##### Table of Contents









UNITED STATES SECURITIES AND EXCHANGE COMMISSION


Washington, D.C. 20549


Form 10-Q


|           |  |                                                                                             
|---------- |  | --------------------------------------------------------------------------------------------
|(Mark One) |  |                                                                                             
|þ          |  | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934 
|          
|           |  | For the quarterly period ended March 31, 2006                                               
|          
|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


12b-2


o þ o


12b-2 o þ


APPLICABLE ONLY TO CORPORATE ISSUERS:












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##### 










SPANISH BROADCASTING SYSTEM, INC.


INDEX


|                                  |  |                                                                                                                                                           |  |      |    | 
|--------------------------------- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ---- | -- | 
|                                  |  |                                                                                                                                                           |  | Page |   
|                                  |  |                                                                                                                                                           |  |      |   
|PART I. FINANCIAL
    INFORMATION
|ITEM 1.                           |  | Financial Statements 
    Unaudited                                                                                                                      |  |      | 4  | 
|                                  |  | Unaudited Condensed Consolidated Balance
    Sheets as of March 31, 2006 and December 31, 2005                                                            |  |      | 4  | 
|                                  |  | Unaudited Condensed Consolidated Statements
    of Operations for the Three-Months Ended March 31, 2006 and
    2005                                      |  |      | 5  | 
|                                  |  | Unaudited Condensed Consolidated Statements
    of Changes in Stockholders Equity and Comprehensive Income
    for the Three-Months Ended March 31, 2006 |  |      | 6  | 
|                                  |  | Unaudited Condensed Consolidated Statements
    of Cash Flows for the Three-Months Ended March 31, 2006 and
    2005                                      |  |      | 7  | 
|                                  |  | Notes to Unaudited Condensed Consolidated
    Financial Statements                                                                                        |  |      | 8  | 
|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                                                                                                                                   |  |      | 21 | 
|PART II. OTHER INFORMATION       
|ITEM 1.                           |  | Legal Proceedings                                                                                                                                         |  |      | 21 | 
|ITEM 1A.                          |  | Risk Factors                                                                                                                                              |  |      | 22 | 
|ITEM 6.                           |  | Exhibits                                                                                                                                                  |  |      | 22 | 
|Section 302 CEO Certification    
|Section 302 CFO Certification    
|Section 906 CEO Certification    
|Section 906 CFO Certification    



2



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##### Table of Contents



Special Note Regarding Forward-Looking Statements


10-Q 10-K


3



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##### Table of Contents






PART I.  FINANCIAL INFORMATION







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

SPANISH BROADCASTING SYSTEM, INC. AND SUBSIDIARIES





Unaudited Condensed Consolidated Balance Sheets


|                                                                                                   |                                                                                                                                                                                                                                                  |                                                                                                    |         |          |              |  |         |          |           | 
|-------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ | -------------------------------------------------------------------------------------------------- | ------- | -------- | ------------ |  | ------- | -------- | --------- | 
|                                                                                                   |                                                                                                                                                                                                                                                  | March 31,                                                                                          |         |          | December 31, | 
|                                                                                                   |                                                                                                                                                                                                                                                  | 2006                                                                                               |         |          | 2005         | 
|                                                                                                   |                                                                                                                                                                                                                                                  |                                                                                                    |         |          |              | 
|                                                                                                   |                                                                                                                                                                                                                                                  | (In thousands,                                                                                     |        
|                                                                                                   |                                                                                                                                                                                                                                                  | except per share data)                                                                             |        
|ASSETS                                                                                            
|Current assets:                                                                                    |                                                                                                                                                                                                                                                  |                                                                                                    |         |          |              |  |         |         
|                                                                                                   | Cash and cash equivalents                                                                                                                                                                                                                        |                                                                                                    | $       | 66,436   |              |  | $       | 125,156  |          
|                                                                                                   | Receivables, net of allowance for doubtful accounts of $4,071 in
    2006 and $3,832 in 2005                                                                                                                                                     |                                                                                                    |         | 27,976   |              |  |         | 34,269   |          
|                                                                                                   | Prepaid expenses and other current assets                                                                                                                                                                                                        |                                                                                                    |         | 4,319    |              |  |         | 3,635    |          
|                                                                                                   | Assets held for sale                                                                                                                                                                                                                             |                                                                                                    |         |         |              |  |         | 65,109   |          
|                                                                                                   |                                                                                                                                                                                                                                                  |                                                                                                    |         |          |              | 
|                                                                                                   |                                                                                                                                                                                                                                                  | Total current assets                                                                               |         |          | 98,731       |  |         |          | 228,169   | 
|Property and equipment, net of accumulated depreciation of
    $31,229 in 2006 and $30,335 in 2005 |                                                                                                                                                                                                                                                  |                                                                                                    | 24,638  |          |              |  | 22,973  |         
|FCC licenses                                                                                       |                                                                                                                                                                                                                                                  |                                                                                                    | 749,823 |          |              |  | 710,410 |         
|Goodwill                                                                                           |                                                                                                                                                                                                                                                  |                                                                                                    | 32,806  |          |              |  | 32,806  |         
|Other intangible assets, net of accumulated amortization of $79
    in 2006 and $70 in 2005        |                                                                                                                                                                                                                                                  |                                                                                                    | 1,355   |          |              |  | 2,580   |         
|Deferred financing costs, net of accumulated amortization of
    $867 in 2006 and $749 in 2005     |                                                                                                                                                                                                                                                  |                                                                                                    | 6,443   |          |              |  | 8,744   |         
|Other assets                                                                                       |                                                                                                                                                                                                                                                  |                                                                                                    | 652     |          |              |  | 596     |         
|Derivative instrument                                                                              |                                                                                                                                                                                                                                                  |                                                                                                    | 11,472  |          |              |  | 6,939   |         
|                                                                                                   |                                                                                                                                                                                                                                                  |                                                                                                    |         |          |              | 
|                                                                                                   |                                                                                                                                                                                                                                                  | Total assets                                                                                       |         | $        | 925,920      |  |         | $        | 1,013,217 | 
|                                                                                                   |                                                                                                                                                                                                                                                  |                                                                                                    |         |          |              | 
|                                                                                                  
|LIABILITIES AND STOCKHOLDERS EQUITY                                                              
|Current liabilities:                                                                               |                                                                                                                                                                                                                                                  |                                                                                                    |         |          |              |  |         |         
|                                                                                                   | Accounts payable and accrued expenses                                                                                                                                                                                                            |                                                                                                    |         | 17,495   |              |  |         | 21,487   |          
|                                                                                                   | Accrued interest                                                                                                                                                                                                                                 |                                                                                                    |         | 53       |              |  |         | 1,426    |          
|                                                                                                   | Deposits on sale of stations                                                                                                                                                                                                                     |                                                                                                    |         |         |              |  |         | 55,000   |          
|                                                                                                   | Unearned revenue                                                                                                                                                                                                                                 |                                                                                                    |         | 2,048    |              |  |         | 263      |          
|                                                                                                   | Deferred commitment fee                                                                                                                                                                                                                          |                                                                                                    |         | 431      |              |  |         | 450      |          
|                                                                                                   | Current portion of the senior credit facility term loan due 2012                                                                                                                                                                                 |                                                                                                    |         | 3,250    |              |  |         | 3,250    |          
|                                                                                                   | Current portion of the senior credit facility term loan due 2013                                                                                                                                                                                 |                                                                                                    |         |         |              |  |         | 100,000  |          
|                                                                                                   | Current portion of other long-term debt                                                                                                                                                                                                          |                                                                                                    |         | 76       |              |  |         | 75       |          
|                                                                                                   | Series B cumulative exchangeable redeemable preferred stock
    dividends payable                                                                                                                                                                |                                                                                                    |         | 2,014    |              |  |         | 2,014    |          
|                                                                                                   |                                                                                                                                                                                                                                                  |                                                                                                    |         |          |              | 
|                                                                                                   |                                                                                                                                                                                                                                                  | Total current liabilities                                                                          |         |          | 25,367       |  |         |          | 183,965   | 
|Senior credit facility term loan due 2012, less current portion                                    |                                                                                                                                                                                                                                                  |                                                                                                    | 318,500 |          |              |  | 319,313 |         
|Non-interest bearing note payable due 2009                                                         |                                                                                                                                                                                                                                                  |                                                                                                    | 14,876  |          |              |  |        |         
|Other long-term debt, less current portion                                                         |                                                                                                                                                                                                                                                  |                                                                                                    | 473     |          |              |  | 492     |         
|Deferred income taxes                                                                              |                                                                                                                                                                                                                                                  |                                                                                                    | 141,797 |          |              |  | 144,163 |         
|Unearned revenue, less current portion                                                             |                                                                                                                                                                                                                                                  |                                                                                                    | 3,538   |          |              |  |        |         
|Other long-term liabilities                                                                        |                                                                                                                                                                                                                                                  |                                                                                                    | 386     |          |              |  | 525     |         
|                                                                                                   |                                                                                                                                                                                                                                                  |                                                                                                    |         |          |              | 
|                                                                                                   |                                                                                                                                                                                                                                                  | Total liabilities                                                                                  |         |          | 504,937      |  |         |          | 648,458   | 
|                                                                                                   |                                                                                                                                                                                                                                                  |                                                                                                    |         |          |              | 
|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;
    89,932 shares issued and outstanding at March 31, 2006
    and December 31, 2005 |                                                                                                    |         | 89,932   |              |  |         | 89,932   |          
|                                                                                                   |                                                                                                                                                                                                                                                  |                                                                                                    |         |          |              | 
|Stockholders equity:                                                                              |                                                                                                                                                                                                                                                  |                                                                                                    |         |          |              |  |         |         
|                                                                                                   | Series C preferred stock, $0.01 par value and
    liquidation value. Authorized 600,000 shares; issued and
    outstanding 380,000 shares                                                                                                        |                                                                                                    |         | 1        |              |  |         | 1        |          
|                                                                                                   | Class A common stock, $0.0001 par value. Authorized
    100,000,000 shares; 40,277,805 shares issued and
    outstanding at March 31, 2006 and December 31, 2005                                                                                 |                                                                                                    |         | 4        |              |  |         | 4        |          
|                                                                                                   | Class B common stock, $0.0001 par value. Authorized
    50,000,000 shares; 24,503,500 shares issued and
    outstanding at March 31, 2006 and December 31, 2005                                                                                  |                                                                                                    |         | 2        |              |  |         | 2        |          
|                                                                                                   | Additional paid-in capital                                                                                                                                                                                                                       |                                                                                                    |         | 520,988  |              |  |         | 520,421  |          
|                                                                                                   | Accumulated other comprehensive income                                                                                                                                                                                                           |                                                                                                    |         | 11,472   |              |  |         | 6,939    |          
|                                                                                                   | Accumulated deficit                                                                                                                                                                                                                              |                                                                                                    |         | (201,416 | )            |  |         | (252,540 | )        
|                                                                                                   |                                                                                                                                                                                                                                                  |                                                                                                    |         |          |              | 
|                                                                                                   |                                                                                                                                                                                                                                                  | Total stockholders equity                                                                         |         |          | 331,051      |  |         |          | 274,827   | 
|                                                                                                   |                                                                                                                                                                                                                                                  |                                                                                                    |         |          |              | 
|                                                                                                   |                                                                                                                                                                                                                                                  | Total liabilities, cumulative exchangeable redeemable preferred
    stock and stockholders equity |         | $        | 925,920      |  |         | $        | 1,013,217 | 
|                                                                                                   |                                                                                                                                                                                                                                                  |                                                                                                    |         |          |              | 



