##### Table of Contents









UNITED STATES SECURITIES AND EXCHANGE COMMISSION


Washington, D.C. 20549


Form 10-Q


|           |  |                                                                                             
|---------- |  | --------------------------------------------------------------------------------------------
|(Mark One) |  |                                                                                             
|þ          |  | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934 
|          
|           |  | For the quarterly period ended September 30, 2005                                           
|          
|or        
|          
|o          |  | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934
|          
|           |  | For the transition period
    from           to                                             

Commission file number 33-82114





Spanish Broadcasting System, Inc.


(Exact name of registrant as specified in its charter)


|                                                                   |  |                                         
|------------------------------------------------------------------ |  | ----------------------------------------
|Delaware                                                           |  | 13-3827791                              
|(State or other jurisdiction of
    incorporation or organization) |  | (I.R.S. Employer
    Identification No.)

2601 South Bayshore Drive, PH II


Coconut Grove, Florida 33133


(Address of principal executive offices)(Zip Code)


(305) 441-6901


(Registrants telephone number, including area code)


(Former name, former address and former fiscal year,


if changed since last report)


þ o


þ o


o þ


APPLICABLE ONLY TO CORPORATE ISSUERS:












---










SPANISH BROADCASTING SYSTEM, INC.


INDEX


|                                  |  |                                                                                                                                                             |  |      |    | 
|--------------------------------- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ---- | -- | 
|                                  |  |                                                                                                                                                             |  | Page |   
|                                  |  |                                                                                                                                                             |  |      |   
|PART I. FINANCIAL
    INFORMATION
|ITEM 1.                           |  | Financial Statements 
    Unaudited                                                                                                                        |  |      | 3  | 
|                                  |  | Unaudited Condensed Consolidated Balance
    Sheets as of December 31, 2004 and September 30,
    2005                                                      |  |      | 3  | 
|                                  |  | Unaudited Condensed Consolidated Statements
    of Operations for the Three- and Nine-Months Ended
    September 30, 2004 and 2005                          |  |      | 4  | 
|                                  |  | Unaudited Condensed Consolidated Statements
    of Changes in Stockholders Equity and Comprehensive Loss
    for the Nine-Months Ended September 30, 2005. |  |      | 5  | 
|                                  |  | Unaudited Condensed Consolidated Statements
    of Cash Flows for the Nine-Months Ended September 30, 2004
    and 2005                                     |  |      | 6  | 
|                                  |  | Notes to Unaudited Condensed Consolidated
    Financial Statements                                                                                          |  |      | 7  | 
|ITEM 2.                           |  | Managements Discussion and Analysis
    of Financial Condition and Results of Operations                                                                   |  |      | 16 | 
|ITEM 3.                           |  | Quantitative and Qualitative Disclosures
    About Market Risk                                                                                              |  |      | 25 | 
|ITEM 4.                           |  | Controls and Procedures                                                                                                                                     |  |      | 26 | 
|PART II. OTHER INFORMATION       
|ITEM 1.                           |  | Legal Proceedings                                                                                                                                           |  |      | 26 | 
|ITEM 6.                           |  | Exhibits                                                                                                                                                    |  |      | 28 | 
|EX-31.1: CERTIFICATION           
|EX-31.2: CERTIFICATION           
|EX-32.1: CERTIFICATION           
|EX-32.2: CERTIFICATION           



2



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##### Table of Contents






PART I.  FINANCIAL INFORMATION







|        |                                 
|------- | --------------------------------
|Item 1. | Financial Statements  Unaudited

SPANISH BROADCASTING SYSTEM, INC. AND SUBSIDIARIES





Unaudited Condensed Consolidated Balance Sheets


|                                                                |                                                                                                                                                                                                                                                                                                                                                   |                            |           |          |               |   |         |          |         | 
|--------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | -------------------------- | --------- | -------- | ------------- | - | ------- | -------- | ------- | 
|                                                                |                                                                                                                                                                                                                                                                                                                                                   | December 31,               |           |          | September 30, |  
|                                                                |                                                                                                                                                                                                                                                                                                                                                   | 2004                       |           |          | 2005          |  
|                                                                |                                                                                                                                                                                                                                                                                                                                                   |                            |           |          |               |  
|                                                                |                                                                                                                                                                                                                                                                                                                                                   | (In thousands,             |          
|                                                                |                                                                                                                                                                                                                                                                                                                                                   | except share data)         |          
|Assets                                                         
|Current assets:                                                 |                                                                                                                                                                                                                                                                                                                                                   |                            |           |          |               |   |         |         
|                                                                | Cash and cash equivalents                                                                                                                                                                                                                                                                                                                         |                            | $         | 132,032  |               |   | $       | 100,901  |        
|                                                                | Net receivables                                                                                                                                                                                                                                                                                                                                   |                            |           | 32,622   |               |   |         | 31,033   |        
|                                                                | Prepaid expenses and other current assets                                                                                                                                                                                                                                                                                                         |                            |           | 2,520    |               |   |         | 3,168    |        
|                                                                | Assets held for sale                                                                                                                                                                                                                                                                                                                              |                            |           | 65,004   |               |   |         | 65,109   |        
|                                                                |                                                                                                                                                                                                                                                                                                                                                   |                            |           |          |               |  
|                                                                |                                                                                                                                                                                                                                                                                                                                                   | Total current assets       |           |          | 232,178       |   |         |          | 200,211 | 
|Property and equipment, net                                     |                                                                                                                                                                                                                                                                                                                                                   |                            | 22,178    |          |               |   | 22,155  |         
|FCC licenses                                                    |                                                                                                                                                                                                                                                                                                                                                   |                            | 710,410   |          |               |   | 710,410 |         
|Goodwill                                                        |                                                                                                                                                                                                                                                                                                                                                   |                            | 32,806    |          |               |   | 32,806  |         
|Other intangible assets, net                                    |                                                                                                                                                                                                                                                                                                                                                   |                            | 1,400     |          |               |   | 2,123   |         
|Deferred financing costs, net                                   |                                                                                                                                                                                                                                                                                                                                                   |                            | 10,073    |          |               |   | 9,079   |         
|Other assets                                                    |                                                                                                                                                                                                                                                                                                                                                   |                            | 678       |          |               |   | 1,369   |         
|Derivative instrument                                           |                                                                                                                                                                                                                                                                                                                                                   |                            |          |          |               |   | 4,380   |         
|                                                                |                                                                                                                                                                                                                                                                                                                                                   |                            |           |          |               |  
|                                                                |                                                                                                                                                                                                                                                                                                                                                   | $                          | 1,009,723 |          |               | $ | 982,533 |         
|                                                                |                                                                                                                                                                                                                                                                                                                                                   |                            |           |          |               |  
|                                                               
|Liabilities and Stockholders Equity                           
|Current liabilities:                                            |                                                                                                                                                                                                                                                                                                                                                   |                            |           |          |               |   |         |         
|                                                                | Current portion of the senior credit facility term loan due 2009                                                                                                                                                                                                                                                                                  |                            | $         | 123,750  |               |   | $       |         |        
|                                                                | Current portion of the senior credit facility term loan due 2012                                                                                                                                                                                                                                                                                  |                            |           |         |               |   |         | 3,250    |        
|                                                                | Current portion of the senior credit facility term loan due 2013                                                                                                                                                                                                                                                                                  |                            |           |         |               |   |         | 100,000  |        
|                                                                | Current portion of other long-term debt                                                                                                                                                                                                                                                                                                           |                            |           | 3,154    |               |   |         | 73       |        
|                                                                | Deposits on sale of stations                                                                                                                                                                                                                                                                                                                      |                            |           |         |               |   |         | 35,000   |        
|                                                                | Accounts payable and accrued expenses                                                                                                                                                                                                                                                                                                             |                            |           | 24,225   |               |   |         | 14,299   |        
|                                                                | Accrued interest                                                                                                                                                                                                                                                                                                                                  |                            |           | 5,428    |               |   |         | 1,141    |        
|                                                                | Series B cumulative exchangeable redeemable preferred stock
    dividends payable                                                                                                                                                                                                                                                                 |                            |           |         |               |   |         | 2,013    |        
|                                                                | Deferred commitment fee                                                                                                                                                                                                                                                                                                                           |                            |           | 525      |               |   |         | 469      |        
|                                                                |                                                                                                                                                                                                                                                                                                                                                   |                            |           |          |               |  
|                                                                |                                                                                                                                                                                                                                                                                                                                                   | Total current liabilities  |           |          | 157,082       |   |         |          | 156,245 | 
|Senior credit facility term loan due 2013, less current portion |                                                                                                                                                                                                                                                                                                                                                   |                            |          |          |               |   | 320,125 |         
|95/8% senior
    subordinated notes due 2009, net               |                                                                                                                                                                                                                                                                                                                                                   |                            | 326,476   |          |               |   |        |         
|Other long-term debt, less current portion                      |                                                                                                                                                                                                                                                                                                                                                   |                            | 567       |          |               |   | 512     |         
|Deferred income taxes                                           |                                                                                                                                                                                                                                                                                                                                                   |                            | 127,055   |          |               |   | 139,730 |         
|Other long-term liabilities                                     |                                                                                                                                                                                                                                                                                                                                                   |                            | 993       |          |               |   | 661     |         
|                                                                |                                                                                                                                                                                                                                                                                                                                                   |                            |           |          |               |  
|                                                                |                                                                                                                                                                                                                                                                                                                                                   | Total liabilities          |           |          | 612,173       |   |         |          | 617,273 | 
|                                                                |                                                                                                                                                                                                                                                                                                                                                   |                            |           |          |               |  
|Cumulative exchangeable redeemable preferred stock:             |                                                                                                                                                                                                                                                                                                                                                   |                            |           |          |               |   |         |         
|                                                                | 103/4%
    Series B cumulative exchangeable redeemable preferred
    stock, plus accrued dividends at December 31, 2004,
    $0.01 par value, liquidation value $1,000 per share.
    Authorized 280,000 shares; 83,054 shares issued and
    outstanding at December 31, 2004 and 89,932 shares
    issued and outstanding at September 30, 2005 |                            |           | 84,914   |               |   |         | 89,932   |        
|                                                                |                                                                                                                                                                                                                                                                                                                                                   |                            |           |          |               |  
|Stockholders equity:                                           |                                                                                                                                                                                                                                                                                                                                                   |                            |           |          |               |   |         |         
|                                                                | Series C preferred stock, $0.01 par value and
    liquidation value. Authorized 600,000 shares; issued and
    outstanding 380,000 shares                                                                                                                                                                                                         |                            |           | 1        |               |   |         | 1        |        
|                                                                | Class A common stock, $0.0001 par value. Authorized
    100,000,000 shares; 40,197,805 shares issued and
    outstanding at December 31, 2004 and 40,277,805 shares
    issued and outstanding at September 30, 2005                                                                                                                              |                            |           | 4        |               |   |         | 4        |        
|                                                                | Class B common stock, $0.0001 par value. Authorized
    50,000,000 shares; 24,583,500 shares issued and
    outstanding at December 31, 2004 and 24,503,500 shares
    issued and outstanding at September 30, 2005                                                                                                                               |                            |           | 2        |               |   |         | 2        |        
|                                                                | Additional paid-in capital                                                                                                                                                                                                                                                                                                                        |                            |           | 520,450  |               |   |         | 520,421  |        
|                                                                | Accumulated other comprehensive income, net of taxes                                                                                                                                                                                                                                                                                              |                            |           |         |               |   |         | 2,628    |        
|                                                                | Accumulated deficit                                                                                                                                                                                                                                                                                                                               |                            |           | (207,821 | )             |   |         | (247,728 | )      
|                                                                |                                                                                                                                                                                                                                                                                                                                                   |                            |           |          |               |  
|                                                                |                                                                                                                                                                                                                                                                                                                                                   | Total stockholders equity |           |          | 312,636       |   |         |          | 275,328 | 
|                                                                |                                                                                                                                                                                                                                                                                                                                                   |                            |           |          |               |  
|                                                                |                                                                                                                                                                                                                                                                                                                                                   | $                          | 1,009,723 |          |               | $ | 982,533 |         
|                                                                |                                                                                                                                                                                                                                                                                                                                                   |                            |           |          |               |  



