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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, 2011
 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 000-27823
 
 Spanish Broadcasting System, Inc.
  Delaware
    
    13-3827791(State or other jurisdiction of
    
    (I.R.S. Employerincorporation or organization)
    
    Identification No.)
 2601 South Bayshore Drive, PH 2
Coconut Grove, Florida 33133  (Address of principal executive offices) (Zip Code)
 (305) 441-6901  (Registrants telephone number, including area code)
 þ o
 o o
  Large accelerated filer o
    
    Accelerated filer o
    
    Non-accelerated filer o
    
    Smaller reporting company þ(Do not check if a smaller reporting company)
 o þ




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##### 



SPANISH BROADCASTING SYSTEM, INC.
INDEX
 PagePART I. FINANCIAL INFORMATIONITEM 1. Financial Statements  Unaudited
    
    
    4Unaudited Condensed Consolidated Balance Sheets as of March 31, 2011 and December 31, 2010
    
    
    4Unaudited Condensed Consolidated Statements of Operations for the Three-Months Ended March 31, 2011 and 2010
    
    
    5Unaudited Condensed Consolidated Statement of Changes in Stockholders Deficit and Comprehensive Income for the Three-Months Ended March 31, 2011
    
    
    6Unaudited Condensed Consolidated Statements of Cash Flows for the Three-Months Ended March 31, 2011 and 2010
    
    
    7Notes to Unaudited Condensed Consolidated Financial Statements
    
    
    8ITEM 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    14ITEM 4. Controls and Procedures
    
    
    20PART II. OTHER INFORMATIONITEM 1. Legal Proceedings
    
    
    20ITEM 6. Exhibits
    
    
    21Exhibit 31.1Exhibit 31.2Exhibit 32.1Exhibit 32.2
   2




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Special Note Regarding Forward-Looking Statements
   3




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PART I. FINANCIAL INFORMATION
 
 Item 1.
    
    Financial Statements  Unaudited
 SPANISH BROADCASTING SYSTEM, INC. AND SUBSIDIARIES
 
  March 31,
    
    
    December 31,2011
    
    
    2010(In thousands, except share data)AssetsCurrent assets:Cash and cash equivalents
    
    $
    62,206
    
    
    
    55,140Receivables, net of allowance for doubtful accounts of $849 in 2011 and $813 in 2010
    
    
    21,518
    
    
    
    26,160Prepaid expenses and other current assets
    
    
    2,567
    
    
    
    3,219Total current assets
    
    
    86,291
    
    
    
    84,519Property and equipment, net of accumulated depreciation of $54,135 in 2011 and $52,819 in 2010
    
    
    40,247
    
    
    
    40,006FCC broadcasting licenses
    
    
    312,623
    
    
    
    312,623Goodwill
    
    
    32,806
    
    
    
    32,806Other intangible assets, net of accumulated amortization of $258 in 2011 and $250 in 2010
    
    
    1,176
    
    
    
    1,184Deferred financing costs, net of accumulated amortization of $6,351 in 2011 and $6,088 in 2010
    
    
    1,251
    
    
    
    1,514Other assets
    
    
    2,243
    
    
    
    2,167Total assets
    
    $
    476,637
    
    
    
    474,819Liabilities and Stockholders DeficitCurrent liabilities:Accounts payable and accrued expenses
    
    $
    19,308
    
    
    
    17,980Accrued interest
    
    
    3,059
    
    
    
    4,057Unearned revenue
    
    
    1,143
    
    
    
    745Other liabilities
    
    
    686
    
    
    
    750Current portion of the senior credit facility term loan due 2012
    
    
    3,250
    
    
    
    3,250Current portion of other long-term debt
    
    
    442
    
    
    
    416Series B cumulative exchangeable redeemable preferred stock dividends payable
    
    
    16,960
    
    
    
    14,478Total current liabilities
    
    
    44,848
    
    
    
    41,676Other liabilities, less current portion
    
    
    824
    
    
    
    985Derivative instruments
    
    
    763
    
    
    
    829Senior credit facility term loan due 2012, less current portion
    
    
    302,250
    
    
    
    303,063Other long-term debt, less current portion
    
    
    6,200
    
    
    
    6,180Deferred income taxes
    
    
    79,988
    
    
    
    78,247Total liabilities
    
    
    434,873
    
    
    