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SPANISH BROADCASTING SYSTEM, INC. AND SUBSIDIARIES





Unaudited Condensed Consolidated Statements of Operations


|                                                    |                                                                   |                                                               |        |         |         |   |        |         |        |  
|--------------------------------------------------- | ----------------------------------------------------------------- | ------------------------------------------------------------- | ------ | ------- | ------- | - | ------ | ------- | ------ | -
|                                                    |                                                                   | Three-Months Ended                                            |       
|                                                    |                                                                   | March 31,                                                     |       
|                                                    |                                                                   |                                                               |       
|                                                    |                                                                   | 2006                                                          |        |         | 2005    |  
|                                                    |                                                                   |                                                               |        |         |         |  
|                                                    |                                                                   | (In thousands, except                                         |       
|                                                    |                                                                   | per share data)                                               |       
|Net revenue                                         |                                                                   | $                                                             | 37,775 |         |         | $ | 35,339 |        
|                                                    |                                                                   |                                                               |        |         |         |  
|Operating expenses:                                 |                                                                   |                                                               |        |         |         |   |        |        
|                                                    | Engineering and programming                                       |                                                               |        | 11,819  |         |   |        | 7,865   |       
|                                                    | Selling, general and administrative                               |                                                               |        | 16,699  |         |   |        | 15,318  |       
|                                                    | Corporate expenses                                                |                                                               |        | 3,528   |         |   |        | 3,701   |       
|                                                    | Depreciation and amortization                                     |                                                               |        | 927     |         |   |        | 830     |       
|                                                    | Gain on the sale of assets, net of disposal of costs              |                                                               |        | (50,801 | )       |   |        |        |       
|                                                    |                                                                   |                                                               |        |         |         |  
|                                                    |                                                                   | Total operating (income) expenses                             |        |         | (17,828 | ) |        |         | 27,714 |  
|                                                    |                                                                   |                                                               |        |         |         |  
|                                                    |                                                                   | Operating income                                              |        |         | 55,603  |   |        |         | 7,625  |  
|                                                    |                                                                   |                                                               |        |         |         |  
|Other (expense) income:                             |                                                                   |                                                               |        |         |         |   |        |        
|                                                    | Interest expense, net                                             |                                                               |        | (5,419  | )       |   |        | (10,170 | )     
|                                                    | Loss on early extinguishment of debt                              |                                                               |        | (2,997  | )       |   |        |        |       
|                                                    | Other, net                                                        |                                                               |        | (26     | )       |   |        | 7       |       
|                                                    |                                                                   |                                                               |        |         |         |  
|                                                    |                                                                   | Income (loss) before income taxes and discontinued operations |        |         | 47,161  |   |        |         | (2,538 | )
|Income tax benefit                                  |                                                                   |                                                               | (6,380 | )       |         |   | (2,579 | )      
|                                                    |                                                                   |                                                               |        |         |         |  
|                                                    |                                                                   | Income before discontinued operations                         |        |         | 53,541  |   |        |         | 41     |  
|Loss on discontinued operations, net of tax         |                                                                   |                                                               |       |         |         |   | (2     | )      
|                                                    |                                                                   |                                                               |        |         |         |  
|                                                    |                                                                   | Net income                                                    |        | $       | 53,541  |   |        | $       | 39     |  
|Dividends on Series B preferred stock               |                                                                   |                                                               | (2,417 | )       |         |   | (2,282 | )      
|                                                    |                                                                   |                                                               |        |         |         |  
|Net income (loss) applicable to common stockholders |                                                                   | $                                                             | 51,124 |         |         | $ | (2,243 | )      
|                                                    |                                                                   |                                                               |        |         |         |  
|Basic and diluted income (loss) per common share:   |                                                                   |                                                               |        |         |         |   |        |        
|                                                    | Net income (loss) per common share before discontinued operations |                                                               | $      | 0.71    |         |   | $      | (0.03   | )     
|                                                    |                                                                   | Net loss per common share from discontinued operations        |        | $       |        |   |        | $       |       |  
|                                                    |                                                                   |                                                               |        |         |         |  
|                                                    | Net income (loss) per common share                                |                                                               | $      | 0.71    |         |   | $      | (0.03   | )     
|                                                    |                                                                   |                                                               |        |         |         |  
|Weighted average common shares outstanding:         |                                                                   |                                                               |        |         |         |   |        |        
|                                                    | Basic                                                             |                                                               |        | 72,381  |         |   |        | 72,381  |       
|                                                    |                                                                   |                                                               |        |         |         |  
|                                                    | Diluted                                                           |                                                               |        | 72,393  |         |   |        | 72,381  |       
|                                                    |                                                                   |                                                               |        |         |         |  