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##### Table of Contents



SPANISH BROADCASTING SYSTEM, INC. AND SUBSIDIARIES





Unaudited Condensed Consolidated Statements of Operations


|                                                    |                                                          |                                                                                              |        |         |                       |   |         |         |         |   |         |         |        |   |         |         |         |  
|--------------------------------------------------- | -------------------------------------------------------- | -------------------------------------------------------------------------------------------- | ------ | ------- | --------------------- | - | ------- | ------- | ------- | - | ------- | ------- | ------ | - | ------- | ------- | ------- | -
|                                                    |                                                          | Three Months Ended                                                                           |        |         | Nine Months Ended     |  
|                                                    |                                                          | September 30,                                                                                |        |         | September 30,         |  
|                                                    |                                                          |                                                                                              |        |         |                       |  
|                                                    |                                                          | 2004                                                                                         |        |         | 2005                  |   |         | 2004    |         |   | 2005    |        
|                                                    |                                                          |                                                                                              |        |         |                       |   |         |         |         |   |         |        
|                                                    |                                                          | (In thousands, except                                                                        |        |         | (In thousands, except |  
|                                                    |                                                          | per share data)                                                                              |        |         | per share data)       |  
|Net revenue                                         |                                                          | $                                                                                            | 41,127 |         |                       | $ | 43,047  |         |         | $ | 110,651 |         |        | $ | 122,961 |        
|                                                    |                                                          |                                                                                              |        |         |                       |   |         |         |         |   |         |        
|Operating expenses:                                 |                                                          |                                                                                              |        |         |                       |   |         |         |         |   |         |         |        |   |         |        
|                                                    | Engineering and programming                              |                                                                                              |        | 8,097   |                       |   |         | 8,292   |         |   |         | 23,046  |        |   |         | 24,609  |        
|                                                    | Selling, general and administrative                      |                                                                                              |        | 13,637  |                       |   |         | 15,683  |         |   |         | 39,256  |        |   |         | 47,859  |        
|                                                    | Corporate expenses                                       |                                                                                              |        | 2,943   |                       |   |         | 3,154   |         |   |         | 9,170   |        |   |         | 10,588  |        
|                                                    | Depreciation and amortization                            |                                                                                              |        | 798     |                       |   |         | 867     |         |   |         | 2,443   |        |   |         | 2,521   |        
|                                                    |                                                          |                                                                                              |        |         |                       |   |         |         |         |   |         |        
|                                                    |                                                          | Total operating expenses                                                                     |        |         | 25,475                |   |         |         | 27,996  |   |         |         | 73,915 |   |         |         | 85,577  |  
|                                                    |                                                          |                                                                                              |        |         |                       |   |         |         |         |   |         |        
|                                                    |                                                          | Operating income from continuing operations                                                  |        |         | 15,652                |   |         |         | 15,051  |   |         |         | 36,736 |   |         |         | 37,384  |  
|                                                    |                                                          |                                                                                              |        |         |                       |   |         |         |         |   |         |        
|Other (expense) income:                             |                                                          |                                                                                              |        |         |                       |   |         |         |         |   |         |         |        |   |         |        
|                                                    | Interest expense, net                                    |                                                                                              |        | (10,437 | )                     |   |         | (8,021  | )       |   |         | (30,875 | )      |   |         | (28,837 | )      
|                                                    | Loss on early extinguishment of debt                     |                                                                                              |        |        |                       |   |         | (29,443 | )       |   |         |        |        |   |         | (32,597 | )      
|                                                    | Other, net                                               |                                                                                              |        | 14      |                       |   |         | (8      | )       |   |         | 270     |        |   |         | 1,792   |        
|                                                    |                                                          |                                                                                              |        |         |                       |   |         |         |         |   |         |        
|                                                    |                                                          | Income (loss) from continuing operations before income taxes and
    discontinued operations |        |         | 5,229                 |   |         |         | (22,421 | ) |         |         | 6,131  |   |         |         | (22,258 | )
|Income tax expense                                  |                                                          |                                                                                              | 8,462  |         |                       |   | 10,618  |         |         |   | 9,960   |         |        |   | 10,618  |        
|                                                    |                                                          |                                                                                              |        |         |                       |   |         |         |         |   |         |        
|                                                    |                                                          | Loss from continuing operations before discontinued operations                               |        |         | (3,233                | ) |         |         | (33,039 | ) |         |         | (3,829 | ) |         |         | (32,876 | )
|Income on discontinued operations, net of tax       |                                                          |                                                                                              | 17,638 |         |                       |   | 3       |         |         |   | 28,527  |         |        |   |        |        
|                                                    |                                                          |                                                                                              |        |         |                       |   |         |         |         |   |         |        
|                                                    |                                                          | Net income (loss)                                                                            |        | $       | 14,405                |   |         | $       | (33,036 | ) |         | $       | 24,698 |   |         | $       | (32,876 | )
|Dividends on preferred stock                        |                                                          |                                                                                              | (2,164 | )       |                       |   | (2,406  | )       |         |   | (6,326  | )       |        |   | (7,031  | )      
|                                                    |                                                          |                                                                                              |        |         |                       |   |         |         |         |   |         |        
|Net income (loss) applicable to common stockholders |                                                          | $                                                                                            | 12,241 |         |                       | $ | (35,442 | )       |         | $ | 18,372  |         |        | $ | (39,907 | )      
|                                                    |                                                          |                                                                                              |        |         |                       |   |         |         |         |   |         |        
|Basic and diluted income (loss) per common share:   |                                                          |                                                                                              |        |         |                       |   |         |         |         |   |         |         |        |   |         |        
|                                                    | Net loss per common share before discontinued operations |                                                                                              | $      | (0.08   | )                     |   | $       | (0.49   | )       |   | $       | (0.16   | )      |   | $       | (0.55   | )      
|                                                    |                                                          | Net income per common share from discontinued operations                                     |        | $       | 0.27                  |   |         | $       |        |   |         | $       | 0.44   |   |         | $       |        |  
|                                                    |                                                          |                                                                                              |        |         |                       |   |         |         |         |   |         |        
|                                                    | Net income (loss) per common share                       |                                                                                              | $      | 0.19    |                       |   | $       | (0.49   | )       |   | $       | 0.28    |        |   | $       | (0.55   | )      
|                                                    |                                                          |                                                                                              |        |         |                       |   |         |         |         |   |         |        
|Weighted average common shares outstanding:         |                                                          |                                                                                              |        |         |                       |   |         |         |         |   |         |         |        |   |         |        
|                                                    | Basic                                                    |                                                                                              |        | 64,756  |                       |   |         | 72,381  |         |   |         | 64,722  |        |   |         | 72,381  |        
|                                                    |                                                          |                                                                                              |        |         |                       |   |         |         |         |   |         |        
|                                                    | Diluted                                                  |                                                                                              |        | 64,962  |                       |   |         | 72,381  |         |   |         | 65,095  |        |   |         | 72,381  |        
|                                                    |                                                          |                                                                                              |        |         |                       |   |         |         |         |   |         |        