    430,980Commitments and contingencies (note 7)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; 92,349 shares issued and
outstanding at March 31, 2011 and December 31, 2010, respectively
    
    
    92,349
    
    
    
    92,349Stockholders deficit:Series C convertible preferred stock, $0.01 par value and liquidation value. Authorized 600,000 shares;
380,000 shares issued and outstanding at March 31, 2011 and December 31, 2010, respectively
    
    
    4
    
    
    
    4Class A common stock, $0.0001 par value. Authorized 100,000,000 shares; 41,669,805 and 41,639,805
shares issued and outstanding at March 31, 2011 and December 31, 2010, respectively
    
    
    4
    
    
    
    4Class B common stock, $0.0001 par value. Authorized 50,000,000 shares; 23,403,500
shares issued and outstanding at March 31, 2011 and December 31, 2010, respectively
    
    
    2
    
    
    
    2Additional paid-in capital
    
    
    525,230
    
    
    
    525,199Accumulated other comprehensive loss
    
    
    (763
    )
    
    
    (829
    )Accumulated deficit
    
    
    (575,062
    )
    
    
    (572,890
    )Total stockholders deficit
    
    
    (50,585
    )
    
    
    (48,510
    )Total liabilities and stockholders deficit
    
    $
    476,637
    
    
    
    474,819
   4




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SPANISH BROADCASTING SYSTEM, INC. AND SUBSIDIARIES
 
  Three-Months EndedMarch 31,2011
    
    
    2010(In thousands, except per share data)Net revenue
    
    $
    30,775
    
    
    
    30,846Operating expenses:Engineering and programming
    
    
    10,206
    
    
    
    9,874Selling, general and administrative
    
    
    13,179
    
    
    
    12,789Corporate expenses
    
    
    1,931
    
    
    
    2,221Depreciation and amortization
    
    
    1,339
    
    
    
    1,55626,655
    
    
    
    26,440Loss (gain) on the disposal of assets, net
    
    
    (7
    )
    
    
    Operating income
    
    
    4,127
    
    
    
    4,406Other (expense) income:Interest expense, net
    
    
    (2,036
    )
    
    
    (6,303
    )Change in fair value of derivative instrument
    
    
    
    
    
    
    2,847Income before income taxes
    
    
    2,091
    
    
    
    950Income tax expense
    
    
    1,781
    
    
    
    1,778Net income (loss)
    
    
    310
    
    
    
    (828
    )Dividends on Series B preferred stock
    
    
    (2,482
    )
    
    
    (2,482
    )Net loss applicable to
common stockholders
    
    $
    (2,172
    )
    
    
    (3,310
    )Basic and diluted net loss per common share
    
    $
    (0.03
    )
    
    
    (0.05
    )Weighted average common shares outstanding:Basic & Diluted
    
    
    72,673
    
    
    
    72,600
   5




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SPANISH BROADCASTING SYSTEM, INC. AND SUBSIDIARIES
 
 
 Class C
    
    
    Class A
    
    
    Class B
    
    
    
    
    
    
    Accumulatedpreferred stock
    
    
    common stock
    
    
    common stock
    
    
    Additional
    
    
    other
    
    
    
    
    
    
    TotalNumber of
    
    
    Par
    
    
    Number of
    
    
    Par
    
    
    Number of
    
    
    Par
    
    
    paid-in
    
    
    comprehensive
    
    
    Accumulated
    
    
    stockholdersshares
    
    
    value
    
    
    shares
    
    
    value
    
    
    shares
    
    
    value
    
    
    capital
    
    
    loss
    
    
    deficit
    
    
    deficit(In thousands, except share data)Balance at December 31, 2010
    
    
    380,000
    
    
    $
    4
    
    
    
    41,639,805
    
    
    $
    4
    
    
    
    23,403,500
    
    
    $
    2
    
    
    $
    525,199
    
    
    $
    (829
    )
    
    $
    (572,890
    )
    
    $
    (48,510
    )Issuance of Class A common stock from
vesting of restricted stock
    
    
    
    
    
    
    
    
    
    
    30,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Stock-based compensation
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    31
    
    
    
    
    
    
    
    
    
    
    
    31Series B preferred stock dividends
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (2,482
    )
    
    
    (2,482
    )Comprehensive income:Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    310
    
    
    
    310Unrealized gain on derivative instruments
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    66
    