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SPANISH BROADCASTING SYSTEM, INC. AND SUBSIDIARIES





Unaudited Condensed Consolidated Statements of Changes in


Stockholders Equity and Comprehensive Income


for the Three-Months Ended March 31, 2006


|                             |                                          |                                       |         |   |              |   |   |              |  |  |            |   |             |           |   |   |       |  |            |         |  |   |               |   |  |             |         |     |               |   |        |       |  |   |          |        |   |   |         |        |        | 
|---------------------------- | ---------------------------------------- | ------------------------------------- | ------- | - | ------------ | - | - | ------------ |  |  | ---------- | - | ----------- | --------- | - | - | ----- |  | ---------- | ------- |  | - | ------------- | - |  | ----------- | ------- | --- | ------------- | - | ------ | ----- |  | - | -------- | ------ | - | - | ------- | ------ | ------ | 
|                             |                                          | Class C                               |         |   | Class A      |   |   | Class B      |  |  |            |   |             |           |   |   |      
|                             |                                          | Preferred Stock                       |         |   | Common Stock |   |   | Common Stock |  |  |            |   | Accumulated |           |   |   |       | 
|                             |                                          |                                       |         |   |              |   |   |              |  |  | Additional |   |             | Other     |   |   |       |  | Total      |        
|                             |                                          | Number                                |         |   | Par          |   |   | Number       |  |  | Par        |   |             | Number    |   |   | Par   |  |            | Paid-In |  |   | Comprehensive |   |  | Accumulated |         |     | Stockholders |  
|                             |                                          | of Shares                             |         |   | Value        |   |   | of Shares    |  |  | Value      |   |             | of Shares |   |   | Value |  |            | Capital |  |   | Income        |   |  | Deficit     |         |     | Equity        |  
|                             |                                          |                                       |         |   |              |   |   |              |  |  |            |   |             |           |   |   |       |  |            |         |  |   |               |   |  |             |         |     |               |  
|                             |                                          | (In thousands, except per share data) |        
|Balance at December 31, 2005 |                                          |                                       | 380,000 |   |              | $ | 1 |              |  |  | 40,277,805 |   |             | $         | 4 |   |       |  | 24,503,500 |         |  | $ | 2             |   |  |             | 520,421 |     |               |   | 6,939  |       |  |   | (252,540 | )      |   |   | 274,827 |       
|                             | Stock options expense                    |                                       |         |  |              |   |   |             |  |  |            |  |             |           |   |  |       |  |            |        |  |   |               |  |  |             |         | 567 |               |   |        |      |  |   |          |       |   |   |         | 567    |       
|                             | Series B preferred stock dividends       |                                       |         |  |              |   |   |             |  |  |            |  |             |           |   |  |       |  |            |        |  |   |               |  |  |             |         |    |               |   |        |      |  |   |          | (2,417 | ) |   |         | (2,417 | )     
|Comprehensive income:        |                                          |                                       |         |   |              |   |   |              |  |  |            |   |             |           |   |   |       |  |            |         |  |   |               |   |  |             |         |     |               |   |        |       |  |   |          |        |   |   |         |       
|                             | Net income                               |                                       |         |  |              |   |   |             |  |  |            |  |             |           |   |  |       |  |            |        |  |   |               |  |  |             |         |    |               |   |        |      |  |   |          | 53,541 |   |   |         | 53,541 |       
|                             | Unrealized gain on derivative instrument |                                       |         |  |              |   |   |             |  |  |            |  |             |           |   |  |       |  |            |        |  |   |               |  |  |             |         |    |               |   |        | 4,533 |  |   |          |       |   |   |         | 4,533  |       
|                             |                                          |                                       |         |   |              |   |   |              |  |  |            |   |             |           |   |   |       |  |            |         |  |   |               |   |  |             |         |     |               |  
|                             |                                          | Comprehensive income                  |         |   |              |   |   |              |  |  |            |   |             |           |   |   |       |  |            |         |  |   |               |   |  |             |         |     |               |   |        |       |  |   |          |        |   |   |         |        | 58,074 | 
|                             |                                          |                                       |         |   |              |   |   |              |  |  |            |   |             |           |   |   |       |  |            |         |  |   |               |   |  |             |         |     |               |  
|Balance at March 31, 2006    |                                          |                                       | 380,000 |   |              | $ | 1 |              |  |  | 40,277,805 |   |             | $         | 4 |   |       |  | 24,503,500 |         |  | $ | 2             |   |  | $           | 520,988 |     |               | $ | 11,472 |       |  | $ | (201,416 | )      |   | $ | 331,051 |       
|                             |                                          |                                       |         |   |              |   |   |              |  |  |            |   |             |           |   |   |       |  |            |         |  |   |               |   |  |             |         |     |               |  



