##### 









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 March 31, 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


APPLICABLE ONLY TO CORPORATE ISSUERS:












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##### 



SPANISH BROADCASTING SYSTEM, INC.


INDEX


|                              |  |                                                                                                                  |  |      |    | 
|----------------------------- |  | ---------------------------------------------------------------------------------------------------------------- |  | ---- | -- | 
|                              |  |                                                                                                                  |  | Page |   
|                              |  |                                                                                                                  |  |      |   
|PART I. FINANCIAL INFORMATION
|                             
|ITEM 1.                       |  | Financial Statements  Unaudited                                                                                 |  |      |    | 
|                              |  | Unaudited Condensed Consolidated Balance Sheets as of
    December 31, 2004 and March 31, 2005                   |  |      | 2  | 
|                              |  | Unaudited Condensed Consolidated Statements of Operations for
    the Three-Months Ended March 31, 2004 and 2005 |  |      | 3  | 
|                              |  | Unaudited Condensed Consolidated Statements of Cash Flows for
    the Three-Months Ended March 31, 2004 and 2005 |  |      | 4  | 
|                              |  | Notes to Unaudited Condensed Consolidated Financial Statements                                                   |  |      | 5  | 
|ITEM 2.                       |  | Managements Discussion and Analysis of Financial Condition
    and Results of
    Operations                    |  |      | 16 | 
|ITEM 3.                       |  | Quantitative and Qualitative Disclosures About Market Risk                                                       |  |      | 21 | 
|ITEM 4.                       |  | Controls and Procedures                                                                                          |  |      | 22 | 
|                             
|PART II. OTHER INFORMATION   
|                             
|ITEM 1.                       |  | Legal Proceedings                                                                                                |  |      | 22 | 
|ITEM 5.                       |  | Other Information                                                                                                |  |      | 24 | 
|ITEM 6.                       |  | Exhibits and Reports on Form 8-K                                                                                 |  |      | 25 | 

1



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##### 



PART I.  FINANCIAL INFORMATION




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

SPANISH BROADCASTING SYSTEM, INC. AND SUBSIDIARIES


Unaudited Condensed Consolidated Balance Sheets


|                                                    |                                                                                                                                                                                                                                                                                              |                            |           |          |           |   |           |          |         | 
|--------------------------------------------------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | -------------------------- | --------- | -------- | --------- | - | --------- | -------- | ------- | 
|                                                    |                                                                                                                                                                                                                                                                                              | December 31,               |           |          | March 31, |  
|                                                    |                                                                                                                                                                                                                                                                                              | 2004                       |           |          | 2005      |  
|                                                    |                                                                                                                                                                                                                                                                                              |                            |           |          |           |  
|                                                    |                                                                                                                                                                                                                                                                                              | (In thousands,             |          
|                                                    |                                                                                                                                                                                                                                                                                              | except share data)         |          
|ASSETS                                             
|Current assets:                                     |                                                                                                                                                                                                                                                                                              |                            |           |          |           |   |           |         
|                                                    | Cash and cash equivalents                                                                                                                                                                                                                                                                    |                            | $         | 132,032  |           |   | $         | 161,924  |        
|                                                    | Net receivables                                                                                                                                                                                                                                                                              |                            |           | 32,622   |           |   |           | 23,811   |        
|                                                    | Prepaid expenses and other current assets                                                                                                                                                                                                                                                    |                            |           | 2,520    |           |   |           | 2,216    |        
|                                                    | Assets held for sale                                                                                                                                                                                                                                                                         |                            |           | 65,004   |           |   |           | 64,559   |        
|                                                    |                                                                                                                                                                                                                                                                                              |                            |           |          |           |  
|                                                    |                                                                                                                                                                                                                                                                                              | Total current assets       |           |          | 232,178   |   |           |          | 252,510 | 
|Property and equipment, net                         |                                                                                                                                                                                                                                                                                              |                            | 22,178    |          |           |   | 22,254    |         
|FCC licenses                                        |                                                                                                                                                                                                                                                                                              |                            | 710,410   |          |           |   | 710,410   |         
|Goodwill                                            |                                                                                                                                                                                                                                                                                              |                            | 32,806    |          |           |   | 32,806    |         
|Other intangible assets, net                        |                                                                                                                                                                                                                                                                                              |                            | 1,400     |          |           |   | 1,391     |         
|Deferred financing costs, net                       |                                                                                                                                                                                                                                                                                              |                            | 10,073    |          |           |   | 9,738     |         
|Other assets                                        |                                                                                                                                                                                                                                                                                              |                            | 678       |          |           |   | 886       |         
|                                                    |                                                                                                                                                                                                                                                                                              |                            |           |          |           |  
|                                                    |                                                                                                                                                                                                                                                                                              | $                          | 1,009,723 |          |           | $ | 1,029,995 |         
|                                                    |                                                                                                                                                                                                                                                                                              |                            |           |          |           |  
|LIABILITIES AND STOCKHOLDERS EQUITY               
|Current liabilities:                                |                                                                                                                                                                                                                                                                                              |                            |           |          |           |   |           |         
|                                                    | Current portion of the senior credit facilities term loan due
    2009                                                                                                                                                                                                                       |                            | $         | 123,750  |           |   | $         | 123,438  |        
|                                                    | Current portion of other long-term debt                                                                                                                                                                                                                                                      |                            |           | 3,154    |           |   |           | 3,112    |        
|                                                    | Deposit on sales of stations                                                                                                                                                                                                                                                                 |                            |           |         |           |   |           | 20,036   |        
|                                                    | Accounts payable and accrued expenses                                                                                                                                                                                                                                                        |                            |           | 24,225   |           |   |           | 19,614   |        
|                                                    | Accrued interest                                                                                                                                                                                                                                                                             |                            |           | 5,428    |           |   |           | 13,397   |        
|                                                    | Deferred commitment fee                                                                                                                                                                                                                                                                      |                            |           | 525      |           |   |           | 506      |        
|                                                    |                                                                                                                                                                                                                                                                                              |                            |           |          |           |  
|                                                    |                                                                                                                                                                                                                                                                                              | Total current liabilities  |           |          | 157,082   |   |           |          | 180,103 | 
|95/8% senior
    subordinated notes, due 2009, net  |                                                                                                                                                                                                                                                                                              |                            | 326,476   |          |           |   | 326,807   |         
|Other long-term debt, less current portion          |                                                                                                                                                                                                                                                                                              |                            | 567       |          |           |   | 549       |         
|Deferred income taxes                               |                                                                                                                                                                                                                                                                                              |                            | 127,055   |          |           |   | 123,981   |         
|Other long-term liabilities                         |                                                                                                                                                                                                                                                                                              |                            | 993       |          |           |   | 966       |         
|                                                    |                                                                                                                                                                                                                                                                                              |                            |           |          |           |  
|                                                    |                                                                                                                                                                                                                                                                                              | Total liabilities          |           |          | 612,173   |   |           |          | 632,406 | 
|                                                    |                                                                                                                                                                                                                                                                                              |                            |           |          |           |  
|Cumulative exchangeable redeemable preferred stock: |                                                                                                                                                                                                                                                                                              |                            |           |          |           |   |           |         
|                                                    | 103/4%
    Series B cumulative exchangeable redeemable preferred
    stock, $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 85,286 shares
    issued and outstanding at March 31, 2005 |                            |           | 84,914   |           |   |           | 87,196   |        
|                                                    |                                                                                                                                                                                                                                                                                              |                            |           |          |           |  
|Stockholders equity:                               |                                                                                                                                                                                                                                                                                              |                            |           |          |           |   |           |         
|                                                    | Series C preferred stock, $0.002 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 40,207,805 shares
    issued and outstanding at March 31, 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 24,573,500 shares
    issued and outstanding at March 31, 2005                                                                               |                            |           | 2        |           |   |           | 2        |        
|                                                    | Additional paid-in capital                                                                                                                                                                                                                                                                   |                            |           | 520,450  |           |   |           | 520,450  |        
|                                                    | Accumulated deficit                                                                                                                                                                                                                                                                          |                            |           | (207,821 | )         |   |           | (210,064 | )      
|                                                    |                                                                                                                                                                                                                                                                                              |                            |           |          |           |  
|                                                    |                                                                                                                                                                                                                                                                                              | Total stockholders equity |           |          | 312,636   |   |           |          | 310,393 | 
|                                                    |                                                                                                                                                                                                                                                                                              |                            |           |          |           |  
|                                                    |                                                                                                                                                                                                                                                                                              | $                          | 1,009,723 |          |           | $ | 1,029,995 |         
|                                                    |                                                                                                                                                                                                                                                                                              |                            |           |          |           |  