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##### Table of Contents



SPANISH BROADCASTING SYSTEM, INC. AND SUBSIDIARIES





Unaudited Condensed Consolidated Statements of Changes in


Stockholders Equity and Comprehensive Loss


for the Nine Months Ended September 30, 2005


|                                   |                                                                                    |                                   |         |   |              |   |   |              |  |  |            |        |             |           |   |   |       |  |            |         |   |   |               |   |  |             |         |     |               |   |       |       |  |   |          |         |   |   |         |         |         |  
|---------------------------------- | ---------------------------------------------------------------------------------- | --------------------------------- | ------- | - | ------------ | - | - | ------------ |  |  | ---------- | ------ | ----------- | --------- | - | - | ----- |  | ---------- | ------- | - | - | ------------- | - |  | ----------- | ------- | --- | ------------- | - | ----- | ----- |  | - | -------- | ------- | - | - | ------- | ------- | ------- | -
|                                   |                                                                                    | Class C                           |         |   | Class A      |   |   | Class B      |  |  |            |        |             |           |   |   |      
|                                   |                                                                                    | Preferred Stock                   |         |   | Common Stock |   |   | Common Stock |  |  |            |        | Accumulated |           |   |   |       | 
|                                   |                                                                                    |                                   |         |   |              |   |   |              |  |  | Additional |        |             | Other     |   |   |       |  | Total      |        
|                                   |                                                                                    | Number                            |         |   | Par          |   |   | Number       |  |  | Par        |        |             | Number    |   |   | Par   |  |            | Paid-In |   |   | Comprehensive |   |  | Accumulated |         |     | Stockholders |  
|                                   |                                                                                    | of Shares                         |         |   | Value        |   |   | of Shares    |  |  | Value      |        |             | of Shares |   |   | Value |  |            | Capital |   |   | Income        |   |  | Deficit     |         |     | Equity        |  
|                                   |                                                                                    |                                   |         |   |              |   |   |              |  |  |            |        |             |           |   |   |       |  |            |         |   |   |               |   |  |             |         |     |               |  
|                                   |                                                                                    | (In thousands, except share data) |        
|Balance at December 31, 2004       |                                                                                    |                                   | 380,000 |   |              | $ | 1 |              |  |  | 40,197,805 |        |             | $         | 4 |   |       |  | 24,583,500 |         |   | $ | 2             |   |  |             | 520,450 |     |               |   |      |       |  |   | (207,821 | )       |   |   | 312,636 |        
|                                   | Issuance cost of the Series B preferred stock                                      |                                   |         |  |              |   |   |             |  |  |            |       |             |           |   |  |       |  |            |        |   |   |               |  |  |             |         | (29 | )             |   |       |      |  |   |          |        |   |   |         | (29     | )      
|                                   | Conversion of Class B common stock to Class A common
    stock                     |                                   |         |  |              |   |   |             |  |  |            | 80,000 |             |           |   |  |       |  |            | (80,000 | ) |   |               |  |  |             |         |    |               |   |       |      |  |   |          |        |   |   |         |        |        
|Series B preferred stock dividends |                                                                                    |                                   |        |   |              |   |  |              |  |  |           |        |             |           |  |   |       |  |           |         |   |   |              |   |  |             |        |     |               |   |      |       |  |   | (7,031   | )       |   |   | (7,031  | )      
|Comprehensive income (loss):       |                                                                                    |                                   |         |   |              |   |   |              |  |  |            |        |             |           |   |   |       |  |            |         |   |   |               |   |  |             |         |     |               |   |       |       |  |   |          |         |   |   |         |        
|                                   | Net loss                                                                           |                                   |         |  |              |   |   |             |  |  |            |       |             |           |   |  |       |  |            |        |   |   |               |  |  |             |         |    |               |   |       |      |  |   |          | (32,876 | ) |   |         | (32,876 | )      
|                                   | Unrealized gain on derivative instrument (net of income tax
    expense of $1,752) |                                   |         |  |              |   |   |             |  |  |            |       |             |           |   |  |       |  |            |        |   |   |               |  |  |             |         |    |               |   |       | 2,628 |  |   |          |        |   |   |         | 2,628   |        
|                                   |                                                                                    |                                   |         |   |              |   |   |              |  |  |            |        |             |           |   |   |       |  |            |         |   |   |               |   |  |             |         |     |               |  
|                                   |                                                                                    | Comprehensive loss                |         |   |              |   |   |              |  |  |            |        |             |           |   |   |       |  |            |         |   |   |               |   |  |             |         |     |               |   |       |       |  |   |          |         |   |   |         |         | (30,248 | )
|                                   |                                                                                    |                                   |         |   |              |   |   |              |  |  |            |        |             |           |   |   |       |  |            |         |   |   |               |   |  |             |         |     |               |  
|Balance at September 30, 2005      |                                                                                    |                                   | 380,000 |   |              | $ | 1 |              |  |  | 40,277,805 |        |             | $         | 4 |   |       |  | 24,503,500 |         |   | $ | 2             |   |  | $           | 520,421 |     |               | $ | 2,628 |       |  | $ | (247,728 | )       |   | $ | 275,328 |        
|                                   |                                                                                    |                                   |         |   |              |   |   |              |  |  |            |        |             |           |   |   |       |  |            |         |   |   |               |   |  |             |         |     |               |  



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##### Table of Contents



SPANISH BROADCASTING SYSTEM, INC. AND SUBSIDIARIES





Unaudited Condensed Consolidated Statements of Cash Flows


|                                                 |                                                                                              |                                                  |                                                                                                 |                                                        |         |        |         |          |        |        |         |  
|------------------------------------------------ | -------------------------------------------------------------------------------------------- | ------------------------------------------------ | ----------------------------------------------------------------------------------------------- | ------------------------------------------------------ | ------- | ------ | ------- | -------- | ------ | ------ | ------- | -
|                                                 |                                                                                              | Nine Months Ended                                |                                                                                                
|                                                 |                                                                                              | September 30,                                    |                                                                                                
|                                                 |                                                                                              |                                                  |                                                                                                
|                                                 |                                                                                              | 2004                                             |                                                                                                 |                                                        | 2005    |       
|                                                 |                                                                                              |                                                  |                                                                                                 |                                                        |         |       
|                                                 |                                                                                              | (In thousands)                                   |                                                                                                
|Cash flows from operating activities:            |                                                                                              |                                                  |                                                                                                 |                                                        |         |        |         |         
|                                                 | Net income (loss)                                                                            |                                                  | $                                                                                               | 24,698                                                 |         |        | $       | (32,876  | )     
|                                                 | Adjustments to reconcile net income (loss) to net cash provided
    by operating activities: |                                                  |                                                                                                 |                                                        |         |        |         |          |       
|                                                 |                                                                                              | Income from discontinued operations, net of tax  |                                                                                                 |                                                        | (28,527 | )      |         |          |       |       
|                                                 |                                                                                              | Loss on early extinguishment of debt             |                                                                                                 |                                                        |        |        |         |          | 32,597 |       
|                                                 |                                                                                              | Gain on disposal of fixed assets                 |                                                                                                 |                                                        | 58      |        |         |          | 14     |       
|                                                 |                                                                                              | Depreciation and amortization                    |                                                                                                 |                                                        | 2,443   |        |         |          | 2,521  |       
|                                                 |                                                                                              | Net barter income                                |                                                                                                 |                                                        | (348    | )      |         |          | (241   | )     
|                                                 |                                                                                              | Provision for doubtful trade accounts receivable |                                                                                                 |                                                        | 682     |        |         |          | 527    |       
|                                                 |                                                                                              | Amortization of debt discount                    |                                                                                                 |                                                        | 909     |        |         |          | 717    |       
|                                                 |                                                                                              | Amortization of deferred financing costs         |                                                                                                 |                                                        | 1,491   |        |         |          | 1,400  |       
|                                                 |                                                                                              | Increase in deferred income taxes                |                                                                                                 |                                                        | 9,809   |        |         |          | 10,923 |       
|                                                 |                                                                                              | Amortization of deferred commitment fee          |                                                                                                 |                                                        | (56     | )      |         |          | (56    | )     
|                                                 |                                                                                              | Changes in operating assets and liabilities:     |                                                                                                 |                                                        |         |        |         |          |        |       
|                                                 |                                                                                              |                                                  | (Increase) decrease in trade receivables                                                        |                                                        |         | (5,341 | )       |          |        | 955    |        
|                                                 |                                                                                              |                                                  | Decrease (increase) in other current assets                                                     |                                                        |         | 1,022  |         |          |        | (677   | )      
|                                                 |                                                                                              |                                                  | Increase in other assets                                                                        |                                                        |         | (254   | )       |          |        | (701   | )      
|                                                 |                                                                                              |                                                  | Decrease in accounts payable and accrued expenses                                               |                                                        |         | (3,735 | )       |          |        | (9,306 | )      
|                                                 |                                                                                              |                                                  | Increase in deferred commitment fee                                                             |                                                        |         | 600    |         |          |        |       |        
|                                                 |                                                                                              |                                                  | Increase (decrease) in accrued interest                                                         |                                                        |         | 7,206  |         |          |        | (4,287 | )      
|                                                 |                                                                                              |                                                  |                                                                                                 |                                                        |         |       
|                                                 |                                                                                              |                                                  |                                                                                                 | Net cash provided by continuing operations             |         |        | 10,657  |          |        |        | 1,510   |  
|                                                 |                                                                                              |                                                  |                                                                                                 | Net cash provided by (used in) discontinued operations |         |        | 1,565   |          |        |        | (291    | )
|                                                 |                                                                                              |                                                  |                                                                                                 |                                                        |         |       
|                                                 |                                                                                              |                                                  |                                                                                                 | Net cash provided by operating activities              |         |        | 12,222  |          |        |        | 1,219   |  
|                                                 |                                                                                              |                                                  |                                                                                                 |                                                        |         |       
|Cash flows from investing activities:            |                                                                                              |                                                  |                                                                                                 |                                                        |         |        |         |         
|                                                 | Proceeds from sale of radio stations, net of closing costs                                   |                                                  |                                                                                                 | 51,924                                                 |         |        |         |         |       
|                                                 | Advances on purchase price of stations                                                       |                                                  |                                                                                                 | (234                                                   | )       |        |         | (750     | )     
|                                                 | Deposit on sale of stations                                                                  |                                                  |                                                                                                 |                                                       |         |        |         | 35,000   |       
|                                                 | Additions to property and equipment                                                          |                                                  |                                                                                                 | (2,318                                                 | )       |        |         | (2,590   | )     
|                                                 |                                                                                              |                                                  |                                                                                                 |                                                        |         |       
|                                                 |                                                                                              |                                                  |                                                                                                 | Net cash provided by investing activities              |         |        | 49,372  |          |        |        | 31,660  |  
|                                                 |                                                                                              |                                                  |                                                                                                 |                                                        |         |       
|Cash flows from financing activities:            |                                                                                              |                                                  |                                                                                                 |                                                        |         |        |         |         
|                                                 | Payments of other long-term debt                                                             |                                                  |                                                                                                 | (168                                                   | )       |        |         | (3,468   | )     
|                                                 | Payment of deferred financing costs                                                          |                                                  |                                                                                                 | (166                                                   | )       |        |         | (9,043   | )     
|                                                 | Payment of deferred offering costs                                                           |                                                  |                                                                                                 | (375                                                   | )       |        |         |         |       
|                                                 | Proceeds from Class A stock options exercised                                                |                                                  |                                                                                                 | 453                                                    |         |        |         |         |       
|                                                 | Payment of the
    95/8% senior
    subordinated notes, due 2009 and related premiums        |                                                  |                                                                                                 |                                                       |         |        |         | (351,124 | )     
|                                                 | Proceeds from senior credit facility term loan due 2012                                      |                                                  |                                                                                                 |                                                       |         |        |         | 325,000  |       
|                                                 | Proceeds from senior credit facility term loan due 2013                                      |                                                  |                                                                                                 |                                                       |         |        |         | 100,000  |       
|                                                 | Payment of senior credit facility term loan due 2012                                         |                                                  |                                                                                                 |                                                       |         |        |         | (1,625   | )     
|                                                 | Payment of senior credit facility term loan due 2009                                         |                                                  |                                                                                                 | (938                                                   | )       |        |         | (123,750 | )     
|                                                 |                                                                                              |                                                  |                                                                                                 |                                                        |         |       
|                                                 |                                                                                              |                                                  |                                                                                                 | Net cash used in financing activities                  |         |        | (1,194  | )        |        |        | (64,010 | )
|                                                 |                                                                                              |                                                  |                                                                                                 |                                                        |         |       
|                                                 |                                                                                              |                                                  |                                                                                                 | Net increase (decrease) in cash and cash equivalents   |         |        | 60,400  |          |        |        | (31,131 | )
|Cash and cash equivalents at beginning of period |                                                                                              |                                                  | 45,609                                                                                          |                                                        |         |        | 132,032 |         
|                                                 |                                                                                              |                                                  |                                                                                                 |                                                        |         |       
|Cash and cash equivalents at end of period       |                                                                                              |                                                  | 106,009                                                                                         |                                                        |         |        | 100,901 |         
|                                                 |                                                                                              |                                                  |                                                                                                 |                                                        |         |       
|Supplemental cash flows information:             |                                                                                              |                                                  |                                                                                                 |                                                        |         |        |         |         
|                                                 | Interest paid during the period                                                              |                                                  |                                                                                                 | 21,733                                                 |         |        |         | 33,469   |       
|                                                 |                                                                                              |                                                  |                                                                                                 |                                                        |         |       
|                                                 | Income taxes paid during the period, net                                                     |                                                  |                                                                                                 | 337                                                    |         |        |         | 1,613    |       
|                                                 |                                                                                              |                                                  |                                                                                                 |                                                        |         |       
|                                                 | Non-cash investing and financing activities:                                                 |                                                  |                                                                                                 |                                                        |         |        |         |          |       
|                                                 |                                                                                              |                                                  | Accrual and/or issuance of Series B preferred stock as
    payment of preferred stock dividends |                                                        | $       | 6,326  |         |          | $      | 5,018  |        
|                                                 |                                                                                              |                                                  |                                                                                                 |                                                        |         |       
|                                                 |                                                                                              |                                                  | Accrual of dividend payable for payment of Series B
    preferred stock cash dividends          |                                                        | $       |       |         |          | $      | 2,013  |        
|                                                 |                                                                                              |                                                  |                                                                                                 |                                                        |         |       
|                                                 |                                                                                              |                                                  | Unrealized gain on derivative instrument                                                        |                                                        | $       |       |         |          | $      | 4,380  |        
|                                                 |                                                                                              |                                                  |                                                                                                 |                                                        |         |       