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##### Table of Contents



SPANISH BROADCASTING SYSTEM, INC. AND SUBSIDIARIES





Unaudited Condensed Consolidated Statements of Cash Flows


|                                                 |                                                                                                         |                                                                                                  |                                                          |                                                      |         |        |          |        |        |        |        |  
|------------------------------------------------ | ------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------ | -------------------------------------------------------- | ---------------------------------------------------- | ------- | ------ | -------- | ------ | ------ | ------ | ------ | -
|                                                 |                                                                                                         | Three-Months Ended                                                                               |                                                         
|                                                 |                                                                                                         | March 31,                                                                                        |                                                         
|                                                 |                                                                                                         |                                                                                                  |                                                         
|                                                 |                                                                                                         | 2006                                                                                             |                                                          |                                                      | 2005    |       
|                                                 |                                                                                                         |                                                                                                  |                                                          |                                                      |         |       
|                                                 |                                                                                                         | (In thousands)                                                                                   |                                                         
|Cash flows from operating activities:            |                                                                                                         |                                                                                                  |                                                          |                                                      |         |        |          |       
|                                                 | Net income                                                                                              |                                                                                                  | $                                                        | 53,541                                               |         |        | $        | 39     |       
|                                                 | Adjustments to reconcile net income to net cash provided by
    operating activities:                   |                                                                                                  |                                                          |                                                      |         |        |          |        |       
|                                                 |                                                                                                         | Income from discontinued operations, net of tax                                                  |                                                          |                                                      |        |        |          |        | 2      |       
|                                                 |                                                                                                         | Loss on early extinguishment of debt                                                             |                                                          |                                                      | 2,997   |        |          |        |       |       
|                                                 |                                                                                                         | Gain on the sale of assets, net of disposal costs                                                |                                                          |                                                      | (50,801 | )      |          |        | (9     | )     
|                                                 |                                                                                                         | Depreciation and amortization                                                                    |                                                          |                                                      | 927     |        |          |        | 830    |       
|                                                 |                                                                                                         | Net barter income                                                                                |                                                          |                                                      | 24      |        |          |        | 257    |       
|                                                 |                                                                                                         | Provision for (reduction of) doubtful trade accounts receivable                                  |                                                          |                                                      | 488     |        |          |        | (107   | )     
|                                                 |                                                                                                         | Amortization of debt discount                                                                    |                                                          |                                                      |        |        |          |        | 331    |       
|                                                 |                                                                                                         | Amortization of non-interest bearing note                                                        |                                                          |                                                      | 98      |        |          |        |       |       
|                                                 |                                                                                                         | Stock option expense                                                                             |                                                          |                                                      | 567     |        |          |        |       |       
|                                                 |                                                                                                         | Amortization of deferred financing costs                                                         |                                                          |                                                      | 304     |        |          |        | 499    |       
|                                                 |                                                                                                         | Decrease in deferred income taxes                                                                |                                                          |                                                      | (6,215  | )      |          |        | (2,623 | )     
|                                                 |                                                                                                         | Increase in unearned revenue                                                                     |                                                          |                                                      | 11      |        |          |        | 270    |       
|                                                 |                                                                                                         | Amortization of deferred commitment fee                                                          |                                                          |                                                      | (19     | )      |          |        | (19    | )     
|                                                 |                                                                                                         | Changes in operating assets and liabilities:                                                     |                                                          |                                                      |         |        |          |        |        |       
|                                                 |                                                                                                         |                                                                                                  | Decrease in trade receivables                            |                                                      |         | 5,755  |          |        |        | 8,812  |       
|                                                 |                                                                                                         |                                                                                                  | (Increase) decrease in prepaids and other current assets |                                                      |         | (684   | )        |        |        | 304    |       
|                                                 |                                                                                                         |                                                                                                  | Increase in other assets                                 |                                                      |         | (56    | )        |        |        | (208   | )     
|                                                 |                                                                                                         |                                                                                                  | Decrease in accounts payable and accrued expenses        |                                                      |         | (3,992 | )        |        |        | (5,195 | )     
|                                                 |                                                                                                         |                                                                                                  | (Decrease) increase in accrued interest                  |                                                      |         | (1,373 | )        |        |        | 7,969  |       
|                                                 |                                                                                                         |                                                                                                  |                                                          |                                                      |         |       
|                                                 |                                                                                                         |                                                                                                  |                                                          | Net cash provided by continuing operations           |         |        | 1,572    |        |        |        | 11,152 |  
|                                                 |                                                                                                         |                                                                                                  |                                                          | Net cash used in discontinued operations             |         |        |         |        |        |        | (3     | )
|                                                 |                                                                                                         |                                                                                                  |                                                          |                                                      |         |       
|                                                 |                                                                                                         |                                                                                                  |                                                          | Net cash provided by operating activities            |         |        | 1,572    |        |        |        | 11,149 |  
|                                                 |                                                                                                         |                                                                                                  |                                                          |                                                      |         |       
|Cash flows from investing activities:            |                                                                                                         |                                                                                                  |                                                          |                                                      |         |        |          |       
|                                                 | Proceeds from sale of radio stations, net of closing costs                                              |                                                                                                  |                                                          | 64,759                                               |         |        |          | 20,036 |       
|                                                 | Acquisition of television stations                                                                      |                                                                                                  |                                                          | (18,496                                              | )       |        |          |       |       
|                                                 | Additions to property and equipment                                                                     |                                                                                                  |                                                          | (2,168                                               | )       |        |          | (894   | )     
|                                                 |                                                                                                         |                                                                                                  |                                                          |                                                      |         |       
|                                                 |                                                                                                         |                                                                                                  |                                                          | Net cash provided by investing activities            |         |        | 44,095   |        |        |        | 19,142 |  
|                                                 |                                                                                                         |                                                                                                  |                                                          |                                                      |         |       
|Cash flows from financing activities:            |                                                                                                         |                                                                                                  |                                                          |                                                      |         |        |          |       
|                                                 | Payment of senior credit facility term loan due 2009                                                    |                                                                                                  |                                                          |                                                     |         |        |          | (312   | )     
|                                                 | Payment of senior credit facility term loan due 2012                                                    |                                                                                                  |                                                          | (813                                                 | )       |        |          |       |       
|                                                 | Payment of senior credit facility term loan due 2013 (including
    prepayment premium of $1.0 million) |                                                                                                  |                                                          | (101,000                                             | )       |        |          |       |       
|                                                 | Payment of Series B preferred stock dividend                                                            |                                                                                                  |                                                          | (2,417                                               | )       |        |          |       |       
|                                                 | Payments of other long-term debt                                                                        |                                                                                                  |                                                          | (157                                                 | )       |        |          | (87    | )     
|                                                 |                                                                                                         |                                                                                                  |                                                          |                                                      |         |       
|                                                 |                                                                                                         |                                                                                                  |                                                          | Net cash used in financing activities                |         |        | (104,387 | )      |        |        | (399   | )
|                                                 |                                                                                                         |                                                                                                  |                                                          |                                                      |         |       
|                                                 |                                                                                                         |                                                                                                  |                                                          | Net (decrease) increase in cash and cash equivalents |         |        | (58,720  | )      |        |        | 29,892 |  
|Cash and cash equivalents at beginning of period |                                                                                                         |                                                                                                  | 125,156                                                  |                                                      |         |        | 132,032  |       
|                                                 |                                                                                                         |                                                                                                  |                                                          |                                                      |         |       
|Cash and cash equivalents at end of period       |                                                                                                         |                                                                                                  | 66,436                                                   |                                                      |         |        | 161,924  |       
|                                                 |                                                                                                         |                                                                                                  |                                                          |                                                      |         |       
|Supplemental cash flows information:             |                                                                                                         |                                                                                                  |                                                          |                                                      |         |        |          |       
|                                                 | Interest paid during the period                                                                         |                                                                                                  |                                                          | 7,426                                                |         |        |          | 1,945  |       
|                                                 |                                                                                                         |                                                                                                  |                                                          |                                                      |         |       
|                                                 | Income taxes paid during the period, net                                                                |                                                                                                  |                                                          | 389                                                  |         |        |          | 1,649  |       
|                                                 |                                                                                                         |                                                                                                  |                                                          |                                                      |         |       
|                                                 | Non-cash investing and financing activities:                                                            |                                                                                                  |                                                          |                                                      |         |        |          |        |       
|                                                 |                                                                                                         | Unrealized gain on derivative instrument                                                         |                                                          | $                                                    | 4,533   |        |          | $      |       |       
|                                                 |                                                                                                         |                                                                                                  |                                                          |                                                      |         |       
|                                                 |                                                                                                         | Unearned revenue (advertising given as consideration for
    acquisition of television stations) |                                                          | $                                                    | 5,338   |        |          | $      |       |       
|                                                 |                                                                                                         |                                                                                                  |                                                          |                                                      |         |       
|                                                 |                                                                                                         | Non-interest bearing note payable issued for the acquisition of
    television stations          |                                                          | $                                                    | 14,778  |        |          | $      |       |       
|                                                 |                                                                                                         |                                                                                                  |                                                          |                                                      |         |       
|                                                 |                                                                                                         | Accrual of preferred stock as payment of preferred stock dividend                                |                                                          | $                                                    |        |        |          | $      | 1,910  |       
|                                                 |                                                                                                         |                                                                                                  |                                                          |                                                      |         |       



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##### Table of Contents



SPANISH BROADCASTING SYSTEM, INC. AND SUBSIDIARIES





NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS




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

10-Q S-X. 10-K.






|   |                     
|-- | --------------------
|2. | Assets Held for Sale

KZAB-FM KZBA-FM,




KZAB-FM KZBA-FM


KZAB-FM KZBA-FM




|   |                     
|-- | --------------------
|3. | Stockholders Equity



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



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SPANISH BROADCASTING SYSTEM, INC. AND SUBSIDIARIES


NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)










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

3 4




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

KXOL-FM


|                      |  |                     |           |  |                |   |              |                         |  |                   
|--------------------- |  | ------------------- | --------- |  | -------------- | - | ------------ | ----------------------- |  | ------------------
|                      |  | Number of Class A   |           |  |                |   |             
|                      |  | Common Shares       |           |  | Per Share      |   |              |                        
|Warrant Date of Issue |  | Underlying Warrants |           |  | Exercise Price |   |              | Warrant Expiration Date
|                      |  |                     |           |  |                |   |              |                        
|April 30, 2003(1)     |  |                     | 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  3 | (a))                    |  | December 23, 2008 
|                      |  |                     |           |  |                |   |              |                        
|                      |  |                     | 4,400,000 |  |                |   |              |                         |  |                   
|                      |  |                     |           |  |                |   |              |                        






|    |                                                                                                               
|--- | --------------------------------------------------------------------------------------------------------------
|(1) | Subsequent to March 31, 2006, warrants for
    100,000 shares of Class A common stock expired
    unexercised.

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SPANISH BROADCASTING SYSTEM, INC. AND SUBSIDIARIES


NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




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



| |           
| | ----------
| | Background





| |                                                                    
| | -------------------------------------------------------------------
| | Impact of the Adoption of SFAS No. 123(R)
    Share-Based Payment



|                                             |       |   |     |     | 
|-------------------------------------------- | ----- | - | --- | --- | 
|Engineering and programming expenses         |       | $ | 180 |    
|Selling, general and administrative expenses |       |   | 87  |    
|Corporate expenses                           |       |   | 300 |    
|                                             |       |   |    
|                                             | Total |   | $   | 567 | 
|                                             |       |   |    









| |                      
| | ---------------------
| | Valuation Assumptions



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SPANISH BROADCASTING SYSTEM, INC. AND SUBSIDIARIES


NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




|                        |  |                    |         |   |      |  |         |  
|----------------------- |  | ------------------ | ------- | - | ---- |  | ------- | -
|                        |  | Three-Months Ended |        
|                        |  | March 31,          |        
|                        |  |                    |        
|                        |  | 2006               |         |   | 2005 | 
|                        |  |                    |         |   |      | 
|Expected life           |  |                    | 7 years |   |      |  | 5 years |  
|Dividends               |  |                    | None    |   |      |  | None    |  
|Risk-free interest rate |  |                    | 4.83    | % |      |  | 4.18    | %
|Expected volatility     |  |                    | 67      | % |      |  | 72      | %





| |                                   
| | ----------------------------------
| | Stock-Based Payment Award Activity