2



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##### 



SPANISH BROADCASTING SYSTEM, INC. AND SUBSIDIARIES


Unaudited Condensed Consolidated Statements of Operations


|                                                     |         |                                                           |                                                                                     |        |         |        |        |        |         |        |  
|---------------------------------------------------- | ------- | --------------------------------------------------------- | ----------------------------------------------------------------------------------- | ------ | ------- | ------ | ------ | ------ | ------- | ------ | -
|                                                     |         | Three Months Ended                                        |                                                                                    
|                                                     |         | March 31,                                                 |                                                                                    
|                                                     |         |                                                           |                                                                                    
|                                                     |         | 2004                                                      |                                                                                     |        | 2005    |       
|                                                     |         |                                                           |                                                                                     |        |         |       
|                                                     |         | (In thousands, except per                                 |                                                                                    
|                                                     |         | share data)                                               |                                                                                    
|Net revenue                                          |         | $                                                         | 29,232                                                                              |        |         | $      | 35,339 |       
|                                                     |         |                                                           |                                                                                     |        |         |       
|Operating expenses:                                  |         |                                                           |                                                                                     |        |         |        |        |       
|                                                     |         | Engineering and programming                               |                                                                                     |        | 7,412   |        |        |        | 7,865   |       
|                                                     |         | Selling, general and administrative                       |                                                                                     |        | 10,917  |        |        |        | 15,318  |       
|                                                     |         | Corporate expenses                                        |                                                                                     |        | 3,228   |        |        |        | 3,701   |       
|                                                     |         | Depreciation and amortization                             |                                                                                     |        | 822     |        |        |        | 830     |       
|                                                     |         |                                                           |                                                                                     |        |         |       
|                                                     |         |                                                           | Total operating expenses                                                            |        |         | 22,379 |        |        |         | 27,714 |  
|                                                     |         |                                                           |                                                                                     |        |         |       
|                                                     |         |                                                           | Operating income from continuing operations                                         |        |         | 6,853  |        |        |         | 7,625  |  
|                                                     |         |                                                           |                                                                                     |        |         |       
|Other (expense) income:                              |         |                                                           |                                                                                     |        |         |        |        |       
|                                                     |         | Interest expense, net                                     |                                                                                     |        | (10,238 | )      |        |        | (10,170 | )     
|                                                     |         | Other, net                                                |                                                                                     |        | 175     |        |        |        | 7       |       
|                                                     |         |                                                           |                                                                                     |        |         |       
|                                                     |         |                                                           | Loss from continuing operations before income taxes and
    discontinued operations |        |         | (3,210 | )      |        |         | (2,538 | )
|Income tax expense (benefit)                         |         |                                                           | (3,948                                                                              | )      |         |        | (2,579 | )     
|                                                     |         |                                                           |                                                                                     |        |         |       
|                                                     |         |                                                           | Income from continuing operations before discontinued operations                    |        |         | 738    |        |        |         | 41     |  
|Income (loss) on discontinued operations, net of tax |         |                                                           | 10,940                                                                              |        |         |        | (2     | )     
|                                                     |         |                                                           |                                                                                     |        |         |       
|                                                     |         |                                                           | Net income                                                                          |        | $       | 11,678 |        |        | $       | 39     |  
|Dividends on preferred stock                         |         |                                                           | (2,054                                                                              | )      |         |        | (2,282 | )     
|                                                     |         |                                                           |                                                                                     |        |         |       
|Net income (loss) applicable to common stockholders  |         | $                                                         | 9,624                                                                               |        |         | $      | (2,243 | )     
|                                                     |         |                                                           |                                                                                     |        |         |       
|Basic and diluted income (loss) per common share:    |         |                                                           |                                                                                     |        |         |        |        |       
|                                                     |         | Net loss per common share before discontinued operations: |                                                                                     | $      | (0.02   | )      |        | $      | (0.03   | )     
|                                                     |         | Net income per common share from discontinued operations: |                                                                                     | $      | 0.17    |        |        | $      |        |       
|                                                     |         |                                                           |                                                                                     |        |         |       
|                                                     |         | Net income (loss) per common share:                       |                                                                                     | $      | 0.15    |        |        | $      | (0.03   | )     
|                                                     |         |                                                           |                                                                                     |        |         |       
|Weighted average common shares outstanding:          |         |                                                           |                                                                                     |        |         |        |        |       
|                                                     | Basic   |                                                           |                                                                                     | 64,693 |         |        |        | 72,381 |        
|                                                     |         |                                                           |                                                                                     |        |         |       
|                                                     | Diluted |                                                           |                                                                                     | 65,359 |         |        |        | 72,381 |        
|                                                     |         |                                                           |                                                                                     |        |         |       