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##### Table of Contents



SPANISH BROADCASTING SYSTEM, INC. AND SUBSIDIARIES





NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS




|   |                      
|-- | ---------------------
|1. | Basis of Presentation







|   |                              
|-- | -----------------------------
|2. | New Accounting Pronouncements

Share-Based Payment Accounting for Stock-Based
Compensation


Exchanges of Nonmonetary Assets Accounting for Nonmonetary
Transactions




|   |                     
|-- | --------------------
|3. | Assets Held for Sale





7



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##### Table of Contents















|   |                     
|-- | --------------------
|4. | Stockholders Equity



|    |                         
|--- | ------------------------
|(a) | Series C Preferred Stock







8



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##### Table of Contents







|    |                           
|--- | --------------------------
|(b) | Class A and B Common Stock

3 4




|    |         
|--- | --------
|(c) | Warrants



|                      |  |                     |           |  |                |                 |                 |  |                    | 
|--------------------- |  | ------------------- | --------- |  | -------------- | --------------- | --------------- |  | ------------------ | 
|                      |  | Number of Class A   |           |  |                |                 |                
|                      |  | Common Shares       |           |  | Per Share      |                 | Warrant         | 
|Warrant Date of Issue |  | Underlying Warrants |           |  | Exercise Price |                 | Expiration Date | 
|                      |  |                     |           |  |                |                 |                 | 
|March 31, 2003        |  |                     | 100,000   |  |                | $6.14           |                 |  | March 31, 2006     | 
|April 30, 2003        |  |                     | 100,000   |  |                | $7.67           |                 |  | April 30, 2006     | 
|May 31, 2003          |  |                     | 100,000   |  |                | $7.55           |                 |  | May 31, 2006       | 
|June 30, 2003         |  |                     | 100,000   |  |                | $8.08           |                 |  | June 30, 2006      | 
|July 31, 2003         |  |                     | 100,000   |  |                | $8.17           |                 |  | July 31, 2006      | 
|August 31, 2003       |  |                     | 100,000   |  |                | $7.74           |                 |  | August 31, 2006    | 
|September 30, 2003    |  |                     | 100,000   |  |                | $8.49           |                 |  | September 30, 2006 | 
|December 23, 2004     |  |                     | 3,800,000 |  |                | (see Note 4(a)) |                 |  | December 23, 2008  | 
|                      |  |                     |           |  |                |                 |                 | 
|                      |  |                     | 4,500,000 |  |                |                 |                 |  |                    | 
|                      |  |                     |           |  |                |                 |                 | 



|    |                   
|--- | ------------------
|(d) | Stock Option Plans



9



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##### Table of Contents





|                                  |           |        |       |          |       |   |       |       | 
|--------------------------------- | --------- | ------ | ----- | -------- | ----- | - | ----- | ----- | 
|                                  |           |        |       | Weighted |      
|                                  |           |        |       | Average  |      
|                                  |           |        |       | Exercise |      
|                                  |           | Shares |       |          | Price |  
|                                  |           |        |       |          |       |  
|Outstanding at December 31, 2004  |           |        | 3,013 |          |       | $ | 12.28 |      
|                                  | Granted   |        |       | 174      |       |   |       | 9.46  | 
|                                  | Exercised |        |       |         |       |   |       |      | 
|                                  | Forfeited |        |       | (383     | )     |   |       | 14.02 | 
|                                  |           |        |       |          |       |  
|Outstanding at September 30, 2005 |           |        | 2,804 |          |       | $ | 11.87 |      
|                                  |           |        |       |          |       |  



|                         |            |             |       |             |         |  |          |          |  |   |             |          |  |          |       |       |  |   |       |       | 
|------------------------ | ---------- | ----------- | ----- | ----------- | ------- |  | -------- | -------- |  | - | ----------- | -------- |  | -------- | ----- | ----- |  | - | ----- | ----- | 
|                         |            |             |       | Weighted    |         |  |          |          |  |   |            
|                         |            |             |       | Average     |         |  |          |          |  |   |            
|                         |            |             |       | Remaining   |         |  | Weighted |          |  |   |             | Weighted | 
|                         |            |             |       | Contractual |         |  | Average  |          |  |   |             | Average  | 
|                         |            | Number      |       |             | Life    |  |          | Exercise |  |   | Number      |          |  | Exercise |      
|Range of Exercise Prices |            | Outstanding |       |             | (Years) |  |          | Price    |  |   | Exercisable |          |  | Price    |      
|                         |            |             |       |             |         |  |          |          |  |   |             |          |  |          |      
|$  0  4.99              |            |             | 100   |             |         |  | 5.2      |          |  | $ | 4.81        |          |  |          | 100   |       |  | $ | 4.81  |      
|                         | 5  9.99   |             |       | 1,710       |         |  |          | 7.4      |  |   |             | 9.01     |  |          |       | 1,048 |  |   |       | 8.68  | 
|                         | 10  14.99 |             |       | 268         |         |  |          | 8.6      |  |   |             | 10.95    |  |          |       | 77    |  |   |       | 11.23 | 
|                         | 15  19.99 |             |       | 16          |         |  |          | 6.6      |  |   |             | 15.48    |  |          |       | 16    |  |   |       | 15.48 | 
|                         | 20  24.99 |             |       | 710         |         |  |          | 4.1      |  |   |             | 20.00    |  |          |       | 710   |  |   |       | 20.00 | 
|                         |            |             |       |             |         |  |          |          |  |   |             |          |  |          |      
|                         |            |             | 2,804 |             |         |  | 6.6      |          |  | $ | 11.87       |          |  |          | 1,951 |       |  | $ | 12.76 |      
|                         |            |             |       |             |         |  |          |          |  |   |             |          |  |          |      



|                        |  |                    |         |   |                   |  |         |      |  |  |         |   |  |  |         |  
|----------------------- |  | ------------------ | ------- | - | ----------------- |  | ------- | ---- |  |  | ------- | - |  |  | ------- | -
|                        |  | Three-Months Ended |         |   | Nine-Months Ended | 
|                        |  | September 30,      |         |   | September 30,     | 
|                        |  |                    |         |   |                   | 
|                        |  | 2004               |         |   | 2005              |  |         | 2004 |  |  | 2005    |  
|                        |  |                    |         |   |                   |  |         |      |  |  |         |  
|Expected life           |  |                    | 7 years |   |                   |  | 5 years |      |  |  | 7 years |   |  |  | 5 years |  
|Dividends               |  |                    | None    |   |                   |  | None    |      |  |  | None    |   |  |  | None    |  
|Risk-free interest rate |  |                    | 4.08    | % |                   |  | 4.18    | %    |  |  | 3.47    | % |  |  | 4.14    | %
|Expected volatility     |  |                    | 76      | % |                   |  | 69      | %    |  |  | 78      | % |  |  | 71      | %

