Radio One to Restate Financials Over Reach Media

RADIO ONLINE | Wednesday, July 28, 2010 | 4:47pm CT

In a SEC filing, Radio One concluded that it's necessary to restate the Urban radio broadcaster's consolidated financial statements for 2009, 2008 and 2007 and for each quarterly financial reporting period from January 1, 2009 through March 31, 2010. The restatement is solely the result of an error of measurement and classification of a non-controlling interest in Reach Media.

The effects of the error overstated consolidated stockholders' equity and understated mezzanine equity at the end of each reporting period by equal amounts. The adjustment will not affect any previously reported financial results in the consolidated statements of operations or consolidated statements of cash flows and will not affect previously reported net income or earnings per share.

As part of the Company's acquisition of a controlling 51% ownership interest in Reach Media in 2005, the non-controlling shareholders of Reach Media were granted the right to require Reach Media to purchase all or a portion of their shares. In its previously filed consolidated financial statements, the company classified the non-controlling interests as a component of permanent equity. Because the non-controlling interests in Reach Media will become redeemable on February 28, 2012, the company must elect to subsequently measure the non-controlling interest to its expected redemption value.