    39.1%
                                       ======== ======= ===== =======


                                                    2006
                                       -------------------------------
                                                               Average
SOI Margin %                           Stations Revenue  SOI    SOI %
----------------------------------------------- ------- ------ -------
50% or greater                              30   $23.4  $14.5    62.0%
30% to 49%                                  20    11.9    4.8    40.7%
0% to 29%                                   32     9.8    1.6    16.9%
Less than 0%                                17     3.8   (0.8) (21.7%)
                                       -------- ------- ------ -------
Subtotal                                    99    48.9   20.1    41.2%
Other                                        -     4.8   (0.5) (11.2%)
                                       -------- ------- ------ -------
Total                                       99   $53.7  $19.6    36.3%
                                       ======== ======= ====== =======

Balance Sheet

As of December 31, 2006, the company had net debt of $360.3 million and was in compliance with the covenants of its credit facilities and bond indentures. The company's bank leverage ratio was 5.88 versus a compliance covenant of 6.75 and its bond leverage ratio was 5.46 versus a compliance covenant of 7.0.

Stock Repurchases

During the quarter ended December 31, 2006, the company did not repurchase shares of its Class A common stock. As of March 9, 2007 Salem had repurchased 2,130,418 shares of Class A common stock for approximately $32.2 million at an average price of $15.12 per share and had 23,842,520 shares of its Class A and Class B common stock outstanding.

Acquisitions and Divestitures

During the quarter ended December 31, 2006, Salem completed the following divestiture and exchange transactions:

    --  KORL (690 AM) in Honolulu, Hawaii was acquired on October 1,
        2006 by exchanging KHCM (1170 AM) in Honolulu, Hawaii plus
        $1.0 million (Salem retained the call letters KHCM, which are
        used on 690 AM);

    --  WZAZ (1400 AM) in Jacksonville, Florida was sold on December
        5, 2006 for $1.0 million (this station was operated by
        acquirer under a Local Marketing Agreement ("LMA") as of
        October 1, 2006);

    --  WJGR (1320 AM) and WZNZ (1460 AM) in Jacksonville, Florida
        were sold on December 5, 2006 for $1.8 million (these stations
        were operated by acquirer under an LMA as of October 1, 2006);
        and

    --  WITH (1230 AM) in Baltimore, Maryland was sold on December 22,
        2006 for $3.0 million.

The following divestiture transaction was pending as of December 31, 2006:

-- WKNR (850 AM) in Cleveland, Ohio was sold on February 7, 2007

for $7.0 million.

The following acquisition and divestiture transactions were entered into after December 31, 2006:

    --  KKSN (910 AM) in Portland, Oregon will be acquired for
        approximately $4.5 million (this station is operated by Salem
        under an LMA as of February 1, 2007 with call letters KTRO);
        and

    --  ChristianMusicPlanet.com was acquired on February 8, 2007 for
        $0.3 million; and

    --  WVRY (105.1 FM) in Nashville, Tennessee to be sold for $0.9
        million.

    First Quarter 2007 Outlook

    For the first quarter of 2007, Salem is projecting:

    --  Total revenue to be between $55.5 million and $56.0 million
        compared to first quarter 2006 total revenue of $52.0 million;

    --  Adjusted EBITDA to be between $10.8 million and $11.3 million
        compared to first quarter 2006 Adjusted EBITDA of $11.8
        million; and

    --  Net income per diluted share to be approximately zero.

    First quarter 2007 outlook reflects the following:

    --  Same station net broadcasting revenue increasing to $49.0
        million to $49.5 million from a base of $47.8 million in first
        quarter 2006;

    --  Non-broadcast revenue increasing to approximately $5.5 million
        from a base of $3.3 million in first quarter 2006;

    --  Same station SOI declining to $15.9 million to $16.4 million
        from a base of $17.4 million in first quarter 2006;

    --  Non-cash compensation expense of $0.7 million compared to
        first quarter 2006 non-cash compensation expense of $1.3
        million;

    --  Increased marketing and programming costs of $1.2 million
        primarily on News Talk stations in Chicago, Dallas, Denver,
        Los Angeles, Louisville and Phoenix, and on Contemporary
        Christian Music stations in Atlanta, Dallas, Los Angeles and
        Portland;

    --  Continued growth from our core block programming business and
        our underdeveloped radio stations, particularly our News Talk
        stations;

    --  Ongoing softness in the radio advertising market; and

    --  The impact of recent acquisition, exchange and divestiture
        transactions.

    Conference Call Information

Salem will host a teleconference to discuss its results today, on March 12, 2007 at 5:00 p.m. Eastern Time. To access the teleconference, please dial 973-935-8511 ten minutes prior to the start time or listen via the investor relations portion of the company's website, located at www.salem.cc. A replay of the teleconference will be available through March 26, 2007 and can be heard by dialing 973-341-3080, pass code 8515586 or on the investor relations portion of the company's website, located at www.salem.cc.