3



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##### 



SPANISH BROADCASTING SYSTEM, INC. AND SUBSIDIARIES


Unaudited Condensed Consolidated Statements of Cash Flows


|                                                 |                                                                                       |                                                                   |                                                   |                                                        |         |        |         |        |        |        |        |  
|------------------------------------------------ | ------------------------------------------------------------------------------------- | ----------------------------------------------------------------- | ------------------------------------------------- | ------------------------------------------------------ | ------- | ------ | ------- | ------ | ------ | ------ | ------ | -
|                                                 |                                                                                       | Three Months Ended                                                |                                                  
|                                                 |                                                                                       | March 31,                                                         |                                                  
|                                                 |                                                                                       |                                                                   |                                                  
|                                                 |                                                                                       | 2004                                                              |                                                   |                                                        | 2005    |       
|                                                 |                                                                                       |                                                                   |                                                   |                                                        |         |       
|                                                 |                                                                                       | (In thousands)                                                    |                                                  
|Cash flows from operating activities:            |                                                                                       |                                                                   |                                                   |                                                        |         |        |         |       
|                                                 | Net income                                                                            |                                                                   | $                                                 | 11,678                                                 |         |        | $       | 39     |       
|                                                 | Adjustments to reconcile net income to net cash provided by
    operating activities: |                                                                   |                                                   |                                                        |         |        |         |        |       
|                                                 |                                                                                       | (Income) loss from discontinued operations, net of tax            |                                                   |                                                        | (10,940 | )      |         |        | 2      |       
|                                                 |                                                                                       | Gain on disposal of fixed assets                                  |                                                   |                                                        |        |        |         |        | (9     | )     
|                                                 |                                                                                       | Depreciation and amortization                                     |                                                   |                                                        | 822     |        |         |        | 830    |       
|                                                 |                                                                                       | Net barter expense                                                |                                                   |                                                        | 46      |        |         |        | 257    |       
|                                                 |                                                                                       | Reduction of trade doubtful accounts                              |                                                   |                                                        | (232    | )      |         |        | (107   | )     
|                                                 |                                                                                       | Amortization of debt discount                                     |                                                   |                                                        | 294     |        |         |        | 331    |       
|                                                 |                                                                                       | Amortization of deferred financing costs                          |                                                   |                                                        | 493     |        |         |        | 499    |       
|                                                 |                                                                                       | Decrease in deferred income taxes                                 |                                                   |                                                        | (4,012  | )      |         |        | (2,623 | )     
|                                                 |                                                                                       | Amortization of deferred commitment fee                           |                                                   |                                                        | (19     | )      |         |        | (19    | )     
|                                                 |                                                                                       | Changes in operating assets and liabilities:                      |                                                   |                                                        |         |        |         |        |        |       
|                                                 |                                                                                       |                                                                   | Decrease in trade receivables                     |                                                        |         | 3,861  |         |        |        | 8,812  |       
|                                                 |                                                                                       |                                                                   | Decrease in other current assets                  |                                                        |         | 267    |         |        |        | 304    |       
|                                                 |                                                                                       |                                                                   | Increase in other assets                          |                                                        |         | (577   | )       |        |        | (208   | )     
|                                                 |                                                                                       |                                                                   | Decrease in accounts payable and accrued expenses |                                                        |         | (3,537 | )       |        |        | (4,925 | )     
|                                                 |                                                                                       |                                                                   | Increase in deferred commitment fee               |                                                        |         | 300    |         |        |        |       |       
|                                                 |                                                                                       |                                                                   | Increase in accrued interest                      |                                                        |         | 7,115  |         |        |        | 7,969  |       
|                                                 |                                                                                       |                                                                   |                                                   |                                                        |         |       
|                                                 |                                                                                       |                                                                   |                                                   | Net cash provided by continuing operations             |         |        | 5,559   |        |        |        | 11,152 |  
|                                                 |                                                                                       |                                                                   |                                                   | Net cash provided by (used in) discontinued operations |         |        | 908     |        |        |        | (3     | )
|                                                 |                                                                                       |                                                                   |                                                   |                                                        |         |       
|                                                 |                                                                                       |                                                                   |                                                   | Net cash provided by operating activities              |         |        | 6,467   |        |        |        | 11,149 |  
|                                                 |                                                                                       |                                                                   |                                                   |                                                        |         |       
|Cash flows from investing activities:            |                                                                                       |                                                                   |                                                   |                                                        |         |        |         |       
|                                                 | Proceeds from sale of radio stations, net of closing costs                            |                                                                   |                                                   | 23,730                                                 |         |        |         |       |       
|                                                 | Deposit on sale of stations                                                           |                                                                   |                                                   |                                                       |         |        |         | 20,036 |       
|                                                 | Additions to property and equipment                                                   |                                                                   |                                                   | (682                                                   | )       |        |         | (894   | )     
|                                                 |                                                                                       |                                                                   |                                                   |                                                        |         |       
|                                                 |                                                                                       |                                                                   |                                                   | Net cash provided by investing activities              |         |        | 23,048  |        |        |        | 19,142 |  
|                                                 |                                                                                       |                                                                   |                                                   |                                                        |         |       
|Cash flows from financing activities:            |                                                                                       |                                                                   |                                                   |                                                        |         |        |         |       
|                                                 | Repayments of other long-term debt                                                    |                                                                   |                                                   | (55                                                    | )       |        |         | (87    | )     
|                                                 | Increase in deferred financing costs                                                  |                                                                   |                                                   | (140                                                   | )       |        |         |       |       
|                                                 | Increase in deferred offering costs                                                   |                                                                   |                                                   | (430                                                   | )       |        |         |       |       
|                                                 | Repayment of senior credit facilities                                                 |                                                                   |                                                   | (312                                                   | )       |        |         | (312   | )     
|                                                 |                                                                                       |                                                                   |                                                   |                                                        |         |       
|                                                 |                                                                                       |                                                                   |                                                   | Net cash used in financing activities                  |         |        | (937    | )      |        |        | (399   | )
|                                                 |                                                                                       |                                                                   |                                                   |                                                        |         |       
|                                                 |                                                                                       |                                                                   |                                                   | Net increase in cash and cash equivalents              |         |        | 28,578  |        |        |        | 29,892 |  
|Cash and cash equivalents at beginning of period |                                                                                       |                                                                   | 45,609                                            |                                                        |         |        | 132,032 |       
|                                                 |                                                                                       |                                                                   |                                                   |                                                        |         |       
|Cash and cash equivalents at end of period       |                                                                                       |                                                                   | 74,187                                            |                                                        |         |        | 161,924 |       
|                                                 |                                                                                       |                                                                   |                                                   |                                                        |         |       
|Supplemental cash flows information:             |                                                                                       |                                                                   |                                                   |                                                        |         |        |         |       
|                                                 | Interest paid during the period                                                       |                                                                   |                                                   | 2,479                                                  |         |        |         | 1,945  |       
|                                                 |                                                                                       |                                                                   |                                                   |                                                        |         |       
|                                                 | Income taxes paid during the period                                                   |                                                                   |                                                   | 323                                                    |         |        |         | 1,649  |       
|                                                 |                                                                                       |                                                                   |                                                   |                                                        |         |       
|                                                 | Noncash investing and financing activities:                                           |                                                                   |                                                   |                                                        |         |        |         |        |       
|                                                 |                                                                                       | Accrual of preferred stock as payment of preferred stock dividend |                                                   | $                                                      | 1,366   |        |         | $      | 1,910  |       
|                                                 |                                                                                       |                                                                   |                                                   |                                                        |         |       



4



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##### 



SPANISH BROADCASTING SYSTEM, INC. AND SUBSIDIARIES


NOTES TO UNAUDITED CONDENSED CONSOLIDATED


FINANCIAL STATEMENTS




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







|   |                                                                               
|-- | ------------------------------------------------------------------------------
|2. | Financial Information for Parent, Guarantor and Non-Guarantor
    Subsidiaries