    
    
    
    
    
    
    66Comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    376Balance at March 31, 2011
    
    
    380,000
    
    
    $
    4
    
    
    
    41,669,805
    
    
    $
    4
    
    
    
    23,403,500
    
    
    $
    2
    
    
    $
    525,230
    
    
    $
    (763
    )
    
    $
    (575,062
    )
    
    $
    (50,585
    )
   6




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SPANISH BROADCASTING SYSTEM, INC. AND SUBSIDIARIES
 
  Three-Months EndedMarch 31,2011
    
    
    2010(In thousands)Cash flows from operating activities:Net income (loss)
    
    $
    310
    
    
    
    (828
    )Adjustments to reconcile net income (loss) to net cash provided by operating activities:(Gain) loss on the sale of assets
    
    
    (7
    )
    
    
    Stock-based compensation
    
    
    31
    
    
    
    39Depreciation and amortization
    
    
    1,339
    
    
    
    1,556Net barter income
    
    
    127
    
    
    
    (46
    )Provision for trade doubtful accounts
    
    
    172
    
    
    
    282Amortization of deferred financing costs
    
    
    263
    
    
    
    266Deferred income taxes
    
    
    1,741
    
    
    
    1,744Unearned revenue
    
    
    335
    
    
    
    37Change in fair value of derivative instrument
    
    
    
    
    
    
    (1,819
    )Changes in operating assets and liabilities:Trade receivables
    
    
    4,406
    
    
    
    3,560Prepaid expenses and other current assets
    
    
    652
    
    
    
    451Other assets
    
    
    (76
    )
    
    
    63Accounts payable and accrued expenses
    
    
    1,657
    
    
    
    41Accrued interest
    
    
    (998
    )
    
    
    3,256Other liabilities
    
    
    (225
    )
    
    
    (270
    )Net cash provided by operating
activities
    
    
    9,727
    
    
    
    8,332Cash flows from investing activities:Purchases of property and equipment
    
    
    (1,737
    )
    
    
    (385
    )Proceeds from the sale of property and equipment and insurance recoveries
    
    
    13
    
    
    
    Net cash used in investing activities
    
    
    (1,724
    )
    
    
    (385
    )Cash flows from financing activities:Payment of senior secured credit facility term loan 2012
    
    
    (813
    )
    
    
    (813
    )Payments of other long-term debt
    
    
    (124
    )
    
    
    (111
    )Net cash used in financing activities
    
    
    (937
    )
    
    
    (924
    )Net increase in cash and cash
equivalents
    
    
    7,066
    
    
    
    7,023Cash and cash equivalents at beginning of period
    
    
    55,140
    
    
    
    53,580Cash and cash equivalents at end of period
    
    $
    62,206
    
    
    
    60,603Supplemental cash flows information:Interest paid
    
    $
    1,758
    
    
    
    1,758Income taxes paid, net
    
    $
    8
    
    
    
    8Noncash investing and financing activities:Accrual of Series B preferred stock cash dividends not declared
    
    $
    2,482
    
    
    
    2,482Unrealized gain (loss) on derivative instruments
    
    $
    66
    
    
    
    (84
    )
   7




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SPANISH BROADCASTING SYSTEM, INC. AND SUBSIDIARIES
 
 NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 1. Basis of Presentation
   2. Stockholders Deficit
 (a) Series C Convertible Preferred Stock
    (b) Class A and B Common Stock
 3 4
  8




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(c) Share-Based Compensation Plans
 2006 Omnibus Equity Compensation Plan
  1999 Stock Option Plans
  Stock Options and Nonvested Shares Activity
   WeightedWeighted
    
    
    
    
    
    
    AverageAverage
    
    
    Aggregate
    
    
    RemainingExercise
    
    
    Intrinsic
    
    
    ContractualShares
    
    
    Price
    
    
    Value
    
    
    Life (Years)Outstanding at December 31, 2010
    
    
    1,918
    
    
    $
    5.90Granted
    
    
    
    
    
    
    Exercised
    
    
    
    
    
    
    Forfeited
    
    
    (6
    )
    
    
    5.50Outstanding at March 31, 2011
    
    
    1,912
    
    
    $
    5.91
    
    
    $
    169
    
    
    
    4.5Exercisable at March 31, 2011
    
    
    1,862
    
    
    $
    6.01
    
    
    $
    169
    
    
    