|                                 |           |        |       |          |       |          |             |      |  |           |       |  |  |   |     |  | 
|-------------------------------- | --------- | ------ | ----- | -------- | ----- | -------- | ----------- | ---- |  | --------- | ----- |  |  | - | --- |  | 
|                                 |           |        |       |          |       | Weighted |             |      | 
|                                 |           |        |       | Weighted |       |          | Average     |      |  |          
|                                 |           |        |       | Average  |       |          | Remaining   |      |  | Aggregate |      
|                                 |           |        |       | Exercise |       |          | Contractual |      |  | Intrinsic |      
|                                 |           | Shares |       |          | Price |          |             | Term |  |           | Value | 
|                                 |           |        |       |          |       |          |             |      |  |           |       | 
|Outstanding at December 31, 2005 |           |        | 2,939 |          |       | $        | 11.54       |      |  |           |       |  |  |   |     | 
|                                 | Granted   |        |       |         |       |          |             |     |  |           |       |  |  |   |     |  | 
|                                 | Exercised |        |       |         |       |          |             |     |  |           |       |  |  |   |     |  | 
|                                 | Forfeited |        |       |         |       |          |             |     |  |           |       |  |  |   |     |  | 
|                                 |           |        |       |          |       |          |             |      |  |           |       | 
|Outstanding at March 31, 2006    |           |        | 2,939 |          |       | $        | 11.54       |      |  |           | 6.5   |  |  | $ | 102 | 
|                                 |           |        |       |          |       |          |             |      |  |           |       | 
|Exercisable at March 31, 2006    |           |        | 2,323 |          |       | $        | 12.20       |      |  |           | 5.9   |  |  | $ | 72  | 
|                                 |           |        |       |          |       |          |             |      |  |           |       | 



|                         |  |         |       |  |          |             |     |         |          |  |          |  |  |             |       |  |          |  |       |  |  |   |       | 
|------------------------ |  | ------- | ----- |  | -------- | ----------- | --- | ------- | -------- |  | -------- |  |  | ----------- | ----- |  | -------- |  | ----- |  |  | - | ----- | 
|                         |  |         |       |  |          | Weighted    |     |         |          |  |          |  | 
|                         |  |         |       |  |          | Average     |     |         |          |  |          |  | 
|                         |  |         |       |  |          | Remaining   |     |         | Weighted |  |          |  |  | Weighted    |      
|                         |  |         |       |  |          | Contractual |     |         | Average  |  |          |  |  | Average     |      
|                         |  | Vested  |       |  | Unvested |             |     | Life    |          |  | Exercise |  |  | Number      |       |  | Exercise | 
|Range of Exercise Prices |  | Options |       |  | Options  |             |     | (Years) |          |  | Price    |  |  | Exercisable |       |  | Price    | 
|                         |  |         |       |  |          |             |     |         |          |  |          |  |  |             |       |  |          | 
|$ 0 -  4.99              |  |         | 100   |  |          |             |    |         |          |  | 4.7      |  |  | $           | 4.81  |  |          |  | 100   |  |  | $ | 4.81  | 
|5 -  9.99                |  |         | 1,351 |  |          |             | 494 |         |          |  | 7.4      |  |  |             | 8.70  |  |          |  | 1,351 |  |  |   | 8.74  | 
|10 - 14.99               |  |         | 146   |  |          |             | 122 |         |          |  | 8.1      |  |  |             | 10.95 |  |          |  | 146   |  |  |   | 11.04 | 
|15 - 19.99               |  |         | 16    |  |          |             |    |         |          |  | 6.1      |  |  |             | 15.48 |  |          |  | 16    |  |  |   | 15.48 | 
|20 - 24.99               |  |         | 710   |  |          |             |    |         |          |  | 3.6      |  |  |             | 20.00 |  |          |  | 710   |  |  |   | 20.00 | 
|                         |  |         |       |  |          |             |     |         |          |  |          |  |  |             |       |  |          | 
|                         |  |         | 2,323 |  |          |             | 616 |         |          |  | 6.5      |  |  | $           | 11.54 |  |          |  | 2,323 |  |  | $ | 12.20 | 
|                         |  |         |       |  |          |             |     |         |          |  |          |  |  |             |       |  |          | 

11



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##### Table of Contents



SPANISH BROADCASTING SYSTEM, INC. AND SUBSIDIARIES


NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




| |                                                                          
| | -------------------------------------------------------------------------
| | Pro forma Information for Periods Prior to the Adoption of
    SFAS123(R)





|                                                                                                                                    |                                |  |        |       |  
|----------------------------------------------------------------------------------------------------------------------------------- | ------------------------------ |  | ------ | ----- | -
|Net loss applicable to common stockholders:                                                                                         |                                |  |        |      
|As reported                                                                                                                         |                                |  | (2,243 | )    
|Deduct: total stock-based employee compensation expense
    determined under fair value based method for all awards, net of
    tax |                                |  | (742   | )    
|                                                                                                                                    |                                |  |       
|Pro forma net loss                                                                                                                  |                                |  | (2,985 | )    
|                                                                                                                                    |                                |  |       
|Net loss per common share:                                                                                                          |                                |  |        |      
|                                                                                                                                    | As reported: Basic and Diluted |  |        | (0.03 | )
|                                                                                                                                    |                                |  |       
|                                                                                                                                    | Pro forma: Basic and Diluted   |  |        | (0.04 | )
|                                                                                                                                    |                                |  |       



|   |                   
|-- | ------------------
|4. | Operating Segments



Radio broadcasting.


Television broadcasting.




|                                     |            |                    |  |        |        |  |  |        |        |  |   |       |       |  |  |     |    |  
|------------------------------------ | ---------- | ------------------ |  | ------ | ------ |  |  | ------ | ------ |  | - | ----- | ----- |  |  | --- | -- | -
|                                     |            | Three-Months Ended |  |        |       
|                                     |            | March 31,          |  |        | Change | 
|                                     |            |                    |  |        |        | 
|                                     |            | 2006               |  |        | 2005   |  |  | $      |        |  | % |      
|                                     |            |                    |  |        |        |  |  |        |        |  |   |      
|                                     |            | (In thousands)     | 
|Net revenue:                         |            |                    |  |        |        |  |  |        |        |  |   |       |       |  |  |    
|                                     | Radio      |                    |  | 37,344 |        |  |  | 35,339 |        |  |   | 2,005 |       |  |  | 6   | % 
|                                     | Television |                    |  | 431    |        |  |  |       |        |  |   | 431   |       |  |  | 100 | % 
|                                     |            |                    |  |        |        |  |  |        |        |  |   |      
|                                     |            | Consolidated       |  |        | 37,775 |  |  |        | 35,339 |  |   |       | 2,436 |  |  |     | 7  | %
|                                     |            |                    |  |        |        |  |  |        |        |  |   |      
|Engineering and programming expense: |            |                    |  |        |        |  |  |        |        |  |   |       |       |  |  |    
|                                     | Radio      |                    |  | 8,436  |        |  |  | 7,865  |        |  |   | 572   |       |  |  | 7   | % 
|                                     | Television |                    |  | 3,383  |        |  |  |       |        |  |   | 3,382 |       |  |  | 100 | % 
|                                     |            |                    |  |        |        |  |  |        |        |  |   |      
|                                     |            | Consolidated       |  |        | 11,819 |  |  |        | 7,865  |  |   |       | 3,954 |  |  |     | 50 | %
|                                     |            |                    |  |        |        |  |  |        |        |  |   |      