5 8 5 8


5



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##### 



SPANISH BROADCASTING SYSTEM, INC. AND SUBSIDIARIES


NOTES TO UNAUDITED CONDENSED CONSOLIDATED


FINANCIAL STATEMENTS  (Continued)




|                                            |                      |                         |          |           |              |  |           |              |  |  |              |         |  |       |          |          |   |  |           |         | 
|------------------------------------------- | -------------------- | ----------------------- | -------- | --------- | ------------ |  | --------- | ------------ |  |  | ------------ | ------- |  | ----- | -------- | -------- | - |  | --------- | ------- | 
|                                            |                      | As of December 31, 2004 |         
|                                            |                      |                         |         
|                                            |                      |                         |          | Non       |              |  |          
|                                            |                      |                         |          | Guarantor |              |  | Guarantor |              |  | 
|Condensed Consolidating Balance Sheet       |                      | Parent                  |          |           | Subsidiaries |  |           | Subsidiaries |  |  | Eliminations |         |  | Total |         
|                                            |                      |                         |          |           |              |  |           |              |  |  |              |         |  |       |         
|Cash and cash equivalents                   |                      | $                       | 110,374  |           |              |  | 18,647    |              |  |  | 3,011        |         |  |       |         |          |   |  | 132,032   |        
|Net receivables                             |                      |                         |         |           |              |  | 30,974    |              |  |  | 1,648        |         |  |       |         |          |   |  | 32,622    |        
|Other current assets                        |                      |                         | 992      |           |              |  | 1,069     |              |  |  | 459          |         |  |       |         |          |   |  | 2,520     |        
|Assets held for sale                        |                      |                         |         |           |              |  | 1,107     |              |  |  | 63,897       |         |  |       |         |          |   |  | 65,004    |        
|                                            |                      |                         |          |           |              |  |           |              |  |  |              |         |  |       |         
|                                            | Total current assets |                         |          | 111,366   |              |  |           | 51,797       |  |  |              | 69,015  |  |       |          |         |   |  |           | 232,178 | 
|Property and equipment, net                 |                      |                         | 1,334    |           |              |  | 14,177    |              |  |  | 6,667        |         |  |       |         |          |   |  | 22,178    |        
|Intangible assets, net                      |                      |                         | 1,962    |           |              |  | 9,249     |              |  |  | 733,405      |         |  |       |         |          |   |  | 744,616   |        
|Deferred financing costs, net               |                      |                         | 10,073   |           |              |  |          |              |  |  |             |         |  |       |         |          |   |  | 10,073    |        
|Investment in subsidiaries and intercompany |                      |                         | 738,151  |           |              |  | 342,518   |              |  |  | (644,000     | )       |  |       | (436,669 | )        |   |  |          |        
|Other assets                                |                      |                         | 37       |           |              |  | 640       |              |  |  | 1            |         |  |       |         |          |   |  | 678       |        
|                                            |                      |                         |          |           |              |  |           |              |  |  |              |         |  |       |         
|                                            |                      | $                       | 862,923  |           |              |  | 418,381   |              |  |  | 165,088      |         |  |       | (436,669 | )        |   |  | 1,009,723 |        
|                                            |                      |                         |          |           |              |  |           |              |  |  |              |         |  |       |         
|Current portion of long-term debt           |                      | $                       | 123,750  |           |              |  | 70        |              |  |  | 3,084        |         |  |       |         |          |   |  | 126,904   |        
|Accounts payable and accrued expenses       |                      |                         | 8,206    |           |              |  | 11,542    |              |  |  | 4,477        |         |  |       |         |          |   |  | 24,225    |        
|Accrued interest                            |                      |                         | 5,423    |           |              |  | 5         |              |  |  |             |         |  |       |         |          |   |  | 5,428     |        
|Deferred commitment fee                     |                      |                         | 525      |           |              |  |          |              |  |  |             |         |  |       |         |          |   |  | 525       |        
|                                            |                      |                         |          |           |              |  |           |              |  |  |              |         |  |       |         
|                                            | Current liabilities  |                         |          | 137,904   |              |  |           | 11,617       |  |  |              | 7,561   |  |       |          |         |   |  |           | 157,082 | 
|Long-term debt                              |                      |                         | 326,476  |           |              |  | 567       |              |  |  |             |         |  |       |         |          |   |  | 327,043   |        
|Other debt                                  |                      |                         | 993      |           |              |  |          |              |  |  |             |         |  |       |         |          |   |  | 993       |        
|Deferred income taxes                       |                      |                         |         |           |              |  |          |              |  |  | 127,055      |         |  |       |         |          |   |  | 127,055   |        
|                                            |                      |                         |          |           |              |  |           |              |  |  |              |         |  |       |         
|                                            | Total liabilities    |                         |          | 465,373   |              |  |           | 12,184       |  |  |              | 134,616 |  |       |          |         |   |  |           | 612,173 | 
|                                            |                      |                         |          |           |              |  |           |              |  |  |              |         |  |       |         
|Series B preferred stock                    |                      |                         | 84,914   |           |              |  |          |              |  |  |             |         |  |       |         |          |   |  | 84,914    |        
|                                            |                      |                         |          |           |              |  |           |              |  |  |              |         |  |       |         
|Series C preferred stock                    |                      |                         | 1        |           |              |  |          |              |  |  |             |         |  |       |         |          |   |  | 1         |        
|Common stock                                |                      |                         | 6        |           |              |  |          |              |  |  | 1            |         |  |       | (1       | )        |   |  | 6         |        
|Additional paid-in capital                  |                      |                         | 520,450  |           |              |  |          |              |  |  | 94,691       |         |  |       | (94,691  | )        |   |  | 520,450   |        
|Accumulated deficit                         |                      |                         | (207,821 | )         |              |  | 406,197   |              |  |  | (64,220      | )       |  |       | (341,977 | )        |   |  | (207,821  | )      
|                                            |                      |                         |          |           |              |  |           |              |  |  |              |         |  |       |         
|                                            | Stockholders equity |                         |          | 312,636   |              |  |           | 406,197      |  |  |              | 30,472  |  |       |          | (436,669 | ) |  |           | 312,636 | 
|                                            |                      |                         |          |           |              |  |           |              |  |  |              |         |  |       |         
|                                            |                      | $                       | 862,923  |           |              |  | 418,381   |              |  |  | 165,088      |         |  |       | (436,669 | )        |   |  | 1,009,723 |        
|                                            |                      |                         |          |           |              |  |           |              |  |  |              |         |  |       |         

6



---



##### 



SPANISH BROADCASTING SYSTEM, INC. AND SUBSIDIARIES


NOTES TO UNAUDITED CONDENSED CONSOLIDATED


FINANCIAL STATEMENTS  (Continued)