    4.4
   9




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WeightedOutstanding
    
    
    Average
    
    
    ExercisableWeighted
    
    
    Remaining
    
    
    
    
    
    
    WeightedAverage
    
    
    Contractual
    
    
    
    
    
    
    AverageUnvested
    
    
    Exercise
    
    
    Life
    
    
    Number
    
    
    ExerciseRange of Exercise Prices
    
    Vested Options
    
    
    Options
    
    
    Price
    
    
    (Years)
    
    
    Exercisable
    
    
    Price$0.20  4.99
    
    
    675
    
    
    
    50
    
    
    $
    1.64
    
    
    
    7.6
    
    
    
    675
    
    
    $
    1.615.00  9.99
    
    
    989
    
    
    
    
    
    
    
    8.06
    
    
    
    2.4
    
    
    
    989
    
    
    
    8.0610.00  11.78
    
    
    198
    
    
    
    
    
    
    
    10.79
    
    
    
    3.5
    
    
    
    198
    
    
    
    10.791,862
    
    
    
    50
    
    
    $
    5.91
    
    
    
    4.5
    
    
    
    1,862
    
    
    $
    6.01
   WeightedAverage Grant-Date Fair ValueShares
    
    
    (per Share)Nonvested at December 31, 2010
    
    
    30
    
    
    $
    1.57Awarded
    
    
    
    
    
    
    Vested
    
    
    (30
    )
    
    
    1.57Forfeited
    
    
    
    
    
    
    Nonvested at March 31, 2011
    
    
    
    
    
    $
    
 3. Basic and Diluted Net Income (Loss) Per Common Share
    Three-Months EndedMarch 31,2011
    
    
    2010Basic weighted average shares outstanding
    
    
    72,673
    
    
    
    72,600Effect of dilutive equity instruments
    
    
    185
    
    
    
    154Dilutive weighted average shares outstanding
    
    
    72,858
    
    
    
    72,754Options to purchase shares of common stock and
other stock-based awards outstanding which are
not included in the calculation of diluted net
income (loss) per share because their impact is
anti-dilutive
    
    
    1,487
    
    
    
    1,755
  10




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4. Operating Segments
  Three-Months EndedMarch 31,2011
    
    
    2010(In thousands)Net revenue:Radio
    
    $
    26,441
    
    
    
    27,080Television
    
    
    4,334
    
    
    
    3,766Consolidated
    
    $
    30,775
    
    
    
    30,846Engineering and programming expenses:Radio
    
    $
    6,409
    
    
    
    5,790Television
    
    
    3,797
    
    
    
    4,084Consolidated
    
    $
    10,206
    
    
    
    9,874Selling, general and administrative expenses:Radio
    
    $
    10,836
    
    
    
    10,871Television
    
    
    2,343
    
    
    
    1,918Consolidated
    
    $
    13,179
    
    
    
    12,789Corporate expenses:
    
    $
    1,931
    
    
    
    2,221Depreciation and amortization:Radio
    
    $
    618
    
    
    
    733Television
    
    
    575
    
    
    
    562Corporate
    
    
    146
    
    
    
    261Consolidated
    
    $
    1,339
    
    
    
    1,556(Gain) loss on the disposal of assets, net:Radio
    
    $
    (7
    )
    
    
    Television
    
    
    
    
    
    
    Corporate
    
    
    
    
    
    
    Consolidated
    
    $
    (7
    )
    
    
    Operating income (loss):Radio
    
    $
    8,585
    
    
    
    9,686Television
    
    
    (2,381
    )
    
    
    (2,798
    )Corporate
    
    
    (2,077
    )
    
    
    (2,482
    )Consolidated
    
    $
    4,127
    
    
    
    4,406Capital expenditures:Radio
    
    $
    263
    
    
    
    59Television
    
    
    1,423
    
    
    
    295Corporate
    
    
    51
    
    
    
    31Consolidated
    
    $
    1,737
    
    
    
    385
 March 31,
    
    
    December 31,2011
    
    
    2010Total Assets:
    
    (In thousands)Radio
    
    $
    426,065
    
    
    
    425,106Television
    
    
    46,643
    
    
    
    45,707Corporate
    
    
    3,929
    
    
    
    4,006Consolidated
    
    $
    476,637
    
    
    
