Guarantor Arrangements

The Company recognizes, at the inception of a guarantee, a liability for the fair value of the obligation undertaken by issuing the guarantee. The following is a summary of agreements that the Company has determined are within the scope of guarantor arrangements:

The Company enters into indemnification agreements in the ordinary course of business. Under these agreements, the Company typically indemnifies, holds harmless, and agrees to reimburse the indemnified party for losses suffered or incurred by the indemnified party. The maximum potential amount of future payments the Company could be required to make under these indemnification agreements is unlimited. The Company believes that the estimated fair value of these agreements is minimal. Accordingly, the Company has not recorded liabilities for these agreements as of December 31, 2015.
Under the Company’s Credit Facility, the Company is required to reimburse lenders for any increased costs that they may incur in the event of a change in law, rule or regulation resulting in their reduced returns from any change in capital requirements. The Company cannot estimate the potential amount of any future payment under this provision, nor can the Company predict if such an event will ever occur.
In connection with many of the Company’s acquisitions, the Company enters into time brokerage agreements or local marketing agreements for specified periods of time, usually six months or less, whereby the Company typically indemnifies the owner and operator of the radio station, their employees, agents and contractors from liability, claims and damages arising from the activities of operating the radio station under such agreements. The maximum potential amount of any future payments the Company could be required to make for any such previous indemnification obligations is indeterminable at this time. The Company has not, however, previously incurred any significant costs to defend lawsuits or settle claims relating to any such indemnification obligation.

Financial Statements Of Parent

The condensed financial data of the Parent Company has been prepared in accordance with Rule 12-04 of Regulation S-X. The Parent Company’s financial data includes the financial data of Entercom Communications Corp., excluding all subsidiaries.

The most significant restrictions on the payment of dividends by Radio (as contemplated by Rule 4-08(e) of Regulation S-X) are set forth in the Credit Facility and the indenture governing the Senior Notes.

Under both the Credit Facility and the indenture governing the Senior Notes, Radio is permitted to make distributions to the Parent Company in amounts, as defined, as follow: (a) amounts which are required to pay the Parent Company’s reasonable overhead costs, including income taxes and other costs associated with conducting the operations of Radio and its subsidiaries; and (b) certain amounts which qualify as “Restricted Payments.” With respect to the Credit Facility, the permitted Restricted Payment is generally $40 million plus Cumulative Retained Excess Cash Flow. The Company’s ability to make a Restricted Payment in these amounts under the Credit Facility is a function of its leverage ratio. With respect to the indenture governing the Senior Notes, the permitted Restricted Payment is generally $60 million plus a variable amount. The variable amount is a function of the Company’s EBITDA and the Company’s leverage ratio.

Effectively all of Radio’s assets are subject to these distribution limitations to the Parent Company.

The following tables set forth the condensed financial data (other than the statements of shareholders’ equity and statements of comprehensive income as these statements are not condensed) of the Parent Company:

the balance sheets as of December 31, 2015 and 2014;
the statements of operations for the years ended December 31, 2015, 2014 and 2013;
the statements of shareholders’ equity for the years ended December 31, 2015, 2014 and 2013; and
the statements of cash flows for the years ended December 31, 2015, 2014 and 2013.

ENTERCOM COMMUNICATIONS CORP.
CONDENSED PARENT COMPANY BALANCE SHEETS
(amounts in thousands)

	2015		2014
ASSETS

Current Assets	$	7,289	$	6,446
Property And Equipment - Net		472		495
Deferred Charges And
Other Assets - Net		3,807		2,233
Investment In Subsidiaries / Intercompany		424,493		360,091
TOTAL ASSETS	$	436,061	$	369,265

LIABILITIES AND
SHAREHOLDERS' EQUITY
Current Liabilities	$	19,631	$	14,041
Long Term Liabilities		27,361		26,203
Total Liabilities		46,992		40,244
Perpectual Cumulative Convertible Preferred Stock		27,619		-
Shareholders' Equity:
Class A, B and C Common Stock		397		391
Additional Paid-In Capital		611,754		608,515
Accumulated Deficit		(250,701)		(279,885)
Total shareholders' equity		361,450		329,021
TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY	$	436,061	$	369,265

See notes to condensed Parent Company financial statements.

