Nature Of Business – Entercom Communications Corp. (the “Company”) is one of the five largest radio broadcasting companies in the United States with a nationwide portfolio in excess of 100 stations in 23 markets, including San Francisco, Boston, Seattle, Denver, Portland, Sacramento and Kansas City.

In connection with the preparation of the Company's consolidated financial statements for the year ended December 31, 2012, the Company identified and corrected a prior period error relating to the tax benefits associated with the exercise of employee stock options, the vesting of restricted stock units (“RSUs”) and the payment of dividends upon the vesting of the RSUs. Since the Company is not yet utilizing its net operating loss carryforwards (“NOLs”) that would result in the reduction of current income taxes payable, recognition of certain tax benefits associated with the exercise of employee stock options, the vesting of RSUs and the payment of dividends upon the vesting of the RSUs should have been suspended. This resulted in the recognition of additional income tax expense and a corresponding reduction in income tax benefits associated with the NOLs.

The Company assessed the materiality of this error and concluded that it was not material to any of its previously issued financial statements. The impact to the Company's quarterly periods was inconsequential with the exception of the second quarter of 2011, which is revised herein under Note 21. The Company has revised all affected periods presented herein to reflect the correct accounting for these tax benefits. This non-cash item did not impact the Company's operating income or operating cash flows for the current or prior periods and has no impact on the Company's cash taxes.

The following table presents the effects of the revision on the Company's consolidated statement of operations for the periods presented:

	Year Ended December 31, 2011
	As
	Previously
	Reported		Adjustment		As Revised
	(amounts in thousands, except per share data)

Income taxes (benefit)	$	(16,444)	$	2,233	$	(14,211)
Net income (loss)	$	68,510	$	(2,233)	$	66,277
Net income per share:
Basic	$	1.88	$	(0.06)	$	1.82
Diluted	$	1.81	$	(0.05)	$	1.76

The following table presents the effects of the revision on the Company's consolidated balance sheet as of December 31, 2011:

	December 31, 2011
	As
	Previously
	Reported		Adjustment		As Revised
	(amounts in thousands)

Deferred tax liabilities	$	11,317	$	2,233	$	13,550
Total long-term liabilities	$	636,752	$	2,233	$	638,985
Total liabilities	$	668,125	$	2,233	$	670,358
Accumulated deficit	$	(346,565)	$	(2,233)	$	(348,798)
Total shareholders' equity	$	251,144	$	(2,233)	$	248,911

The following table presents the effects of the revision on the Company's consolidated statement of cash flows for the periods presented:

	Year Ended December 31, 2011
	As
	Previously
	Reported		Adjustment		As Revised
	(amounts in thousands)

Net income (loss)	$	68,510	$	(2,233)	$	66,277
Net deferred taxes (benefit) and other	$	(14,801)	$	2,233	$	(12,568)