10



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##### Table of Contents





|                                                                                                                                    |                                |                    |        |      |                   |  |         |       |   |   |        |      |  |  |         |       |  
|----------------------------------------------------------------------------------------------------------------------------------- | ------------------------------ | ------------------ | ------ | ---- | ----------------- |  | ------- | ----- | - | - | ------ | ---- |  |  | ------- | ----- | -
|                                                                                                                                    |                                | Three-Months Ended |        |      | Nine-Months Ended | 
|                                                                                                                                    |                                | September 30,      |        |      | September 30,     | 
|                                                                                                                                    |                                |                    |        |      |                   | 
|                                                                                                                                    |                                | 2004               |        |      | 2005              |  |         | 2004  |   |   | 2005   |     
|                                                                                                                                    |                                |                    |        |      |                   |  |         |       |   |   |        |     
|Net income (loss) applicable to common stockholders:                                                                                |                                |                    |        |      |                   |  |         |       |   |   |        |      |  |  |         |      
|As reported                                                                                                                         |                                | $                  | 12,241 |      |                   |  | (35,442 | )     |   | $ | 18,372 |      |  |  | (39,907 | )    
|Deduct: total stock-based employee compensation expense
    determined under fair value based method for all awards, net of
    tax |                                |                    | (1,050 | )    |                   |  | (670    | )     |   |   | (3,919 | )    |  |  | (1,999  | )    
|                                                                                                                                    |                                |                    |        |      |                   |  |         |       |   |   |        |     
|Pro forma net income (loss)                                                                                                         |                                | $                  | 11,191 |      |                   |  | (36,112 | )     |   | $ | 14,453 |      |  |  | (41,906 | )    
|                                                                                                                                    |                                |                    |        |      |                   |  |         |       |   |   |        |     
|Net income (loss) per common share:                                                                                                 |                                |                    |        |      |                   |  |         |       |   |   |        |      |  |  |         |      
|                                                                                                                                    | As reported: Basic and Diluted |                    | $      | 0.19 |                   |  |         | (0.49 | ) |   | $      | 0.28 |  |  |         | (0.55 | )
|                                                                                                                                    |                                |                    |        |      |                   |  |         |       |   |   |        |     
|                                                                                                                                    | Pro forma: Basic and Diluted   |                    | $      | 0.17 |                   |  |         | (0.50 | ) |   | $      | 0.22 |  |  |         | (0.58 | )
|                                                                                                                                    |                                |                    |        |      |                   |  |         |       |   |   |        |     



|   |           
|-- | ----------
|5. | Litigation





| |                   
| | ------------------
| | Hurtado Litigation





| |                          
| | -------------------------
| | Wolf, et. al., Litigation



11



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##### Table of Contents















| |                              
| | -----------------------------
| | Amigo Broadcasting Litigation



12



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##### Table of Contents









|   |                                     
|-- | ------------------------------------
|6. | New Senior Secured Credit Facilities



| |        
| | -------
| | General







5 8


13



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##### Table of Contents







| |                  
| | -----------------
| | Interest and Fees







| |                          
| | -------------------------
| | Collateral and Guarantees





| |                            
| | ---------------------------
| | Covenants and Other Matters





| |   |                                                                                                                                                                                         
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | incur additional debt, incur contingent obligations and issue
    additional preferred stock;                                                                                           
|
| |  | create liens;                                                                                                                                                                           
|
| |  | pay dividends, distributions or make other specified restricted
    payments, and restrict the ability of certain of our
    subsidiaries to pay dividends or make other payments to us;
|
| |  | sell assets;                                                                                                                                                                            
|
| |  | make certain capital expenditures, investments and acquisitions;                                                                                                                        
|
| |  | enter into certain transactions with affiliates;                                                                                                                                        
|
| |  | enter into sale and leaseback transactions; and                                                                                                                                         
|
| |  | merge or consolidate with any other person or sell, assign,
    transfer, lease, convey or otherwise dispose of all or
    substantially all of our assets.                             

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|   |                                                     
|-- | ----------------------------------------------------
|7. | Derivative Financial Instrument (Interest Rate Swap)

Accounting for
Derivative Instruments and Hedging Activities Accounting for
Certain Derivative Instruments and Certain Hedging
Activities




|   |                                                               
|-- | --------------------------------------------------------------
|8. | Redemption of
    95/8% Senior
    Subordinated Notes due 2009

5 8 5 8 5 8 5 8 5 8




|   |                               
|-- | ------------------------------
|9. | Television Station Acquisition



15



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##### Table of Contents





|    |                                                  
|--- | -------------------------------------------------
|10. | Second Amendment to Related Party Lease Agreement










|        |                                                                                          
|------- | -----------------------------------------------------------------------------------------
|Item 2. | Managements Discussion and Analysis of Financial
    Condition and Results of Operations

Overview








16



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##### Table of Contents



Comparison Analysis of the Operating Results for the Three
Months Ended September 30, 2004 and 2005




|            |                                                 |                                             |        |         |        |   |        |         |         |   |       |         |         |   |   |      |      |   
|----------- | ----------------------------------------------- | ------------------------------------------- | ------ | ------- | ------ | - | ------ | ------- | ------- | - | ----- | ------- | ------- | - | - | ---- | ---- | --
|            |                                                 | Three Months Ended                          |        |         |       
|            |                                                 | September 30,                               |        |         | Change |  
|            |                                                 |                                             |        |         |        |  
|            |                                                 | 2004                                        |        |         | 2005   |   |        | $       |         |   | %     |        
|            |                                                 |                                             |        |         |        |   |        |         |         |   |       |        
|            |                                                 | (In thousands)                              |        |         |        |   |       
|Net revenue |                                                 | $                                           | 41,127 |         |        | $ | 43,047 |         |         |   | 1,920 |         |         |   | 5 | %   
|            | Engineering and programming expense             |                                             |        | 8,097   |        |   |        | 8,292   |         |   |       | 195     |         |   |   | 2    | %   
|            | Selling, general and administrative expense     |                                             |        | 13,637  |        |   |        | 15,683  |         |   |       | 2,046   |         |   |   | 15   | %   
|            | Corporate expenses                              |                                             |        | 2,943   |        |   |        | 3,154   |         |   |       | 211     |         |   |   | 7    | %   
|            | Depreciation and amortization                   |                                             |        | 798     |        |   |        | 867     |         |   |       | 69      |         |   |   | 9    | %   
|            |                                                 |                                             |        |         |        |   |        |         |         |   |       |        
|            |                                                 | Operating income from continuing operations |        |         | 15,652 |   |        |         | 15,051  |   |       |         | (601    | ) |   |      | (4   | )%
|            | Interest expense, net                           |                                             |        | (10,437 | )      |   |        | (8,021  | )       |   |       | (2,416  | )       |   |   | (23  | )%  
|            | Loss on early extinguishment of debt            |                                             |        |        |        |   |        | (29,443 | )       |   |       | 29,443  |         |   |   | 100  | %   
|            | Other income (expense), net                     |                                             |        | 14      |        |   |        | (8      | )       |   |       | (22     | )       |   |   | (157 | )%  
|            | Income tax expense                              |                                             |        | 8,462   |        |   |        | 10,618  |         |   |       | 2,156   |         |   |   | 25   | %   
|            | Income on discontinued operations, net of taxes |                                             |        | 17,638  |        |   |        | 3       |         |   |       | (17,635 | )       |   |   | (100 | )%  
|            |                                                 |                                             |        |         |        |   |        |         |         |   |       |        
|            |                                                 | Net income (loss)                           |        | $       | 14,405 |   |        | $       | (33,036 | ) |       |         | (47,441 | ) |   |      | (329 | )%
|            |                                                 |                                             |        |         |        |   |        |         |         |   |       |        

Net Revenue.


Engineering and Programming Expenses.


Selling, General and Administrative Expenses.


Corporate Expenses.


Operating Income from Continuing Operations.


Interest Expense, Net.


17



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Loss on early extinguishment of debt. 5 8


Income Taxes. Goodwill and Other Intangible
Assets


Discontinued Operations, Net of Taxes.


Net Income.


Comparison Analysis of the Operating Results for the Nine
Months Ended September 30, 2004 and 2005




|            |                                               |                                             |         |         |        |   |         |         |         |   |        |         |         |   |    |      |      |   
|----------- | --------------------------------------------- | ------------------------------------------- | ------- | ------- | ------ | - | ------- | ------- | ------- | - | ------ | ------- | ------- | - | -- | ---- | ---- | --
|            |                                               | Nine Months Ended                           |         |         |       
|            |                                               | September 30,                               |         |         | Change |  
|            |                                               |                                             |         |         |        |  
|            |                                               | 2004                                        |         |         | 2005   |   |         | $       |         |   | %      |        
|            |                                               |                                             |         |         |        |   |         |         |         |   |        |        
|            |                                               | (In thousands)                              |         |         |        |   |        
|Net revenue |                                               | $                                           | 110,651 |         |        | $ | 122,961 |         |         |   | 12,310 |         |         |   | 11 | %   
|            | Engineering and programming expense           |                                             |         | 23,046  |        |   |         | 24,609  |         |   |        | 1,563   |         |   |    | 7    | %   
|            | Selling, general and administrative expense   |                                             |         | 39,256  |        |   |         | 47,859  |         |   |        | 8,603   |         |   |    | 22   | %   
|            | Corporate expenses                            |                                             |         | 9,170   |        |   |         | 10,588  |         |   |        | 1,418   |         |   |    | 15   | %   
|            | Depreciation and amortization                 |                                             |         | 2,443   |        |   |         | 2,521   |         |   |        | 78      |         |   |    | 3    | %   
|            |                                               |                                             |         |         |        |   |         |         |         |   |        |        
|            |                                               | Operating income from continuing operations |         |         | 36,736 |   |         |         | 37,384  |   |        |         | 648     |   |    |      | 2    | % 
|            | Interest expense, net                         |                                             |         | (30,875 | )      |   |         | (28,837 | )       |   |        | (2,038  | )       |   |    | (7   | )%  
|            | Loss on early extinguishment of debt          |                                             |         |        |        |   |         | (32,597 | )       |   |        | 32,597  |         |   |    | 100  | %   
|            | Other income, net                             |                                             |         | 270     |        |   |         | 1,792   |         |   |        | 1,522   |         |   |    | 564  | %   
|            | Income tax expense                            |                                             |         | 9,960   |        |   |         | 10,618  |         |   |        | 658     |         |   |    | 7    | %   
|            | Income (loss) on discontinued operations, net |                                             |         | 28,527  |        |   |         |        |         |   |        | (28,527 | )       |   |    | (100 | )%  
|            |                                               |                                             |         |         |        |   |         |         |         |   |        |        
|            |                                               | Net income (loss)                           |         | $       | 24,698 |   |         | $       | (32,876 | ) |        |         | (57,574 | ) |    |      | (233 | )%
|            |                                               |                                             |         |         |        |   |         |         |         |   |        |        

Net Revenue.