Salem Communications Corporation (Nasdaq: SALM) is a leading U.S. radio broadcaster, Internet content provider, and magazine and book publisher targeting audiences interested in Christian and family-themed content and conservative values. In addition to its radio properties, Salem owns Salem Radio Network(R), which syndicates talk, news and music programming to approximately 2,000 affiliates; Salem Radio Representatives(TM), a national radio advertising sales force; Salem Web Network(TM), an Internet provider of Christian content and online streaming; and Salem Publishing(TM), a publisher of Christian-themed magazines. Upon the close of all announced transactions, the company will own 97 radio stations, including 61 stations in 23 of the top 25 markets. Additional information about Salem may be accessed at the company's website, www.salem.cc.

Forward Looking Statements

Statements used in this press release that relate to future plans, events, financial results, prospects or performance are forward-looking statements as defined under the Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those anticipated as a result of certain risks and uncertainties, including but not limited to the ability of Salem to close and integrate announced transactions, market acceptance of Salem's radio station formats, competition from new technologies, adverse economic conditions, and other risks and uncertainties detailed from time to time in Salem's reports on Forms 10-K, 10-Q, 8-K and other filings filed with or furnished to the Securities and Exchange Commission. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. Salem undertakes no obligation to update or revise any forward-looking statements to reflect new information, changed circumstances or unanticipated events.

Regulation G

Station operating income, non-broadcast operating income, EBITDA and Adjusted EBITDA are financial measures not prepared in accordance with generally accepted accounting principles ("GAAP"). Station operating income is defined as net broadcasting revenues minus broadcasting operating expenses. Non-broadcast operating income is defined as non-broadcast revenue minus non-broadcast operating expenses. EBITDA is defined as net income before interest, taxes, depreciation and amortization. Adjusted EBITDA is defined as EBITDA before loss on early redemption of long-term debt, discontinued operations (net of tax), litigation costs, gain or loss on the disposal of assets and non-cash compensation expense. In addition, Salem has provided supplemental information as an attachment to this press release, reconciling these non-GAAP financial measures to the most directly comparable financial measures prepared in accordance with GAAP. The company believes these non-GAAP financial measures, when considered in conjunction with the most directly comparable GAAP financial measures, provide useful measures of the company's operating performance.

Station operating income, non-broadcast operating income, EBITDA and Adjusted EBITDA are generally recognized by the broadcasting industry as important measures of performance and are used by investors as well as analysts who report on the industry to provide meaningful comparisons between broadcasting. Station operating income, non-broadcast operating income, EBITDA and Adjusted EBITDA are 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, or superior to, the company's results of operations presented on a GAAP basis such as operating income and net income. In addition, Salem's definitions of station operating income, non-broadcast operating income, EBITDA and Adjusted EBITDA are not necessarily comparable to similarly titled measures reported by other companies.

Salem Communications Corporation
Condensed Consolidated Statements of Operations
(in thousands, except share, per share and margin data)

                         Three Months Ended          Year Ended
                            December 31,            December 31,
                         2005         2006        2005        2006
                      ------------ ----------- ----------- -----------
                       (unaudited)

Net broadcasting
 revenue                  $50,915     $53,736    $198,852    $208,400
Non-broadcast revenue       2,975       6,031      10,790      19,369
                      ------------ ----------- ----------- -----------
Total revenue              53,890      59,767     209,642     227,769
Operating expenses:
  Broadcasting
   operating expenses      31,005      34,104     121,462     131,117
  Non-broadcast
   operating expenses       2,561       5,602       9,889      18,172
  Legal settlement              -           -         650           -
  Corporate expenses        4,936       5,710      19,607      24,043
  Depreciation and
   amortization             3,234       4,075      13,017      15,193
  (Gain) loss on
   disposal of assets         (32)        225         527     (18,647)
                      ------------ ----------- ----------- -----------
Total operating
 expenses                  41,704      49,716     165,152     169,878
                      ------------ ----------- ----------- -----------
Operating income           12,186      10,051      44,490      57,891
Other income
 (expense):
  Interest income              70          96         207         210
  Interest expense         (5,998)     (6,485)    (22,559)    (26,342)
  Loss on early
   redemption of long-
   term debt                    -           -         (24)     (3,625)
  Other expense, net         (143)         46        (506)       (420)
                      ------------ ----------- ----------- -----------
Income from continuing
 operations before
 income taxes               6,115       3,708      21,608      27,714
Provision for income
 taxes                      2,858       1,789       8,570      11,167
                      ------------ ----------- ----------- -----------
Income from continuing
 operations                 3,257       1,919      13,038      16,547
Discontinued
 operations, net of
 tax                           37       1,346        (376)      2,452
                      ------------ ----------- ----------- -----------
Net income                 $3,294      $3,265     $12,662     $18,999
                      ============ =========== =========== ===========
Other comprehensive
 income (loss), net of
 tax                          436          (5)        318         457
                      ------------ ----------- ----------- -----------
Comprehensive income       $3,730      $3,260     $12,980     $19,456
                      ============ =========== =========== ===========

