Exhibit 12.1
RATIO OF EARNINGS TO FIXED CHARGES
SALEM COMMUNICATIONS CORPORATION
AND COMMUNICATIONS HOLDING CORPORATION
PARENT
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PRO FORMA(2)
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NINE MONTHS NINE MONTHS
ENDED YEAR ENDED ENDED
YEAR ENDED DECEMBER 31, SEPTEMBER 30, DECEMBER 31, SEPTEMBER 30,
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1997 1998 1999 2000 2001 2001 2002 2001 2002
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(DOLLARS IN THOUSANDS)
Pretax income (loss)
from continuing
operations............ $(1,086) $(1,924) $(6,086) $19,146 $ 7,983 $ 6,754 $(5,157) $ 9,295 $(4,176)
Interest expense...... 12,706 15,941 14,219 17,452 26,541 19,719 20,293 25,230 19,312
Interest portion of
rent expense.......... 1,601 1,615 2,000 2,467 2,667 2,013 2,174 2,667 2,174
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Earnings.............. $13,221 $15,632 $10,133 $39,065 $37,191 $28,486 $17,310 $37,192 $17,310
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Interest expense...... $12,706 $15,941 $14,219 $17,452 $26,541 $19,719 $20,293 $25,230 $19,312
Interest portion of
rent expense.......... 1,601 1,615 2,000 2,467 2,667 2,013 2,174 2,667 2,174
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Fixed charges(3)...... $14,307 $17,556 $16,219 $19,919 $29,208 $21,732 $22,467 $27,897 $21,486
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Ratio of earnings to
fixed charges(3)...... 0.9x 0.9x 0.6x 2.0x 1.3x 1.3x 0.8x 1.3x 0.8x
SALEM HOLDING(1)
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PRO FORMA(2)
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NINE MONTHS YEAR NINE MONTHS
YEAR ENDED ENDED ENDED ENDED
DECEMBER 31, SEPTEMBER 30, DECEMBER 31, SEPTEMBER 30,
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1999 2000 2001 2001 2002 2001 2002
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(DOLLARS IN THOUSANDS)
Pretax income (loss)
from continuing
operations............ $ 508 $36,786 $22,276 $16,969 $ 4,970 $23,588 $ 5,951
Interest expense...... 14,174 15,506 26,538 19,716 20,814 25,226 19,833
Interest portion of
rent expense.......... 2,000 2,467 2,624 2,073 1,968 2,624 1,968
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Earnings.............. $16,682 $54,759 $51,438 $38,758 $27,752 $51,438 $27,752
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Interest expense...... $14,174 $15,506 $26,538 $19,716 $20,814 $25,226 $19,833
Interest portion of
rent expense.......... 2,000 2,467 2,624 2,073 1,968 2,624 1,968
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Fixed charges(3)...... $16,174 $17,973 $29,162 $21,789 $22,782 $27,850 $21,801
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Ratio of earnings to
fixed charges(3)...... 1.0x 3.0x 1.8x 1.8x 1.2x 1.8x 1.3x
(1) Selected consolidated financial and other data of Salem Holding as of and
for the three years ended December 31, 1999 is identical to Parent's selected
consolidated financial and other data for those periods because Parent formed
Salem Holding as a wholly-owned subsidiary in May 2000 and assigned
substantially all of its assets and liabilities to Salem Holding in August 2000.
(2) Financial information as of September 30, 2002, on a pro forma basis for the
repayment of $13.0 million of borrowings under the credit facility of Salem
Holdings, since September 30, 2002, the issuance of the notes offered hereby,
and the use of the net proceeds therefrom, together with additional borrowings
of approximately $8.4 million under the credit facility of Salem Holding, to
redeem in full the 9 1/2 % senior subordinated notes due 2007 of Salem Holding.
(3) For the purposes of calculating the ratio of earnings to fixed charges and
pro forma earnings to fixed charges, "earnings" consist of income (loss) before
income taxes and extraordinary items plus fixed charges, and "fixed charges"
consist of interest expense plus an allocation of a portion of rent expense
representing interest. The pro forma earnings to fixed charges ratio gives
effect to the issuance of the notes offered hereby, and the use of the net
proceeds therefrom, together with additional borrowings of approximately $8.4
million under the credit facility of Salem Holding, to redeem in full the 9 1/2
% senior subordinated notes due 2007 of Salem Holding, as if each occurred at
the beginning of the period presented. For the years ended December 31, 1997,
1998 and 1999 and for the nine months ended September 30, 2002 and September 30,
2002 (pro forma), our earnings were inadequate to cover fixed charges; the
coverage deficiency for the years ended December 31, 1997, 1998 and 1999 and for
the nine months ended September 30, 2002 and September 30, 2002 (pro forma) was
$1.1 million, $1.9 million, $6.1 million, $5.2 million and $4.2 million
respectively.