|                                            |                      |                      |          |           |              |  |           |              |  |  |              |         |  |       |          |          |   |  |           |         | 
|------------------------------------------- | -------------------- | -------------------- | -------- | --------- | ------------ |  | --------- | ------------ |  |  | ------------ | ------- |  | ----- | -------- | -------- | - |  | --------- | ------- | 
|                                            |                      | As of March 31, 2005 |         
|                                            |                      |                      |         
|                                            |                      |                      |          | Non       |              |  |          
|                                            |                      |                      |          | Guarantor |              |  | Guarantor |              |  | 
|Condensed Consolidating Balance Sheet       |                      | Parent               |          |           | Subsidiaries |  |           | Subsidiaries |  |  | Eliminations |         |  | Total |         
|                                            |                      |                      |          |           |              |  |           |              |  |  |              |         |  |       |         
|Cash and cash equivalents                   |                      | $                    | 137,178  |           |              |  | 22,109    |              |  |  | 2,637        |         |  |       |         |          |   |  | 161,924   |        
|Net receivables                             |                      |                      |         |           |              |  | 22,614    |              |  |  | 1,197        |         |  |       |         |          |   |  | 23,811    |        
|Other current assets                        |                      |                      | 909      |           |              |  | 865       |              |  |  | 442          |         |  |       |         |          |   |  | 2,216     |        
|Assets held for sale                        |                      |                      |         |           |              |  | 1,114     |              |  |  | 63,445       |         |  |       |         |          |   |  | 64,559    |        
|                                            |                      |                      |          |           |              |  |           |              |  |  |              |         |  |       |         
|                                            | Total current assets |                      |          | 138,087   |              |  |           | 46,702       |  |  |              | 67,721  |  |       |          |         |   |  |           | 252,510 | 
|Property and equipment, net                 |                      |                      | 1,441    |           |              |  | 14,065    |              |  |  | 6,748        |         |  |       |         |          |   |  | 22,254    |        
|Intangible assets, net                      |                      |                      | 1,962    |           |              |  | 9,240     |              |  |  | 733,405      |         |  |       |         |          |   |  | 744,607   |        
|Deferred financing costs, net               |                      |                      | 9,738    |           |              |  |          |              |  |  |             |         |  |       |         |          |   |  | 9,738     |        
|Investment in subsidiaries and intercompany |                      |                      | 736,374  |           |              |  | 357,483   |              |  |  | (644,493     | )       |  |       | (449,364 | )        |   |  |          |        
|Other assets                                |                      |                      | 254      |           |              |  | 628       |              |  |  | 4            |         |  |       |         |          |   |  | 886       |        
|                                            |                      |                      |          |           |              |  |           |              |  |  |              |         |  |       |         
|                                            |                      | $                    | 887,856  |           |              |  | 428,118   |              |  |  | 163,385      |         |  |       | (449,364 | )        |   |  | 1,029,995 |        
|                                            |                      |                      |          |           |              |  |           |              |  |  |              |         |  |       |         
|Current portion of long-term debt           |                      | $                    | 123,438  |           |              |  | 71        |              |  |  | 3,041        |         |  |       |         |          |   |  | 126,550   |        
|Deposit on sales of stations                |                      |                      | 20,036   |           |              |  |          |              |  |  |             |         |  |       |         |          |   |  | 20,036    |        
|Accounts payable and accrued expenses       |                      |                      | 5,117    |           |              |  | 10,087    |              |  |  | 4,410        |         |  |       |         |          |   |  | 19,614    |        
|Accrued interest                            |                      |                      | 13,397   |           |              |  |          |              |  |  |             |         |  |       |         |          |   |  | 13,397    |        
|Deferred commitment fee                     |                      |                      | 506      |           |              |  |          |              |  |  |             |         |  |       |         |          |   |  | 506       |        
|                                            |                      |                      |          |           |              |  |           |              |  |  |              |         |  |       |         
|                                            | Current liabilities  |                      |          | 162,494   |              |  |           | 10,158       |  |  |              | 7,451   |  |       |          |         |   |  |           | 180,103 | 
|Long-term debt                              |                      |                      | 326,807  |           |              |  | 549       |              |  |  |             |         |  |       |         |          |   |  | 327,356   |        
|Other debt                                  |                      |                      | 966      |           |              |  |          |              |  |  |             |         |  |       |         |          |   |  | 966       |        
|Deferred income taxes                       |                      |                      |         |           |              |  |          |              |  |  | 123,981      |         |  |       |         |          |   |  | 123,981   |        
|                                            |                      |                      |          |           |              |  |           |              |  |  |              |         |  |       |         
|                                            | Total liabilities    |                      |          | 490,267   |              |  |           | 10,707       |  |  |              | 131,432 |  |       |          |         |   |  |           | 632,406 | 
|                                            |                      |                      |          |           |              |  |           |              |  |  |              |         |  |       |         
|Series B preferred stock                    |                      |                      | 87,196   |           |              |  |          |              |  |  |             |         |  |       |         |          |   |  | 87,196    |        
|                                            |                      |                      |          |           |              |  |           |              |  |  |              |         |  |       |         
|Series C preferred stock                    |                      |                      | 1        |           |              |  |          |              |  |  |             |         |  |       |         |          |   |  | 1         |        
|Common stock                                |                      |                      | 6        |           |              |  |          |              |  |  | 1            |         |  |       | (1       | )        |   |  | 6         |        
|Additional paid-in capital                  |                      |                      | 520,450  |           |              |  |          |              |  |  | 94,691       |         |  |       | (94,691  | )        |   |  | 520,450   |        
|Accumulated deficit                         |                      |                      | (210,064 | )         |              |  | 417,411   |              |  |  | (62,739      | )       |  |       | (354,672 | )        |   |  | (210,064  | )      
|                                            |                      |                      |          |           |              |  |           |              |  |  |              |         |  |       |         
|                                            | Stockholders equity |                      |          | 310,393   |              |  |           | 417,411      |  |  |              | 31,953  |  |       |          | (449,364 | ) |  |           | 310,393 | 
|                                            |                      |                      |          |           |              |  |           |              |  |  |              |         |  |       |         
|                                            |                      | $                    | 887,856  |           |              |  | 428,118   |              |  |  | 163,385      |         |  |       | (449,364 | )        |   |  | 1,029,995 |        
|                                            |                      |                      |          |           |              |  |           |              |  |  |              |         |  |       |         

7



---



##### 



SPANISH BROADCASTING SYSTEM, INC. AND SUBSIDIARIES


NOTES TO UNAUDITED CONDENSED CONSOLIDATED


FINANCIAL STATEMENTS  (Continued)


|                                                |                                                     |                                           |         |           |              |  |           |              |  |  |              |        |   |       |        |         |   |  |         |        | 
|----------------------------------------------- | --------------------------------------------------- | ----------------------------------------- | ------- | --------- | ------------ |  | --------- | ------------ |  |  | ------------ | ------ | - | ----- | ------ | ------- | - |  | ------- | ------ | 
|                                                |                                                     | For the Three Months Ended March 31, 2004 |        
|                                                |                                                     |                                           |        
|                                                |                                                     |                                           |         | Non       |              |  |          
|                                                |                                                     |                                           |         | Guarantor |              |  | Guarantor |              |  | 
|Condensed Consolidating Statement of Operations |                                                     | Parent                                    |         |           | Subsidiaries |  |           | Subsidiaries |  |  | Eliminations |        |   | Total |       
|                                                |                                                     |                                           |         |           |              |  |           |              |  |  |              |        |   |       |       
|Net revenue                                     |                                                     | $                                         |        |           |              |  | 26,788    |              |  |  | 2,444        |        |   |       |       |         |   |  | 29,232  |       
|Station operating expenses                      |                                                     |                                           |        |           |              |  | 16,175    |              |  |  | 2,154        |        |   |       |       |         |   |  | 18,329  |       
|Corporate expenses                              |                                                     |                                           | 3,228   |           |              |  |          |              |  |  | 120          |        |   |       | (120   | )       |   |  | 3,228   |       
|Depreciation and amortization                   |                                                     |                                           | 96      |           |              |  | 603       |              |  |  | 123          |        |   |       |       |         |   |  | 822     |       
|                                                |                                                     |                                           |         |           |              |  |           |              |  |  |              |        |   |       |       
|                                                | Operating income from continuing operations         |                                           |         | (3,324    | )            |  |           | 10,010       |  |  |              | 47     |   |       |        | 120     |   |  |         | 6,853  | 
|Interest (expense) income, net                  |                                                     |                                           | (9,914  | )         |              |  | 1,006     |              |  |  | (1,330       | )      |   |       |       |         |   |  | (10,238 | )     
|Other income (expense), net                     |                                                     |                                           | 177     |           |              |  | 121       |              |  |  | (3           | )      |   |       | (120   | )       |   |  | 175     |       
|Equity in net income of subsidiaries            |                                                     |                                           | (20,727 | )         |              |  |          |              |  |  |             |        |   |       | 20,727 |         |   |  |        |       
|Income tax (benefit) expense                    |                                                     |                                           | (4,012  | )         |              |  | 20        |              |  |  | 44           |        |   |       |       |         |   |  | (3,948  | )     
|Discontinued operations, net of tax             |                                                     |                                           |        |           |              |  | 10,940    |              |  |  |             |        |   |       |       |         |   |  | 10,940  |       
|                                                |                                                     |                                           |         |           |              |  |           |              |  |  |              |        |   |       |       
|                                                | Net (loss) income                                   |                                           | $       | 11,678    |              |  |           | 22,057       |  |  |              | (1,330 | ) |       |        | (20,727 | ) |  |         | 11,678 | 
|Dividends on preferred stock                    |                                                     |                                           | (2,054  | )         |              |  |          |              |  |  |             |        |   |       |       |         |   |  | (2,054  | )     
|                                                |                                                     |                                           |         |           |              |  |           |              |  |  |              |        |   |       |       
|                                                | Net (loss) income applicable to common stockholders |                                           |         | 9,624     |              |  |           | 22,057       |  |  |              | (1,330 | ) |       |        | (20,727 | ) |  |         | 9,624  | 
|                                                |                                                     |                                           |         |           |              |  |           |              |  |  |              |        |   |       |       