Engineering and Programming Expenses.


18



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Selling, General and Administrative Expenses.


Corporate Expenses.


Operating Income from Continuing Operations.


Interest Expense, Net.


Loss on early extinguishment of debt. 5 8


Other Income, net.


Income Taxes.


Discontinued Operations, Net of Taxes.


Net Income.


Liquidity and Capital Resources




19



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|                                                |                                                      |                   |        |        |        |   |         |         |   |  |         |   | 
|----------------------------------------------- | ---------------------------------------------------- | ----------------- | ------ | ------ | ------ | - | ------- | ------- | - |  | ------- | - | 
|                                                |                                                      | Nine Months Ended |        |        |       
|                                                |                                                      | September 30,     |        |        | Change |  
|                                                |                                                      |                   |        |        |        |  
|                                                |                                                      | 2004              |        |        | 2005   |   |         | $       |  
|                                                |                                                      |                   |        |        |        |   |         |         |  
|                                                |                                                      | (In thousands)    |        |        |       
|Capital expenditures                            |                                                      | $                 | 2,318  |        |        | $ | 2,590   |         |   |  | 272     |  
|                                                |                                                      |                   |        |        |        |   |         |         |  
|Net cash flows provided by operating activities |                                                      | $                 | 12,222 |        |        | $ | 1,219   |         |   |  | (11,003 | )
|Net cash flows provided by investing activities |                                                      |                   | 49,372 |        |        |   | 31,660  |         |   |  | (17,712 | )
|Net cash flows used in financing activities     |                                                      |                   | (1,194 | )      |        |   | (64,010 | )       |   |  | (62,816 | )
|                                                |                                                      |                   |        |        |        |   |         |         |  
|                                                | Net increase (decrease) in cash and cash equivalents |                   | $      | 60,400 |        |   | $       | (31,131 | ) |  |         |   | 
|                                                |                                                      |                   |        |        |        |   |         |         |  

Net Cash Flows Provided by Operating Activities.


Net Cash Flows Provided by Investing Activities.


Net Cash Flows Used In Financing Activities. 5 8






| |   |                                                                                                                                                           
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | The demand for advertising within the radio broadcasting
    industry and economic conditions in general will not deteriorate
    in any material respect;
|
| |  | We will continue to successfully implement our business
    strategies; and                                                                               
|
| |  | We will not incur any material unforeseen liabilities, including
    environmental liabilities.                                                           







20



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5 8 5 8


Accounting for
Derivative Instruments and Hedging Activities Accounting for
Certain Derivative Instruments and Certain Hedging
Activities














21



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22



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|                                                                              |  |       |         |               |      |  |                    |      |  |  |         |  |  |      |        |  |      |  |        |      |  |  |            |  |  |  |        |  |  |  |         | 
|----------------------------------------------------------------------------- |  | ----- | ------- | ------------- | ---- |  | ------------------ | ---- |  |  | ------- |  |  | ---- | ------ |  | ---- |  | ------ | ---- |  |  | ---------- |  |  |  | ------ |  |  |  | ------- | 
|                                                                              |  |       |         | As of         |      |  | For the Year Ended |     
|                                                                              |  |       |         | September 30, |      |  |                    |     
|Contractual Obligations                                                       |  | Total |         |               | 2005 |  |                    | 2006 |  |  | 2007    |  |  | 2008 |        |  | 2009 |  |        | 2010 |  |  | Thereafter | 
|                                                                              |  |       |         |               |      |  |                    |      |  |  |         |  |  |      |        |  |      |  |        |      |  |  |            | 
|Recorded obligations:                                                         |  |       |         |               |      |  |                    |      |  |  |         |  |  |      |        |  |      |  |        |      |  |  |            |  |  |  |        |  |  |  |         | 
|Senior secured credit facility term loan due 2012(a)                          |  | $     | 458,672 |               |      |  | 5,850              |      |  |  | 22,418  |  |  |      | 22,223 |  |      |  | 22,029 |      |  |  | 21,835     |  |  |  | 23,941 |  |  |  | 340,376 | 
|Senior secured credit facility term loan due 2013(b)                          |  |       | 103,693 |               |      |  | 2,005              |      |  |  | 101,688 |  |  |      |       |  |      |  |       |      |  |  |           |  |  |  |       |  |  |  |        | 
|Other long-term debt(c)                                                       |  |       | 717     |               |      |  | 27                 |      |  |  | 108     |  |  |      | 108    |  |      |  | 108    |      |  |  | 108        |  |  |  | 108    |  |  |  | 150     | 
|103/4%
    Series B cumulative exchangeable redeemable preferred
    stock(d) |  |       | 78,149  |               |      |  | 2,417              |      |  |  | 9,668   |  |  |      | 9,668  |  |      |  | 9,668  |      |  |  | 9,668      |  |  |  | 9,668  |  |  |  | 27,392  | 
|                                                                              |  |       |         |               |      |  |                    |      |  |  |         |  |  |      |        |  |      |  |        |      |  |  |            | 
|                                                                              |  | $     | 641,231 |               |      |  | 10,299             |      |  |  | 133,882 |  |  |      | 31,999 |  |      |  | 31,805 |      |  |  | 31,611     |  |  |  | 33,717 |  |  |  | 367,918 | 
|                                                                              |  |       |         |               |      |  |                    |      |  |  |         |  |  |      |        |  |      |  |        |      |  |  |            | 
|Unrecorded obligations:                                                       |  |       |         |               |      |  |                    |      |  |  |         |  |  |      |        |  |      |  |        |      |  |  |            |  |  |  |        |  |  |  |         | 
|Operating leases(e)                                                           |  |       | 37,023  |               |      |  | 976                |      |  |  | 5,513   |  |  |      | 3,542  |  |      |  | 3,470  |      |  |  | 2,943      |  |  |  | 3,147  |  |  |  | 17,432  | 
|Employment agreements(f)                                                      |  |       | 37,292  |               |      |  | 3,776              |      |  |  | 13,705  |  |  |      | 10,459 |  |      |  | 7,418  |      |  |  | 1,498      |  |  |  | 438    |  |  |  |        | 
|                                                                              |  |       |         |               |      |  |                    |      |  |  |         |  |  |      |        |  |      |  |        |      |  |  |            | 
|                                                                              |  | $     | 74,315  |               |      |  | 4,752              |      |  |  | 19,218  |  |  |      | 14,001 |  |      |  | 10,888 |      |  |  | 4,441      |  |  |  | 3,585  |  |  |  | 17,432  | 
|                                                                              |  |       |         |               |      |  |                    |      |  |  |         |  |  |      |        |  |      |  |        |      |  |  |            | 
|Total obligations                                                             |  | $     | 715,546 |               |      |  | 15,051             |      |  |  | 153,100 |  |  |      | 46,000 |  |      |  | 42,693 |      |  |  | 36,052     |  |  |  | 37,302 |  |  |  | 385,350 | 
|                                                                              |  |       |         |               |      |  |                    |      |  |  |         |  |  |      |        |  |      |  |        |      |  |  |            | 






|    |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|--- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(a) |  | Our senior secured credit facility term loan due 2012 is a
    variable-rate debt instrument, but we entered into an interest
    rate swap to hedge (fix) our interest rate for five years.
    See Notes 6 and 7 to our unaudited condensed consolidated
    financial statements for additional information. For the purpose
    of calculating our contractual obligations, we assumed an
    interest rate of approximately 7.48% after the five year
    interest rate swap terminates.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   
|(b) |  | Our senior secured credit facility term loan due 2013 is a
    variable-rate debt instrument. The net cash proceeds received
    from the sale of our Los Angeles (KZAB-FM and KZBA-FM) radio
    stations, when and if completed, will be used to repay our
    borrowings under this credit facility. Therefore, we
    reclassified the Credit Facilities balance from long-term debt
    to current debt. For the purpose of calculating our contractual
    obligations, we assumed that the senior secured credit facility
    will be paid-down on January 31, 2006, and an interest rate
    of approximately 8.02%.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   
|(c) |  | Other long-term debt relates to a capital lease.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   
|(d) |  | Our Series B preferred stock has no specified maturity.
    However, holders of the preferred stock may exercise an option
    on October 15, 2013, to require us to redeem all or a
    portion of their preferred stock. The holders of shares of
    Series B preferred stock are entitled to receive cumulative
    dividends at a rate of
    103/4% per
    year of the $1,000 liquidation preference per share. All
    dividends are cumulative from the date of issuance of the
    Series B preferred stock and are payable quarterly in
    arrears on October 15, January 15, April 15 and July
    15 of each year. On or before October 15, 2008, we, at our
    option, may pay dividends in cash or in additional fully paid
    and non-assessable shares of Series B preferred stock
    (including fractional shares or, at our option, cash in lieu of
    fractional shares) having an aggregate liquidation preference
    equal to the amount of such dividends. After October 15,
    2008, dividends may be paid only in cash, which are included in
    this contractual obligation table. Our ability to pay cash
    dividends is subject to the terms of our credit facilities.
|   
|    |  | The dividend due October 15, 2005, was the first preferred
    stock dividend paid in cash. For the purpose of calculating our
    contractual obligations we assumed that the Series B
    preferred stock will pay dividends in cash going forward as of
    September 30, 2005.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   
|(e) |  | Included in our non-cancelable operating lease obligations are
    minimum lease payments for office space and facilities and
    certain equipment.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   
|(f) |  | We are committed to employment contracts for certain executives,
    on-air talent, managers and others expiring through 2010.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              