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##### Table of Contents



SPANISH BROADCASTING SYSTEM, INC. AND SUBSIDIARIES


NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)


|                                                                                                                           |            |                    |   |        |        |  |  |        |        |  |   |        |        |   |  |     |     |   
|-------------------------------------------------------------------------------------------------------------------------- | ---------- | ------------------ | - | ------ | ------ |  |  | ------ | ------ |  | - | ------ | ------ | - |  | --- | --- | --
|                                                                                                                           |            | Three-Months Ended |   |        |       
|                                                                                                                           |            | March 31,          |   |        | Change | 
|                                                                                                                           |            |                    |   |        |        | 
|                                                                                                                           |            | 2006               |   |        | 2005   |  |  | $      |        |  | % |       
|                                                                                                                           |            |                    |   |        |        |  |  |        |        |  |   |       
|                                                                                                                           |            | (In thousands)     |  
|Selling, general and administrative:                                                                                       |            |                    |   |        |        |  |  |        |        |  |   |        |        |   |  |    
|                                                                                                                           | Radio      |                    | $ | 14,552 |        |  |  | 15,318 |        |  |   | (766   | )      |   |  | (5  | )% 
|                                                                                                                           | Television |                    |   | 2,147  |        |  |  |       |        |  |   | 2,147  |        |   |  | 100 | %  
|                                                                                                                           |            |                    |   |        |        |  |  |        |        |  |   |       
|                                                                                                                           |            | Consolidated       |   | $      | 16,699 |  |  |        | 15,318 |  |   |        | 1,381  |   |  |     | 9   | % 
|                                                                                                                           |            |                    |   |        |        |  |  |        |        |  |   |       
|Operating income (loss) before corporate expenses,
    depreciation and amortization and gain on sales of assets,
    net: |            |                    |   |        |        |  |  |        |        |  |   |        |        |   |  |    
|                                                                                                                           | Radio      |                    | $ | 14,356 |        |  |  | 12,156 |        |  |   | 2,200  |        |   |  | 18  | %  
|                                                                                                                           | Television |                    |   | (5,099 | )      |  |  |       |        |  |   | (5,099 | )      |   |  | 100 | %  
|                                                                                                                           |            |                    |   |        |        |  |  |        |        |  |   |       
|                                                                                                                           |            | Consolidated       |   | $      | 9,257  |  |  |        | 12,156 |  |   |        | (2,899 | ) |  |     | (24 | )%
|                                                                                                                           |            |                    |   |        |        |  |  |        |        |  |   |       
|Depreciation and amortization:                                                                                             |            |                    |   |        |        |  |  |        |        |  |   |        |        |   |  |    
|                                                                                                                           | Radio      |                    | $ | 618    |        |  |  | 572    |        |  |   | 46     |        |   |  | 8   | %  
|                                                                                                                           | Television |                    |   | 57     |        |  |  |       |        |  |   | 57     |        |   |  | 100 | %  
|                                                                                                                           | Corporate  |                    |   | 252    |        |  |  | 258    |        |  |   | (6     | )      |   |  | (2  | )% 
|                                                                                                                           |            |                    |   |        |        |  |  |        |        |  |   |       
|                                                                                                                           |            | Consolidated       |   | $      | 927    |  |  |        | 830    |  |   |        | 97     |   |  |     | 12  | % 
|                                                                                                                           |            |                    |   |        |        |  |  |        |        |  |   |       
|Capital expenditures:                                                                                                      |            |                    |   |        |        |  |  |        |        |  |   |        |        |   |  |    
|                                                                                                                           | Radio      |                    | $ | 529    |        |  |  | 689    |        |  |   | (160   | )      |   |  | (23 | )% 
|                                                                                                                           | Television |                    |   | 1,518  |        |  |  |       |        |  |   | 1,518  |        |   |  | 100 | %  
|                                                                                                                           | Corporate  |                    |   | 121    |        |  |  | 205    |        |  |   | (84    | )      |   |  | (41 | )% 
|                                                                                                                           |            |                    |   |        |        |  |  |        |        |  |   |       
|                                                                                                                           |            | Consolidated       |   | $      | 2,168  |  |  |        | 894    |  |   |        | 1,274  |   |  |     | 143 | % 
|                                                                                                                           |            |                    |   |        |        |  |  |        |        |  |   |       

|              |            |                 |   |         |         |  |  |           |           | 
|------------- | ---------- | --------------- | - | ------- | ------- |  |  | --------- | --------- | 
|              |            | As of March 31, |  
|              |            |                 |  
|              |            | 2006            |   |         | 2005    | 
|              |            |                 |   |         |         | 
|Total Assets: |            |                 |   |         |         |  |  |          
|              | Radio      |                 | $ | 881,283 |         |  |  | 1,029,995 |          
|              | Television |                 |   | 44,637  |         |  |  |          |          
|              |            |                 |   |         |         | 
|              |            | Consolidated    |   | $       | 925,920 |  |  |           | 1,029,995 | 
|              |            |                 |   |         |         | 



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





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

successors-in


13



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##### Table of Contents



SPANISH BROADCASTING SYSTEM, INC. AND SUBSIDIARIES


NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




10b-5








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





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SPANISH BROADCASTING SYSTEM, INC. AND SUBSIDIARIES


NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)






|   |                                                          
|-- | ---------------------------------------------------------
|6. | Repayment of Second Lien Senior Secured Credit Facilities





|   |                               
|-- | ------------------------------
|7. | Television Station Acquisition

WSBS-TV






15



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##### Table of Contents








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

Overview


LaMusica.com


WSBS-TV WDLP-TV) WDLP-DT) 18-to






16



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##### Table of Contents



Comparison Analysis of the Operating Results for the
Three-Months Ended March 31, 2006 and 2005




|                                                                                                                           |            |                    |   |        |        |  |  |        |        |  |   |        |        |   |  |     |     |   
|-------------------------------------------------------------------------------------------------------------------------- | ---------- | ------------------ | - | ------ | ------ |  |  | ------ | ------ |  | - | ------ | ------ | - |  | --- | --- | --
|                                                                                                                           |            | Three-Months Ended |   |        |       
|                                                                                                                           |            | March 31,          |   |        | Change | 
|                                                                                                                           |            |                    |   |        |        | 
|                                                                                                                           |            | 2006               |   |        | 2005   |  |  | $      |        |  | % |       
|                                                                                                                           |            |                    |   |        |        |  |  |        |        |  |   |       
|                                                                                                                           |            | (In thousands)     |  
|Net revenue:                                                                                                               |            |                    |   |        |        |  |  |        |        |  |   |        |        |   |  |    
|                                                                                                                           | Radio      |                    | $ | 37,344 |        |  |  | 35,339 |        |  |   | 2,005  |        |   |  | 6   | %  
|                                                                                                                           | Television |                    |   | 431    |        |  |  |       |        |  |   | 431    |        |   |  | 100 | %  
|                                                                                                                           |            |                    |   |        |        |  |  |        |        |  |   |       
|                                                                                                                           |            | Consolidated       |   | $      | 37,775 |  |  |        | 35,339 |  |   |        | 2,436  |   |  |     | 7   | % 
|                                                                                                                           |            |                    |   |        |        |  |  |        |        |  |   |       
|Engineering and programming expense:                                                                                       |            |                    |   |        |        |  |  |        |        |  |   |        |        |   |  |    
|                                                                                                                           | Radio      |                    | $ | 8,436  |        |  |  | 7,865  |        |  |   | 572    |        |   |  | 7   | %  
|                                                                                                                           | Television |                    |   | 3,383  |        |  |  |       |        |  |   | 3,382  |        |   |  | 100 | %  
|                                                                                                                           |            |                    |   |        |        |  |  |        |        |  |   |       
|                                                                                                                           |            | Consolidated       |   | $      | 11,819 |  |  |        | 7,865  |  |   |        | 3,954  |   |  |     | 50  | % 
|                                                                                                                           |            |                    |   |        |        |  |  |        |        |  |   |       
|Selling, general and administrative:                                                                                       |            |                    |   |        |        |  |  |        |        |  |   |        |        |   |  |    
|                                                                                                                           | Radio      |                    | $ | 14,552 |        |  |  | 15,318 |        |  |   | (766   | )      |   |  | (5  | )% 
|                                                                                                                           | Television |                    |   | 2,147  |        |  |  |       |        |  |   | 2,147  |        |   |  | 100 | %  
|                                                                                                                           |            |                    |   |        |        |  |  |        |        |  |   |       
|                                                                                                                           |            | Consolidated       |   | $      | 16,699 |  |  |        | 15,318 |  |   |        | 1,381  |   |  |     | 9   | % 
|                                                                                                                           |            |                    |   |        |        |  |  |        |        |  |   |       
|Operating income (loss) before corporate expenses,
    depreciation and amortization and gain on sales of assets,
    net: |            |                    |   |        |        |  |  |        |        |  |   |        |        |   |  |    
|                                                                                                                           | Radio      |                    | $ | 14,356 |        |  |  | 12,156 |        |  |   | 2,200  |        |   |  | 18  | %  
|                                                                                                                           | Television |                    |   | (5,099 | )      |  |  |       |        |  |   | (5,099 | )      |   |  | 100 | %  
|                                                                                                                           |            |                    |   |        |        |  |  |        |        |  |   |       
|                                                                                                                           |            | Consolidated       |   | $      | 9,257  |  |  |        | 12,156 |  |   |        | (2,899 | ) |  |     | (24 | )%
|                                                                                                                           |            |                    |   |        |        |  |  |        |        |  |   |       
|Depreciation and amortization:                                                                                             |            |                    |   |        |        |  |  |        |        |  |   |        |        |   |  |    
|                                                                                                                           | Radio      |                    | $ | 618    |        |  |  | 572    |        |  |   | 46     |        |   |  | 8   | %  
|                                                                                                                           | Television |                    |   | 57     |        |  |  |       |        |  |   | 57     |        |   |  | 100 | %  
|                                                                                                                           | Corporate  |                    |   | 252    |        |  |  | 258    |        |  |   | (6     | )      |   |  | (2  | )% 
|                                                                                                                           |            |                    |   |        |        |  |  |        |        |  |   |       
|                                                                                                                           |            | Consolidated       |   | $      | 927    |  |  |        | 830    |  |   |        | 97     |   |  |     | 12  | % 
|                                                                                                                           |            |                    |   |        |        |  |  |        |        |  |   |       
|Capital expenditures:                                                                                                      |            |                    |   |        |        |  |  |        |        |  |   |        |        |   |  |    
|                                                                                                                           | Radio      |                    | $ | 529    |        |  |  | 689    |        |  |   | (160   | )      |   |  | (23 | )% 
|                                                                                                                           | Television |                    |   | 1,518  |        |  |  |       |        |  |   | 1,518  |        |   |  | 100 | %  
|                                                                                                                           | Corporate  |                    |   | 121    |        |  |  | 205    |        |  |   | (84    | )      |   |  | (41 | )% 
|                                                                                                                           |            |                    |   |        |        |  |  |        |        |  |   |       
|                                                                                                                           |            | Consolidated       |   | $      | 2,168  |  |  |        | 894    |  |   |        | 1,274  |   |  |     | 143 | % 
|                                                                                                                           |            |                    |   |        |        |  |  |        |        |  |   |       