|                                                |                                                     |                                           |         |           |              |  |           |              |  |  |              |       |  |       |        |         |   |  |         |        |  
|----------------------------------------------- | --------------------------------------------------- | ----------------------------------------- | ------- | --------- | ------------ |  | --------- | ------------ |  |  | ------------ | ----- |  | ----- | ------ | ------- | - |  | ------- | ------ | -
|                                                |                                                     | For the Three Months Ended March 31, 2005 |        
|                                                |                                                     |                                           |        
|                                                |                                                     |                                           |         | Non       |              |  |          
|                                                |                                                     |                                           |         | Guarantor |              |  | Guarantor |              |  | 
|Condensed Consolidating Statement of Operations |                                                     | Parent                                    |         |           | Subsidiaries |  |           | Subsidiaries |  |  | Eliminations |       |  | Total |       
|                                                |                                                     |                                           |         |           |              |  |           |              |  |  |              |       |  |       |       
|Net revenue                                     |                                                     | $                                         |        |           |              |  | 33,075    |              |  |  | 2,264        |       |  |       |       |         |   |  | 35,339  |       
|Station operating expenses                      |                                                     |                                           |        |           |              |  | 21,199    |              |  |  | 1,984        |       |  |       |       |         |   |  | 23,183  |       
|Corporate expenses                              |                                                     |                                           | 3,701   |           |              |  |          |              |  |  | 120          |       |  |       | (120   | )       |   |  | 3,701   |       
|Depreciation and amortization                   |                                                     |                                           | 103     |           |              |  | 596       |              |  |  | 131          |       |  |       |       |         |   |  | 830     |       
|                                                |                                                     |                                           |         |           |              |  |           |              |  |  |              |       |  |       |       
|                                                | Operating income from continuing operations         |                                           |         | (3,804    | )            |  |           | 11,280       |  |  |              | 29    |  |       |        | 120     |   |  |         | 7,625  |  
|Interest expense, net                           |                                                     |                                           | (8,857  | )         |              |  |          |              |  |  | (1,313       | )     |  |       |       |         |   |  | (10,170 | )     
|Other income (expense), net                     |                                                     |                                           | 5       |           |              |  | (64       | )            |  |  | 186          |       |  |       | (120   | )       |   |  | 7       |       
|Equity in net income of subsidiaries            |                                                     |                                           | (12,695 | )         |              |  |          |              |  |  |             |       |  |       | 12,695 |         |   |  |        |       
|Income tax (benefit) expense                    |                                                     |                                           |        |           |              |  |          |              |  |  | (2,579       | )     |  |       |       |         |   |  | (2,579  | )     
|Discontinued operations, net of tax             |                                                     |                                           |        |           |              |  | (2        | )            |  |  | _           |       |  |       |       |         |   |  | (2      | )     
|                                                |                                                     |                                           |         |           |              |  |           |              |  |  |              |       |  |       |       
|                                                | Net income                                          |                                           | $       | 39        |              |  |           | 11,214       |  |  |              | 1,481 |  |       |        | (12,695 | ) |  |         | 39     |  
|Dividends on preferred stock                    |                                                     |                                           | (2,282  | )         |              |  |          |              |  |  |             |       |  |       |       |         |   |  | (2,282  | )     
|                                                |                                                     |                                           |         |           |              |  |           |              |  |  |              |       |  |       |       
|                                                | Net (loss) income applicable to common stockholders |                                           |         | (2,243    | )            |  |           | 11,214       |  |  |              | 1,481 |  |       |        | (12,695 | ) |  |         | (2,243 | )
|                                                |                                                     |                                           |         |           |              |  |           |              |  |  |              |       |  |       |       

8



---



##### 



SPANISH BROADCASTING SYSTEM, INC. AND SUBSIDIARIES


NOTES TO UNAUDITED CONDENSED CONSOLIDATED


FINANCIAL STATEMENTS  (Continued)


|                                                |  |                                           |        |           |              |  |           |              |  |  |              |   |  |       |         |   |  |  |        |  
|----------------------------------------------- |  | ----------------------------------------- | ------ | --------- | ------------ |  | --------- | ------------ |  |  | ------------ | - |  | ----- | ------- | - |  |  | ------ | -
|                                                |  | For the Three Months Ended March 31, 2004 |       
|                                                |  |                                           |       
|                                                |  |                                           |        | Non       |              |  |          
|                                                |  |                                           |        | Guarantor |              |  | Guarantor |              |  | 
|Condensed Consolidating Statement of Cash Flows |  | Parent                                    |        |           | Subsidiaries |  |           | Subsidiaries |  |  | Eliminations |   |  | Total |        
|                                                |  |                                           |        |           |              |  |           |              |  |  |              |   |  |       |        
|Cash flows from operating activities            |  | $                                         | (5,898 | )         |              |  | 14,432    |              |  |  | (2,067       | ) |  |       |        |   |  |  | 6,467  |  
|                                                |  |                                           |        |           |              |  |           |              |  |  |              |   |  |       |        
|Cash flows from investing activities            |  | $                                         | 40,174 |           |              |  | (1,818    | )            |  |  | 24,894       |   |  |       | (40,202 | ) |  |  | 23,048 |  
|                                                |  |                                           |        |           |              |  |           |              |  |  |              |   |  |       |        
|Cash flows from financing activities            |  | $                                         | (882   | )         |              |  | (16,172   | )            |  |  | (24,085      | ) |  |       | 40,202  |   |  |  | (937   | )
|                                                |  |                                           |        |           |              |  |           |              |  |  |              |   |  |       |        