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New Accounting Pronouncements


Share-Based Payment Accounting for Stock-Based
Compensation


Exchanges of Nonmonetary Assets Accounting for Nonmonetary
Transactions


Disclosure Regarding Forward-Looking Statements






| |   |                                                                                                                                                                                                                                                                                                                                                                        
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Our substantial amount of debt could adversely affect our
    financial health;                                                                                                                                                                                                                                                                                        
|
| |  | We will require a significant amount of cash to service our debt
    and to make cash dividend payments under our Series B
    preferred stock;                                                                                                                                                                                                                        
|
| |  | Our ability to generate cash depends on many factors, some of
    which are beyond our control;                                                                                                                                                                                                                                                                        
|
| |  | We may not have the funds or the ability to raise the funds
    necessary to repurchase our Series B preferred stock if
    holders exercise their repurchase right, or to finance the
    change of control offer required by our Series B preferred
    stock and the indenture that would govern our
    103/4% subordinated
    exchange notes due 2013, if issued;
|
| |  | Any acceleration of our debt or event of default would harm our
    business and financial condition;                                                                                                                                                                                                                                                                  
|
| |  | Despite our current significant level of debt, we and our
    subsidiaries may still be able to incur substantially more debt,
    which, if increased, could further intensify the risks
    associated with our substantial leverage;                                                                                                                                
|
| |  | The terms of our debt restrict us from engaging in many
    activities and require us to satisfy various financial tests;                                                                                                                                                                                                                                              
|
| |  | The terms of our debt and our preferred stock impose or will
    impose restrictions on us that may adversely affect our business;                                                                                                                                                                                                                                     
|
| |  | We may not complete the proposed sale of our Los Angeles
    stations;                                                                                                                                                                                                                                                                                                 

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| |   |                                                                                                                                                                                                                                                                                                       
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | We may not complete the proposed purchase of WDLP-TV
    (Channel 22) and WDLP-DT (Channel 3), in Key West,
    Florida, and WSBS-CA (Channel 50) in Miami, Florida.                                                                                                                                  
|
| |  | We have experienced net losses in the past and, to the extent
    that we experience net losses in the future, our ability to
    raise capital and the market price of our common stock may be
    adversely affected;                                                                               
|
| |  | Our operating results could be adversely affected by a national
    or regional recession;                                                                                                                                                                                                            
|
| |  | A large portion of our net revenue and station operating income
    currently comes from our New York, Los Angeles and Miami markets;                                                                                                                                                                 
|
| |  | Loss of any key personnel could adversely affect our business;                                                                                                                                                                                                                                        
|
| |  | Our growth depends on successfully executing our acquisition
    strategy;                                                                                                                                                                                                                            
|
| |  | We are a holding company and depend entirely upon cash flow from
    our subsidiaries to meet our obligations;                                                                                                                                                                                        
|
| |  | Raúl Alarcón, Jr., our Chairman of the Board of
    Directors, Chief Executive Officer and President, has majority
    voting control and this control may discourage or influence
    certain types of transactions, including an actual or potential
    change of control such as a merger or sale;
|
| |  | We compete for advertising revenue with other radio groups as
    well as television and other media companies, many of which have
    greater resources than we do;                                                                                                                                  
|
| |  | Cancellations or reductions in advertising could adversely
    affect our net revenues;                                                                                                                                                                                                               
|
| |  | The FCC has begun more vigorous enforcement of its indecency
    rules against the broadcast industry, which could have a
    material adverse effect on our business;                                                                                                                                
|
| |  | We may face regulatory review for additional acquisitions and
    divestitures in our existing markets and, potentially,
    acquisitions in new markets;                                                                                                                                             
|
| |  | Any failure by us to comply with the Sarbanes-Oxley Act of 2002
    could cause a loss of confidence in the reliability of our
    financial statements and could have a material adverse effect on
    our business and the price of our Class A common stock;                                       
|
| |  | We must be able to respond to rapidly changing technology,
    services and standards which characterize our industry in order
    to remain competitive;                                                                                                                                             
|
| |  | Our business depends on maintaining our FCC licenses. We cannot
    assure you that we will be able to maintain these licenses;                                                                                                                                                                       
|
| |  | The market price of our shares of Class A common stock may
    fluctuate significantly; and                                                                                                                                                                                                           
|
| |  | Current or future sales by existing stockholders could depress
    the market price of our Class A common stock.                                                                                                                                                                                      








|        |                                                               
|------- | --------------------------------------------------------------
|Item 3. | Quantitative and Qualitative Disclosures About Market
    Risk





25



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##### Table of Contents














|        |                        
|------- | -----------------------
|Item 4. | Controls and Procedures

Evaluation Of Disclosure Controls And Procedures.


Changes In Internal Control Over Financial Reporting.





PART II  OTHER INFORMATION







|        |                  
|------- | -----------------
|Item 1. | Legal Proceedings



Hurtado Litigation






26



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Wolf, et. al., Litigation










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##### Table of Contents







Amigo Broadcasting
Litigation











|        |         
|------- | --------
|Item 6. | Exhibits

Exhibits 


| |   |    |  |   |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| | - | -- |  | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | 3 | .1 |  |  |  | Third Amended and Restated Certificate of Incorporation of
    Spanish Broadcasting System, Inc. (the Company),
    dated September 29, 1999 (incorporated by reference to the
    Companys 1999 Registration Statement on Form S-1
    (Commission File No. 333-85499) (the 1999
    Registration Statement)) (Exhibit A to this exhibit
    is incorporated by reference to the Companys Current
    Report on Form 8-K, dated March 25, 1996 (the
    1996 Current Report)).
|
| | 3 | .2 |  |  |  | Certificate of Amendment to the Third Amended and Restated
    Certificate of Incorporation of the Company, dated
    September 29, 1999 (incorporated by reference to
    Exhibit 3.2 of the Companys 1999 Registration
    Statement).                                                                                                                                                                                                                                              

28



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##### Table of Contents



| |   |     |  |   |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| | - | --- |  | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | 3 | .3  |  |  |  | Amended and Restated By-Laws of the Company (incorporated by
    reference to Exhibit 3.3 of the Companys Quarterly
    Report on Form 10-Q, dated May 10, 2005).                                                                                                                                                                                                                                                                                           
|
| | 3 | .4  |  |  |  | Certificate of Elimination of 14
    11/4% Senior
    Exchangeable Preferred Stock, Series A of the Company,
    dated October 28, 2003 (incorporated by reference to
    Exhibit 3.3 of the Companys Quarterly Report on
    Form 10-Q, dated November 14, 2003 (the 11/14/03
    Quarterly Report)).                                                                                                                                                    
|
| | 4 | .1  |  |  |  | Article V of the Third Amended and Restated Certificate of
    Incorporation of the Company, dated September 29, 1999
    (incorporated by reference to Exhibit 3.1 of the
    Companys 1999 Registration Statement).                                                                                                                                                                                                                                       
|
| | 4 | .2  |  |  |  | Certificate of Designations dated October 29, 2003, Setting
    Forth the Voting Power, Preferences and Relative, Participating,
    Optional and Other Special Rights and Qualifications,
    Limitations and Restrictions of the
    103/4%
    Series A Cumulative Exchangeable Redeemable Preferred Stock
    of Spanish Broadcasting System, Inc. (incorporated by reference
    to Exhibit 4.1 of the Companys 11/14/03 Quarterly
    Report).        
|
| | 4 | .3  |  |  |  | Certificate of Designations dated October 29, 2003, Setting
    Forth the Voting Power, Preferences and Relative, Participating,
    Optional and Other Special Rights and Qualifications,
    Limitations and Restrictions of the
    103/4%
    Series B Cumulative Exchangeable Redeemable Preferred Stock
    of Spanish Broadcasting System, Inc. (incorporated by reference
    to Exhibit 4.2 of the Companys 11/14/03 Quarterly
    Report).        
|
| | 4 | .4  |  |  |  | Indenture dated June 29, 1994, among the Company, IBJ
    Schroder Bank & Trust Company, as Trustee, the
    Guarantors named therein and the Purchasers named therein
    (incorporated by reference to Exhibit 4.1 of the
    Companys 1994 Registration Statement on Form S-4 (the
    1994 Registration Statement)).                                                                                                                                  
|
| | 4 | .5  |  |  |  | First Supplemental Indenture dated as of March 25, 1996, to
    the Indenture dated as of June 29, 1994, among the Company,
    the Guarantors named therein and IBJ Schroder Bank &
    Trust Company, as Trustee (incorporated by reference to the 1996
    Current Report).                                                                                                                                                                               
|
| | 4 | .6  |  |  |  | Second Supplemental Indenture dated as of March 1, 1997, to
    the Indenture dated as of June 29, 1994, among the Company,
    the Guarantors named therein and IBJ Schroder Bank &
    Trust Company, as Trustee (incorporated by reference to the 1996
    Current Report).                                                                                                                                                                               
|
| | 4 | .7  |  |  |  | Supplemental Indenture dated as of October 21, 1999, to the
    Indenture dated as of June 29, 1994, among the Company, the
    Guarantors named therein and IBJ Schroder Bank & Trust
    Company, as Trustee (incorporated by reference to the
    Companys 1999 Registration Statement).                                                                                                                                                                 
|
| | 4 | .8  |  |  |  | Indenture with respect to
    95/8% Senior
    Subordinated Notes due 2009 with The Bank of New York as
    Trustee, dated November 2, 1999 (incorporated by reference
    to the Current Report on Form 8-K dated November 2,
    1999 (the 1999 Current Report)).                                                                                                                                                                                        
|
| | 4 | .9  |  |  |  | Indenture with respect to
    95/8% Senior
    Subordinated Notes due 2009 with The Bank of New York as
    Trustee, dated June 8, 2001 (incorporated by reference to
    the Companys Registration Statement on Form S-3,
    filed on June 25, 2001 (the 2001
    Form S-3)).                                                                                                                                                                           
|
| | 4 | .10 |  |  |  | Form of stock certificate for the Class A common stock of
    the Company (incorporated by reference to the Companys
    1999 Registration Statement).                                                                                                                                                                                                                                                                                                      
|
| | 4 | .11 |  |  |  | Certificate of Elimination of 14
    11/4%
    of Senior Exchangeable Preferred Stock, Series A of the
    Company, dated October 28, 2003 (incorporated by reference
    to Exhibit 3.3 of the Companys Quarterly Report on
    Form 10-Q filed November 14, 2003).                                                                                                                                                                                        
|
| | 4 | .12 |  |  |  | Certificate of Designation Setting Forth the Voting Power,
    Preferences and Relative, Participating, Optional and Other
    Special Rights and Qualifications, Limitations and Restrictions
    of the Series C Convertible Preferred Stock of the Company
    (Certificate of Designation of Series C Preferred
    Stock) (incorporated by reference to Exhibit 4.1 of
    the Companys Quarterly Report on Form 8-K filed on
    December 27, 2004).
|
| | 4 | .13 |  |  |  | Certificate of Correction to Certificate of Designation of
    Series C Preferred Stock of the Company dated
    January 7, 2005 (incorporated by reference to the
    Companys Annual Report on Form 10-K filed on
    March 16, 2005).                                                                                                                                                                                                                    