|              |            |                 |   |         |         |  |  |           |           | 
|------------- | ---------- | --------------- | - | ------- | ------- |  |  | --------- | --------- | 
|              |            | As of March 31, |  
|              |            |                 |  
|              |            | 2006            |   |         | 2005    | 
|              |            |                 |   |         |         | 
|Total Assets: |            |                 |   |         |         |  |  |          
|              | Radio      |                 | $ | 881,283 |         |  |  | 1,029,995 |          
|              | Television |                 |   | 44,637  |         |  |  |          |          
|              |            |                 |   |         |         | 
|              |            | Consolidated    |   | $       | 925,920 |  |  |           | 1,029,995 | 
|              |            |                 |   |         |         | 

17



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|            |                                               |                    |        |         |        |  |        |         |       |  |       |         |        |  |   |      |        |  
|----------- | --------------------------------------------- | ------------------ | ------ | ------- | ------ |  | ------ | ------- | ----- |  | ----- | ------- | ------ |  | - | ---- | ------ | -
|            |                                               | Three-Months Ended |        |         |       
|            |                                               | March 31,          |        |         | Change | 
|            |                                               |                    |        |         |        | 
|            |                                               | 2006               |        |         | 2005   |  |        | $       |       |  | %     |        
|            |                                               |                    |        |         |        |  |        |         |       |  |       |        
|            |                                               | (In thousands)     |       
|Net revenue |                                               | $                  | 37,775 |         |        |  | 35,339 |         |       |  | 2,436 |         |        |  | 7 | %   
|            | Engineering and programming expense           |                    |        | 11,819  |        |  |        | 7,865   |       |  |       | 3,954   |        |  |   | 50   | %     
|            | Selling, general and administrative expense   |                    |        | 16,699  |        |  |        | 15,318  |       |  |       | 1,381   |        |  |   | 9    | %     
|            | Corporate expenses                            |                    |        | 3,528   |        |  |        | 3,701   |       |  |       | (173    | )      |  |   | (5   | )%    
|            | Depreciation and amortization                 |                    |        | 927     |        |  |        | 830     |       |  |       | 97      |        |  |   | 12   | %     
|            | Gain on sale of assets, net of disposal costs |                    |        | (50,801 | )      |  |        |        |       |  |       | (50,801 | )      |  |   | 100  | %     
|            |                                               |                    |        |         |        |  |        |         |       |  |       |        
|            |                                               | Operating income   |        | $       | 55,603 |  |        | $       | 7,625 |  |       |         | 47,978 |  |   |      | 629    | %
|            | Interest expense, net                         |                    |        | (5,419  | )      |  |        | (10,170 | )     |  |       | 4,751   |        |  |   | (47  | )%    
|            | Loss on early extinguishment of debt          |                    |        | (2,997  | )      |  |        |        |       |  |       | (2,997  | )      |  |   | 100  | %     
|            | Other (expense) income, net                   |                    |        | (26     | )      |  |        | 7       |       |  |       | (33     | )      |  |   | (471 | )%    
|            | Income tax benefit                            |                    |        | (6,380  | )      |  |        | (2,579  | )     |  |       | (3,801  | )      |  |   | 147  | %     
|            | Loss on discontinued operations, net of taxes |                    |        |        |        |  |        | (2      | )     |  |       | 2       |        |  |   | N/A  |       
|            |                                               |                    |        |         |        |  |        |         |       |  |       |        
|            |                                               | Net income         |        | $       | 53,541 |  |        | $       | 39    |  |       |         | 53,502 |  |   |      | 137185 | %
|            |                                               |                    |        |         |        |  |        |         |       |  |       |        

Net Revenue.


Engineering and Programming Expenses. start-up


Selling, General and Administrative Expenses.


Corporate Expenses.


18



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##### Table of Contents



Gain on sales of assets, net. KZAB-FM KZBA-FM,


Operating Income. start-up


Interest Expense, net.


Loss on early extinguishment of debt.


Income Taxes. KZAB-FM KZBA-FM,


Net Income.


Liquidity and Capital Resources






|                                                     |  |                    |          |   |        |  |        |   |  |  |          |  
|---------------------------------------------------- |  | ------------------ | -------- | - | ------ |  | ------ | - |  |  | -------- | -
|                                                     |  | Three-Months Ended |          |   |       
|                                                     |  | March 31,          |          |   | Change | 
|                                                     |  |                    |          |   |        | 
|                                                     |  | 2006               |          |   | 2005   |  |        | $ | 
|                                                     |  |                    |          |   |        |  |        |   | 
|                                                     |  | (In thousands)     |          |   |       
|Capital expenditures                                 |  | $                  | 2,168    |   |        |  | 894    |   |  |  | 1,274    |  
|                                                     |  |                    |          |   |        |  |        |   | 
|Net cash flows provided by operating activities      |  | $                  | 1,572    |   |        |  | 11,149 |   |  |  | (9,577   | )
|Net cash flows provided by investing activities      |  |                    | 44,095   |   |        |  | 19,142 |   |  |  | 24,953   |  
|Net cash flows used in financing activities          |  |                    | (104,387 | ) |        |  | (399   | ) |  |  | (103,988 | )
|                                                     |  |                    |          |   |        |  |        |   | 
|Net (decrease) increase in cash and cash equivalents |  | $                  | (58,720  | ) |        |  | 29,892 |   |  |  |          |  
|                                                     |  |                    |          |   |        |  |        |   | 

Net Cash Flows Provided by Operating Activities.


Net Cash Flows Provided by Investing Activities.


19



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##### Table of Contents



KZAB-FM KZBA-FM, KZAB-FM KZBA-FM,


Net Cash Flows Used In Financing Activities.






| |   |                                                                                                                                                     
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------
| |  | the demand for advertising within the 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 and legal judgements.                                



KZAB-FM KZBA-FM,




WDLP-TV


20



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##### Table of Contents
















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

10-K







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

Evaluation Of Disclosure Controls And Procedures. 13a-15(e)


Changes In Internal Control Over Financial Reporting.





