Salem Media Group, Inc. Annual report pursuant to Section 13 and 15(d)

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables)

12 Months Ended

Dec. 31, 2012

Depreciation is computed using the straight-line method over estimated useful lives as follows:


Category		Life
Buildings		40 years
Office furnishings and equipment		5-10 years
Antennae, towers and transmitting equipment		20 years
Studio and production equipment		7-10 years
Computer software and website development costs		3 years
Record and tape libraries		3 years
Automobiles		5 years
Leasehold improvements		Lesser of 15 years or life of lease

These intangibles are amortized using the straight-line method over the following estimated useful lives:


Category		Life
Customer lists and contracts		Lesser of 5 years or life of contract
Favorable and assigned leases		Life of the lease
Domain and brand names		5 years
Internally developed software		3 to 5 years
Customer relationships		1 to 3 years
Other amortizable intangible assets		5 to 10 years

Deferred financing costs consist of the following:

A summary of the changes in the gross amount of unrecognized tax benefits is as follows:


	December 31, 2012
	(Dollars in thousands)
Balance at January 1, 2012	$	3,852
Additions based on tax positions related to the current year		—
Additions based on tax positions related to prior years		—
Reductions related to tax positions of prior years		—
Decrease due to statute expirations		(2,429	)
Related interest and penalties, net of federal tax benefits		(98	)

Balance as of December 31, 2012	$	1,325

The following table sets forth the shares used to compute basic and diluted net earnings per share for the periods indicated:


	Year Ended December 31,
	2010		2011		2012
Weighted average shares		24,086,829		24,475,102		24,577,605
Effect of dilutive securities - stock options		566,636		208,542		409,361

Weighted average shares adjusted for dilutive securities		24,653,465		24,683,644		24,986,966