Question-and-Answer Session
Operator
(Operator Instructions) The first question comes from the line of Bishop Cheen – Wachovia.
Bishop Cheen – Wachovia
Welcome Tom. Nice to hear you on the call. Perry congratulations, I think you were named ?Broadcaster of the Year? by Broadcasting Magazine, was it?
Perry Cook
Yes it was. Thank you very much Bishop.
Bishop Cheen – Wachovia
I’m sure the cash award was enormous. All the directional stuff is cooking. You are managing your balance sheet. The one big challenge continues to be that senior leverage covenant. You are right up against it now. We knew it was going to be tight. Do you want to give us color on how you work around that 4.5 covenant because you have certainly managed the other ones.
Thomas Carter
I will answer that or at least try to give some color around it. We monitor our covenants continuously and closely. Obviously I get that. That is the environment I come from. We are very focused on compliance. We have several initiatives that are available to us or are in the works that could aid us in generating liquidity to provide de-leveraging.
We continually re-evaluate expenses at the station and the corporate level as well as any balance sheet actions that we could take to address any situation going forward. So we have a number of things we are evaluating that we are contemplating that we are trying to determine if and when it would be appropriate to do any and all of those actions. I can’t get into specifics with regard to what they are but believe me we are very focused on it.
Bishop Cheen – Wachovia
I would imagine with your background you are focused on it. One quick follow-up, you are certainly trying to put e-media and the retrans and get it, moving at a light slope. Can you give us color on cost cuts? Is there more to go for your fixed cost cuts, if you have pretty much achieved everything you can? Whatever you can tell us about the other side of your P&L.
Perry Cook
As you heard in the results we reported today, contraction in operating expenses versus the prior year even given effect for the two acquisitions. We will see in the back half of the year, and also the second quarter results included several hundred thousand dollars related to acquisition costs or restructuring costs for some of the consolidation work that we did in the 2009 second quarter. We will see the benefit of that in the back half of the year but we have gone back again to ask our station managers and with Tom’s arrival we are taking a hard look here at the corporate side of things and we expect in the back half of the year in addition to the programs already in place there will be an additional seven figure cost savings that will come into play as we obviously have to operate in the environment which we have been given here. So there will be additional expense savings and measures implemented beyond what has been announced, what has been talked about and the corporate team and the station manager are fully participatory in that process. It is going on in real time.
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