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| |    |    |  |   |  |                                                                                                                                                          
| | -- | -- |  | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------
| | 31 | .1 |  |  |  | Chief Executive Officers Certification pursuant to
    Section 302 of the Sarbanes-Oxley Act of 2002.                                                   
| | 31 | .2 |  |  |  | Chief Financial Officers Certification pursuant to
    Section 302 of the Sarbanes-Oxley Act of 2002.                                                   
|
| | 32 | .1 |  |  |  | Chief Executive Officers Certification pursuant to
    18 U.S.C. Section 1350, as adopted pursuant to
    Section 906 of the Sarbanes-Oxley Act of 2002.
|
| | 32 | .2 |  |  |  | Chief Financial Officers Certification pursuant to
    18 U.S.C. Section 1350, as adopted pursuant to
    Section 906 of the Sarbanes-Oxley Act of 2002.

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##### Table of Contents



SIGNATURES






| |                                  
| | ---------------------------------
| | SPANISH BROADCASTING SYSTEM, INC.



| |     |                     
| | --- | --------------------
| | By: | /s/ Joseph A. García

| | 
| | 
| | 



| |                                                                                                                                                                             
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Joseph A. García                                                                                                                                                            
| | Executive Vice President, Chief 
     Financial Officer and Secretary (principal 
     financial and accounting officer and duly 
     authorized officer of the registrant)



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##### Table of Contents



Exhibits 


| |      |  |  |   |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| | ---- |  |  | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | 3.1  |  |  |  |  | Third Amended and Restated Certificate of Incorporation of
    Spanish Broadcasting System, Inc. (the Company),
    dated September 29, 1999 (incorporated by reference to the
    Companys 1999 Registration Statement on Form S-1
    (Commission File No. 333-85499) (the 1999
    Registration Statement)) (Exhibit A to this exhibit
    is incorporated by reference to the Companys Current
    Report on Form 8-K, dated March 25, 1996 (the
    1996 Current Report)).
|
| | 3.2  |  |  |  |  | Certificate of Amendment to the Third Amended and Restated
    Certificate of Incorporation of the Company, dated
    September 29, 1999 (incorporated by reference to
    Exhibit 3.2 of the Companys 1999 Registration
    Statement).                                                                                                                                                                                                                                              
|
| | 3.3  |  |  |  |  | Amended and Restated By-Laws of the Company (incorporated by
    reference to Exhibit 3.3 of the Companys Quarterly
    Report on Form 10-Q, dated May 10, 2005).                                                                                                                                                                                                                                                                                                                     
|
| | 3.4  |  |  |  |  | Certificate of Elimination of 14
    11/4% Senior
    Exchangeable Preferred Stock, Series A of the Company,
    dated October 28, 2003 (incorporated by reference to
    Exhibit 3.3 of the Companys Quarterly Report on
    Form 10-Q, dated November 14, 2003 (the 11/14/03
    Quarterly Report)).                                                                                                                                                                              
|
| | 4.1  |  |  |  |  | Article V of the Third Amended and Restated Certificate of
    Incorporation of the Company, dated September 29, 1999
    (incorporated by reference to Exhibit 3.1 of the
    Companys 1999 Registration Statement).                                                                                                                                                                                                                                                                 
|
| | 4.2  |  |  |  |  | Certificate of Designations dated October 29, 2003, Setting
    Forth the Voting Power, Preferences and Relative, Participating,
    Optional and Other Special Rights and Qualifications,
    Limitations and Restrictions of the
    103/4%
    Series A Cumulative Exchangeable Redeemable Preferred Stock
    of Spanish Broadcasting System, Inc. (incorporated by reference
    to Exhibit 4.1 of the Companys 11/14/03 Quarterly
    Report).                                  
|
| | 4.3  |  |  |  |  | Certificate of Designations dated October 29, 2003, Setting
    Forth the Voting Power, Preferences and Relative, Participating,
    Optional and Other Special Rights and Qualifications,
    Limitations and Restrictions of the
    103/4%
    Series B Cumulative Exchangeable Redeemable Preferred Stock
    of Spanish Broadcasting System, Inc. (incorporated by reference
    to Exhibit 4.2 of the Companys 11/14/03 Quarterly
    Report).                                  
|
| | 4.4  |  |  |  |  | Indenture dated June 29, 1994, among the Company, IBJ
    Schroder Bank & Trust Company, as Trustee, the
    Guarantors named therein and the Purchasers named therein
    (incorporated by reference to Exhibit 4.1 of the
    Companys 1994 Registration Statement on Form S-4 (the
    1994 Registration Statement)).                                                                                                                                                            
|
| | 4.5  |  |  |  |  | First Supplemental Indenture dated as of March 25, 1996, to
    the Indenture dated as of June 29, 1994, among the Company,
    the Guarantors named therein and IBJ Schroder Bank &
    Trust Company, as Trustee (incorporated by reference to the 1996
    Current Report).                                                                                                                                                                                                         
|
| | 4.6  |  |  |  |  | Second Supplemental Indenture dated as of March 1, 1997, to
    the Indenture dated as of June 29, 1994, among the Company,
    the Guarantors named therein and IBJ Schroder Bank &
    Trust Company, as Trustee (incorporated by reference to the 1996
    Current Report).                                                                                                                                                                                                         
|
| | 4.7  |  |  |  |  | Supplemental Indenture dated as of October 21, 1999, to the
    Indenture dated as of June 29, 1994, among the Company, the
    Guarantors named therein and IBJ Schroder Bank & Trust
    Company, as Trustee (incorporated by reference to the
    Companys 1999 Registration Statement).                                                                                                                                                                                           
|
| | 4.8  |  |  |  |  | Indenture with respect to
    95/8% Senior
    Subordinated Notes due 2009 with The Bank of New York as
    Trustee, dated November 2, 1999 (incorporated by reference
    to the Current Report on Form 8-K dated November 2,
    1999 (the 1999 Current Report)).                                                                                                                                                                                                                  
|
| | 4.9  |  |  |  |  | Indenture with respect to
    95/8% Senior
    Subordinated Notes due 2009 with The Bank of New York as
    Trustee, dated June 8, 2001 (incorporated by reference to
    the Companys Registration Statement on Form S-3,
    filed on June 25, 2001 (the 2001
    Form S-3)).                                                                                                                                                                                                     
|
| | 4.10 |  |  |  |  | Form of stock certificate for the Class A common stock of
    the Company (incorporated by reference to the Companys
    1999 Registration Statement).                                                                                                                                                                                                                                                                                                                                

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##### Table of Contents



| |      |  |  |   |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| | ---- |  |  | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | 4.11 |  |  |  |  | Certificate of Elimination of 14
    11/4%
    of Senior Exchangeable Preferred Stock, Series A of the
    Company, dated October 28, 2003 (incorporated by reference
    to Exhibit 3.3 of the Companys Quarterly Report on
    Form 10-Q filed November 14, 2003).                                                                                                                                                                                        
|
| | 4.12 |  |  |  |  | Certificate of Designation Setting Forth the Voting Power,
    Preferences and Relative, Participating, Optional and Other
    Special Rights and Qualifications, Limitations and Restrictions
    of the Series C Convertible Preferred Stock of the Company
    (Certificate of Designation of Series C Preferred
    Stock) (incorporated by reference to Exhibit 4.1 of
    the Companys Quarterly Report on Form 8-K filed on
    December 27, 2004).
|
| | 4.13 |  |  |  |  | Certificate of Correction to Certificate of Designation of
    Series C Preferred Stock of the Company dated
    January 7, 2005 (incorporated by reference to the
    Companys Annual Report on Form 10-K filed on
    March 16, 2005).                                                                                                                                                                                                                    
|
| | 31.1 |  |  |  |  | Chief Executive Officers Certification pursuant to
    Section 302 of the Sarbanes-Oxley Act of 2002.                                                                                                                                                                                                                                                                                                                                                       
|
| | 31.2 |  |  |  |  | Chief Financial Officers Certification pursuant to
    Section 302 of the Sarbanes-Oxley Act of 2002.                                                                                                                                                                                                                                                                                                                                                       
|
| | 32.1 |  |  |  |  | Chief Executive Officers Certification pursuant to
    18 U.S.C. Section 1350, as adopted pursuant to
    Section 906 of the Sarbanes-Oxley Act of 2002.                                                                                                                                                                                                                                                                                                    
|
| | 32.2 |  |  |  |  | Chief Financial Officers Certification pursuant to
    18 U.S.C. Section 1350, as adopted pursuant to
    Section 906 of the Sarbanes-Oxley Act of 2002.                                                                                                                                                                                                                                                                                                    

33