Basic income per share
 before discontinued
 operations                 $0.13       $0.08       $0.51       $0.68
Discontinued
 operations, net of
 tax                           $-       $0.06      $(0.01)      $0.10
Basic income per share
 after discontinued
 operations                 $0.13       $0.14       $0.49       $0.78

Diluted income per
 share before
 discontinued
 operations                 $0.13       $0.08       $0.51       $0.68
Discontinued
 operations, net of
 tax                           $-       $0.06      $(0.01)      $0.10
Diluted income per
 share after
 discontinued
 operations                 $0.13       $0.14       $0.49       $0.78

Basic weighted average
 shares outstanding    25,376,973  23,847,520  25,735,641  24,215,867
                      ============ =========== =========== ===========
Diluted weighted
 average shares
 outstanding           25,433,317  23,852,840  25,794,875  24,223,751
                      ============ =========== =========== ===========


Other Data:
Station operating
 income                   $19,910     $19,632     $77,390     $77,283
Station operating
 margin                      39.1%       36.5%       38.9%       37.1%
Salem Communications Corporation
Condensed Consolidated Balance Sheets
(in thousands)


                                             December 31, December 31,
                                                2005         2006
                                             ------------ ------------

Assets
Cash                                              $3,979         $710
Accounts receivable, net                          30,953       31,984
Deferred income taxes                              4,614        5,020
Other current assets                               4,047        2,881
Assets of discontinued operations                 12,456            -
Property, plant and equipment, net               116,245      128,713
Intangible assets, net                           463,139      508,410
Bond issue costs                                   2,742          593
Bank loan fees                                     3,709        2,996
Fair value of interest rate swaps                    743        1,290
Other assets                                       3,303        3,667
                                             ------------ ------------
Total assets                                    $645,930     $686,264
                                             ============ ============

Liabilities and Stockholders' Equity
Current liabilities                              $20,658      $27,295
Long-term debt and capital lease obligations     326,685      358,978
Deferred income taxes                             40,810       53,935
Other liabilities                                  8,659        8,340
Stockholders' equity                             249,118      237,716
                                             ------------ ------------
Total liabilities and stockholders' equity      $645,930     $686,264
                                             ============ ============
Salem Communications Corporation
Supplemental Information
(in thousands)

                              Three Months Ended        Year Ended
                                 December 31,          December 31,
                               2005        2006       2005     2006
                            ----------------------- ------------------
                            (unaudited)
Capital expenditures
Acquisition related / income
 producing                      $10,266     $2,813   $16,010  $14,608
Maintenance                         691      2,180     6,212    6,514
                            ----------------------- ------------------

Total capital expenditures      $10,957     $4,993   $22,222  $21,122
                            ======================= ==================


Tax information
Cash tax expense                   $177        $57      $341     $256
Deferred tax expense              2,681      1,732     8,229   10,911
                            ----------------------- ------------------
                                                         894
Provision for income taxes       $2,858     $1,789    $8,570  $11,167
                            ======================= ==================

Tax benefit of non-book
 amortization                    $4,542     $3,499   $13,602  $14,119
                            ======================= ==================


Reconciliation of Same
 Station Net Broadcasting
 Revenue to
  Total Net Broadcasting
   Revenue
Net broadcasting revenue -
 same station                   $50,159    $52,542  $195,832 $200,620
Net broadcasting revenue -
 acquisitions                        16        633       446    6,041
Net broadcasting revenue -
 dispositions                       663        456     2,497      456
Net broadcasting revenue -
 format changes                      77        105        77    1,283
                            ----------------------- ------------------

Total net broadcasting
 revenue                        $50,915    $53,736  $198,852 $208,400
                            ======================= ==================


Reconciliation of Same
 Station Broadcasting
 Operating Expenses to
  Total Broadcasting
   Operating Expenses
Broadcasting operating
 expenses - same station        $29,990    $32,926  $117,978 $123,263
Broadcasting operating
 expenses - acquisitions             36        586       817    6,414
Broadcasting operating
 expenses - dispositions            847        481     2,484      458
Broadcasting operating
 expenses - format changes          132        111       183      982
                            ----------------------- ------------------

Total broadcasting operating
 expenses                       $31,005    $34,104  $121,462 $131,117
                            ======================= ==================


Reconciliation of Same
 Station Station Operating
 Income to Total Station
 Operating Income
Station operating income -
 same station                   $20,169    $19,616   $77,854  $77,357
Station operating income -
 acquisitions                       (20)        47      (371)    (373)
Station operating income -
 dispositions                      (184)       (25)       13       (2)
Station operating income -
 format changes                     (55)        (6)     (106)     301
                            ----------------------- ------------------

