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

Annual report pursuant to Section 13 and 15(d)

ACQUISITIONS AND RECENT TRANSACTIONS (Tables)

ACQUISITIONS AND RECENT TRANSACTIONS (Tables)

12 Months Ended

Dec. 31, 2014

Repayments of our Term Loan B were as follows:

Date	Principal Paid			Unamortized Discount
	(Dollars in Thousands)
December 31, 2014	$	4,000	$	16
November 28, 2014		4,000		15
September 29, 2014		5,000		18
March 31, 2014		2,250		8

Schedule of dividend distributions

During the year ended December 31, 2014, after quarterly review of our earnings, cash flows, financial requirements, and other factors, our Board of Directors' declared equity distributions to all stockholders of record of our Class A and Class B common stock as follows:

Announcement Date	Record Date	Payment Date	Amount Per Share		Cash Distributed (in thousands)
December 2, 2014	December 15, 2014	December 29, 2014	$	0.0650	$	1,646
September 2, 2014	September 16, 2014	September 30, 2014	$	0.0625		1,579
May 27, 2014	June 16, 2014	June 30, 2014	$	0.0600		1,514
March 6, 2014	March 17, 2014	March 31, 2014	$	0.0575		1,444

Summary of Business Acquisitions and Asset Purchased

A summary of our business acquisitions and asset purchases for the year ended December 31, 2014, none of which were individually or in the aggregate material to our Consolidated financial position as of the respective date of acquisition, is as follows:

Acquisition Date	Description	Total Cost
		(Dollars in thousands)
December 23, 2014	WLTE-FM Pendleton, South Carolina (asset acquisition)	$	525
December 23, 2014	FM Translator, Pickens, South Carolina (asset acquisition)		185
December 22, 2014	FM Translator, Bayshore Gardens, Florida (asset acquisition)		140
November 24, 2014	FM Translator, Traveler's Rest, South Carolina (asset acquisition)		200
October 1, 2014	KXXT-AM Phoenix, Arizona (business acquisition)		575
May 22, 2014	WOCN-AM Miami, Florida (business acquisition)		2,450
May 6, 2014	WRTH-FM (formerly WOLT-FM), Greenville, South Carolina (business acquisition)		1,125
April 15, 2014	FM Translators, Orlando, Florida, Tampa, Florida, Omaha, Nebraska (asset purchase)		357
February 7, 2014	KDIS-FM, Little Rock Arkansas and KRDY-AM, San Antonio, Texas (business acquisition)		1,984
January 10, 2014	Eagle Publishing (business acquisition)		10,628
Various	Purchases of domain names (asset purchases)		487
		$	18,656

Summary of Total Acquisition Consideration

The following table summarizes the total acquisition consideration for the year ended December 31, 2014:

Purchase Price Consideration	Total Consideration
	(Dollars in thousands)
Cash payments	$	12,682
Escrow deposits paid in prior years		1,345
Deferred cash payments made related to prior year acquisition		(600	)
Present value of deferred cash payments (due 2015)		893
Present value of deferred cash payments (due 2016)		2,289
Present value of estimated fair value of contingent earn-out consideration		2,047
Total purchase price consideration	$	18,656

Total Acquisition Consideration Allocated

The total acquisition consideration was allocated to the net assets acquired as follows:

	Broadcast Assets Acquired		Digital Media Assets Acquired			Publishing Assets Acquired			Net Assets Acquired
							(Dollars in thousands)
Assets
Property and equipment	$	2,338	$	1,179		$	3,929		$	7,446
Developed websites				539			38			577
Broadcast licenses		5,144								5,144
Goodwill		38		2,128			189			2,355
Customer lists and contracts				2,232			509			2,741
Domain and brand names				1,921			843			2,764
Subscriber base and lists				2,446						2,446
Author relationships							1,682			1,682
Non-compete agreements				79			66			145
Favorable and assigned leases		20								20
Liabilities
Deferred revenue & royalties assumed				(3,779	)		(2,885	)		(6,664	)
	$	7,540	$	6,745		$	4,371		$	18,656

Income (Loss) from Discontinued Operations

The following table sets forth the components of the loss from discontinued operations:

	For the Year Ended December 31,
	2012			2013
	(Dollars in thousands)
Net revenues	$	38		$	10
Operating expenses		196			72
Operating loss	$	(158	)	$	(62	)
Impairment of assets used in discontinued operations
Loss from discontinued operations	$	(158	)	$	(62	)
Benefit from income taxes		(63	)		(25	)
Loss from discontinued operations, net of tax	$	(95	)	$	(37	)

Acquisitions Two Thousand Thirteen [Member]

Schedule of dividend distributions

During the year ended December 31, 2013, after reviewing our earnings, cash flows, financial requirements, and other factors, our Board of Directors' declared equity distributions to all stockholders of record of our Class A and Class B common stock as follows:

Announcement Date	Record Date	Payment Date	Amount Per Share		Cash Distributed (in thousands)
November 20, 2013	December 10, 2013	December 27, 2013	$	0.0550	$	1,376
September 12, 2013	September 26, 2013	October 4, 2013	$	0.0525		1,308
May 30, 2013	June 14, 2013	June 28, 2013	$	0.0500		1,240
March 18, 2013	March 25, 2013	April 1, 2013	$	0.0500		1,234

Summary of Business Acquisitions and Asset Purchased

A summary of our business acquisitions and asset purchases for the year ended December 31, 2013, none of which were material to our consolidated financial position as of the respective date of acquisition, is as follows:

Acquisition Date	Description	Total Consideration
		(Dollars in thousands)
December 10, 2013	Twitchy.com (business acquisition)	$	1,536
December 9, 2013	EverythingInspirational.com (asset purchases)		400
September 23, 2013	Land, San Antonio, Texas (asset purchase)		500
September 11, 2013	GodUpdates.org (asset purchase)		250
August 10, 2013	Christnotes.org (business acquisition)		500
February 15, 2013	WTOH-FM, Columbus, Ohio (business acquisition)		4,000
February 5, 2013	WGTK-FM, Greenville, South Carolina (business acquisition)		5,427
Various	Purchase of various intangible Internet assets (asset purchases)		207
		$	12,820

Summary of Total Acquisition Consideration

The following table summarizes the total acquisition consideration for the year ending December 31, 2013:

Purchase Price Consideration	Total Consideration
	(Dollars in thousands)
Cash payments	$	7,477
Early repayment of principal on seller-financed note due 2014		2,000
Deferred cash payments (due 2014)		300
Net present value of deferred advertising credits		2,427
Fair value of contingent earn-out consideration		616
Total purchase price consideration	$	12,820

Total Acquisition Consideration Allocated

The total acquisition consideration was allocated to the net assets acquired as follows:

	Broadcast Assets Acquired		Digital Media Assets Acquired		Net Assets Acquired
	(Dollars in thousands)
Assets
Property and equipment	$	1,752	$	355	$	2,107
Broadcast licenses		7,429				7,429
Goodwill		37		393		430
Customer lists and contracts				359		359
Domain and brand names		―		1,687		1,687
Software		―		99		99
Favorable and assigned lease		709				709
	$	9,927	$	2,893	$	12,820

- Definition

Tabular disclosure of disposal groups, which may include the gain (loss) recognized in the income statement and the income statement caption that includes that gain (loss), amounts of revenues and pretax profit or loss reported in discontinued operations, the classification and carrying value of the assets and liabilities comprising the disposal group, and the segment in which the disposal group was reported. Also may include the amount of adjustments to amounts previously reported in discontinued operations such as resolution of contingencies arising from the disposal transaction or the operations of the component prior to disposal.

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