    474,819
  11




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5. Comprehensive Income (Loss)
  Three-Months EndedMarch 31,2011
    
    
    2010Net income (loss)
    
    $
    310
    
    
    
    (828
    )Other comprehensive income (loss):Amounts reclassified to earnings during the
period
    
    
    
    
    
    
    1,028Unrealized gain (loss) on derivative instruments
    
    
    66
    
    
    
    (84
    )Total comprehensive income
    
    $
    376
    
    
    
    116
 6. Income Taxes
    7. Litigation
  8. Fair Value Measurement Disclosures
 Fair Value of Financial Instruments
    March 31, 2011
    
    
    December 31, 2010Gross
    
    
    
    
    
    
    GrossCarrying
    
    
    
    
    
    
    CarryingDescription
    
    Amount
    
    
    Fair Value
    
    
    Amount
    
    
    Fair ValueSenior credit facility term loan
    
    $
    305.5
    
    
    
    297.2
    
    
    
    306.3
    
    
    
    291.2103/4%
Series B cumulative exchangeable redeemable
preferred stock
    
    
    92.3
    
    
    
    71.4
    
    
    
    92.3
    
    
    
    69.3Promissory note payable, included in other
long-term debt
    
    
    6.4
    
    
    
    6.2
    
    
    
    6.5
    
    
    
    6.4
  12




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Fair Value of Derivative Instruments
  Fair value measurements at March 31, 2011LiabilitiesMarch 31, 2011
    
    
    Quoted prices in
    
    
    Significantcarrying value and
    
    
    active markets
    
    
    other
    
    
    Significantbalance sheet
    
    
    for identical
    
    
    observable
    
    
    unobservablelocation of derivative
    
    
    instruments
    
    
    inputs
    
    
    inputsDescription
    
    instruments
    
    
    (Level 1)
    
    
    (Level 2)
    
    
    (Level 3)Derivative
designated as a
cash flow hedging
instrument:Interest rate swap
    
    $
    763
    
    
    
    
    
    
    
    763
    
    
    
    
 Fair value measurements at December 31, 2010LiabilitiesDecember 31, 2010
    
    
    Quoted prices in
    
    
    Significantcarrying value and
    
    
    active markets
    
    
    other
    
    
    Significantbalance sheet
    
    
    for identical
    
    
    observable
    
    
    unobservablelocation of derivative
    
    
    instruments
    
    
    inputs
    
    
    inputsDescription
    
    instruments
    
    
    (Level 1)
    
    
    (Level 2)
    
    
    (Level 3)Derivative
designated as a
cash flow hedging
instrument:Interest rate swap
    
    $
    829
    
    
    
    
    
    
    
    829
    
    
    
    
  13




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Three-Months EndedMarch 31,Interest rate swaps
    
    2011
    
    
    2010Gain (loss) gain recognized in other comprehensive
loss (effective portion)
    
    $
    66
    
    
    
    (84
    )Loss reclassified from accumulated other
comprehensive loss into interest expense
    
    
    
    
    
    
    1,028Gain recognized in change in fair value of
derivative instrument
    
    
    
    
    
    
    2,847
 9. Subsequent Events
 Acquisition of Houston Television Station
  
 Item 2.
    
    Managements Discussion and Analysis of Financial Condition and Results of Operations
 Overview
     14




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15




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Comparison Analysis of the Operating Results for the Three-Months Ended March 31, 2011 and 2010
  Three-Months EndedMarch 31,2011
    
    
    2010(In thousands)Net revenue:Radio
    
    $
    26,441
    
    
    
    27,080Television
    
    
    4,334
    
    
    
    3,766Consolidated
    
    $
    30,775
    
    
    
    30,846Engineering and programming expenses:Radio
    
    $
    6,409
    
    
    
    5,790Television
    
    
    3,797
    
    
    
    4,084Consolidated
    
    $
    10,206
    
    
    
    9,874Selling, general and administrative expenses:Radio
    
    $
    10,836
    
    
    
    10,871Television
    
    
    2,343
    
    
    
    1,918Consolidated
    
    $
    13,179
    
    
    
    12,789Corporate expenses:
    
    $
    1,931
    
    
    
    2,221Depreciation and amortization:Radio
    
    $
    618
    
    
    
    733Television
    
    
    575
    
    
    
    562Corporate
    
    
    146
    
    
    