PART II  OTHER INFORMATION







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

10-Q


21



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##### Table of Contents








|         |             
|-------- | ------------
|Item 1A. | Risk Factors

10-Q, 10-K 10-K







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

Exhibits


| |   |    |  |   |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| | - | -- |  | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | 3 | .1 |  |  |  | Third Amended and Restated Certificate of Incorporation of
    Spanish Broadcasting System, Inc. (the Company),
    dated September 29, 1999 (incorporated by reference to the
    Companys 1999 Registration Statement on Form S-1
    (Commission File No. 333-85499) (the 1999
    Registration Statement)) (Exhibit A to this exhibit
    is incorporated by reference to the Companys Current
    Report on Form 8-K, dated March 25, 1996 (the
    1996 Current Report).
|
| | 3 | .2 |  |  |  | Certificate of Amendment to the Third Amended and Restated
    Certificate of Incorporation of the Company, dated
    September 29, 1999 (incorporated by reference to
    Exhibit 3.2 of the Companys 1999 Registration
    Statement).                                                                                                                                                                                                                                             
|
| | 3 | .3 |  |  |  | Amended and Restated By-Laws of the Company (incorporated by
    reference to Exhibit 3.3 of the Companys 1999
    Registration Statement).                                                                                                                                                                                                                                                                                                                                          
|
| | 3 | .4 |  |  |  | Certificate of Elimination of
    141/4% 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)).                                                                                                                                                                                                                 

22



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##### Table of Contents



| |       |     |  |   |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| | ----- | --- |  | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | 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
    141/4% 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 Current 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
    Exhibit 4.13 of the Companys Annual Report filed on
    Form 10-K for the fiscal year 2004).                                                                                                                                                                                           
|
| | 10    | .1  |  |  |  | Amendment to Asset Purchase Agreement, dated January 6,
    2006, by and among Mega Media Holdings, Inc., WDLP Licensing,
    Inc., and WDLP Broadcasting Company, LLC, WDLP Licensed
    Subsidiary, LLC, Robin Broadcasting Company, LLC, and Robin
    Licensed Subsidiary, LLC (incorporated by reference to
    Exhibit 10.1 of the Companys Current Report on
    Form 8-K filed January 12, 2006).                                                 
|
| | 10    | .2  |  |  |  | Security Agreement, dated as of March 1, 2006, among Mega
    Media Holdings, Inc., WDLP Licensing, Inc., WDLP
    Broadcasting Company, LLC, WDLP Licensed Subsidiary, LLC, Robin
    Broadcasting Company, LLC and Robin Licensed Subsidiary, LLC
    (incorporated by reference to Exhibit 10.1 of the
    Companys Current Report on Form 8-K filed
    March 6, 2006).                                                                               
|
| | 10    | .3  |  |  |  | Pledge Agreement, dated as of March 1, 2006, among Mega
    Media Holdings, Inc., WDLP Broadcasting Company, LLC, WDLP
    Licensed Subsidiary, LLC, Robin Broadcasting Company, LLC and
    Robin Licensed Subsidiary, LLC (incorporated by reference to
    Exhibit 10.2 of the Companys Current Report on
    Form 8-K filed March 6, 2006).                                                                                                           
|
| | 10    | .4  |  |  |  | Secured Promissory Note, dated March 1, 2006, made by
    Spanish Broadcasting System, Inc., Mega Media Holdings, Inc. and
    WDLP Licensing, Inc. in favor of WDLP Broadcasting Company, LLC
    and Robin Broadcasting Company, LLC, in the principal amount of
    $18,500,000 (incorporated by reference to Exhibit 10.3 of
    the Companys Current Report on Form 8-K filed
    March 6, 2006).                                                    
|
| | 10    | .5  |  |  |  | Third Amendment to Lease, dated as of March 7, 2006,
    between Irradio Holdings, Ltd. and Spanish Broadcasting System,
    Inc. (incorporated by reference to Exhibit 10.106 of the
    Companys Annual Report on Form 10-K filed
    March 16, 2006).                                                                                                                                                                                                  
|
| | 14    | .1  |  |  |  | Code of Business Conduct and Ethics (incorporated by reference
    to Exhibit 14.1 of the Companys 2004 Form 10-K).                                                                                                                                                                                                                                                                                                                                       
|
| | 31(i) | .1  |  |  |  | Chief Executive Officers Certification pursuant to
    Section 302 of the Sarbanes-Oxley Act of 2002.                                                                                                                                                                                                                                                                                                                                                     
|
| | 31(i) | .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.                                                                                                                                                                                                                                                                                                  

23



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##### Table of Contents



SIGNATURES






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



| |     |                     
| | --- | --------------------
| | By: | /s/ JOSEPH A. GARCÍA

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



24



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##### Table of Contents



Exhibits


| |   |     |  |   |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| | - | --- |  | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | 3 | .1  |  |  |  | Third Amended and Restated Certificate of Incorporation of
    Spanish Broadcasting System, Inc. (the Company),
    dated September 29, 1999 (incorporated by reference to the
    Companys 1999 Registration Statement on Form S-1
    (Commission File No. 333-85499) (the 1999
    Registration Statement)) (Exhibit A to this exhibit
    is incorporated by reference to the Companys Current
    Report on Form 8-K, dated March 25, 1996 (the
    1996 Current Report).
|
| | 3 | .2  |  |  |  | Certificate of Amendment to the Third Amended and Restated
    Certificate of Incorporation of the Company, dated
    September 29, 1999 (incorporated by reference to
    Exhibit 3.2 of the Companys 1999 Registration
    Statement).                                                                                                                                                                                                                                             
|
| | 3 | .3  |  |  |  | Amended and Restated By-Laws of the Company (incorporated by
    reference to Exhibit 3.3 of the Companys 1999
    Registration Statement).                                                                                                                                                                                                                                                                                                                                          
|
| | 3 | .4  |  |  |  | Certificate of Elimination of
    141/4% 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
    141/4% 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).                                                                                                                                                                                                                       

25



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##### Table of Contents



| |       |     |  |   |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| | ----- | --- |  | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | 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 Current 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
    Exhibit 4.13 of the Companys Annual Report filed on
    Form 10-K for the fiscal year 2004).                                                                                                                                                                                           
|
| | 10    | .1  |  |  |  | Amendment to Asset Purchase Agreement, dated January 6,
    2006, by and among Mega Media Holdings, Inc., WDLP Licensing,
    Inc., and WDLP Broadcasting Company, LLC, WDLP Licensed
    Subsidiary, LLC, Robin Broadcasting Company, LLC, and Robin
    Licensed Subsidiary, LLC (incorporated by reference to
    Exhibit 10.1 of the Companys Current Report on
    Form 8-K filed January 12, 2006).                                                 
|
| | 10    | .2  |  |  |  | Security Agreement, dated as of March 1, 2006, among Mega
    Media Holdings, Inc., WDLP Licensing, Inc., WDLP
    Broadcasting Company, LLC, WDLP Licensed Subsidiary, LLC, Robin
    Broadcasting Company, LLC and Robin Licensed Subsidiary, LLC
    (incorporated by reference to Exhibit 10.1 of the
    Companys Current Report on Form 8-K filed
    March 6, 2006).                                                                               
|
| | 10    | .3  |  |  |  | Pledge Agreement, dated as of March 1, 2006, among Mega
    Media Holdings, Inc., WDLP Broadcasting Company, LLC, WDLP
    Licensed Subsidiary, LLC, Robin Broadcasting Company, LLC and
    Robin Licensed Subsidiary, LLC (incorporated by reference to
    Exhibit 10.2 of the Companys Current Report on
    Form 8-K filed March 6, 2006).                                                                                                           
|
| | 10    | .4  |  |  |  | Secured Promissory Note, dated March 1, 2006, made by
    Spanish Broadcasting System, Inc., Mega Media Holdings, Inc. and
    WDLP Licensing, Inc. in favor of WDLP Broadcasting Company, LLC
    and Robin Broadcasting Company, LLC, in the principal amount of
    $18,500,000 (incorporated by reference to Exhibit 10.3 of
    the Companys Current Report on Form 8-K filed
    March 6, 2006).                                                    
|
| | 10    | .5  |  |  |  | Third Amendment to Lease, dated as of March 7, 2006,
    between Irradio Holdings, Ltd. and Spanish Broadcasting System,
    Inc. (incorporated by reference to Exhibit 10.106 of the
    Companys Annual Report on Form 10-K filed
    March 16, 2006).                                                                                                                                                                                                  
|
| | 14    | .1  |  |  |  | Code of Business Conduct and Ethics (incorporated by reference
    to Exhibit 14.1 of the Companys 2004 Form 10-K).                                                                                                                                                                                                                                                                                                                                       
|
| | 31(i) | . 1 |  |  |  | Chief Executive Officers Certification pursuant to
    Section 302 of the Sarbanes-Oxley Act of 2002.                                                                                                                                                                                                                                                                                                                                                     
|
| | 31(i) | . 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.                                                                                                                                                                                                                                                                                                  

26