Total station operating
 income                         $19,910    $19,632   $77,390  $77,283
                            ======================= ==================


Reconciliation of Station
 Operating Income and Non-
 Broadcast
  Operating Income to
   Operating Income
Station operating income        $19,910    $19,632   $77,390  $77,283
Non-broadcast operating
 income                             414        429       901    1,197
Less:
  Corporate expenses             (4,936)    (5,710)  (19,607) (24,043)
  Legal settlement                    -          -      (650)       -
  Depreciation and
   amortization                  (3,234)    (4,075)  (13,017) (15,193)
  Gain (loss) on disposal of
   assets                            32       (225)     (527)  18,647
                            ----------------------- ------------------

Operating income                $12,186    $10,051   $44,490  $57,891
                            ======================= ==================


Reconciliation of Adjusted
 EBITDA to EBITDA to Net
 Income
Adjusted EBITDA                 $15,245    $15,185   $58,178  $58,351
Less:
  Stock-based compensation            -       (788)        -   (4,334)
  Discontinued operations,
   net of tax                        37      1,346      (376)   2,452
  Gain (loss) on disposal of
   assets                            32       (225)     (527)  18,647
  Legal settlement                    -          -      (650)       -
  Loss on early redemption
   of long-term debt                  -          -       (24)  (3,625)

EBITDA                           15,314     15,518    56,601   71,491
Plus:
  Interest income                    70         96       207      210
Less:
  Depreciation and
   amortization                  (3,234)    (4,075)  (13,017) (15,193)
  Interest expense               (5,998)    (6,485)  (22,559) (26,342)
  Provision for income taxes     (2,858)    (1,789)   (8,570) (11,167)
                            ----------------------- ------------------

Net income                       $3,294     $3,265   $12,662  $18,999
                            ======================= ==================




                             Outstanding Applicable
                                 at       Interest
                              12/31/2006    Rate
                            -----------------------
Selected Debt and Swap Data
  7 3/4% senior subordinated
   notes                       $100,000       7.75%
  Senior bank term loan B
   debt (1)                      73,125       7.13%
  Senior bank term loan C
   debt (swap matures
   7/1/2012) (2)                 30,000       6.74%
  Senior bank term loan C
   debt (swap matures
   7/1/2012) (2)                 30,000       6.45%
  Senior bank term loan C
   debt (swap matures
   7/1/2012) (2)                 30,000       6.28%
  Senior bank term C debt
   (at variable rates) (1)       75,000       7.22%
  Senior bank revolving debt
   (at variable rates) (1)       19,100       7.25%
  Swingline credit facility
   (3)                            1,241       8.25%

(1) Subject to rolling LIBOR plus a spread
 currently at 1.75% and incorporated into the rate
 set forth above.

(2) Under its swap agreements, the Company pays a fixed rate
 plus a spread based on the Company's leverage, as defined in
 its credit agreement. As of December 31, 2006, that spread
 was 1.75% and is incorporated into the applicable interest
 rates set forth above.


(3) Subject to prime interest rate.
Salem Communications Corporation
Supplemental Information
(in millions)
                                         Projected
                                       Three Months
                                           Ending        Three Months
                                       March 31, 2007       Ended
                                         Low      High  March 31, 2007
                                     ----------- ------ --------------
                                     (unaudited)
Reconciliation of Station Operating
 Income to Operating Income
Station operating income                  $16.2  $16.7
Plus:
  Non-broadcast revenue                     5.5    5.5
Less:
  Non-broadcast operating expenses         (5.5)  (5.5)
  Corporate expenses                       (5.7)  (5.7)
  Stock-based compensation (corporate
   expense portion)                        (0.5)  (0.5)
  Depreciation and amortization            (3.7)  (3.7)
                                     ----------- ------

Operating income                           $6.3   $6.8
                                     =========== ======


Reconciliation of Same Station Net
 Broadcasting Revenue to
  Total Net Broadcasting Revenue
Net broadcasting revenue - same
 station                                  $49.0  $49.5          $47.8
Net broadcasting revenue -
 acquisitions / dispositions / format
 changes                                    1.0    1.0            1.0
                                     ----------- ------ --------------

Total net broadcasting revenue            $50.0  $50.5          $48.8
                                     =========== ====== ==============


Reconciliation of Same Station
 Station Operating Income to
  Total Station Operating Income
Station operating income - same
 station                                  $15.9  $16.4          $17.4
Station operating income -
 acquisitions / dispositions / format
 changes                                    0.3    0.3           (0.3)
                                     ----------- ------ --------------

Total station operating income            $16.2  $16.7          $17.1
                                     =========== ====== ==============

Source: Salem Communications Corporation