|                                                |  |                                           |        |           |              |  |           |              |  |  |              |   |  |       |        |   |  |  |        |  
|----------------------------------------------- |  | ----------------------------------------- | ------ | --------- | ------------ |  | --------- | ------------ |  |  | ------------ | - |  | ----- | ------ | - |  |  | ------ | -
|                                                |  | For the Three Months Ended March 31, 2005 |       
|                                                |  |                                           |       
|                                                |  |                                           |        | Non       |              |  |          
|                                                |  |                                           |        | Guarantor |              |  | Guarantor |              |  | 
|Condensed Consolidating Statement of Cash Flows |  | Parent                                    |        |           | Subsidiaries |  |           | Subsidiaries |  |  | Eliminations |   |  | Total |       
|                                                |  |                                           |        |           |              |  |           |              |  |  |              |   |  |       |       
|Cash flows from operating activities            |  | $                                         | 5,677  |           |              |  | 6,084     |              |  |  | (612         | ) |  |       |       |   |  |  | 11,149 |  
|                                                |  |                                           |        |           |              |  |           |              |  |  |              |   |  |       |       
|Cash flows from investing activities            |  | $                                         | 21,603 |           |              |  | (472      | )            |  |  | (212         | ) |  |       | (1,777 | ) |  |  | 19,142 |  
|                                                |  |                                           |        |           |              |  |           |              |  |  |              |   |  |       |       
|Cash flows from financing activities            |  | $                                         | (476   | )         |              |  | (2,150    | )            |  |  | 450          |   |  |       | 1,777  |   |  |  | (399   | )
|                                                |  |                                           |        |           |              |  |           |              |  |  |              |   |  |       |       



|   |                              
|-- | -----------------------------
|3. | New Accounting Pronouncements





|   |                     
|-- | --------------------
|4. | Assets Held for Sale







9



---



##### 



SPANISH BROADCASTING SYSTEM, INC. AND SUBSIDIARIES


NOTES TO UNAUDITED CONDENSED CONSOLIDATED


FINANCIAL STATEMENTS  (Continued)










|   |                     
|-- | --------------------
|5. | Stockholders Equity



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











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



10



---



##### 



SPANISH BROADCASTING SYSTEM, INC. AND SUBSIDIARIES


NOTES TO UNAUDITED CONDENSED CONSOLIDATED


FINANCIAL STATEMENTS  (Continued)


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 5(a)) |                 |  | December 23, 2008  | 
|                      |  |                     |           |  |                |                 |                 | 
|                      |  |                     | 4,500,000 |  |                |                 |                 |  |                    | 
|                      |  |                     |           |  |                |                 |                 | 



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



11



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##### 



SPANISH BROADCASTING SYSTEM, INC. AND SUBSIDIARIES


NOTES TO UNAUDITED CONDENSED CONSOLIDATED


FINANCIAL STATEMENTS  (Continued)




|                                 |           |        |       |          |       |   |       |       | 
|-------------------------------- | --------- | ------ | ----- | -------- | ----- | - | ----- | ----- | 
|                                 |           |        |       | Weighted |      
|                                 |           |        |       | Average  |      
|                                 |           |        |       | Exercise |      
|                                 |           | Shares |       |          | Price |  
|                                 |           |        |       |          |       |  
|Outstanding at December 31, 2003 |           |        | 2,351 |          |       | $ | 13.05 |      
|                                 | Granted   |        |       | 993      |       |   |       | 10.12 | 
|                                 | Exercised |        |       | (89      | )     |   |       | 6.53  | 
|                                 | Forfeited |        |       | (242     | )     |   |       | 12.99 | 
|                                 |           |        |       |          |       |  
|Outstanding at December 31, 2004 |           |        | 3,013 |          |       | $ | 12.28 |      
|                                 |           |        |       |          |       |  
|                                 | Granted   |        |       | 80       |       |   |       | 10.78 | 
|                                 | Exercised |        |       |         |       |   |       |      | 
|                                 | Forfeited |        |       | (60      | )     |   |       | 20.00 | 
|                                 |           |        |       |          |       |  
|Outstanding at March 31, 2005    |           |        | 3,033 |          |       | $ | 12.09 |      
|                                 |           |        |       |          |       |  



|                         |  |             |       |             |         |  |          |          |  |   |             |          |  |          |       |  |  |   |       | 
|------------------------ |  | ----------- | ----- | ----------- | ------- |  | -------- | -------- |  | - | ----------- | -------- |  | -------- | ----- |  |  | - | ----- | 
|                         |  |             |       | 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   |             |         |  | 5.7      |          |  | $ | 4.81        |          |  |          | 100   |  |  | $ | 4.81  | 
|5  9.99                 |  |             | 1,624 |             |         |  | 7.9      |          |  |   | 9.05        |          |  |          | 994   |  |  |   | 8.68  | 
|10  14.99               |  |             | 486   |             |         |  | 5.2      |          |  |   | 10.52       |          |  |          | 296   |  |  |   | 10.32 | 
|15  19.99               |  |             | 18    |             |         |  | 7.1      |          |  |   | 15.48       |          |  |          | 18    |  |  |   | 15.48 | 
|20  24.99               |  |             | 805   |             |         |  | 4.1      |          |  |   | 20.00       |          |  |          | 805   |  |  |   | 20.00 | 
|                         |  |             |       |             |         |  |          |          |  |   |             |          |  |          |      
|                         |  |             | 3,033 |             |         |  | 6.4      |          |  | $ | 12.09       |          |  |          | 2,213 |  |  | $ | 12.90 | 
|                         |  |             |       |             |         |  |          |          |  |   |             |          |  |          |      



|                        |  |           |         |   |           |  |         |  
|----------------------- |  | --------- | ------- | - | --------- |  | ------- | -
|                        |  | March 31, |         |   | March 31, | 
|                        |  | 2004      |         |   | 2005      | 
|                        |  |           |         |   |           | 
|Expected life           |  |           | 7 years |   |           |  | 5 years |  
|Dividends               |  |           | None    |   |           |  | None    |  
|Risk-free interest rate |  |           | 3.33    | % |           |  | 4.18    | %
|Expected volatility     |  |           | 78      | % |           |  | 72      | %

12



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##### 



SPANISH BROADCASTING SYSTEM, INC. AND SUBSIDIARIES


NOTES TO UNAUDITED CONDENSED CONSOLIDATED


FINANCIAL STATEMENTS  (Continued)




|                                                                                                                                    |                                |                    |        |      |      |  |        |       |  
|----------------------------------------------------------------------------------------------------------------------------------- | ------------------------------ | ------------------ | ------ | ---- | ---- |  | ------ | ----- | -
|                                                                                                                                    |                                | Three-Months Ended |       
|                                                                                                                                    |                                | March 31,          |       
|                                                                                                                                    |                                |                    |       
|                                                                                                                                    |                                | 2004               |        |      | 2005 | 
|                                                                                                                                    |                                |                    |        |      |      | 
|Net income (loss) applicable to common stockholders:                                                                                |                                |                    |        |      |      |  |        |      
|As reported                                                                                                                         |                                | $                  | 9,624  |      |      |  | (2,243 | )    
|Deduct: total stock-based employee compensation expense
    determined under fair value based method for all awards, net of
    tax |                                |                    | (1,784 | )    |      |  | (742   | )    
|                                                                                                                                    |                                |                    |        |      |      | 
|Pro forma net income (loss)                                                                                                         |                                | $                  | 7,840  |      |      |  | (2,985 | )    
|                                                                                                                                    |                                |                    |        |      |      | 
|Net income (loss) per common share:                                                                                                 |                                |                    |        |      |      |  |        |      
|                                                                                                                                    | As reported: Basic and Diluted |                    | $      | 0.15 |      |  |        | (0.03 | )
|                                                                                                                                    |                                |                    |        |      |      | 
|                                                                                                                                    | Pro forma: Basic and Diluted   |                    | $      | 0.12 |      |  |        | (0.04 | )
|                                                                                                                                    |                                |                    |        |      |      | 



|   |           
|-- | ----------
|6. | Litigation











13



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##### 



SPANISH BROADCASTING SYSTEM, INC. AND SUBSIDIARIES


NOTES TO UNAUDITED CONDENSED CONSOLIDATED


FINANCIAL STATEMENTS  (Continued)