ENTERCOM COMMUNICATIONS CORP.
CONDENSED PARENT COMPANY INCOME STATEMENTS
(amounts in thousands)

	YEARS ENDED DECEMBER 31,
	2015		2014		2013

NET REVENUES	$	1,536	$	1,309	$	615

OPERATING (INCOME) EXPENSE:
Depreciation and amortization expense		1,123		1,217		1,122
Corporate general and administrative expenses		26,395		26,463		24,229
Merger and acquisition costs and restructuring charges		6,836		1,042		-
Net (gain) loss on sale or disposal of assets		(601)		(601)		(1,954)
Total operating expense		33,753		28,121		23,397
OPERATING INCOME (LOSS)		(32,217)		(26,812)		(22,782)

OTHER (INCOME) EXPENSE:
Net interest expense, including amortization
of deferred financing expense		-		15		1
Other expense (income)		-		-		(165)
Income from equity investment in subsidiaries		(79,838)		(73,561)		(71,118)
TOTAL OTHER (INCOME) EXPENSE		(79,838)		(73,546)		(71,282)

INCOME (LOSS) BEFORE INCOME TAXES (BENEFIT)		47,621		46,734		48,500

INCOME TAXES (BENEFIT)		18,437		19,911		22,476
NET INCOME (LOSS) AVAILABLE TO THE COMPANY		29,184		26,823		26,024
Preferred stock dividend		(752)		-		-
NET INCOME (LOSS) AVAILABLE TO COMMON SHAREHOLDERS	$	28,432	$	26,823	$	26,024

See notes to condensed Parent Company financial statements.

ENTERCOM COMMUNICATIONS CORP.
PARENT COMPANY STATEMENTS OF SHAREHOLDERS' EQUITY
YEARS ENDED DECEMBER 31, 2015, 2014 AND 2013
(amounts in thousands, except share data)

									Retained
	Common Stock						Additional		Earnings
	Class A			Class B			Paid-in		(Accumulated
	Shares	Amount		Shares	Amount		Capital		Deficit)		Total
Balance, December 31, 2012	31,226,047	$	312	7,197,532	$	72	$	601,847	$	(332,737)	$	269,494
Net income (loss) available to the Company	-		-	-		-		-		26,024		26,024
Compensation expense related to granting
of stock awards	96,560		1	-		-		4,269		-		4,270
Exercise of stock options	171,625		2	-		-		243		-		245
Purchase of vested employee restricted
stock units	(186,038)		(2)	-		-		(1,638)		-		(1,640)
Balance, December 31, 2013	31,308,194		313	7,197,532		72		604,721		(306,713)		298,393
Net income (loss) available to the Company	-		-	-		-		-		26,823		26,823
Compensation expense related to granting
of stock awards	638,102		7	-		-		5,225		-		5,232
Exercise of stock options	57,500		-	-		-		82		-		82
Purchase of vested employee restricted
stock units	(141,502)		(1)	-		-		(1,513)		-		(1,514)
Forfeitures of dividend equivalents	-		-	-		-		-		5		5
Balance, December 31, 2014	31,862,294		319	7,197,532		72		608,515		(279,885)		329,021
Net income (loss) available to the Company	-		-	-		-		-		29,184		29,184
Compensation expense related to granting
of stock awards	738,195		7	-		-		5,517		-		5,524
Exercise of stock options	11,750		-	-		-		35		-		35
Purchase of vested employee restricted
stock units	(131,688)		(1)	-		-		(1,561)		-		(1,562)
Preferred stock dividend	-		-	-		-		(752)		-		(752)
Balance, December 31, 2015	32,480,551	$	325	7,197,532	$	72	$	611,754	$	(250,701)	$	361,450

See notes to Parent Company financial statements.

ENTERCOM COMMUNICATIONS CORP.
CONDENSED PARENT COMPANY STATEMENTS OF CASH FLOWS
(amounts in thousands)

	YEARS ENDED DECEMBER 31,
	2015		2014		2013

OPERATING ACTIVITIES:
Net cash provided by (used in) operating activities	$	(25,355)	$	(21,652)	$	(18,167)

INVESTING ACTIVITIES:
Additions to property and equipment		(304)		(213)		(146)
Deferred charges and other assets		(1,142)		(481)		(468)
Proceeds (distributions) from investments in subsidiaries		29,030		23,610		20,208
Net cash provided by (used in) investing activities		27,584		22,916		19,594

FINANCING ACTIVITIES:
Payment of fees associated with the issuance of preferred stock		(220)		-		-
Proceeds from the exercise of stock options		35		82		245
Purchase of vested employee restricted stock units		(1,562)		(1,514)		(1,640)
Payment of dividend equivalents on vested restricted stock units		(7)		-		-
Payment of dividends		(413)		-		-
Net cash provided by (used in) financing activities		(2,167)		(1,432)		(1,395)

NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS		62		(168)		32
CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR		133		301		269
CASH AND CASH EQUIVALENTS, END OF YEAR	$	195	$	133	$	301

See notes to condensed Parent Company financial statements.

Accounting Policies

The Parent Company follows the accounting policies as described in Note 2 except that the Parent Company accounts for its investment in its subsidiaries using the equity method.

Debt – For a discussion of debt obligations of the Company, refer to Note 8.

Other - For further information, reference should be made to the notes to the consolidated financial statements of the Company.