    261Consolidated
    
    $
    1,339
    
    
    
    1,556(Gain) loss on the disposal of assets, net:Radio
    
    $
    (7
    )
    
    
    Television
    
    
    
    
    
    
    Corporate
    
    
    
    
    
    
    Consolidated
    
    $
    (7
    )
    
    
    Operating income (loss):Radio
    
    $
    8,585
    
    
    
    9,686Television
    
    
    (2,381
    )
    
    
    (2,798
    )Corporate
    
    
    (2,077
    )
    
    
    (2,482
    )Consolidated
    
    $
    4,127
    
    
    
    4,406
  Three-Months EndedMarch 31,2011
    
    
    2010(In thousands)Net revenue
    
    $
    30,775
    
    
    
    30,846Engineering and programming expenses
    
    
    10,206
    
    
    
    9,874Selling, general and administrative expenses
    
    
    13,179
    
    
    
    12,789Corporate expenses
    
    
    1,931
    
    
    
    2,221Depreciation and amortization
    
    
    1,339
    
    
    
    1,556(Gain) loss on disposal of assets, net of disposal costs
    
    
    (7
    )
    
    
    Operating income
    
    $
    4,127
    
    
    
    4,406Interest expense, net
    
    
    (2,036
    )
    
    
    (6,303
    )Change in fair value of derivative instrument
    
    
    
    
    
    
    2,847Income tax expense
    
    
    1,781
    
    
    
    1,778Net income
    
    $
    310
    
    
    
    (828
    )
  16




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##### Table of Contents



Net Revenue
  Engineering and Programming Expenses
  Selling, General and Administrative Expenses
  Corporate Expenses
  Operating Income
  Interest Expense, Net
  Income Taxes
  Net Income
  Liquidity and Capital Resources
    17




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##### Table of Contents




    
    the demand for advertising within the broadcasting industry and
economic conditions in general will not deteriorate further in any
material respect;
    
    we will continue to successfully implement our business strategy; and
    
    we will not incur any material unforeseen liabilities, including but
not limited to taxes, environmental liabilities, regulatory matters
and legal judgments.
   Three-Months EndedMarch 31,
    
    
    Change2011
    
    
    2010
    
    
    $(In thousands)Capital expenditures:Radio
    
    $
    263
    
    
    
    59
    
    
    
    204Television
    
    
    1,423
    
    
    
    295
    
    
    
    1,128Corporate
    
    
    51
    
    
    
    31
    
    
    
    20Consolidated
    
    $
    1,737
    
    
    
    385
    
    
    
    1,352Net cash flows provided by operating activities
    
    $
    9,726
    
    
    
    8,332
    
    
    
    1,394Net cash flows used in investing activities
    
    
    (1,723
    )
    
    
    (385
    )
    
    
    (1,338
    )Net cash flows used in financing activities
    
    
    (937
    )
    
    
    (924
    )
    
    
    (13
    )Net increase in cash and cash equivalents
    
    $
    7,066
    
    
    
    7,023
 Capital Expenditures
  Net Cash Flows Provided by Operating Activities
  Net Cash Flows Used in Investing Activities
  Net Cash Flows Used in Financing Activities
   18




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##### Table of Contents



Recent Developments
 Acquisition of Houston Television Station
  NASDAQ Delisting Letter
   Dividend Payment on the Series B Preferred Stock
 3 4
   3 4
   19




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##### Table of Contents



Investment Banker Engagement Letter
  Off-Balance Sheet Arrangements
  
 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
   20




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##### Table of Contents



Item 6.
    
    Exhibits
 (a) Exhibits
  ExhibitNumber
    
    Exhibit Description31.1
    *
    
    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.
 *
    
    Filed herewith**
    
    Furnished herewith  21




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##### Table of Contents



SIGNATURES
  SPANISH BROADCASTING SYSTEM, INC.By:
    /s/ JOSEPH A. GARCÍAJOSEPH A. GARCÍAChief Financial Officer,
Chief Administrative Officer, Senior
Executive Vice President and Secretary
(principal financial and accounting officer
and duly authorized officer of the registrant)   22




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##### Table of Contents



EXHIBIT INDEX
 ExhibitNumber
    
    Exhibit Description31.1
    *
    
    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.
 *
    
    Filed herewith**
    
    Furnished herewith  23