14



---



##### 



SPANISH BROADCASTING SYSTEM, INC. AND SUBSIDIARIES


NOTES TO UNAUDITED CONDENSED CONSOLIDATED


FINANCIAL STATEMENTS  (Continued)










15



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##### 





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

Overview








Comparison Analysis of the Operating Results for the Three
Months Ended March 31, 2004 and 2005




|            |                                                 |                                             |        |         |        |   |        |         |       |   |       |         |         |   |    |      |      |   
|----------- | ----------------------------------------------- | ------------------------------------------- | ------ | ------- | ------ | - | ------ | ------- | ----- | - | ----- | ------- | ------- | - | -- | ---- | ---- | --
|            |                                                 | Three Months Ended                          |        |         |       
|            |                                                 | March 31,                                   |        |         | Change |  
|            |                                                 |                                             |        |         |        |  
|            |                                                 | 2004                                        |        |         | 2005   |   |        | $       |       |   | %     |        
|            |                                                 |                                             |        |         |        |   |        |         |       |   |       |        
|            |                                                 | (In thousands)                              |        |         |        |   |       
|Net revenue |                                                 | $                                           | 29,232 |         |        | $ | 35,339 |         |       | $ | 6,107 |         |         |   | 21 | %   
|            | Engineering and programming expense             |                                             |        | 7,412   |        |   |        | 7,865   |       |   |       | 453     |         |   |    | 6    | %   
|            | Selling, general and administrative expense     |                                             |        | 10,917  |        |   |        | 15,318  |       |   |       | 4,401   |         |   |    | 40   | %   
|            | Corporate expenses                              |                                             |        | 3,228   |        |   |        | 3,701   |       |   |       | 473     |         |   |    | 15   | %   
|            | Depreciation and amortization                   |                                             |        | 822     |        |   |        | 830     |       |   |       | 8       |         |   |    | 1    | %   
|            |                                                 |                                             |        |         |        |   |        |         |       |   |       |        
|            |                                                 | Operating income from continuing operations |        |         | 6,853  |   |        |         | 7,625 |   |       |         | 772     |   |    |      | 11   | % 
|            | Interest expense, net                           |                                             |        | (10,238 | )      |   |        | (10,170 | )     |   |       | 68      |         |   |    | (1   | )%  
|            | Other (expense) income, net                     |                                             |        | 175     |        |   |        | 7       |       |   |       | (168    | )       |   |    | (96  | )%  
|            | Income tax (benefit) expense                    |                                             |        | (3,948  | )      |   |        | (2,579  | )     |   |       | 1,369   |         |   |    | (35  | )%  
|            | Income (loss) from discontinued operations, net |                                             |        | 10,940  |        |   |        | (2      | )     |   |       | (10,942 | )       |   |    | (100 | )%  
|            |                                                 |                                             |        |         |        |   |        |         |       |   |       |        
|            |                                                 | Net income                                  |        | $       | 11,678 |   |        |         | 39    |   |       | $       | (11,639 | ) |    |      | (100 | )%
|            |                                                 |                                             |        |         |        |   |        |         |       |   |       |        

16



---



##### 



Net Revenue.


Engineering and Programming Expenses.


Selling, General and Administrative Expenses.


Corporate Expenses.


Operating Income from Continuing Operations.


Income Taxes.


Discontinued Operations, Net of Taxes.


Net Income.


Liquidity and Capital Resources




17



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##### 





|                                                |                                           |                    |        |        |        |   |        |        |  |  |        |   | 
|----------------------------------------------- | ----------------------------------------- | ------------------ | ------ | ------ | ------ | - | ------ | ------ |  |  | ------ | - | 
|                                                |                                           | Three Months Ended |        |        |       
|                                                |                                           | March 31,          |        |        | Change |  
|                                                |                                           |                    |        |        |        |  
|                                                |                                           | 2004               |        |        | 2005   |   |        | $      | 
|                                                |                                           |                    |        |        |        |   |        |        | 
|                                                |                                           | (In thousands)     |        |        |       
|Capital expenditures                            |                                           | $                  | 682    |        |        | $ | 894    |        |  |  | 212    |  
|                                                |                                           |                    |        |        |        |   |        |        | 
|Net cash flows provided by operating activities |                                           | $                  | 6,467  |        |        | $ | 11,149 |        |  |  | 4,682  |  
|Net cash flows provided by investing activities |                                           |                    | 23,048 |        |        |   | 19,142 |        |  |  | (3,906 | )
|Net cash flows used in financing activities     |                                           |                    | (937   | )      |        |   | (399   | )      |  |  | 538    |  
|                                                |                                           |                    |        |        |        |   |        |        | 
|                                                | Net increase in cash and cash equivalents |                    | $      | 28,578 |        |   | $      | 29,892 |  |  |        |   | 
|                                                |                                           |                    |        |        |        |   |        |        | 

Net Cash Flows Provided By Operating Activities.


Net Cash Flows Provided by Investing Activities.


Net Cash Flows Used In Financing Activities.


5 8




| |   |                                                                                                                                                        
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | the economic conditions 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.                                                        







18



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##### 





5 8 5 8


















19



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##### 





New Accounting Pronouncements




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 existing 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;                                                                                                                                                                                                                                                                                                 
|
| |  | 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;                                                                                                                                                

20



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##### 





| |   |                                                                                                                                                                                                                                                                                                       
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | 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, many operators 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





21



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##### 







|        |                        
|------- | -----------------------
|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











22



---



##### 













23



---



##### 











|        |                  
|------- | -----------------
|Item 5. | Other Information



5 8 5 8




24



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##### 









|        |                                 
|------- | --------------------------------
|Item 6. | Exhibits and Reports on Form 8-K

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.                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   
|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).                                                                                                                                                                                                          

25



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##### 



|     |  |   |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|---- |  | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    
|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).                                                                                                                                                                                                                    
|10.1 |  |  |  | Nonqualified Stock Option Agreement dated as of March 15,
    2005 between the Company and Jason Shrinsky.                                                                                                                                                                                                                                                                                                                                                   
|10.2 |  |  |  | Nonqualified Stock Option Agreement dated as of July 11,
    2003 between the Company and Joseph A. García.                                                                                                                                                                                                                                                                                                                                                  
|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.                                                                                                                                                                                                                                                                                                    

Reports on Form 8-K










26



---



##### 



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)     



27



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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.                                                                                                                                                                                                                                                                                                                                                                                                                                          
|    
|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).                         



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|     |  |   |  |                                                                                                                                                                                                                                          
|---- |  | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    
|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).
|    
|10.1 |  |  |  | Nonqualified Stock Option Agreement dated as of March 15,
    2005 between the Company and Jason Shrinsky.                                                                                                                               
|    
|10.2 |  |  |  | Nonqualified Stock Option Agreement dated as of July 11,
    2003 between the Company and Joseph A. García.                                                                                                                              
|    
|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.